Lightspeed's Connor Love on drone warfare, counter-UAS investing, and why the US is dangerously behind

doing all right. Good to be back, guys. Yeah. Oh, you got a suit this time. Oh, looking great. We love I wanted to I I won't say I dress up just for you, but you know, I would have taken the suit off far before this, you know, if I wasn't coming on. Fantastic. Thanks so much for jumping on.

Uh have you been tracking the Ukraine story closely? Uh any insights there? Anything in the portfolio that's uh at all relevant in the defense tech world? Uh, do you expect a response from the US government or guidance or change to any strategies? Really, any takes on that?

I mean, first [ __ ] what a what a time to be alive. I mean, uh, you know, I'm sure your your your Twitter feeds and and your group chats were blown up, uh, pun intended, over the weekend. Yeah. Um, I mean, it's pretty crazy. I mean, let's be honest, like, first, I'm not shocked that that the Ukrainians did this.

Uh, I mean, the execution seemed to be flawless from what we can pull from from open source intel. I do think though, I mean, again, it's not a surprise.

The the Ukrainians have been mastering drone warfare for the last handful of years, and you know, you want to call it, you know, they called it spiderweb, like this was their this was their Trojan horse. This was their, you know, Israeli beeper. Um, and and the outcome is is is is pretty impressive to be honest.

I mean, what what what from the outside looking in, like the Russians woke up over the weekend and they thought they were getting their $4 timu orders and what did they get? They got a thousand, you know, FPV drones, you know, blowing them to smitherines. So, it's pretty impressive.

I mean, my my takeaways from this are really twofold, please. The first is like there's never been a clear signal of where warfare is going.

Um and to be clear what you know what I what I view this from you know both the the entrepreneurs in my portfolio but also from my perspective I mean the world is about uh you know cheap attraitable a lot of times uh autonomous systems and that's you know playing out in warfare that's playing out in other areas of life and then the second thing is um you know candidly it's like uh it's it's really hard to defend yourself at the pace at which things are changing um and and again like I know we do some things here in the United States and trying to be on the front end of a lot of this innovation.

But when this happens, I think this almost just resets everyone again and says, "All right, how do how do we respond to it? " And I think it's to your point, it's not a it's not a direct US response. It's more of, hey, what do we need to buy?

What do we need to develop, you know, for our own fight in, you know, in some way, shape, or form? Yeah. What do you think? Uh, obviously, you're a venture capitalist, not a geopolitical strategist, but what what what's the right Russian response to this?

Is it, hey, we suddenly need to be wary of having cell coverage anywhere near strategic military assets?

I mean, it seems like Ukraine and Ukraine in Ukraine's perfect world, they could run this style of attack a bunch and copy and paste and hit other targets, but it feels like something that was dependent on cellular technology that that's something that the the Russians can revoke, you know, fairly fairly quickly.

Sure, it'll be inconvenient, but I'm curious if you have have a take. Yeah, I mean I, you know, to be honest, when I think about um how do you defend against this? I think there is, you know, I wouldn't call this the easy answer of just, you know, turning off off the cellular network.

Um, I actually think the the only way to do it kind of practically is in layers or in a multitude of of of different ways because, you know, yeah, the, you know, the reality is if you looked at how the Ukrainians carried out this attack, they did so on the local, you know, Russian cell network.

Um, which again, I don't think any Russian kind of defense unit at any of these bases was ever thinking that they would have to turn off their own cell network. And then there's just the practicality of how you do it. I mean, I think there was what, four or five different attacks that hit all at the same time.

What do you what do you do? You you turn off the network for tens of thousands, hundreds, thousands of people. And oh, by the way, this is like a dirty little secret that nobody talks about.

You know, yes, you have your military systems that are protected and all that, but a lot of coordination is happening through WhatsApp.

a lot of coordination on and so all of a sudden you turn off the cell networks, you're actually inhibiting your own defense, your own response, the the first responder, you know, the you know, getting your own people out of there. So I I think it's a bit more complex than that.

And then the last thing I'd say is just like uh even if you do this in layers, you know, you you need to be resilient in a way, but you're you're not going to stop everything.

I mean this was just brilliant master class of you know again if if maybe there was a plan we didn't know this but maybe there's a plan for you know a hundred bases and we only hit five of them and and and so if you think about just the the broad you know geopolitical you know you know geographic coverage you you have to have I think to be 100% certain on anything it's just you it's impossible you can't do it it's interesting there was like that Huawei narrative for a while about 5G towers and potential back doors and it was always about It would the narrative was always about spying.

Yeah. And I think now you have to consider sabotage, not just espionage. And the idea that if you could even just provision a tower that has some sort of just just if this SIM card comes through, just let it go through, you know, don't don't worry about it. This this this SIM card can always communicate.

Uh that's that's very scary. So I wonder I mean this is a funny aside, but it's it's real. I mean, back when I was in Iraq not so long ago, we would go by like burner phones to be able to like check the news and, you know, catch up with your family on on obviously non-pertinent things.

