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Transcription of our conversation with Paul English:
Immad Akhund:
- Hey everyone, welcome to the new Founders in Arms podcast with me, Immad Akhund, CEO and Co-founder of Mercury.
Raj Suri:
- And I'm Raj Sui, co-founder of several companies. Today we're very excited to have Paul English, one of the most storied and prolific entrepreneurs I think of our time. You were the CTO of Kayak previously, probably most well known for, but you've also done a lot of other cool things. Paul would love to hear from you, kind of what you're up to nowadays? You run several companies, right? You've started many companies since Kayak and also you do a lot of nonprofit work I, I believe as well.
Paul English:
- I describe myself like my, I think my Twitter bio says "I start companies and nonprofits." I think I've started and sold six companies now. Kayak was the one with the biggest outcome of course and that was 10 years of my life. But I've also done e-commerce, security software, customer service, consumer travel, business travel and podcasting were my six companies and now I'm running a little venture studio, and a venture studio, unlike an incubator and accelerator where we help other people with their ideas, a venture studio is a little bit more arrogant, I apologize for that, where we only work on our own ideas and it's incredibly fun. We have a team of 10 people spread across Boston and New York and we have 30 developers offshore and we currently have five companies under development and I'm having the time of my life, like I'm very ADD and it's incredibly exciting to be able to work on like three different companies in one day.
Immad Akhund:
- Do you come up with the company's ideas for the Venture Studio?
Paul English:
- Yeah, it's me and the team.
Immad Akhund:
- Yeah, that is fun. Are they all kind of consumer focused ideas or all sorts of things?
Paul English:
- We have almost all, the consumer. We have one B2B, we're doing a group calendaring application to be called Supercal. It'll be supercal.com. It's not released yet. Hopefully that'll be coming out in October. But that's a very exciting company. The others are all B2C, but the calendaring thing just problem bothered me so much that I just had to do something about it. It's almost impossible to get a meeting set up with three people or four people or God help you. Five people. There's no software for it. Calendar doesn't do it. Google doesn't do it. Outlook doesn't do it. There's no way to do it. And so we're building that and we think we have a pretty innovative solution to it. I don't wanna get too much into it yet 'cause we're not released yet. We're releasing sometime in October, but that's our one B2B company. The others are all B2C.
Immad Akhund:
- Oh, that's cool. Before I started Mercury, I did think it would be fun to start a venture studio but I wasn't quite as successful as you so I can get away with it. But I think the idea of working on like lots of ideas is quite fun. Also that first phase of like zero to one is like kind of the most invigorating.
Paul English:
- Yeah. Someone asked me recently when I was gonna retire and I'm like, I kind of feel like I am retired because I'm doing the most fun thing I can possibly think of work-wise, which is create something outta scratch. Like it's, it's kind of the dream and I get to chase that dream multiple times a day. So it's a very, very fun for me.
Immad Akhund:
- Yeah. One thing I find funny about VCs is they, they don't want to invest in consumer startups. They also don't want to invest in hardware startups and they also don't want to invest in kind of SMB startups. But those are where all the biggest successes are. So I, I think you have I guess the luxury to kind of focus on...
Paul English:
- I think with B2C it, it's true with venture in general, but B2C failure is very high. So like I have a dating app called Lola and we do, we do a couple things that with we think are very unique across all dating apps, but dating apps, it's a hard business to create. There are so many that come and go all the time and there's the big guys like Tinder and Hinge and Bumble, but there's probably 50 other dating apps and so it's a little audacious to try to create yet another one when the streets are littered with bodies of prior dating app founders. But we're going for it anyway.
Raj Suri:
- And you're not looking necessarily for venture scale outcomes, right? It doesn't need to be become like a public company for it to be successful.
