This Week in Startups - Startup pitch competition! Jason invests $25K into one of four founders | E1703

Episode Date: March 21, 2023

Today on the podcast, we have a new format for you! Jason will hear four pitches from Founder University participants and choose ONE startup to invest $25K in! (1:45) (0:00) Jason kicks off the show and explains the pitch format! (1:45) Jason brings on Presh and Kelly to explain the fundamentals of Founder University and introduces today's pitches! (13:44) ⁠Squarespace - Use code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/TWIST (16:18) George Lam pitches Fantastic Funding (21:18) Naman Dwivedi pitches Promptify (25:59) Pilot - Go to https://pilot.com/twist for 20% off your first 6 months (27:30) Phil Boucher pitches OpenSpot (34:00) Matt Edminster pitches Renegade Labs (39:22) ⁠Fennel - Join the waitlist and get your first month free at http://fennel.com/twist (40:35) Kelly and Presh's pick for best return for LPs (45:33) The live audience votes! (50:22) What Founder University meant to these Founders (53:39) Jason makes his decision on who will receive $25K Check out the startups!: https://fantasticfunding.com https://www.promptify.ai https://www.findopenspot.com https://www.renegadelabs.io FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Presh: https://twitter.com/preshdkumar FOLLOW Kelly: https://twitter.com/KSchricks

Welcome to This Week in Startups, everybody. We have an awesome show for you today. We're going to be doing this in front of a live YouTube audience. I am going to hear four pitches. And these are two-minute pitches, and I'll ask some questions after those two-minute pitches, from founders who have attended Founder University. You can find some information about Founder University at Founder. It's a 12-week program, and we invest $25,000 in five to ten of the companies.

We'd order to be interesting to take four of the top companies from our fourth cohort of Founder University and invest $25,000 in one of them live on the air. And we'll do that at the end of the show. So let's get started. This weekend startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain.

Pilot. Grow your business sustainably and operate more effectively. Pilot provides the most reliable accounting, CFO, and tax services for startups and small businesses. Head to pilot.com slash twist and get 20% off for the first six months. And Fennell is a mobile investing app making it easy for you to dig in to understand things like who sits on a company's board, what their executive compensation looks like, and other employee-specific statistics and detailed ESG metrics that can help you decide whether a company is worth investing in or how you can push to make it better. Join the waitlist and get your first month free at fennel.com slash twist.

I have with me two of my favorite people on planet Earth who work with me at launch. That's our investment firm. That produces Founder University, Presh and Kelly. welcome to this week in startups. That's what you're saying. Thanks for having me. There you go. All right.

So, Prash, let's start with you. Introduce yourself to the audience. You can explain how long you've been working at launch and our history together briefly, but then maybe talk about what occurs in the 12-week program. Kelly, then I'll have you introduce yourself and how long we've been working together briefly. And then maybe you could go through.

What are the qualities we look for in this $25,000 investment we've been doing? doing first money in the essential friends and family round you can talk about what we're looking for and then things that are maybe signals that we will wait on investing we'll you know wait for some things to change okay presh you have the floor cool thanks jason yeah i'm presh i've worked for launch and jason for just over five years started on last name too last name too please presh denoumarsh i worked at launch and jason for jason for the past five years started uh on the media side doing marketing and growth, then later transition to the investment team and now help with running the

program with Kelly, Found University. So the program, as Jason mentioned, it's 12 weeks and it's for founder builders. And it's to get their MVP or initial product off the ground and get them to get users. So it's 12 week. We have live sessions, both A-Sync and the live sessions with experts. The expert topics are really focused around getting users and building a product. We also do the live sessions which are midweek sessions and this is where we get to communicate and build community with the founders in the program. And really, the core benefit we hear from founders about the program is the community and accountability aspect with these live sessions. And so we do that for 12 weeks. And the goal is really to find companies that will potentially invest in, maybe go through

the accelerator and write a larger check down the road. And maybe, Pras, you could explain how we charge for the program because we don't want to make money our founders, but we do charge $500 to come and then we do something really interesting with that $500 at the end. So explain our pricing, using air quotes here, for

founder dot university. Yeah, it's a good point. So we charge, unquote, $500 to participate, and it's really just an accountability charge. So we 100% refund the charge at the end of the program. We just want to see that everyone is taking this seriously,

and they attend the weekly sessions. They send their investor updates. At the end of the 12 weeks, we refund the payment of $500. So it's a free program. You just have a $500, let's say, hold on your credit card. And that $500, Kelly, has resulted in approximately what percentage of completion

over the first, this is the fourth cohort, right? We're above 95. I think it might be 97% completely. Wow. Now, if we didn't charge 500 bucks, then I think the completion rate would be like 30%. So this is one of the more brilliant ideas we stumbled upon. We're like, if we make this free, we're going to have a thousand people sign up and 100 people complete it. If we have, if we make it $500, we'll only have 300 people sign up, but we'll have 97% completed. We'll have 285 people completed or something in that range, which is exactly what's transpired. It is a little bit complicated. because we have to refund 300 people attending with Stripe and give the $500 back. So our Stripe credit rating might be crazy at this point because we refund so many people's money. So I'm not sure exactly how to make that work better. But we never want to charge founders, but we don't want them to burn the slot.

And then in order to get the $500 back, if people have like a death in the family or a kid's rehearsal or something, we'll give an excused absence and people can have one or two of those, I guess. but explain what people have to do in order to check in every week to ensure that we take attendance, as it were, on Mondays. We only take attendance on Mondays, right? Yeah, that's the way it works. Yeah, you know that. So the live sessions, around halfway 30 minutes into the presentation, we'll drop a link, and it's a tight form. And really, this acts is two things.

