a16z's Bryan Kim on leading $15M investment in Cluely: viral distribution meets AI desktop assistant

Brian. Give the level anatomy of the deal. The anatomy of the deal and then we bring in Roy and we just go crazy. Brian, welcome to the studio. How you doing? Good to meet you. Good to meet you. Great to be here. Thanks, John. Thanks, Jordy. Your notifications must be crazy right now.

Clearly, you guys decided, hey, Friday, let's let's throw it out. Over the time, right? Nobody's crazy to launch. Everyone's going to going going on a weekend. Yeah. There's no other Andre deals that are really taking up mind share right now. This is the one.

Yeah, you guys you the the the thinking machines was leaking to the world the two billion and of course clearly it's just going to suck all the attention out of the room. For sure. For sure. This is the hot one.

Anyways, uh we got we got your we got your launch post here that we read through briefly earlier on the show, but why don't you break down uh background on you and then let's break down the deal, why you invested, and then then of course we're going to have Roy on in just 10 minutes. Fantastic.

Uh background on me, been at A6D for four or five years. Look at a lot of AI applications. You met a bunch of my colleagues here and had them on already. invested in 11 labs functional health of the world and prior to this uh was a was a snap uh as early employee and was a CFO.

U yeah 5 years no I'm in New York right now but uh my heart is in LA. Okay. Yeah, we got to get you back. LA's uh LA's coming up. It was too too nice to live you know.

Um all right so deal uh rational uh anatomy of deal or as you said the anatomy break I think it like really really breaks down to a couple things but really three points one is you know distribution it's really really hard to get distribution these days and to get it repeatedly is a little bit of a dark art yep and so I think uh Roy have that in in abundance so one got the distribution we invest for strengths of strengths as you know not lack of weakness and so that's really exciting for us Um, second, I love the product.

Um, you know, I grew up on Dragon Ball Z. Yeah. And I always wanted one of those scouters that tells you how strong is Jordy, how strong is John, like the thing goes up, right? And, uh, that's essentially what it is on your web browser, right? Talking to people.

You just do a quick command enter and it just gives you all the things you need to know while reading it and looking into your eyes. I think that's special. I think that sort of is right for a lot of the use cases, whether it's consumer or enterprise. So, I love the product. Mhm.

So, that's that's one thing I'll I'll call out. Today, we've had our intern uh over on the intern cam testing testing the product all day long. And I've been impressed. I've been impressed. He's there. There we go. How are you liking it so far? Yeah, it's been really good. I mean, it it's very fast.

Uh the answers are really good. I I think it's like a great product. That's amazing. Out of 10, what would you rate it? Why are Why did you put it in a car? Nine. Uh it's our version of kind of like the the the office in a box. What do they call this? The quiet room. Yeah.

A lot a lot of people have like these toll booth or like you know phone booth style live in the pod and our version of a pod is a Maybach. Yeah. It's very perfectly it's perfectly soundproof. So when we don't want to hear him he just rolls up the window. He just he just rolls up but he's got a D a desk in there.

Uh he's got a comfortable setup. Phenomenal. Phenomenal massage chairs. Good, good, good ergonomics. Yes. Thank you. That's right. So, we've we've had uh Roy on the show a couple times.

We've covered some of the various stunts and we got some push back one of the times we had him on because we hadn't used the product and somebody was calling us out and now as a company we're paid we're paid subscribers of Cle. We're customers.

throw you can throw the TVPN logo on the site and I've been I've been impressed like we we were kind of firing back questions using it more in that interview functionality and and the answers were very good guesstimates of of you know if somebody that had generalized knowledge on a topic being able to answer quickly and he actually better question on it answer it answered the 747 question better than my chatbt 40 direct question clearly mogged clearly mogged 03 yeah Yeah.

Yeah. Whatever. Whatever the f whatever I was 03 03 love that but it did well. Um I guess the last point I'll just add on is you know it's a you know revenue conversion. A lot of people think oh it's just hype and what's happening is it all distribution all the stunts.

The truth is that he he is actually converting that to revenue right whether it's consumer or enterprise. So that to me is sort of the I guess the seriousness that underlies the crazy stunts that people see outside. And that combination works for me. I'm excited for it. Um, and you know, let's go. Let's go.

Let's go back to the first one. Uh, Royy's clearly great at distribution, breaking through, getting attention. It feels like earned media does have a cap versus paid media or brand marketing or some of the other flywheels of, you know, referral programs or or or, you know, some viral mechanic. cap, John.