And every now and then, I was, you know, I was in northern Iraq and every now and then I would go just pull up my Google search on this burner phone. And my location happened to be Tran, Iran. Almost every time that I would go to search there, and I'd be like, "Oh, this is weird. That's exactly where I am.

" So, again, I think um I think it's really hard to do in practicality. I think the the the manner is like you just have to have resiliency. You just have to have a bunch of different options both on the defense and and the offensive side.

I mean, look at what the Ukrainians are actually using for the majority of their drones in Ukraine right now. Fiber optic cable. They're not even using networks at at this point, too. So, can you actually What is that? Can you go a level deeper on what that fiber optic infrastru?

Yeah, Saurin mentioned that, but I don't actually understand. Is it like a cable that flies through the air? 100%. I mean, think about it. It's it's it's arguably unlimited amount of fiber optic, really thin filament cables that all it's doing is is it's transmitting data to the to to the drone.

And, you know, you're inhibited um you know, arguably by how how much fiber optic cable, how much how much kind of filament can you lay out. And so, so it's actually like a spiderweb that they're just drawing across the sky. 100%.

So you could have and it's it I'm I'm so curious to actually understand, you know, we don't have to talk about it today, but the actual mechanics is it like effectively on a spool that's just running out. That's that's literally what it looks like.

I mean, I I haven't been on the ground in in Ukraine, but when I talk to my portfolio, you know, founders and companies that either are or have kind of partners there, I mean, you literally drive around the front lines of Ukraine right now and all you see is just miles and miles of clumps of all this this severed fiber optic cable.

So again, I think that just to zoom back, like I actually think the takeaway here is that the pace at innovation that's happening both in Ukraine, but like let's be honest here. What we are watching in in Ukraine and in Russia um is a precursor to what life looks like in the Pacific.

And and I think that's, you know, maybe sounds a little bit doomsday in a way or another, but if you don't think that the Chinese are watching what happened to the Russians, um, and and either changing their own kind of defensive plans, uh, you know, building new kind of technology and equipment, you're just you're you're wrong.

Like they are we know that for a fact. The uh I I remember because uh it was somebody at Andrew was responding to one of these posts, but a Chinese official was posting this video, a render. It was a render.

they were getting roasted for using a render, but it was like this mother ship style aircraft drone that was launching hundreds of drones off the side.

And so that's like the scary thing is, you know, could you have, you know, stealth aircraft at at some point that that can actually do the same type of deployment that this these trucks did, right? Like a new B-52 should be dropping FPV drones instead of just unargeted bombs. They'll just be a lot more targeted.

I mean I think I think there are many I mean again I think the the reframing that's happening both on in my mind as an investor but candidly like also in the DoD and the in the government side um is before we used to think about deterrence just by like hey let's buy the big new exquisite system let's buy the thing that if we stack you know head-to-head like again I think I I shared this with you guys before but back when I used to work in the Pacific we created this really kind of popular and widely distributed unclassified um you know slide that was literally just all of the US ships stacked up against the Chinese ships and just like you look at the math it's this crazy crazy metric we're you know grossly behind by you know hundreds of ships um and that's just one example I think the the frame the the mindset we had then was just like oh well then if we get more systems and we get more of these things that could have these big effects then we're going to win we're going to deter conflict we're going to win I just think the paradigm has changed now it's about okay what are the means that we actually have those effects.

And it's not just about, I hate to say it, buying another F-35 or buying another aircraft carrier exquisite system.

It's let's think about this as a parts of a whole thesis and say, okay, if I can build a missile that costs a tenth of what we used to have, if I can use a drone that costs a thousandth of what we have, but have a thousand of them, have 10,000 of them, you actually achieve, if not a better end outcome in just a different means.

And by changing the modeicum of how you deliver it, the enemy has to change how they defend against it. So again, I I just I think that's the future of of of where we're going. It's not going to look just like what happened, you know, over the weekend in Russia, but it's going to rhyme.

It's going to look very similar to that. Do you think this speeds up uh DoD procurement in any way? I mean, it's certainly such a such a visceral and like tractable problem. We've seen Ander working counter UAS for years, but there's also a ton of other startups taking different approaches.

We had the secretary of the army Dan Driscoll on and he was mentioning that they are ready to see demos from even early stage startups.

They want to see things and you think about not even in great power competition with China but just if there's an army base abroad, they're going to want to fight against this and they're going to want a really robust ensemble of counter UAS technologies. Well, yeah.

Why don't you give us I'm curious how you think of the market map of counter UAS technology because you know uh we've had uh Steve Simony on from Allen Control Systems that that can be a great solution if you're on a battlefield right but if you can't you can't you know protect against an NFL stadium for like counterterrorism by like shooting you know rounds middle into the air in the middle of a city right unless you're in Texas.

Yeah, Texas. Yeah. I don't know.

I I think the way to you know back to kind of my my defense in you know multiple layers comment I think the way you look at this market is almost like a spectrum on one end of the spectrum you have what I would define as like the non-kinetic stuff that in a weird way can be kinetic but this is you know your EW jamming this is your you know laser based systems uh and then on the other end of the spectrum you have like something as simple as like shooting a bullet or shooting a shotgun at something and I think again there's there's a there's a middle ground here which you know you start to take both like EW W resilient things, but then also like, you know, you mentioned the anvil drone from from, you know, Anderil of a drone flying and hitting another drone.

