This Week in Startups - TWiST News: Nvidia's AI Edge, Google Might Have to Sell Chrome, and Founder Fridays Updates | E2049

Starting point is 00:00:00 So, JP, do you think that the DOJ has gone far enough in its proposed remedies? I was reading Luther Lowe, who had Paul's U.S. Y Combinator, and he was saying that some of Google's complaints are them actually just pretending to be upset and that the DOJ could have gone further. So was brave hoping for an even more punitive set of remedies? So everything we need is in there and then some. It's all about monetization, right? And there's two ways you can monetize, and there's two ways you can monetize. and there's two ways that Google can remedy the situation. One is if you have a browser like Brave,

Starting point is 00:00:34 and you send a lot of queries to Google, because half of our users, let's say, are still using Google as a search engine. So we send them a couple billion queries a month for which they don't pay us, right? Oh, yeah, yeah, we're talking about big numbers. And one billion queries a month are coming to our browser, but we get no money on this traffic we send to Google for free, for a year.

Starting point is 00:00:53 You're talking about hundreds of millions of dollars that we've given them. This Weekend Startups is brought to you by, RAMP, the corporate card and spend management software designed to help you save time and money. Get $250 when you join Ramp today at ramp.com slash twist. DevSquad. Most dev agencies only offer developers. Why? Because product management is hard.

Starting point is 00:01:17 Get an entire product team for the cost of one U.S. developer plus 10% off at devsquod.com slash twist. And, DigitalOcean, whether you're just getting started with AI, or seeing you. your project take off. DigitalOcean is the cloud platform that lets you focus on what matters, building killer apps. Right now, get up to $100,000 in free credits at DO.co slash twist. Terms and conditions apply. All right, everybody, welcome back to this week in startups. I'm Jasoncalcannis, X.com slash Jason, Instagram.com slash Jason, LinkedIn, Jason, LinkedIn, and me on all the platforms. I interact with people. D.Ms are open. And with me, of course, Alex Wilhelm, the famous TechCrunch editor and writer has joined this week in startups to chop it up with me three days a week.

Starting point is 00:02:05 And we've got more guests coming in. We're going to be doing some triplets and quartets coming up. If you have people who you love and you want to see on regular rotation here on this week in startups, let us know because we're doing news three days a week with interviews. We put it together. Alex, how you doing on a Thursday? Yeah. Yeah. No, I'm doing good. I'm just kind of amazed at how much is going on in technology right now, given that it's this time of year. I've been a reporter for a long time. Usually, back in the day, things would slow down a bit, but it feels, I don't know this is just post-election jockeying and so forth, Jason, but it feels like the news velocity is about as high as it's been at any point this year. So I'm feeling good. Lots to talk about.

Starting point is 00:02:45 You are right. The velocity of news is tremendous. I just saw Matt Gates is not going to be attorney general. He took himself out of the running. It's just nonstop. And with Trump, You have to understand he's an entertainer, and he does a lot of entertaining things, and the press loves, loves Trump because Trump equals ratings. So there's going to be a lot of politics and policy on the show over the next four years. We're going to try to keep it out of the lunacy and the Matt Gates craziness. We're going to try to keep it policy-based. But of course, here we are. We're about to talk about Google on the docket and the Google breakup remedies.

Starting point is 00:03:25 Yes. And I think that Matt Gates would have played a major part in that, but now we have to take that out. So it's going to be crazy. And one of the great things is having people who are first principled nonpartisans to talk about it. And that's what we're hoping to do here on the show. Let's get right to it. You know, I know you were very excited about Nvidia last night and they crushed it. Yes.

Starting point is 00:03:48 Just give us the overview here. I mean, this is extraordinary. It was incredibly impressive. As we said, you know, if they just met expectations, probably not enough. We expected them to actually beat them by a little bit, Jason. And here's the number. So revenue expected 33.2 billion.

Starting point is 00:04:03 Revenue actual, 35.1. And then earnings per share expected, 74 cents, actual 81 cents. And then, yeah, I know, right? And then critically, their guidance for the last quarter of the year, their Q4 of their fiscal 25 did have guidance that met investor expectations. So everyone's pretty happy. shares haven't moved too much, Jason, but it does seem to be that this indicates that the hype train AI can keep going for at least another quarter or two.

Starting point is 00:04:32 All right. I just want to pause here and say, they beat the top line by $2 billion, $1.9 billion. That's extraordinary. Yeah. I mean, that is just bonkers on already high expectations. They beat the EPS by $0.7 a share, which is about 10%. That's exactly what I was about to say, about 10%. That is extraordinary.

Starting point is 00:04:58 And they're saying revenue in the next quarter will be 37.5 billion or something to that effect, which is another two and a half billion, another almost, you know, whatever, 10%. I mean, it's just bonk. And that's quarter of a quarter to go up 8% or something. Yeah. But the stock didn't move. I think that means that it's all priced in. Everything's always priced in. So be careful out there, folks.

Starting point is 00:05:22 This thing is a juggernaut. It's not going anywhere. And the question I had for you yesterday was, is anybody going to compete for these dollars? Is there a competitor for these dollars? And it does not seem like that has emerged. I know Amazon has a big project to make their own chips, et cetera, and competing products. Is there any on the horizon headwind or, let me have as headwinds? Headwinds would be things that are not direct competitors.

Starting point is 00:05:49 They would be things like the economy, et cetera. I guess there's two things that people are wondering. One, will there be a competitor for this category of servers essentially in data centers for AI? And then number two, this hitting a wall concept that people have been debating, you know, is there going to be some plateauing of AI and therefore the need for these? So any insights on those two? Yeah.

Starting point is 00:06:20 So the thing, the way that I would answer, the question about AI chips, AI-focused chips and competition is that as it stands right now, they have already secured sufficient leadership in the next generation of chips that any material competitor from a startup or I would say a big tech company as well will be in the next generation. So the investing call after Nvidia's earnings focused a lot on Blackwell, Jason, which is the successor to the Hopper architecture that we all know, the H-100s that are out there. and just quoting from their earnings call, demanded greatly exceeds supply.

Starting point is 00:06:57 We are on track to exceed our previous blackwell revenue estimates. Customers are gearing up to deploy blackwell at scale, et cetera, et cetera, et cetera. So it seems that invidia will retain the crown for the foreseeable future. That said, there are a lot of startups out there that are pursuing this because the company makes so much money. And Jason, I think any business that has 35 billion in revenue and net income of 20 billion in one quarter is going to attract, I mean a sea of competitors over. time because there's just too much profit there to not go after.

Starting point is 00:07:23 I guess the Amazon in-house AI chip, Traneum 2. Yep. That's the one that's designed to reduce essentially Amazon's reliance, but Amazon is one of the biggest customers because they have AWS. So even if Amazon does make a great in-house chip for lower cost jobs to reduce people's AWS cloud computing bills, and you would assume other people will do the same, people still might want to rent H-100s. Or the new Blackwell chips.

Starting point is 00:07:53 Well, the new Blackwells, yeah. So therefore, it's not even Amazon's choice. They're providing to the startup community and other folks, their cloud, as is Azure, as is Google Cloud, as is Oracle's Cloud. So they're just going to buy what their customers want. So we're going to see. Cerebris is the other company, I guess, that's making AI chips. Cibrus, etched.

Starting point is 00:08:15 And then also there's a company called D-Matrix. And they're actually mine. Microsoft backed, and there was a new story that came out this week, which we just pulled up, that they've actually kind of put together their first actual chip. So there's movement here. I think one reason, Jason, we haven't seen as many competitors out in the market, as you might expect, is that building chips is much harder than building software in terms of time to product and market.

Starting point is 00:08:36 So I would not be shocked if next year was a very exciting year for chip startups. But you also asked about the AI wall. And this was what I was most curious about in the earnings once we saw that the numbers themselves were good, kind of what we expected. So the first analyst question that I saw was, I'm going, hey Jensen, CEO of Nvidia, what's up with this AI wall? Are you worried? And Jensen gave, I would say, a very good answer. And I'm going to try to just add Jason to a couple sentences here. Tell me if this works. Essentially the old model of training AI models, pre-training scaling, is intact, he says, and it's still continuing. But that does not address,

Starting point is 00:09:14 I would say, the rate of progress, which people say has slowed down. But Jensen says there's two other ways that they are improving AI models in the market today. One is post-training scaling and then essentially what we saw with O1 from OpenAI, which was test time scaling. So there's two other approaches now, creating a three-prong approach to improving AI models, which Jensen thinks is going to keep going and improving what we have in the market for a long time to come. So some slowdowns in one approach, but there's several approaches.