One, to get attendance. The other is, it's just an accountability update of the progress to the company's made. So we'll ask questions like if you've added any users this week, if you've made any changes to your landing page, things like that gets us a better idea of how the companies are progressing through week over week. Now, Kelly, let's talk about what you and Prash do, and you can introduce yourself as well, what you would do with that data from those weekly check-ins and then the $25,000 investment in how we make that investment. Yeah, absolutely. So I'm Kelly. I am a previous founder. Last names as well. Sorry, I'm Kelly Shricker. I have a background as a founder and an operation specifically around scaling startups.

I've been working with Jason at launch for about a year, a little over a year and a half. And in total, I used to work with him at Inside. So just about five years all in with J-Cal these days. So to speak. Yep. So now talking about Founder University, what we do is we like to keep an eye on the progress. You know, Jason is all about do the work, right? So we love to follow along, answer any questions along the way.

We do a lot of one-off calls with founders in the program just if they get stuck on anything. If we see anything we can be helpful with in those updates, we like to jump on it very quickly. The 12 weeks tends to go very fast. And then from there, at the end of the program, we like to make these $25,000 bets. Again, hopefully that is just one step of the success, as you could call it. You know, companies will either get that $25,000 check. They'll get to know us. They'll continue on.

Maybe they get into the accelerator or even one. of our syndicates later on in life as well. And so that, every time they give that attendance, they fill out a couple questions about things that have changed and we review them, or I should say, you and press review them. And then you'll come to our investment team and you'll say, hey, I identified one that looks like it's making great progress. I think, you know, the two of you will then have a little dialogue between the two of you, you'll present it to the investment team and say, I think we should put $25,000 into this

company. We do it out of $1 million valuation. Many of the companies are not yet even incorporated. So we are literally acting like the friends and family check. And not everybody's got rich friends and family to put in a $25,000 check. But we like to be the first money in. Why do we do that? Well, it just to me is my roots.

I gave these 2550K checks to amazing companies like Robin Hood, Uber, et cetera, and just took a lot of flyers. We're doing that now, but we do that with the expectation that we'll be able to invest the second, third, or fourth time in the company and maybe get past the 2.5% ownership up to maybe 10 or even 20 in the winners. So that is our fun strategy is to have, so people understand, I'll explain our funnel. 50 million people watch all in and this week in startups. 15,000 a year. 15,000 people contact us at launch about investing in their companies. Launch.com slash apply is where people can apply to take a meeting with our team. That of those 15,000 will,

that apply, we'll have 3,000 that we do meetings with, including Founding University folks. And then that results in 50 to 100 investments per year. And that'll probably grow to 100 to 200 investments per year because we want to do sincerely a $125,000 investments every year. And then in our fourth fund, which we're raising right now, launch fund four, which is launch.com slash F-O-U-R, if you want to be an LP, we're raising publicly. We want to have in that fund, 200 to 300 of these investments. So if it winds up being a $50 million fund or a $75 million fund, a full five to seven and a half million of that, Callie and Press, will be these checks that you are shepherding. And so those, we hope if we had 300 of those,

would result in 50 of those getting further funding from us. And this is what we call a milestone based funding system, which Silicon Valley is predicated on. Friends and family, seed, or pre-seed investing, then seed funds investing, angel investors investing, and then series A, series B, et cetera. So we really want to put ourselves in that funnel all the way to the point of series A. And then if you were to take our funnel, it would be like the top of the overall funnel from incubators, seed rounds, series A, series B, C, and then eventually public companies or an exit. So let's talk a little bit about the criteria we look for. So Prash, when we're looking at, at companies, I'll go back to you for a second. What are two or three things at this early stage

that we look for? Now, these are not Series A companies. This is when we have very little information on a company, but what are some of the early signs that we've identified as potentially driving future success and the future success of a founder university company would be getting into Y Combinator, Tech Stars, launch accelerator, or even doing a seed round of 500K. That would be success coming out of Founder University. So what do we look for? Yeah, so a couple of things that are super important is, even if they haven't started a company, like previous projects that they've built. So this can be a simple website that does a specific task or just any prior building experience.

And the reason we look for builders is because you've mentioned this a bunch of times, Jason, but it's like the founder without any funding can work on this project and build it themselves. And they aren't reliant at the very early stage to, use capital because the capital that they're using is essentially just just their time. So Builder Founder is very important to the program. And then the other thing is just early signs of traction if they can maybe even build a wait list, any signs of people wanting to use the product, that's going to be another tell and what we're prioritizing.

Kelly, other than they've built previous products and they have some signs of customer traction, what else do we look for? What are things at this early stage that would make us interested in making that 25K bet? Yeah, I think another interesting one to think about is founder problem fit, right? And so when they have really interesting experience and a really good reason for why they want to build this product and have it in the world, I think that always jumps out to us as well. Yeah. Another thing we look for, builder founders, we talked about that and multiple founders. So in the early stage, if you have two or three founders working on a project, if they've worked together before on a project, maybe they worked at Google, maybe they did a college project that failed, that shows that they can work together and that you have multiple points of redundancy. Three people, two or three people grinding on something is obviously better than one, because being a solo founder is really ten times more difficult than having two co-founders.