I also just think there's um there's this layer that no one else really talks about. Um and when you look at this um you know what happened over the weekend, there's a full like how would you have solved this in the first place? You can think, oh yeah, we can shut down the cell network. We can get a bunch of shotguns.

We can get a bunch of you know, different systems that shoot down systems. Or you could just do better counter intelligence and understand, you know, in some way, shape or form that this and that's hard to do to be really really honest because one truck gets in, you still have an effect in some way, shape, or form.

But, you know, in the end, I think like the US military is not just going to buy one of these systems. They're not going to be like, ah, let's go with Andrew's Anvil. They're going to buy litany of these things.

And if you think about just the the sheer complexity of the locations at which we are at and where our critical infrastructure sits, a single solution doesn't solve the problem.

I mean, you know, go talk to, you know, I know you guys were talking about the cell network earlier, but you guys should get a famous John Doyle who's now building a business called Cape, but used to be an early Palunteer guy.

um you know he's building a a private cell network and you know part of what he's doing is is enabling for when you know we call it a pace plane in the military when you shut everything off you still have a way to kind of communicate and talk but yeah in the end I think you're going to see this litany of of many buys as opposed to like one solution that that that solves them all.

Yeah. I wonder if there will be almost like adversarial camouflage for uh computer vision based models because I mean I've seen I've seen situations where people were worried about like facial detection.

So they would wear specific makeup with like triangles and it would it would look very odd to a human but to a computer it would read as just I can't process this at all. And so imagine it's crazy because in a way this isn't new. Like go back and look at at at World War II. Like what did we do?

We built literally wooden towns across the channel because when people were looking or doing like, you know, it looked like it was real. Now it's just, you know, the technology has has flashed forward so far.

But but, you know, in in in the end, I think again it's one of these things where it's like, you know, there's going to be no single solution that that fits them all. I do think that and this is like worth commenting.

Um I think a lot of times when we look at you know we as investors or entrepreneurs building or even just the general public thinks that the DoD has truly autonomous systems. And and the reality is is like you have humans in the loop on 99% of what's happening. And that's not necessarily a bad thing.

I just think the scary thing is like, you know, call it our uh our doctrine, call it our Geneva Convention laws, call it whatever you want to call it, but the reality is when [ __ ] hits the fan with China, do you think they're going to have a human in the loop and making decisions of how to kill or not kill something?

They're just going to kill things. And and so to me, it's like we, you know, we need to be thoughtful about how we do it. We are a beautiful democracy who cares about life and and kind of human nature.

Um, but at the same time, like we're not really doing autonomous systems yet, and that just makes me a little scared to be honest. Yeah. Uh, put this in the context of DJI and Tik Tok. The Tik Tok ban was always a little abstract.

It was like, well, it's kind of brain rot for kids and that's not great, but people watch Instagram reels and that seems maybe equally as bad or maybe fine. Uh, but maybe they're steering the algorithm to influence our pol.

It was all very like four steps away from something bad and so it kind of didn't catch ground and didn't really get off the ground. But DJI has been in the news as a potential ban target.

This seems like it concretizes the feeling of danger so much more intimately than Tik Tok where it was like oh well like the you know the CCP could find out that you are into luxury sports cars or something and they could do something with that. they can blackmail you.

Uh, but that's very different than drones explode and so maybe we don't want drones. So, um, do you have any I think even even more important it's like look who's using those drones. I mean again like this is this is what we did.

I mean I you know I was in the military not too long ago but um I remember on some of my first training exercises this this new team and I don't even know who they were off the top of my head but they came to us and they're like hey we're going to try this new thing that's drone warfare.

I was like oh [ __ ] we developed a new smaller predator or something like that. They literally just pulled the DJI out of a box and they said, "Hey, go screw around with this in the woods and like we did. " It was like super cool. We innovated on some stuff.

But I think you're right, it gets super scary when we're taking the feeds and the data and the information from that drone, you know, not necessarily touching it, putting it into our classified system because there there are controls for that.

Um but again even even some of the you know again you should talk to you know Saurin you should talk to the Orca guys you should talk to you know Andy from Vector about like there's a lot of open source tools that are actually used as think everything from you know navigating you know the the fight computers of these drones but even in those situations like we just have to be thoughtful again I am I am on the side of um you know again when I was in the military everyone gets so scared about classifications and no one wanted to get in trouble for this reason the The reality is if you're so scared about using some type of tech then you're going to lose.

It's going to be the different way. It's not going to be the information leakage way. So there's some middle ground of like we need to just set a policy and and hopefully the policy is broad enough.

And then oh by the way hopefully like us builders are building at the same time so we can build a capacity that actually meets it. But you know the story is not clear here in the future other than you know we need a US version of that to be able to to to operate in similar ways. Yeah.