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Starting point is 00:11:09 members FDIC, terms and conditions apply. So let's talk about Google, the DOJ, obviously has a case against Google and now we're going to the remedy. Google lost the case. Maybe tee this up for us

Starting point is 00:11:22 and then let's talk about the remedy and I have been giving a lot of thought as to how this might go down and I have a lot of practical questions about what would happen if Google Alphabet was forced to spin out the Google Chrome browser. Yeah. Okay, so just to back everyone into this

Starting point is 00:11:42 recall that back in August of this year, Google was declared by court to be a monopolist and one that, quote, acted as one to maintain its monopoly. This was for you nerds out there, a violation of Section 2 of the Sherman Act. Jason, this sent shockwaves through technology. This was a big moment. The question then became, though, okay, Google's a monopoly. What are you going to do about it? So we've been waiting to hear from the Department of Justice what they were going to put out in their initial proposed final judgment, or PFJ. So if you see that acronym out there in the news, it's essentially the DOJ's pitch to, hey, they're a monopoly. Here's how we're going to fix it.

Starting point is 00:12:20 And Jason, the headline story out there that everyone's talking about is that the DOJ wants Google to divest Chrome. But there's quite a lot else in there, including the possible divesture of Android and a lot of other business rules about what Google can and cannot do, including investing into other AI companies or other search companies. So it feels pretty broad. and Google is peeing its pants is maybe how I'd put it frankly That's a technical term That's a technical term Yeah I mean I don't know that they need to

Starting point is 00:12:49 I think what they need to do And this is really the hard thing to do When you've got Something as core to the business As you have two core pieces, Chrome Which is kind of built into everything It's very integrated into search

Starting point is 00:13:05 Because you have the default search engine It is very tied to your Google account, whether you have a Gmail account or a Google Domains account, like a Google Docs account, because it syncs all your information into the Chrome browser. You know that when you log into a Chrome browser. So they have really integrated this tightly. And then, of course, the reason they did Chrome was to control the user behavior of going into the URL bar and instead of typing in Google.com, typing in your cert. And Firefox was printing money for a long time, as was the operon. browser, Mozilla, just a bunch of folks. And so all of this added up to a way for them to kind of

Starting point is 00:13:48 intercept searches before anybody else could intercept them. That's why it was so critical for them to give tens of billions of dollars a year to Apple to secure those high-end customers. Apple customers are the highest-end customers because they can afford a $1,200 phone. So the default search there is worth more because remember, Google search monetizes through advertising, whoever owns the Apple user base gets the Mercedes, the Tesla ad searches, whoever owns the Android users, well, yeah,

Starting point is 00:14:20 they get a lot of global users, but they're going to get the Toyota, no offense to Toyota, you know, the Toyota Prius searches and the used Prius searches. So just keep that in mind of how critical some of these deals are to them. And also, Jason,

Starting point is 00:14:34 the data that comes from those searches is more monetizable to your point, which is very critical. But also, it provides a lot of significant, to Google about how to tune its search engine. And one of the points the DOJ made was that Google bought access to essentially search audiences, use that information to make itself better, and then no one else could compete with that virtuous cycle. So one of the remedies is that Google

Starting point is 00:14:55 will have to, quote, disclose data sufficient to level the scale-based playing field that is illegally slanted, including at least licensing syndicated search results that provide competitors a chance to offer greater innovation. That's a lot. Yeah. So I had talk to you a little bit about maybe putting in context how much revenue Google has from advertising versus other ad networks and stuff like that. Because one way to look at this is product base. Another way to look at it is revenue base. On a product basis, you can't debate that Google doesn't have 90% of queries, searches right now. Although you and I know people are doing searches on Claude and ChatGPT pretty frequently, I would say,

Starting point is 00:15:40 say the majority of my usage of CERT has gone to Open AI with a trickle to GROC and a trickle over to Claude right now. And actually, some to Gemini. So I would say I might be, you know, the early adopter in this metaphor, the vanguard of technology adoption. So I feel like that part of it is going to be sound by the market, which is the great paradox of this. By the time they got to 20 years later to Google search monopoly, it has viable competitors, which is really weird. It's almost like somebody got to the top of the hill and they started running down the hill and you just push them in the back and they're going to go tumbling down the hill. And then take all the credit for it as well. Like look what I did. Yeah. Yeah. It's like tripping somebody who's already

Starting point is 00:16:26 fallen. You know, they're already, you know, at peak search market share. But if you look at this through online advertising, they are also a smaller percentage of online advertising than people realize because they're competing with Amazon, Uber, Instacart, DoorDash, and of course, Meta, who have large advertising businesses. So, and then if you look at advertising overall, which would include television advertising, I think Netflix, Amazon, Prime, other people have advertising, right? Oh, yeah. And then you have advertising in newspapers, magazines, and then you have outdoor advertising. So you have other places to put your advertising dollars. Do you have any idea of percentage-wise, what percentage of,

Starting point is 00:17:08 revenue. We all know that Google has the majority of searches, but what about ad dollar? I want to make a point before I answer that, Jason, just so everyone knows that when we talk about the Google search monopoly, just to be clear, the DOJ reports that Google has unlawfully maintained its monopolies in general search services and search text advertising. So it is a very, it's a constrained point, still a large market, but certainly not trying to say that they own all the advertising market or all of search whole cloth. So there are some distinctions there. In terms of their total share of the U.S. advertising market, I don't have the number off top

Starting point is 00:17:47 of my head, but it's 27%. I was going to say less than a third. So there you go. And if you look at the duopoly of Google and meta, together they hold 57% here in the U.S. So that means, like, of all advertising in the world, they own maybe single digits. That's the, you know, like the question I have. How much do they own of all? So we'll bring that to you in another episode as we double click on it.

Starting point is 00:18:15 Let's talk about what are some possible scenarios here. And then we have a special guest, which I'm very excited about because my favorite browser is brave. And we have somebody from Brave here, a competitor who is directly impacted by all of this. So if Google is forced to spin out Google Chrome, I have a series of questions. Okay. Who would buy it? They have to spin it out. So that means somebody has to buy it or it has to be a standalone business.

Starting point is 00:18:40 Yes. So let's start with the first question. Who would possibly buy this? And then what would you value it in? Yeah. Then what you would value it at would be based upon its ability to do a deal for search. So here we are. If you are the DOJ, you're probably going to say it can't be.

Starting point is 00:19:04 owned by the Mag 7, right? Because that makes no sense. You're breaking up one of the Mag 7. You're not going to let Apple buy it, right? You're not going to let Amazon or meta buy it. Because then it's just like making somebody else, you know, one of the seven, you know, giant bullies or whatever you want to call them if you view them as bullies like the DOJ does. You're just letting one bully get the weapon of another bully. So that's, it's got to be somebody below that group, somebody under a $500 billion market cap. It's like, okay. Then would you allow if a smaller company bought it. Let's say, just going to pick a random company here. Salesforce isn't in, or HubSpot aren't in the MagSavon, right? They're under a trillion dollar market cap companies,

Starting point is 00:19:44 I believe. So if you let a SaaS company, at Lassen, I don't know, some 50 to 250 billion dollar, $500 billion company buy it, would they not be allowed to do an ad deal with Google? Would that be not allowed? Because if Salesforce buys it, I don't know why they would, but let's just say they did, then they're going to be banned from having Google buy it and Google monetizes at the highest level, which means they've got to let somebody else buy it, then how do you value it? Because if you can't do a Google deal, well, then it's kind of, I don't want to say worthless, but it's going to be hard to monetize this thing. That means you have to sell the advertising to Bing or Brave or Duck, or Somebody who has a competing search engine. Or we,

Starting point is 00:20:31 Would you sell it to Yahoo, the private equity owned, you know, maybe five or $10 billion company that owns a collection of assets? Maybe that makes sense. But you would essentially be sunsetting this browser. Now, on top of all that is an open source company. So I'm going to stop there because this is one of the most complicated things I've ever heard. Strategically cutting out Chrome, okay, no big deal.

