Learn. Share. Evolve…

0:00:06 I have a saying where momentum is a moat today in this sort of era of AI applications.
0:00:09 And when I say momentum is a moat, I don’t mean just distribution.
0:00:11 I also mean product iteration.
0:00:19 And so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company
0:00:22 that are highly high and exceptional, great people to build products,
0:00:28 and then use that to continue to iterate on innovation on the product format that is already amazing.
0:00:33 Yesterday, A16Z partner Brian Kim joined TBPN with hosts John and Jordy.
0:00:38 The discussion centers on Cluelive, an AI product that has generated significant attention online.
0:00:43 Brian shares his perspective on the decision to invest, how he evaluates early traction and distribution,
0:00:47 and what he looks for when backing founders with unconventional go-to-market strategies.
0:00:49 Let’s get into it.
0:00:53 As a reminder, the content here is for informational purposes only.
0:00:56 Should not be taken as legal, business, tax, or investment advice,
0:00:59 or be used to evaluate any investment or security,
0:01:03 and is not directed at any investors or potential investors in any A16Z fund.
0:01:08 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:01:11 For more details, including a link to our investments,
0:01:16 please see A16Z.com forward slash disclosures.
0:01:22 Brian, welcome to the studio.
0:01:23 How are you doing?
0:01:23 Good to meet you.
0:01:25 Good to meet you.
0:01:25 Great to be here.
0:01:26 Thanks, John.
0:01:27 Thanks, Jordy.
0:01:29 Your notifications must be crazy right now.
0:01:33 Clearly, you guys decided, hey, Friday, let’s throw it out.
0:01:34 That’s right.
0:01:35 Nobody’s crazy to launch.
0:01:37 Everyone’s going on a weekend.
0:01:43 Yeah, there’s no other Andreessen deals that are really taking up mindshare right now.
0:01:43 This is the one.
0:01:47 Yeah, you guys, the thinking machines was leaking to the FT.
0:01:49 Steamrolled the $2 billion deal.
0:01:52 And, of course, Cluelay is just going to suck all the attention out of the room.
0:01:53 For sure, for sure.
0:01:54 This is the hot one.
0:02:00 Anyways, we got your launch post here that we read briefly earlier on the show.
0:02:04 Why don’t you break down background on you, and then let’s break down the deal, why you
0:02:05 invested.
0:02:08 And then, of course, we’re going to have Roy on in just 10 minutes.
0:02:08 Fantastic.
0:02:10 Background on me.
0:02:12 Been at A16D for four or five years.
0:02:13 Look at a lot of AI applications.
0:02:16 You met a bunch of my colleagues here and had them on already.
0:02:19 Invested in 11 labs, functionalists of the world.
0:02:24 And prior to this, was with a SNAP as an early employee and with a CFO.
0:02:26 Were you down in LA?
0:02:27 Yeah.
0:02:28 Are you in LA now?
0:02:30 No, I’m in New York right now.
0:02:31 But my heart is in LA.
0:02:32 Okay, yeah.
0:02:33 We got to get you back.
0:02:35 LA’s coming up.
0:02:36 It was too nice to live, you know?
0:02:38 All right.
0:02:39 So, deal, rational.
0:02:41 Anatomy of deal.
0:02:42 Or as you said.
0:02:42 The anatomy.
0:02:45 I think it really, really breaks down to a couple things.
0:02:47 But really, three points.
0:02:48 One is, you know, distribution.
0:02:51 It’s really, really hard to get distribution these days.
0:02:55 And to get it repeatedly is a little bit of a dark art.
0:02:55 Yep.
0:02:59 And so, I think Roy had that in abundance.
0:03:01 So, one, got the distribution.
0:03:04 We invest for strengths of strengths, as you know, not lack of weakness.
0:03:06 And so, that’s really exciting for us.
0:03:09 Second, I love the product.
0:03:12 You know, I grew up on Dragon Ball Z.
0:03:12 Yeah.
0:03:16 And I always wanted one of those scouters that tells you, how strong is Jordy?
0:03:17 How strong is John?
0:03:18 Sure.
0:03:19 Like, the thing goes up, right?
0:03:22 And that’s essentially what it is on your web browser, right?
0:03:23 Yeah.
0:03:25 Talking to people, you just do a quick command enter.
0:03:29 And it just gives you all the things you need to know while reading it and looking into your eyes.
0:03:31 I think that’s special.
0:03:35 I think that sort of is right for a lot of the use cases, whether it’s consumer or enterprise.
0:03:36 So, I love the product.
0:03:40 So, that’s one thing I’ll call out today.
0:03:45 We’ve had our intern over on the intern cam testing the product all day long.
0:03:46 And I’ve been impressed.
0:03:46 Yeah.
0:03:46 I’ve been impressed.
0:03:47 He’s there.
0:03:48 Tyler, give us your video.
0:03:50 How are you liking it so far?
0:03:51 Yeah.
0:03:52 It’s been really good.
0:03:53 I mean, it’s very fast.
0:03:55 The answers are really good.
0:03:56 I think it’s like a great product.
0:03:57 Well, that’s amazing.