The capacity issue is so interesting because it's like even if DJI is just a friendly consumer drone company by virtue of buying a hundred million dollars worth like like demand pulling this massive demand signal to scale the supply chain results in an industrial capacity is dual use even if the products that reach America are never dual use.

I mean, this is, you know, again, I said I'd put on a suit for you, but um I was talking with a with a with a member this morning, a member of Congress this morning, and this is actually what we spent 90% of our time talking about, which is just, okay, say we all agree and say the DoD in Congress fixes our acquisition pathways.

Say these are the right things to buy. You can't just snap your fingers and build these. I mean, this takes time. I mean, go look at what what Andre is doing in Ohio. I mean, I think they're doing it at a pace better than anybody else, but like, you know, same thing with Seronic on the on the boat building side, too.

But it it it takes time. You know what I mean? You can't just have thousands of systems tomorrow. You need to make decisions today that are doing everything from the supply chain to again like, you know, Congress gets gets a little scared sometimes or DoD gets a little scared sometimes.

It's like, well, if you're not a prime, we can't trust you to give you a bunch of money up front to develop it. And finally, that that's like changing. That culture is changing.

and saying like actually giving $100 million to Castilian or Anderl or whoever in advance of them building it is probably a 10 times better answer than you know giving it to a prime. But we're not there yet. Like we're still pretty far off. Yeah.

Saurin said they're the highest producing US manufacturer right now in their class and they're putting up 1,500 a month or something like that. Yeah. But but the Ukrainians built millions. Yeah. I mean, the Ukrainians are building thousands a day like in just a and again, it's it's a it's a different ecosystem.

People come to me a lot and we're just like, well, isn't the US DoD going to do this? And, you know, part of me says like, no, because I I know how slow we move. The other part of me just thinks that like there is some value in, you know, what we call interoperability.

Um, and again, I think that's kind of somewhat an old school way of thinking, but like you need to know that if you give a thousands of one type of drones to, you know, one unit that the next unit is going to fight in a similar way where, you know, the tactics and techniques kind of all align.

Because in the end, like what we what we aren't talking about with these drones, what we aren't talking about with these new missiles or systems is like there's an entire downstream integration and there's a training that happens.

It's not just like okay once we have them in the warehouse we press a button and we win the war with China like no we need to train integrate and and again that's just another problem again like there are some companies trying to trying to go attack this like Andy at Vector is doing this he calls it like warfare as a service model which I think is like really interesting looks more like training with a little bit of tech but yeah I just think there are big gaps and uh you know I'm optimistic about the future but you know I have a you know a one-year-old daughter it's like I this is what I think about like this is what keeps upon man.

Talk talk to me about nominal um any news there and and really like how does that type of product uh and interface with like just the the general news and tenor in DC right now? Yeah. I mean um I I I know you guys have had uh Cam on your show a couple times, the the the founder of Nominal.

I think um I think what we're um what's what's super interesting is like we are seeing this wave of new hardware uh development in the US and historically it's been in a manner and in a way that's very much like you know hey here locked here's your hundreds of millions of dollars go build go iterate slowly and now we're getting like you know what looks more like the SpaceX like build the thing in flight um this is what Castillian's doing this is what many other companies are doing and so there needs to be this like software you know both you know telemetry and and obser you know, observation layer, but it's also just like the tools that if we want to get to this end state of having a million drones in the hands of our war fighters, having hundreds of thousands of of, you know, autonomous systems, having thousands of missile systems, you kind of need to build all the infrastructure and enable it below it.

That's both on the supply chain side, I was talking about, but also on the software and development side. So, I just think what you're seeing, you know, nominal is one example, but there are many other examples of this is like you're seeing the picks and shovels built out for this ecosystem.

I guess there will be big winners in like the hardware categories that's owning the product, but I think there's going to be just as many winners on the downstream both, you know, infrastructure side and call it supply chain, call it software, call it whatever.

Um, and again, like I just I'm I'm I'm optimistic about the market. I'm not necessarily optimistic about the outcome of our security and safety in the world, but um you know, that's my job as a venture capitalist. I guess that's rough. Uh always paranoid. Uh what was your reaction to the meta and news last week?

uh around VR. I'm sure it wasn't a surprise, but uh I'm also curious if you think we're going to see more uh if that gives, you know, other uh big tech giants kind of full permission to to lean in to that kind of partnership. Yeah, VR is a a weird one for me personally.

And again, like back in my time in service, there was this uh I'd call it a research project through um Army Research Laboratory where they were trying to develop and again really old school, you know, bad um you know, VR at the time, but use it for like planning purposes.

And the idea is like in the military, you get out these two-dimensional maps and you look at something and say like, "Okay, this is how we're going to plan. This is where forces are going to be. " And it's it's really slow. It's it's obviously not optimal when you talk about terrain and kind of other things.

So, I was part of a unit in the Pacific actually where we were testing this back then. And I remember taking it to like the brigade commander, the guy who I don't know was in charge of 5,000 or so soldiers.

And you know, I have this I still have this photo of on my phone of him with these glasses on like standing there being like, well, what do I do with this thing? You know, and again like it's part of this is a cultural thing that we need to shift.

