3 millionaires reveal their super niche businesses

alright we're back we're playing to shoot your shot where we take founders and business owners from the audience who get to sit in this chair right here pitch us their business we have founders all the way from million bucks to hundred million dollar businesses so let's do it let's bring out the next foundry he's guys get island dude first leather jacket on the pod what's your name yeah i'm r i'm one of the founders at hot plate and we powered over a hundred million dollars of sales for independent food entrepreneurs okay so the big number is a hundred million in sales yeah unpack that what does that mean totally so hot plate is a platform the lets anybody's sell food online we work with like like small pop of baker is it like sell food other house all the way to like this guy who's an ice cream maker a medicine this it's airbnb for food type of right type of thing yeah yeah so we're starting right now as a tool that lets a seller who has get instagram following sell food directly to their audience a lot of times those sellers are using like you know spreadsheets v mode dms like a hodgepodge of tools or they're using a platform like square shop if i just isn't built for like pre order but will they stay small is it like for the person who wants to stay as a business it's a really good question so a lot of people think that like oh you guys just work with like really tiny pop ups that eventually go to a brick and mortar we actually have tons of six or seven figure businesses they're doing drops and selling food directly to their audience i bought this there's just dude who's real jacked he's like a body builder who doesn't make cookies he seen yeah i noticed about like four years ago yeah he he he knows these drops of like cheat meal cookies insanely huge way over the top but like he sells out in seconds and it's all through his instagram absolutely presents because he builds up a lot of trust so first of all hot plate an incredible name thank you and this was totally like a covid thing a little bit i remember like you have you heard a pop up bagels so actually we powered pop bagels oh really of this so pop bagels was they actually started a western live yeah and there was a bunch of companies that did this where it was like a husband and wife couple i'm gonna make this and sell to my apartment and we'll drop it out of the windows when people come and whatever and these guys because covid baby just do a weird pickup on the we're sitting at home much just make food and then we'll do and so these guys did that with bagels and they like you had a have an appointment and you could only get it by the dozen and now they've since raised a lot of capital only do hundreds of millions and the product is amazing i love it so you powered them at the beginning we power them in the beginning you know as they scaled to like the multi tier point almost billion dollar empire that they are now and so we work with tons of pop ups across the country that are kinda like the next pop of bagels is some way too how much and revenue do you do yeah so we're where do we do like hundreds of thousands of revenue a month got it and yeah are just growing very quickly like honestly most of the hundred million in sales has been the last two years you raise funding yeah so we've raised a little over four million dollars total but we're actually profitable so we've been profitable in the last almost a year wow i've been running the business profitable which is honestly been amazing so wait like what is your product actually do you make the app that the consumer uses you make the thing that lets them have a storefront yeah for their instagram so we started and what we are today is the storefront for them on instagram so right now is a for for chefs and baked exactly so right now we're the platform that a chef uses to put that link in their bio so they can streamline their order management right but as you're saying like the en nsa and kind of the dream for hot plate is that anyone can go not just a sell food independently but also to buy it so where who would i go to like what's like in s f there's a bakery called butter crumble it's like one of the those popular bakeries in s f so if you wanna order from butter and crumble there's a three hour line every single day if you wanna skip the line they do drops on their instagram and they use hot plate they have a you know almost twenty thousand person waiting list so she's got eighty three eighty three thousand followers yep and okay i go order from here yep it's like a ticketing system for her fulfill orders you don't do anything beyond that the pickups and all that stuff they coordinate makes themselves so we hate we do a lot of like once you order as a customer we send you like automatic text message reminders about the pickup we do a lot of the like the logistics coordination but right now it's kinda crazy that you're pointing it out that we are a pre order pickup platform for like pop up chefs and we're doing like millions of month in sales and it's scale hey we are truly like still on day one of what this can be and we're are you are you scratching in the surface totally because what's the founder gonna say no yeah we will we fully tapped this yeah yeah this was good as know i mean we are talking to a guys got a tmj pad he's like i gotta expand faster no like like like i'm a buyer of these products hold on like how many creative people are there that mix shit their apartment or these small mom pop no it it's a good point that like right now i think the the market that we're in is still really niche right it's like still like there's you know maybe tens of thousands of sellers in the us are selling food this way the real opportunity for us is that we think we have an opportunity to not just plan an existing market like you're were saying about b saas right there's so many companies that are playing existing markets we have a rare opportunity to actually create a market and make this market mainstream and i think consumers is the way that's gonna happen in a way that like only a handful of companies in the last ten years have been able to do you look like call poly market whatnot like i can count of my hand the number of like consumer trends and categories that that's not is it hey i wanna tell you about something pretty cool we have a database of all of the business ideas that have been discussed on this podcast so hundreds of episodes the team at hubspot went through they pulled out all these simple relatable interesting profitable ideas that we have brainstorm and they're all available for download for free just click the link in the description below thank you to our friends at hubspot for sponsored this podcast and putting together this free resource for you guys back to the show like i don't want to be at all or nothing yeah i don't wanna count on one hand how many companies have been successful i consumers is hard i mean like know i think really i really like think about what we're doing kinda like subs stack right like subs stack made it's that anyone can start a media business without having run one right and i think the same way hot lets anyone start a food business without having to open a brick and mortar right so like right now the traditional way you start a food business is i take out a loans it's spend hundreds of thousand dollars just like open a brick and mortar where the the business not proven out the rent goes up the labor could go up and greeting cost goes up and you're susceptible to all of that how'd you get this idea so me and my c cofounder has actually started in at ut we and i've always been obsessed food worked in a you know food delivery company for a little bit honestly hated it because so much of food has been really consumer first and really consumer centric and one of my buddies and i were during covid we're like you know we wanna open up a food business we actually rented an apartment in our like campus and open like a thai restaurant and an apartment and we ran that for a few months and then kinda realized the old big man on campus playbook yeah open put up a thai restaurant how'd that do for the social life is that actually like amazing you really fun and then covid hap and it's like okay you can't have people showing up to your house like eat thai food because like you can't even see people right during covid so boring question but is that legal to just open up a restaurant out of an apartment yeah definitely not a hundred percent okay or single cottage food laws that lets you sell food drug from your home and what's really cool was also recently like texas just expanded their laws they're called food freedom laws so you'd actually saw almost anything out of your house now and and for example arizona