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AI for Investors, Publisher Rewards, Sleep Tech & More – 2024 Jam with JCal Recap | E2032
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- [00:01]
A
Hey, everybody. Alex from this week in startups here. Today's episode is a special one. We are going to wrap up Jam with JCAL for the season. Now, if you're new to the show, Jam with jcal became a staple over the last couple of months. It's where some of the most promising startups out there, all using tech domains, had the chance to brainstorm on the show with Jason live and tackle their biggest challenges on the road to success. The segment has been a hit, so today we're doing a recap of all the jams that have aired. If you missed one, don't worry, we got you lots of JSON coming your way. Before we get started though, I do want to say a shout out to tech domains for sponsoring jam with JCal because, you know, for any tech company out there, tech is a pretty reasonable domain to pursue. So please sit back, enjoy this episode, and I'll see you on the other side.
- [00:54]
B
All right, everybody, it's time for another jam session with jcal. This is a very simple project that I came up with. This is my invention. No, it's not, actually. You know whose invention it is. Travis from Uber used to do something called the jam Sesh and it was just like a couple of founders getting together. We hang out, you know, pop open a couple of coal ones and talk about business and jam out on ideas. Man, it was some of the best times I ever had. And we're bringing it back to this week in startups and we have got a partner on this program. The partner is dot tech domain names and they came up with a simple idea. Hey, listen, if you got under 2 million in funding and you got a tech domain name, which is a really cool domain name to have, you get to come on the program if you've got a great idea and a great company. And so today we're going to hear from Ramsey Schaefer and He is the CEO and co founder of UpTrends AI. And they are UpTrends AI tech. Ramsey, welcome to the show.
- [01:50]
C
Thanks for having me, jcal. Excited to jam.
- [01:52]
B
Okay, let's jam out. Why don't you start just telling us for two minutes about. About your company. Run us through it, show us the product, whatever you want to do, and then tell me what's the most challenging part of your business. Three, two, go.
- [02:04]
C
Sweet. Okay, I've got some slides. Love to just get your raw feedback on them and then I've got some.
- [02:08]
B
Questions that we can feedback on the deck. I get that a lot. Feedback on the deck. You're going to use this deck to raise money or you just want to explain the product to raise money? Yeah.
- [02:17]
C
Intro call.
- [02:17]
B
Got it. Okay, good. So the audience for this is seed funds. I assume you're a seed stage startup, so. Great. Three, two, go.
- [02:25]
C
All right. I'm Ramsey. I'm the founder of Uptrends. We help financial advisors stay ahead of the news. So this is Zach. He's an independent financial advisor and a few times each day he'll get an email from a client asking him something like, you know, John Deere is up 5% today. Why? Or I saw Nike fell 20% last week. What's going on? So he'll go to Google, he'll go to Twitter, he'll go to Morningstar for some headlines, but more often than not, he's left scrambling to get back with a solid answer. Now imagine, multiply this by dozens of clients, hundreds of stocks, thousands of daily news events, and you can see how this becomes a huge time consuming part of Zach's week. And frankly, it's holding him back from being a better advisor with more clients. So we're introducing Uptrends, the AI assistant. Automating the news cycle for investment advisors, Uptrends monitors thousands of news sites, filings and financial data sources to detect, summarize and alerts act about the trends and events affecting the stocks that matter to him and his clients. With Uptrends, he can easily see which stocks are trending in online chatter. He can click into those stocks and get an AI summary of recent market moving events, which he can then directly send to his clients. Things like John Deere's up 5% today because they got an analyst upgrade from, you know, ubs. Most importantly, he can set instant, highly customizable alerts to be notified about the next big event. Just choose the stocks he cares about, pick the types of alerts he wants to receive from price changes to insider trading, set the frequency he wants to be notified and we'll send him an AI summary via email about the chatter when it matters. So ultimately, what we what used to take him hours now takes him minutes. Uptrends makes it 10 times easier to stay ahead of market moving events and find the answers he needs right away without any doom scrolling or FOMO required. Uptrends operates as a freemium monthly subscription. Anyone can get started for free. And then we have premium plans for more customizable high higher volume alerts. We have a $15 essentials package for DIY portfolio managers and a $50 pro package catered towards investment advisors like Zach. Now there are 300,000 investment advisors in the US today, along with millions of DIY portfolio managers and retail investors. So for us to get from here to 10 million in ARR, we need to get to something like 16,000 advisors on our pro plan. And to get to 100 million in ARR, we need to get to 166,000 advisors. Last but not least, our team consists of myself as CEO and my co founder Sam as CTO. Sam and I have 10 years experience as stock market investors. Together we've written peer reviewed research on the relationship between new sentiment and stock market outcomes. I've previously been a financial analyst and Sam was employee number one of a 10 million ARR startup. We're rounded out by our PhD machine learning lead Joe and our front end developer Hamza, that is Uptrends AI. We're on a mission to save investment advisors from the news to help them build better relationships with more clients by staying ahead of the chatter when it matters.
- [05:19]
B
Thank you. Okay, so there are. Great job by the way. Overall, the pitch is tight in that it explains to me what you do, who your customer is and what the product is. So when you do these pitches, especially in a condensed format, two or three minutes, you really have a very small number of boxes you need to check. This is not a 30 minute presentation, this is a 3 minute or less presentation, which is, you know, to be honest, all an investor needs to start a conversation. Okay. The customer of this product is a financial advisor. And there are registered investment advisors, there are wealth managers, there are financial advisors. There's a lot of different categories here, but it's for somebody who manages another person's portfolio. And it's a B2B2C type product. There's B2B, there's B2C. You're enabling a business to talk to a customer in the same way Shopify is. You would say Shopify allows somebody selling stuff on the Internet to then reach customers. Fantastic. These businesses tend to be great because you're enabling an existing business to do more business, to do business more efficiently or to save money, one of those things. And so here you've identified a problem. Do I think you've identified a big problem? I'm not sure yet your advisors will tell you, but we know that these advisors get paid a lot of money. Right. What does the average wealth manager make in the United States? What does the median wealth manager make? What is their compensation per year?
- [06:55]
C
I know each client for them is an average of $10,000 in the door.
- [06:59]
B
Okay. Every Year. Yep. Okay. So if they have. But if they have 100 clients, that's $1 million a year. And you know what? I see these guys and gals who are. And they come at me all the time, Silicon Valley guy. I'm a whale for them. But, you know, they're going after also my mom and my dad. You know, there's somebody who helps them. And so, you know, people have a retirement account. They got some, you know, 401k and they got some equities, you know, but save the money, you know, and These guys make 1% of it. 1% of $1 million. 10,000 doll. Okay. So. And there's lots of millionaires that's growing because equities are growing. And America has a large number of millionaires. UAE has the most imported millionaires right now in terms of where millionaires are flowing. So I do think. Sounds crazy. If you want to raise money, one of the easiest places for you to raise money is to move to Abu Dhabi or Dubai and put your company there, because that's like kind of the new Hong Kong or New York, and you can get a golden visa, and you can get them to invest 250k, 500k out of the gate. Boom. They do that for, like, almost any American or European or somebody from Singapore, Australian, that Indian that comes and puts their company there. So I'm gonna put that as a little caveat there, because money is moving to Abu Dhabi specifically, and then also Dubai, two amazing cities. Let's put that on the side here. I think the product looks okay. I think it needs a bit of a design refresh. It's a little bit too techy and not finance. I want to just talk to you about design for a second.
- [08:35]
C
I actually have a question around that.
- [08:37]
B
Yeah. Okay. Tell me your question. Sure.
- [08:39]
C
So speaking of design, I'm thinking a lot about our team right now. We're a team of four getting ready to fundraise.
- [08:45]
B
Yeah.
- [08:45]
C
And you've talked a lot in the past about the importance of your founding team. But thinking about what's. What's next, my question is, like, those two to three next specific job functions for hires. Where should we be focusing?
- [08:58]
B
Well, as we've talked about, let's talk about the four you got. I'm hoping two of them are writing code.
- [09:02]
C
Four of us are writing code.
- [09:04]
B
God, I'm in love with your company already. You got four people writing code. How many of them are founders? How many of them are employees?
- [09:09]
C
With two founders, two employees with stock.
- [09:12]
B
Perfect. That's great. So you got some redundancy there. You can basically there's going to be two more positions you have to add at some point. One is going to be somebody to do sales and that person right now should be one of the founders. Why should you do founder led sales? Because you need to know, you need to have customer 0, customer 1, 2, 3, and you got to be able to listen to them. So let's pause for a second here. Tell me about how many paying customers you have and how much you charge. Ballpark. And how do you charge?