He's going to be in front of Congress, you know, using Cl and some spectacles. Cheating when he's dragged in front of Congress, you know, for antitrust.

Do you think it has a cap or or or and and because you could one one scenario is is this is his this is not this is not his uh this is not his permanent go to market motion. It's it's merely the beach head.

It's it's the way to break through, get attention, hire the first 50 interns, but the next thousand interns will come through recruiters and kind of standard practice and he'll be on a more traditional podcast circuit when he has news. Uh, but we won't be hearing from him every single day.

Uh, the other is that maybe we're in a new era and he actually can and the company can go viral every single day and you're seeing kind of the the Mr. Beast playbook in reverse instead of Mr. Beast going viral every day and then launching a uh a snack brand. uh the other way around.

So he's builds a company and then becomes famous on the back of that company. Uh which one of those feels right to you? Yeah, I think uh maybe I'll just comment one, Mr. Beast follows Roy. So that that's fun fact one. That makes sense. Fun fact two.

I think from a media and audience perspective, John and Jordy, I think I think of it as like a bunch of oceans. There's no one ocean. There's Indian, Pacific, Atlantic, and that's Twitter, you know, Facebook properties as well as like, you know, more organic. And all of these pools of water are very, very deep. Yeah.

And in terms of general population, who I lovingly call our, you know, consumers. I still think it's so early. The only consumer AI product people are using are really chachi PT. Yeah.

And for them to actually learn about products like this and use it, I think the the the sort of oceans way deeper than we imagined and we're just scratching the surface today. Talk about calculated risk there. This feels, you know, this is a calculated bet. You guys invested 15 million in the company.

He's clearly talented on the product side, clearly talented on the attention side. You know, he's charismatic, he's fun to talk to, he's well spoken, all these things. So there's a lot of reasons to love it.

And then the the push back and and other other VCs that maybe didn't do the deal would say, "Oh, Roy's like a wild wild card. " Like do do you think that more investors need to be comfortable with like a very potential real risk and and and maybe the average VC has just gotten a little soft? Two things I think.

Look, like if you think of the history of large general population products, you see a lot of them actually being pretty risky early on or not for Facebook. Where does Snap begin? What was, you know, uh, Reddit initially? And sort of think of thinking about that.

I think there's a beginning of a lot of the consumer products and products that are used by many people have a funny beginning sometimes. And I think so one calculated risk site, we're comfortable with that.

And I think second thing is when I you know I have a saying where momentum is a moat today in this sort of era of AI applications and when I say momentum is a mode I don't mean just distribution I also mean product iteration and so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company that are highly high and exceptional great great people to build products and then use that to continue to iterate on innovation on the format that is already amazing.

So that's sort of the bet if you will and when those two come together I think we'll be surprised. How do you think about uh restrictions or dynamics from the major like big tech companies?

Because you mentioned that you know there's a consumer angle here but when I see the product I see it as a desktop app and many consumer interactions happen on the phone. And so, uh, you know, Roy was fantastic at creating a viral moment around the idea of like using Cloey on a first date.

Uh, and yet you're not going to have a first date over a Zoom meeting on your MacBook Pro. Maybe maybe Royy's planning another pandemic. Yeah, May maybe.

But but but but but people do talk to each other on the phone and on FaceTime, but it's much harder to plug in and do screen recording and do uh picturein picture and all of that. So it feels like there needs to be some sort of transition point if you're going to go broader to killer use cases for consumer.

Um but at the same time, you're going to bump up against a ton of push back from the platforms who just say, "We don't want to give you access to that API. We don't want you to screen record for for for privacy reasons good or bad. So I don't disagree.

We are techno optimists and I would believe that there will be another innovation that actually allows the likes of Culy to live and be omnipresent in everyday interaction. That said, you know, AI is like a digital god we created and we trapped it behind a little chat box. Yeah.

So it is natural to me that it should live on a thing that you actually work and interact with the most. And we're starting with computers today because that's where the power is. Like that's actually the digital god is not godly enough on the little little, you know, uh little devices today.

So we put it in a little larger box. Yep. And the little boxes will get better and we're excited for that future. Awesome. Well, I'm excited for you guys. Congratulations on the deal. And we got to get Roy in here. We should pull up we should pull up the launch video as well. But thank you for joining.

Thanks for having me. Ryan, thank you for being bold and making real bets. probably had to fight it out with American Dynamism team because as we know they're working on hardware. They're working on reindustrialization. They're doing everything over there. Uh