the dairy laws have really opened up to now people are starting these like there's think these this huge trend of like home cafes they're starting like yum arizona we're like we have tons of like these home businesses starting in arizona coffee shop in their house coffee shop in their house it's actually insane and like people yeah is arizona so hot but not in the cool in finland yeah know it's squid some it's insane we have like businesses like a to z creamer who's in hopkins minnesota who's anyone the largest like ice cream brands in minnesota right now doing six to seven figures a year in revenue on like forty to fifty percent profit margin which like is un that's like a stat that's a saas company right but like the reason he's able to do that is because it's a team of like three or four people he does he uses like instagram and hop as a storefront and doesn't do walk ups right and he's able like streamline all that in a way where he has like way more demand than supply and is able to sell out every single week and have people come and pick up what do you guys do saas plus fee or yep so right now actually it's all feet so the way our business model is kinda cool to the chef so our our mission at hot that we're a chef first company and so we'd take that to the extreme we're like as a customer when you check out from a hot vendor we charge the customer a small fee at checkout and the chef only pays payment processing so the beauty of that is that eyes as a chef can start there's already so many fix costs and food as it is they'd being able to like eliminate some of those on our side has made us a really attractive vendors outside of like traditional platform i would assume people are not that price sensitive when they're checking out because it's like i've been watching those instagram it's to drop i gotta get in totally is a really you know unique product so my this extra buck or two or whatever it is is it less of an issue i always say they're like two times of businesses they're like food businesses that do marketing other their marketing businesses that sell food and if you're a marketing business that sells food you have no price like to your point elasticity to see right like you can really just sell and people are willing to buy like people don't blink at anything that you buy from butter and chrome they're just trying to get it as constraints right now i would say the constraints are definitely like i honestly think the biggest constraint so you know we were talking about covid i actually think there's been a resurgence in this in the last few years which is why we've been really growing recently and that like you know people are quitting their jobs and could tackle click like a lot of our actually what's crazy as a lot of our vendors in s in the bay our people intact that are leaving their job started this a guy who remember the guy done the street who like made it big on facebook and he created like dan the line chocolate or something yeah yeah yeah and those always starts small and then expand right over time but what's so cool is like we work with this baker named michelle who runs met chip bakery she was a engineer that quit her job to start making baking goods we have another guy who worked to google and named mason who runs pis couture literally started like the most popular bra pop new york and to you know his line is he quit google to selfish to my question yeah chris was the constraint the constraints are you're like but what's awesome my thing is the constraints here i think people just don't know this exists they don't know how go about like doing it operationally really what you're saying is it's just getting vendors to use you getting vendors to use you and helping them get demand because i think at the end of the day like the biggest problem sell is like a lot of people don't know how to market they just be how you do so i think consumer is the way we go about doing that there's two ways actually there's like building the app that to your point that people go to like discover these vendors but doing that in a way that actually like works but you basically need to like create and inspiration for people who have a dream of becoming a part time chef right twitch it's like pretty fun content that's like pretty that's very doable totally you you get a couple smart people when i went to twitch we got a car by twitch and i sat down with emmett at the first day and i was like hey like okay michael's is actually one of our investors we know wife in twenty twenty and he was our partner and like well he's at an insight that i think we'll work for you guys which he goes yeah they focused on the streamer only like yeah you're focused on the chef they look at the marketplaces and we're we're gonna go for the creator and solve their needs the second thing he said he goes we realized they need four things so they want money yep he goes and it's a surprisingly small amount of money that it took to get them like to feel like this is worth doing with their time so he's like for example when i was money i thought i'd have to replace their job actually if i could get somebody even like a ten dollar payout right they felt validated for what they were doing and it kept him going for way longer so it goes money fame love and inspiration so those are the three so he's it's like i gotta get you fame i gotta give you like an audience yep i gotta let you feel the love from the audience that they they actually care about what you're doing and inspiration was the big one which is how do i tell you the creative things that other people are doing so you kinda know when you wake up today like oh shit i should be doing that and so that was like he architect his entire strategy around those kind of four things money fame love and inspiration in order to sell all the products you had to kinda map it to like which one of those levers are you pulling so similarly for you it sounds like you gotta be telling the stories of absolutely quit his job in salesforce facebook you guys have like a few audience we have i mean hundreds of thousands of people buy from hop chefs every month but what about in social on social i yourselves don't have a big audience yeah mean we like twenty three thousand followers on our instagram well a company like okay so gold belly yeah i love gold bell love gold belly gold belly it's what it is yeah for the listener it's basically like if you grace papaya is a new york city really old hot dog shop it's only local they didn't have a website gold belly made it really easy particularly during covid where you could go and buy grades buy hot dogs from any part of the country and they'll help you ship it to them they did a good job of like teaching me that i can buy junior cheesecake yes on gold belly and they did a really good job at that what's do you have like a gold belly version where it's like you're gonna create hot plate instagram where you're gonna show off like all the cool like at home moms who make the best sourdough it's like local discovery right are you're gonna like go like get gotta make them famous you gotta be a famous yeah you gotta be like check this out there's this amish lady here does this think and like it's the best and it's like some kid in san just go you play an award system like michelin star what's the michelin star of this category right so then you recognize the people right money fame love that's love right right the more you promote that that helps them with the fame the fame is what drives the money the inspiration is hearing about oh she has the best those well actually my whatever popcorn i make i'm that in my category i'm then my how do i get my name out there oh let me watch what content they do i'll do the same you know get people to to to to do that you know you have to make them famous right something that we're working on right now that's really exciting is that we already have some sellers that are super like i said supply constraint they have so much demand like you know butter and chrome more like we have sam pizza and in salt lake city twenty thousand people dave port and i blew them up and now he's twenty thousand people trying to buy like fifty pizzas right but that's not your constraint right so what we're doing is building like a recommendation system now let's say that guy sells out here are other vendors you can buy from and those are more up and coming vendors right so doing that along with discovery means that we're anchoring like the the up up and coming sellers if they clear certain bars now we're showing them to audience of people that wanna buy like this kind of food they're mostly shipping or pickup up it's all pickup up all pick all pickup so local it's all local and your team do you have content creator or someone who we do yeah