Paul English:
- We sold one, we sold, we had a podcasting app called Moonbeam and we sold that to Odyssey. They own about 300 radio stations and it was a great, great app and the reason we sold it was they had scale of users and it also funded my studio for like two years. So I have not had to raise any venture capital. We're self-funded and maybe we sell one company every year or two for a small outcome just to keep funding us. But we do wanna swing for the fences with some of our companies like Supercal. We're trying to build a very big company with a very small team. At Kayak, I used to manage a company for revenue per employee and when we took it public 2012 we had 200 employees and 300 million in revenue and that million and half per employee was, you know, it's not OnlyFans level, which is like $30 million employee, something like that. But it was more than anyone had done in travel at the time. And we all our decisions are based on that, that efficiency. And for my little studio, it's called Boston Venture Studio, it's bvs.net, for my little studio, the thing we measure ourselves on is users per engineer and we really wanna keep the engineering teams as small as we possibly can, which means that we need the engineers to be as strong as possible. So I am just really intrigued with how many users can I get with an, with a product built by only three engineers. I just kind of intellectually love this problem.
Immad Akhund:
- What was the WhatsApp number at when they sold? I think they had like 20 engineers and like a hundred million users or something. Was it something like that?
Raj Suri:
- Something like that, yeah, it was crazy.
Paul English:
- It was crazy too. Yeah, OnlyFans is probably, was another one that was off the charts. Incredibly small team but large user base.
Raj Suri:
- Yeah, I, I have the exact same philosophy. You know, it's like nowadays, especially with AI, you can have really small teams to do amazing things.
Paul English:
- I'm waiting for the first startup worth a billion dollars made by one person,
Raj Suri:
- Probably two people. But yeah, I think, yeah...
Immad Akhund:
- Well the funny thing that happened in Silicon Valley, especially during 2021 is everyone could raise so much money that there was just like, yeah the idea of like software actually leading to like, you know, more dollars per employee or more users per employee was kind of thrown out the window. It was just like, hey, how much, how much people can we hire And like scaled up sales and marketing and it was like the whole thesis was screwed up.
Paul English:
- We have some discipline in that we're self-funded in that we're very careful with every dollar we spend. There's 10 of us in the US and 30 offshore for the 10 in the US we spend money to like get together. Like last weekend one of my co-founders recently bought a couple hundred acres up in Vermont and last, I shouldn't say weekend, last week we went, spent a couple days up there on sort of an outing and we had a blast like hanging out, had really good dinners and went apple picking and hiked the farm, did all these cool stuff. So we love spending time on the team just doing crazy things. But we're very judicious in most cases where we spend money because we are self-funded.
Immad Akhund:
- You said you had 300 million in revenue and only 200 employees. Did that mean you were very profitable when you went public?
Paul English:
- Yeah, we were crazy profitable and I actually just returned back to Kayak after 10 years away and now I work for them one hour a week. And the reason I went back is my co-founder Steve Hafner, who's one of the best entrepreneurs I've ever met is trying to reboot the product strategy. You know, Kayak is feeling increasing pressure from Google. Google is, they're just a fierce competitor because they are the top of the funnel so they take over more and more of the pages for their own products as opposed to get showing people other products and we're trying to re reboot the product a little bit, working on some really fun things. But I'm, I've committed 'em, I said I'll give you one hour a week and I'm having a blast going back there. So Kayak is also still, you know, it's near a billion dollars in revenue and very profitable but we're trying to figure out how to get it to be even more profitable and grow faster.
Raj Suri:
- You had a great story about how you met your co-founder and like you kind of like decided to like get married after like an hour meeting or something.
