Nabeel Hyatt: Do we know what this
thing is gonna be called, Fraser?

Fraser Kelton: No, but we decided that the
world definitely needs another podcast.

That is exactly what,
exactly what's required.

ChatGPT came up with some names.

They were all pretty bad puns playing on
podcasts, AI and startups, none of which

had any taste . I forget what they were.

Nabeel Hyatt: If you can pull them
up at some point, maybe towards the

end of the segment, it'll be great.

So, I am Nabeel Hyatt.

Fraser Kelton: I'm Fraser Kelton.

Nabeel Hyatt: We are doing a thing that
is at least spiritually connected to

a podcast that I used to do with my
old friend and partner, Bijan, when

I basically first got into venture.

We started a thing called Hallway
Chat and the goal was not to be,

I mean, very clearly, not to be
the most well structured, highest

production value place on the block.

The goal was really just to lead with
authenticity about them really crazy time.

At the beginning of the mobile
revolution, where it felt like everything

was changing every single week.

And.

of course, now we have.

a new time.

in AI.

That.

feels an awful lot like that.

And I've got a new partner in Frazier.

Who's uh, now the new VC, who's a former.

Founder and an operator , actually Fraser.

Do you want to talk about yourself at all?

Fraser Kelton: No, I do.

Nobody wants to hear us talk
about ourselves on this.

I don't think.

You say this to founders all the time?

There's nothing worse than VCs bloviating
about themselves and their ideas.

And so we have to keep
the second part of this.

Otherwise we don't have a podcast,
but we can save people from the first.

Nabeel Hyatt: There's these things
called, search engines, although we will

discuss the potential disruption and
those such things where you can look

up our bios and figure out who we are

And if tradition holds and every
week, we're going to focus on our new

AI product that we're actually using
and trying to wrestle with and any of

the insights that come out of that.

Uh, just crying, frankly, stay curious
as we try to navigate all this new space.

And of course.

Frazier we'll navigate the
new venture landscape..

together.

Uh, you can try and keep the
one venture question per week.

Fraser Kelton: Okay.

Yeah.

Yeah.

try my best to limit it to one.

This is a weird world.

So you, you told me the other
week that you use perplexity

for basically everything that
you used to use Google for.

Nabeel Hyatt: Yeah, we did
have this conversation.

I, I don't use Google anymore
really as a search engine.

I, I find it's just not good enough.

That doesn't mean I don't use Google
because it turns out there's a lot of

things Google's done over the years that
are not about search engines per se.

But pretty much all of my searches
have gone to perplexity and then

some percentage of what you would
loosely categorize as search.

Now goes to Claude or ChatGPT.

And yeah, I, I think perplexity
I think there's rumors about IVP

having invested, that we're having
the information this week, some

large round and so on and so forth.

And, on the surface it feels
insane to to be investing and

looking at something that's trying
to compete directly with Google.

But at the same time, how many amazing AI
products have you actually used and stuck

in the last nine months since ChatGPT?

And, and the obvious one that people talk
about is probably CodeComplete, right?

But, but

Fraser Kelton: massive numbers,
user numbers this week.

So I think it's it's GitHub copilot.

It's chat GPT.

There's a lot of interest early on around
RAG like systems for chatting with your

docs chatting with enterprise content.

Nabeel Hyatt: talk to my PDFs.

Fraser Kelton: I think so.

I want my PDFs to talk back to me though.

That's what I want.

I want the synthesized voice of
Sky to come back and tell me that.

That I'm writing this memo wrong.

But, talk a little bit about perplexity
and the product experience and the

user like value that you get from
it versus chat GPT versus Google.

Like it's interesting to hear that
you go there all of the time for what

used to be, quote unquote search.

Nabeel Hyatt: I think it's a great
example of sometimes little things matter.

I think Arvind and that team have
done a lot of subtle things that

make that product really work
that are worth chatting about.

First of all, the, the like six
months ago when agents were suddenly

all the thing for a minute they
launched a little, a little agent

which takes your search engine query.

and then tries to ask follow up
clarifying questions in order to narrow

down and make your search better.

And it's a great example of
does it work all the time?

No.

When it works, it's absolutely magical.

And so, you're searching for something
and then it actually, in dynamic

real time, builds a little UI of,
say, checkboxes or radio buttons that

say, oh, did you mean this or this?

Now, obviously, in the world of agents,
everybody's figuring out exactly, it's

almost like agents are like self driving
cars you can demo them, 80 percent in

a wonderful demo in two months, but
actually getting them to be really

performant and reliable is a, is a
Herculean task, as I think all our builder

friends are, are figuring out right now.

But, but I think it actually works
very well in Perplexity's case.

And not least of which is a good
example is Have you used Google's new

generative engine that they launched?

The conversational

they're basically their
competitor to Perplexity.

Fraser Kelton: yeah.

SGE Search Generative Experience.

I will tell you, it was the
first time that I really had

to reckon with two things.

Number one how painful it is
when you have to ship your org

chart in your business model.

Because, yeah, you can now,
you can now use it to do your

first draft, they call it.

So you go to the search engine that
you've used for 25 years and you

can write write me a poem about...

Tulips.

And it will write the poem about tulips,
and then you have your search results

for, for poems about tulips at the bottom.