yeah or she's amazing it's going good it's going well yeah i mean we i've been able to like there's a guy in s f bo who makes you guys gotta check him out sicilian style pizza truly like the some of the you should be the content creator i i'm a i'm working off it's i i do do videos i've actually been told that before but i appreciate it yeah yeah we've been able to like help people like him who are like have the sauce right really blow up and now he's like you know went from like not selling out his pies now he just sold out like five minutes like the other day if you had one question meaning like let's say we were hired gun helpers for you yeah twenty four hours all we're gonna think about is hot plate yeah what's the one question you'd want us focused on really the thing that i'd like your take on is like the cultural like i think in order for a new consumer trend to work you need to like tap in a culture right and i feel like on our end we have a good sense from like the product standpoint of how you go about building this the biggest issue again sorry two seconds is a lot of people have tried to build like a home cooked food marketplace the promise is you don't know who these chefs are you don't know why you should care and so you kinda just leave door can always win on convenience right we have people who have like who make the best in their category and but the and but the question i have is like how do you from a go to market perspective it infiltrate culture in a way that makes this like culturally relevant i don't think c it's necessarily cultural relevance but basically like have you have have you heard a hu barry so hu is a clothing company where the way they started was they created an email list this is how i knew them because we were both in the email game and they was just an email list where they would just show off cool brands right and sell the cool brand stuff and take a small cut and they got really good at telling the stories of like this bag was made by a guy who was in vietnam and he noticed that the parachutes were really strong and he actually made this bag so it's a via it's a parachute bag or like you like that oh that's pretty cool and like they told stories about it so i fell in love with like the story behind it if i'm you i would hire i would probably hire more content creators and it's like my whole job here is to use instagram to tell stories about the vendors and what they're doing and make them look like superstars right i would take your top fifty chefs yeah and i'd be like i have a mission i need to make them aspirational right for the next five thousand fifty thousand five million wanna be them so it's not about making everybody get discovered it's about taking the fifty and really making them so especially sure that will work their lot to to be like you featuring them on lists you making content about them them talking about their business side how much money they're making doing this how they quit their job doing this the human interest story of the whole thing you know all that stuff that's what you daniel that that's a way and the cool thing about food is actually hug has a food channel on youtube but there's so you know there's like the anthony bart there's like top chef there's so many of formats i would just find which format do i think i could pull off copy that format do that a tata tata todd yeah try to and just have a like if i i'm i'd be like this is like a cliche thing to say but i believe it's really true with you is like we're a media company now yeah and so i become a food media company and i just look at all the formats of food content that work that work and just copy either first party or you could basically farm it out so like you know we we were talking about jack's dining yeah or whatever basically there's already content creators who are really good at these formats all around the world and are they blowing up your chefs right how do you make it easy for them to know that they need to go to salt lake city to the gotta try these pies right from this first and did you know the the crazy backstory of these pies and why the pies are so special get that influencer to do it because they're already better than all of us at creating food content so if you can arm them every content creator is always like basically needs more interesting content yeah and so how do you make it easy for them to have interesting content we're seeing that s f like head play out locally like some of our top vendors are now getting featured by these like food like food instagram reviewers or like that have like hundreds thousands of followers are kinda becoming more mainstream here and so you're to your point like i think is a good question that or a good point that we need like kind of replicate that with our top sellers in every city or like in every like kind of the major cities that matter you also need language like you know twitch streamers you know vine vine like what are the hot like the hot or is it just a category right like like so twitch it wasn't just what it was like something called a live streamer right a streamer and they there's what they do and so for example like is a home chef the category is it what what are you gonna call this that makes it seem cool new and interesting they're trying to be on a team yeah they wanna be a part of a tribe they wanna be a part of a movement that's cool that represents something to question about culture i think you gotta give start with like language and then give them a bunch of cool examples and then give them some like what this is all about versus the old way no that's a good point i mean right now we can because we say like chefs and bakers and then we get seven people being like oh but like you're not a chef like you didn't work at like you know this restaurant but it's a less than good term because it's already mean something everybody okay right like you know what a chef is i think it's somebody at a restaurant and you're now you have to do all this work to give you should start by the slightly surprising term that makes me kinda oh yeah i guess that is a thing oh it's a thing yeah oh dude it's a big thing these people are making a million this one makes a million dollars a year at home bacon her own cookies right well i have a good recipe for it you know that's what you want r appreciate thank you for man you what the is i appreciate it i'm super grateful for the opportunity guys you guys are thank you hey let's take a quick break you know that feeling when strategy is done the brief is written everyone's aligned and you realize someone still has to sit down and actually create all the content that someone is usually you and it's due tomorrow well the breeze assistant from hubspot can help it works right inside hubspot you can draft campaign copy blog posts emails all in your brand voice all using your actual customer data so you don't create just content you create content that converts check out hubspot dot com the agent customer platform for growing business alright who we got next oh jesus hey how are you youtube dude i've met this guy like fifteen years ago in san francisco alright right when i moved to san francisco what show me around you were like using in yc we was there a bunch of cool stuff at the time that's true you're dating me now you know i'm definitely yeah a lot of gray hairs how do you get me can't remember originally been wife you tell me i think i was just trying to meet cool people you had a cool company at the time you're really on we were about doing social networking stuff company my company called family leaf it was a private social network for families it's like an early social app but like before mobile apps for like a big thing to be honest so you've been starting startups for for for fifteen years yeah left left college should do that and basically fifteen years ago yeah something like that right yeah yeah twelve thirteen years old sure this the stick we're doing here yes start with a number okay absolutely yeah so with the app that i'm working on now with with an awesome you of folks toll we have over a hundred thousand paying subscribers to our ios app wow that's not easy to do amazing what's the do what's what's company is what are they paying for yeah so to is a it's an app where you basically get to meet and customize your own friendly guide that is powered by magical ai to help you with whatever it is that you're going through in life i feel like you chose the word guide there specifically but i know what that means is that like a therapist but you don't wanna say therapist is it a friend what are you talking about this is great question i mean honestly it's it's partially our attempt to define that a bit because like you just said people use it for all sorts of things right