- [09:44]
C
Yeah. So right now we have a few hundred paying customers, two paid plans, a $15 a month and a $50 a month. I will say originally we were more focused on the B2B retail investor. And after feedback, we've learned a lot about. You've made the cardinal sin.
- [09:58]
B
You made the cardinal sin. We did. Of all startups. But we've learned you tried to run two different businesses concurrently, a B2C and a B2B. But you figured out that B2B is the one. Great. And then you've made the next cardinal sin, which is you are charging far too little. We just established that one customer equals $10,000. Do you believe you will keep. You will get your clients these wealth advisors, do you believe you can get them one extra customer a year? I think so, yeah. Okay. Do you think you could save them from churning a customer every year?
- [10:29]
C
Easy.
- [10:30]
D
Yeah.
- [10:30]
B
Okay, what is the value of getting a new customer and not losing a customer to them?
- [10:35]
C
Yeah, I mean, that's my pitch right there.
- [10:37]
B
What is the value, though? I'm asking you a specific question. A dollar amount.
- [10:41]
C
Well, if it's $10,000. 1% commission.
- [10:44]
B
Yep.
- [10:44]
C
Whatever that is.
- [10:46]
B
$10,000. And they would have lost one, that cost them 10 and they would have gained one, that's 10. So you've created $20,000 in value, which means the LTV. Do you know what that stands for? LTV.
- [10:58]
C
Lifetime value.
- [10:59]
B
Perfect. Okay. I'm just benchmarking where you're at in your startup journey. Your LTV is people will stick with this product for seven years. I'm going to guess maybe five on average. Let's pick five. Because that means each customer you acquire is worth $100,000 to you. That means your CAC. What does CAC stand for?
- [11:18]
C
Customer acquisition costs.
- [11:20]
B
Perfect. Your CAC could be $1,000 and you would make it back very quickly. So the value you're providing, if we low ball it, you gain one, you don't lose one. You know, 20, 20,000 a year. You're providing in five years, 100,000 of value. That means you really should be charging 10% of that number, which is $10,000, which is $2,000 a year. You're charging $50 a month. $50 a month, you know, is. But $600 a year. So you probably, for this product should be charging 500amonth, 400amonth, because you can really justify it. That first customer you save, you should get 100% of it. In my mind, okay, you should get 100% of it. So that would be a thousand or 800amonth. So I would just get rid of all this pricing and be taken seriously by your customers. A wealth manager is spending on lunch with their client, $600 or dinner. They're taking them to a Knicks game or a Mavs game, and they're sitting in the first four rows for $10,000. That's how they think. And you're coming to them asking for 600 bucks. You. It's like they pay more for, you know, that's what they're paying for their Gmail account. Come on.
- [12:30]
D
Sure.
- [12:31]
B
Yeah. Let's raise the price on this. Right? Signaling. Yes. So the signaling is way off. Now, what this will also do for you is it's going to have you capture the high end first and then go downstream. You want to capture the high end because the high end is going to have the best advice for you. So not only by raising your price do you increase perceived value. You have more money to hire people, and you have the ability to get the best chef's kiss. Best advice. So I want you laser focus, not on the number of customers. I would rather you have the 10 of these wealth advisors who make $5 million a year or $2 million a year, than for you to have 200 of them that make 400,000 a year. You want to go for the really high end here. They're going to give you great advice. So I think you got to redesign the product at the UX a little better. And I think there's some virality here that you haven't thought of. And this is what a jam session is about. You identified, like, there's a problem. Customer says, oh, my God, I own Tesla stock, Uber stock. Oh, my God, Uber's up like four bucks right now. I just noticed before I got on air because the Robotaxi is being delayed in some way. Who knows what's going on? And now you got this, like, existential thing. I mean, this is like panic inducing for Tesla shareholders. Lyft shareholders, Uber shareholders. If I had exposure to that. I do. I would be like, oh my God, I'm not. But anyway, putting on all side be really interesting if when you shared the dashboard of the stocks with a customer, if the wealth manager got a ping, Jason just opened the website. Jason just like a docusign. So look at the docusign. Hey, the customer opened the contract. The customer went to page two where you send your deck to somebody in like whatever the slide deck thing that watches. Oh, they stayed on, they went back to slide five, you know, they spent two minutes on slide five and they just zip, zipped past six, seven and eight. Why? Oh, six, seven and eight are irrelevant to them. But they really cared about the team slide, but they didn't care about the go to market or vice versa. So you got so much you could do here in intelligence and people will pay for that big time. If I know that my customers are typing in the ticker symbol Uber and then if they could write a question on that portal where they said, you know, let's say, you know, I'm the, I'm the, I'm the, I'm the wealthy individual, you are the wealth advisor Ramsay. And I'm on the website. And I just say like, what is this about? Why is Uber up in Tesla down if Tesla is going to kill Uber? According to this story. And then you wrote back, okay, here's the Goldman Sachs report. That's a Business Insider story. Business Insider is sensational. They want to get you to click Goldman Sachs has an analyst who's been covering Uber. This is the analyst name and I direct you to that story. Now, the interface has the entire history of us going back and forth. And then additionally, this all has to be mobile at some point. So getting a mobile and a designer is critical. And then I think the next piece would be to have what's called an SDR or business development rep. Would be very good for you to have somebody who trying to figure out who wealth managers are and a viral way to get them on the phone with you. Those would be my next two or three hires. If you could get the money in here, you're doing a great job, you got a great idea and I understand you told me you were talking to some of your customers in a group chat somewhere. Like a discord or a Signal or a WhatsApp.
- [15:50]
C
Yeah, just iMessage.
- [15:51]
B
Imessage. So you got like a. Do you have one to one discussions or do you have like a product council yet?
- [15:57]
C
We've got a discord for like large group. And then I have like a small group of three or four advisors that I text weekly.
- [16:04]
B
Okay, awesome. That's really what you want to do? Ramsey, I wish you massive success with this idea you jammed with jcal. Rate your jam with jcal. How would you rate this in terms of helpful?
- [16:15]
A
Huh?
- [16:15]
B
Give me an honest number between one and ten.
- [16:17]
C
That was great. I would say ten. Yeah, for sure.
- [16:19]
B
Okay, here we go. I don't want to bias it in any way, but you, you know what, you should meet our team so you might be a good candidate to come to our accelerator because I think there's something here. And when I jam with somebody, I got to tell you, you're good to jam with. Cause you're quick, you give really good answers, you don't filibuster. And that's what people love when they're jamming. So that's a really good note for everybody listening to this week. In startups, when you're interacting with an investor who's a know it all investor, who's seen it all, who's invested in hundreds of companies, you gotta be able to go back and forth quickly, right? And you gotta be able to have that real intellectual discussion. And you did good with that.
- [16:53]
E
Right?
- [16:53]
B
It's like kind of playing pickleball or ping pong or tennis. You want to have a good volley. In just 15 minutes together we had a great volley. I like you. I like the way you answer questions. I like the way you think. You kind of did your thing. You made yourself likable. I understand your business. You're thoughtful. You seem like you got a chip on your shoulder and you want to be successful. I think lean into that a little bit like a little bit of the drive. Don't be too mellow. And congratulations, Ramsey. And we'll see you all next time on Jam with jcal. Thank you to our sponsor tech with me today, Anna Molhotra. I got your last name correct. Yes, perfect. I'm good with Indian names, you know, and Sri Lanka names. My friend Jamalhapiti, I teach all of our friends how to say his last name. For some reason I'm just good with those names. Okay. You understand the premise here. Our friends at Doc Tech, you have a great tech domain name which is the roam app. Tech. Everybody can go check that out. I'm going to give you like two or three minutes to pitch me on your startup and then you tell me what your challenges are, your ideas, and then I'll give you some ideas and maybe we'll grind out some good ideas and strategies for you to make make your roam app even more successful. Three, two, go.