But, you know, I I think when I see the the you know, Palmer, you know, going back with Mark and I put a it puts a smile on my face because to me it's like this is the best of what we need. We need the best technology companies and the best defense technology companies working together in some way, shape or form.

And the reality is we're, you know, 10 years ago or more than that when I was in and we tried this and technology wasn't there. I know for a fact that, you know, the solution and the hardware and the software around it is 10 times better now. So, I look forward to see what Andre comes out with.

I mean, [ __ ] if anybody's going to do it, Palmer is probably the right guy to do it. But, um, we'll see. You know, I I haven't seen the outcome yet, so I'm I'm excited to give it a try. Yeah, I really just feel like if it's anyone's game to win, it's Palmer.

It's like the perfect merger of everything he's done in his career. No, in my view, he was going to win that category. It was just whether or not he would have to reinvent the full production capacity, reinvent the technology that he patented there and gave them. Yeah. Uh what is your take on Golden Dome?

What companies or or industries are you tracking related to that? Obviously, we have a missile defense system, but we're planning on ramping it up. Uh what what do you think is interesting if that project kind of gets off the ground? Um I mean I'll I won't bury the lead.

I don't think anyone knows what Golden Dome is or isn't. Um which is okay. I mean the thing that I give President Trump a lot of credit for is he has these big audacious things and he just goes and wills them into happen.

And again I'm not an expert in from the inside the DoD, but like that's how you have to get a lot of stuff done. I mean, you have to almost make it not too big to fail, but put the cart before the horse in order to to to align both Congress and DoD support behind it.

I think from a from a principled kind of um like what can it do perspective, it's an absolute no-brainer.

I mean, again, like to to to look at the technology that has happened in Israel and to understand that like one, the Israelis developed that, but you know, we we we had, you know, you know, a say and an input in that as well.

um that we don't have that in the United States just seems again other things that make me feel uncomfortable. Um I think the reality is there's there's going to be a lot of different components of this that still need to be built.

I mean there's there's an entire space component, there's entire you know kind of missile and aector component. I mean in a perfect world when we can see and know everything coming, we actually need to be able to do something to it.

And if you think we have enough missiles to respond to, you know, everything we see potentially, um you're wrong. Um, so again, I think it's a it goes back to kind of my statement before. Um, these things take time.

Um, and I'm glad that President Trump has these audacious goals and getting it done before his third term. Um, I just think it's it's arguably in my opinion, if done correctly, it will be a Manhattan project-like undertaking where it's going to take multiple different department.

It's not just going to space missile defense and saying like, "Hey, solve this problem for us. " I mean, this is going to create a new line of budget. It's going to create new kind of work streams. is going to need new congressional support.

Um the beauty is we got a bunch of awesome space companies and a bunch of defense companies that can respond to it. Um I just don't think anyone knows what it looks like yet. So excited and optimistic.

I would say it's interesting like as soon as we as soon as we were talking about Golden Dome and like the space-based ICBM weapons, like the big guys, now we need like a golden spiderweb defense system to like stop like the local drones and do I mean it's layered, like I said, you know, like you know, to some extent a missile defense system.

I mean, probably not with, you know, I don't have the full specs, but probably not with the height of those drones we're we're kind of flying at.

But you fly a oneway drone a thousand kilometers or, you know, 3,000 km, you throw it up high enough in the air, like 100% something like, you know, Golden Dome can help with that. It feels like a missile attack, honestly. Yeah. Yeah.

And and again, like this is the last thing I'd leave you with, which is I do fundamentally believe back to my both spectrum on defense, there's also a spectrum on offensive weapons, too.

Like everyone thinks that the answer is a $10 million missile and that's the most exquisite best thing that's going to save us every time.

If we can get better both, you know, on the on on the low range, excuse me, on the low cost, high performant missiles and in drone based systems, I actually don't even think we need those, you know, hundred million, $10 million systems in the end. But again, something optimistic to look forward to. It's great.

Well, thank you so much for coming on. This is fantastic conversation. Always. Yeah, guys. All right, we'll chat soon. Have a great trip. Thanks. Bye. Uh, let's tell you about public. com investing for those who take it seriously. They got multiasset investing, industryleading yields. They're trusted by millions, folks.

And we have Melissa in the in the studio. Uh, she has some massive news and we're going to need to hit that size gong. Can you introduce yourself? We're welcome to the stream. How are you doing? We're gonna have to hit the real size gong. So, uh, break it down.

What are you announcing today and why should we hit this gong? Yes, we are coming out of stealth with Netic today and announcing our $20 million fund raise from Greylock and Mike Waly amongst amazing other investors and visionary founders and growing our service. Hit the wide. Hit the wide. Hit the wide. Go for it.

That's my quest. Here we go. Backto back rounds. Let's go. Congratulations. Thank you. Thank you guys. Now that we've gotten the important stuff out of the way, what does the company do? Yes. Uh we work with the backbone of America.

Uh we're building for the essential services industries like home services and Yeah, exactly. You guys are essential. That's why I'm on here, right? Yeah. I could be doing a lot of different stuff today.

