The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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?
00:23:51 · Harry Stebbings, Matteo Franceschetti
[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? [00:24:09] S0: Yeah. I think Chinese, they really nailed particularly automotive. And based on my understanding, what happened is around 10 ago, they understood that they didn't want to compete with European manufacturers on standard engines. That is when they decided to double down on electrical technology. And since then, they started developing their cars. But I go to China often for work. Now we sell in China, but we also manufacture in China. When you see the quality of their cars, because in the past we used to think that some of these products were just cheap and ugly. Well, instead, now they design cars, say, Oh, me, if you go to their stores, it looks like an Apple store, but there are cars, there are no other devices for the home. These cars, they literally look like a Ferrari aesthetics, or they have these seats that turn, so you can just sit and then Dude, I've the TikToks. They look so cool. [00:25:03] S1: Yeah, it's incredible. Screens come down.
00:25:03 · Harry Stebbings, Matteo Franceschetti
[00:25:03] S1: Yeah, it's incredible. Screens come down. [00:25:05] S0: Screens come down. Ceiling. Massage, everything is voice control. So they're really focused on the customer experience, and it's incredible. And I think a lot of other manufacturers around the world, they don't focus enough on the user experience. [00:25:19] S1: Completely get you and agree with that. But as your wonderful accent denotes, you are Italian. Yeah. And a huge amount of the European industrial economy is rotating, centered around cars. Yeah. Do you worry about that? [00:25:33] S0: Well, I worry even more about another factor. I think all the Chinese manufacturers, they will become robotic companies. I think all these automakers should transform themselves and start building humanoids because the humanoid will be what cars were in the 60s. If they don't do that, they will not lose only cars. They will lose also the humanoid market, which is trillions of dollars. [00:25:56] S1: Are you seeing the advancement with humanoids in China in a way that you really didn't expect? [00:26:00] S0: Yes. I don't know if you saw the I don't know what was the formal name, the Olympics of Raids? [00:26:06] S1: The Humanoid Games, I think.
00:26:06 · Harry Stebbings, Matteo Franceschetti
[00:26:06] S1: The Humanoid Games, I think. [00:26:08] S0: Yeah, it's insane. The way I look at that is, okay, you look at this thing, it looks a bit funny, they look a bit clunky, but they start doing these things. Knowing how fast AI is moving, if next year, those same games will be mind blowing. That is what worries me. What I saw today, right, if you just look at that and you say, oh, hello, look at the thing, these robots, you know, they are not really good at walking. Even if they did the records in the 100 meters, there was a robot that ran faster than Usain Bolt. [00:26:37] S1: So they know how to I did a video on this. There was robot that beat the high jump. [00:26:43] S0: Yes, I saw that. And as they were fighting, you know, the fighters. Tennis. Yeah. [00:26:49] S1: Like, real Tennis time was really cool. It's insane. Yeah. But in one year from now, we will be blown away at speed of AI. Did you see the paper last night, or essay or post last night from someone at OpenAI, Sam promoted it, that basically said, we actually need to put a slight pause on this. It is getting too far too fast. [00:27:10] S0: Yeah. I think the part that is worrying everybody is the part of self learning from these models, and so they are getting to the point where they train themselves. And that is when we start losing control. There is a point, even in our [00:27:22] S1: model Do know that we're already there?
00:27:22 · Harry Stebbings, Matteo Franceschetti
[00:27:22] S1: model Do know that we're already there? [00:27:23] S0: I think we are. Then I think there is a big delta between what we see as users, and probably what the frontier model companies have in house. And I think they have already seen it behind the scene. You have seen some of the things that are happening already in terms of cybersecurity, in these civilizations, so that there were three attempts of civilization, I think, in an OpenAI model where agents were building their own group. [00:27:49] S1: I'm gonna go there. You sell in China. You you spend a lot of time in China. A lot of your investors, including Keith Raboy, who's a friend of mine, fucking hates China. How do you reflect on that? Is it as evil and CCP driven as it seems? Are we in a deglobalized world that should hate China? How do you think about that? [00:28:08] S0: Yeah. I don't have a specific opinion on that, so I cannot really comment. I can just tell you, for us, it's key market, it's a big opportunity, and we decided to sell there, and it's doing really well for us. [00:28:20] S1: Is it very different selling in China? [00:28:22] S0: Yes, because you cannot sell on eightsleep.com. Literally, you don't sell on a website. They don't use website. And so for us, it was literally learning everything from scratch. [00:28:31] S1: What do you mean they don't sell on a website? [00:28:33] S0: Chinese don't buy on websites. There is no e commerce as we know it. They only buy on their super apps. So on WeChat, Rednote, and equivalent. We had to learn all that.
00:28:33 · Matteo Franceschetti, Harry Stebbings
[00:28:33] S0: Chinese don't buy on websites. There is no e commerce as we know it. They only buy on their super apps. So on WeChat, Rednote, and equivalent. We had to learn all that. [00:28:44] S1: What the fuck? So where do they land? Like, you send a referral link to your friend? Where's the referral link from? I'm confused. [00:28:51] S0: Yeah. Imagine that everything, the equivalent, to oversimplify, is like if you were buying everything on WhatsApp. They don't go on any website. Website are, at the most, just literally like if you just want to scroll and see some picture and read a bit more about the product, but all the purchases, all their credit cards are on Rednote or kind of Amazon equivalent and WhatsApp equivalent, or TikTok, obviously. [00:29:15] S1: Does that impact how you think about how we should think about security for these AI assistants? Everyone now is like, Oh, would never put my credit card in Instinct. Or, What if it gets hacked?