Like it just makes

Nabeel Hyatt: Oh, wait, just they still
put in the Google searches, right?

With the Google ads and
things, it makes no sense,

Fraser Kelton: it makes
no sense, no sense at all.

And the, the other thing that I
realized was They're vulnerable and

they realize that they're vulnerable.

If they're willing to ship this type of
janky experience into their core product

they, they don't know what to do because
they have a business model, which is,

maybe the best business model of all,
of all time, that's at real risk here.

And their solution is to allow
you to do your first draft within

the search results below it.

I think maybe the
optimistic story on this is.

They're shipping early, they're going
to learn, they're going to iterate

and they're going to, to figure it
out because it's so economically

important for them to do it.

But I think that this is the first
time in the past 11 months where I

thought, Oh Oh, this is going to be
a really interesting couple of years.

I mean, and that's the optimistic
story for, for Arvind, right?

And perplexity.

Nabeel Hyatt: Yeah, I think it is.

In general with AI products, I've
just tried to take the idea of slowing

down all of my computer use, right?

That's how I've thought about the
next two years, which is just if I'm

gonna go do a search, then one out
of every three times, take the time.

Do the search on three or
four different engines.

Try weird stuff.

And yes, that slows down everything,
but you have to test your defaults.

If you're gonna, if you're gonna be on
the edge, if you're gonna really feel

how all these things are really working,
and you'll take the time to do that, and

have to fit into your day to day life.

Otherwise, it's some random thing
for a half an hour on a Thursday

afternoon, you're like, I'm
supposed to try this product now.

What's my search?

And that just doesn't

Fraser Kelton: Right.

Nabeel Hyatt: I, I, so I've tried,
I've probably done dozens of, of...

of searches on Bing, the new
Google ish thing and Perplexity.

I had a weird one where, I
wear a beanie all the time.

I saw Brad Pitt wearing a beanie.

I was like, where does he get
his, where does he get his beanie?

And if you just think about
the old world of Google, where

would that content come from?

That content would come from
some content farm somewhere.

Someone at BuzzFeed wrote a listicle

Fraser Kelton: Mm hmm.

Mm

Nabeel Hyatt: about, about Brad Pitt's
beanies or, or celebrity beanies,

and then, and then Google scrapes
that, and the economic bundle is

obviously that I hopefully click
on it sometimes, and then, and then

BuzzFeed or whoever else gets a penny.

This whole model , is going to completely
break down because, one, Google, those

searches were way worse on, on their
website it was slow, it gave back only

one answer, not all the answers, and
Perplexity just did a very, very good

job of I don't know what they're doing
under the hood, but very, very good job

of, I think, just doing rag across a deep
corpus set of search results retrieving

out the right things and then actually
presenting them in a good format.

Now, if I have to fast forward a couple
of years, I don't think it'll even

look like a search engine page, right?

It should.

Eventually look almost like that BuzzFeed
page, just dynamically generated,?

It will, it will be nicely laid out.

The photos of the
beanies will be on there.

I'm using a really bad example, but
these are the kinds of ridiculous

things that people search for
randomly on a Friday afternoon.

Fraser Kelton: yeah,

Nabeel Hyatt: And and I also
like, one thing we talked about as

well, I want to come back to is not
all my searches go to Perplexity.

And I think a partner, Yaz, brought
up, and we were talking about the

hallway, is there really going to
be one search engine in the future?

So do you differentiate what
you go to chat GPT for right

now, as an example, versus what
you go to Google for right now?

Fraser Kelton: yeah, when I want to
learn something I go to ChatGPT, right?

So a lot of our job is, is being
curious and trying to understand things.

I no longer go because Google makes you
do both a lot of work to pull out the

information as well as like people have
spent, I don't know, two decades now

trying to game the Google search results.

So that has become, I don't know, this
adversarial thing where you're trying

to put in the work to learn how to.

To get to the answers that you
want, and there's a whole other

side of the equation fighting to
give you the junk on the SEO side.

I used to have some hacks,
everybody does, who's an early

adopter of a pen site reddit.

com, if you want to find out
what the, the best thing is.

And you can now ask ChatGPT
and it gives it to you.

Oh yeah probably the people that I have
the most respect for as early adopters

in terms of taste and product sense and
like discerning input on these types

of things have basically said the same
thing as you about Perplexity , which,

which really caught me off guard.

For me, it's a creature of habit
and then the power of defaults

and distribution where I have

Nabeel Hyatt: Of course.

Fraser Kelton: actively fight that.

And so I'm still finding myself going to.

to Google.

And then when it's an important enough
search, this is, I mean, maybe the

optimistic story, when it's an important
enough search that Google lets me down,

I find myself then going to perplexity.

And how many times am I going to
do that before I just go right to

perplexity or something similar to that?

To your question of when I go to Google,
it's if I want to know how late the

restaurant is open down the street, or
I want to it's, it's all the stuff that

you've mentioned earlier that are, are.

Appendages to the original type of
reasons that we went to Google, right?

Is the one box type of stuff,

Nabeel Hyatt: It is one box.

I think Google as an internet
search engine is terrible, it's

not just because of AI and being
able to ask questions of things.

It's also just the degradation of
content on the internet, which of course,

when there's a bunch of AI generated
content, will only degrade faster.