Paul English:
- I was at Greylock working with a guy named Bill Kaiser and one day my friend Larry Bond asked me to go over to General Catalyst, look at a company for them. And as I was leaving Joe Cutler at General Catalyst is like, what are you doing here today? I said, I'm looking at the company of your partner and he said, there's a guy here I want you to meet. His name is Steve Hafner, he is one of the founders Orbits and he wants to create a travel company. I said sure, I'm happy to meet him. So I, so we went down to Legal Seafoods in Harvard Square, had a couple drinks, I think it was sort of a liquid lunch type of day and he gave me the pitch and I liked it a lot and he said he was looking for a CTO. I said, I will find you A CTO, I run a group of CTOs and how much are you paying? He said, $150 and 4%. I said, I think that sounds awesome. I can, I bet I can find you something good for that. He said, why won't you do it? I said Nah, I just sold my loss company to Intuit. I'm hanging out at another VC firm, I'm working and starting my own company. He said, what would it take to have you do it? And I said, I don't know, at a minimum 50 50. And he put his hand across table, said deal on tour, went up and Steve's like Good news, bad news, good news is I have a co-founder now a 50 50 co-founder and we're each putting a million dollars in tomorrow, which he forgot to mention to me during the lunch. And then he said, but the bad news is I'm tearing up the term sheet 'cause now of the co-founder, I'm worth a lot more money. And Joe's like, I introduced the two of you 45 minutes ago. So it was just like, it was very funny sequence of events but Steve and I just had a fantastic partnership. We're very similar in many ways. Like we're both, I'm trying to think of impulsive is one way to say it. Some might say reckless, you know, we're incredibly decisive. We'd rather make a decision than have a drawn out meeting. So we just like try stuff all the time and we trust people so much that it kind of, they, they like you really today's day one the job, you're really gonna let me check code into the iPhone app, like you're gonna let me change it on my first day was like, yeah go for it. You know, we liked you, we we liked you when we interviewed you, we, we only changed the product and had a lot of fun together. So I'm back then now just an hour a week but having a blast working with the team,
Immad Akhund:
- That's a cool story. What do you think are the characteristics that make like a very profitable software startup? Like what, what is it that people get wrong and end up having like these crazy kind of cost structures?
Paul English:
- Well when you think about what's not a profitable startup, you look at that company when you visit them and you see some inefficiencies. You see some people like duplicating tasks. You see some people who are unsure what their working on, how their work contributes to the company and there's a lot of debate and meetings get dragged on and decisions get revisited and revisited. Like you can't make a decision. And you look at companies that scale and there's incredible clarity of vision. Like every person the company knows we're just gonna do x. And so at Kayak it was, we just wanna be able to search engine, we're not a merchant, we don't sell anything, we just wanna be the best search engine for travel. And everyone in the company knew it and they all knew what their role was in creating that. So I think the first thing is clarity of vision equal to that I guess I would say is just being great recruiters. Because if you can hire five just really tremendous, tremendous people, they're gonna hire the next 50 who will hire the next 500 and that that team is gonna build a company. So I would say the two biggest things I would tell an entrepreneur looking to start a company right now is just make sure you have clarity of vision that everyone gets it. Don't be afraid to say things with just simple. Sometimes we think when you get up in front of a room you have to wow them with like lots and lots of stuff. But no, the best companies, it's a very simple thing. Like Instagram was share photos, YouTube share videos. I mean you want a sim, really simple vision.
Immad Akhund:
- I've noticed that often when companies do spend a lot of money it's because they're like very dependent on like expensive distribution channels. Like they're spending a ton on Facebook ads or Google ads or they have this huge kinda sales and marketing engine. And I always think as soon as you're in this mindset where like every single user you're trying to do this like LTV cap game where you are like okay, I'm gonna pay this much money like $600 and they're gonna pay that off in two years. And like that just ends up being actually like a fairly capital intensive business. Whereas you kind of wanna build a business where people come to you and find you because you're just the best product and you're serving like a really big need. And get this kind of organic distribution…
Paul English:
- It's catching lightning in a bottle to create a product where your users bring their friends back. We all go for it. It's hard to achieve. But that's what we're all seeking is can we build a product that is so transformational in someone's day that they just love celebrating, like showing how smart they're by saying look at this site I just found, you know on I smart I found this amazing thing.
Raj Suri:
- You also mentioned that you had 30 offshore engineers or something for for BBS. Is that like a strategy that's worked pretty well is like building the offshore team?