Starting point is 00:20:54 It's a pain in the neck for Google. But how does it become a viable standalone business if it can't have a search deal? All right, take a second and picture the ultimate all-star team for your startup. Okay, you got that mental image? Maybe the Avengers, maybe even X-Men, Wolverine, Cyclops, pick your favorite superhero team. And let's be realistic. Until you've raised your Series A or your Series B, you might need some help building that dream team and finding top-tier talent, managing all the timelines you've got and maintaining

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Starting point is 00:22:30 it's great that you point this out. We were on Hacker News earlier today, looking for the most interesting commentary from the market. And quite literally, this is the thing people are chewing on. What is the value of Chrome not inside of a search company and when it's unable to monetize via a major search deal, all of what we've seen with iOS and Google?

Starting point is 00:22:50 Right. I honestly have no idea. And so normally when we talk about taking a large company and breaking it up in smaller pieces, we think in terms of unlocking value, that if you took something and made it smaller and more discreet, people would value it differently,

Starting point is 00:23:04 and that the aggregate would be worth more than the whole. In this case, it feels like if you break off Chrome, it crumbles into your hands like sand. And so I don't see it happening. And so here's my pitch to you. Is this the DOJ doing the door slamming negotiation technique, make a lot of noise,

Starting point is 00:23:25 threaten this, and then when they actually retreat to the position they expected, it feels like a concession, and then Mountain Vue gets to say, hey, you know, we got to keep Chrome, da-da. I mean, who knows? I do think they're probably trying to give Google an off-ramp here to make a sacrifice. You're exactly correct. Taking some things out of a conglomerant would unlock value. Taking YouTube out would unlock extraordinary value. And I think the greatest move for Google shareholders would be to just offer that. Offer YouTube. That would offer YouTube.

Starting point is 00:24:03 That's $50 billion in revenue a year plus the subscription base. It would be a Netflix competitor immediately. Google would be bummed, but it wouldn't be the end of the world for them. I agree with that. And just to put it into context, everybody, in Q3 this year, YouTube ads were at $8.92 billion business. up from 7.9 in the preceding year. So not the fastest growing company,

Starting point is 00:24:29 but certainly one that has ample scale to be public and still maintain advertiser share and so forth. And they have subscription revenue too. For sure. Significant. But the issue I have with this is not a product complaint, but more of a, how would divesting YouTube answer the core issues

Starting point is 00:24:48 that DOJ has with Google's kind of search ads business and does it actually go at the heart of that particular issue. As a soft commercial lamb, I get it. I'm just curious if it'll, you know, appease the right thought. I think the search a lot of, YouTube is a lot of searches. So if you look at the percentage of searches, it would go down. And I don't think they would be able to monetize the search deals with Apple, et cetera, if they didn't, at the level they're able to, if they didn't have YouTube. I think it's that key of a piece. They think they're making $50 billion a year off of YouTube because the ad revenue is like $33, $34 billion,

Starting point is 00:25:25 and then there's another $15 billion, I guess, in subscription revenue with YouTube premium. So yeah, I don't think it's a perfect max to the concerns they have, but it would be significant. I think it would actually be more significant than Chrome in terms of hurting Google in some ways in terms of the size of the business, because I think you'll lock $500 billion off the market. I think we'd trade at 10 times. Chrome, yeah, I'm not.

Starting point is 00:25:50 Not sure, but let's bring our guest on and let's see what their opinion is here. And so that will, you know, really help us contextualize this. Everyone, we have Jean-Paul Schmatz or JP, if you want to call them that if you're here in the U.S. Head of Brave Search, head of ads over at Brave Brave. And also worked according to his LinkedIn at Abe Books way back in the day, which if you're a used book. Yeah, if you're a used book nerd, you know that company. JP, thanks for coming on the show, man. Appreciate it.

Starting point is 00:26:16 What's your take here, JP, when you see them spinning at Chrome, you work on the the Brave browser. It's a private company. I love it. It's my favorite browser. The reason it's my favorite browser is you don't track anything and you have shields up. And when you have your shields up on the margins, some websites don't like it. But I would say 95 out of 100. It just works so much faster. And it works really well on mobile. And you have your own search engine, which I do not change my default search engine. I like to use Brave. I like to have a little privacy. I like to go faster and I don't like to be tracked. Of course, I use Google sometimes.

Starting point is 00:26:50 I go back for Google flights. I go back for Nick scores. But I have gotten quite used to Braves search engines. So when you run a browser company, you're a standalone browser company. So do you make money through a deal with Google at all? Or is your money all coming directly from your own ad network, I guess? It comes directly because one of the, well, one of the points that the DOJ is making is that Google only gives you money if you agree not to compete with them.

Starting point is 00:27:19 And that is the crux of the matter. So if you have a browser and you decide to make a search engine, you're not going to get money from Google. You only get money from Google if you agree not to compete, which in the case you had the example of Apple doing some deals with Bing for Siri and then Google telling them we don't really like that so much. Or Firefox was actually invested in clicks, which is the company that created what became Brave Search.

Starting point is 00:27:46 And when they renegotiated, they deal with Google in 2017. Google told them that they didn't like that thing in Europe that they were doing. So the payments of Google, two browsers were always conditional on non-compete. And this is the crux of the case. And this is in the remedy. If you read them carefully, this is basically what is now forbidden. So these strong-arm tactics will call them what they are. If you want this incredibly robust, the largest search ad network in the world,

Starting point is 00:28:18 and you want to monetize it on your search engine, let's say Braves or Duck. Dot, Do is a competitor. You are the two, I think, largest independent search engines outside of Google in the United States, in the English banking language. You can't use their ad network. Their ad network has scale. And then if anybody tries to compete on the margins, they swing a stick. essentially and say, yeah, we don't like what you're doing there.

Starting point is 00:28:44 It would be terrible if something happened to that really nice car you have parked outside. And, you know, in Brooklyn, you know, when they told you like, it would be terrible if something happened to the car you're parking in front of my house, you would move your car because you would know what would happen. You might have a broken window or, you know, your tires might be gone when you come back. No, that's really one of the main monetization. So one of the main anti-competitive move that Google was. doing was basically here's a pot of money, but you agree, do not compete. And if you compete,

Starting point is 00:29:14 we basically make your life nearly impossible because you have to do, you have to finance a browser, which is since the day of Explorer has become a non-profit, right? NetScape did not monetize the B2C business. They gave the browser away, tried to sell the server. When Explorer came out, they were spot a window, so it was for free. When Firefox came out, it was open source and sort of an outcast of Netscape, and they couldn't make money. He was a nonprofit, right? And then Chrome was offered as a way for Google to reduce their payments to third parties.

Starting point is 00:29:46 So the browser business has always been a loss leader, right? Tell me how you built your search index and how hard it is to compete against Google's global search index because this seems like a non-trivial task. It seems like it would cost a lot of money and a lot of time, but correct me if I'm wrong or if I'm right. Yeah, I mean, we, so first of all, we are at Brave Search

Starting point is 00:30:11 one of three independent indexes. I think there's Google, Bing, and us. They used to be Yandex and Baidu, but I think both of them have pretty much given up on trying to index the American and European world. Companies like Dock.org go, perplexity, or everyone else that you could

Starting point is 00:30:30 call a search engine, typically just worry about the user interface. I put it in a very nice way. They basically use a search API in the back. There's three search APIs in the world, Bing search API, brave search API, and Google search API, which is actually underuse because it's not a high quality and it's not exactly. Is it not high quality on purpose, by the way? Yeah, of course.

Starting point is 00:30:52 So this is one of the other remedy is that the DOJ is asking Google to make a basically cheap and high-quality version of its search index. If your startup is all in on AI, well, DigitalOcean is the cloud platform that's going to help you scale faster without headaches, DigitalOcean, you can quickly spin up GPU-powered virtual machines and start training models, building your AI agents, and crunching massive data sets in seconds. And when you're done, you can turn those virtual machines off as quickly as you spun them up. Dio, DigitalOOOcean is going to help you scale computing power based on your precise needs without making upfront hardware investment. Save that money.

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Starting point is 00:32:10 That's DO.co slash twist. I'm ambivalent about that one because we build a large business in the search API at Brave and we would not like Google to have to sell it for zero bucks, right? That would not be so great for us.