I think I encapsulate that there's
basically three searches, and maybe

they end up being one product that
rules them all eventually, but it's also

possible sometimes there's bifurcation,
and we see this happen in industries.

And so maybe these end up being
three different companies.

The first one is, I want one box results.

I know it's a one shot answer.

It's probably eight words.

You probably know it.

I know you know it.

Just, just tell me.

And, and Google has done a very good job
of largely ripping a bunch of Yelp and

other people's content off turning it
into beautiful little one box results.

I still go to Google
for that all the time.

Second is inquiry, which
you use the word learning.

When I know that the first answer is
probably wrong, or I will be confused

by it, and I want to ask follow
ups, then I go to GPT or Claude.

And then the third is research, which
is close to learn but different,

where I just want an answer, but
it's a big multivariate answer.

That is, the research questions,
which is obviously the, actually,

Perplexity does an amazing job
on, on the Reddit style questions.

And, frankly, academic
scholarly publications as well,

it does a really good job.

So for me research goes to
Perplexity, OneBox goes to Google

and, and inquiry goes to ChatGPT.

But this is...

This is early in the kind of muck of
everybody messing around with this stuff,

so I'm curious to see how it goes in a

Fraser Kelton: Yeah.

Somebody was telling me that the, the
the pessimistic story for all of this

is that Google and now OpenAI have so
many resources and, and some semblance

of either distribution or brand that
they may not innovate on the right

product experience, but they can just
rip it off once somebody delivers

something that's like clearly resonating.

And we'll see.

I think that that's what makes this
time so fascinating to me is in

2008, 2009, I think you and I would
have had very similar views on how

the mobile landscape was going to
play out between Android and iOS.

Maybe we'd get the relative
share a little bit wrong.

I think in this case, nobody knows
anything and there's a lot of big Big

markets and products that are up for
grabs for the first time in a long time.

Nabeel Hyatt: I mean, this is true,
despite what Sam Lessin says, that I

think there actually will be an AI market.

Fraser Kelton: You told
me you were worked up.

I haven't, I haven't read
anything that it has to say.

There's some semblance of 37 signals
content marketing going on here that

I just can kind of like push a little
bit into the corner, but what's up?

Nabeel Hyatt: no, I like, he's, he's,
okay, yes, of course, he's a little

provocative, but I think these are
long held beliefs not just hot takes.

Sam has a podcast with three other people,
which is actually, I think, the best new

podcast of the last year focused on tech.

Less is more, because specifically, it's
four humans that actually like each

other and actually know each other.

And so there's real authenticity
discussion as they talk about a bunch of

things, which is not most shows, right?

Most shows are canned content marketing.

A anyway So look, there's a first
part of what Sam's rant is and he has

a rant on his show and then he just
released like a 975 page, probably

generated by AI, PowerPoint deck
that kind of like regales how seed is

dead, AI is just a weird pipe dream.

Trying to save VC, it's all going
to crap, and everyone should just

start cottage software businesses.

That's ostensibly the long story short of
Sam's pitch about the evolving ecosystem.

I, there's a part of it that, first,
I agree with, which is that he has a

framing that the kind of industrialization
of venture capital phase is done.

That, that at this point, the factory
farmed B2B SaaS company is over.

And that he sees is that
causing a bunch of late stage.

Crowd into seed spray and pray, they're
not really working with those companies.

Just yeah, you know that
some junior partner has been

told to put money to work.

So the jamming money into random seed
companies and it's messing everything up.

And so if you're a seed or
series a fund oh, wow, you got

a real, you got a real problem..

So, I believe that.

But the second bit where he gets to
AI, I think, he's just anchored in his

priors before AI, where it just felt
like there was not enough innovation.

So, his feeling, I could like, I hope
I don't boil it down the wrong way, is

that fundamentally AI is a sustaining
innovation, not a disruptive innovation,

so it'll change the world, but it'll
just be that Google adds AI, and

Facebook adds AI, and it'll be fine.

If you're Adobe, you win anyway, you
just add AI, and that kind of thing.

And that there's no moat, because
it's all, open source anyway so

what's the moat you're going to
have and there's no network effects.

And that the tech is moving too
fast for, for startups to keep up.

I have a couple of like pretty
basic flawed issues with this.

Fraser Kelton: If the tech is moving so
fast, isn't that the opportune time for

Nabeel Hyatt: There you go!

Fraser Kelton: Arvind is a 25
person team, I think, and he's out

executing like everybody else who has.

tried to push into this space
and, and there's something

remarkable about what he's doing.

He, he's shipping both at the technical
level inference that is like 2.

5 times faster than, than other
inference platforms that are

specifically focused on that.

And then his product decisions are
like tasteful and thoughtful, and

he is not having to fight against
legacy business models and an entire

org chart that has calcified around
an an old way of doing things.

So anyway, you, you teed me up, but

Nabeel Hyatt: Yeah, no, exactly.

I just fundamentally disagree that
big tech is going to dominate.

One of the things I love about what's
happening in AI right now is that

we talk to lots of investors that
are quote unquote active in AI.

And they are activating wildly
different ideas about what's

going to work than we are.

And Sam's going to operate
as part of the ecosystem.

That is ultimately a good
thing for founders, right?