Paul English:
- It's not that. If I was creating a venture studio from scratch, I wouldn't say if someone came to me and said they wanna create a venture studio, I wouldn't say go create an offshore team. Like that wasn't part of the calculus. It was more that there's a guy named Yasser Bashir who grew up in Lahore, Pakistan, went to school at Stanford, worked big tech in EOS for a while and then went back to Pakistan. He now has 750 engineers working for him. He and I have worked together for 15 years now. He built Core Tech at Kayak and my next two companies and we just have so much fun working together. He said he will build anything I design, he'll build for free just for equity. So it makes us be unbelievably capital efficient and they get good equity in our companies and I want them to money because the more money they make working with BS, the more they're gonna keep giving us their best engineers.
Immad Akhund:
- Well that's a cool concept. Like then you want to just pay for them and not give up equity or you already think you get the best people when they have ownership.
Paul English:
- I don't know, like at this stage of my life I made so much money at Kayak and my company is like, I don't need more money. I basically, I've given away over half my Kayak money so far, maybe two thirds. So I'm, it's like I'm giving away money. I mean I'm still making money too, so I'm doing okay. Don't feel sorry for me. But my new companies, I think I wanna spread it around. I want people to make money, I want people to become wealthy.
Raj Suri:
- It's super cool. Paul, you're also on a lot of nonprofit boards and and like a lot of philanthropic stuff. I, I'm very interested in that as a founder. Like you know like I think founders have a duty to like contribute to the world or help the world beyond our companies. I would love to hear what, what motivates you and which you know, nonprofits you're excited about?
Paul English:
- I think every for-profit founder should also start a nonprofit, maybe even two, which sounds crazy but I've started four, I'm on eight nonprofit boards. I think everyone should be involved in at least like as a donor and two nonprofits, one local near where you live and one international. And you should learn about the dynamics of each one. I've learned so much from my nonprofit mentors that have helped me in my job. Like for example, Ophelia Dahl, she's the co-founder of Partners in Health in Boston. She's a gifted storyteller and when you watch her give a talk in front of her team in Haiti, she's just like captivating and people want to work hard for her. And so I aspire like I wish I could tell a story as well as she can. So non good not-profit leaders can motivate for-profit leaders and it's just been very rewarding for me. I also, people ask me how can I run five companies and four nonprofits but have no stress in my life? 'cause I, I do have very, very little stress. I color code my calendar, there's four colors, it's from stuff linked to my day job, a nonprofit self-improvement which is like gonna the gym, a meditation class, whatever or friends and family. And every Monday, Friday my assistant Eliza and I look at my calendar for two weeks out and we make sure there's a balance of the four colors and if there's not a nonprofit I feel kind of empty or I feel guilty. Like I, I feel like malnourished I'm not, my soul is not being nourished that week. So to me it's just an important part of having a healthy week.
Immad Akhund:
- Well why start a nonprofit that seems like, I mean there's a lot out there you said donate as well but like is there something special about founders starting nonprofits?
Paul English:
- Yeah, I mean last year I donated to 82 nonprofits so I don't just start them, I also donate and when I encounter a problem the first thing I do is I say is this someone already else solving this problem? I do this for tech as well. I problem in my life right now that's a tech problem that I came up with idea for a product that I'm trying not to build. I'm trying to find someone to already build it.
Immad Akhund:
- Oh yeah, what's, what's the idea? Maybe someone can build it who's listening?
Paul English:
- It's basically an app for families who have caretakers for elderly parents and you wonder, is your caretaker really spending that much time with your mom and dad? Are they showing up late, are they coming, they leaving early, are they leaving in the middle of the day? So now kind of to monitor when your loved one and your caretaker are in the same room together, like are they together? And you can build other caretaker features in there as well. Like the caretaker could say I took your dad out to lunch and that cost me $30. And then they can enter their expense. You could Venmo them the amount in the app. So somehow up to, to manage caretakers and I have a design for it but I kind of don't want to build it. I'm hoping I can find someone else.
Immad Akhund:
- You want, you want to use like AI where you just have like a video in the, in your parents' house and that's just monitoring the situation.
Paul English:
- They don't want cameras in the house.