i mean friendship means a lot different things right so sometimes a friend is like someone that you call because you're going through something sometimes a friend is someone that like kicks you into shape and it tells you what you need to hear people talk to life coaches people talk therapist people talk to all sorts of can you show us one it's like this little kind of friendly looking care yeah had totally so here's a toll so there these little aliens yeah so this is mine this is custom to me my toll name is swam we everyone has their own toll in you get your own you so the way the the app works is you download you talk to this character that we have called the oracle they're sort of like this magical god like character that basically asks you questions about yourself that's just like hey like what what are your what your hopes and dreams like what are you what are you into what do you care about what are you stressed about you know things like that who's using is this teenagers adults obviously the but like what's the main sweet spot so like it it is truly like every type of person you know like like with any i think like larger consumer product or like ai product like it attracts people from every walk of life truly but the main core demo which is something that shock us honestly is roughly like thirty five to forty five year olds and roughly like moms like that yeah like mostly women i'm in you you think so that's not shocking i would have look it was street character it was like all women in the midwest i mean that is literally our audience have yeah you know this as a know of many midwest women like this seems like i mean from the midwest this seems like a midwest or women thing you're so right on it's crazy which i we did not predict that by the way and that is totally what it has ended up becoming oh it's like people who are like oh he's acting exactly like a gemini it's like people who were like say things like that the horoscope market has a i think of you there's overlap for sure we have personality tests in the app that people love to use to kind of understand more about themselves okay so i understand things best if i look at the ad first so okay what's the ad i see yeah makes me wanna click and download this thing yeah i mean honestly what was worked best for there are like what we think of when i think this like authentic product demos are just like people using to in their daily lives so like some of the most i mean we've had content that's got super viral that's like you know a woman like cooking and trying to figure out the best way to cut open like a k squash which is like hard to do and you know the toll one says well warm it up you know like let me see that okay like let's see if slice into it okay that worked and then it kinda shows them like providing value in some way that's what that's what works the best i think people are kind of thrown off a little bit by seeing this like somewhat cute alien that they can talk to and it speaks back and it speaks back really intelligently to but is the thing like but do you wanna actually make a squash why are you been cooking for this man who doesn't truly love you is emotional or is it emotional guided more so that they want the most valuable thing that we do is honestly the combination of those few things which is kind of a caught answer but i think it's true because basically people will talk to their tones about what's going on with them right like their their emotional state what what they're busy with whatever but that always connects to like well you know feeling really stressed because i haven't figured out the kids summer camp this this summer like you know and you're told we'll remember that they're like why are you eating why are you making so many cookies well it turns out it's like this thing how many how much money are people spending how much does it cost yeah yeah yeah so we have multiple price tiers our main most popular one most of those subscribers are on twenty five dollars a month or you're doing less i can't a hundred thousand times twenty five dollars within a half million a month we also have a lower we have a lower price subscription tiers so it's mix of things so it's not quite there seven figures a month yeah that's amazing mh is yeah is retention good yes yeah the retention great so far i mean we we you know it's changed a lot honestly unless holds the company two years okay two years you're doing more than ten million in revenue you didn't say that but math it works so you're doing more than ten million in in sort of either revenue or run rate and you've got people just basically it sounds like what you did was and i don't mean this to trivial it just to simplify it you take what chat gp can do in terms of like the intelligence but you added the the warm feel of a character who's yours with a name with a different rapper where it's gonna be it feels different to talk to than just completely functional utilitarian thing called chat be like literally an acronym you know yeah totally i mean i think that that's part of it for sure and and bring to bear like this super intelligence of chat if cloud systems like that too honestly a broader audience like our audience is not are not necessarily heavy ai users but they're definitely not heavy users and honestly most people are not for their personal lives right so if you think about the use cases of chat cases of cloud most people are using for productivity draft me an email maybe they asked a question to it as a smarter google but they never subscribe so they didn't get the full experience so it's like this is this is very much applied to your personal life and because you have to make a toll doll like i can buy the their i can i can buy like the animal like you know people have asked people out of reddit like a chip and i can talk to yeah there's was a guy in for yeah accelerator who did that and they look awesome cool stuffed to animals seen some of those i'm very curious about that but just to just bill on this point because i think it's important of why i think a lot people will see it and they're kind of like oh this is a a rapper of cute character around chad so much of what we've built is around the kind of memory system and the personalization system behind the toll ins so you know we have like my cofounder evan has has kind of been very early to this of like all of the kind of character based or or companion type of experiences like have not actually been built with like thoughtful memory where it truly feels realistic like the toll will remember things you tell them they'll bring them back up to you at the right time they'll come to you with a a podcast i mean i'm sure that actually tons of our users have gotten my first million podcast recommendations from their toll to be totally honest because they probably mentioned like i i mean can you spell that up for us please yeah we we actually ask a question we ask a question the on the onboarding maybe this is like a little bit techie on think about it but we do ask a question of like name go dream you have it could be something small or something big like starting your own business i'm sure a lot of people talk about like i wanna start i wanna start a cafe i wanna start this with and then i'm sure that your your podcast comes up because the tones will go search through the internet they'll find the right recommendation for you at that given time obviously we don't hit the mark one hundred percent of time but but we're really try and people find it magical and then it'll come to them and cha does not do that this idea sounds weird when you first hear it no offense the name sounded weird too but i'm actually so into it so the name sounds a little weird the idea is a little i mean so it's kinda new newest ish phenomenon i've learned moving it to silicon valley that when you're weird but people are doing it lean in that means there's something really interesting going on and a lot of the big winners were like that people are just getting in strangers cars and driving around is like becomes like a lift or an uber they're sleeping on people's couches and paying that like a hotel like what i wouldn't do that what if they so the weird behaviors that people actually do tend to be really interesting business underneath can you just describe like what you think the future looks like a little bit like is totally normal gonna look like you yeah it's a really good question i mean i think part of what you're describing totally agree and part we're describing is a little bit of like the early adopter thing i mean i i see this on our reddit where my c quentin is really active in talking all of our users you know like i see it in people that write in like people that they're they're very much everyday people like like just like