Outset raises $17M Series A from 8VC for AI-moderated research — Microsoft and Nestlé are customers

let's bring in the next team if we have one. Come on down. How you doing? Aaron, what's up? How you doing? This is a YC alumni and he just he just raised a series A today. Congratulations A here. Yeah. So, we were trying to make this happen for the last week, but he just announced his series A today. 17 million, right?

17 million. Congratulations. There we go. I mean, we have stuff to celebrate. I already got the hat. I got the hat. Hey, congratulations. Seems like you've done that a couple times. Yeah. Yeah. This is the biggest round of the day. All right. Uh, who did the round? Uh, how far along are you? How big is the company?

Give me some stats. Yeah. Yeah. Okay. Uh, so 8 8C did the By the way, guys, this is awesome. I did like the interview with Venturebe and this I'm way more starruck by this. So, like I'm not just saying that, but I'm uh Yeah. So, 8VC led the round. Absolute dog. Uh, what what partner are you working with?

Uh, Jack Moshkovitz. He's great. He's fantastic. Um, yeah. Yeah. So, how far along? So, we were uh And were you in the last batch? No, we were we were a couple batches ago. We were summer 23. Um, great vintage. Was that still excellent or was that back? No, we were the first back. We were Yeah. Yeah. Yeah.

We had an advantage. Um, but yeah. So, Outset does AI moderated research. So, what does that mean? It's like when C when when big companies have to do a ton of research like Nestle has to go figure out what, you know, whether they should launch this weird version of Desjouro pizza or something, they go do research.

So, either they're running massive surveys and they're getting like very low fidelity data. They don't really know much. It's just a bunch of numbers. or they're running interviews and that's where it's a one-on-one interview with everybody, right? Which not actually cost effective. So, totally.

So, now you can run AIE interviews. That means AI is leading the conversation, digging in, following up, probing deeper, and synthesizing all of that for you. Got it. Uh, and we How big is that? How big is the legacy market? So, so the research market is like 140 billion. It's it's actually a really big one.

Uh, just like Yeah. And there's like huge companies that you probably may have never heard like Ipsos and Contour and like these like big guys that are uh just kind of sitting there. So, so there's a lot of opportunity and uh yeah, we work with like Microsoft, Nestle, Weight Watchers.

So, we've been super enterprise focused and uh yeah, we're a couple years in. What are the interaction patterns that you like or you think are kind of unlocked by AI? I imagine that voice phone calls is top of mind versus like forms which was always like available and already computerized essentially.

It's actually I think the cooler thing is what you can get from participants and synthesized. So it's like so now we do video interviews and they do audio and they can even share their screen, right?

So all of that is being ingested and then like people ask like to say I have an avatar when it's interviewing and we actually did research and people don't want that. They don't want the avatar. No, they don't want the avatar.

The avatar is something like weird uncanny valley stuff where I'm like and you're just like used to phone calls. Yeah, people used to phone calls and they're fine sharing their video, but like if you suddenly see an AI, you're like, I'm trying to make, you know, 15 bucks doing some research.

You like suddenly see that, you're going to be all weirded out. So, it's actually much better to have AI come through with voice and text. Yep. Talk to me about recruiting. You said 15 bucks. That's enough to get someone to jump on, but how do they even find out that 15 bucks is on the table? Yeah.

So, we partner with a number of different like companies that do nothing but panels, like nothing but recruiting. Nothing but recruiting.

So, you have like uh user interviews and prolific are they probably get some demographics and some base All that and they have millions of people that are like ready to It's like gig work, right? And and so they Okay. I need 100,000 people that drink energy drinks to give me feedback. Exactly. Exactly.

And you could Yeah. You can do all that through our platform. Is there a certain unlock when an AI doesn't need to like, you know, if a human is scheduling research calls, you know, you could imagine they do like four 30 minute blocks and then they take a little break and they do some more or something like that.

I I don't know how it works, but an AI could hypothetically talk for hours and hours and hours and hours like kind of 100%.

So there's like, you know, I think a lot of AI stuff is like, oh, where can it replace the human thing and now it's cheaper, but actually like this this is uh taking on the stuff that like humans can't physically do. We only have 24 hours in a day.

And so it happens that people use it to like interview 500 people, right, in a day or two. And that's like it's literally not possible. It's like just the laws of physics don't allow it. And so they're able to do that. They can do multilingual. They kind of do it all at once.

So, you can wind up like unlocking actual like stuff you've never heard. I don't Can I curse on this? Uh, we usually don't, but you uh stuff that they like would not have uncovered anywhere else. Um, and they actually are able to get that like in this way. Yeah. What's your what's your stack under the hood?

What models are you using getting the most value out of? Yeah, we're using a combination. So, it's, you know, it's like we're hitting multiple models constantly, but Azure we we're using a lot of Azure actually. OpenAI models under the hood through Azure and it is your model router helpful?

I saw they announced that at Build. I haven't talked to anyone that's actually used it. Um I I don't know yet actually. I so I don't think we rolling it out.

So basically like what we need is just incredible amount of reliability because what we'll have is like three customers are all running like 500 simultaneous interviews. So we have to actually scale very very quickly.

Um and also like a lot of our customers like the Nestics of the world like they care a lot about like super safe, super reliable. So we kind of like wind up the kind of Azure. Yeah. And then you're also probably going through like peak LLM usage hours too cuz you're not doing it in the middle of the night.

No, we can't process it on our own time. It like has to happen in that moment. But then we also fall back to OpenAI. We use Gemini for stuff. So we're like hitting a lot. Yeah. Talk about the uh uh the is the voice modality beyond the uncanny valley at this point? Is that why voice is valuable?

