This Week in Startups - Startup pitch competition! Jason invests $25K into one of three founders | E1932

Episode Date: April 17, 2024

This Week in Startups is brought to you by… Wistia. All-in-one video platform for business, with tools that help you create, manage, and measure the impact of your videos. Try Wistia for free at https://wistia.com/startups Eight Sleep. Good sleep is the ultimate game changer. Now you can add the Pod Cover to any mattress! Go to https://www.eightsleep.com/twist to check out the Pod Cover and get $200 off the pod plus free shipping! Northwest Registered Agent. Northwest Registered Agent will form your business quickly and easily. For just $39 plus state fees, Northwest will handle your complete business identity. Visit https://www.northwestregisteredagent.com/twist today * Todays show: Jason and Presh kick off the Founder University pitch competition (00:00), then we hear from Jared on Umbrella Sports (6:40), Linda on Mastertech (14:47), and Aleksandr on Ellis (24:20). Finally, Jason awards a $25K investment (44:17), and Presh details how to apply! * Timestamps: (00:00) Jason kicks off the show! (2:49) Jason brings on Presh to explain the fundamentals of Founder University and introduces today's pitches! (6:40) Jared Lewandowski pitches Umbrella Sports (13:20) Wistia - Try Wistia for free at https://wistia.com/startups (14:47) Linda Gray pitches Mastertech (22:51) Eight Sleep - Go to https://www.eightsleep.com/twist for $200 off the Pod plus free shipping (24:20) Aleksandr Diamond pitches Ellis (29:39) Jason and Presh assess the startups and their pitches (39:43) Northwest Registered Agent - For just $39 plus state fees, Northwest will handle your complete business identity. Visit https://www.northwestregisteredagent.com/twist today (44:12) Jason picks the startup he will invest in! (44:51) Feedback on the Founder University experience * Founder University: Cohort 8 begins May 9th! Apply here: https://www.founder.university * We are doing Founder Fridays! Go check out https://founderfridays.tech * Follow Jared: X: https://twitter.com/_playumbrella LinkedIn: https://www.linkedin.com/in/jaredlewandowski Check out Umbrella Sports: https://www.playumbrella.com * Follow Linda: X: https://twitter.com/mastertechai LinkedIn: https://www.linkedin.com/in/linda-gray-6433b251/ Check out Mastertech: https://www.mastertech.ai/ * Follow Aleksandr: X: https://twitter.com/heyaleksandr LinkedIn: https://www.linkedin.com/in/asdiamond Check out Ellis: https://ellis.so * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Thank you to our partners: (13:20) Wistia - Try Wistia for free at https://wistia.com/startups (22:51) Eight Sleep - Go to https://www.eightsleep.com/twist for $200 off the Pod plus free shipping (39:43) Northwest Registered Agent - For just $39 plus state fees, Northwest will handle your complete business identity. Visit ⁠https://www.northwestregisteredagent.com/twist⁠ today * Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups * Subscribe to the Founder University Podcast: https://www.founder.university/podcast * Founder University: Cohort 8 begins May 9th. Apply here: https://www.founder.university

You have to ask yourself, well, if I'm not able to build anything and I'm not able to find co-founders, am I ready to be a founder? What I've heard candidly from other investors is, if you can't find co-founders and you can't build a product, well, you failed the first two tests of being an entrepreneur. So just be aware of how you'll be perceived in the marketplace if you don't know how to build a product. This week in startups is brought to you by Wistia, is the all-in-one video platform for business with tools that help you create, manage, and measure the impact of your videos. Try Wistia for free at Wistia.com slash startups.

8Sleep. Good Sleep is the ultimate game changer. Now you can add the pod cover to any mattress. Go to 8Sleep.com slash twist to check out the pod cover and get $200 off the pod plus free shipping. And Northwest Registered Agent. When starting your business, it's important to use a service that will actually help you. Northwest Registered Agent is that service. They'll form your company fast, give you the documents you need to open a business bank account,

and even provide you with mail scanning and a business address to keep your personal privacy intact. Visit Northwest Registeredagent.com slash twist to get a 60% discount. discount on your next LLC. All right, everybody. Welcome back to this week in startups. Everybody loves to know what startups are we investing in at my venture capital fund. The fund is called launch. You can go to launch.co to learn a little bit more about our fund.

We are a pre-seed and a seed stage fund primarily. And one of the things we learned how to do early on was find startups that were very nascent. They were in their formation stage. And we love to help those founders navigate, you know, all the blocking and tackling the simple steps that you need to get done in that first year. Whereas we like to call it year zero when you're just getting ready to start up. And so we created a product called Founder University. And Founder Universities, I like to refer to it as a pre-accelerator.

So before you go to Y Combinator TechStars or in fact our accelerator, launch accelerator, we like to have something. and it turns out this 12-week course we created has been highly effective, at least that's what founders tell us, in helping them get started. And about half the companies that apply to Founder University, they come to the program, not even incorporated yet.

So with me is Presh. He's an associate here at launch. He helps run the Founder University program with Pelly on my team. Presh, welcome back to the program. You heard my little preamble there. Thank you, Jason. Good to be here.