Raj Suri:
- You know my, my wife has the same problem to monitor her mom in China and yeah we have cameras so she uses the cameras all the time. She's always looking at the cameras. Yeah, I think some kind of sensor actually, you know, so, so you save a click.
Immad Akhund:
- Honestly as an AI, watching the camera would be quite good because even like I remember when I had a baby and you don't know what the babysitter is doing and I don't want to go look at like one hour of the babysitter video and like it just, it's like hey, it's hard to like catch some bad behavior but…
Paul English:
- I do think this will be, this is a good, this is different than my idea what you just said, but I think what you just said is a great idea for new company cameras that you don't have to monitor yourself 'cause AI is monitoring them.
Immad Akhund:
- Yeah, it's good for security as well. I get a fricking alert every time someone like walks by my house. I'm like this is useless.
Paul English:
- Yeah, I know my camera, I have a Google Nest doorbell and it can recognize faces so it tells me if someone rings my doorbell it opens up my phone and tells me, well it shows you the video but also announces who's at my door. And I thought that's pretty cool. But I used to think 10 years ago maybe you could have offshore security guards to watch cameras for you 'cause the labor cost is cheaper than US base security team. But you're right Immad in that you don't need an offshore person watching it. You can have AI watching it. I think it's a, I think it's a clever idea, one of your listeners should go build that company and give you stock in it. I think it's a great idea.
Immad Akhund:
- I guess like this kind of ties into the other topic that I think is interesting right now. Do we think there's a lot more kind of consumer startups that are like becoming available because of kind of this AI enabling it and like if you were thinking through those kind of ideas, like how would you kinda think about like what is likely to be successful and not successful in the consumer startup space?
Paul English:
- I think the most powerful role in a technology company is the product manager. And if you take a product manager with AI on their shoulder, it's now a product manager and a designer and an engineer in a QA engineer in a release engineering DevOps engineer. Like there's so much that the AI can do. And what you need is a product manager, I use that term in quote product manager. It's really just a person with an idea to say I have this problem, I wanna solve it. And they can have discussions with language models about how will would you build a video monitoring app like to look for how often are the two people in the frame versus one person? And through having ongoing discussions with your language model, it'll eventually emit code that does that for you. And product managers and I say quote unquote product managers, they're gonna figure this out so they can build products in their own. Some of these product managers will be engineers, some will be designers. But it's gonna happen that people are building products in their own.
Immad Akhund:
- How many years away are we from someone being able to do that?
Paul English:
- I follow a number of accounts on Twitter that show examples of this, of people building simple apps with language models and it's happening already. The question is when will it be mass market? Like does this debate about will every company have its own software? Like if you run an accounting company, are you gonna develop your own accounting software? Are you gonna buy accounting software? And there's one theory that says when it's so easy to build software and hopefully to extend software, every accounting company can just say, okay, I like QuickBooks but I want the invoice to look like that, not like that and have it just change. 'cause they just talk to it. Like I think that's gonna happen.
Immad Akhund:
- I do think there's, I mean take accounting, there's like a lot of integrations and like there's a lot of nuance that like you probably do do want to use like off the shelf software for some of it, but maybe you can like augment it with ai.
Paul English:
- Yeah, I know all the products you're building with BVS are all built with AI. We have an event invitation system called partyclick.com lets you set an event and capture photos from your guests and all of our templates for party invite templates are created with ai. We have, lemme see going down the list. So Lola, we're using AI to match people on the dating app Supercal using AI to decide where in your calendar we should insert a meeting. So Deets is my travel company deets.com, like show me the Deets, I use AI to generate guides. And then we're also using SpamStrike as a new product which released spams strike.com that uses the AI to tell when you get a text message, is it spam or not? And we're also using AI to do things like competitive research and analysis and help us think about like how to market products. Some of our ads are generated by AI so we're really using it as every part of the business. I only have 10. The reason you can have five products with 10 employees in the US is 'cause each employee has like three or four AI helping them.