Are you using voice a lot? because you can imagine that uh this might have been possible via text interactions. You're texting your responses back and forth. Probably get more out of a voice interaction.

Uh are we just if we if we talk to you again in like two years, do you think it'll be like okay yeah now I'm a believer in the in the avatar thing because it is photoreal. Okay. So so two things. So one right now what matters most is obviously the modality of the participant.

Like if you think about like all we care about is the most deep like like uh thoughtful in-depth data that we can like pull from you that respond. So that matters way better than text and that's way better than our first product that we like talking. Yeah.

Our first like pilot with Weight Watchers back in 2023 was like all text and it was actually pretty good but like it's nothing compared to what people actually say. Um and so that's what matters most is like video screen share uh uh uh voice from the participants from AI. Yeah. Like so we use voice a lot.

So there's a voice to voice mode where there's like no buttons, it's just conversation and like people like it but like not as much. And I think there's still just if it's not a person, then it's still got just the minor imperfections, the kind of slight bits of latency.

And so I do think in 2 years we'll talk more about that, but ultimately like people know it's a computer. Like they know it's AI and like they're kind of cool about it. Like we we've done a bunch of this research. We're like do you care that it's AI? Like no like I I get it. Yeah. Right.

In fact, they like have even expressed that like they'll share more because there isn't a person. It's this idea of like social desiraability bias. You're like, I don't want to come off as a person that is X, Y, and Z to another human. I will just tell you, look, I want this to be faster. I want you to taste better.

Like, yeah. Or or like or like the real reason I'm not using your product is this. I'm not going to say that to a PM or a researcher who's like at the company, right? But instead, you'll tell the real truth. And that was like our initial pilot with Weight Watchers was all about weight loss.

And like that was like a thing people don't want to share a lot about, but with AI they like shared everything about their lifestyle. Yeah. I mean it sounds like you've done like you've worked with really big companies and that's where the money is.

But uh when you went through YC or if you're here uh you know there's a big theme of talk to your customers. Has there been any pull at the lower end of the market? Yeah. It it's funny. I I sometimes get a founder reaching out like I I really want to use this cuz I don't want to talk to my customers.

Like talk to your customers. We don't want you as customer. Yeah. There's basically I like I think a good a good reason not to use an AI moderator is like if you could sell to that person probably don't outsource that, right? Like maybe to build the relationship yourself.

So the truth is especially all the B2B stuff there's not as like we usually turn around and say come back when you're like a couple hundred people and like you're kind of scaling that out.

Um but yeah, with with some consumer stuff where you really have millions of people you're trying to learn from, it can make a ton of sense. uh talk to me about the like data processing and the intelligibility that goes into once you have all that data.

Uh it's very nice to be like hey we have like you know 5,000 hours of video we prepared a 200page report. Yeah. But nobody reads that.

So how are you thinking about actually compressing that down because that seems uniquely suitable for AI but there's still a lot of art in terms of like a lot of people say oh yeah I did a deep research report and then I uh the next query was give me 10 bullet points about that because I didn't actually want the full report.

Yeah. Yeah. So so all right. So, so our vision here is like we should be building we are building the like deep research but for primary research. So you think about deep research is like all right all desk research now commoditized.

So what if you just ask a question you just want to like learn from real people that's much more upto-date that whatever like your own proprietary data it should be the same kind of idea right end to end agents are doing that but today like the premise of AI kind of uh uh scaling your qualitative research is like you also have to help them do something with all that conversational data right because otherwise you're like left with just like hours and hours of transcripts I'm like I'm not going to review that the application of this is I know this is not what you're focusing on but if I was a a a VC that wanted to write a a multi multi00 million growth check being able to like get live interviews with like 500 customers.

People are going to do this with GLG and that's right. No, this is a huge opportunity actually. So, so um yeah, I have a whole side thought like I think one of the challenges there is with the expert networks is all about finding the right people.

But if you're in a situation where you can find the right people and you can find a hundred of the right people. Well, we just had Plato AI on you because you you should talk to them. They're in this batch. They do like LLM based people search.

So you could find like every person that at at data bricks that was a former founder, you know. No, there's an opportunity to connect all of that through through that.

But what I was going to say with the synthesis is is what we do is basically taking all the video stuff and then we like process it and we give you basically reports, but it's like not just a like here's what it's telling you like deep research style. But what you can do is like start like uh uh slicing and dicing it.

You could like we quantify it. We give you breakdowns. We like build highlight reels for you. And then like people can like cut it and segment it. And so it's like a whole analytic suite on top of qualitative data which is like not a thing that has ever been done cuz what were you doing what were you doing before this?

So before this I was VP of product at triple bite if you know yeah harsh hired me. Yeah. Exactly. Exactly. He uh yeah he anyway so so uh I I worked at Triple Bite at at uh Jumpstart another company.

So, I was like leading product and design teams, but earlier in my career, I was like a I was a consultant where I was doing like this work non-stop where I was like, "Are you a Are you a nominative determinism guy? " Yeah. Yeah. He's looking for the capital to fire a billion dollars into research. Yeah.

I have not capitalized on that. I was looking at, but we're big we're big uh we're big into the names or the truth. The name like that. Yeah. It works well for you. I have a friend who always calls me the loose cannon. Like you can never know what to expect. It's a little bit too much. Dial it in the capital cannon.

You can trust it with your capital. Just give it to fire in the capital cannon and boom. Yeah. I'm going to pivot off of loose cannon off to capital. Aaron capital cannon. There you go. Anyway, this has been fantastic. Thanks