And being a builder means you don't have to go find people to build your vision. You can build it yourself. The best titles, I think, product manager, developer, designer, UX, all of that is, you know, a creative towards getting an MVP to market. And we like to offer that 25K check to people who have those qualities. Those are the things that why Combinator Techstars and the Lunch Accelerator look for or seed funds look for. So what we're describing is not just because we like them for no reason, Kelly, Fresh, the people who are downstream of this 25K friends and family check,

it's really a friends and family check, those downstream investors, including our accelerator, are going to look for those qualities, yeah? Yeah. Absolutely. Yeah. Okay, we're about to announce the winner

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Everything just works inside of Squarespace. And of course, it's optimized for mobile. You know about the gorgeous templates. But you can also sell content there, courses, et cetera, appointments, and save the 15% tax that other platforms are taking from you. That's your money. Don't give it to a platform. Use Squarespace instead. Squarespace.com slash twist for a free trial.

And when you're ready to log, use the offer code Twist to save 10%. off your first purchase of a website or domain. We love you, Squarespace. And they hold the belt here at this weekend startups for our longest running partner. Thank you so much for supporting this weekend startups and our mission to support founders and inspire innovation. All right, so let's get started. We have four companies here. They're going to have two minutes to present each. I'll have each one of you introduce the company. Then they'll present. I might ask them a question or two or we'll just have a dialogue about that company. And at the end of the four companies, I will rank them and give the number one company $25,000.

I kid you not, there's a guaranteed $25,000 bet going in here. And all of the founders had said they would accept this 25K bet. So they're all open to it. Now, some of you're saying, hey, it's at a million dollar valuation, $25,000. That seems low. For this stage of company, it's not low. That's what you would offer in a friends and family round. But we do not force anybody to take this.

It's just an offer if they need it. Some people are rich already. They have $25,000. or their aunt or uncle can give them the 25,000, or they just want to go directly to a seed round or they want to go directly into an accelerator, and that's fine with us too. We might offer them a spot in our accelerator. Why Combinator might give them $150,000, and we're fine with that as well. So let's get started. Who would like to introduce our first company? All right. We'll start with George from Fantastic Funding. Welcome to the program, George, from Fantastic Funding. And he's going to present. And what week is this right now, George, for the founder university? So we've completed the program. Oh, right. We completed the program and we actually built this whole MVP.

I'm going to show you during the program. So started the program. We had nothing. Then we built the MVP. We launched it kind of halfway through the program. And then we obviously have progress to show. And what was the number one thing you got out of the program, would you say? The permission to build an imperfect MVP.

I think I used to, you know, I used to work at a, at a big tech company. We have a lot of clients and projects we already do. So I always felt really awkward about putting out an MVP with sort of imperfections and things. But then because you're in this program with 300 other folks and really supportive people like Kelly and Prech that say, just launch, just, you know, do something, get some results that's what we're looking for. I think that really helped sort of clear my mind. Just like, okay, you know what? I'm just going to build something. I'm just going to put it out there.

Okay, we'll put two minutes on the clock. And when it's time to wrap up, you'll see Kelly or Press. Make the wrap up signal, the universal one, which is a spinning finger. Three, two, go. Hi, I'm George, founder of fantastic funding. Meet Johan. He's an actual creator on our platform. He built this super cool self-balancing robot and it's going viral on social media.

He wants to turn this into a real product, into a real business. But here comes the problem. He has all these different platforms like Shopify, Wix, Kickstarter, Patreon that he needs to use to raise funds and start selling online. This is way too much for him to do by himself. and the fees and commissions are insane. He also has all his customer data spread across these different platforms and all of them give him a new URL, so his SEO is terrible. Luckily, he's now on fantastic funding,

the first all-in-one platform where he can turn his idea into a real product. He starts off small with our community pages feature. Here, people can donate a small amount to validate his idea. Once he has a thriving community, he can now start taking pre-orders to fund his first batch of manufacturing. Now that he has his inventory, he can find, fulfill his pre-orders, but he can even continue selling with our storefront feature. He keeps the same URL he's had since day one, so his SEO is fantastic.

We charge a 5% commission of storefront sales, and we offer all the services the creator might need directly through the platform. That gives us $21,000 in annual revenue per creator, so when we have 5,000 creators, we'll hit $100 million in revenue. Just for context, that's only 0.2% of all the creators that Shopify alone has, so there's room to grow in this market. We're also exploring the idea of seeing if we can get paid in equity instead of just cash. Imagine if Old Birds or Ring funded through our platform and we had that upside.

We launched our MVP as part of Founder University and we have grown our users, our creators, and our revenue week on week. The team and I have raised over $20 million for crowdfunded projects as independent crowdfunding consultants, so we know this space like no other and we really know how to build a platform that our creators would love to use. On top of that, we have great relationships with creators, so it's very easy for us to get new projects onto the site. Thank you so much for your time.

Okay, just to start off, what a great presentation. We understand what you do. We understand who your customer is, and we understand how you make money. Just amazing progress, and you have domain expertise. So you understand the challenges that people who are doing crowdfunding they face, right? because you consulted with them.

So I guess what I have a question about is, how is this different than me putting my project on Kickstarter? What would you say if somebody was coming to you saying, I'm considering Kickstarter and I'm considering your startup, fantastic funding? Did I get that correct? Fantastic funding? Yeah, absolutely.