Tell everybody a little bit about Founder University and maybe how it's evolved over the last couple of classes as we've invested more of our time and effort into running the program. Yeah. So, yeah, as you said, 12-week program, we started cohort one, which was really we let anyone with an idea into the program. Then we've evolved the program, each cohort slightly changing. And so now we're, we're starting our eighth cohort, which starts just under a month, May 9th. Applications are still open for that. And with the eighth cohort and the last iterations, we've really been prioritizing builder founders into the program. And builder founders, we define that specifically. So that's like

a combination of developer, designer, growth hacker, a combination, or all three. So that's how we define a builder. And we prioritize teams because we've noticed startups are hard. And so they are. Correct. Yeah. And so having a co-founder. makes things just a little bit easier. Maybe even a lot easier, you know, especially when you have three people going after it. You know, two or three co-founders, if somebody's having a bad day, bad week,

or they don't have a certain skill set, you can rely on your co-founder or even two co-founders. Three seems to be the magic number. We see sometimes people start with four, go down to two or three. Sometimes we see people start with one and that person burns out or, you know, just isn't able to raise capital

or have enough talent in that organization to compete with the people who maybe have two or three co-founder. So finding a co-founder is job one. And being able to build something, I mean, what have we found with solo founders and idea people? Idea people, you know, I have an idea, but I can't execute on it. What have we found with those startups historically? Yeah, I think it's just lack of direction as well. So the solo founder with an idea will come in and then not really build anything in the 12 weeks. And so that's what we kind of consider a failure over the program.

As long as you build something and you put it out in the world, that's step number one. But the sole founders that don't do that, that's what we're not optimizing for. Kind way of saying it. You know, we have to place bets. And so you have to ask yourself as a founder coming into it. Hey, you're listening to this week in startups. Maybe you want to come to founder. Dot university.

That's where you can apply. You have to ask yourself, well, if I'm not able to build anything and I'm not able to find co-founders, am I ready to be a founder? What I've heard candidly from other investors is if you can't find co-founders and you can't build a product, well, you failed the first two tests of being an entrepreneur. So just be aware of how you'll be perceived in the marketplace if you don't know how to build a product.

And gosh, in today's world, you're building your side hustle. You have your plunge app. You're able to build it. You have a co-founder and you've got product velocity. The product keeps improving, yeah? That's right. Yeah. And so you've learned this first hand. Yeah. Yeah. I mean, I've kind of just taken the lessons in in the program from our, our content that we do and done that as a kind of experiment alongside Founder University. So kind of dog fooding the founder university curriculum and product. You can go see that. Is it go polar? Is the URL? Yeah. Gopolar.com. Okay. There you go. You can go check out his cold plunge app and see how precious built it. All right. So today we're going to have three or four.

of the founders from this cohort, pitch me, and then we'll decide who we're going to invest in here live on the air, right? That's correct. We've got three founders lined up. All right, let's get started.

I'm going to give them two or three minutes to pitch their idea, and then I'll ask them some questions. Sounds good. Okay, first up, we've got Jared from Umbrella Sports. Welcome, Jared. Now, Jared, remember,

some number of people are only listening, so it's important that if you're showing something, that you sportscast it, in other words, explain what they're seeing on the screen. Okay, Sounds good.

All right. You're ready. Three, two, go. Hi, I'm Jared Lewandowski, founder of umbrella sports and creator of smart grip. Golf is hard, very hard, but it doesn't have to be. Introducing Smart Grip. On a mission to fix my own slice, I created Smart Grip to be discreet and effective, giving me more distance and confidence off the T.

We launched a successful crowdfunding campaign in 2022 to validate the idea and refine the hardware and sold hundreds of units around the world. The feedback has been incredible. We will offer two models. Our entry-level experience smart grip is available today, and it's permitted for use in golf tournaments by the USGA, giving us the unique ability to collect critical grip position and swing motion data while under pressure

and compare that to practice data. And next month, we'll be launching a companion app featuring order tracking, a referral program, and an in-app subscription model with premium personalized content. With golf embracing technology and other sports industries already there, let's talk about smart grip pro, which will let golfers easily view and share their performance data with friends, coaches, and club fitters. Focused first on delivering an exceptional user experience.

We will hit our first hundred million by the end of 2025 via B2C through hardware sales and subscriptions. But our biggest opportunity is on the B2B side, where we'll hit $1 billion by 2030 delivering tournament performance data and enabling software integration through exclusive partnerships with golf simulators and launch monitors and entertainment golf companies. access to tournament performance data will also enable golf club manufacturers to make better golf equipment for competing under pressure. Professional and collegiate coaches will be more effective with their students. And with a smart grip enhanced fitting process, those seven iron warm-up swings at club fittings will be a lot less awkward.

Our unfair advantage is my career as a product design leader. My love for the game of golf and my co-founder's experience in global production and manufacturing. Thank you for your time and the opportunity to pitch today. All right. massive revenue expectations there, a hundred million by the end of 2025, a billion by 2030. We like the audacity.

And so what you've built is a hardware device that attaches to a golfer's golf glove, which are specific for that sport. It looks like it goes on the back of the hand, and it must have a battery, an accelerometer, and some other sensors in it that let you track the swing. and in some way you're able to use an algorithm or some machine learning to figure out what the swing was and then maybe give some advice on how to improve it. Yeah, this is the core product.

Correct. Yeah, and we built it first and foremost to be effective. It solves a problem. Right now we see a lot of golf technology that tells you more about the problem, but doesn't fix it for you at all. Got it. Where this will be immediately effective as soon as you put it on, you'll hit better. Got it. And it looks like it's $150 for the regular version, $500 for the pro.