Raj Suri:
- It's a cool model. This competitive research piece. I, I saw a demo of a product the other day that was really compelling. I mean like you can have AI basically monitor everything your competitors are doing. You know, their LinkedIns, their websites, every single word that you know, their, their founders put on, you know, Twitter or whatever and they give you like a weekly or daily update on competitors movement. I think it's quite compelling as a product.
Immad Akhund:
-What was the name of the company?
Raj Suri:
-I forgot now I gotta, I gotta find, I saw a random demo on one of the social sites.
Paul English:
- There's a company I'm advising right now called Moneyball. It's named after the book. Their website is moneyball.ai and we're they're using is AI to create profiles of founders. And so they're gonna sell this to angel investment groups and venture capital firms. So if two or three founders come to you and they pitch you, the AI can read everything these people have ever written on Twitter and LinkedIn and Medium and Stack Overflow and GitHub. It just, just consume every content they've ever produced. It will watch their videos and it'll give a psychological profile of the founders and it'll give a psychological profile of them as a team because a lot of startups fail 'cause there's an implosion across the founders and this sort of did a toxic culture and one founder gets fired and so they're trying to do the Moneyball thing.
Immad Akhund:
- Have they back tested this like against like failed startups and successful startups?
Paul English:
- They have, they have the product's not released yet, but keep an eye on it. It's Moneyball.ai. It's a very cool founding team.
Raj Suri:
- I'd like to see how the profile looks like for Elon Musk.
Paul English:
- That's the X Raj. That's exactly what I told him to do. I said I want, you know, you know that Manchild to tell me about his psychological damage that makes him...
Immad Akhund:
- I feel like focusing on founders is maybe too small a market, they should do like college admission and like.
Raj Suri:
- You can do for every employee, for every interview, right?
Paul English:
- Yeah. Employee. Yeah,
Raj Suri:
- We've had employees who turned out to be like Nazis. Like I'm like, we've actually had that problem and it, I could have definitely used the service for that.
Immad Akhund:
- Like I feel like it's a bit of a dystopian world though if like anything you've ever said is being like held against you forever kind of thing.
Raj Suri:
- Companies still need to know right? There's a like a, you know, and, and this happens anyways, like it's like it just slower process. Someone is like, you know, manually combing through everything.
Immad Akhund:
- So you had an employee that was like actually Nazi?
Raj Suri:
- Yeah, you know, he was just like a, he seemed like a normal guy, you know, except he lived on a boat, which was kind of weird. You know, this happens in the Bay Area.
Immad Akhund:
- I don't think normal people live on a boat. Yeah, that's like one of the cheapest ways to live in the Bay Area.
Raj Suri:
- But otherwise he seemed totally fine and then he'd left the company at some point after a couple years and then he turned out to run for office in California as like the head of the Nazi party or something like that. Like, or the head of like some, it was not called the Nazi party but it was basically a Nazi party. Yeah. So we had no idea. Just no idea at all.
Immad Akhund:
- Did you get a chance to see this Meta Orion glasses? They just released them yesterday.
Paul English:
- The Meta, the Meta RayBan. Yeah,
Immad Akhund:
- The RayBan. But they've got a new version but it can do a holographic kind of like display projected onto the lens that looks 3D.
Raj Suri:
-It just was announced yesterday. It looks really cool.
Paul English:
- Yeah, the ones I got mine a couple of months ago and I mean, I'm not wearing them right now and I'm not wearing them regularly, but it completely blew me away because when you have, if you're wearing AirPods, you can have discussions and have AI listening to and enhancing the conversation. But who wants to walk around life wearing AirPods? Right? You don't, you don't wanna be at dinner with people and people are like, that's weird. He is wearing AirPods. But if you wear something that looked like regular glasses and has a camera, so you can say, what am I looking at? And it can whisper in your ear. It has a microphone, a speaker and a camera. It's pretty amazing thinking of AI and glasses. I think she think it's such a great vision. I mean Google talked about this was it 15 years ago with the Google glasses, but the AI wasn't there yet. The real time wasn't there yet. And real time still isn't fastened quite fast enough yet, but it's coming.