Why should I? What are the top three reasons in order of why I should use fantastic funding? So there's a very specific type of question I'm asking, and let's see how you answer it. Absolutely. So a site like Kickstarter basically is just like a hosting provider. It just hosts your project, but it doesn't help you, it doesn't support you. And it's only for that 31 day campaign of your multi-year journey. Fantastic funding actually helps you before your campaign by building a community, which is super important. And then after your campaign with your fulfillment and actually continuing to sell. So that's both important for the creator because they're supported throughout the entire journey. But it's also important for us as a company in terms of revenue because we're we can continue making money with these creators for two years instead of for 30 days. Got it. So you are like the Amazon fulfillment for them, as well as the consultant for them,

and Kickstarter is but a platform. They don't offer consulting services, and they don't offer ongoing commerce. Those are two amazing differentiators. Well done. Let's meet our next company. All right. Next up is Naman from Promptify. Okay.

I like where this is going. Promptify. This sounds really interesting to me. We are Promptify. And AI Prompts as a service marketplace that enables prompt engineers to turn their GPT prompts into paid APIs. Let's jump into the product and see how easy Promptify makes it to turn your prompts into APIs.

Let's go to the Create Prompts page. Let's say, I want to make an AI prompt that takes in a number and outputs a joke about that number using AI. I enter the title and name of the prompt, then I enter the actual body of the prompt, from which the input variables are automatically extracted. Then I enter the price per API call.

And just like that, in a few clicks, my prompt API is live, and I can get paid for it. Let's now test it out using the playground. We enter the number four, and there we have it. A joke about the number four. Anyone can now integrate this API into their app, any developer using this code snippet. Middlewares went live last week, the core functionality.

We are working on the UI of these middlewares. These enable prompt engineers to build non-primitive applications. They can do things like input manipulation. They can make external API calls. They can chain prompts one after another. All of this using an extremely simple interface. We are really excited about this feature. We launched on 17th February, so about one month,

and we have steady number of signups happening every week and we are in talks now with two clients who want to integrate AI capabilities into their organizations and we are creating those capabilities for them in the form of prompt APIs. We are the only marketplace that is focused on prompt APIs without ever having to open your IDE. This makes us different from all our competitors. We are a team of two experienced software developers who are childhood friends and we are are excited about the future of prompt engineering. Thank you.

Okay, well done. So if I'm understanding correctly, you allow a marketplace of prompts, and for people who don't know what prompts are, prompts are the conditions that you would give to, something like chat GPT, in order to make the work product coming back better. So an example of a prompt might be,

explain to me as if I was a five-year-old how the United States government works, right? And that would be a prompt. But there are much more sophisticated prompts that can be made. Limit the data set, you know, respond in this specific format, respond in this tone. And these are constantly changing. And if you were a neophyte to chat GPT, it's easier to have somebody refining a vertical like say HR or programming or journalism or copy editing. Is that correct? That's exactly right. My pit seems to have done the job quite well then.

Yeah. So this is a fantastic idea. There are multiple people working on it in the space. So what I'll ask is, tell me a little bit about your background and your team's background that makes you uniquely qualified in the world to go after this opportunity, which is a clear opportunity in the world in my mind. So you got to. me on that. Yes. I believe it's an opportunity. I believe the product is reasonably good already. So I want to know why are you and your team the ones to uniquely go after this in the world? We are a team of two people.

We are childhood friends and we both have experience in software development, combined experience of 15 years. I am an entrepreneur. This is my second company. Before this, I had a game studio where I delivered over 50 games with top publishers in the world. And my focus was on extremely fast product iterations. And this is what I'm bringing to Promptify.

We're launching new features, new products, new spinoffs every week. And this is the thing that is so exciting for us because AI is so dynamic right now. And my skill set, my partner's skill set, who is working in enterprise software, he is also very experienced with scaling systems. So combine, we do the job. You had me at rapid iteration. startups as we talk about Kelly and Presh are about product velocity. And here we have a founder who's focused on product velocity in a great category.

So well done. All right, everybody. I'm here with Asim Dahar. He is the CEO and founder of pilot. You guys know pilot. They help everybody with their accounting, CFO and tax services. Welcome to the program. Thanks for having me.

A lot of talk about burn rate. How can a startup in this kind of climate reduce their burn and extend their run. Yeah, it's a great question. So burn ultimately or increasing cash in your bank account is a consequence of four basic levers. The first is revenue. Can you sell more to your new customers or existing customers? Can you raise prices? Can you do things that actually increase the amount of revenue you take in? The second is gross margin. Can you reduce the cost of providing your service so the same customers generate more cash for you. The third is payment terms. Can you get folks to prepay you annually? Maybe can you negotiate more flexibility with your own vendors? And the fourth, of course, is just decreasing costs. Are there expenses you can reduce or cancel? Are there investments you can defer until subsequent years? Yeah, great advice. And you've got to look at all four of these things.

And, man, sometimes a customer can pay a little bit more. And founders are scared of raising their prices. And sometimes they're lowering their prices when they should be, in fact, raising them because they're providing more value. So really think that through. Not just cutting costs, but also maybe look at how much you're charging. Maybe it's time to increase it a little bit. Great job.

All right, listen, if you're a twist listener, you can get 20% off for the first six months of doing your accounting with Pilot. Pilot.com slash twist. That's pilot.com slash twist for 20% off your first six months. Who do we have next? Next up is Phil from OpenSpot. Okay, moving right along here. I like the pace. And we limit these presentations to two minutes for a reason. We want the founder to be able to explain their product and their business and their customer basically in two minutes or under. And that means they have to leave out all the other nonsense. They can't talk too much about the total addressable market.

