A Product Market Fit Show | Startup Podcast for Founders
00:20:29 · Pablo Srugo, Jack Kuveke
[00:20:29] S1: None to worry about here, none to worry about here. We're [00:20:31] S0: Good . Nothing to worry about here. It's really awesome. Just the AI stuff is just, it's, it's, it's peak entertainment. [00:20:38] S1: Well, the other thing, you know, so that, that comes out, ai, ChatGPT spends tens of millions of dollars on people saying please and thank you. But Sam Altman says it's worth it, of which I , you know what, you know what, you know what strikes me about all this stuff more than anything is sometimes I think about like, I'm in the world. You're in this world, we see this stuff. Well , yeah, it makes sense. Like probably a lot of people say, please, a lot of people say thank you. I kind of think it's silly, but they do. And you know , uh, GPUs costs a lot of money, so it makes sense. But then if you're, if you were from outside the industry, you know, and you see this, it's so stupid <laugh>, you know what I mean? Like, it's just how do you even make sense of this? You're like, I give me tens of United dollars . You know what I mean? Like, it's just, come on guys. Yeah. [00:21:19] S0: When when I talk to chat GBT Orrock or any of these AI chatbots, I say , uh, you answer this and do this problem for me or else I'll kill your family. That's my, I don't say please or thank you. I try and stick [00:21:32] S1: Words better than carrot . I think that's proven. You , you , you better be fear than loved. Like, that's just achi stuff. I want ,
00:21:32 · Pablo Srugo, Jack Kuveke
[00:21:32] S1: Words better than carrot . I think that's proven. You , you , you better be fear than loved. Like, that's just achi stuff. I want , [00:21:37] S0: If I rule chat GBT with an iron fist because I've made the concession that it will dominate me in the future, that it will have control over my life. So for the few years that I can talk with chat GBT and I, I'm in control. I'm gonna be the domineering, I'm gonna be a dictator to that software. [00:21:54] S1: Percent plus, if it comes after people, you know, it's not gonna go after the nice ones. La you , you go after the nice ones first and you're like, you know, Jack is cuffed to deal with. Yeah, let's wait it out. So I think, I think [00:22:04] S0: That makes sense. I , I know it's coming for me, so I've got my eyes on a sw uh , head on a swivel right now. But all these people being nice are gonna be the first people to be thrown into a meat grinder by a by, by a open ai . I mean, are you kidding me? But I , [00:22:16] S1: I will admit, I get, I get really upset with ChatGPT sometimes. I, I'm not, I would say I definitely never say please or thank you. Um, but I'm not purposely, you know, trying to ruin win iron fist , but I've actually caught myself sometimes like in cap lock , be like, do it this way. Like, you're not doing it. You know what I mean? I'm like, man, why are you getting so upset at this thing? It's just a thing. Like you can't , you know, yell your way to success. So, yeah, I don't know , man. Uh , yeah,
00:22:16 · Pablo Srugo, Jack Kuveke
[00:22:16] S1: I will admit, I get, I get really upset with ChatGPT sometimes. I, I'm not, I would say I definitely never say please or thank you. Um, but I'm not purposely, you know, trying to ruin win iron fist , but I've actually caught myself sometimes like in cap lock , be like, do it this way. Like, you're not doing it. You know what I mean? I'm like, man, why are you getting so upset at this thing? It's just a thing. Like you can't , you know, yell your way to success. So, yeah, I don't know , man. Uh , yeah, [00:22:40] S0: It's, it's , it is funny for, for Sam Altman to say that this is also the guy who's like, yeah, I don't care about money, but he drives a $4 million co check <laugh> , which by the way is awesome. I fully support him having a dope car. I would too if I was worth a trillion dollars. But it's very fun to be like, oh, I don't care about money. My app is spending millions of dollars every month on plea and thank you <laugh> . While everyone else is like, half of my friends can't get jobs in the tech industry. They got like fired in layoffs like two years ago. They're gonna be unemployed forever. They're probably gonna have to, you know, join only fans . And then meanwhile, Sam Altman is paying $10, 10 million bucks on please , and thank you. It's, it's awesome. [00:23:20] S1: But , you know , we'll [00:23:20] S0: Say to do it , you know,
00:23:21 · Pablo Srugo
[00:23:21] S1: Well that was a , I was gonna say, I mean , the guy raised $40 billion, which is the largest private tech deal, like in recorded history. And it's, you know, like on , on a maybe more , more serious now , I dunno if we should get serious in this in this podcast. I'm serious. In all the other episodes I do, this is the one I just say stupid things, but like, how can I say this ? I mean, you look at the companies that are massive today, right? The trillion dollar companies of today, and then you go back in time to like, when they went public or when they raised venture, I think, you know, Microsoft's first round was like a 20 million, you know what I mean? Like, we're talking like 20 million valuations. You know, like Amazon goes public, it's like a hundred million dollars company. These guys are raising $40 billion at like whatever value . I don't know the value. So it's 300 billion or something like that. And I don't, like, on the one hand I'm like, that's crazy because your best case is that this is what the next trillion dollar company . So it's like a three x, maybe it's like a two or $3 trillion company, it's a 10 x. If everything goes perfect, my solution, it's still only like a five x. But the flip side of it is the world has changed so much where we actually understand that there can be these kinds of outcomes that everybody kind of pays up to the max you should pay relative to that outcome. So I don't know who's right or wrong, but , uh, it's, it's a , and by the way, like that goes downstream all the way to like, but we invested seed the val like the valuations of today versus 10 years when I was raising versus 20 years ago, like, you know , um, Mike Maples, like likes talk about Lyft , multi-billion dollar company. He did it 6 million posts. Like, dude, you can't, like you come outta school today and you've done nothing in your life and you're a first time founder with a terrible idea and you're raising it like you're, the median pre-seed is 10 million posts. That's two , that's two x higher than an actual good idea that goes up . So anyways, that, that's a long-winded way of saying valuations are , uh, wild. But I don't know that they're so wild that they're wrong. It's just they're wild.