0:03:59 Out of time, what would you rate it?
0:04:00 Why did you put it in the car?
0:04:02 I would say nine.
0:04:07 It’s our version of kind of like the office in a box.
0:04:07 What do they call this?
0:04:08 The quiet room?
0:04:08 Yeah.
0:04:11 A lot of people have like these toll booths.
0:04:11 Yeah.
0:04:12 Yeah.
0:04:12 Yeah.
0:04:13 Phone booth style.
0:04:16 I think the World Economic Forum says like live in the pod.
0:04:17 Yeah.
0:04:19 And our version of a pod is a Maybach.
0:04:19 Yeah.
0:04:20 It’s very perfectly.
0:04:21 It’s perfectly soundproof.
0:04:23 So, when we don’t want to hear him.
0:04:24 He just rolls up the window.
0:04:25 He just rolls up the window.
0:04:27 But he’s got a desk in there.
0:04:27 Yeah.
0:04:28 It’s a great setup.
0:04:29 He’s got a comfortable setup.
0:04:29 Phenomenal.
0:04:30 Phenomenal.
0:04:31 Massage chair.
0:04:31 It’s great.
0:04:32 Good ergonomics.
0:04:33 Yes.
0:04:34 Yeah.
0:04:34 Thank you.
0:04:35 Thank you, Tyler.
0:04:36 It made it a last bit.
0:04:36 Yeah.
0:04:36 Yeah.
0:04:37 So, that was.
0:04:40 So, we’ve had Roy on the show a couple of times.
0:04:40 Yeah.
0:04:45 We’ve covered some of the various stunts and we got some pushback one of the times we had
0:04:47 them on because we hadn’t used the product.
0:04:47 We hadn’t used it.
0:04:49 And somebody was calling us out.
0:04:49 Yeah.
0:04:53 And now, as a company, we’re paid subscribers of Cluely.
0:04:53 We are.
0:04:54 We’re customers.
0:04:56 You can throw the TVPN logo on the site.
0:04:57 Yeah.
0:04:57 Excellent.
0:04:59 I’ve been impressed.
0:05:03 Like, we were kind of firing back questions, using it more in that interview functionality.
0:05:10 And the answers were very good guesstimates of, you know, if somebody that had generalized
0:05:12 knowledge on a topic being able to answer quickly.
0:05:13 And he actually looked.
0:05:14 I think it answered a better question on.
0:05:20 It answered the 747 question better than my ChatGPT 4.0 direct answer.
0:05:21 There we go.
0:05:22 Cluely mogged.
0:05:23 Yeah.
0:05:23 O3.
0:05:24 Yeah, yeah, yeah.
0:05:25 Whatever the fine.
0:05:26 I wasn’t O3.
0:05:27 Cluely mogged O3.
0:05:28 But it did well.
0:05:30 I guess the last point I’ll just add on.
0:05:33 You know, it’s a, you know, revenue conversion.
0:05:36 A lot of people think, oh, is it just hype and what’s happening?
0:05:38 Is it all distribution, all the stunts?
0:05:43 The truth is that he is actually converting that to revenue, right?
0:05:44 Whether it’s consumer or enterprise.
0:05:51 So that, to me, is sort of the, I guess, the seriousness that underlies the crazy stunts
0:05:52 that people see outside.
0:05:54 And that combination works for me.
0:05:55 I’m excited for it.
0:05:57 And, you know, let’s go.
0:05:58 Let’s go.
0:06:00 Let’s go back to the first one.
0:06:05 Roy’s clearly great at distribution, breaking through, getting attention.
0:06:15 It feels like earned media does have a cap versus paid media or brand marketing or some of the
0:06:21 other flywheels of, you know, referral programs or, you know, some viral mechanic.
0:06:25 It doesn’t have a cap, John, he’s going to be in front of Congress, you know, using Cluelay and some spectacles.
0:06:26 Well, that’s a good question.
0:06:29 Cheating when he’s dragged in front of Congress, you know, for antitrust.
0:06:41 Do you think it has a cap or, or, or, and, and because you could, one, one scenario is, is this is his, this is not, this is not his, this is not his permanent go-to-market motion.
0:06:43 It’s, it’s merely the beachhead.
0:06:50 It’s, it’s the way to break through, get attention, hire the first 50 interns, but the next thousand interns will come through recruiters and kind of standard practice.
0:06:56 And he’ll be on a more traditional podcast circuit when he has news, but we won’t be hearing from him every single day.
0:07:03 The other is that maybe we’re in the new era and he actually can, and the company can go viral every single day.
0:07:13 And you’re seeing kind of the, the Mr. Beast playbook in reverse instead of Mr. Beast going viral every day and then launching a, a, a snack brand the other way around.
0:07:17 So he’s builds a company and then becomes famous on the back of that company.
0:07:20 Which one of those feels right to you?
0:07:23 Yeah, I think, uh, maybe I’ll just comment.
0:07:24 One, Mr. Beast follows Roy.
0:07:25 So that, that’s fun.
0:07:26 There we go.
0:07:27 Fun fact one.
0:07:28 That makes sense.
0:07:29 Fun fact two.