Is that per year, per month, per day, one-time fee? How do you charge for the product here? Because it wasn't exactly clear. Yep, that is for the hardware piece alone. Both units will be, will have the same insides. And so what we can do is if you buy the entry level and you decide you wanted the higher-end model, we can enable the data tracking. And then on top of that, we'll be charging a $99 per year.

a subscription fee for that as well. It looks like the build of materials on this is not going to be super expensive, probably tens of dollars, I'm guessing. Yeah, we have it down to around 30, 35 bucks to... So I wonder why put this friction up front of a high price or have two different models. Why not just make it, you know, 20 bucks a month, $150 a year and call it a day and simplify the pricing? We've seen, being a golfer myself, I'm very familiar with the technology.

in the industry and what golfers are willing to pay. We're right in the middle, actually, probably on the lower to middle end of where the price point for this type of technology, when you're thinking about anything that can help be related to data. So trackman, for example, is $2,000 or up. So we feel like we're pretty competitive in our pricing and won't have any. Trackman is a, it'll track your swing and where your ball goes. It only tracks a six-inch zone, essentially just a launch monitor. What is its hardware profile?

It uses a video and a laser within it, so it's able to track that six-inch zone where you make the impact. Smart group will actually enhance that. So this is like something you would install at a... Potentially. Yeah, so I know what I'm saying, the product you're talking about, that's $2,000 is a fixed installation. It's not something you just strap as a wearable. Got it. And you can't, and to add to that real quick, Jason, you can't bring it to you with a turn on a, you can't bring it with your tournament.

Put it up on the T-box after before every shot where we'll be able to capture that. Great, awesome. And so hardware's hard, presh. We normally own invest in hardware, but hardware-enabled subscriptions, we do have an exception for hardware's hard. What have you seen, Prash, in terms of the investment community when they see not only hardware, but consumer hardware? What are the lessons we've learned in that space?

Yeah, and before I answer that, I actually also want to point out, so Jared was, Jared came to founder, University Cohort 5 with just the hard Got it. And no, no kind of vision on the software side at that point. And then joined cohort seven, our latest one, with more thinking around building the into a HASS product. HASS being hardware as a service. Got it.

As opposed to software as a service that businesses use. What have we seen, fresh from the investment community, when we introduce our founders, you know, at the pre-seed stage or seed stage, when we email folks and say, hey, we've got this great hardware company. What is the reaction typically? Yeah, typically not the greatest. For a specific reason of hardware being a one-time sale and having to upsell on different products over time

versus a subscription, right, similar to SaaS, you get the hardware, which is an upfront fee, and then a subscription model that's going to be more predictable revenue for the company. And then investors like that, because now you can see how that grows. not having to continuously sell into the customer. Awesome. All right. Well done.

Jared. Hey, everyone. Quick shout out to our friends at Wistia. Wistia is the ultimate tool every marketer needs to supercharge a video strategy. It's a powerhouse for generating leads. And I want to tell you about one really specific feature that Wistia has. When you're playing a video, let's say it's a tutorial video and it's teaching people how to use your SaaS product or even your consumer product.

Well, a pop up can appear in the video that says for more information or to book, a meeting, put your email in right now. This is transformative. You can't do this with other video players. That's why you use Wistia. You get to capture people's email addresses right in the video. You have to see it. It is going to increase conversions for your webinars, for your book demos by at least 10x. And Wistie is going to seamlessly integrate into all your tools, Marquetto, HubSpot, Perot. This means all those fresh leads are going to go automatically into your marketing platform. And you can take those leads and score them and then get them into your nurture flows where you're nurturing those leads and turning them into happy customers. Keep moving them through your sales funnel effortlessly with Wistia.

They even let you add custom CTAs, calls to actions to your videos to drive prospects to the next stage of your funnel. So if you're looking to elevate your lead gen, streamline lead nurturing, and enhance user engagement with advanced analytics, Wistia is the perfect tool for you. Wistia is everything a marketer needs to create host analyze and market video. Try Wistia for free by heading to wistia.com slash startups. WISTA.com slash startups. Let's meet our next founder. All right. We've got Linda from MasterTech. Okay. Linda, welcome to the program. You have two minutes to pitch. Three, two, go. Hi, we are MasterTech AI, and we're using AI to make auto repair faster, easier, and safer for shops and DIYers. Meet John. John is an auto technician working at in the

independent shop. Unlike in dealerships, John needs to be able to service any of the up to 60,000 unique models of vehicles that exist in the U.S. today. However, there is no current software platform that can easily aggregate all the information he needs. As a result, John will often only rely on his personal experience, and with a shortage of qualified technicians in the industry, vehicles are often misdiagnosed and repairs are done incorrectly. Introducing MasterTech AI. MasterTech AI will aggregate all technical service bulletins, community data, along with the vehicle's personal service history so that John can easily access all the information he needs to quickly root-cost vehicle issues.

Additionally, when it comes to performing repairs, MasterTech AI will guide John through OEM specifications and procedures with an AI conversational interface. To ensure data accuracy, we are finalizing licensing agreements with OEM data providers for all vehicles. MasterTech AI will also index the most relevant DIY demonstrations from YouTube where parts, tools, steps, and warnings are extracted. This ensures that the job can be done safely and efficiently, preventing mistakes and comebacks.

There are over 240,000 auto repair shops in the U.S. To get to 10 million ARR, we will need over 2,700 shops. To get to 100 million ARR, we will need over 27,000 shops. Our team consists of myself with 17 years of engineering experience, at Microsoft and Niantic. My co-founder date has over two decades of experience in auto repair industry, including only an operating a seven-figure shop. Thank you.