We're going to get a spread
of different capital to try a

bunch of different experiments.

We'll let it play out over time.

But I do think, yeah, there are
two flaws in Sam's argument.

So one is like he overestimates the
big tech's ability to execute, right?

Most large companies.

A struggle to adopt new tech.

And startups can find ways to
sell against Google and Microsoft.

And frankly, one of my little
examples, there was a world where

Microsoft dominated all of GovTech.

Big, entrenched sales.

And Google, when it was still a relatively
early company, actually used cloud and

pushed into that, into that dominance in
a way that I think, frankly, beforehand

you would have said would never work.

And there's lots and lots and
lots of examples of startups

using The disadvantage of a large
company to their benefit, right?

The second is that I think Sam, as
a lot of that entire generation of

founders, grew up in a world where
network effects were the biggest moat.

And so I think there's an anchoring
idea that isn't that the moat?

And, and so, if you grew up in that
world, you look at Facebook, and look,

network effects are an incredible,
incredible barrier to entry, but

at the same time, it's not the
only way startups build durability.

There were many startups
with no network effects.

Frankly, Google Search versus
Microsoft that we were talking about

earlier is an exact example of this.

Vertical integrations like Microsoft,
working from the OSS layer up to the

office layer and launching Microsoft
Office . Apple . Cisco . Cruise

. There's lots of other ways other
than network effects for a startup to

build competitive barriers to entry.

I think he's also over indexing on large
companies that are innovative in AI.

And forgetting that AI is going
to transform every industry

beyond big tech, right?

Manufacturing and healthcare, and
it's going to be a 20 year run

just like it was for the internet.

It's going to go hit every
little part of the economy.

Lots of those parts of the economy
are going to deeply struggle

to come up with a solution.

And there, there's no incumbent advantage.

Yes, some big company could
build a solution for that area,

but also so could a startup.

And so it's all the normal things
that happen with startups, right?

Fraser Kelton: Yeah, yeah, listen, I'm
a Satya Stan and, and that lovely line

that he made Google Dance was, like,
so fun, but come on it wasn't Bing and

Sydney that made Google Dance, I had, it's
just a really bad, crummy product, and

everybody knows it's a bad, crummy product
It is open AI and, and what, what was

shipped there that is making Google dance.

And we just talked earlier about how like
their entire business model is going to

have to be reconsidered for a world where
you can write a poem about tulips and

then have search results put below it.

Like they, they have real
fundamental problems that

they're gonna have to navigate.

Nabeel Hyatt: I think it's very
easy to underestimate how hard

it is for incumbents to change
and trench workflows, right?

It's, it's easier for startups
to start from scratch.

And there's an inherent conflict, and you
called it out, very first thing, between

these two ideas, that, that this is a...

Sustaining innovation, so companies
are just going to add it, and that

it's moving unbelievably fast.

Because it's not just moving unbelievably
fast, and this is a thesis to how

we, how we are navigating the world
right now with founders, which is,

it's not just moving very fast at the
foundational level layer, the model

layer, where there's new capabilities
coming out constantly, it's also moving

really fast at the user expectation
layer, right, at that top layer.

And so the, the, that, the last
revolution in AI 15 years ago, we

actually, as a firm, we didn't go
that deep into it . We had Cruise

and a couple of other investments.

But part of the problem in that age
of small models is that folks with the

data and the distribution win, right?

If you have all the data and you're
Google and you got a distribution,

you're just going to win.

What feels different here is, one,
the data, everybody has access to

the data, with a few big exceptions
. So there's a data advantage.

And then the third D , if I want
to keep this little D thing going,

is is the design is changing, right?

Like the, the kind of concept of a product
like Descript is that you used AI to

completely change the workflow on the
front end of how somebody actually makes

a podcast or edit a video in a way that
was never true for the last 20 years.

When the workflow and design changes.

Then the incumbents, they can't
completely change their workflows

without alienating their current base,
so they have incumbency disadvantage.

And you see this with Adobe, they
didn't, their, their launch of a copycat

product to Descript was Adobe Podcast.

Now, they didn't change a previous
product, they had to start from scratch.

They built a new UI, they launched
a copy, it's pretty good, it's just

getting started, we'll see what happens.

They obviously have money and brand
to go push it out into the market.

They're going to try bundling, all
the things that large companies do.

But that's no different than how large
companies have tried to compete with

startups for the last 30 years and

startups have been

Fraser Kelton: 30 plus years, sure.

Yep, the I think if you look at the
past 12 months, you have seen incumbents

move very quickly into this space.

The whole world has, right?

And I think part of it is, we have a short
term overestimating the impact, and then

long term we underestimate, and there's
going to be a very profound change.

But if you look at what the incumbents
are doing, they're layering in Cheap

ways to leverage this technology, right?

Hey, listen, we can now do some
sort of like really amazing

summarization around unstructured data.

And our app is unstructured data
because it's recording sales calls.

And that is incrementally
more useful for that product.

And it, it's pretty awesome that they
moved so quickly to introduce these

types of features of functionality.

But I think that It's an absence of
imagination to think that there's

not going to be entirely new user
experiences that are delivered off of

this technology, especially because
the technology is strictly only

going to get better from here on out.