- [18:06]
F
Perfect. Thanks so much for having me, Jake Hal I'm Ana, co founder and CEO of Roam and we're working on yard sharing built for dogs. I'm actually not going to pitch you today. I'm going to go right to our problem, but I will start with a bit of an intro of the product. So meet Rome the dog. He's a good boy and he loves humans and he's a husky, so he has a lot of energy that he needs to let out every single day, so he's not a menace to society. But because he doesn't get along with other dogs, public dog parks are just not an option for him. Which is true for about 70% of dogs, even if their humans don't know it. And unfortunately, his humans live in an apartment and don't have a yard of their own to let roam play off leash safely. And roam's humans are part of the growing rate of apartment dwelling pet owners. And you probably guessed it, but Rome is mine and my co founder's dog and he's the inspiration behind what we're working on, which is yard sharing built for dogs with roam, dog owners book a yard near them and neighbors can rent out their outdoor space and earn with every booking. Simply put, we're a two sided yard ship marketplace. So the challenge we wanted to present to you today, jcal, is supply acquisition. Specifically, we knew going in that demand will come really quickly, but we knew that if they go onto the app and they don't see a yard that they like, they won't have a good experience. And so at Roam, liquidity is mostly based off of what dog owners are looking for in a yard. It comes down to three things. First, is the yard safe for their dog? Next, the yard should be close by. And finally, it's at least big enough for their dog to run around it.
- [19:26]
B
Yeah.
- [19:27]
F
And so all of these things determine what makes a good yard for a guest. And so we focused on building as much of this good supply as we could before starting our demand acquisition. And so we've spent about six months of dedicated effort to grow our supply. We've had only about 20 years to show interest, but we have seven yards in Seattle. Two of them are too far, one is too small, and one, honestly, is just mine. We just bought a house. One, however, is a local private dog park business that we just onboarded and we plan to lean into this a bit more. But I think to build true liquidity and give our demand the options they need, we need to scale our numbers of good yards through consumers and not just businesses. And so some of the strategies we've already tried is reaching out to personal network, posting on Craigslist and Nextdoor. All of those have been successful, but direct mail door to door and reaching out to rover sitters has not. And of course, we successfully onboarded that one business. And so before I open up to feedback and questions, jcal, yeah, I just want to put this challenge in perspective. Our supply growth is in green and you can see that it's fairly low and flat since the beginning of the year. But our demand growth in pink has more of an exponential curve coming up. And much of this is because we onboarded that local business. And as of last week, I'm finally full time on roam. And I think to be successful, this is a time to just be heads down on growing supply. We have all this demand coming in and we want to be able to provide at least one good yard and we need to do that quickly. So, jcal, you know, I know you have experience with marketplaces, you know, products, writers, drivers. So this is my question for you. How to get yards?
- [20:51]
B
This is a great question and it's one I'm uniquely qualified to answer because we specialize in investing in marketplaces. We have Stone Algo, which is a marketplace of diamond sellers and buyers. We have Meowtao, which is a cat sitting, which is very different than dog sitting and obviously Uber and Thumbtack. We love a great marketplace. And building supply is really important. And you've heard of, you've got Airbnb here for dog runs. Brilliant idea. There's a very simple way. You buy the supply with minimums and you have this great benefit that some number of people are already Airbnb owners or VRBox. So what you're going to do is I want you. And we also have Gigster, which rents space as well. Now, they're potentially a competitor because they rent space for a lot of different uses. I have never seen Dog Parker on there. I think that's kind of niche and there's some insurance issues or whatever. But generally speaking, I think going to an existing marketplace that already does Airbnb and you go and you check out an Airbnb and you look at the Airbnb and you say to yourself, hey, this is interesting. This Airbnb has a yard and a yard on the side. They could very easily cut out this yard, fence it in, or just put a gate on it. And they can still rent their Airbnb and they can incrementally do this. And they know how to manage people, they know how to market, they know how to take pictures. And so you could draft on Airbnb and VRBO's existing network. That could be such a simple unlock. And when you talk to them, you could say, hey, we're a startup like Airbnb, except we're doing this. People love meeting founders and they love startups. People love entrepreneurs. I mean, I love you. You came on here, you got a beautiful idea, and the pitch was so crisp and the design was so good, and you understand your market. The charming story of it's your husband and your, your dog love it all. And so that's what I would do. And then what Uber did was they cold called drivers, they went to Google, they found livery companies, Lincoln Town Cars, what they used to call black cars, and, and they just ground it out. Boom. And sometimes I think they even took rides and said, hey, I'm with the company Uber. Here's how it works. Can I show you the app? And I think they bought that inventory. They said, hey, we'll give you a minimum of $500 a month for five rides guaranteed. And we'll pay it to you, you know, for just having the app on. And if you keep the app on for 10 days in a row, every day, we're going to send you, you have it on, we'll send you 50 bucks, whatever it is, so you can just say to them, like, listen, I want to do this for the month. I'll give you 500 bucks for the month. And if we make above 500, you know, we'll give you some. And if we don't, we're going to take 30%, you know, we'll just eat the 500. That's the way I would do it.
- [23:32]
F
Got it.
- [23:32]
B
And I think it'll work really well. Have, have you thought of this strategy and do you think it will work?
- [23:38]
F
So I reached out to Rover sitters through the Rover app, and we actually got kicked off because, you know, obviously we weren't following their terms of service. Any suggestions on how to reach these Airbnb hosts outside of the platform?
- [23:50]
B
Well, two ways. Many of them have their own dedicated websites because they want to route around the fees of Airbnb. Other ones just, they're happy to pay the Airbnb fees, but a lot of times you'll find clues in their descriptions and they'll call it like, you know, if they were in Austin they'll call it like, I don't know, south of Congress Retreat. And you Google south of Congress Retreat and you find them on Yelp, you find them in other places. Right. So I think there are ways to do that. And then you can just keep opening accounts and doing the thing where you talk to them and just say, you know, hey, I would love to talk to you. Here's my number. And then when you talk to them, you're just gonna have to deal with that. The other thing to do is to go to Reddit and Reddit has a lot of sub forums and you could find the one if you're in Seattle or Austin or Brooklyn or even like Bay Ridge, Brooklyn. And then you say, hey, I'm looking for a place to run my dog. And I started. And then in the details, like, you know, you kind of float the idea, start getting people talking about it. And so, yeah, it's a little gray market. You understand the concept of, like, there's white hat, black hat, gray, black, illegal, white hat, legal gray. Yeah, you're bending the rules a little bit. You can do a little rule bending here and maybe start some conversations on forums and see if you can get, you know, inventory that way. So I think online forums are pretty good for that. Obviously nextdoor you tried. I bet you nextdoor worked to a certain extent. Maybe it did.
- [25:18]
F
We just need to lean into it a little more.
- [25:20]
B
Lean into it. I also think dog walkers could be very interesting for you. And so getting a couple of these weirdos, you know what I'm talking about, like these people who love dogs like so much and they get on the ground with like six of them and you see them walking to the dog park with six of them, you might be able to get a dog walker and say, hey to the dog walker. If I had a dog run here and there was a staff member there and there was lemonade and had four sections and you could put four dogs in four different sections, man. And this is what a jam session is about. And I'm thinking about this, I'm wondering if it. You should just find a plot of land and build 10 pens in it. Start selling coffee there, let's go have some cold brew there and just sit there all day and let people come into it. And you kind of hack it like that. Right. That's another possibility for you.
- [26:12]
F
Absolutely.
- [26:13]
B
Could air if you could do a short term rental. What neighborhood you do in Roman?
- [26:17]
F
We're in Seattle.
- [26:19]
B
Perfect.
- [26:19]
F
Yeah.
- [26:20]
B
Is there a specific area, like in.
- [26:22]
F
Seattle, the neighborhoods we want to Target is Queen Anne, if you've heard of it.
- [26:27]
B
I haven't. What is the average home price there, I wonder?
- [26:30]
F
One to two million.
- [26:32]
B
Okay, perfect. There's a really crummy house that's for rent in that area. That's a dog of a house. Got weird bathrooms and, like, falling apart. And nobody wants to put their family in there. And they would only rent it if they really had to because they want to get their kid into the school system. And that person can't rent it. I would go to that person, say, hey, listen, I'm an entrepreneur. Here's what I'm doing. I want to do this business. Would you mind if I rented it for three months and tried? And I'll have insurance and everything. It's nothing for you to worry about. And, you know, I'm not going to damage the lawn or anything. And if I do, you know, you got my deposit. You can keep it. And I would actually try doing this in the most central place you could rent, because what is rent of a house there? 5k a month. 4k a month?
- [27:10]
F
Yeah, sounds about right. 4 to 5.
- [27:12]
B
Okay, let's say it's 5k all in. And then the backyard, you set up pens. How much could that cost to set up a pen? 500 bucks each with some gates you order on Amazon or something. Holy cow. You set up 20, 20 pens there. And then you tell people, hey, I got this place for dogs. And oh, by the way, we also have an upsell. We have grooming on site, and we got an upsell for you. Because you mentioned somebody had this as a business already, right? There was somebody doing a private for rent dog bar.