We are MasterTech AI, and we're using AI to make auto repair faster, easier, and safer for shops and DIYers. Oh, wow. So absolutely fantastic. Great presentation. You are taking all of the knowledge out there on how to fix cars. You mentioned these bulletins that come out. I guess these are things that

you know, Honda or Tesla, I think they do most of the repairs themselves, but, you know, the Hondas of the world, the Toyotas of the world, they come out with these bulletins hey, here's what's wrong with the axle, the transmission, the engine, spark plugs, whatever it happens to be. You want to put that into

a language model and have technicians be able to ask questions, hey, this is what I'm seeing, and then it would inform them, here are the possible ways to diagnose it or fix it. And then you also seem to say this would be also for DIY folks. So I guess consumers could go use this language model. The question always becomes here, Prash,

how is this better or different than what you could do natively with, you know, Gemini, Claude, or, you know, OpenAI, whatever language model is out there? So, Linda, how will this be different than what I can natively do if I say, hey, I'm hearing some clanking from my Toyota Odyssey. You know, it's a 2017 model. How is your system going to have an advantage over, say, chat GPT? Absolutely. So the advantage that comes with any AI model or any sort of vertical AI application is with the data.

Right now, if you go to chat QPT or any of the other AI chat bots, you will get some generic answer if you ask those types of questions, but they do not have either in the training data or direct access to all of the OEM specifications and procedures. So, you know, from my, you know, kind of all those things I've learned in the space, there's actually a vast amount of technical data that's specific to every vehicle, right? That's specific to the YAR-MIC model and even beyond that, the sub-model, the trim, the engine type, and these are things that could make a huge difference as far as, you know, how to do it correctly versus doing it incorrectly and causing the car to be in an unsafe state for the technician and on the road.

So we are licensing actually the OEM data directly through a data provider from the OEMs, and we are finalizing the approval process, and we've gotten approved for majority of the data that we need. So we are able to leverage that data with our rag retrieval so that we can get them the exact data for their vehicle. And so that's for the OEM procedures along with the technical. People Service bulletins. So these are like known issues that are put out by the manufacturers. What would the interface for these be? What's the interface for the interaction?

Is it going to be the mechanic takes out their smartphone and talks to, or they type into their phone, or do they wear AR glasses and record videos of what they're doing in real time? What's the interface like for the mechanic? The interface to start off with will be a web interface for the chat bot. So the technicians today, often they will have a personal laptop that they use to look up information before they start the job. So this is how they're looking out technical information today. So that's we're providing a faster, easier, more accurate way to do that.

So they'll have a laptop open. They go to a browser. They ask the question there. They type it in, got it. And in the future, do you ever see, you know, people wearing a camera or something to that effect? Because it does seem to me proprietary data would be very valuable if you can get this in the hands. of a thousand mechanics and let's say they were wearing AR glasses or even just like the off the shelf uh you know cameras attached to a camera a camera attached to their shoulder or something

if you could actually record them repairing stuff my lord you could you could get some really good proprietary data so to tell me about where you think this might go in the future absolutely all of that is on our roadmap so we're starting out with the the web browser app experience And then we're going to look to build a voice assistant, right? So these mechanics, you know, they're working on when they're actually doing the job, they need to be hand-free from, you know, using a digital device. So the easiest, you know, kind of product to build next is to do a voice assistant, right? Maybe a mobile, mobile app that is voice first.

And then really, AR has always been our long-term vision, you know, the like Microsoft, you know, AR headset, one of their first demo. was for, you know, technicians to be able to visualize all the specifications as they're twerking, like, the specific parts of the car. And there's been a lot of, like, really interesting demos that people have, like, had together using Applevision Pro as well, where they have, like, YouTube running on one side with a demonstration along with some technical data. So HoloLens type thing. Yes. You could put that on and you could get some extra advice.

And then there's a middle ground where being able to talk to the assistant and say, you know, I changed Spark plug number four. still not working, and it maybe gives you another idea. Absolutely fantastic. How are you going to charge for it? What's the pricing? Yeah. So we are looking to be around $300 per month for these shops. And that's around the ballpark range that they're paying for similar kind of data

providers for how they look up technical information today. Great. $300 a month, $4,000 a year. Sounds like a great pricing model. And is the product in market yet? Do you have anybody testing it or using it? So for our new MVP, we're launching it at May 1st. So this is with the OEM data.

Yes. Awesome. May 1st, we'll have some more information. So this is what happens at the pre-seed. We have a vision. We have some mock-ups and we're trying to make a decision. Do we believe Linda's vision? Do believe she can execute with all this great experience of Microsoft and working in

AR before? Well done. Linda. Elite performers have a secret and it helps them stand out in their field. You want to know what that secret is? I can tell you. sleep, whether you're an athlete, an entrepreneur, or are you just a career-driven professional, like the people who listen to this podcast? Quality sleep is the fuel that powers your success.

Well, how do you get deep, restful sleep? Very simple. You do what I do. Eight sleep. I got two eight-sleep mattresses. I never miss a night on my eight-sleep, and they're selling more than just mattresses right now. You can sleep like a champion with the eight-sleep pod cover. That's right. You don't have to get rid of your existing mattress, you put the cover on, slips right on top of your bed, and instantly transforms your sleep game. We're talking about dual zone heating and cooling. So if you have a partner and you're both in the same bed, you know, one might sleep hot and one might sleep cold. I like it a little chilly-willy. And this smart temperature adjustment keeps you in your ideal zone for a deeper uninterrupted rest. In other words, you set how you like it,

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free shipping. Who's up next to Fresh? All right. Next up, we've got Alexander from Ellis. Okay, Alexander, welcome to the program. Tell us a little bit about what you're working on with Alice. Hey, I'm Alexander, the CEO and co-founder of Ellis, where we help startups get customers. Oh, so imagine for a second. Imagine for your second, you're a business owner, or a startup founder, and the first thing you want to do is go out into the market and try to get some customers. So you're going to try and do that with the cold email campaign. First thing you're going to do is work with the registrar to buy a domain. I hope you chose one with a great

UI because you're going to spend some time manually configuring it. Work with one of these providers demarking or postmark to have continuous monitoring in place so spammers don't use your domain. You're going to work with Microsoft private email or Gmail to get an actual inbox and then warm that inbox up with instantly your warm-up inbox. Now you're going to have to buy a MailChimp, Sandgrid, or HubSpot, subscription, set up the campaign. Make sure that your campaign and all of your services are compliant with Google and Yahoo's new sender guidelines, buy a B2B contact database or find the people you're going to contact manually, and then glue all this together, and now you can finally go out and start an email campaign.