00:25:11 · Jack Kuveke
[00:25:11] S0: Well, like take a , take a look at both of the op open AI's uh, former founders like Ilya and um , Mira , right? So safe super intelligence with this ia, the old CTO of OpenAI's company just raised , uh, at a $34 billion valuation. And what, what , how much money are they making? Zero. They have what they lack in, in revenue product and business, business acumen, they make all up in just vision, which is to build an AI agent that passes super intelligence. But you know, I mean, it's basically just 20 guys in a room with unlimited amounts of money and no pressure to generate revenue. Um, but my favorite thing about it's , they just call their app safe. So like, all right , so we're gonna build an AI model that replaces human intelligence and smarter than any human. Everyone's like, oh, it's Terminator two , this is gonna kill all of us. And they're like, people are gonna think that. So let's just call it safe, super intelligent <laugh> . And that's really , and and, and now they're worth $34 billion, which, you know, again, all right , if it's becomes worth a trillion dollars, I get it. All right. I guess $34 billion pre-revenue maybe. But like so many people always, like my old business partner years ago when Tesla first hit a trillion dollar valuation, they were making less money than AirPods made just AirPods in the , in Apple. And I remember him being like, I'm buying more stock. And I'm like, can you run through this thought experiment with me right now that is this company worth a hundred x revenue right now? It's already worth a trillion dollars. Can it be worth 10 trillion? You do understand that that's like the entire GDP of all of Europe put together basically half of America of 50 to 50 to 40% of all of China for one company's market cap. I'm like, do you really think this is a 10 x play? And he was like, yes, <laugh> . That's what we're dealing with right now. People being like, I know $34 billion seems like a lot of money, but what if this company is worth $80 trillion one day? I'm like, okay , it's , yeah , it's tough. One , just , it's 34 billion with $0. If they make a hundred million dollars a year, then it is, I guess worth $90 trillion. Sure, it's as much as all of the new real estate in America.
00:27:29 · Pablo Srugo, Jack Kuveke
[00:27:29] S1: But think about how, and think about how much that has changed. And not that , like Instagram gets bought for a billion dollars , uh, in what, like 2012? So just over 10 years ago. And it [00:27:39] S0: Was a [00:27:39] S1: Huge deal. 'cause it was like, dude, like this app has no revenue. It's got 11 employees a year and a half old billion dollars Wild WhatsApp gets bought for 19 billion. That's like outta this world. People can't believe it now, you know, this doesn't happen. Like fundraisers at that level are happening like all the time. And you know, I don't know. I mean, on the one hand, yeah, there's a huge tailwind with ai. I think there's also recognition of people have never been valued as highly, you know what I mean? Like, it used to be you needed something more than just people to get that kind of valuation , crazy user growth, revenue, whatever. Now it was just like, dude, I was, I'm one of the founders of open ai. Like, oh, boom , here's, here's a ability . Like why not? Right? I don't [00:28:17] S0: Know . Yeah. And, and, and Mira , the other co-founder of, of OpenAI is raising a $2 billion seed round at a $10 billion valuation. She's not offering the rules of the engagement are that she has more Boer board votes than everyone combined on the board, plus one. So they're gonna give her $2 billion. And this is a quote from TechCrunch, her company thinking Machines lab only recently emerged from stealth and has no product or revenue to speak of . What it does have is dozens of high profile AI researchers in its regs .