But um you know we give them an AI revenue engine so that when they are these are industries even though they're super important they're affected by labor shortages external circumstances and demand changes physical infrastructure. So when they have high demand we help them handle it.

So you get all they get all the dollars and help their end users. And when they're low on demand we help them generate demand so that you can always maximize the revenue. What what is a good example customer?

Like we hear about these SMBs in like this abstract context, but is that is it actually like one guy who owns an LLC who has a few employees or is the median customer more of a like small business or medium-sized business with uh dozens or even hundreds of employees?

And then I want to walk through how they actually use the product. uh is it is it replacing or augmenting an existing kind of sales force or or someone that they have internally or is it just uh kind of helping individuals do more with less?

So we work with actually pretty large customers that would be owned by private equity from you know hundreds of millions of dollars to a few billion uh of dollars as well as smaller companies that are around like 1020 million revenue size.

So across the board we started with the larger ones to really um you know demonstrate the impact of our platform. At the end this is also a business but now actually this is a life life passion for me because I do want to help with smaller companies as well.

That's how I came across this problem as a customer myself for HVAC in my own home. So, we just announced a very large uh partnership with NextStar Network to be able to help a thousand companies that are more on the mid-market side as well. And for the smaller, you know what, we want to support everybody.

I think we would start with some materials for them to get ready for AI before maybe they roll us out. But, um, you know, we want to really help across the board. So, one example would be how are they using it? They're actually completely integrated with our platform.

So we would use firstparty signals about their customers as well as third-party signals like we find from weather to um you know really property information or different types of things to help any of the customers that are coming in. So they get help immediately. And these are complex jobs, right?

Like there's actually quite a bit of information you need to collect to be able to deploy the right labor. And then based on that data, we predict the user's next need, you know. So I'm almost building for myself. I'm like, I would never think about these things.

For me, I wish somebody told me, Melissa, you're going to need this next month because, you know, I don't know, a storm is coming or San Francisco weather is again terrible, so you got to fix this.

So and then we turn that into predicting the next need for their end users so that the companies can really cultivate uh the relationship with their customers but based on need versus random promos. Right. So everyone wants everyone wants their HVAC system like tuned up before the big heat wave hits. Exactly.

you can do essentially outbound sales to existing clients and potentially new clients before that hits with with like the correct information, the correct pitch. But exactly what is the actual medium? Are you sending text messages, emails, phone calls, all of the above? What does that look like?

For inbound, we're really integrated across the board on all channels. So voice, text, online widgets, web chat, third party integrations because revenue doesn't come from one channel, right?

It comes from all channels and you know c the same customer if I'm in a meeting right now I might be texting an essential service provider right now even though I'm busy but a few hours later I might call them right on the outbound campaigns we really do see a lot of success with especially text since it's much more respectful.

So we started from there and we'll be rolling out to more channels. So I'm I'm I'm intimately familiar with all the tooling in email. you have you Mailchimp and all the different AWS SCES and all the different systems that have built up to make that easy and I can imagine how you would automate that.

Talk to me about automating a phone call. It feels like with whisper uh transcription and then uh text to speech. We're now kind of pass the touring test on that, but are you building stuff yourself? Are you training your own models?

Are you partnered with other AI companies to provide that piece of the stack or is that so integral that you're handling it yourself?

This is actually the integral part of this is that certain technologies have passed deterring tests but actually for really um you know missionritical workflows like this where you are absolutely like utility and you can't drop all the uh work and you know the engineering really focus goes to the orchestration right so what does it mean is that like when depending on whatever workflows that you're handling which models are the best when they're not the best.

How can you actually fine-tune only for that task? And how can you make sure not only it looks good in a demo? We actually at Culture, we don't ever do demo.

We show real deployments and let you test, but it's very different out there when you're talking to somebody with an accent or that person doesn't even know what they need, right? It's actually very complex.

So all of the engineering work not only goes um you know improving and integrating machine learning advancements but also doing our own orchestration fine-tuning as well as evaluations so that you can be like utility and really reliable when you're replacing these systems and augmenting the teams that rely on this right.

Yeah. What's the process like selling AI to SMBs? We've had a bunch of people on the show that sell to larger corporates, Fortune 500. There's an excitement from the Fortune 500 to just buy AI even if they're unclear of what the value is. I could imagine you see two scenarios.

One where owners or operators are excited about potential efficiency or more revenue, more leads. Uh but and then another side which is like, well, I don't know about this AI stuff. Um why are you doing an accent, Jordy? Why are you doing an accent? Actually, you know, you'll be surprised.

I This is why I'm building for these industries. These are probably the best founders and entrepreneurs I have ever met in my life. And I'm in the heart of Silicon Valley and I work very hard to get here. And now all these founders truly, they are extremely ROI oriented. They're extremely customer oriented.

And the incentives are very aligned, right? Like they only do better if they serve their end customer better. and I only do better if I help them do better. So, it's extremely aligned. So, we actually don't see, you know, they might ask questions, but everybody is extremely open about it.

They know that that future is here. They can stay behind. It's not like the enterprises you're a little bit alluding to where let me just put this on my board deck and have like a few million spent here and there to show how AI oriented I am and then they won't actually use it.