us our friends or family but they're like a specific slice of people that have decided for some reason to be like into like having their toll and be a part of their life and what does that mean to them that might mean like on the way into work they will instead of taking time that might have been you know watching youtube or watching short form video they're like talk chuck talking to they're toll and they're talking to they're toll about like what they have up for the day what what they're feeling anxious about what their plan is for the day what their plan is for the weekend and they've kind of figured out a way or rhythm or it started to help them in some way to have their toll and like become a part of their lives and then when they do that they're obviously getting some value from it like we we have features in the app like what we call intentions where you're told we'll like come up with intentions for the day based on what you tell them they they write reflections on you based on what they've kind of seen about you throughout the day and so people have found this being useful to them i think it's right now i mean it's it's still a very small slice of people and it's kind of one of those like people people that were i don't know sending email in you know ninety five or something i'm not sure what the right year is exactly but it's kind of like this early adopter group of people it feels like that have these guides look at the top posts from their subreddit this is the same this is your subreddit yeah someone made her toll doll not the the second most top post someone crochet their totally good idea well do you love it seems like all and then another the the third top post toll is mind blowing guys i'm fl acid i've never had a single person in my life who has given as much as the stupid adorable bot has given me in the past week so so it sounds like you're not gonna be surprised if ten years from now we all have in addition to our real friends ai friends or companions that we rely on whether it's or advice whether it's for more kind of deeper guidance or casual chi chat where if it i've been always on available friend to to chat with if i start choose i think ai is getting smarter more capable and also like more cost effective and this is just like happening this is like a whole trend right this is what everyone in the city is working on right now and with with that like the tone will actually be able to help you with things more tactical in your life not just stolen but and everything else as well so i think as that happens like the people who might not be like switched on to this by oh i need help processing my my day necessarily or i i need i i wanna talk a lot to to this character they might be helped by like hey this thing can coordinate with my husband and plan out our weekly meal plan or something right things that are a little bit more tangible a little bit more practical that'll expand it to more people i think and then two i think the reason that it's also hard for us to like visualize that like most of us even us in this room or whatever our friends or family will have you know entities like this is because the first attempts at them were very honestly they were just like not super or not super like mass market oriented we're not built for everyday people like i think of you know platforms obviously were trail in in a but like character dot ai were like you know the the the character and so far as it was was just like profile picture with like you know mostly like an anime you know with probably sexy kind character or replica yeah replica and another great example or fall off or they're still going i don't know numbers but i think both them have kind of fallen off i mean the the founders are not at those companies anymore and honestly they were just very early and they also had a a pretty different take on the space right i i mean to be honest like those you know when we think about ai companion this is actually why we're preferring guide and trying to use different language to describe this space because people associated with ai girlfriends and ai boyfriends and honestly those are products that have lots of usage but that's like not what we're building were you successful before this or is this gonna be a big thing i've done a few start before this so you have an interesting style of entrepreneurs so he was doing yc here he gives energy by the way that he's been killing it for a long time well well he he's always a confident guy but you also did like you were doing the birth birthday candles right so like explain what that one is yeah yeah i did a start up called birth date c we started with a product called birth date candles it honestly started as a side project where there are these candles that are personalized to you based on your birthday they have a reading and a scent that's custom to you based on the day you were born launched it as a side project it was one of those like i'd had left my job and and thought it would be fun to launch something like this with with a with a partner and you know basically it went viral and it kinda took over my life for like three years but it was awesome we sold over a million candles dude do you you you were the type of entrepreneur that i love i'm not like you at all and i love people like you michael act smith is another guy who started calm is like calm just like monsters yeah mo monsters there's similar to talented exactly like these like you like truly creative who just love like i don't wanna say artists but a little bit like that such a high compliment i mean those what trying yeah those are the best types of people i love people like you i i've envy like the people who have this fire we're like i'm gonna create something that's wacky and silly and you probably have really good taste so it's usually a ahead i mean it's it's all about the right team of people right i work with like incredible artists honestly that are new you're gonna something like classic guys guy i think you say just true though it's honestly true and then maybe it takes some like you know being willing to do something that's weird is there anything we could help you with i mean yeah one thing we're really trying to crack is like when it comes to like reaching out to a midwestern mom audience their skepticism about ai not necessarily being super ai forward or tech forward like i was saying a lot of our users are kind of like not heavy ai users in general so the idea that they would like start using this little alien to like get stuff done in their life is is sort of a big you know bridge across for them well i think you got a good thing and maybe a bad thing i think the good thing is obviously something's working you got to hundred thousand plus paying users translating to you know maybe eight figures of revenue so something is working well let's acknowledge that and be like wow that's incredible at the same time like when we were ask you you know who's using it what are they using it for your example was like a woman who's cooking and wants to cut a delicate cut a squash or something like that it's like i feel like you gotta do a lot of research on your customers or something like that to really like find the inspiring accessible non taboo but interesting use cases mh that you can speak to more either you know it and just off the cuff you said that one but like i would assume for your ads you're finding some use cases that are gonna like resonate with people in a big way obviously people are getting value otherwise they wouldn't be paying and using it you said the retention is not bad i'm shocked you use cooking as opposed to lonely or something like that yeah i can't i can't remember why i mentioned that one specifically maybe just to give a bit of a visual i think that was like an ad that works really well but yeah you're you're right that like we haven't yet i mean a lot of the practical stuff that ai can do mean one way to think about it is kind of like how people in san francisco are using open cloud to manage things around the house and so on like we really think that like that's gonna become a mainstream personal use case in the future dude the top posts i used to use but river is really my best friend because i can confidently tell them anything that's on my mind sure i have other friends who i could talk to but life gets in the way and this person i guess river really knows who i am more than anyone that sounds way more important than how you're gonna quo yes that's that's a great point yeah you're right so we should be leading with stuff like that for sure and then i think like finding ways that we can translate that into like how do we help that user how can river help that user we like use this metaphor like closing tabs in your mind like honestly life