Starting point is 00:32:23 So that's one of the stuff that we criticize. But there's only three independent search engine and to come back to your question, yes, it is hard. That's why I started this thing in 2008 and it took a great team of people many, many years to get to a level

Starting point is 00:32:37 where we could get to 100%, which was only achieved by Joseph in his team, so Joseph Pujol runs the search engine. It was only achieved after Bing raises price factor 17-fold after they had the deal with Open AI, and we could not afford the 10% that we were still using Bing on, and we decided to go 200%. So it took us 13 years to go to independence in indexing. So, J-P, do you think that the DOJ has gone far enough in its proposed? remedies. I was reading Luther Lowe, who had policy of a Y

Starting point is 00:33:12 Combinator, and he was saying that some of Google's complaints are them actually just pretending to be upset and that the DOJ could have gone further. So was brave hoping for an even more punitive set of remedies? So everything we need is in there

Starting point is 00:33:28 and then some. And so I do agree with what you guys were discussing earlier that there's a good settlement that can be made there. And it could very well be that they don't have to diverse Chrome in the end. But the main reason people don't compete in search, right, is it's not about data so much because, you know, there's a, there's a lot of kids that went to Stanford, I went to Stanford. We know how to build it, right?

Starting point is 00:33:53 The problem why we're not building it is because no one is going to give us money to build it because they don't think it's going to be remonetized, right? No VCs in the last 15 years. Jason knows this, but it was a little, but it was more like 20 years ago, Jason and I were fooling around research. engines, like, no one will give you money to build a search index, right? So you got to find it somewhere. And they don't give you money because they don't believe that you will be able to distribute it, number one, because they know distribution cost money.

Starting point is 00:34:20 Distribution would be possible if you had tons of money. So it's all about monetization, right? And there's two ways you can monetize, and there's two ways that Google can remedy the situation. One is, if you have a browser like Brave and you send a lot of queries to Google because, you know, half of our users, let's say, are still using Google as a search engine. So we send them a couple billion queries a month for which they don't pay us. Yeah. Oh, yeah, yeah.

Starting point is 00:34:43 We're talking about big numbers. And one billion queries a month are coming to our browser, but we get no money on this, on this traffic we send to Google for free, for a year. You're talking about hundreds of millions of dollars that we've given them. On the other hand, if you have a search engine, they have a product called AdSense for Search, which actually is made to finance search engine, except you cannot use it if you have a browser because they don't allow you to monetize queries that starts from a toolbar, they call it. This is ridiculous, right?

Starting point is 00:35:09 And both of these points are in the DOJ document, meaning that there is somewhere in there. Well, it's a bit loyally, right? Because they turn it into negative. They say that Google is not supposed to pay or to give special value to people for exclusivity, et cetera. Now, let's play this for a minute. Does that mean that Google cannot pay Apple for the traffic?

Starting point is 00:35:32 Well, that would be interesting because then the market gap of Google would go up by $500 billion, right, because 23 billion times multiple. And Apple's market cap would go down, so the perpetrator gets up. That doesn't make sense. So they will continue to pay Apple, I believe, roughly the same amount of money,

Starting point is 00:35:48 but they will also have to pay Brave the same amount of money, but they cannot request exclusivity, which means that Apple will have to display a choice screen and say, do you want to use Brave? Do you want to use Google? Right? There's a lot of choice screens

Starting point is 00:36:01 in this remedy situation because... JP, just to make sure that I'm tracking this, because exclusivity won't be, allowed, your company will therefore be able to monetize the search queries you already send to Google from folks who use Brave, but don't use Brave search. So we believe so. And second, whenever I had the chance to talk to the DOJ, I always said, look, look, if it doesn't help Brave, I don't know if it's a remedy that works.

Starting point is 00:36:26 Got it. Now, if you spin out Chrome, does it immediately help Brave? Well, it depends. Because if they have a gigantic deal with Google, you just create another monopoly or near monopoly, not a monopoly, but. Neo Monopoly and they're the richest company in the world, right? And they can start, I don't know,

Starting point is 00:36:42 I mean, it's a different world, but I don't think you really make a huge difference by just doing that. Now, to be fair to the DOJ, that's three lines in a 35-page document, right? Obviously, for the press, you have the impression that it's 35 pages out of 35 pages.

Starting point is 00:36:59 That is, I think, it's very easy for the press to conceptualize spinning out a product. What they don't understand is the deal structure, and that's where the nuances, and I think, JP, you explain that perfectly, which is, if you run a search engine, you can't use their ad network. If you compete with them on a browser or a search engine, you can't use their ad network. And just saying to them, listen, if you're going to let people monetize, it's got to be good for everybody. You can't

Starting point is 00:37:25 pick and choose and you can't strong-arm people into not competing with you, because that is the definition of antitrust, being able to say, and they could keep taking this further and further and further. Now, they can't bully Apple, but they could have said to Apple at some point, and there was a lot of rift here between Apple and Google over the iPhone, because Android came first, and Steve Jobs felt very betrayed by the iPhone. I mean, imagine if they said to Apple, like, you can't make an iPhone or else, you know, we're not going to allow Macs to have search. Can't use Google search on a Mac, right? Like, it's really crazy to think of telling other people what businesses they can be in in order to have a business relationship with you.

Starting point is 00:38:06 But that's what they did with Samsung. That's what they do with Firefox, which are less powerful. They basically told Samsung, you can have your own browser, but it has to have Google search in it. But you cannot have, I run a browser in Asia and I try to be on the phones. And they would tell me, no, we cannot do it because we have a deal with Google. And even browser that we would pre-installed on the second screen have to have Google search as a default. If not, we don't get the App Store. Yeah.

Starting point is 00:38:33 So that's one of the remedy as well. that Google cannot in the future condition the availability of the app store, which, you know, you don't have the app store, your Android phone is a break. You have nothing. Yeah, yeah. Yeah. And it's like having a supermarket and you don't have anything on the shelves. It's kind of like, it's just a shell.

Starting point is 00:38:52 Yeah. So that was the, it's another remedy. You know, you have like, I don't know, there's like 10 sections and each section that's like five remedies. And one of them is Google cannot condition the availability of a, another product based, on the supply of search as a default. Is Google upset at Brave for, you know, protecting people's privacy so deftly

Starting point is 00:39:16 and removing ads and giving that control to users? Or is that part of their animosity towards Brave? You know, they just don't pay us, but I think the fact that they don't pay us is more connected to, they don't like competition. And, you know, Brandon is a person that has built two major search engines, two major browsers in his life. So who's to say he cannot do it a third time?

Starting point is 00:39:40 And I remember that there was a company before Brave that was so too brave. I used to tell a prospective employee who would always ask the question, why does the world need another browser and another search engine? And I would tell them, look, there has been five browsers

Starting point is 00:39:55 in the history of the web. It's only 25, 30 years. Who tells you they cannot be a sex one, right? Like, why does history stop at Chrome? And why do you all? need a search engine in the world where, I don't know, like, I mean, it's difficult to build. So, yes, there are less search engine, there are less countries in the world that make search engine than countries that make atomic bombs.

Starting point is 00:40:17 So, yeah, it's difficult. But having another search engine, I mean, that certainly is a nice thing to have. Yeah. What do you think of what Sam Holtland's doing over at OpenAI with their search experiment? Is it good? Yeah. I mean, first of all, they realize that, they realize a number of things.

Starting point is 00:40:37 One is that an LLM that's not connected to the web is a bit, well, it's less good than it could be, right? Yeah. And if it's connected to the web, then it is most likely going to use a search engine to go to the web because, you know, and so without,

Starting point is 00:40:54 you know, I cannot talk too much about other things, but I mean, they have to connect to some search engine, you know. And then it does. Through like an API with a company that we may have mentioned in the last five minutes, perhaps? Maybe.

Starting point is 00:41:09 But the thing is that now the question becomes much more interesting is where does AI live in the future? Because you can answer that question by saying, oh, it will live everywhere. But that's not an answer. The real answer is there is a place where people ask every question they can think of. And that's the navigation bar of a browser, right? And so does AI, like in Brave, I mean, you use Brave Search, right? So you know that we have the summarizer,

Starting point is 00:41:34 which, by the way, we launched way before Google did that and way before everyone else. And it basically reads all the results of the web for you and summarizes them on top, which I think is a super useful feature for that kind of queries. And so exactly, I mean, people are going to use GPT, of course, in a B2B API type business thing.

Starting point is 00:41:55 And it will have to be connected to the web as well. Some people are going to use GPT or the web page. But I think, you know, a lot of people will use GPT in a browser-like product. And that will have access to if I want to go to a restaurant tonight and I want to know who are the five-best restaurant. And, you know, you've got to get some AI somewhere. And that is going to be in something of a browser. So, yes, at OpenAI, there's a guy who was one of the first creators of Firefox and one of the guys who created Chrome. So they work at Open AI.