But that was extremely exhausting, and when I first wanted to do this, I just wanted to pay someone that knew what they were doing to handle all of this for me. So I built Ellis, a unified B2B email marketing platform that lets you reach out to leads like you know them. We automate all of the setup I just mentioned, and we personalize every single email that goes out with AI. And our spam rates are less than 2 and 1,000 of our emails go to spam. At the end of the day, that's a 5x better conversion rate for you than if you use the traditional templated email marketing system.

We charge a monthly subscription and a credit for each person we contact. We never charge if your email bounces or go to spam, and it's 50% plus margins on all of our accounts. In our first four months of launch, we've got nine customers, eight startups, and enterprise, and we've crossed 1,200 MRR last November. Happy to answer any questions you have, Jason. Okay, call me J-Cal if you like.

Very nicely done. I know this problem firsthand. I've had countless startups ask me, how do we warm up our emails, how do we not wind up in spam filters, how do we do sequences that don't annoy people, you know, anybody who's in business right now, you get far too many off-topic,

spam-y, you know, sequences, but sometimes you get a sequence and I get some that I'm like wow this is really interesting it is targeted I'd like to know more about it so I think what you're building should because it's going to cost money and because it's not free you should get people who have real products real services and I guess you'll say no to people who feel spammy so that you can keep your service a little bit more high end what does it cost for somebody to use the service how do you charge 300 a month subscription and 500 for a thousand people to contact. Okay.

So $300 a month for a subscription. That's the baseline subscription for a one domain name, 10 salespeople, one salesperson. How does it work in terms of, you know, somebody using it for, you know, if you had 500 salespeople versus I don't know how many salespeople or emails you can send them with a $300 a month version? So we work with startups. so we don't have any seat-based pricing right now. That's just for, yeah, company. Got it. Okay, so you'll figure out when you get to larger enterprises,

how much to charge. You'll have small, medium, large. Fresh, you've done a lot of this kind of email sequencing before in your career. Tell me a little bit about how you would assess this service compared to the Franken service. You would have to build yourself, and you probably have built. Yeah. Problems definitely there. We do this for a bunch of launch domains,

had to go through a similar process. So that all makes sense. I think a lot of the interesting piece is not landing in spam and having creative emails that catch people's attention. So the combination of those two things, I think is what is really to outline here and why we think, like Ellis is interesting. It's a huge problem.

Everyone's doing for B2B companies, like you mentioned, you know, email is the primary source of communication there for all those deals. And so as long as you can get in front of all the thousands of females you get in a day, there's like some insight there that I think is interesting. I'd love to see it just put all these services together, even, you know, like the Zoom info, like getting the leads in there as well.

So eventually, like I think you can really build the full sack here. Really fascinating. And startups are a great place to start selling into. because they're resource constrained, they're clever, and they're willing to adopt new technologies because they're looking for an advantage over the big companies. And they're very promiscuous when it comes to trying new things or maybe seeking out new solutions

so that they get an edge on their larger competitors who have more resources and can throw people or money or advertising. You know, a startup with five people, they may not have a bunch of cash laying around. So they will use, services like yours. So really well done. Okay, so now I got to make a decision which one I would invest in. And so let's go back and forth through these and tell me when we put it through the launch system of evaluating a company. And the qualities we look for in a company, candidly, which qualities did each of these companies tick off?

Let's go through each one. And we have the reasons why we like to invest in a company. So what did our team come up with here? Investing at our firm is a team sport, but we like to make individual decisions. So we act as a team when we deliberate on which companies to invest in, and then we like somebody to take ownership of that investment. So let's do the deliberation process here. Tell me about one of the companies and what were there things that you have of why we

should invest? and I'll challenge you on those. Yeah, okay, cool. So let's do MasterTac. The couple tags here, Builder Founders, that's Linda and her co-founder. Builders how? What specifically, yeah?

Yeah, so Linda is a, was head of engineering at Pokemon Go at Neantek. And then also at Microsoft, I believe, as well. So that qualifies the builder founders there. And she has a co-founder as well. Okay, so there's co-founders. We like that. and then she's an actual engineer.

Is she writing the code for this startup? Because you know, that's going to be my follow-up question. You know, sometimes we'll have somebody on the team will say, oh, it's a builder founder. They're a developer, but they're not actually writing the code for this company. The last time they wrote code was, you know, when Bill Clinton was president, and, you know, they were a frontline coder. We're looking for people who are writing code today.

So is she writing code? Yes or no. Yes. Okay. Fantastic. So we have builder founders. That's great. and we have two co-founders, two reasons.