0:07:35 I think from a media and audience perspective, John and Jordy, I think, I think of it as like a bunch of oceans.
0:07:36 There’s no one ocean.
0:07:44 There is Indian Pacific Atlantic, and that’s Twitter, you know, Facebook properties, as well as like, you know, more organic.
0:07:48 And all of these pools of water are very, very deep.
0:07:49 Yeah.
0:07:56 And in terms of general population, who I lovingly call our, you know, consumers, I still think it’s so early.
0:07:56 Yeah.
0:08:00 The only consumer AI product people are using are really chat GPT.
0:08:01 Yeah.
0:08:08 And for them to actually learn about products like this and use it, I think the, the, the sort of oceans way deeper than we imagined.
0:08:10 And we’re just scratching the surface today.
0:08:13 Talk about calculated risk.
0:08:16 There, this feels, you know, this is a calculated bet.
0:08:19 You guys invested 15 million in the company.
0:08:25 He’s clearly talented on the product side, clearly talented on the attention side.
0:08:26 You know, he’s charismatic.
0:08:28 He’s fun to talk to.
0:08:29 He’s well-spoken, all these things.
0:08:31 So there’s a lot of reasons to love it.
0:08:39 And then the, the pushback and, and other, other VCs that maybe didn’t do the deal would say, oh, Roy’s like a wild, wild card.
0:08:48 Like, do you, do you think that more investors need to be comfortable with like a very potential real risk and, and, and maybe the average VC has just gotten a little soft?
0:08:50 Good things.
0:08:59 I think, look, like if you think of the history of large general population products, you see a lot of them actually being pretty risky early on.
0:09:01 Sought or not for Facebook.
0:09:02 Where does Snap begin?
0:09:05 What was, you know, Reddit initially?
0:09:13 And sort of think of, thinking about that, I think there is a beginning of a lot of the consumer products and products that are used by many people have a funny beginning sometimes.
0:09:17 And I think, so one, calculated risk site, we’re comfortable with that.
0:09:25 And I think second thing is when I, you know, I have a saying where momentum is a moat today in this sort of era of AI applications.
0:09:28 And when I say momentum is a moat, I don’t mean just distribution.
0:09:30 I also mean product iteration.
0:09:43 And so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company that are highly, high and exceptional, great, great people to build products.
0:09:48 And then use that to continue to iterate on innovation on the product format that is already amazing.
0:09:51 So that’s sort of the bet, if you will.
0:09:53 And when those two come together, I think we’ll be surprised.
0:10:00 How do you think about restrictions or dynamics from the major, like big tech companies?
0:10:04 Because you mentioned that, you know, there’s a consumer angle here.
0:10:09 But when I see the product, I see it as a desktop app.
0:10:13 And many consumer interactions happen on the phone.
0:10:21 And so, you know, Roy was fantastic at creating a viral moment around the idea of like using Clueli on a first date.
0:10:28 And yet you’re not going to have a first date over a Zoom meeting on your MacBook Pro.
0:10:31 Maybe Roy’s planning another pandemic.
0:10:32 Yeah, maybe.
0:10:37 But people do talk to each other on the phone and on FaceTime.
0:10:44 But it’s much harder to plug in and do screen recording and do picture-in-picture and all of that.
0:10:52 So it feels like there needs to be some sort of transition point if you’re going to go broader to killer use cases for a consumer.
0:10:58 But at the same time, you’re going to bump up against a ton of pushback from the platforms who just say,
0:11:00 we don’t want to give you access to that API.
0:11:04 We don’t want you to screen record for privacy reasons, good or bad.
0:11:05 So I don’t disagree.
0:11:07 We are techno-optimists.
0:11:15 And I would believe that there will be another innovation that actually allows the likes of Clueli to live and be omnipresent in everyday interaction.
0:11:19 That said, you know, AI is like a digital god we created.
0:11:21 And we trapped it behind a little chat box.
0:11:27 So it is natural to me that it should live on a thing that you actually work and interact with the most.
0:11:32 And we’re starting with computers today because that’s where the power is.
0:11:38 Like that’s actually the digital god is not godly enough on the little, little, you know, little devices today.
0:11:40 So we put it in a little larger box.
0:11:41 Yep.
0:11:42 And the little boxes will get better.
0:11:44 And we’re excited for that future.
0:11:45 Awesome.
0:11:46 Well, I’m excited for you guys.
0:11:48 Congratulations on the deal.
0:11:49 And we got to get Roy in here.
0:11:51 We should pull up the launch video as well.
0:11:52 But thank you for joining.
0:11:53 Thanks for having me.
0:11:56 Brian, thank you for being bold and making a real bet.
0:11:58 Probably had to fight it out with the American Dynamism team.
0:12:01 Because as we know, they’re working on hardware.
0:12:02 They’re working on reindustrialization.
0:12:04 They’re doing everything over there.
0:12:05 Thank you so much for stopping by.
0:12:06 We’ll talk to you soon.
0:12:06 Cheers.
0:12:07 Bye.
0:12:11 Thanks for listening to the A16Z podcast.
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0:12:20 We’ve got more great conversations coming your way.
0:12:21 See you next time.