Starting point is 00:42:27 So, yeah, they're probably doing a browser, right? Yeah. At some point they will launch a browser. You're right. One thing is that I, over the years building search engine, I realized that some people think differently about things. So many years ago, I was trying to convince Facebook, Dan Rose, and Zuckerberg, like, you guys need, you should launch a browser.

Starting point is 00:42:50 Like, you're such a threat to Google if you, if you launch a browser, you're going to be master of the world. And they were like, no, we already have one. And I said, okay. Well, my app is a browser. People open link. And my social discovery search. So they had a different view of the world, which turned out not to be correct because

Starting point is 00:43:09 social is not a good search engine and the Facebook app is not a good browser. But they didn't feel the need. So it could very well be that open AI goes in the same direction. And they say it's very AI-centric and we don't care about navigational queries. We don't care about this. We don't care about that. But what Google discovered in the past is that you need to have 100% of the query. if you want to make money on the 18%.

Starting point is 00:43:31 And so, sure, you remember the queries you've done with perplexity and open AI, but these are the 24% that are not monetizable, right? So if you explore the number of queries and you say, oh, there's a company that does the smart stuff, there's a company that does the navigational stuff, there's a company that does the porn stuff, and then there's a company that does the commercial stuff, that doesn't work so well.

Starting point is 00:43:54 Because you have three bankrupt companies and you have one that makes all the money, and that would be Amazon. And so I think the magic of search is having this box where people just ask everything. And AI is going to have to live there. We talked about how there might be monetization opportunities in a post-Google settlement world for brave and brave search. I'm curious, though, what your expectations are for driving increased search volume?

Starting point is 00:44:19 Because if you monetize your existing volume, better, great. But do you think that the remedies, as discussed by the DOJ, will actually help smaller search engines get more net new users. Yes. So we already have kind of in Europe, we have a preview of this because the DMA, which is a new legislation in Europe, actually forces Apple to give users a browser choice,

Starting point is 00:44:41 and the DMA forces Google Chrome to give users a search choice. So if you start Chrome in Europe the first time they ask you, do you want to use Brave Search or Google Search, etc. So we do know that this works. And what's the impact on that? Like how much acceleration did that drive in your ability to get new, users. Oh, it's very significant.

Starting point is 00:45:00 Like, or growth in Europe is twice as big as it is in the U.S. at the moment, just because of that. Oh, really? Yeah, I think the, you know, the word of mouth growth is probably the same across all countries because people have like social structure and stuff. But, but Europe, we can see double the growth at the moment and it has to be coming from there. Okay. Thanks.

Starting point is 00:45:22 I really appreciate it. J.P., thanks for getting us into what actually matters here. It was really great to catch up. And I appreciate you educating us on the nuances here. It really is about these deals and the deal making. And the browser is just, like you said, a couple sentences in this 35 pages. Really truly appreciate you coming on the show. Thank you, Jason.

Starting point is 00:45:41 Thanks, Alex. I talk to you soon. Okay. Well, that was great, Alex, because this is like a breaking news story. And I think when you get somebody who's on the inside, who's got decades of experience on it, you actually get to what is really happening here. And he seemed very excited about not quite. Chrome being spun out, but just the dealmaking being leveled. And anytime you're in organization,

Starting point is 00:46:04 you have great dealmakers and the organization needs to grow, incentives really matter. So what we've seen happen over 20 years is there's a lot of great people at Google building amazing things. And it's been amazing for customers to get a free browser, to get free YouTube, free storage. You know, we can stream to YouTube right now for free. All that infrastructure is paid for. and the Chrome browser itself and Google Docs, which is available for free. All this free stuff they give you,

Starting point is 00:46:32 Gemini's free, is because of that ad network. But then you put a bunch of pirate business development people into an organization who have stock options. And the incentive is to grow market share. That's the incentive.

Starting point is 00:46:45 There's no incentive to not grow. And so what happens over multiple decades in a business is if you've won everything, your team is there saying, well, what do we win next? What do we win next? And some of the creative people will go over and do creative things like Waymo. Some of the energy will go into buying things, like Android, like buying YouTube.

Starting point is 00:47:10 Sure. And then there's also some creative energy and cycles that go into BD, business development. And they are going to scour the earth and find incredible deals to grow the business, right? So there's multiple ways to grow a business. You could acquire things. You could create new, incredible new verticals. Like, remember, they tried Loon to do low Earth orbit. I miss Loon.

Starting point is 00:47:32 Balloons that would do, you know, spread things. Obviously, that worked better with satellite, you know, when SpaceX lowered the cost to put those up there. So make new incredible things like Waymo. And then the final piece is, we'll let the BD team scour the Earth go to every corner. But eventually, when you're a monopoly and you have a monopolistic position, that business development team is going to do more and more extreme cutthroat things. Just the nature of business.

Starting point is 00:47:59 And it happened at Microsoft where they told people if you want the Microsoft operating system, Windows, on your machine, you got to put on the desktop, the Internet Explorer, browser. And that's what killed Netscape or greatly angled Netscape over time.

Starting point is 00:48:12 Because Netscape used to be able to buy Netscape. It was packaged software at CompuServe. You would go and buy a $50 browser. Then they made it. They had the server, you know, web servers and everything. They tried to monetize it otherwise.

Starting point is 00:48:23 So anyway, it's a really interesting case. We'll keep watching it. I believe Google's going to navigate this and we'll be sitting here 10 years from now. And Google will be a vibrant company and they'll have figured this all out and they'll maybe lose on the margin some of these really aggressive deals. But they have other businesses like Waymo that can become a trillion dollar business. Waymo is worth whatever it is tens of billions now. Yes.

Starting point is 00:48:47 I think that becomes a trillion dollar business itself in the next 10, 20 years. So there's other ways for them to make money. YouTube will continue to grow. So great job doing that up. And I think you got for the audience really awesome information here. And with this new Lena Con, with the end of the wrath of Khan,

Starting point is 00:49:04 and a very frisky, non-MAT gates, DOJ, and a very frisky M&A environment, you know, Google might be able to buy into other verticals

Starting point is 00:49:16 that are not the core one. So this is where M&A kind of is valuable because it's, If Google could have been buying things all along, like let's say they could buy Snapchat, or they could have bought Whole Foods, or they could buy Uber or Airbnb, and their M&A teams were like, you know what, we're sitting on all this money. Why don't we go buy Uber, Lyft, Instacart, DoorDash, whatever, then they wouldn't be doing

Starting point is 00:49:38 these kind of grinded out deals on the margins. Do you think so? Because to me, Google's a big enough company with enough smart people that they would do both at the same time? The profit motive is a great driver of activity. But there's leadership at the company. And the leadership, if Sundar is, you know, setting direction, and you say, you know what, Sundar, you can't put any cycles on M&A. We're not doing it, right? Look at Adobe Figma. It's just not worth the time. The Jews ain't worth the squeeze.

Starting point is 00:50:06 So for four years or more, they've just said, you know what? Can't focus on M&A. So when he goes and puts in an eight hour day, there might have been two hours in that day where they focused on M&A opportunities or an hour. And that's like, well, there's nothing we can do here. let's go figure out something else to work on. Okay, let's work on squeezing more money out of the search business. Jason, that was the meanest thing you've ever said about a CEO I've ever heard that he puts in an eight hour day. That is such a... All right, 10. I mean, when you work in a big company like that, sure.

Starting point is 00:50:40 I mean, it's a 24-7 job. Yeah. He probably puts in eight-hour Sundays, some Sunday soup. I know. I'm just joking because it came out. I know you. I know how you approach work and time and so forth. So I'm just laughing because I think that's about the rudest thing.

Starting point is 00:50:52 You said it's someone who even has two direct reports, let alone, you know, 200,000. This is a great, this is a great segment. Jason Wisdom, we'll just, if I have any wisdom to share. Here's what I've learned. All right. I'm taking notes. There's a group of people who just love their jobs and careers. You don't need them to tell them to work extra hours.

Starting point is 00:51:12 They just love it so much. I don't have to tell you to check tech meme, shout out Gabe, you know, to check your Twitter handle and see what's buzzing in tech over the weekend. And you love tech. True. And S-1 comes out, you're going to read it when it comes out. It doesn't matter if it hits your desk at 10 a.m. Or 10 p.m. You're going to be like, ooh, S-1.

