This Week in Startups
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to extract profits because we know the prices keep falling the minute that, you know, the the models get slightly out of date.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.
00:25:42 · Lon Harris, S0, D.A. Wallach, Dave McClure
[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. [00:26:15] S0: All right. Now we're back. I'm gonna play everybody's famous game. Who has more subscribers? DA. The name of the game is who has more subscribers? More subscribers. Do you understand the name of the game? I [00:26:29] S2: love it. [00:26:29] S0: Okay. You do understand. [00:26:32] S3: Which which game show host was that good? [00:26:34] S0: I don't know. Just my generic game. [00:26:35] S1: Wink. Wink. Wink. Calacanis, Dale. Something like that.
00:26:35 · Lon Harris, S0, D.A. Wallach
[00:26:35] S1: Wink. Wink. Wink. Calacanis, Dale. Something like that. [00:26:39] S0: Okay. In all seriousness, I don't know if everybody understands exactly how many subscribers these products have. Anthropic is undisclosed right now, unfortunately. So the game kind of doesn't work. Consumers, according to OpenAI and some reports, OpenAI has 50,000,000 subscribers. 50,000,000 subscribers in their consumer base out of their 900,000,000 weekly users, about 6%. So the game is off. I was kind of goofing on it when I teased it. But let's talk about that as a concept because in all seriousness, the one I always go to is, and I'll just ask you to give me your best guess, your best, best guess, D. A. Wallach. How many subscribers does Microsoft three sixty five have? Microsoft Office. And this is obviously the most successful business subscription service. I'll give you a little clue there. Most of... That's the most successful one of all time. I'm gonna [00:27:47] S2: guess. 200,000,000. [00:27:50] S0: Very close. 110,000,000 subscribers. It's extraordinary when you think about that. It has over 10,000,000,000 in estimated annual revenue for consumers, but paid subscribers 110,000,000 is the best I can estimate here. And if these things are at 50 and these are consumers prosumers, this is an enormous subscription business. Do you think consumers will ultimately pay $20 a month for this like they do for their Netflix? [00:28:20] S2: You know, I think think [00:28:22] S0: And agents?
00:28:22 · S0, D.A. Wallach, Dave McClure
[00:28:22] S0: And agents? [00:28:23] S2: Do think both Apple and Google haven't reached their steady state offering yet clearly. And you know, in so far as the mobile phone remains the preeminent computing platform, it's theirs to lose. So my assumption is that at some point in the future, Apple Intelligence is going to be at parity with these things. I mean, it'd be a real screw up for... I mean, it's already... They've already screwed up by not being there today. Okay? But they're the biggest... You know, one of the biggest companies in the world, they're not hemorrhaging cash the way that all their competitors are right now on AI infrastructure. So they've got a big budget that they should be dedicating to ensuring that everyone who uses an iPhone is not paying a $20 a month cloud subscription or OpenAI subscription. [00:29:17] S3: Do you think that's a up or do you think that's a good bet? Because I think they intentionally decided to wait it out. [00:29:22] S2: I think they're patient. [00:29:23] S0: I think they have [00:29:24] S2: the distribution. So they're in the pole position here. And, you know, I I would be doing the same thing they're doing. I mean, I I would assume that they're trying a lot of stuff in... Inside the company. And once they get to a product that they feel is good enough, safe enough, user friendly enough, that's just gonna be what's preloaded. Right? [00:29:46] S3: And get up, then they buy instinct. Exactly. For $10,000,000,000.
00:29:46 · Dave McClure, D.A. Wallach
[00:29:46] S3: And get up, then they buy instinct. Exactly. For $10,000,000,000. [00:29:51] S2: I mean, I think they can wait. They've got the distribution, and, you know, we'll see if Sam Altman's mobile device, whatever that ends up being, is gonna actually be the next platform. I don't think the Meta Glasses are likely to display cell phones. So as of yet, we have not found the successor to the iPhone and the same can be said of Google and obviously they're further ahead on AI than Apple is. So it's also theirs to lose when it comes to the people who are using Android phones.