They can't talk too much about themselves. They've got to just be very efficient here in giving us the information about their product, customer, and maybe a little bit about their team, et cetera, but this creates what we call internally the trailer of a startup. It's not meant to be the comprehensive pitch. It's the trailer that gets you the next meeting. So the goal of a two-minute pitch, what you might call an elevator pitch, we call a the trailer is to just get the founder good at explaining their business in a short period of time

so they can get a real 20-minute meeting with a VC or seed fund. Okay, who do we got next? And let's get, let's keep the train movement here. Hey, everyone. My name is Phil Boucher. I'm a pediatrician, and I created OpenSpot, which is a waitless management platform for healthcare practices to fill last-minute appointments. I want you to meet Donna. She's a practice administrator for a thriving ear, nose and throat practice. Her practice is booked out three months, but they have many last-minute cancellations each day, and they lack the team bandwidth to start calling those patients to fill last-minute open spots, so they end up with holes in their schedule. Those holes in the schedule cause delays in patient care and health outcomes, frustration from the staff and from the clinicians who are left

twiddling their thumbs instead of practicing their craft, and lost revenue on the order of $200 to over $1,000 in revenue per visit. With OpenSpot, Donna's team and adds new patients onto their cloud-based wait list. When a cancellation occurs, any team member can immediately start going down the list, sending text messages to offer the spot to waiting patients. No phone calls, no voicemails, no phone tag, and no hassles. Over 85% of the patients reply within 10 minutes so they can quickly run through the list until they fill that spot. We're a SaaS business that has started, and we charge based on our monthly fee, based on the number of clinicians that are in the practice, and we set our pilot pricing to ensure that even minimal

use pays for itself each month. I'm a pediatrician, and so our first vertical focuses on private practice physicians and mental health care practitioners, but we plan to branch into other adjacent verticals like aesthetics, speech therapy, physical therapy, anyone whose clients book out three weeks or longer. I took this idea, this from idea to MVP to sales during Founder University. I built it myself, and we launched in our first clinic on February 1st. A urology practice with 16 clinicians, they added over 100 patients to their wait list. They had 20 patients reply yes. I get a text every time somebody says yes, and they've had four people say yes today to get into those open appointment spots.

And so OpenSpot has generated way more revenue than it costs the practice to do that. My team right now is myself, but I'm actively interviewing and speaking with co-founders for the opportunity to join as the COO, and then our next hire will be sales. The first half of the year, our plan is to optimize our client workflows and feature sets and then develop direct integrations with EMRs, and then, incorporate AI into open spot so that we can take the staff completely out of the picture so that these appointments can be handled without anyone having to touch the patient scheduling. And that's it. Awesome. So at the end, here's your tip.

Just, I'm Phil. We're open spot. We blank, blank, blank, right? So always end with the chance to reinforce your message. This is fantastic. you're an MD. You found a customer. Let me ask this. In the first month, what was the total value of the meeting slots that you saved for that customer? What was the total value, if you had to estimate it, how many slots and what would the dollar value be of those? I would say,

burned, right? They're burned. They're otherwise burned. So they're lost forever. So for a urologist for a specialty practice is probably $500 on average per slot, and we have filled over 20 spots during the month of February. So that doctor's office, just to meditate on this, only using this product for a month, and this is something you hand stitched together just during Founder University. Congratulations. Thank you. You were able to save what would be $120,000 in pure profit because it's a fixed cost

business. The doctors, the receptionist, the lights, the rental of the space. that's all paid for. So this is a $120,000 in pure profit for that practice that they otherwise would not have had or ready. Correct. Well, I think it's 500 times 20 is 10,000. 10,000, but I times it by 12 months. Oh, by 12 months.

Okay, yes. Now I understand. 120,000. That's how my mind works. Now, what would that practice? That was a one doctor practice, I take it? 16 doctors. Oh, 16 doctors, so across all of them.

So a $16 practice, what do you think? that 120, if we were to look at how much that practice made per doctor, is it a million dollars per doctor? Typically, $2 million per doctor? Probably two million. Yeah. Got it. Okay. Two million dollars per doctor. And what's the average margin? What's the profit margin of a $2 million office? A $2 million for a doctor, is it a 10% margin at the end of the day, 20%? It depends on the specialty with if they have a surgical suites and everything like that, for probably 15 to 30% depending on the specialty. So it might profit $600,000 or $500,000.

So this, you know, extra money that could have been wasted, you know, depending on how many doctors you're across, could be significant in terms of increasing profitability. Right. And the thing about healthcare is you can't just raise your prices like you can on eggs because insurance companies lock in those rates and are slow to adjust. So they don't have the ability to just, you know, jack up the price of surgery or whatever. Amazing.

So well done. Really appreciate your time. Congratulations on graduating Founder University. Did you get your $500 back? Not yet, but I submitted the stuff. Perfect. Okay. Well done.

Okay. Who's our final contestant here with Founder University? And again, we're going to give $25,000 to one of these four founders at the end. They've all agreed to take the 25K. And let's see who our final contestant. Our final founder is. Hi. Final founder is Matt from Renegadeeat Live.

Take it away. Hi. Hi, I'm Metadminster, co-founder of Renegade Labs, and we're building the world's first interactive drone gaming experience. We combine the thrill of video games with the acrobatics of drone racing at the scale of swarms into a new category of entertainment. Our first game, drone hunt consists of 10 drones. Four players, eight levels, is a 15-minute-long experience that can be played day or night. Think of it as duck hunt plus drones in real life. Future titles include Alien Invasion, Tennis, baseball, and Buck Hunter.