- [27:39]
F
Correct. So they're a bar slash dog park.
- [27:42]
B
Okay, so somebody else had to stay.
- [27:44]
F
We've taken their outdoor. We've taken up their outdoor space for private bookings.
- [27:48]
B
Love it. So here, now, see, now we're starting. This is what a jam session's about. I like doing it. There's something here. You know this concept third space. You ever hear about that third space?
- [27:56]
F
I have not.
- [27:57]
B
Okay, there's your house. There's your work. That's one space. That's a second space. Describe for me a third space. You could go today. That's not one of those two. If you needed to not be in a coffee shop, you got it. You nailed it. Starbucks isn't selling coffee in many cases. A lot of what Starbucks is selling is a third space. I don't want to be home. I've been cooped up. I hate my boss. He's a complete jerk. He makes me say yes, chef to him. He's just overbearing. Talks to me about my career. He's annoying. Where else can I go? It I could go to a third space. I get a Starbucks, put my headphones on, I just jam out there. It's air conditioned, beautiful furniture, nice room. What's another third space? The gym. Gym. You got it. Give me another third space.
- [28:42]
F
A private dog park where I can get coffee and drinks.
- [28:45]
B
And now we're talking. Now we're talking. Now we're talking. So this is like a really interesting business. Also, there are lots that are available. So, you know, somebody's got a parking lot and they're making a thousand bucks a month or 2,000 bucks a month on some crummy parking lot. Now, Seattle, I think it's got a lot of regulations. Is that like a regulation heavy place?
- [29:03]
F
I believe so. But I do think I have looked at Zillow for just small plots of land. Just put a fence up, make it a yard. But it's capital intensive, so that's been the only setback there.
- [29:13]
B
So, you know, have you raised money for this idea yet?
- [29:15]
F
We have not. We have bootstrapped so far.
- [29:17]
B
Okay, so one of the things about these ideas is, you know, you get into a jam session with an investor like we did here today, we start doing it. Now you can say, hey, you know what? Jaycal kind of pitched me on this. Sounds like I could do this for 5k a month. Why don't I just ask them for 10k a month? That's 125k. Guess what? That's what we give people in our accelerators. 125K. So, you know, have you put money.
- [29:39]
F
Into this business yet?
- [29:41]
B
Just a little bit.
- [29:41]
F
Only 3 to $5,000. Just cash here and there.
- [29:45]
B
Perfect. Love it. So, and you're a nepo, baby. You got a trust fund. You're independently wealthy.
- [29:50]
F
I am not.
- [29:51]
B
No, you want to be rich, you want to be powerful, you want to be a legend. Okay, great. Come with me. So anyway, my point is, this is why accelerators exist in the world. Launch accelerator, techstars, Y Combinator, et cetera. Reason they exist is because people like you have, you know, unbelievable amounts of energy and ideas. And this is a crazy outlier idea. And, well, it, you know, like, you got to get started and learn. And so you came to me with that problem of the demand. But as we went back and forth and we volley, volley, like playing pickleball, ping pong tennis, I always tell People, man, you know, maybe there's a bigger idea here, which is third space we're that maybe where the Starbucks of dog runs. And the dog who's antisocial is what got us here. Just like the couch surfing is what got Airbnb going. But that wedge, maybe we open that up and maybe we'll make as much money from the concession and the secondary services. Dog training. Hey man, if this dog is bad behaved and that's why you're coming here, well, maybe we have a dog trainer here who's 50 bucks an hour. Okay, man, we got a lot we could unpack here. Grooming, et cetera. Really great idea, really great presentation. I like the design, I like the pitch. I like everything about it. Congratulations. Great job jamming with jcal. Rate on a scale of 1 to 10, how helpful this was.
- [31:17]
F
Am I allowed to say 11?
- [31:19]
B
I mean, I can't tell you what to say.
- [31:22]
F
I think the Airbnb thing is going to work. I really think it's going to work. So I want to give it 11.
- [31:27]
B
Okay, I'm let you give it 11. It's not for me to judge. I can't imagine coming here and talking to a legendary angel investor who could change your entire life and giving anything less than a 10. But you gave 11, which I give you credit for. You know, last time I did this, the guy was like, I give it a 10. You came out and was like, huh? I put one more than 10. Right, now we're talking. Now we're really jamming. Great job. And you know who else does a great job? My friends at tech domains can't get a dot com. Listen, you put in 3, 4, $5,000 into this roam dot com. It's not built in a day. I think about Rome all the time. Roman Empire. Rome.com is a $10 million domain. 5 million dollar domain, 4 letters in the dictionary. Destination. Great destination. So hey, the roam app. Txt. Great domain. Fantastic tech also. That signals to me that you get it. The technology does change the world. So shout out to my friends at tech and we will see you all on the next jamming with jcal. Hey everybody, welcome back to this week in startups. It's time for our next jam with JCAL session brought to you by our friends at tech domain names. The way we do this is you have to have under 2 million in funding and so it's for early stage startups. Ulama is our first startup and the founder is Tyce Herman. And Tyce, I've never heard that name T Y C E. Pronounced T I C E. I think tice.
- [32:50]
D
Yep.
- [32:51]
B
Really interesting name. I've never come across it. And your company is Ullama?
- [32:57]
D
Yes.
- [32:58]
B
And that's U L A M A T E C H. You got a great tech domain name. Why don't you show me what you're working on and then just tell me what your biggest challenge is.
- [33:07]
D
Our software is for architects to analyze their 3D building models for code compliance before they submit their designs to government reviewers for approval. So we like to think of ourselves as Grammarly or architectural 3D building mod. We have software that plugs directly into architectural design software and architects select the location that they're in and the specific codes that they want to use to analyze their 3D building model. They'll go through the sort of two dimensional drawings of the 3D building model and assess them for specific codes. So that could be building code, it could be accessibility, ADA code, plumbing, fire. The architect can select what they would like to use and our plugin then runs through their entire 3D model, evaluating all the geometric and parameter relationships within that model. Once that's done, they get both text and visualization of how their model is out of compliance and suggestions on how to make updates to the model to bring it into compliance. And that's broken out by sections of the code and also building elements within the 3D model.
- [34:18]
B
Got it. So an architect is pulling up this floor plan, looks like a live workspace, and then they put your plugin into their architectural software. What's the architectural software most common one called?
- [34:31]
D
It's called Revit.
- [34:33]
B
Revit, okay, so you're a plugin for Revit and then it goes to their designs and then it matches them to the local rules and regulations, the codes. Is that correct?
- [34:44]
D
Yeah, that's right. We've created a rules engine that will look at their entire 3D model.
- [34:49]
B
Is that using AI to do that? How is it doing it?
- [34:52]
D
We are assessing the 3D model within multimodal AI model, and we're also creating those rules by parsing the regulatory text with AI models.
- [35:01]
B
Got it. And so what jurisdictions do you work in and how long have you been doing this product?
- [35:07]
D
We've been working on it about a year. And right now we're just doing codes that are broadly applicable in any municipality. So ADA federal policies, or sort of vanilla off the shelf building codes.
- [35:22]
B
So ADA policies, Americans with Disabilities Act I believe is what it stands for. What's an example of that? Is that like the width of a doorway or how bathrooms Work. What's an example or the most common example?
- [35:34]
D
Those are both great examples. A concrete one would be a toilet. Has to be a certain distance from the nearest sidewall so that someone can reach a grab bar within an easy, comfortable distance.
- [35:44]
G
Got it.
- [35:45]
B
And so it's going to check the ADA rules against what an architect made, correct?
- [35:51]
D
That's right.
- [35:52]
B
And do the architects frequently screw this up or do they generally know all these rules and get it right?
- [35:59]
D
They have a decent working understanding of code, but there's so much minutiae within code that it's difficult for them to. To keep track of it all as they're designing. Most architects are doing what's called parametric design. So as they're making changes, other things in the model are changing downstream of that, and so things can get out of sync really quickly.
- [36:18]
B
Got it. And this isn't occurring in real time. You basically upload your. Your floor plans and then you run this against it, and then it tells you, yeah, this.
- [36:27]
D
They don't even have to upload anything. This is within their design software.
- [36:31]
B
But they.
- [36:31]
D
But they do it on demand, so it's not just constantly pinging them. Hey, this is out of compliance. Right.
- [36:37]
B
Because that would be what a copilot does. A copilot is sitting there while a person's working, let's say like Grammarly on your grammar or a copilot like GitHub's while you're writing code. So I'm curious why it doesn't do it while you're working.