Starting point is 00:51:32 I'm in. You're going to go read it because you're Alex Wilhelm and you love them. And there are people who want work-life balance. And when it's 6 o'clock, they're like, my phone's off, my slacks off. And you just have to determine if in your company you want to have people who are just naturally motivated and you don't have to push them. Or if you want to have people who have life work. balance and that's fine too. Or in some positions, you don't care and in some positions you do,

Starting point is 00:52:00 right? So in customer support, you may not need people who are putting in 50, 60 hours a week and they're just so enthused about the next episode of the pod. They want it to be 10% better each time like you and I do. And, uh, you know, it's just the nature of things. And what you have to do is just define what you want as an organization and make sure everybody who comes to that organization understands them. And that's where young, founders make mistakes, is they think that they can get inside somebody's head and motivate them. It's a narcissistic pursuit. It is a delusion of grandeur that I could take another human being and make them as motivated

Starting point is 00:52:37 as I am to watch the Knicks or listen to Dire Straits or go skiing or read an S-1 or, you know, put extra time into thinking about who the main character is so we can have a better guess for today's show. You know, I wake up every day, I think, who's a really interesting person that we could talk to? Man, yesterday, how great it was yesterday when we talked to, um, Allen control systems? Allen control systems. Like, I don't, I think you picked that one. I'm like, that got me jazzed up for the 24 hours after it. I was stoked that you found that guest.

Starting point is 00:53:08 Found founders are the best to talk to because they will always give you that energy boost. And that has been true my entire career, is if you find, especially a founder who's doing well is like a double shot of espresso because not only are they powered by themselves, but they have. tailwind. Yeah. They're going into hypersonic mode. You know, they're about to hit the pass to the space boundary. Long way of staying, you know, just define the culture you want. It's okay to have a nine to five culture. It's okay to have a 24-7 culture. Just make sure people know on the way in. That's what it is. And you got to tell them 10 times. I tell people who come work for me. I define how good you are for a match for our company and how responsive you are to me and your teammates. That doesn't mean I expect you to put in an eight-hour

Starting point is 00:53:50 Sunday, but it does mean if I text on a Sunday or I slack on a Sunday, you're probably going to see it and respond. I mean, unless you're off the grid or something, of course. Yeah, yeah, everyone gets sick here and there, but I think that's actually because this matters. Is it for me? Responsive absolutely matters. And also, one of the things that I've consistently noticed in people who are highly performant is that if you go to their preferred channel of communication, they are highly responsive. That does not mean they're responsive across every channel. Some people love emails, Some people love text. Some people you have to call.

Starting point is 00:54:21 But people will find a way to be available to the right things. And that does seem to track very closely to high performance. So yeah. Speaking about founders, though, let's do some Friday's Jason. All right. Well, let me tee this up for you. Founder Fridays. I love meetups.

Starting point is 00:54:38 Last night I spoke at the all-in meetup here in Austin. And the 290 people had signed up when I was on my way over there in the afternoon. And there were definitely over 200 people who showed up. got to meet everybody, did a Q&A. I think people love using online to go meet offline. And I wanted to do meetups for this week in startups. And we've tried them three or four different times. I used to do them ad hoc.

Starting point is 00:55:01 In fact, in the first year of the show, we used to have like a Korean one and somebody who wanted to come into work for us. Did that one. We had one in Japan. We had ones all across the country, France. And we would have them pitch their startups in these live meetups. So I was bringing it back, but we needed a platform. and this platform river

Starting point is 00:55:18 allows us to have these founder Friday meetups but I wanted to come up with a purpose and the purpose I wanted was four founders by founders four founders by founders

Starting point is 00:55:27 and I got this from Knicks fan TV is my friend CP's slogan is four fans by the fans you know it's a radio call-in show after the next game we all chop it up

Starting point is 00:55:38 I call into the show all the time and talk about the next game for me it's like my local WFAN when I lived in New York I never got on the air for that

Starting point is 00:55:46 but I go on the air, you know, every fifth or tenth game for Knicks fan TV. So this is four founders by founders. And we give them a format and we want them to have six to eight people in each pod. And we have dozens of cities now. I've hired a half-time person to manage this. And we've now got thousands of people signed up in dozens of cities. And they've been doing this founder Fridays. Once a month, they get together.

Starting point is 00:56:09 Here is founder Fridays. You can go to founder Fridays. tech, right? Founder Fridays. that tech. It's very simple. Founders host a local meetup in their city on River. That's the software platform we use. They find a venue, coffee shop, co-working, a restaurant, whatever, and they get together on that Friday. We have them in all different cities, which is fantastic. Amsterdam, Calgary, Vancouver, we're looking for hosts for these. No lawyers, accountants,

Starting point is 00:56:37 service people, no looky-lose. You have to have a startup and it has to be run by two or three founders. You cannot do it as a law firm or something like that or a real estate broker. No offense to all those folks. I use them all day long. We have startup basics here with Wilson-Sucini and Cruz. So we'd love the service providers to support these, but we found that when we did these previously, they would get taken over by people looking for customers. And what we wanted to have was a tight little circle, enough that you could go around the circle, which I think is six, seven, or eight people. Once it gets past eight people, it takes too long, to answer. or one question each month with each other,

Starting point is 00:57:16 hey, what are you struggling on? What's working? And man, it has a transformative effect. I've been very low-key about this because we're about to hit a year on it. I don't promote it too much because I didn't want it to get in and did. But the conversations that are happening here are changing people's lives. It's very lonely to be a founder.

Starting point is 00:57:32 We've now created a vehicle for it, and you can sponsor it. So on River, for a thousand bucks, if you're a law firm, an accounting firm, you can go, but you've got to buy everybody dinner or lunch. $350 bucks for each one. So three for a thousand bucks. It's a de minimis amount of money. If you do go, you can't be a pain in the neck. You got to be supportive and helpful. You don't get to promote

Starting point is 00:57:54 yourself at it. You just get to be, you just get to say, I'm happy to buy everybody alone. That's it. So if you're like a law firm and you got an office in Vancouver and you want to do this, feel free. We don't have a sales department itself, sir. I asked Maddie, who's a researcher here in Austin with me, to talk to the founder Friday folks. They're in a WhatsApp group and we have them all in a group, WhatsApp group. It's really fun because you get this persistent discussion of all the hosts in one group, Alex, and I'll make sure they edge you. And then each of the cities has their own group. So they're just talking about stuff all day long. It's really wonderful. Small communities for founders by founders. I asked Maddie to talk to them and say, hey, are there any good stories

Starting point is 00:58:29 that occurred and to coordinate that with you? And I think we have two of the hosts who are going to talk about the stories occurring in their local chapter. Yes. And the first one of those is Jor Colbert. George, founder Friday host over in Austin, Texas. And George, you are the CEO and co-founder of albatraz.a.ai, and that's albatraz t-R-O-Z. Dot A-I. Welcome to the show. Thanks for having me, Jason. Alex. Happy to be here. I'm sorry. I'm in Austin. I haven't been able to go because the founder Fridays have fallen when I was traveling, but I will be coming to one. And maybe we'll do it instead of, we usually coordinate them all on the same Friday so everybody can do it.

Starting point is 00:59:05 They all share their photos in the groups. They share it on socials. And then my team likes and retweets and we get to promote the companies. but how many months have you been doing it? Where do you meet? And then maybe tell us about a discussion that's occurred that's been helpful. Yeah. So I've been the host for the past three months. We meet at a bar on the east side. The name, excuse me right now.

Starting point is 00:59:28 But yeah, so we meet every Friday from 4 to 6 p.m. We've had, you know. Every Friday. No, so every first Friday of every month. Every first Friday. P.m., Central Machine Works. That's where it is. 4 to 6 p.m.

Starting point is 00:59:41 The idea is, hey, hey, if you're a founder and you want to get together, one of my philosophies is founders learn best from other founders. So especially in the early stage, you know, you might be very strong on the technical side. You might be very strong on the business side. You might come and say,

Starting point is 00:59:56 hey, like, I'm wondering how to approach this aspect of a problem. And so that's what I've been doing. And in terms of good stories, there are two of them. I'm going to go with the first one. It's Joe at talonway.

Starting point is 01:00:07 That I.O. So he's a non-technical founder. And he's working on a problem. And his key issue was he suspected that the approach to the engineering that we're currently doing was not the right way. And as a technical founder, one of the first things we told him was he was absolutely correct. If you let engineers, they will try to over-optimize everything. And they'll tell you, hey, give me a long list of requirements and then leave me alone for two to three months while I go build it. And then you can go present into the customer.