Meet Larry. Larry owns an amusement park and is looking for his next big attraction. He's not alone, Grace the musical festival planner, Steve the go-car track owner, and Helen the outdoor bar manager all have common needs. They have an open space they want to commercialize. They don't want high upfront costs, and they want something that don't increase existing foot traffic to their businesses. So they can make money off emission sales, food and beverage, and advertise revenue sharing. Our solution is to take the open space they want to commercialize, provide an easy-to-set-up, low-risk and safe, eye-catching one-of-a-kind experience, that keeps getting better.

We feature a B-to-B business model using off-the-shelf drones for $20,000 per month that provides everything you need to get started. In Phase 2, we'll look at additional games, virtual tournaments, and larger swarm size. And in Phase 3, we'll move on to permanent locations, start introducing intermission advertising, as well as start collecting game licensing by opening our platform to other developers. We believe there's over 2,200 customers in the United States alone, with one customer bringing in $240,000 in annual reoccurring revenue. If we capture 20% of the market, it will bring in $105 million,

in annual reoccurring revenue. That's only one unit per customer and doesn't include additional game subscriptions or advertising and licensing. Our team has over 25 years of combined development experience with 15 years in robotics alone, and we're willing to learn anything to get the job done. I'm Matt Edminster, co-founder of Renegade Labs, and we're building the world's first interactive drone gaming experience. Okay, so would you say this is a franchise model where they pay a percentage of their revenue or a flat rate SaaS model with hardware as a service. If you had to describe the business model. Yeah, I mean, I think the one that we've looked at so far as the hardware as a service,

I mean, I'm not completely set on it. I've looked at some like revenue sharing type franchise models as well. You know, I'm really just focusing on the product at this point and making it, you know, good enough to make people want to pay that much or produce that much capital. But, you know, I would definitely say hardware as a service is where I'm leaning right now just to try to be lean and mean and get profitable as quickly as possible. What's the hardware investment for somebody who, about 30K? 30K, and that's with labor to go set it up and stuff.

Oh, okay. So maybe 20, 25K and then some labor to set it up. Yeah. And then some training, et cetera. So I'll tell what I like about a franchise revenue sharing model is. You might be able to say, we'll give you a loan on the $30,000. We'll take the first 90% of revenue until we pay back. We'll take the first 80% and you take.

20% until you pay it back. And then we flip to 80, 20 the other way. So there's all kinds of interesting things you can do. If it's a qualified person, if you had $500,000 in seed investing, you could float the first 10 people for 25K and get this going. And then you could name it something really great like McDonald's does. And then you could put the cities on a map. And then you could give people a franchise where they have, you know, the only location within,

I don't know, 25 miles or some amount of density. And then they have first right of refusal on stuff that's within 25 miles, that one, or within a, probably would do it based on, I think, population. Okay, so you have the first 250,000 people around this location and we'll open up locations that have 250,000 people. So, for example, in New York City, you might have five locations in Brooklyn, but over the same square mileage, you know, in Boise, Idaho, you might only want to have two, right, because it's about density.

Brooklyn, you could have one in downtown Brooklyn, one in Flap Bush, and they would not compete against each other because it's so far away. But absolutely brilliant idea. What's your background? How did you come up with the idea? My wife. Yeah, my wife actually came up with the idea we were talking one night, and she thought it was a great idea. And we started building it the end of 2019. And then COVID happened and I had young kids. So I put my family first and really focused on them. But I have a working prototype now. So it's real. I started with a prototype. And Kelly had the great idea. Thank you, Kelly, to you. use off-the-shelf drones instead of building all the drones myself. So I'm buying drones from manufacture drone light show drones. So I can scale faster, yeah.

Awesome. Is drone light show drones the one that does the Burning Man drone shows? They're not that particular brand of drone, right? They have their own. I think Verge Arrow did the show this year, but that it's definitely an evolving space. I think Kimball has a company doing it as well. I literally have seen Kimball's drone shows. So tell me, how many new,

it would it be for you to get this $25,000 first money in, how meaningful would that be for you? I think it would let me get my first customer, which would be cool, because I have to go through the FAA certification process. I'm ready for that, and I, you know, I think I could become profitable from it. And tell me, Found University, how meaningful was that program to you and your journey as a founder? I don't think I'd be here without it. I think I'd still be playing with my backyard toy. It's no secret that retail investors have taken the financial world by storm. But, you know, deal. Institutions have always had the upper hand in the markets. Well, Fennell is a new mobile investing app that puts the power of conscious investing in your hands. Fennell's app allows you

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All right, so here we go. Thank you so much. Great job. You can turn your camera off. And now we'll have our deliberations that you all can listen in on. Kelly, when we recap the four companies and then tell me which company

you think will return the most money for us. I'm going to ask you these questions different ways. But the first lens, just tell us the four companies, which one do you think will return the most for our limited partners. And these are the limited partners in Launch Fund 4, which is currently raising. If you want to be a limited partner in Launch Fund 4,

launch.co slash F-O-U-R. So we are promoting three things on this podcast. You can be an LPNR fund. You can join Founder University, and then eventually we'll probably syndicate these companies or one of these companies to the Syndicate.com, which you can join if you're an accredited investor. Okay.

And you can watch this podcast and you can advertise on it. So, I mean, there's just like five ways for us to win in this, but recap the four companies and tell me in your version of the world, which one you believe, Kelly, will return the most for our limited partners. Cut-throat decision, I'm asking you to me. I will make that decision. So our four companies were fantastic funding. They are the ones that are working on helping folks bring products to life.