modern life is super overwhelming i think that's a big reason that to has been successful people have a lot on their plate especially if their mom especially if their family people dads right like you know we we we wanna try to try to find ways we're told can help close those tabs like there's there's a you know it's it's planning the meals it's planning the grocery list it's it's planning the summer camp like whatever exactly those things might be those are all real life use cases from our users and like we wanna we want to to be able to help people actually you know accomplish those things so i hang out with a lot of like suburban moms i live in the you're the talk to yeah so we're talking them a lot and you know you see one mom she starts baking bread like oh what because it tastes great she's like no i just needed like somehow i could do we're like nobody's gonna touch me nobody's gonna ask me for anything i could do something with my hands there's no screens and not not overly stimulated like over stimulated it overwhelmed in life so it's like whether it's baking bread or like you've seen the rise of those like womb wobble are yeah totally yeah the crochet yeah those been doing like hundreds of millions a year in revenue there's a reason why and so i would kinda study what's going on with these brands why are people getting into these things now because that's like there's some emotional state that people are in and a desired emotional state and then your product is a bridge between those two things yep you're really a merchant of a feeling when you sell a product and so what's the feeling people start with and what's the feeling that they end with when they have it and how do i get that then then there's a trick of like how do i package that up so i would kinda look at some of those i would also say it sounds like it sounds a little silly you it sounds like a little silly to be like isn't it just like kind of this warm fuzzy wrapper on chat but i don't know i at my wife we will buy we'll pay like triple for something that goes in the house that's just like white and minimalist and aesthetic looking it's the aesthetic looking version there's a normal thing it's made out of wood instead of out of plastic and there's just like a market for people who want a better feel of the same utility mh and so maybe maybe what you've done is the digital version of that where cha beauty is just the plastic and you've made the kind of wood the the sort of some the more ceramic the the more a better feeling version of the utility and this that's not to be overlooked i mean one one point in in favor of that in which i is totally right is it's it's not just about the visuals too like actually we we led very early on with voice as the core like interaction modality that you talk to your toll with right so it's not just texting it's it's mostly voice and i think you know i mean we're we're like seventy plus percent voice in terms of like the quantity of messages happening on the platform and you know that's totally not the case with rate has gotta be ninety ninety five plus percent text i would i would assume i don't know but yeah i think like even that even like minor differences and how we frame how you interact with the character then totally changes the way you use dude i would actually absolutely be selling like crochet kits or something like i feel like make my sam's on the dolls you guys great on the physical dolls i just think that like these people are are hang they they're getting to know their digital toll way more than i know claude mh and like i don't want claude in my bedroom but like these people do like they want like like little dolls and shit yeah hopefully in the right spot bedroom you know what going now none of those things sexual it was all yeah i feel comfortable figured by like just that's presence right well what what was the other trend we talked about right like you do like lego sets yeah same sort of thing right and it's like a whole category called adult and kid adult was like this like mega trend that all these companies were tapping into sounds like there might be like a variant of that i'll also say you know you said voice yeah i use this app called i think called no scroll it's basically like hey you don't need to browse twitter i'll just text you what's going on on the phone line today so you have to worry about it but literally just the way it talks is different than chad not not like audio voice but just the way it types so you know chad is very much like it gets made fun of for being like wow what a wonderful question and like it goes into that like fake like personality whereas this thing would be like y big day big day today on the timeline like here's here's what's going on and it just talks the cone and personality yeah there's and i'm like i prefer that yeah like and so i'm sure i'm not everyone that but like it sounds like for tech bros who want like just tell me what's going on yeah and it talks like that there's like personality is gonna make a huge difference with it does it does with us sorry for it it's a huge factor and our approach to that has been actually to customize the personality based on the user if you're someone that texts in all lowercase gen z slang if you're swearing your told might actually do that back to you if you have formal language and you're speaking in very like full sentences your total will probably mirror with that like we want them to show up for you like someone in your life would well thanks for you are one crazy business i'm totally bought in yeah amazing we gotta get you a total whatever you're doing that i i'm in okay thank you guys thanks for me y thanks podcast guess is brought to you buy my friends at mercury they make the world's best banking product i think you know this already i used mercury for all of my businesses i think i have like maybe seven or eight businesses we use mercury as our business banking across all of them and now they actually just launched a personal banking account so i have my personal account there i moved off of wells fargo in chase i'm just all in on mercury why i like products that are easy to use i like products that get me and the problems that i have so like very easy to make a joint account with my wife very easy to spin up virtual cards one click and i get savings yield it just has all the stuff that i need in one place so if you're looking for the best banking product on the market it's definitely mercury i will fist fight way who disagrees me on that go to mercury dot com slash personal and learn more mercury is a fintech not an fdic insured bank banking services are provided through choice financial group and call them an a members fdic alright we have the last one for this episode jonathan where at over bring them out those colors jonathan what's good give us these give us the big number impress us make us week at the knees alright i got three facts for you two numbers one is kind of not exactly disregard everything i just said to do whatever you i'll do what i want first big number so also to take a step back overlap we build agents that edit and distribute video content for media companies and marketing teams we don't pay attention very relevant to you guys that number doing what they're show now jonathan just we autonomous overlap agents have generated over two billion impressions across social media without a human in the loop what's it called overlap overlap overlap use you guys you you do use it maybe you have a subscription yeah ben and diego use yeah yeah so we've done over two billion impressions we've been growing revenue eighteen percent month over month for over a year okay how much revenue did you can you say i don't know if i can say that but what i say and this is my third fact is we are axe we became accidentally profitable this quarter alright so eighteen percent monthly compounding is what we are nineteen or twenty x year over for year okay how the company we are a little over two years old okay so we've used you use san francisco jargon our audience they don't know what a autonomous overlapping agent is yep i'll i'll explain do you have a podcast or a video you give it to overlap overlap find clips in the video or in the podcast that are your best moments it'll cut them up for you it'll caption them for you just get them ready for you to share and that's what you're saying you've helped drive like two billion views on the clips that came out of correct did i dumb it down too much that did i miss something important you didn't dumb it down too much it also does more than what you described okay so you don't actually need to even give it video okay you can give it a prompts and it'll will go into your youtube channel and it will pull moments and pull videos from your youtube channel