Raj Suri:
- It's very compelling. I've, I've tried really hard to buy these glasses, so I'm I'm like a hardware software background, right? So I love devices.
Immad Akhund:
- Wait, why didn't you just buy them?
Raj Suri:
- I couldn't buy them. They kept canceling my order.
Immad Akhund:
-Oh really?
Raj Suri:
-The reason my prescription is like, yeah, my prescription is a bit too strong for them so they can only take certain prescriptions.
Immad Akhund:
- Are you like completely blind when you take those glasses off?
Raj Suri:
- No, well I'm like minus six, minus seven and they, they only go to like minus five and a half or something.
Immad Akhund:
- Oh really?
Raj Suri:
- So yeah, so it's not ready for me, but I was thinking of just buying it anyways and just putting 'em over my glasses. But yeah, you could work context. I really wanna try these out, but, but I was, I saw an interview with Zuck when he talked about these things and, and I was really struck by how well he was thinking about it because he was like, the glasses have to look amazing. That's the most important thing. And, and you know, you have to wanna wear the glasses anyways and it has to be super light and feel just like normal glasses. And that's been always the issue, right? Like the Apple vision prob product. I mean, no one's gonna wear something like that for very long. And, and it's just an obvious thing I think for like a product person to think about. But Apple, this massive company probably wasted billions of dollars on that product, right?
Immad Akhund:
- I mean Meta spent I think $50 billion or something so far. Is it $50 billion?
Raj Suri:
- It was insane. Yeah. On on the VR stuff. Yeah. But AR stuff is way more compelling.
Immad Akhund:
- I think it's both, right? Like I think that's, this is what they were developing anyway. You should check it out. It's called Orion. It's, it's got the, this video has the funniest bit. I like literally cracked out laughing. So in the video Zuckerberg, which he's clearly like messing with us, he is like, okay, you know, you wanna do hand tracking and voice, but you know, that's all annoying. What you really want is a neural interface. And I'm like, whoa are they're launching a neural like interface into people's heads or something. And then what it turns out to be is like a, something that you just put on your arm and it like detects finger movements. And I'm like, that is not a neural interface. That is like a extreme kind of like exaggeration, but it's such a funny part of the video.
Raj Suri:
- Have you tried that with the Apple Vision? Like there, there is a way to do that too, right? Like it's basically like the finger,
Immad Akhund:
- I mean it's like you just pinch your fingers and stuff. It's it's okay, but it's very finicky. I mean it was like basically the week it was launched, but everything about the Apple Vision kind of usage was like pretty finicky at the time.
Raj Suri:
- Paul, did you ever do a hardware product?
- When I left Kayak, I had an incubator. We didn't work on our own ideas, so we helped invest in back other founders and we had someone who built a network drive for all your media instead of storing in media on the web, which people are really nervous about. The idea is just stored on this device and ultimately the company didn't survive. I think people had just become more and more comfortable that this stuff is gonna be in the cloud.
Raj Suri:
- You know, there's such a long history of hardware startups failing in Silicon Valley, so I'm, I'm not surprised that VCs don't back them, you know, very much the problem actually ends up being not the product. The, you can actually do great demos with hardware or like you can do, you can build prototypes relatively easy and stuff. The hard part is actually the, the supply chain and the inventory. It's like how many devices do you order, you know, for your sale? And like if you, if you don't enough order enough devices, consumers get annoyed 'cause they have to wait too long for the product. And if you order too much, your, your company can fail. And this happens a lot for, for small startups. Like Apple is gonna take a write down on this Apple vision thing, right? It'll take like several billion dollars write down. They can do that. But a startup can't do that and VCs can't back that. So the model actually for VC funded hardware startups I think is really tough.
Immad Akhund:
- Isn't the other issue that like whatever you do, like there's gonna be a kind of a Chinese or some other ripoff of it pretty quickly. So it's hard to like actually establish a brand and like be differentiated long enough.