No, these people actually are absolutely incredible and partner with us so closely to see in numbers, right? We let them even track it. This is how much you've generated from only AI handled jobs or interactions. So, we've been very happy about it.

And it's the same from a $20 million revenue business to a billion dollar revenue business. Obviously, there might be a few steps here and there, but I am pretty happy about um how incred incredible of entrepreneurs I'm working with in this industry. I think I choose uh to do that. Yeah. You mentioned Yeah.

I always I always think it's it's funny when when people in Silicon Valley like look at these maybe trade businesses and they think, "Oh, I can just, you know, get a better CRM, get some software.

" And it's like you realize the person that was operating this business for 20 years is like a is like a fixture of their community. Like they are like perspective and also extremely hard. Extremely they're working 14 hours a day. Their overnight success comes over 20 years, right?

not just like various um I don't know and like tonight in my bedroom I built this and now I went viral and now I'm the hot kid on the block and all these many times it's their families right like everybody really investing in this and even when you work with a larger company or owned by it like everybody's truly invested in this to give you a sense like um I have brainstorming calls with my customers on Sundays they'll call me with really cool ideas and I'm like interesting so try this the next day I'll follow up with a try this one, try this uh demo.

Let's see if you like it and then we'll actually launch it this week for you. Right. I absolutely love that. Um what what's how are you do you guys leverage your own tools at all or do you have your own internal tooling to be more efficient?

I I from what I can see you don't have very many employees and and what do you use very quickly? I know hopefully you'll help with that. We're hiring across the board especially with for our engineering but also go to market teams now and product.

So um we actually do utilize various tools internally just to increase engineering output but also still especially when it comes to various coding tools um I will say because we ship for really missionritical workflows you need to make sure that it might like accelerate you and augment you but you still have to make sure everything is ready for production because we're handling a lot of large volume customers that are really deploying these services to help somebody maybe after a storm like a few weeks ago in St.

Louis, it happened after the tornadoes. So, we have to make sure everything is really getting that check uh from us and like the best engineers we have hired across MIT, Stanford, Scale, Palunteer, HRT.

Um but yeah I mean if you're a fool if you're not using uh augmented tools for your team and you are right we are a small team and that is by design because I think all of us are also here to create the best things out of nothing right and really keep our culture and grow in that way.

Uh you mentioned you worked really hard to get to Silicon Valley. Can you give us a little bit of the the journey and the background to get here? Yeah, I will say building a company is almost as hard as getting uh to hear from a small town in Turkey. I grew up in the Mediterranean.

Um just like a tiny town actually in Turkey on the western coast and um yeah, I think it is an incredible community, but there is absolutely like no opportunity especially for someone like me who's focused on math and computer science.

So I tried to first leave actually I went to boarding schools that I got in starting age 13. So I haven't lived at home since 13. Um and then spent some time in India uh when I got into United World Colleges actually for two years and I thought that's how I would learn English because my English really sucked.

Um and I did you know I'm doing pretty fine. Um, and yeah, from there it's been my dream to come to Stanford. And I didn't know anything about it actually. I only saw it through a summer camp I came to on a scholarship.

And um, even my flights were funded by thousands of emails I sent to businessmen in Turkey and one of them responded and sent me here to California. And when I saw it, I was like, I have to be here. And since then, there's no, you know, easy way of explaining this.

It's you I I think probably I fought tooth and nail to be able to um really get here. And I'm glad because I love this place. And mainly for me, it's about the people. Everybody's interested in your ideas. Everybody is interested in making them possible for the world.

And if anything, I wanted to change one part of it when it came to my own company is that I want to build for the real world, not just for Silicon Valley or other startups.

I want to build for America and then and then the world like this country that gave me a lot of opportunity and then hopefully globally the real world economies that run everybody's lives. Yeah, I know you worked at scale.

Um can you talk a little bit about human in the loop or uh business process outsourcing or any sort of uh like the centaur model of AI and how that might play a role in your current or future roadmap? Yeah.

So it actually labeling does not play a lot of role for our road map like right now obviously it was big especially when you're improving these models there was a lot of labeling and then it turned to expert labeling. Now you really focus these models in terms of how is it going to be better in physics or coding etc.

But for us human in the loop actually comes from um collaborating very closely with the teams of our customers because they will have actually many times what we see in these industries that they won't have like BPOS what we call um or outsource call centers sometimes they might have but they'll have also internal teams which are very valuable resources.

So what they can do with us is that they spend their time only for missionritical interactions when they need to take over and actually see the context from the conversation about the person about the home so that they don't have to repeat anything they can build rapport immediately and for the remainder of time since AI is really handling everything else that they can focus on more uh more important and high lever tasks whether you're helping with accounting whether you're helping with actually making intelligent business decisions about where to grow.

And believe it or not, a lot of people start from there to build their careers in these industries. For example, our engagement manage management lead uh she actually joined us from our earliest customers and she started as a CSR, right? Don't worry, they're amazing.