They have Promptify, which is working through chat GPT engineers and getting those to market. We have OpenSpot, which is a B2B SaaS for healthcare companies to fill their waitlist and Renegade Labs, which is hardware as a service, bringing drone games to the world. And so for these companies, I think the one that has the biggest potential for RLP's is fantastic funding. I think it's a really interesting position. Okay. And what do you love about that?

Why do you think it's going to return the most money for us? I'm going to hear your thinking as an investor. and you are an investor who's learning, dare I say, the J-Cal playbook. So what in the J-Cal playbook gives you signal that this is going to be a great investment? I think it goes back. Did I just talk about myself on the third person? Sorry about that. You're learning my playbook.

I'm trying to teach everybody who works for me in my playbook. So go ahead. What do you think? I think in very true J-Cal fashion, a lot of people want to be entrepreneurs. And it's hard to bring ideas to life. And I think having opportunities like this that not only are that. that one piece that already exists in the world, but providing more comprehensive services, I mean, similar to how we do even in Founder University and a lot of other programs,

makes a lot of sense and I think could return a lot of money, especially with that new addition he made to his pitch and how they might make money in the future. Fantastic, Prish, which one will return the most money for our LPs and why? So my pick for returning the most capital to the LPs is open spot. and the reason being is the problem they're solving, just based on the pricing, I think they can 10x their pricing. So they're charging $150 right now and they're saving with your back of the envelope math, Jason, $120K a year. That's a huge savings. So they're essentially making the practice more money by using the tool.

And I think they have a ton more room to grow on their pricing. So I'm going to pick up these. If they're making $10,000 a month and they're charging 150, they are charging 1.5% for those open slots. I think a better pricing would be $500 a month, which is but 5% of those slots. And then anything over $10,000, they get another 5%, which would then give them the ability if they did $20,000 to make $1,000 and that still would be 5%. So they could come up with like a little bit of a sliding scale. maybe they get 7% of everything over 10,000. Who knows?

But enough to make it so people think it's too cheap. So I like your answer there. Now, I'm going to ask a different question. Which one of these companies has the best product velocity and is iterating on their product the fastest, which would be a signal for us that despite the early signal, they could pivot or end or the team could find other opportunities, right? because we have limited ability.

So I'll let you do this first, Prussia Kelly got to go first last time. Which one of these companies has the most product velocity, which is to say the product gets better really quickly. Which one has the best product velocity, do you think? Yeah, I'm also going to stick with OpenSpot. So doubling down there.

Okay. Reason being, the product also was kind of incepted in the program and also built throughout the program. And so, and after being built, also sold in the program. So they went from kind of idea to building product and to selling in that 12-week program. So I think, I think terms of product velocity there, up there. Great.

All right. So now the audience, we have a live YouTube audience for those of you who are listening to the podcast or watching it here. And I'm going to ask the almost 300 people watching. To take part in this poll, which company should Jason invest $25,000 in for the moderators who are doing this? Can Nick or one of the moderators do a poll? Which startup would you invest $25,000 in? Fantastic funding.

Promptify OpenSpot or Renegade Labs. Everybody take a moment here. I'm going to answer as well in which one I think we should do. And we will see if we can get to 100 votes here, hopefully. We can get one out of three people. I see we have 29 votes. and it's moving very quickly right now. We have one, 37 votes, 42 votes,

and I will read them off when we hit 100 votes. So everybody who's in the chat right now, YouTube.com slash this weekend is a great way for you to subscribe to our channel, hit the bell, and when we do live stuff like this, you can participate. Okay, we're at 103 votes, so we made it there. 58% of you said open spot, 21% said Renegade Labs, 11% said Fantastic Funding and 9% said Prompt in five.

I will go through each of these companies right now and tell you the right answer. Fantastic funding has a limited upside because like Etsy or Airbnb, they are enabling people to be entrepreneurs. When you enable people to be entrepreneurs, my lord, is that one of those unlimited opportunities. Uber also allows people to be entrepreneurial, Airbnb, Etsy, so many of those plans. platforms allow people to take control of their life and destiny, as you correctly pointed out, Kellyn. So that's why I love that company. Now, Promptify. These are two developers who have crazy fast velocity. I love that in a space that has unlimited upside as well. We all know, chat GPT4 and the prompts are essentially how your output is going to be based on how good

those prompts are. So this is a brilliant idea. The ability to, again, make somebody into an entrepreneur. You're enabling somebody else to become an entrepreneur on your platform. Platforms win. So instead of trying to make the products on fantastic funding, or instead of trying to make the prompts and sell them, both of those are platforms that enable other people to create product and they take a marketplace fee essentially. And we go to our third startup, the waitlist startup. This is a classic SaaS business. They sell a SaaS solution, but they could also take a little bit of the margin. Again, there's so much money at stake. This one has unlimited upside, I believe, and all three of those first ones are executing. Now we get to the final one with Renegade drones.

This is a fantastic business because, although it's hardware-based and I didn't want to like it, the idea that this could be franchise-based and people like mini-golf, which is an incredible business, small business, this one could enable, I believe, a thousand people to have small businesses that make hundreds of thousands of dollars a year, which collectively means a billion dollars. Four amazing startups, all four worthy of investment, all four share that they, or three of the four, enable other people to build businesses, and one of the four enables you to optimize a very robust business.

I'm going to ask you for your number two and then you're number one. Kelly, your number two out of these four that you most want me to make the decision to invest in is your number two only. My number two only is promptify. Why? Why? It is because I didn't get to say this a second ago. They also actually pivoted in the program. And so their velocity on this has been insane.