And, you said this, I'm stealing your
line, is I don't even think we've seen

from the artists and creatives how
to use this technology appropriately

yet, and I think that that's fair.

Nabeel Hyatt: If you think the
problem is a puzzle, then large

companies have a huge advantage.

Puzzles can get solved by
throwing money at the problem.

But if the problem is a
mystery, Founders have a chance.

to win because agility,
wins and you need judgment.

Something that.

Large companies have problem with.

Fraser Kelton: Yep.

I very much agree.

Like the way that I think about the
world is there's this continuum of

project to product and on the project
end is doing things right and on the

product end is, Doing the right things.

And I feel like the jigsaw metaphor
is like slide it all the way over to

project where you're doing things right.

Nabeel Hyatt: Right, so this is a
puzzles versus mystery situation, and

there will be parts of the market,
absolutely, which feel like puzzles.

Let me just add a chatbot client, let
me get the retrieval properly, it'll

be added to my product, and we're done.

And then the mystery is places
where this technology will lead

to new types of interfaces, and
new types of experiences, that...

Don't sit anywhere comfortably where
an incumbent has previously been.

That's where startups have the advantage.

Fraser Kelton: And you're right.

If you just need to have
a 12 month known roadmap

For shipping AI, then let's coordinate
all your cross functional stakeholders

and make sure that they're bought
in and, and, you check the boxes.

And if it's figuring out the, the right
thing, I think we're so early in, in

understanding the types of experiences
that this technology can provide for us.

And, and we're, we're
just getting started.

Like I think as you said, again,
like the creatives haven't shown

us what's possible just yet

Nabeel Hyatt: Yeah, that's right.

That's right.

I'm, I'm going to throw to
you, actually, on the spot.

I know you're not prepared at all for
this, but ... We just went through

a process where we were talking
to a bunch of limited partners.

So for those who don't know venture
capital, we actually have to raise

money just like founders raise money.

And largely from non profits, endowments
pension funds, places like that.

So when we make money, that's
where the money goes to

those kinds of organizations.

Was there anything about that
process of talking to some LPs over

the course of the AGM in this last
week that caught you by surprise?

Fraser Kelton: It's surprising how much...

Felt very similar to being a founder
raising capital from VCs and then

how some of it felt so different.

You and I sat through a whole host
of different meetings and there

was meetings where the vibe just
was great from the hello, right?

Nabeel Hyatt: Yeah, yeah.

Fraser Kelton: in and it feels.

It just feels great.

The entire experience feels great.

And then there's some where you sit
down and you're like, Well, the vibe

here is not quite the same as the vibe
that just was in the other meeting.

I'm not sure how this
is going to turn out.

The other thing that is very similar is...

You just get into a groove, but you have
to have some feeling of spontaneity in

the discussions, and when, when I was
pitching VCs, you'd get to the point

with the deck where you would have a
pause and you knew, you knew nine times

out of ten they're going to lean in
with this question, and you didn't.

You didn't, you didn't pitch it, so that
you could get ahead of the question.

You pitched it so that they would ask
the question because you knew the answer

to give, but it had to feel spontaneous.

Nabeel Hyatt: There's a
theater to all of it, right?

There's a theater to pitching, and I
do think for an engineering mindset

when they're going out to raise money,
a lot of times the answer is, let me

answer all the questions in the deck.

And let me get it in order, and
somebody asked that question

there, I got a slide for that.

I used to do a thing, it's hard now
in Zoom land, but I used to do a

thing when I was pitching, where I
would take one question that I knew

was just an absolutely plump T up,
and and I would remove the slide,

and then have them ask the question,
and I'd be like, that's interesting.

Do you got a whiteboard marker?

And, and the act of you just, you
get up and you walk over to the

whiteboard and you're sketching
and talking in real time and man it

just, it pulls the room together.

Fraser Kelton: The place where it
was surprising and different, and it

continues to be surprising for me is
that we can spend our day talking to

founders who are trying to create a
future that may or may not take shape

in two years, three years, four years.

I mean, with Cruise, it was eight
years of Kyle grinding, right?

Yeah.

Yeah.

And then we step into a world where we
have to talk about portfolio construction

and it's just very strange to think
that the entire world works because

of portfolio construction, right?

And the risk that you take on so that
these, these outliers can actually

have oxygen and come to life.

Nabeel Hyatt: Well, I mean, I do think
that for the folks who, who came into

venture in the last four or five years,
they're learning a really key lesson

right now, and they have learned a really
key lesson over the last year , there's

a reason why it, it actually works.

I'm a person who like, it's like what
Winston Churchill said about democracy.,

Venture is a very flawed model.

It's just that it's the best model
that we have for sustaining innovation.

I mean, the other alternatives, if
you look at things like corporate R& D

and how many wonderful amazing things
come out of corporate R& D, you're

like, that's not the way to do it.

Okay, so what else do we do?

Do you want the EU to figure
out what we should build next?

That's not the right way to do it.

Like almost all the other models for how
We get an ecosystem to sit on the right

edge of risk and innovate and create
what's going to be next in the world.

I actually am a very big booster
for this particular model.

Like it, it takes builders and it
takes VCs and so on and so forth.

I also hate the industrialization of
venture capital because it, it feels

Fraser Kelton: just different.

Yep.