- [36:51]
D
Yeah. We talked to hundreds of architects at this point, and a lot of the questioning was early on about how frequently do you want this sort of analysis. And most architects just want to be able to design. You turn on their design brain and then at certain checkpoints come in and look at things like code compliance. But they don't want that constantly getting in the way of their design flow.
- [37:15]
B
That makes sense. They're trying to get into a groove. They don't want to have this interrupting them. Tell me, what's the biggest challenge with your business? And it's like, seems like a very reasonable idea and a good starting point for a feature, if not a product, like an interesting wedge. What's your biggest challenge? I'm curious.
- [37:32]
D
Yeah, one thing that we're thinking about actually right now is we're launching a smaller version of this product as a standalone offering. It's going to be for sale on the web. It's ready to go live tomorrow once I finish my distribution list. And it's a component of this overall technology for code compliance. It goes through and it identifies all the elements in that 3D building model and then normalizes the attribution and naming. Right now, it's not very standardized, and that makes it hard for architects to do all sorts of other activities. So what we're struggling with thinking through is how do we use this initial product launch to generate sort of interest and also make this sort of case that, hey, we know how to develop products for our customer base. This isn't our core product and our. Our sort of main value proposition, but, you know, we're servicing this sort of customer base and then just sort of like telling a good story around that through this initial product launch.
- [38:33]
B
So are you looking to launch us in the United States? In Germany? Where are you looking to launch us? I'm assuming the United States.
- [38:39]
D
This first product that we're launching can be used internationally because all it's doing is identifying the sort of elements within the building. It's not. It's not applying any of the rules yet.
- [38:48]
B
Okay, well, I know that there are hundreds of thousands of architects between the United States and Europe. Right. And so they already like to spend on software. The software they use cost hundreds of dollars a year to low. Thousands of dollars a year, I would assume.
- [39:04]
D
Yeah. The software developing for Revit is thousands of dollars a year. And that's just our sort of baseline design software.
- [39:11]
B
Got it. And does that software have an app store for the plugins like Shopify does or Apple does? Yeah.
- [39:19]
D
Autodesk, the maker of Revit, has an app store. It's not commonly used yet. It doesn't have a lot of traction like an Apple Store, but it's gaining momentum.
- [39:29]
B
So, you know, this is always the challenge with these app stores, because if you leverage the App store to try to get customers and you're very successful, you've basically given a roadmap to those platforms to incorporate you into their product. Without knowing Autodesk and how they were, do they historically support a really great developer ecosystem of plugins, or do they have a reputation for, you know, basically stealing those innovations and putting them into their own products?
- [40:02]
D
Less the reputation of just sort of like taking them and embedding them in their own products. They do a lot of acquisitions now. They're, you know, giant company at this point. So a lot of their new development is through acquisitions. Yeah. And their developer support has been sort of lackluster in the past, but they are really renewing their focus on that. So there's a lot of momentum around The App Store.
- [40:21]
B
Yeah. That's great. So, you know in a lot of these cases, how the App Store features you and your relationship with Autodesk is going to be the key driver. So if you make Salesforce plugins or Shopify plugins, there's a, usually a developer evangelist, a vice president there. And if you, you know, make nice with them, they might feature you and bring you 10 customers a day. And if you can work that ecosystem, that's going to be incredibly accretive to your business growing. And it also builds a dependency, but that dependency also builds an acquisition path. So, you know, there's good and bad here. The good is they could, you know, really appreciate what you're doing, not have time for it. And you could basically own this little piece of the puzzle for architects. And so, you know, and then you could have a dependency. They could decide to take you off that homepage or promote somebody else or build it themselves. And all of a sudden your business goes to zero, which has happened to people who build plugins. Specifically, the developer community at Facebook, famously like Zynga, got absolutely demolished over time. And so you can look at those historical precedents. The more you understand your customers, your. The more you spend time with them, the better off you're going to be. I would try to embed your company into, you know, wherever the most architects are, whether that's a school or, you know, a company that you can say, hey, I know you're going to get a lot of value out of this tool. Can we, you know, have two seats at your office and we call this the bear hug. You know, if you could find out who is a great customer for you. They've got 50 architects, 25 architects. You say hey to the CEO of some upstart. The founders would be possible to get two desks here and hang out. That's another way for you to get closer to the mix, to the people who are using it. So those are my two paths for you. Building the developer community or bonding with the. The evangelists at that App Store, or deeply bonding with, you know, an architectural firm, or doing both.
- [42:23]
D
Yeah.
- [42:24]
B
And, you know, then if, you know, they decide they're going to compete with you, and you know it's harder for them to compete with you and kill your company. If you've developed that relationship with the evangelist team, they're going to be like, let's keep supporting them. They're only charging $500 a year per architect for this plug in, we're charging 5,000 a year. You know, that Seems like a good price, you know, so getting your customers to pay also critically important at this early stage. If people aren't willing to pay for it and you've put a lot of work into it and it's, you know, reliable software, you know, then that should tell you, like, maybe this isn't providing enough value and that's where pricing comes in. So those are my two hopes for you. It seems like you're off to a great start and I wish you great luck with it. Any other questions for me?
- [43:06]
D
Yeah, I guess maybe if there's anything that you can say about leveraging an early product launch or a second larger product launch and like how, how to really like connect those to like this previous, hopefully success when we launch tomorrow to our major and main product that we're launching end of the year.
- [43:28]
B
Great question. I've seen some entrepreneurs set up little WhatsApp groups or Signal groups or imessage groups or slack rooms with say five or ten like minded customers who become their product advisory council. And then you've got five or 10 people who get early access to what you're doing and get to influence the product. They're your product advisory council. But then when you do launch, hey, they might tell people about it. So there's probably 50 architects who have YouTube channels. There might be 50 people on Instagram who are active architects. There might be a hundred of them on Reddit in, you know, two or three different subreddits. And if you can just slowly collect 10 people from each of those social networks, tell them what you're building, ask them for feedback, you know, you might have this little group of highly influential people rooting for you. And I think, you know, I call this the slow embers, hot embers kind of marketing. It's not like huge numbers, it's more like really hot coals. You know, you ever have a really hot coal, you take one of those coals and you put your hand over, whoa, it's a little bit hot. Now you put 10 of them together and you know, you're about a foot back and you're like, well, I can feel the heat. You know, Then you get like 50 of those coals in a barbecue and they all start turning red. You know, now it's like, whoa, I can't get within three feet of the barbecue. And when I put that tomahawk on, you know, that tomahawk steak, man, it just lights right up and it's almost too hot. But each one of those is just a coal. One little simple coal but together, 50 of those coals can burn so bright, so hot, that boom. And it just explodes, right? And it's just, it's even too hot. That's really what building this fire is about. So don't forget, each coal is, in your case, a customer, an individual. And you just have to build that relationship. Now, each of those relationships will probably take you about an hour. So it's about 50 hours of work, which you're probably like, wow, I gotta push code. I gotta do all this stuff. And this is why sometimes people will have an evangelist or a marketing person just slowly build up that group. And I've done it myself. I have, you know, maybe I would host dinners for other angel investors and LPs in our funds as a venture capitalist. And I still have those, you know, little groups of who went to dinner at different locations. I named them in Signal, you know, the name of the place. And, you know, we have a Marksoft Madison group with like 12 people who came to that dinner and they talk to each other once in a while. And I get to have that like one to few relationship. And they might ask me, somebody might ask me a question and we all talk about it. So I like this like one to few kind of concept. And it could be a zoom call, it could be a WhatsApp group, it could be an email list, whatever the jam is that you want to try. So I really think that will help your launch. Press is nice if there's industry press or a podcast and podcasts, there must be a hundred architectural podcasts and they probably all get like hundreds to low, thousands of people. But going on those and talking about your product and the problem you're trying to solve, people love innovation. And so I would also look at the podcast route, right? And I think in your case, small numbers are good numbers, right? Targeted small numbers is going to be the key because you're not dealing with a consumer product like Uber or Airbnb where you're trying to get a billion people to consider using it. To get a hundred million or two hundred million users, you just need ten thousand paying customers and this thing becomes a ten million dollars a year business. And that's pretty good, you know, as a, you know, a goal for a business like this. But I wish you great luck with it and awesome start.
- [46:53]
D
Thank you. Really appreciate the help.
- [46:56]
B
All right, everybody, we're going to do another jam with Jake House session right now. And today I'm talking to the founder of CorePod, which you can check out at C O R P O D T E C H welcome to the Pod Ulan. How you doing? Why don't you show me your product, tell me about it and then tell me what your biggest challenge is.
