The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:18:03 · Harry Stebbings, Matteo Franceschetti
[00:18:03] S1: And when what's you your AI, it's like your models, it's using Yeah, Grackpod, it's using [00:18:07] S0: we probably, I mean, we should check, but I would imagine we are using Cloud for that. Then internally, we have probably by now, hundreds, if not thousands of agents that we use internally at Eight Sleep. So now, started measuring what I call the human employees, but then there is also the AI employees. And probably the AI employees are, I mean, without probably, we are probably three, four X bigger if you start including all our AI employees. [00:18:33] S1: Where is it most significantly impacting the company? [00:18:36] S0: Growth, because email is like that. Now, also, all our digital marketing, our team received a report every morning from our AI agents suggesting what changes to do or not to do, and they approve or reject. And so also, our marketing business our growth is run by a few people right now. [00:18:57] S1: I worry that in a world of infinite content supply, discovery becomes impossible and we just get flooded. Do you worry about that too? [00:19:05] S0: Definitely. But at the same time, I think that the personal agents will look for the best product, and so if you are the best product, you will still win. So, yeah, so it will be probably for humans, right, the amount of content will be too much, and so we'll need to think about how we show up to humans where humans go. That is how I think. But then you need a different strategy for the agents to make sure that their agents find you and recommend you.
00:19:05 · Matteo Franceschetti, Harry Stebbings
[00:19:05] S0: Definitely. But at the same time, I think that the personal agents will look for the best product, and so if you are the best product, you will still win. So, yeah, so it will be probably for humans, right, the amount of content will be too much, and so we'll need to think about how we show up to humans where humans go. That is how I think. But then you need a different strategy for the agents to make sure that their agents find you and recommend you. [00:19:30] S1: We said there about kind of the amount of agents that you have. Engineering is one where consistently across the board, everyone's engineering teams are being changed unbelievably. How is AI changing your engineering team at Eight Sleep? What are you using? What are you not using? How do you think about that? [00:19:45] S0: Well, our engineers stopped coding around a year ago. Since then, they didn't code. What they have is hundreds of AI engineers that they code for them, and that is how we can achieve what we are achieving at scale in 35 countries, including China, including Middle East, including Europe, where there are a lot of regulations in all of them, it was a fairly tiny team. What tooling do you use? Really Claude. How much do [00:20:10] S1: you spend on Claude a month? [00:20:11] S0: It keeps growing so fast that I know. Is it [00:20:14] S1: like 5,000,000? [00:20:15] S0: No, it's lower than that, but it's still in the millions.
00:20:15 · Matteo Franceschetti, Harry Stebbings
[00:20:15] S0: No, it's lower than that, but it's still in the millions. [00:20:19] S1: And the thing I'm trying to understand is Mark Benioff said that they spend 300,000,000 a year on Claude, and they have a 6,000,000,000 budget for engineering. 5% of engineering salary is being spent on Claude in particular. Yep. And my question as an investor is will it stay at 5%? In which case, we can justify the $2,000,000,000,000 IPO, but it doesn't have massive expansion from there. Is it a case of the 5% is just the start, baby? We're gonna go to 25%, in which case, material has load up on Anthropix IPO. Or is it the case that actually we're going see the commoditization by open models, most of workflows are going to get taken by them, and that 5% could get down to 1% as we see efficiency? [00:20:57] S0: Yeah. I think there will be two vectors in the opposite direction. The usage will increase, and so the 5% will become 50%, but the cost will go down. And so net net, I think it will go down. I was listening to an interview to Sam Alman recently, and he was saying that in the early days, to pay for one hour of electricity at night, you had to work five hours, just to give you a sense of how expensive electricity was in the early days. And now nobody cares about, I don't even know what's the cost of electricity at night in Miami where I live. And so I think the same thing will happen. [00:21:30] S1: Do you find it a bit scary that intelligence is now free and entirely distributed? [00:21:34] S0: Yeah. It's something I [00:21:36] S1: A choice aside, like.
00:21:36 · Harry Stebbings, Matteo Franceschetti
[00:21:36] S1: A choice aside, like. [00:21:37] S0: Think about all that, right, and how businesses will change, how our business will change once that intelligence is semi unlimited. [00:21:45] S1: I asked the instinct this morning to do an in-depth analysis of three of our biggest competitors' Instagram channels because I want Instagram to be a real driver for us moving forwards. What works? What doesn't? What themes work? What hooks work? What layouts work? What doesn't? What captions work? It was incredible. And I said, can you suggest three stories every single day for me at 8AM to do? First one starts tomorrow. [00:22:05] S0: Yeah. The amount of productivity will explode. It's probably like when we went from no computers to computers or probably even bigger industrial revolution or agricultural revolution. We are facing one of those moments. [00:22:17] S1: Knowing what you know now as a consumer and customer of Claude, would you buy Anthropic at the IPO?
00:22:17 · Harry Stebbings, Matteo Franceschetti
[00:22:17] S1: Knowing what you know now as a consumer and customer of Claude, would you buy Anthropic at the IPO? [00:22:22] S0: I would probably buy. I still think there is so much upside in all these companies. I'm really bullish on SpaceX, personally. Why? What drives that? So, here is another theory that I have, and this is just my opinion, but I think with AI, the right companies will transform themselves in holdings. And so what it means is that whatever is doing today will be one of the businesses that we do. But with AI, as we build tools for ourselves, we'll discover other opportunities, business opportunities. And so the Eight Eight Sleep Inc. Will probably own three, four, five, 10 different businesses, which if you think, and if you look at Chinese companies, it's something they have been doing forever. If you look at Xiaomi, Xiaomi does 15 different things. I just watched their latest presentation from their CMO. I look at a lot of Chinese companies because they are geniuses, right? They never stop themselves. Xiaomi, instead of being just like Apple, they also do cars, for example. They do so many other things. [00:23:21] S1: And fridges, and
00:23:21 · Harry Stebbings, Matteo Franceschetti
[00:23:21] S1: And fridges, and [00:23:22] S0: ovens, anyway. Literally, Anything hardware related, anything that is a smart home, but then they also get into components, like some of the components, like BYD develops certain components well outside the car and automotive. So these companies have already proven that the concept of focus is not, oh, you keep doing the same thing forever. It's just, I have certain capabilities, then how can I use this knowledge and capabilities in any form? And with AI, we will all do that. [00:23:51] S1: I'm loving this conversation. And the joys of, like, doing second shows is, like, they're much more casual, which is much better to listen to and also much more fun to do. Do you worry when you see the excellence of these Chinese manufacturers in specifically the kind of automotive industry that it's just gonna hollow out the European car market?