Nabeel Hyatt: it's not just different,
, I think it ruins parts of that model.

It messes with parts of that model that I
think are becoming more obvious now that

we're out of the, B2B sass go go times,

Fraser Kelton: Yeah.

SASSification of everything.

On a different topic, what, AI
product have you slowed down your

life to explore this past week?

It's not even

Nabeel Hyatt: slowed down.

I have been, so I listened
to a lot of podcasts.

I basically have.

The habit of anytime I have any
downtime, unless it's specifically like

thinking time I I'm doing the dishes.

I'm going outside to
take the dog for a walk.

I have a kind of running
list of podcasts going.

I've been using Marco Armitage
Overcast for many, years.

One of my best go to examples
of everything doesn't

have to be venture scale.

Like sometimes the most amazing product
is a one person effort and it's a

beautiful thing and I love that product
and there's a lot of love in it.

I certainly use it over say I don't
know, like Spotify is trying to

mix in my podcast with my music.

Stupidness or Apple Podcasts.

For the first time, and I don't know how
long it's been, 5, 6, 7, 8 years I, don't

use Overcast anymore, so I switched.

To a product called Snipt, S N I P T.

It is what an amazing difference
it makes . Obviously, it's not

changing how you listen to podcasts.

It is still a podcast player.

It's probably lower on features
than than a product like Overcast,

which has had many years.

But that's what you want with
technological innovation, right?

Is that a startup can start not without
having even hit table stakes for the

market, but there's some feature that's
so good that it drives your behavior.

The thing in particular that I
always want is you're listening to

a podcast, I'm in the car, somebody
says something you want to remember.

And the feature I've always wanted is
like, can you just please just clip?

I want my DVR TiVo feature for my podcast.

Like just clip the last 30 seconds
and do something smart with it so that

I don't lose these ideas as they're
coming, as I'm coming across them.

I think this company has been around
for a little while now, but without

all the AI features that they had.

So I think it used to be a, I
can triple click my earbuds.

And it will grab the last little
30 seconds or something like that.

I think it was the previous
version of this product.

I did, I think I tried
this a year ago or more.

It's fine.

It's just not good enough.

Now what it's doing is a bunch
of incredibly wonderful things.

First of all, as I'm scrolling through.

podcast.

It's using AI to do summarization
of the whole podcast.

So instead of it being the thing that
you or I would write about this podcast,

which may or may not be accurate, it's
actually looking at the transcript

and giving me a real summarization of
the topics that are going on in there.

Very interesting.

It then breaks up the podcast
dynamically into chapter clips.

So if I don't like a topic that we're
talking about right now, like if I

don't want to hear about Snipped.

I can double click on my ear
pods and it will just go to

the next chapter dynamically.

That's awesome.

That is awesome.

Which is just like, it just changes
the experience, because we all know...

Frankly, including ours, all
these podcasts go a little long.

And part of it is, that is the joy
of the podcast, is that it feels like

you're in the room with somebody, you're
listening to them go through a topic,

you can get depth, but sometimes you
just don't want to hear about something.

And so the DoubleClick Next Chapter,
even if they haven't set up, and it's

not, it's chapter rankings on very
finite, like two, three minute scales.

It's not like 20 minute scales,
which is what some podcasts do.

And I just love that.

And then the last feature, AI, Native
feature, which is really wonderful,

is now when you triple click, it is
smart about how much it clips, so

it clips only the topic area, which
could be in the future as well.

It clips the topic area that is related
to the thing that you just triple

clicked on, so somewhere, between 15
seconds and like a minute and a half

is what it's grabbing to try and grab
the concept, which is just brilliant.

And then it transcribes it into text.

So you have a transcription, and
then I have that now plugged into...

It has an API call that then
plugs this into ReadWise , which

is a kind of like note taking for
podcasts and Kindle reading app.

And then I have that, through an
API, plugged into my note taking app.

So that basically, every
single time, I triple click.

And I'm not going to talk about my
note taking app, because I love my note

taking app, but we gotta save that,
you can't blow it all in one week.

But I, triple click.

And basically it now becomes a
pipeline where that becomes a

permanent note for reference later on.

What the heck

Fraser Kelton: do you do with that later?

That's for the note
taking app conversation.

But I'm going back to our
conversation last week that 99

percent of our life is mundane.

I used to, tag things on Delicious
religiously, and I still find myself going

back to that archive every now and then.

And so there is some value there, but
I haven't tagged anything in well over

a decade, so I don't know what that
says about the stickiness and long term

value that I actually derive from it.

Nabeel Hyatt: Anyway.

Well, I like, look, I like when
people say things that are insightful.

Like a good example is I used to
reference of puzzles versus mysteries.

And that has been a guiding
thing for me for a little while.

I came from listening to a
podcast years ago, right?

It's when you, it's when you hear
something insightful and you want to

make sure you don't lose it so you
can internalize it a little bit more.

What I really want now is to feed into
a spaced referential learning product.

But maybe that's just a little
bit too nerdy for most people,

but the pod, but snip is

Fraser Kelton: great.

So yeah I'm a fellow Overcast user, and
I think that Marco's just got great taste.

It's an opinionated product.

There's a bunch of different
flourishes that have really

resonated with me over the years.