Raj Suri:
- Yeah, I don't think so. It's true that the, you know, the Chinese and other people will rip it off. But like at the same time, like I think American made products have a, a level of quality and polish and like a whole package around it that is, is tends to be superior and, and and it's very obviously superior. So I I don't think companies die because of that reason. You know like if you look at companies like Jawbone, even Pebble, Fitbit, GoPro, like all these companies, you know, actually had some traction.
Paul English:
- Span, that's another great local company.
Raj Suri:
- Yeah. And recently there's been all these AI pins like these, you know, those I think rewind.
Immad Akhund:
- So it's funny, I have, I got one of these rabbit ones and I literally have not got it running. I feel really guilty about it because it's sitting right in front of me and I've had it for like a month or two.
Paul English:
- I'm excited about the, what's the company with that that had the terrible video? The AI pen?
Raj Suri:
- Is it Rewind? No, Rewind...
Immad Akhund:
- There was a ton of them. Limitless?
Raj Suri:
- Humane. Humane.
Immad Akhund
- Yeah, Humane is the one that was banned.
Paul English:
- That's it. Yeah, yeah, yeah. But I love their vision and you know, that's gonna happen. Their vision will happen. It looks like they're not gonna be the ones that execute their vision, but someone's gonna figure that out. But I must say,
Raj Suri:
- I mean the thing is I'm carrying this, this thing and this and my ear every day. Like Apple should just do it, right?
Paul English:
- I think glasses are gonna be where it's at. I really do. I think glasses are gonna be the new iPhone,
Immad Akhund:
- You know, I always wear sunglasses and it's, it seems like you guys wear eyeglasses, so I wonder if like people who don't wear sunglasses or eyeglasses will like be on board with it or maybe it's,
Paul English:
- I honestly believe it. I believe they will.
Raj Suri:
- It makes a lot of sense. I mean, and and glasses are kind of, some people like to wear them just for like fashion purposes anyways, you know, including clear eyeglasses that they want to look like, you know, more studious or whatever. So I think that everyone's gonna start looking like that and there'll be different flavors of design and stuff every, it's cool. It's, it's a, it's a, it's cool that there people are still innovating in these areas which are not necessarily AI but a combination of hardware software.
Immad Akhund:
- But is it mostly just gonna be these big companies doing it then? I guess Meta's doing it like, it seems like not really a, a space open to startups.
Raj Suri:
- I think there is room, but I don't think the VC model works for it. I think you really need, like a startup needs to partner with a strategic who has like huge amounts of capital. Almost like OpenAI, Microsoft. Like there needs to be like that type of backing. VC capital isn't patient enough, there's not enough capital. And like this model of like if you make a mistake, you're dead doesn't work. You know, you have to be able to make some mistakes and that that's the problem. You know, you just, there's not enough capital there and, and seed stage money doesn't cover it, you know. But I'm trying to think of like any hardware startup that's worked in the last 15 years. Can you guys think of any?
Immad Akhund:
I guess Nest, is that in the last 15 years or is that 20 years ago?
Raj Suri:
Nest? Yes, that's right. Nest is a good example. Yeah. Yeah, I, and yeah they had some, you know, sort like Paul's using their product but a ring as well, right? Ring sold to all day home months. Amazon, right. So yeah, there's a few examples. Speaking of baby monitors, I use Nanit, which is a really good product. It's also a startup. It's like a computer vision and baby monitor. So they, they like track your baby's movements, give you analytics based on that.
Immad Akhund:
- Oh really? Oh that's pretty cool.
Raj Suri:
- Yeah.
Immad Akhund:
- I think we can probably wrap up. This is awesome Paul. Thanks for joining us Paul.
Paul English:
- Yeah, it's some fun talking to you guys.
Raj Suri:
-Very fun. Thanks a lot for joining us and thank you everyone for listening. Feel free to subscribe on Substack, YouTube, Spotify, all the various channels and join our group chat on Tribe. We have quite a few people joining now. So thanks for listening and we'll be on next week.
Immad Akhund:
- See you then.
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