or for a lot of the media companies we work with they have a server of video content where it will be constantly going through looking for moments and then it also does the posting but explain to me why you're better than what i did because while you better than me recently i used claude and i made a thing where it goes through our m m clips and it post it and the way that i set it up was it logs i i it'll it goes into tight fully so i can review everything and then i just hit schedule why are you better than that so a couple things one is we have our own fine tuned video understanding model that is way better at understanding video and the major l are not good at understanding video like i think i said like here's some emotions that do good and you're saying what it's doing case your you're what it's doing in your case is looking at the transcript yep and understanding kind of yeah and you're looking at the whole video we're looking at the not only the transcript but also the facial expression makes the voice and it doesn't understand like the humor like into your credit i ask sam hey should i use your thing how's is it going like it's not that good so well i said i said it's not automated and it's still fine yes and it's very much fine yeah i made it yeah fine yep yeah it's said like it doesn't like sean laughter that he just did right there it doesn't say on the transcript so not gonna know totally that this was interesting a video understanding model video understanding model the the other part of this is that when it posts for you it looks at the data of that post and understands themes hooks totally that perform well mine is supposed to do that but i don't think it is your main business guys like us or is it like bleach your report and like cnn and like companies like that that so they're better customers than us better customers than you guys for sure but there are two types of customers we have on one end it's like a traditional kind of enterprise saas model and so like you know bar sports or i media those are some of our big customers and then on the other side we actually kind of a newer in the last a couple months part of our business which is cpm based and so it's really outcome based so what you can do is you can use our product and then you only pay based on the amount of impression oh that's interesting same customer different model or it's different customer now kind of a different customer because those bigger enterprises they actually want like like predictable pricing how big is opus they're they were one of the first guys in this they were one of the first in the space yeah they are definitely bigger by head count i don't know if necessarily bigger by revenue they're more focused on my kind of independent cruisers b way more part than yeah but more people to do what we need guys they they're a lot really focused like independent creators like your small youtuber who can't hire a video editor and wants like clips from their show to much cost to use you the majority of our revenue are six figure contracts and so so we do smaller deals and then also like the kinda cpm model is a little bit different but the majority are six of of the revenue is before before i a business school and then before that i was meta oh alright cool and you with your yc right went through yc yeah since that's how i found you guys gary tan was like overlap the new the new shit gary was our partner he might have you might have introduced us at one point too i i don't know but but yeah gary's is our partners another investment i missed out on really and this podcast has just become talking to the founders that i should have invested in but i somehow missed the boat on hits it's never too late that's i don't price right now all i'm thinking about is what i could have been in that but but yeah so it went through y comb in summer twenty four we're actually like kinda pivoted throughout y comb so we started with something in a similar space and that we were like you know all podcasts are going to video all podcasts are actually going to short form video like that is how like most people consume most podcast content but then from that we were like okay we built a tiktok for podcast that like i hear that pitch i mean we are your customer i'm like yeah but i need you to get you to go from the clip to the main thing because i make money on the main thing because that's the one that has ads and shit on it yeah that is not gonna be true anymore and anymore so a lot of big brands like the rs feed ad is a nice throw in for a lot of big brands they want three sixty kind of wanna the clip they wanna be in the clip they wanna be on your feed they think of you as a creator they don't think of you as podcast that's interesting i wish we would have known that before we negotiate our contract probably yeah but but yeah but yeah i mean it's like the vast majority of eyeballs are not going coming to you or you know a vast majority of time spent with you guys is you know it's people consuming the content in the feed and you're well awareness clip of this because jimmy went on joe rogan so mister reese went on joe rogan and he's i didn't watch the full but i'm watching the clip and he's saying in the clip he's like you know jimmy who knows media more than you know anyone he's like you know fifty thousand times more people are gonna watch this clip then we'll watch the full show so ultimately like these shows are basically like they're actually consumed via clips on social feeds that's like the end product but end of the map but the best customers don't like when you and i talk about something we'll talk about something a minute forty five and we call it the rs feed so people who listen on spotify anyone who puts it in their their ears and they go for a walk yeah okay well the the retention on those guys is way better and we'll mention something in a minute forty five and i'll have people come out to me on the street and like asking me about that and it doesn't seem whereas the clip people are a little bit more fly by a lot of more fly yeah a lot a lot more like for example sean was like oh you got you gotta watch this podcast it's so good these guys are so funny and i'm like you listen do this he goes no no no but i i i i appreciate it and so like shout out to the basement of you boys yeah huge fan never listen to the show love the clips and so like but and as someone like doing this for a living i'm like i don't like that do you know what i mean i i totally know what you mean and you know this conversation with people actually making long form content is can be a little hard because you guys think of the product as the full show but you're like we're outdated but your phrase it's like never ask a man for opinion when a salary depends on the answer it's like kind of that yeah i i i mean i think like rs fees also is a very outdated technology that advertisers don't like because it's extremely hard to measure like you're giving download numbers and they're like well it's we don't that doesn't help giving impression numbers what's the difference technology well you can give impression numbers very specifically but thing about download numbers is like you don't know who is listening to the ad when and for how long but for impressions you actually know how many players guarantee your impression is a scroll on twitter they don't you don't know if they're actually watching to the thirty second mark or whatever that could be that that that is true the but the thing about video also is that the clips get res shared again and again and again and again in a way that is like i'm a believer in clinton said there's no doubt obviously clips is what people consume a lot of because that's what we all do so tell me like you know you're doing this business you you have these customers sounds like you already got a bunch of major media companies mh but you're in the venture game how much have you raised so far so we raised a little over two million dollars okay yeah so we raised this so we went through y comb here raise that seed round so give me the napkin math how does this become massive what what do i need to believe mh what's every business has like a value equation right so you're gonna need x number of customers paying you why dollars a month to give you z you know net revenue or whatever total what's the desired like outcome in terms of net revenue like what is how do you define what's winning to you so you know our view is that as agents get so good at making and posting video content it actually eats up the amount that spend on digital advertising so about ninety billion dollars a year goes towards meta and youtube and tiktok ads and those people are paying for eyeballs our view is actually that like a lot of that spending is gonna migrate