What do you miss in, in
Snipped that Overcast gave you?

Nabeel Hyatt: I'm opening up Overcast in
front of me right now to look through.

So he does a really good job of,
having custom clipping at the

beginning and the end of podcasts.

So some of these podcasts start with.

A minute and a half of ads in
the beginning, or a lot of times

I find like the last minute of
the outro is always useless.

Like they just go bloviate for, I lose
a minute and a half of my life every

time I listen to a podcast at the end.

And I actually really like the simple,
clean feature of like how many seconds

of the outro do you want to cut from the
end of every single podcast, which when

you're listening ongoing is helpful.

I also think his shortened silences.

is a very nice feature.

I think those two are probably the
simple ones that kind of like bug me.

There's probably other stuff.

Fraser Kelton: Yeah, isn't it funny?

The I forget what he calls
it, but the shortened silences

feature is so lovingly done.

And when he's spoken about how he built
that in the past, you just realize

here's somebody who loves his craft.

It is so great that when I listen on
other players and I try their speed

up equivalent, it's just jarring.

Nabeel Hyatt: It's not as good.

It's just jarring.

It's not listenable.

Fraser Kelton: That's right.

That's right.

Interesting.

Oh, the last one is

Nabeel Hyatt: Snipped.

Very simple one also is Snipped is very
bad at downloading episodes ahead of time.

So it's fine for streaming, but
like I get on a plane and the

only thing it downloads is things
are already sitting in the queue.

And I want it to just, it's audio, man.

It doesn't take up that much space.

Just, like, download hundreds of
podcasts so I can listen to what I want.

It's still bad at that.

Yeah.

But the whole point is, like, is it
gonna, is it, in a year, is Snipp gonna

be able to download more podcasts?

Like, yeah, probably.

But they, they created a new, for
me at least, they created a reason

we're switching, and now I've got
a new default, and defaults matter.

Yep,

Fraser Kelton: yep.

Not to get too far ahead of things,
but you can imagine that if it knows

the unstructured segments of podcasts
that you actually like, and the ones

that you skip, There can be an entire
discovery piece around, around segments

rather than episodes or podcasts itself.

Like here is some esoteric podcast
talking in, depth around a note

taking app that's going to resonate
with you for these reasons.

Cause

Nabeel Hyatt: That's, your catnip.

Oh yeah, exactly.

That feels like, especially in a
world where it feels like everybody

woke up a year after COVID.

With a great zoom setup and some
mics and decided to start a podcast.

Like we're going to have so much audio.

It's hilarious.

Like I know we're contributing
to the problem, but everybody

with a podcast does create a new
problem, which is content discovery.

And, I don't think for most
podcasts, the answer is.

New things to subscribe to, to
listen to every single episode, but

if Snippet works, you can also see
this cycle where you can listen to

snippets that are more valuable.

It was, I'm sure their original
value proposition, I know it was

because I saw it a while ago.

I don't think it works.

You don't have enough data and
you don't have enough nuance and

unstructured organization before LLMs.

And now with LLMs, I actually think
there's a possibility where a kind

of like okay idea for a product
might actually be a real thing.

We'll see.

Yeah, I

Fraser Kelton: can imagine that you're
not even just getting recommended,

but you're listening to a snipped
podcast that is nothing but segments

that they think you're going to
like on, a topic across a plethora

of different podcasts all stitched

Nabeel Hyatt: together.

Yeah, they have, they're already,
I think they already are in

progress on something similar.

I see.

Well, listen, ship it, guys.

Jeremy was remarking the other night.

I, I do.

Basically record as much of
my life as I can right now.

Partially with the idea that it
will be maybe valuable later on.

I don't know that I'm saying anything
insightful, but maybe something

somebody else will say is insightful.

Or maybe this product can do
something with that audio.

There's got to be a model somewhere
that's going to do something with it.

Fraser Kelton: I think on all of that
stuff, we're going to realize that...

Nothing exciting or interesting or
novel happens in 99 percent of our

lives, and so you'll have terabytes of
content that will remind you of the dull

Nabeel Hyatt: (Laughter).

Fraser Kelton: repetitiveness of
life, by, punctuated by very brief

moments of intense highs and lows.

Nabeel Hyatt: So Fraser, are
you prognosticating, that our AI

summarizing our lives perfectly, will
drive a global nihilism understanding

of the futility of our daily lives?

Fraser Kelton: People don't
even care to that degree, right?

There will be a small pocket of
people who have to confront the

idea that there's nothing going

Nabeel Hyatt: just not that important.

Fraser Kelton: Yeah.

And everybody else will be watching Sunday
night football like they always had been.

Nabeel Hyatt: Emmett Shear, has this
thing about I think he talked about

it at dinner the other night where
he's thinking it's yeah, it turns out.

That the reason Justin.

tv doesn't work is that nobody has an
interesting life on a day to day basis.

And the reason that live reality
television doesn't work all the time

is because even a crazy celebrity
still mostly spends their day doing

mundane and stupid, stupid things.

And so,

Fraser Kelton: Yeah.

And then you get moments like the other
night when a founder is dealing with

immigration hell and you're trying to
figure out how to get this guy who's

just flown into SFO and been held for
23 hours into the country because

he's legally supposed to be there, but
he didn't have the right paperwork.

