This Week in Startups
00:30:20 · Elana Gold, Jason Calacanis
[00:30:20] S2: Yeah. I mean, I have a robot vacuum, and I think it's the best thing in the world. My neighbors over here have, like, a robot lawnmower. And I mean, if a robot could go and be like doing my laundry, folding my clothes, making my bed, like, I'm all here for it. But I think people are just like kind of what we talked about before, just saying, okay, data centers are being built around me. The cost as an individual is going to rise, which just isn't true because there's so many regulations around that right now saying that that isn't the case. Or people are going to say, Hey, we're going to lose all our jobs. And I just think what we're all saying here is like, there's also so many positives to this. And there's so many things that are going to come from this, the manual tasks, manual labor, maybe people get hurt in driving a car every single day, but we're not really talking about how many lives it saves because instead of texting and driving and being distracted by driving, we have a robot driving you. And I think the headlines that read is, oh, this Waymo got into an accident, or I feel like there was a video the other week that like, oh, Waymo made a left turn when it shouldn't. And like one Waymo in the whole fleet of them made that mistake. Like They [00:31:23] S0: did kill one cat. They killed a cat. Yeah. But I'm not a cat guy, [00:31:26] S2: so I'm not a cat girl either. [00:31:28] S0: So I wasn't particularly brokenhearted about them. I'm kinda not a fan of cats. I'm not... I don't like them.
00:31:28 · Jason Calacanis, Elana Gold, D.A. Wallach, Thomas Tunguz
[00:31:28] S0: So I wasn't particularly brokenhearted about them. I'm kinda not a fan of cats. I'm not... I don't like them. [00:31:35] S2: They might make that the headline later. Like Waymo tells Cat, Jason doesn't care. [00:31:39] S0: FSD, I mean, I don't know. Does everybody here drive a Tesla with FSD? I do. [00:31:45] S2: I don't, but I'm considering getting a Tesla. [00:31:47] S0: What about you, you in a I used to. [00:31:50] S1: I don't. I'm waiting for the next version. [00:31:53] S0: The next version. It's Thomas? I hear it's amazing. [00:31:56] S3: It's a game changer. I mean, it's a Waymo in your driveway. [00:31:59] S0: It's crazy, right? [00:32:00] S3: Yeah, it just drives itself. It saved me from two or three accidents. I was driving home in the rain last night in San Francisco and the reaction times, think one, I think if you're an insurer, I wonder if actually the mandate to shift to self driving will not come from insurance [00:32:19] S0: actual We'll have no business.
00:32:19 · Jason Calacanis, Thomas Tunguz
[00:32:19] S0: actual We'll have no business. [00:32:20] S3: Payouts. Yeah, there's just well, yeah. And so maybe you see the convergence of the self driving car company with the insurance business, but you just look at the I think maybe car insurance ultimately ends up looking like title insurance. We all buy title insurance when we buy a house. The redemption rates on those policies are less than 2%. What happens if car insurance, you only get only 2% or 1% of people actually who drive in a year actually get into accidents? We can get there, right? Waymo is at 93% or 95%. So I think it's pretty fundamental, and it's almost... There's this joke on Twitter, right? The most expensive Tesla, the most expensive car I ever bought was the Tesla full self driving because my spouse wanted one immediately, and so I had to buy two. I think there's almost It's a certain level a [00:33:05] S0: true joke too. [00:33:06] S3: Yeah, a certain level of personal responsibility. Like, I care about you and my family. I want you to have the safest driving experience. If you have a 16 year old, Where are going put them in? If you can, you'll put them in a self driving car so they can't hurt themselves or other people. [00:33:20] S0: I think being anti AI will become increasingly a losing position as consumers get huge value from it. It'd be like being against. I got
00:33:20 · Jason Calacanis, D.A. Wallach
[00:33:20] S0: I think being anti AI will become increasingly a losing position as consumers get huge value from it. It'd be like being against. I got [00:33:32] S1: a question for the group, which is, it's like AI is already quite cheap for the end consumer. I mean, just talked about how disproportionate the value you've gotten in your business is relative to what it's cost you, but it still could be cheaper. It could be free. And [00:33:53] S0: you [00:33:53] S1: think about how China's going at this, as I understand it, their national strategy is basically focus everything on getting AI out there into the economy because the real beneficiaries are going be the people like you who are using it in their business, making their businesses better or individuals making their lives better. And what I wonder is like, there's this thesis in Silicon Valley, the so called everyone wins thesis. And that is just to recap it, the memory makers can win, NVIDIA can win, the Neo Clouds can win, the Frontier Labs can win, everyone can win. That is basically an argument that there is so much profit to go around Yes. That everyone in the ecosystem has this opportunity to basically extract monopoly rents. And what I wonder is like, is that sustainable? Like, I don't know that that is at all part of the political conversation around AI yet. But I do have to say, like, it makes me a little uneasy to watch all of these companies making 80% gross margins. [00:35:02] S0: Yeah.
00:35:02 · Jason Calacanis, D.A. Wallach
[00:35:02] S0: Yeah. [00:35:03] S1: And that's not how capitalism is supposed to work. When you're... When you got to those fat margins, it's supposed to attract competition, the margins get pushed down, your competitive advantage period wanes. What's going on here? And, you know, we alluded to Elana Kahn earlier, like, is there anything that needs to happen here to either spur more competition or otherwise bring down these margins, which just seem unwarranted? [00:35:32] S0: Yeah. This is key question. And I think what we saw from Canva just this week, Canva cut 22% of their staff. That is a 100% AI taking and compressing down things people are paying for. How many people do you know who pay for Canva, who are moms and dads at home and using it? 1,200 people, I think it's 20% of their staff. I can't believe they have 5,000 people working at that company or 6,000 people working there. That's a large number. It feels like if Bending Spoons was running Canva, they'd have 400 people, like 10% or something. So yeah, I think a lot of this software is going to become free, Elana, and then a lot of this margin is going to get taken away, don't you think?
00:36:25 · Elana Gold
[00:36:25] S2: Yeah. I mean, if your business relies on third party inference, what happens when a lot of these customers demand lower prices and you have to continue to cut your margins? And I think a lot of these... I mean, Canva is great, but like they're almost a part of their business is this AI wrapper and they're relying on other AI tools and LLMs to be able to create what they want. They have to be able to cut their costs. And I think it's going be really interesting because in the future, I think a lot of AI is going to be discussing these economics. We've spent years talking about what these models are capable of, but now companies are starting to ask what is actually the cost to deploy them at scale. And so I think companies have been writing this, okay, we need to deploy as much AI as possible in all the different features and aspects, but now they really have to hone in on, hey, if they are using AI, how many people are really necessary to build the same thing that they're building today? And I think you were just saying it where you're spending 40 ks to do, what, 2,000,000 worth of work. I don't think AI could do everything, but I think AI helps a lot of these shops do things quicker and easier and not as many people.