This Week in Startups
00:18:06 · S0, Lon Harris
[00:18:06] S0: to price. I think it's meat. It's it's a meat sack constrained D. A. Is the people, the meat sacks at organizations are not able to deploy it. It's too heady for the average employee. The meat sacks are blocking this. And then if you look at a company like, say, Uber, which adopts the technology pretty fast, they burned all their tokens in the first quarter famously, and then we're like, oh, what do we do now? They just put all of their employees, I think it was 30,000 on OpenAI at once. So I think that this is the key issue. When are the meat sacks able, which organizations will put 100% of meat sacks on this? And will they be able to not just be the meat bridge, the compiler between the output and the input of the AI, and actually orchestrate it? When could they be sophisticated enough to orchestrate this towards a business result? And I think Microsoft and their 60,000 person buyout, one in four employees that are being offered a buyout, is a roadmap. I think another organization like them, they see it, the writing's on the wall. Dave, you've been wanting... Oh, go ahead, Lon and then Dave. [00:19:12] S1: Oh, I was just going say, on This Week in AI this week, Andy Berman of Run Layer addressed this exactly. That's what he was saying, it's just the companies have yet to attach the AI to the data and the systems that would actually cause it to become more valuable. And so that's... We're just waiting for them to sort of make that switch. [00:19:29] S0: And the why? Why are they not doing that?
00:19:29 · S0, Lon Harris, Dave McClure
[00:19:29] S0: And the why? Why are they not doing that? [00:19:31] S1: Exactly the reason that you said that it's just like people being hesitant or not understanding your security concerns or the meat proxy. [00:19:38] S0: Cyber concerns. Yes. Think it's both. The meat sack doesn't know what to do. They're like, what do I do? I already summarized this article. How many more... I don't have any more articles to summarize. Like, but that's not what this technology is for. That was like the demo four years ago. And cyber has made everybody in these big corporations play on their heels. Go ahead, Dave. [00:19:58] S3: I think we're going to get there. I mean, this is early innings. I liken this to teenagers in high school talking about sex. They they they wanna talk about, like, everybody's doing it, but not everybody's doing it. And eventually, they do get there. So, like, as we gotta move up the stack, I think you're gonna see AI productivity gains hit not just tech companies, but normal companies. We're still in the early stages and, you know, a lot of people talk about AI, but most people are not really using, you know, the full potential of AI. Most people are still using it like, you know, Google prompts. A few people are starting to use it, you know, for agents, but we're we're pretty early on.
00:20:36 · S0
[00:20:36] S0: A lot of people think there is a binary choice. Be a capitalist who supports growth or care about the environment and the natural world. But these two ideas don't have to be in opposition. Our friends at the Conservation Fund believe that you can protect land, wildlife, and our shared access to the great outdoors while also providing important economic opportunities. For forty years, the Conservation Fund has been acting quickly to protect at risk land and important wildlife habitats, while also actively supporting local communities and, this is key, creating new jobs. The Conservation Fund already protects over 9,000,000 acres across all 50 states, proving that we can watch out for the environment and keep our natural surroundings in balance without endless gridlock, debate, politics. And this isn't just a land trust scooping up property and sitting on it. They're working alongside permanent stewards who will find practical uses for these important spaces without destroying them. Find out more about how the Conservation Fund is changing the playbook at conservationfund.org. All right. Just to put this in context, Ben, if we round up to $100,000,000,000 in yearly revenue, this puts Anthropic at a quarter of Alphabet's revenue, a third of Microsoft's annual revenue, and a quarter of Apple's annual revenue. In but three or four years of charging for their product. That's why I'm sort of saying like, are we fully appreciating this number? Have we really taken a $100,000,000,000 in revenue and put it next to, you know, Alphabet's 400 or Microsoft's $3.50 or, you know, Apple's 400 and change? Like, this is truly, truly nuts. And it's based upon one... But one business model. Subscribebuy token. So maybe arguably two different billing plans, consumption and subscription. But it's one thing, it's just like one little thing here. Just buy this intelligence. What if they have other products?
00:22:47 · Dave McClure, Ben Black, S0
[00:22:47] S3: What if they started? [00:22:49] S4: This is the Yeah. That's my point. Number that... The one number that I just couldn't get over was the 900% net revenue retention. [00:22:56] S0: Well, like, unpack that and explain it, Ben, for somebody listening. What does it mean to have 900% retention? [00:23:03] S4: Basically, they took the same customer cohort from a from a three month period a year ago and looked at how much they were spending, that was their spending, and then looked at... And basically said that same three months this year same customers three for the three month 909 times more. [00:23:21] S3: Nine times
00:23:21 · Dave McClure, Ben Black, S0, Lon Harris
[00:23:21] S3: Nine times [00:23:21] S4: as much. Times I went and I tried to look through history and you know I can't imagine another product including smoking because it'd kill you real fast, you know, where where where you use nine times as much of the product. And that goes to say that this is the most useful crop... Product I think that's ever been created. Now what this says about the long term ability to extract profits when you compare it to Microsoft, right, and you're on desktops all over the world, you know, you you have a pretty good clear sense of product that they're they're gonna be still charging for that thirty years later. Now I think that, yeah, what's really hard to understand here is how sustainable this incredible growth is and their ability to extract profits because we know the prices keep falling the minute that, you know, the the models get slightly out of date. Because we have this really interesting problem of being like, how long are people willing to pay for the frontier as enterprises get better and better at consuming this product? And the meat sacks get in control of OpenRouter and start sending them to lower cost open source models. [00:24:32] S0: Yeah. Okay. Here's what we're gonna do. We're gonna look at the top subscription products of all time, or currently and all time. And then we're going to put OpenAI and we're to put Anthropic into that table. And then we're going to see if you guys can guess who has more subscribers, who has less. Don't cheat on this simple test. Before we do that, Lon, [00:24:58] S1: I
00:24:58 · Lon Harris, S0
[00:24:58] S1: I [00:24:59] S0: just forgot. Gosh, we're starting this incredible discussion and I lost it. But now I'm putting on my plot pin. Here we go. [00:25:06] S1: Please, yes. [00:25:07] S0: Pause for the cause here. I got my Plaud pin on. I just very gently pressed the button. You can barely see it there on my lapel. And I'm off to the races. Now I'm recording everything. I'm taking notes. And I can say, this would make a great blog post for my newsletter, Jay Cal on Startups, to talk about subscriptions and how to grow subscriptions. And maybe we should do a tactile practical one. And I could just mute myself on the podcast, say that, put it in there and say, Hey, make sure this gets on my to do list. Boom. Plaud gonna make sure. And I see you have your plot as well. Is that for your ever increasing list of to do items that you haven't gotten back to me on yet, Lon? [00:25:42] S1: That's exactly... That there would be no way for me to keep track of everything going on at the podcast and newsletter studio that we're running without the plot pin. I keep it on me all day. I'm always hitting it just for little reminders, little notes, whatever I'm gonna need, and then I could check-in at the end of the day and the beginning of the next day and get to all those checklist items that we did not get to the previous day. So if you wanna check out applaud pin for yourself, go to plod.ai/twist and use the code twist, and they're gonna give you 10% off plaud.aitwist.