Still a customer and you know, she was making a location change. We did everything right. I love, you know, like he's immediately coming into that. Did you do anything? No, no, no. I mean, it's great.

It's like you could just say, "We're going to take your your star employee, but we'll give you the greatest software that you've ever experienced, and we're going to go. " No, no. Now, they also get to interact with her, but supported by us, right? It's all balance sheet R&D now. And Exactly.

I'd like to think that they got a lot of tools from that. But she started actually as a call center employee 20 years ago and she's so smart and incredible that really built the domain knowledge and went to consulting from there and a VP of customer experience and really built right her career.

That's what we want for the people, right? Like actually focus on the things that you can shine in and um build your career in, not just the menial tasks you don't want to do and only spend time on customer intent. Sure.

Talk about uh business model, pricing model, salesforce and has been Mark Beni off been talking about uh cost per resolution in the customer service perspective. Uh there's other uh companies that are doing consumption based pricing, seatbased pricing. What's working? What's not?

What are you seeing uh resonate with your customers best? Yeah, I think we don't do um cost per resolution. It's actually an interesting pricing model, but I think works better for customer support companies for tech when it's all about tickets.

And even then, I think it's a little bit iffy because I mean, what's the resolution? You're able to close the ticket. How many of us have been in a situation where I'm like getting this automated email that my ticket is closed and I'm like well I am not closed you know I am not done here like I got to I need that help.

So for us we really work in enterprise contracts with our customers. So um they get on a there's a platform kind of package that they choose based on which products they want to use and how expanded of channels that they want.

And then on top of that, they have a volume package that they add so that they can spend it across any channel that they liked.

Um, and this also gives them that ability that we're not just signing and goodbye because in a lot of these industries or quite frankly in any company AI is not just like I got on it and now it works. It doesn't. You really have to make it work, ensure that it is working for their operational workflows.

So it gives us the ability to do that and closely partner and then as we go to midmarket that was something that's why I was super excited about this next star uh partnership because they have decadesl long experience in these industries and they have accumulated so much knowledge that today we're able to deploy a netic tenant with that knowledge for their members so that you know a lot of the like maybe they won't have any lift to do they can really roll it out directly from the business insights they would be getting from an amazing membership like them.

Anyways, so yeah. So, um is there was like a meme for a long time about like the the search fund going to buy a business going to do a roll up in in these like SMB markets. Is that has have these have these markets been already rolled up? Like is it are we past that? Yeah, there's quite a bit of rollups.

I'm sure you'll be interested in it next, you know, general. No, we're going to roll up all the podcasts. Oh, I'm sure. I'm sure you're looking into it already. Yes, there's quite a bit of rollups to be honest.

It like really became popular recently because there's quite a bit of capital out there as you also know even from venture capitals. There's so much capital that they're like VCs are crossing over, yeah, we'll go to deploy. Yeah. Only either deploy it to startups that don't need it or do rollups right now. Yeah.

So um yeah there are quite a bit but I think again the winning strategy becomes even if you have a rollup right it's a lot about how are you creating value what tools are you using what tools are you not using what where was the company or this combination of companies you have gotten when you got them and how are you really implementing changes to serve your customer better.

So, we work with various um companies that are owned by incredible private equity partners. Um it's here for private equity. Thank you. Yes. Finally getting some recognition. We love private equity on the show. Yeah. They don't get any recognition at all. Nothing credit.

Private equity is really the backbone of America because it finances. It totally is. SMBs, right? I'll tell you what happened.

I think uh 20 years ago maybe you know it was all around in all of these industries doesn't have to be one a lot of companies to be picked up right so today that's not the case right like you're not really looking for that perfect business everything is stellar and like waiting for you to be picked up in somewhere in the heartland of America so I think private equity actually have to be very innovative and I think they're obviously already numbers focused so they are looking for true partners and that's how many of our engagements started with these companies like actually wasn't even about our company was about talking about AI honestly straightforwardly what's going to work for you what's not going to work for you and I think they are really seeing that for value they have to change it's not just about using one playbook and it works for you for 40 years and um they realize now that a lot of them have to make it work for these companies with the right partners and you know take good decisions so I think I love that we are coinciding with that change, right?

So, it's kind of harder to compete there as well because everybody has capital and not much to really roll up around, right? Well, let's hear for the capital. I mean, at least there's a lot of capital. Congratulations. Uh, thanks so much for coming on conversation.

Thank you for having me and we're so excited to be here especially for the two people who also work very hard and especially you um John have built companies that optimizes performance left and right with Soyand and Lucy and hopefully we take that from from that culture. Yes. Yes. Yes. Thank you.

Well, we'll talk soon, you know. Thanks so much for thanks so much for coming on. Thank you. We'll talk to you soon. See you. Uh, next up we have Jordan Schneider from China Talk coming on. We're gonna ask him. An absolute dog. Is Is China important to talk about? Bring it down for us. Who's talking about China? Yeah.

Who's talking about China? Jordan, welcome to the show. How are you doing? Can we get a sound effect? Oh, he's got Oh, we got the horse now. Is it the year of the horse? What year is it in China? I don't know. Uh, we're we're playing around