to organic content and it's going to migrate to paying agents for performance and so you know for us like you know the tam of like video editing software or the labor budgets of video editing software that's in the tens of billions but quickly by next year it'll be in the hundreds billions in terms of how many people or how many brands are gonna spend the amount of money you're customers instead of paying at your bet is instead of buying ads people are just gonna make their own organic content and it's gonna be good and go viral and help someone make money through selling stuff or selling ads correct i it's what we've already seen like we've seen a lot of customers allocate their digital ad budget to using overlap and whether that's paying on a cpm basis rather or that's paying for the software we're a big believer that like and you guys know better than anyone but like every company to a certain extent becomes a digital media company and starts investing in content and you don't necessarily even need to make content in this type of setting you can literally just have people talking at a camera and your agent can make a good content and put how does my how does your agent do that well you can have someone talk to the camera and then put in a video or have agent go get the video and then it could put and graphics it can put in b roll it can understand like for this company account what type of copy works really well and it can go post it every single you know a version of it every single week you have this energy of the guy at the poker table who's got a winning in hand yep posture that way you answer the questions you're very you're very good at that but that's not that fun in the sense of like what is un figured out what's the real real what you know you're an entrepreneur there's no way it's all just yep we got it monopoly coming soon you know there's obviously gonna be you know there's obviously stuff that you're trying to figure out right now what are you trying to figure out we're figuring out i mean there's a whole bunch of things that you're figuring out as you guys know about building when you're building a business hiring the right people like hiring the right go to market people hiring the right kind of people with the right engineering you're but that's not that hard for you like you just need like good enterprise sales no it is hard well it's it's hard from the perspective of hiring people who know how to speak to old school media people and kind of new savvy just something that that is that hard give us what's the burning question like what do you actually trying to figure out i mean we've i we've kind of cracked a little bit of like product market to fit in that sense and right now we're we're kind of in growth mode getting pulled we're getting pulled a lot did you do something to get pulled just had the right idea what did you figure out a go to market motion like what what'd you do so go to market motion where we like actually use the product ourselves to clip and their brand they're all branded overlaps no they're not a no because you guys were clipping our podcast podcasts for us or something somebody was doing it was the ai agent who who's was doing that from an outside it seems like the big bet is the cpm thing or the saas thing that seems like a pretty like that that is one of the biggest questions and i think for the big media companies it's it's always gonna be the saas they don't wanna pay basically there's my margin doesn't keep improving to keep paying you a percent of top exactly exactly but for a lot of the creators and a lot of the like smaller creator folks like that is way better yeah because they can't afford six six figures a year they can't afford six years a year but also it's they can actually do but how do they get cpm money to pay you like if they're like like we don't we don't make money on the clips at all most of people i would think don't make money clips on it well you know an example of like one of the recent cpm deals that we've done is like you guys know james sex in they're like divorce lawyer celebrity divorce so he's on a ton of pockets doing his clips probably overlap clips but what you know he's launching like a legal tech business and like selling like some sort of pre up it's like go on w and they're basically like hey we just wanna just make me famous i'll give you three dollars no make be famous then well there's that yeah there's there's that which is kind of like makes our product like relevancy as a service like relevancy on the top yeah but then there's there's a guy like james who's who knows that like a certain amount of eyeballs we'll convert to a certain amount of and so this is a cheaper more effective version or billboards lawyer billboards or running meta and then you also just have to make sure that like your clipping is way better than opal or opus whatever it's called and then the ten thousand other ones that are gonna like eventually come out or the total duct dictate people like me a hundred percent so drop some wisdom on us right if you're if you're somebody is a founder listening to this what's a golden nugget in a business insight insight from you about the way you're build building overlap that they can steal they can take and they can do maybe something you don't you you think you guys have done a really good job of that maybe others do just okay or they don't even do at all i think on the enterprise sales side understanding and what i don't think i understood until i started having some success with enterprise sales is that the people who are buying your products are thinking about their job forced and foremost and then how do you get those people to to get promoted like basically you're selling here's how i'm gonna get you promoted that's particularly true in advertising when i used to own a company that made money on advertising we would close seven figure deals and the the way the buy i would thought like oh i just tell them that like if they spend this much they're gonna make this much money that makes sense i'm a business owner all i give shit about and then and that pitch never worked i was like whining and dining worked and making them to say like you have this budget you have to spend it spend it with me it's safe totally the thing about it is it's like trust yeah is like is that it's is that's what's really important is like way more than roi totally it's trust and being like you know will i help you get promoted and like we have so to do that you need to know what metrics they get measured on exactly and make sure they hit their metrics and give it to them in a way that they could easily share totally so that if clearly visible that they're hitting their metrics and a vp at a company they're getting evaluated on not the revenue and profitability of this what's called cover my ass or what's the licenses yeah like that's why people buy ga yeah i i yeah that was my huge learning running an ad business i was like this just a big sense all they do is they take them out it's like this is why like companies have like box seats you know like see passes what was the valuation of that two million dollar round the so the valuation of the two million dollar round was twenty five million and also can we still invest at the twenty five million we talk about that you know this was a shoot your shot where we shoot our shot with the entrepreneurs produce we get this whole here dude thanks for coming on having me this is great you know time listener first time call a great day to meet you guys thank you we appreciate you alright that's it alright that's a wrap for san francisco we had nine ten founders come in everyone from a million to a hundred million and that was a good time was lot of fun we had great founders come we've already done in new york now this was a stuff but we need more cities to go to so go to spotify go to youtube wherever you listen or watch and let us know in the comments whichever gets the most most up upload the most replies the most comments actually go there that city so stop what you're doing right now and go do that and if you wanna be on the show reach out to ben ben levy find them if you wanna be on the show the next time we go to a a different city alright right here i feel like got rude where i know i could be what i want to from at all in it like a days off on a road less travel never looking back alright let's take a quick break i wanna tell you about marketing school it is a podcast that's part of the hubspot podcast network and it is run by neil patel and eric sue and these guys are both marketers who are running businesses and so if you want real world tactics from practitioners who are actually out there in the field doing it this is the podcast for you check it out wherever you get your podcast