Starting point is 01:00:36 And one of the things we were shorted him is like, no, like you have to be, even if you're non-technical, confident enough to push back and say, we're not going to get along this requirements, we're going to minimize those requirements to exactly what we need to solve that problem at 70% of the way. And then you're going to go back to your customer and say, hey, this is a 70% solution.

Starting point is 01:00:55 An MVP. Yes, exactly. And so as soon as we talked to him about it, he was, as I said, you already kind of suspected it, but he needed to hear from all the technical founders that, yes, your engineer is telling you this because, you know, he's just being an engineer.

Starting point is 01:01:08 He wants to overmise, worry about scale in the beginning, and you doesn't need to do that. So that builds your confidence as a first time founder. You're hearing it from multiple co-founders, hey, there is a better way, and it just allowed him to make a better decision. You said you had a second discussion that occurred. Tell us about that one. Yeah.

Starting point is 01:01:25 And so another benefit of learning is also, you know, there's a lot of talk about, you know, founders should be thinking about strategic partnerships, right? And that's one of the best ways to grow. And so myself, you know, I'm a technical founder, I a little bit lack a little bit on the distribution side, right? And so I had a founder who showed up, Michael at Pussy.AI. They built AI generated videos for social media. And, you know, a quick explain to explain to what Alba Chaz is.

Starting point is 01:01:51 Alba Chaz, we build AI sales agents for the real estate space. So specifically over the phone, email, and social media. So here's the picture or AI connects to the property's Instagram profile, TikTok, and when people are interested, the AI engages with those people. But as I said, we are a social conversion. talking to Michael and Twisty and looking at his videos, I'm like, huh, could a property use this to generate videos to post on their Twitter or Instagram profile?

Starting point is 01:02:19 That can be a lead generation thing. And then my AI sales agents can be the lead sales conversion tool. So we got together, we started talking, realized, yes, this is an opportunity here to bundle our solutions and start offering it here. And so while he was originally a BDC guy, there was an opportunity for us to work together and on a debut. and this allows me to say, hey, we have a almost,

Starting point is 01:02:42 you can think of as a full-stack AI marketing solution where you'll use Twisty to generate AI videos for lead generation, and then you'll have Albatross AI as in AI sales conversion to engage with the leads. And so that was one of the two things that I know personally have come out of Founder Fridays, super excited about it.

Starting point is 01:02:59 All right. So go to Founderf Fridays.Tech, and you can sign up for the Austin one. And how many people come each week? What's the range of people coming? Is it five, 10? So I hate to admit it, but we've gotten something from like 20 to 30, 35 people showing up. All founders, though.

Starting point is 01:03:16 But there is a, I think Austin is unique. There is quite a bit of demand for this. And so, yeah, so we've had 20, 30 people. We've tried to split it up between, hey, B2B founders in this section, BDC founders and this. You know, I think Amazon has that policy of like everybody caters around a pizza. So actually, we've gotten a sponsor. We get pizzas. And then we just put them on.

Starting point is 01:03:38 the table, people get around the pizza, a pitcher. I think that assigning people to a table and having a lead on each table is the way to go. Because the more people like structure in these things. And you could have just the structure time. Hey, we're going to do our round table and pizza from three to four 30. You got to sit at a table. You got to be on time. You eat a couple of slices.

Starting point is 01:04:00 You have a beer or a soda pop. And, you know, the leader goes around the table and keeps some time constraint. Each of the eight people gets to explain what they're working on, what their problem is for two minutes. There's four minutes of feedback. That's six minutes told. Or we go to the next person six times six, 36 minutes, six times seven, 42, whatever it is. And you just have a stopwatch and somebody's the timer. So somebody's the moderator, somebody's the timer.

Starting point is 01:04:30 So I really encourage you to put structure on it and then explain how that works with the other leads and the other hosts so that we help. people do that. Do you think people would pay a membership to do this and would it make them more serious about it? I'm curious. I think they would. However, if I can not show my opinion, I'm a little bit against it, especially for early stage founders.

Starting point is 01:04:55 There might be, you might want to throw a barrier or something, right? So like it's not just the look you lose that. 10 bucks, whatever. Maybe, yeah, that might be fine. And it might be way to interpret it. Hey, it's not like we're trying to make money off you here. But it's more like we want to, we want to. to make sure that you're...

Starting point is 01:05:08 Don't burn your seat. Yeah. Yeah, exactly. We want to make sure you're committed. And yeah, like, I think early stage founders, especially when they're, you know, they just launch a product or they're about to launch it. I mean, I have that conversation with founders where they had a product and idea, but they were not sure if it should be B to B and B to C and they're asking everybody else, hey,

Starting point is 01:05:25 what do you think? Yeah, I agree with a barrier, but now what about the vetting to make sure you don't get introlopers in there trying to sell into it? Are you vetting each person who applies and checking their LinkedIn? making sure it's not a service provider or a looky-loo, just somebody who's got nothing to do on a Friday? Or does the River team do that now? How is that working?

Starting point is 01:05:45 So it's a little tough when you have 30 to 40 people coming up. But River just launched a questionnaire. And one of the easiest way to do to filter is just, hey, are you a founder? And if so, do you have a website? And, you know, maybe if you're very early, you may not have a website, but I think it's kind of key. Like, if you're a founder and you're serious and, you know, you're trying to build a business, you probably have a website.

Starting point is 01:06:05 So show me your website. tell me about your company and then that should be enough to kind of filter out anybody who's, you know, what he said? So looky-loo. Yeah, I mean,

Starting point is 01:06:13 that's going to be the key. Great success. Who became the sponsor of the Austin one? I'm curious if it was a law firm or a accounting firm. It was actually Bank of California. Shout out to Sophia. Reached out to me. She was like,

Starting point is 01:06:24 hey, this is cool. I would love to do it. She bought us all beer and pizza at the last one. So that was pretty cool. Yes. Awesome. Yeah.

Starting point is 01:06:31 So I'm asking all the partners to go through the website and to do those sponsorships through river. So make sure they go through river and then they'll just send you the money. We'll keep track of that, make sure they get their deliverables. It's kind of like Alex in some ways, like TEDx. We want to have some controls, but we want to trust founders to do what's right. And we're going to make no money on it. Like, we're not going to take any of the money

Starting point is 01:06:51 just so you know. We have one person who works on this. And right now, you know, maybe we'll, if the sponsorship does become a thing, we'll have her go full time and be the coordinator full time and pay her salary with it. But for now, uh, enjoy the pizza. It's a, thank you, George. And I will see you at the next one, hopefully. Hopefully. That's really fascinating.

Starting point is 01:07:12 Any thoughts, Alex, before we bring on our next one? I love community. I got raised in the Chicago technology scene, actually, to be totally honest. And so I'm a big fan of people that actually bring the stuff together. And these are getting big. The Culver City meetup says 58 people are going to that December 6 meetups. So probably time to start breaking these into small groups. But next up, we have Hiddy, Bogle Sherman, and Coco Harmon.

Starting point is 01:07:33 These are the founder of Friday hosts from Longview, Texas. Shout out Texas for having so many active hosts. Kitty, how are you guys doing? Where's Longview, Texas? I don't even know where that is. Okay. Longview is about four and a half hours from you probably. Okay. Dallas, Houston.

Starting point is 01:07:49 Between Dallas and Shreveport on I-20. Got it. Okay. We're in East Texas. I love it. I love it. I was just reading the economist today about how fabulously Dallas is doing. Dallas, Fort Worth is booming.

Starting point is 01:08:04 Yes. And a lot of people moving their headquarters there. Obviously, Austin is booming with the tech scene, but even like a bunch of financial companies and manufacturing companies are putting their headquarters now, Alex, in Dallas, and they're going to have their own stock market. So how many months have you been doing it? How's it going? You've probably heard the last interview with George.

Starting point is 01:08:25 Tell us a little bit about who you are and how it's going. Well, I'll say thanks to George for being a great host because Coco and I have actually attended the Austin meetup and really fun, made incredible connections, can't say enough good things about that experience. So on our end, which is a little bit of sort of the opposite end of the spectrum, we've, I think we've hosted four or five, and they have been really great. And we've kind of been experimenting because, you know, Jason, you mentioned that being a founder can be lonely. Yeah. And that isolation factor, it doesn't have to be there. But especially in our community, It's almost like they're founders, but they may not know that they exist, like the others exist.