What else do we have in there of reasons of why we might invest? Yeah, the other is a business model or what we call our core five business models. And so in this case, MasterTech is a software as a service. And that is what we consider our core five. Okay, SaaS subscription, pretty straightforward. So we have three great qualities here. Out of the 13 that we look for currently, some of the other ones would be world-class, design. This doesn't have world class design yet. We would define world class design in our

rubric as Apple would feature it as the app of the day. Obviously, we're not there yet. You know, like Com or Robin Hood level award-winning design. So when we see award-winning design, we might check that box off. That's not the case here or for any of the companies here today yet. We very rarely see that. Had a previous exit before, that's not the case here, or have raised venture capital, not the case here. Those are two of the other qualities we look for. Product velocity, not yet the case here, but they're getting there. So we have three solid qualities.

And then conversely, reasons to not invest, what would be some reasons we might not invest in this company in your mind, Fresh? Yeah. So, I mean, one is, and you mentioned it earlier, was can't other AI models just do the same thing if you give them the information. And so that might be a concern, right? These models are getting so good. That would be something to flag. Yeah. Yeah, is how do you compete against what you can natively do?

Great. Let's assess the next startup of why we might invest in the next startup. So we ask ourselves these two questions internally. We try to have a dialogue. This is an abridged version of it. Why we should invest, why we shouldn't invest. When we see two or three reasons to invest, we get curious, take a second or third meeting, let alone four or five or six reasons. And when we see two, three, four, five reasons to not invest, red flags, let's call them,

you know, we may work with the founder and say, hey, we have these concerns. What do you think, right? And one of the concerns might be there's an accounting problem, or maybe they diluted the equity too much. You know, maybe it's too competitive of a fail to slow sell cycle to all different reasons of why you might not invest in a startup. So let's do the next one. All right. Next one, let's do umbrella sports. So Jared's company, another thing here, builder founder.

You can see a theme here. Jared was led UX at a golfing company prior and also has two other co-founders. Got it. So we have multiple co-founders. And at least we know one of them is a builder. The other two, are they builders or not? You know? They are pretty certain there are.

One is a CTO and then one is the product person as well. So what I would want to double click on there is, is the CTO? Tio actually writing code or the other two founders writing the code when they say their product product manager. That's not really what we're looking for in terms of a builder. We're looking for somebody who actually does the actual design, the U.S., putting those pixels together. But okay, we'll go with builder founders.

Sounds like it's probable that the builders are writing the code. Great. We'll get confirmation on that. The other one is capital efficiency. Oh, okay. So they're doing a hardware product. and they were able to sell hundreds of units at the start by joining Founder University within the program. So we flag that as interesting because building hardware product isn't easy,

and they were able to ship the product. So to be clear, one of the 13 reasons we look for in a startup is capital efficiency. Can they get a lot done with a small amount of resources? Why is that important? Startups are almost always resource constrained. So if you're capital efficient, in other words, the product is improving constantly with very small amounts of capital, which typically indicates you have builder founders and multiple co-founders because they don't need to get paid or they might be just taking a small draw. This is why in Silicon Valley in the startup ecosystem, the small teams with builders are capital efficient.

They get product velocity. And ultimately, they learn more. So we're giving you the secrets of how we decide who to invest in. But you can also reverse engineer those founders who are listening to this week in startups and understand why. Why are investors obsessed with multiple co-founders who are good builders and are capital efficient and have world-class design? Because we've seen this movie before. Capital efficient teams with builder founders and multiple co-founders, they just tend to go further faster. I think another one, which was, we have one of our tags is product velocity.

Yes. Right? And we track that from, we do it's something what we call the weekly update in Foundry University. So we can see week over week changes, how the product is evolving. And that's how we track that. And so we flagged this because each week there was something new in the product that Jared and the team had done. Product velocity is super important. The teams that can release more products, run more.

experiments, as we call them in the industry, they're going to learn more. And so if you have product velocity, fantastic. That's great for learning more about your customers. Some teams take a year to release a feature. Some of them push new features every week. The people who push new features every week remove old features that aren't working every week, they tend to learn more, go faster, and build better companies. So product velocity absolutely critically important. So this company has builder founders, product velocities, and their capital efficient, and they're moving to a subscription model,

which we like. There's four really great features of this startup team. Okay. And let's do one more. And last one is Ellis, Alexander, this company. So we had builder founders here. Both of the co-founders are technical and a writing code.

So you have two people writing code. That's really exciting for us. When we see two developers, writing code, you know, whether they're paraprogramming or not, but man, you just think about product velocity and shipping code. That's yum, yum, for us. And for the founders, right? They're going to learn more about their customers.

Great. And it makes sense. If you look, they showed all those things they bolt together fresh. It's like there's 20 startups being, you know, abstracted into one service. You're going to need to push a lot of code. That's true. The other interesting piece is serial team. So Alexander and his school founder worked together on a pre-start up.

Great. So serial team, builder founders. Did they have product velocity? I assume they do. They do. Yep. Okay, great. They don't have world-class design.

What else did they have? And then business model. Oh, great. So four. So when you look at this, as I said earlier, somebody gets to three, four reasons to invest. We're going to get curious. We're going to say, hey, I wonder if they will add

more to this mix. Now, you can't have a previous exit or have work together or have raised venture capital before. Those three things are just historical facts, right? You can't change those. But you could have world-class design. You could find a world-class designer. Give them 500 bucks, $5,000, whatever it is in between. Maybe you do what we've done, press you and I have actually done this over the years of working together where I said, do me favor, I just don't trust that these designers are going to get us anything, just hire three, give them $500 each to make one screen. And then, remember when I would do this? Then, whichever two are best, give them $1,000 to do the next phase of this, whichever one's best, give them another $2,000.