I finally got on the phone with him. He showed me the demo. It's incredible. It's very well built. I'm very impressed with what they've been able to do in such a short time. Fresh. Who's your number two and why? Number two also promptify building on the AI craze and hype,

but also just, you know, navigating the current cycle. And basically, I think what Kelly said is they've been iterating quickly. And also there's multiple solutions in being built currently. So it's kind of there's room for more than one player to be built here. Okay. Now, who's your number one, Kelly, and why? All right. My number one is Renegade Labs.

I think there's really something special about spending time outside and a group environment. friends and family or anybody else work environments. So I think anything that can get us outside has a big upside. Okay. And who's your number one, Prush? Number one is open spot for me. Okay.

Similar to the recent said before, I think on the mid upside. All right. So let's bring our four founders on air, turn your cameras on. And I'll just ask each of you to maybe tell Kelly Impress, since we have this moment here, what the founding university program has meant to each of you. We'll start with you, Matt, from Renegade Labs. Just the Prussian, Kelly, know what the program has meant to you.

Yeah, it's been amazing, Kelly and Peres. And I miss you guys every Thursday. I'm kind of jumping on the Thursday calls there, too. But the amount of guidance and feedback and networking I've been able to do through the program have been awesome. And the lens you've been able to help me focus on has been great, too. George. We can give Kelly and Prussia some feedback on the program.

Yeah. What you enjoyed about it? What was meaningful to you? For sure. So Kelly personally helped me a lot. She's just been super supportive in one-to-one sessions. So thank you, Kelly, for that. Both Presh and Kelly and the whole program, just helped me so much kind of structure things, be accountable, didn't want to lose my $500.

I had a ton of fun. Met great people, met great other, you know, other founders as well. which has also helped me a lot in building a great network that will continue to stay with me even when Founder University is over. Great. Phil, any thoughts on the program? I am a pediatrician and physicians are some of the worst when it comes to business education. And so this program has just been so helpful to me to learn all those things that I was never exposed to in my years of training. And so I'm just grateful for the opportunity and for all the learning and ability to grow so quickly through the program. Okay. And is it Naiman? Am I pronouncing it?

My name is Naman. That's how you pronounce it. Thank you. Yes. So maybe tell us a little bit about what the program has meant to you and what's worked really well for you. The program was simply excellent. And it was quite insane because we had a huge pivot, about three-fourths into the program. But Kelly was so helpful, so supportive. She was available. And we had calls with her. and she was really able to guide us and give us some great feedback, which helped us build our product. So I would say, if you are an entrepreneur and if you're trying to build something,

this is definitely a program you want to join. All right. Thank you so much. If you want to join the program, we're looking for founders. Hopefully, if you have a co-founder or two, that's even better, who want to build an MVP over this 12-week program. You can apply at founder. comiversity slash apply.

I'm guessing. That's right. Yep. Founder. Dot University. So instead of dot com, you do dot university slash apply. It'll be in the show notes as well here. And we're pretty permissive in terms of letting people in. And I think we just ask you to fill out a simple form. Pay the $500. If you come to all 12 Mondays and you just give us a tiny update that takes less than a minute to fill out, that's your attendance card. We give you back the $500. We don't want to burn the slots because we can only accept a couple of hundred people reasonably because we have to review people's work. So I think, you know, if we can get another 300 or so people into this, we're going to do it three times a year, maybe even four eventually. But we love being the first check into these companies. And now, I will make my decision. These four companies each have shown that they are capable of building a product. They each have shown they have the ability to make a product that customers want and that delights customers to a certain extent. And they each have shown as founders the ability to consistently perform week after week.

These are the three things that we're looking for. We want founders who can build product, who can build a team and be accountable, and who can delight customers, right? Because there are only three things that ultimately matter for an entrepreneur, their team, the product that team builds, and the customers who are delighted by that product.

Now, I could tell you that I know which of these products is going to win and return the most for our investors. But I would be lying. Because if you told me that my two or three greatest investments in history would be a meditation app, a stock trading app that didn't charge users

and a cab company, I would literally tell you I was lying. I didn't know which companies of those first 50 that I invested in would turn into unicorns, but unicorns and just game-changing decacorns in some cases, they became. which then leads me to my big announcement today.

I am not investing in any of these companies. I'm sorry, guys. I'm not investing in any of your companies. I'm investing in all of your companies. All four of you are getting the $25,000. So congratulations. You are all getting $25,000 from JCal. I am now officially your first investors.

I'm on your team. And together we will change the world. And then we will move on and raise more money and get you into accelerators, et cetera. Thank you so much for doing the program. I am so proud of each of you for focusing on those customers and getting that product built. And I just want to say thank you to Cresh and Kelly, who have done an extraordinary job of, this is their first founding university that they're managing.

So great job to them. All right. That's it, everybody. Thank you, Jason. Very excited. And everybody is accepting it. So literally right now in your emails will be. your documents to sign, and then probably within 24 or 48 hours, $25,000 will be in your bank account,

and we'll start doing the real work. Then you move over and you get to be in our founder slack. This is where the 500 founders across 300 or so investments hang out and discuss how to, you know, scale their companies together. And you'll be in there with the founders of companies like superhuman or com, etc., and be able to talk about your startup with them. and then we go on to the next phase, which is scaling your company and then helping you raise your next round of funding. Great job, everybody, and we will see you next time on this week and startups. Bye-bye.