Starting point is 01:09:06 And so Founder Friday has given us an opportunity to start finding those people and bringing that into the fold. So it's been going great. And we're really excited to sort of kick off the new year. We had the Longview Economic Development Council CEO come to our November. Yeah, it was awesome. And he was really excited about it because part of their strategic vision right now includes, It's a real emphasis on innovation, which actually in our area, there's a lot of aerospace opportunity.

Starting point is 01:09:36 And so that's kind of random and interesting. But it was really cool to have him there. And we've got some other people like that lined up for January. So I think we're really going to kind of try to take it to the next level in the new year. Love it. How many people have come and any good discussions? Absolutely. So we've had between like four and eight people come.

Starting point is 01:09:57 Perfect. The story we submitted to y'all is, you know, probably a little non-traditional. But so one of our founders, he actually wants to promote an album, but kind of more just promoting an album, he wants to build community. So his passion is getting like neighbors to know their neighbors again, so to speak. And so he wants to build a community around that using art. And so he is amazingly talented and incredible musician,

Starting point is 01:10:24 but he has almost no experience on the business side of things. And so basically since coming, and he's come to all of them. And so since coming to the first one, he's made so much progress. And he's gotten help with like, you know, just understanding the barriers to entry on like a website are actually much lower than you would think. Right. You know. Yeah. What you don't know, what I find is, you know, somebody might have done six hours of research on something.

Starting point is 01:10:52 And you don't even know what you don't know. But that person has done the six hours. and they can explain it to you in 60 seconds or six minutes. And you're like, by the way, you're building a website, just use Squarespace. Or, oh, you're building that type of website. Oh, there's a vertical provider who does just websites called Motive and it's for car dealerships. We're investors in that company as an example. So, you know, if you're a car dealership, there is a solution for you.

Starting point is 01:11:17 I found it. I talked to the person there. And so that's, I think, one of the magical things about the format of four founders, by founders and small groups, because you don't also have to, worry about the motivation of the person, they're doing it because they know you as a founder will be able to help them with something. And man, I have seen this over and over. We do jam sessions with our portfolio companies. And my lord, sometimes they will come together and somebody has a problem and like three out of ten people in the circle are like, oh, you don't know about

Starting point is 01:11:47 X product or service? And they're like, no, I've never heard of this, you know, strike you talk of, you know, back in the day. Or I've never heard about HubSpot. And they're like, oh, let me show you my HubSpot, and they pop it open and they show them the details and boom, they're down. So awesome. Well, you know, it's kind of crazy. You mentioned the founder jam sesh. So Coco and I came to a founder jam session, I think last November actually. Oh, wow. The other day, we watched the recording back, just like, what actually, you know, what was said then? And we went through and so many suggestions that the founders had are things that we've now built and implemented and deployed. And just the network building opportunities, I think the

Starting point is 01:12:25 other thing is that founders are a certain breed. And like you were also saying about the motivation, very motivated. And it's what they think about 24-7. That's actually part of the isolation too, is because not everybody wants to do that. And so it's like, how do we friend friends who also want to do that? And I think that's what you're offering. Yeah. Well, actually what you're offering, Coco, any highlights for you? And maybe tell us a little bit about your company. Well, so Kitty and I are co-founders. So we have the same company and we run the founder- company. We'll give you a little plug here. Yeah, give us your really simple sentence. Indora, where mobile games personalized with the photos stored on your phone and design.

Starting point is 01:13:03 Yes, I remember. Easy and fun. Yeah. Awesome. Yeah. What a great. It's such a great idea. And I can see like grandmas and moms and everybody. I'm on a family group thread now that is all the Calicanuses and then all the Turchies and the McCabe's and it just keeps growing. I don't know how many people are on this I message thread, but I'm sure that my sister-in-law, Dina or or my sister-in-law, Harry, at some point, will submit one of your games to the group chat and everybody will talk about it for a month. It's such a great idea. We're kind of nerdy about the science of nostalgic reflection.

Starting point is 01:13:36 Yes. And so it's actually one of the lead researchers in that category is our advisor and proven to be restorative and expansive in nature. So just by looking back at your photos, it's restorative and that it reduces anxiety, loneliness, and depression. And then it's expansive. It makes you more creative. It inspires you and motivates you on your future. I love your idea so much. So nostalgia, Alex, going back with your family and friends and remembering the good times.

Starting point is 01:14:09 Yes. Makes you feel better. And it's restorative. I love that. And it makes you optimistic about the future. So it's one of the things I love about you, Alex, is sometimes I talk about when you first came on the show or. you'll talk about when you were a teenager coming to TechCrunch 50 or something and seeing me on stage or whatever nostalgia does do that it fills your bucket as I talk to my daughters about and you know what literally literally warms your body temperature really yeah I reach the age of 40 it makes you feel younger so yeah I haven't in 40 yet it's nice of you to mention that I look younger thank you for that yeah I thought it was the weight loss but I think it's all my mistake

Starting point is 01:14:53 nostalgia. Yeah, you must be reflecting. We would like, love that we did compete in a pretty big competition last night. Oh. And we actually won the Investors Award and the Judges Award and $35,000. So we- 35 dime skis? Ooh, yum.

Starting point is 01:15:12 Is it an investment or is it just free money? It's an investment. It's an accelerator here in Texas based originally out of Frisco. What's the term? So they give you specific terms? Or is it like on your next note? We set the terms. Oh, cool.

Starting point is 01:15:27 We'll have the best deal, J-Cal. Oh, good. At the terms. And, yeah, they're really growing. Awesome. What's the name of their, of that? Let's give them a plug. Who's the accelerator?

Starting point is 01:15:38 Road launch accelerator. And it's a product of improving, which is a software development firm. They've got a presence in Canada, the U.S., and then all over South America. Smart move, yeah. If they are building websites for people in apps,

Starting point is 01:15:51 they have a vested interest in startups. We have so many of those Latin American dev firms that, you know, have really great, have great developers that have helped our startup. So I'm super excited for you all. Founders are mutants. And so they're very strange, Alex, to the rest of the world. But when you get together, it's kind of like, oh, yeah, you can make ice. I can make fire. And yeah, I can fly. What do you do? I fly really, I can run really fast. And the mutants just immediately take to each other. And so we call of Founder Fridays, Founder Fridays. Tech, go there, sign up. If you want to start your own chapter, I just ask that you have two or three founders of the chapter. So we don't have the chapter

Starting point is 01:16:30 die because one person, I don't know, has life experiences going on. So you have like a little redundancy. I think three is the right number. Keep building them. Keep them pure. Please, is all I ask is don't pervert them with, you know, other agendas. Let's keep this pure for founders once a month on the first Friday. We do it the first Friday of every month, right? Is that the, is that the rule? unless it's a holiday and then we move it to the second Friday. But we wanted to make it easy to remember. First Friday of every month. So I guess it would be December 6th is the next first Friday.

Starting point is 01:16:59 So hopefully everybody gets that going. And I am super excited. And a quick announcement, I'm going to host all of the founder Friday hosts for a special barbecue here in Austin, if they want to come. So we'll have like an afternoon at the Salt Lake. Well, it's on me. We'll just eat a bunch of barbecue and we'll just have all the hosts meet each other.

Starting point is 01:17:17 So it's like all the mutin, the captains of the. of the mutant super teams will come together at the Saltlick and eat some, I think they have one or two vegan or vegetarian dishes if you're into such things but you might be sad. If you go to Salt Lake and you're a vegetarian mutant, I can't help you, but you can just bring a brown baggett. Absolutely fantastic. This has been great. I'm so happy for you guys. Congratulations on winning 35 dimeskies. That's great. It's going to go a long way.

Starting point is 01:17:44 And Alex, any further questions? I just want to give them a plug. If you want to take a look at what they're building. It's Indora.com, E-N-D-O-R-A dot app. And I have recently learned the power of nostalgia because my nearly two-year-old, we make a quarterly book in my family of all of our photos from the last three months. And then she carries it around the house and makes you look at all the pictures of her. And she doesn't stop doing this. So I've recently done market research and I agree. Kids really love our app accidentally. So love it. All right. Keep grinding. And we will see you all next time on this weekend startups. Bye bye. Thank you.

This Week in Startups - TWiST News: Nvidia's AI Edge, Google Might Have to Sell Chrome, and Founder Fridays Updates | E2049

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