- [47:16]
E
Corporate. Your personal sleep companion. We all have our smartphones nearby. For me is a great tool to connect to my family and friends, keep up to date with all the latest news. But also is a huge source of anxiety and distraction. I always get messages, notifications I do scrolling at night and I have insomnia. I wish I had a digital companion I can talk to, can voice my feelings and help me decompress before I go to sleep at night. Something like this.
- [47:54]
B
Woo Woo. Hi there.
- [47:57]
D
How can I help you today?
- [47:58]
B
What's been bugging you lately?
- [48:00]
E
I'm having some trouble sleeping. I just can't seem to fall asleep at night. Takes me more than two hours to fall asleep.
- [48:15]
B
Oh no.
- [48:16]
D
Sorry to hear that.
- [48:17]
G
That sounds really frustrating.
- [48:18]
B
Can you tell me more about.
- [48:20]
E
You remember Beacon, the dog at the olympics that helped U.S. athletes with their mental health problems? So it's a kind of Gen AI dog right inside a speaker. We've talked to many therapists about mobile apps and they say the mobile app solution doesn't work. It should be a completely separate device and we've made it a smart speaker powered by Gen AI and you can talk to it like if it was your friend. Now let's talk about value. It may seem quite expensive at first glance, but it's actually a bargain. One month is cheaper than one single hour of therapy session with a human expert. We can reach 10 million with just 17,000 customers with about 200 million with 1 in 70,000 users. Who are these users?
- [49:14]
D
People.
- [49:15]
E
High pressure jobs, medium to high income and ready to invest in their mental health. Our team is passionate about building this product and we also have advisors. We've made five prototypes recently I finished Founder University Cohort 8 and last year I attended to Team Draper's Hero Training Program. We got funding from a high technology park of Kyrgyz Republic and European bank for reconstruction development and now we are rising. We want to connect to smartwatches like Garmin to fetch all the health data. Build product, ready product and start pre orders. This is my context.
- [49:55]
B
What is your biggest challenge? What's your challenge with this speaker with a screen that has an avatar or a virtual dog who is going to help you sleep better? What is the big challenge with corepod?
- [50:10]
E
You know JCal, we are B2C and also it's very hard to build B2C and also we are hardware. It's even two times harder to build this kind of software. So my question is, what is the best go to market strategy for this sort of product? And especially that given the fact that we are related to mental health.
- [50:34]
B
Okay, so you're in the tinkering phase. You're building some hardware, you're building some software, and your idea is you want people to sleep better. Interestingly, I have two investments in this space. Last night I hit an 85 on my sleep score with my eight sleep. They're on their fourth generation and they study your sleep, your REM, your deep sleep, all of these issues. And it's quite nice. And it really has helped me, you know, sort of get into a better pattern. And I were, we were investors in com.com and I use sleep stories with myself and my daughters to help go to bed. And so those two things have become good investments for us, great investments in fact. And they do tackle sleep. Other people like whoop watch does it. So you are not only doing hardware and software and doing a startup, you're also going up against a pretty competitive set. So this is not going to be easy. And doing hardware, as the eight sleep team will tell you or the Cafe X team will tell you, really, really increases the degree of difficulty you have to be able to finance. All of you know this hardware. So I think what you have to do is maybe step back and ask yourself, are you making a virtual companion in a speaker format that's different than, you know, say an app because you don't have to take your phone out and you have all the other distractions there? And is that the innovation here or do you want to from first principle, say, I want to help people get to bed at night and this is the best way to do it. And I think that's what you have to ask yourself because clearly you're creative and you have technical ability and you've tried these different things. But which is it? Are you, Are you passionate about hardware and creating this companion or are you passionate about sleep? Which one?
- [52:15]
E
I would say that the core product is the software. So it's personalized. Like your friend which knows you and he knows how to help you sleep better and the hardware is just the way you interact with this software.
- [52:33]
B
Yeah, you would think that you can use AI to be a sleep coach and that that sleep coach requires hardware. I wonder if your sleep coach requires the hardware. I would see if you could build a sleep coach with your iPhone that actually, you know, lets you put your iPhone face down and interacts with you and put you to sleep. Right. So I think a better model might be, hey, eliminate the hardware business for now. You can always do that later. But see if you can make this first part, which is an interactive companion. Who I talk to and they put me to sleep, which is kind of like your dad or your mom telling you a story at night, putting you to bed and tucking you in. I kind of feel like maybe now that I've heard you respond to my question, that you believe the interactive AI assistant is kind of like a sleep coach or a parent tucking you in. Am I correct?
- [53:22]
G
Yeah, yeah, exactly.
- [53:24]
B
So I think you want to first prove that that actually works. And you could do that through an app. You could get 100 beta users and just see if the interactive model actually puts people to sleep better than listening to a sleep story on comm, because that's your competition for 50 bucks a year. Or if it puts you to sleep better than, say, listening to an audiobook or putting on a sound machine. I think what you're up against is not the therapist who charges $500. I had. That was in the presentation. Like, I think, like, that didn't ring true to me. I think what you're up against is the sleep stories on calm. And Calm is up against, you know, free sleep stories and sleep meditations on YouTube. So they have to be that much better. The packaging, you know, and the tracking and all that, and the beautiful interface, they have to be better than the free stuff. And then eight sleep's got to be better than just using a sleep story to go to bed. And they're going quantify itself. So you're going to have to find that market in there. And I think prove that first piece. And then hardware is so difficult, but you seem good at it. So I would just wait on the hardware. I would just make that first piece work. And how close to you are you to proving that out? How many nights, how many users have been put to sleep by your interactive person?
- [54:41]
E
Yeah, we have waiting list and up to 14,000 users.
- [54:47]
B
Okay, so nobody has been put to sleep by this yet except for you.
- [54:50]
G
Yeah.
- [54:51]
B
Okay. So, you know, there's some demand. Cause you got the wait list. What I would do is I would get 10 people and I would look for people in the subreddit on Reddit for insomnia. So there's a Reddit for insomnia. And I would go to the insomnia one and say, hey, I'm a software developer. I'm trying to build software to help People fall asleep. And I think you can do it with an interactive person. And I'm looking for a couple of test users. Here's what I think is going to work. What do y' all think? Would anybody want to try this DM me and see what happens if they allow you to post that and if not, you post it on Hacker News or other places or in a reply. Or you could put it on Craigslist and just on Craigslist say, hey, if you have insomnia, you're reading this at 1am I'm building some software. I'm paying people a 10 gift card to try it for three nights. If you do it as a thank you and fill out a survey and tell me what you like and don't like about the software. And I would get to, you know, let's say 100 people trying it and filling out the survey and see what you learn. Because right now it feels like you're building, building, building something very complex without answering a first principal question. Can a language model put somebody to bed like mom and dad did when they tucked them in and read the Mystoria?
- [55:58]
E
Yeah, actually it's all based on the research. I don't know if that works, but some research, they proved that LLMs, even text based, can really help in this regard.
- [56:11]
D
Great.
- [56:12]
B
So now take what you learned in that study, take what you know about, you know, hardware and tinkering and just prove it to the investment community and prove it to yourself and see what you learn. Maybe it turns out asking, you know, but three questions of the user puts them to bed. Maybe some people want to have, you know, a back and forth 20 times until they fall asleep. Who knows what the language model will come up with the technique. But I think you got to get closer to the customer and do a little more testing before you spend a bunch of money and raise a bunch of money. I don't think you're going to successfully raise money with a hardware company in 2024 going after this because it's very competitive and hardware is really hard. But I think you could get into an accelerator or get some seed investors if you did a small 100 person study yourself and then had that information and you could literally record it. You know, you could have all the interactions from the language model and from your little URL. You don't even have to send them to build a full app or the hardware to test this out. You just send them to a URL with a little script. They open the web browser. Browser, they talk to it and see what happens. So I wish you great luck with it and it's a really great idea and clearly you're passionate about it. So good luck.
- [57:23]
E
Yeah. Thank you jcal.
- [57:24]
B
Awesome. Okay everybody, welcome back. It's time for a jam with JCAL session. Sometimes you know what, I know where some of the bumps in the road are and we have a dialogue about how to solve problems, which is what startups are all about. So with me today is a gentleman named Elliot Easterling. He's the CEO of a company called Bonbon Tech and that is our partner today. Tech is a great domain name. I use it for Founder Fridays Tech. Many people out there are using tech domain names because they're awesome. They let people know you're a technology company. And so thanks to our friends at Dottech for supporting this segment of the show. We pick all the companies that come on. Welcome to the show, Elliot.