And so $2,000 for the final stage, $2,000, $1,000 each for the first, second phase, $500 each, $2,000, $1,500 to get three people to kind of work towards an outcome. And those kind of strategies can work, but you need time and you need a little bit of capital. Hey, startups, you're a new company and you're looking to form your business. But navigating through a maze of hidden fees and legal jargon, it's complicated. It's going to eat up all your time. Well, Northwest registered agent will form your business quickly and easily. And it only takes 10 clicks and 10 minutes. They provide you with a full business identity setup.

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visit Northwest Registeredagent.com slash twist today. That's Northwest registeredagent.com slash twist today. So now that gets us to the big point. Hmm. You can only pick one, Prash. Which one do you think is going to give us an RLP's the greatest return on investment? Which one has the highest chance of getting a return? And we're looking for as a siege stage company,

every company should have the ability to return 100x. So if we're investing in the seed stage at an accelerator level, it might be a million, two million dollar valuation when you go to an accelerator or pre-accelerator. Seed stage four to eight million or pre-seed, you know, tends to be, let's call it three to seven million. Seat stage tends to be five to twelve million. So valuations, a hundred times that, you've got to get to a couple of hundred million

dollar valuation for your company, at least to get a hundred X for your pre-seed, seed and stage investors. So which one do you think could turn 100 times RLP's money, our limited partner's money? You had to just pick one. That's a great question. Pick one. So I think I like MasterTech for this reason. And the reason is I think on her, so on the master's side of the market,

Linda had showed 240,000 auto repair shops in the U.S. and then of that, they needed to get to $10,000, I believe, to get to $10 million in the ARR. So those numbers, that seems doable. And then to get to $100 million, I think it was $10,000, or around that number.

And so that seems like a very clear path of how they get there, charging $300 to these shops. Got it. So you looked at the bottom-up total addressable market, the Tam, that she created, and it made logical sense to you that their team, if they get product market fit,

could execute and get to thousands and then load tens of thousands of garages, mechanics here in the United States. And it's a believable story that they would get enough value to spend $300 a month on this product. I tend to agree with you. It does feel like they have the straight shot

as a SaaS product to get there. SaaS products can be very boring, but also Ellis, also kind of boring, and there's a straight shot there as well and you have two developer co-founder so I was going to go with Ellis first then I was going to go

with Master Tech and then you know consumer's hard but I'm looking at all three and who's your number two in that? Number two is Ellis okay so and I guess it's similar reasons yeah

okay so this really comes down to business to business versus consumer consumer is really hard, it's fickle. But again, our top two investments in history are, oh, Robin Hood. Robin Hood, right. So top three investments in terms of returns for our investors, Uber, Robin Hood, Com. So here we are. We're saying, well, wait a second.

The SaaS company feels like it's the better investment. But wait, we are three of the top three are consumer businesses. And so it turns out consumer businesses, when they hit, they get gigantic. why? There's a lot of consumers. So, you know, business to business, though, smaller outcomes, but less risk. Let's bring our founders back. I just want to just commend everybody for building real businesses. Welcome back, Linda, Jared, Alexander.

These are all real businesses. You've got a lot of work ahead of you. But you can only invest in one. Only invest in one. Preci is giving me his feedback. You've heard feedback. Oh, wait. second.

I'm the GP. I'm the founder of the fund. I can do whatever I want. I would like to invest in all three of your companies. Is that acceptable to all three of you? Absolutely. Okay. Can we be partners, Jared?

It's okay? For sure. Okay. Linda, can we be on this adventure together? Try to build something here. Okay. Alexander, are you cool with having me on the cap table? All right.

Okay, everybody gets money. If you want to get money, have us on your team. You want to be part of the excitement of building startups. well, don't. It's too hard. Do not apply. Do not be involved in startups. Do not invest in startups.

It's too hard. I don't want anybody who hears my voice right now investing in startups, and I don't want you creating startups. However, if you're the lunatic who when you hear the say, I'm going to prove J-Cal wrong, I'm going to do it anyway, that's the person I'm talking to right now. But for the rest of you, far too hard. Linda Jarrett, Alexander, you're lunatics.

you're going to suffer for years. There's a very slim chance of success, high chance of failure, pain, suffering, missed weekends. You're not going to Coachella. You're going to just sacrifice and you're going to work 60, 70, 80 hours a week with the default case, absolute failure and embarrassment. But with that small chance, that maybe, maybe, maybe we hit the bullseye. Okay?

And that makes it all worthwhile. But if you're listening to this and you're questioning it, probably not for you. But if you think, you know what, I want to give it a shot. I want to really work hard. I want to put 60, 70, 80, 90 hours in a week. And, you know, all due respect to Microsoft, you know, or working at Google or Uber,

those are all great things you can do with your life. But if you want to get to the end of your life and say, hmm, I had that itch and I didn't scratch. Had that shot and I didn't take it. Well, if that's you, go to founder. University and apply to come to the 12-week program. Linda, I'll just go around the horn here as we finish up, and we start this adventure together to try to build these companies.

What was great about Founding University? What could we improve? Because we're always trying to make our product a little bit better. Well, for you personally, what was the highlight of Founder University? What did you love about it? And what could we improve? I'm not going to say, what did you hate? But, you know, is there something we could improve in the curriculum or the process?

Yeah. So for me, the biggest thing that I love about Founder University was a community. So as I started out on this journey, it turns out being a founder is very lonely and just being able to network to see other founders going through similar challenge and the struggles and perseverance through them. Like it's very inspiring. And that has been the biggest thing that that's benefited me. Fantastic. What can we do better? I think like maybe some of the curriculum could be a little bit tighter or maybe even more

networking opportunities where people can get together. Fantastic. Okay, so we've got to work on the curriculum. We're going to get some feedback for you offline about what specifically we could do better, but more opportunity to get together. And hey, we're doing Founder Fridays now.