Nabeel Hyatt: I'm surprised that
tech industry hasn't found some way

to break through with both parties
in Washington on immigration.

You should not have a founder
of a venture backed startup.

Having to flee the country quickly
because of visa problems when they're

just trying to build a company in America.

Fraser Kelton: Yeah.

And, I mean, the visa's
already been approved.

He just presented the
wrong piece of paper.

It's just very strange.

I mean, the idea that we train the
best in the world and then kick

them out some number of months after
doesn't make any sense either, right?

Nabeel Hyatt: Yeah.

That's another thing . This may
be counter to everybody hating on

all the Ivy's and everything else.

Higher education is a magnet that pulls.

Immigrants to us to start with,
because frankly, there's already

a Google office in Mumbai, right?

And so, they're going to come
here for college, and then it's

our job as an ecosystem to make
sure they stay, that the best and

brightest who come here for college.

I actually, I have my issues with higher
education and the way it's structured,

but it is one of the industries
of which we massively dominate.

And so trying to disrupt it and kill it.

Just hurts the whole
ecosystem of startups.

So I fix it But the we should just
tear it all down and colleges don't

matter is ignoring what colleges mean

Fraser Kelton: the idea that you
don't want to take the best electrical

engineer in the world and put them
into a six year PhD in some esoteric

area where they're going to go so
deep that there might just be peer

basic research that comes out of it.

Or it might be some, some other
benefit that gets kicked off.

Like we should just be
investing and supporting that

as much as we possibly can.

Nabeel Hyatt: Yeah, look, Community
colleges are actually very, very

beneficial to local communities.

But right above that, you got a bunch
of schools that aren't doing crap for

anybody except for, creating student debt.

Fine.

But for the top third to 40 percent
it is the beginning of the process of

the engine of what makes America work.

Are there problems after that?

Is the idea of yet yet another
person going 12 years down PhD

physics research only to...

Find out that they're working in some
field so deep that they're likely to

never hit a breakthrough at this point.

And they're throwing their whole life away
as one of the brightest people in America.

I can make that rant, too.

We under indexed how much cross
disciplinary learning there

is when you get to actually
coming through breakthroughs.

.
But I think if you remove it,
you really do a lot of damage

to the whole system, so.

Fraser Kelton: But even that
I'm just looking up Dario

from Anthropic's LinkedIn.

He has a PhD in Biophysics, right?

So he went deep in some sort
of, some sort of weird topic.

I don't even know what
biophysics would be.

And now he's, he's running anthropic.

I think that there's certain types
of minds that, that get attracted to

these deep, programs that also then
learn how to learn and, and grind and

all sorts of different skills that
are quite applicable and valuable

for creating pretty profound things.

Nabeel Hyatt: Yeah.

I think that's fair.

. I think people have a hard time with the
non deterministic nature of it all too.

This idea of who do we let in and what
are they going to study and it's we

as a society seem to want everything
to be rapidly deterministic, right?

I come in to get the biophysics.

How many biophysics jobs
are there in the world?

Do we need more people in biophysics?

It's just a very linear thinking
when, the nature of an economy, the

nature of our, frankly, our human
lives, the nature, certainly the

nature of innovation and startups.

Is that a little bit of randomness and a
little bit of chaos is pretty important.

And that comes to college admissions,
that comes to job admissions, that comes

to what you're going to work on 10 years
from now in your life, all of that.

But we live in an era of data
science, and, and numbers.

So the things that seem to
belie that, that determinist

nature people have trouble with,

Fraser Kelton: So here are the names.

Random Seeds, Latent Chat, Unsupervised
Learning, Weekly Prompts, do you think?

Nabeel Hyatt: So, okay, wait,
wait, let's start over again.

The potential names that, was this,
did we use ChatGPT or Claude for

Fraser Kelton: We use Claude and,

Nabeel Hyatt: this podcast.

and ChatGPT.

Okay, so using both Claude and ChatGPT.

The answers, and this is the, just
so we're clear, this is a cold, this

is like the top 10 percent of the
answers that GPT and Claude gave us

for names for this podcast, right?

Run it down again, Fraser?

Fraser Kelton: Random seeds.

Latent chat.

I'm even editing, so I won't edit it.

Tensor talk.

Tensor talk.

Unsupervised learnings.

And, and the other one that I removed
at the start was gen talk, because

anytime anybody says gen AI, I
cringe and die a little bit inside.

I'm not sure that any of these are great.

Nabeel Hyatt: They do have a certain dad
humor quality to them that I appreciate

Fraser Kelton: Yeah.

Isn't that interesting is
it just reinforces how hard

humor is to capture with

Nabeel Hyatt: well, it's obviously
there's just too much dad humor

in the training data . That's the

Fraser Kelton: well, that's what I mean.

Like the funny people are funny
because that's a scarce resource.

It's not like everybody's
walking around being hilarious.

Nabeel Hyatt: That's right.

I have no strong visceral
response to this at all.

You're right.

Unsupervised learning is the least cringe.

I can at least say that.

But if you are one of the handful of
folks that likely listen and you have

a suggestion as well, let us know.

And that's, let's call it for today.

Fraser Kelton: Let's call it.

Thanks.

Nabeel Hyatt: Awesome.

Talk to you later.