- [58:13]
G
Thanks J. Cal. Thanks for having me. I appreciate it. I just want to walk you through a little bit of the business. I'll take you through a deck and then I'd like to jump into some questions I have about some of our go to market.
- [58:22]
B
Review the deck. I like reviewing the deck. Let's see how you did.
- [58:26]
F
Great.
- [58:26]
G
Awesome. Well, I'm the CEO, as you mentioned, of Bonbon Technologies and we are a rewards platform for publishers. Allow publishers to reward anything and that ultimately drives a lot more engagement and much higher registration rates. So let's just get started. Really the pain that we're trying to solve is for ad focused publishers. The 99% of publishers that are ad focused and they've been really suffering from wave after wave of big tech changes. Things like cookie deprecation which started in Safari and now is moving to Chrome. Search results pages referring less and less traffic out, social media algorithms referring less and less traffic out. And then now AI, which is going to have a massive impact as big tech platforms use AI to drive more engagement on their platforms and ultimately refer less traffic out. So what we're seeing is publishers are looking right now for solutions. They're planning for a smaller user footprint, but they also want to drive a lot deeper, more profitable customer relationships from those users that are on their platforms. And so we built basically is a fix by rewarding engagement. So we built the first publisher rewards platform that gives consumers relevant rewards, access to unique content, simple and transparent data and privacy controls and ultimately a better user experience. Publishers get logins and logins re enable cookies and lost IDs. They also allow the publisher to build direct relationships which they're starved for in the world where they're mediated by these big tech platforms. We also give the publishers gamified engagement, a points program that drives things like repeat visitors, page views, watching videos, and ultimately, that's all delivers five times more monetization per user.
- [60:03]
B
All right, you got me so far. It's interesting. Like, I'm, I'm, I'm. I find myself nodding as a publisher just so we. We check in here as you run me through the deck. Yeah. That publishers do have these problems, and if their consumers are logged in and you know a little bit about them, you can monetize them better. And people like gamification. So let's see how this works. Yeah, cool. Yeah.
- [60:24]
G
And you're a medium aven, so I think I knew you'd really understand the business pretty quickly. So we've cracked the code on sculpting consumer behavior with this rewards program. So we built an optimization engine that drives outcomes like 300% higher registration rates, 100% more engagement, 250% higher ad rates. And then we're finding that 54% of people, after they log in, will actually complete their data profiles and provide even a richer understanding to the publishers who's visiting our site. And this is all at a moment where publishers need this most. And so let me just walk you through really quickly, kind of like a sample of the tech.
- [60:57]
B
Finally, I want to see the product. Okay, here we go.
- [61:00]
G
And so on the left, you see a little icon, little tab. That's us. We control that. And that's all the user's navigation. They can access the rewards program. But on the right hand side here, what you see is that at any time through the process, we can allow a publisher to trigger a rewards window, either in line or as a pop like this that essentially runs eight or nine offers simultaneously. To figure out through machine learning, what do the users of that site care about most that will make them willing to register? And not only this technology delivers, like a 3x higher reg rate from anything they've been doing prior.
- [61:33]
B
Okay, so for the audience that was listening, there's a little arrow on the side, like a little chip on your phone. If you were to click it, it pops up, says, hey, would you like to win this television set? Or whatever, some kind of sweepstakes? If you log in, if you register, you automatically get updated. Yeah, yeah. You get entered into the contest. I love it. Yep.
- [61:52]
G
And then after someone enters or registers and we verify their email, we actually gamify the registration process. Like we say, hey, tell us more, a little more about yourself. Give us your name. 94% of people will give us name for more points. Zip code, 91% give us zip gender, 89% give us gender. And even they verify their phone number with us at 54% and we're just getting started. The other things we do is we give people points for reading every article they read. They earn more points and that drives 100% more engagement and just high, high level. We provide them with what we call three parts of the platform. Open Identity Manager, which allows them to collect and manage first party data. This rewards engine which runs hundreds of offers to try and give publishers the ability to reward anything. And then we have a bunch of front end tools that consumers interact with that basically sort of deliver the product. And we also have an API where publishers can call it to issue the rewards on their own.
- [62:41]
B
Very nicely done. Have you started to deploy this with any publishers yet? Where are you at in terms of building this business?
- [62:49]
G
Yeah, we are live on 27 websites. We have 60,000 Bondbar members have actually registered. The one thing is one user logs into the publisher, they become a Bondbar rewards member and also a publisher as first party data. So we've been able to build our file up to 60,000 as of last week and we're running about 60 million monthly pages across our publisher network on great.
- [63:11]
B
You know, publishers are looking for tools like this and if you can help them build their profiles and give them those gamification tools, I could see a number of them wanting to participate in this. The challenge of course is you're trying to solve a problem for publishers who are really struggling, which means they're not high growth and so they might have very small budgets. Right. And so that is an issue is that they're constrained. So has that come up and how are you picking your ideal customer profiles when hey, the publications I used to run, whether it was Engadget or Autoblog or the ones that Vox created themselves like the Verge, etc. A lot of those publications are having challenges these days. Right. And so how do you think about that? Because you're picking publishers which are a group of people whose businesses are might be flat, they might be contracting, they might be slow growth and they may not have budgets.
- [64:09]
G
Yeah. So we offer two solutions for enterprise publishers. We have a SaaS platform where publishers can pay a SaaS fee and we also have a free with ads version. Publishers have to have a minimum size to be able to qualify for free with ads. But we basically inject ads into all our modals and that essentially pays for the deferral program including the rewards.
- [64:27]
B
Got it. So there's nothing to lose for those publishers by using this tool. And on the enterprise version I assume I can opt out of like you owning the profiles and they're just for me if I pay you enough money.
- [64:44]
G
No, the whole program is across publisher rewards program that's sort of backed by Bonbon. And one of the things we do is we issue, basically we issue the rewards out across publishers.
- [64:55]
B
Ah, okay, that's clever. So hold on, that's an important thing to pause on there if you're going to give away this OLED TV that costs $5,000. It that cost of $5,000 will get abstracted across 10 publishers. So it's really net, net 500 each or if it was a hundred publishers it would be $50 each, which is super clever. Okay, I, I understand.
- [65:19]
G
Yes, we have the benefit of that in that we basically can amortize the cost across publisher. Number two is sort of we put the, the privacy guarant users to come into our system and opt out of any publisher they want. We know generally speaking consumers don't like to do that. They just don't want to mess with the settings. But it is a really key, important part of our value proposition.
- [65:39]
B
One of the other nice things here is you know, the user can participate or not participate. So what I like about what you're doing is you might have somebody like me who looks at it, you know, you know, as a 53 year old now and I'm like I don't want anything for free. I don't want to be part of any sweepstakes. But I would might want you to know a little bit more about me as a publisher because I want to get certain mailings, etc. So I have an email for just when I'm shopping that I use for my shopping websites and I don't mind them knowing about me because I would rather get sales for men than women for. You get the idea. Or I want tickets to Knicks games, not, you know, I don't know, Miami Heat games or Chicago Bulls games. So yeah, that kind of personalization is a benefit because you don't waste my time. And then when I was younger I might, if I couldn't afford the OLED TV that's $5,000, I might very much want to join that sweepstakes. Thank you very much. So I think that's a very interesting approach too is this data will help us personalize content for you. And then there's hey, this data might let you get into a sweepstakes. You didn't mention the gamification, but that one was a highlight for me as well. So do you have an example of gamification yet or that's on the roadmap?
- [66:58]
G
Yeah. So one of the things we do is after people register, we sort of say hey. And we deliver this through the email campaigns. We sort of send them a weekly email that basically says, hey, here are some articles you could read that are personalized to you that earn you extra points. And so we're essentially starting to sort of like enable gamification through our newsletter program. And we do also offer point bonuses for doing things that go to this one publisher and play one of their games and that will earn you 100 points. So we're early on in the gamification process, but I do think that that's going to be some of the critical things. My promise to publishers is like, hey, not only can I get you a lot more registered users than you could on your own, but these users are hyper engaged because through communication we can sort of scope, traffic, direct them back to your site to spend time on the things that you care about and ultimately reward them for that behavior and that activity.
- [67:50]
B
One thing that's tried and true is inviting a friend or a friend member, bring a member kind of gamification. So you might find some interesting engagement there from publishers. If you could say, hey, I'm already a member. I think my brother should know about this content. You know who else should know about this story? I enter somebody's email, it emails them, they click, they register, I get points. So that's tried and true. You see that in Robinhood where you gift a stock, you get a stock Uber, you give a ride, you get a ride, Dropbox, you give some storage, you get some storage. So I think you got a really interesting tool based and network based business here. Two ways to win. And so what's your question for me? Any challenges right now in the business?