So that is something we're doing. I think you can go to founder Fridays. dot tech. The amazing. Dot tech domain name. Is that what we're using, Cres? Yep,

that's right. That's the main page. So we're trying to combat loneliness. We created Founder Fridays. Pretty simple. You host a local meetup in your city. Hopefully it's two to 12 people,

I think, is the right number. These things seem to be getting large. We can pull up Founder Fridays. dot tech, and you can see some pictures from these Founder Fridays. We've been putting these on, trying to keep them small. They've been getting too big.

I think, I'm starting to sound like Trump. they're getting too big, okay? Try to keep them smart, but tiki. All right, how much do we love our founders? Founder Fridays.com. And we'll work on our curriculum. But you should host one, Linda.

And now that you've got us in the cap table, what city are you in, Linda? I'm just outside of Seattle. Perfect. So you'd be perfect for you to host the Seattle one or join in on that. The first Friday of every month, we try to host these during the day,

could be at night, could be in the morning for breakfast, could be lunch, could be co-working session in the afternoon, The only thing is you have to be a founder to come. You can't come as a service provider. If you work for Amazon Web Services or AWS, if you're a lawyer and accountant,

any of those great people, service providers, this isn't the event for you. This is only for founders. We might let you buy coffee or something in the future. People will let one service provider in. Okay, Linda, thank you for the feedback. Jared, what did you love about Founder University? And what could we do better?

Well, I absolutely loved working with Kelly and Prisch. Fantastic. Both times around. I was able to make the kickoff in person this year in San Francisco, which is incredible. I love your honesty. I think for me, being a designer, I crave honesty and real feedback. And so that's been extremely precious to us throughout all this. Ideas come cheap.

Ideas are easy. Making that idea of business, however, is something completely different. And I've been learning a lot. So very appreciative of everything from Founders University. Great. Anything we could do better? For me, there's a lot of content. It's a lot to digest.

There is a great wiki that you offer. I would love to be able to spend more in-depth time with those speakers, whether or not that's a sort of tangential session or a separate thing. But I love the pacing that you have. I just would love there are certain topics to dig into a little bit further. You know, it's really great feedback. We have Linda saying give us more content. You're saying, I need more time one-on-one with the speakers, maybe to go more in-depth.

And, you know, one-size does not have. at all. And so now that we're going to be on your cap table, you're going to get into the super secret Slack room with 800 other founders. We backed over the years. I think we've done 400 startups now. So it's like 800 founders in there. And then founder Fridays, you know, we try to do quietly events for our founders. So we do like these office hours, et cetera. And you can help with that. If you're a great designer, maybe you could lead a roundtable discussion on design and refining your design. So great feedback. And we're trying to do more you know, one to few events I call them.

This is like the point of Founder Fridays. Anybody can throw an event for a thousand people, just put out beer and pizza and say startups and a thousand people show up if you make it free and you put out beer and pizza. And then, you know, anybody can do a one-on-one meeting. But to get people to consistently come every month on the first Friday of a month to a 10-person meetup

and have the same 8, 9, 10 people show up, that's where the magic is. So that's what I'm obsessed with. Okay. Alexander. what did you love about Founder University? What do we get right? What do we need to improve on?

I love the people, first and foremost. I loved Prash, I loved you, Jason, loved Kelly. I loved the structure. I loved giving the weekly update every Monday in the Thursday bonus section. When you're a founder, the world is really unstructured. So having a consistent Monday meeting where you have to report everything you've done was nice. for things to work on, it would be awesome if that meeting was in person

so that we could get to know the other people more. I would have loved to have that same vibe that we had at the in-person kickoff every week. I mean, that would be awesome, especially for the Bay Area founders. Okay, there you have it. So there's something for us to work on. Presh, everybody says,

you know what they want? More in person, more learning, more curriculum. I think we're starting to see a theme. The right founders. Love accountability. They love that Monday, being accountable to themselves, their team investors, and the right founders. Man, their sponges, you can never give them too much information. If you give them too much information, they're just going to be like, Jared, which is, you know, oh, get me, I need this expert, get me more time with them.

So we can never work hard enough to get great information in networking for our founders. It's so obvious. But I appreciate y'all reinforcing it. make sure we clip this Presh. And we give our candid reviews to the rest of our 20 person, 21 person team at launch. We work really hard. Thank you to my team, Kelly Presh. Everybody involved.

Heidi, the sales team, which helps, you know, keep the lights on here, Hannah, Jamie, Matt. And then all the investment team from Mike Savino to Ashley to Jackie, Kelly, everybody, Heidi, working really hard. and the young guns, Andre, Bianca, all doing a great job. Caitlin, who did I miss? I miss anybody? I'm sure I miss somebody. But great job, everybody.

If you're passionate about startups and you want to be the coordinator of Founder Fridays, which means working with like 100 cities and the River team, I'm looking for somebody either half-time or full-time, a paid position

just to work and keep that project going because we're so busy. Investing in companies, founders are so busy. We need a coordinator. So if you want to be the founder, Fridays, I guess in the old days, we call it a list mom. You know, the person who makes sure and mothers the group and, you know, parents the group and keeps everything moving forward.

We're looking for like a list mom, a manager, a GM of Founder Fridays. Paid position. I don't expect anybody to do it for free. I think minimum 20 hours a week, maximum, you know, full time. But, you know, it's a remote position. Looking for somebody great. We'll see you all next time. Bye, bye.

Thank you