- [68:33]
G
Yeah. So you know, in today's fundraising environment, you know, ever since the market turned, publish or rather VCs, sort of, they behave similarly and they're sort of the mantra now is like, I want to see revenue and all they care about is revenue, revenue, revenue. Now this is a network effect business and we win by building distribution. Right now we're building users at zero cac. And when you think about most rewards businesses, they're paying, you know, five bucks, 15 bucks per user. We're not paying for users. And so our go to market really should be 100% focused on building distribution, getting more users. But at the same time VCs and the market wants to see revenue, revenue, revenue. Me putting pressure on publishers to essentially pay us is going to slow my business down. So how would you navigate that?
- [69:18]
B
Yeah, sure, this is a great question. Network based businesses do have a carve out in our industry when it comes to monetization. So if you're a SaaS business, if you're superhuman and you charge a dollar a day for an email product or slack and you charge 8 to $35 a month depending on which plan you are per user, yes, of course people want to see the number go up in your business. However, if you could prove that if you, you have these 60,000 members and if you said, hey, we're giving away the iPhone 16 and we just want you to take a survey about mobile phones and visit these three reviews of, you know, we're going to present you with 10 pages. Every time you visit one of these 10 pages in our network and you scroll to the bottom and you know, Click on the iPhone 16, you get entered in. Now you'll get a bunch of sweepstakes jerks who, you know, kind of just do this in a scammy kind of way. But you also, if it's good content, might get people to actually who are interested in iPhone 16s and technology to visit 10 pages. That's good for the publishers. And it costs you $1500 to set up the sweepstakes and give it away. Now you could prove to people, if you could prove to people that when you do that, the publishers get page views and the cost is spread for the iPhone 16 across 30 publishers. So it's only 50 bucks a publisher. And you just run those experiments without having the publishers tell you I'll pay for it. You just, you're running a $1500 experiment. You say, look, we sent of the 60,000 people, 3% of them, you know, went and actually did something. Imagine if we had 6 million people and 3% did something. Now we'd really have a business. So that's up to you to prove it to me, the investor that you could do these little experiments. And whoa, look at the interest that this created. And they had to click on an email to confirm they were in it. And if they put in their friend's email, they got 10 more entries and their friend got double the entries. So there are little experiments like that where you could show growth in the user base. And the page user driving and be able to correlate it. So that's really up to you to run those small tests and prove to us you can grow, you know, 5 to 10% week over week. That would be what viral growth would look like in your business. Now for sales and for SaaS products, you show me a SaaS business growing 10% a month. I'm interested. You show me a business like yours growing 10% a month. I probably would think not very interesting. So you got to get to that 5 to 10% week over week. That's a lot of tests to run. And you know, but you could actually do that with very low dollar amounts.
- [72:12]
G
Yeah, yeah, yeah. I think, I think what you're sort of pointing at is a sort of a unique unit economic story that we need to tell to investors like you to basically say, hey, we're getting these users for free. And then we run these experiments that actually show that we're getting revenue tracks and the revenue traction is building or the activity traction is building on a per unit basis.
- [72:28]
B
Engagement. Yeah, engagement is the name of the game. So you could say to me, you know, if you came to me with these 60,000 and said, okay, it cost us, you know, six months and you know, we burned a half a million, we burned $100,000 in six months getting to 60,000. So we're going to need to spend a million dollars to get to, you know, what we think is 3 million because we're getting better at it. It's a fixed cost business, whatever. But if we did this many prizes, we would get to, you know, 10 million. And then every week or every day we're going to run an experiment with a million of those 10 million so we don't burn them out. But every 10 days they're going to get some sort of offer to engage them and then we'll start charging the publishers because they'll be addict. But you know, you have to get the flywheel started. Right. And so getting the publishers to agree, getting the VCs to agree, all this stuff takes work. So you may have to just invest small dollar amounts to show it on a micro basis. Yeah. And then say imagine we add two zeros. Yeah. And here's what it costs to add two zeros to the velocity I'm showing you. Yeah, yeah.
- [73:32]
G
Makes tons of sense.
- [73:33]
B
Pretty straightforward. Yeah. And that's like your investment. But I, the good news is I think you can show this for very small amounts of money. How many people working on the team, I'm curious How many developers you have?
- [73:43]
G
Yeah, so we have a product person, a couple engineers who are really, really good, are kind of working kind of.
- [73:48]
B
Core on outsourced engineers or full time employees. Offshore.
- [73:54]
G
Offshore part time, basically is what the team looks like. Yeah.
- [73:58]
B
So you're in year one, you're an early stage startup, I take it?
- [74:02]
G
We're pretty early. Yeah, we're sub two years. Yeah.
- [74:04]
B
Okay. Yeah. How much you raise?
- [74:06]
G
1.4, basically.
- [74:08]
B
Oh, okay. Wow. So you've raised a decent amount of money.
- [74:10]
G
Yeah.
- [74:10]
B
You should be able to get that network effect going. Just invest in giving away whatever the product of the moment is that aligns with this. I would also start thinking about, you know, the virality of social media and TikTok, you went after publishers, which is where attention is going away. So they need your tool, obviously they really need it, but their businesses are contracting and you may be selling like, you know, deck chairs to the Titanics. Now what business is growing? TikTok shorts, video podcasts. There's a bunch of things that are growing in the world. So I'd also think about these tools and say, hey, if we had 60,000 TikTokers and people making shorts and they were engaged in the network, what might this look like? Because sometimes, you know, a surfer is only as good as the waves presented to them. Mm. But when you go big wave surfing, right? Yeah. You're. You've got these little tiny waves, three, four, five foot ones. Okay, fine, you can surf them, but it's not like you're going to be going to the North Shore and do it, you know, hitting a 20, 30 foot wave where like, whoa. It's impressive if you can catch one of those waves. So I encourage you to really think deeply about the beach you're surfing at. The beach you're surfing at, it does it. The tide might be going out faster than you can build a business. I love looking at, you know, and I've, I've done this myself, right. I caught the block. I caught the magazine zine wave in the 90s. I caught the blog wave. I caught the podcasting wave 14 years ago when I started still riding that wave and caught the angel and seed investing and incubator wave. Sometimes there's waves that are bigger than you and if you catch them right, man, that's why I'm, I'm doing more thinking about live and shorts. You know, TikTok shorts or. Well, TikToks aren't called shorts. I think YouTube calls them shorts. But anyway, I've been thinking about other alternative formats outside of podcasting. And I've been thinking about live a whole bunch, so I encourage you to think about that as well. You have an interesting business. I mean, I would have if you had presented this business to me to come to our accelerator. I've been like, yeah, let's do it. But I think you're in a weird position having raised a bunch of money, not having violent product, market fit or market pull yet. So you really gotta get some market pull. And I think it might be that you might need to find another beach where the waves are a little bit bigger. So I would think about that. E commerce is another one Direct to consumer. The people in direct to consumer were getting slaughtered, slaughtered trying to get Facebook to work. And Facebook worked for a long time, then it stopped working. But the ones who went to TikTok and social media and podcasts did make it work. So sometimes it's just like it's not you, it's the environment you're applying your skill in. So I think you're very talented.
- [76:59]
G
Yeah, yeah. And I, I, we are. I can't disclose what we're doing, but I think some of the things we indicated are areas where we're testing right now. Doing some experimentation.
- [77:06]
F
Good.
- [77:07]
B
Yeah, I'll leave it at that. I don't want to tip your cards. Yeah. Great job. And for everybody listening, who wants to learn more, give us your URL again. I know that you're a tech, but remind everybody of your domain name. Yep.
- [77:20]
G
Bonbon Tech.
- [77:21]
B
What a great domain name. Bonbon Tech. If you would like to get one of these great tech domain names, just go to get tech and get one of those great tech domain names. Tell them your boy jcal sent you. We'll see you all next time on Jam with jcal in this week in startups.
- [77:41]
A
Thank you for watching. I hope that was educational. The names of the companies that won the jam with JCAL again are Corepod Uptrends, Ulama Rome and Bonbon. What do they all have in common? Well, they're all using tech domains. I think these jam sessions are great for founders, insights, feedback, real time conversation with jcal himself. And if you want to go out there and get your own tech domain, you can just go to get tech. That's G E T E C H. Let us know if you want us to do more jams with Jcal in 2025. Until then, more news coming. I'm Alex. I'll see you soon.