Joshua Browder on why boring vertical AI is the best opportunity beneath foundation model labs

meantime, any breaking news, Jordy? Anything we should run through before we're uh bringing the next guest? Um I think we have our next guest right here. Hey, Josh Browner. How you doing, man? There we go. Good to see you. How you doing? I'm okay. I wasn't expecting you.

How many did you Did you back all the winners already? Um, no. I'm here mainly for social. Okay. Okay. Just hanging out. Just hanging out. There are some amazing companies here. There are. There are. Uh, what what trends do you like? We heard that last batch was cursor for everything.

This batch is lovable for everything. Have you noticed any trends? I'm seeing a lot of uh boring software AI. I was just speaking with a amazing founder working on waste collection AI software. So, and and and you and you're using boring and you're using boring as a pjorative or not as a pjorative.

No, I think more of these businesses need to be built. Less jargon and more boring stuff. More boring stuff. Just find a specific Yeah, I've been I've been impressed with the traction so far.

There's been a couple founders that have come on that uh cool ideas expected to to to to not necessarily have like a a bunch of like real totally traction with with businesses and yeah I mean you've obviously been working in like the application layer of AI for what a decade or something like that now. I'm getting old.

You're still teal fellow right? Yes. Uh young at heart.

Uh but but but does the uh does this idea of like going after bore boring kind of vertical SAS vertical AI uh does that fit with a a worldview that uh maybe like we're not just going to get the the the foundation model labs to oneshot every single business opportunity and in fact it is a great time to build a a niche business.

I think that there's opportunities that are beneath the foundation models. You're seeing them now like coding and things like that, but those are huge opportunities. They're not going to go into waste management. And so you can build 100 million, 200 million business. Yeah. Yeah.

We I I looked at Fiji Simo at when she became the CEO of applications at OpenAI.

She had five things that she was going to knock down and it was like, you know, knowledge retrieval, health, uh, you know, coaching, shopping, talent, coding, but then waste management's not on that list and so I think you're safe for a little bit.

Um, anyway, uh, what what's happening in uh, in your business that's that's exciting? Uh, I imagine there's every time the models get better, your product gets better. Yeah. Um, I I think you constantly have to be innovating. We're like always worried about what the big companies are doing to detect our AI robots.

There are now SAS startups that detect our robots. So, we're trying to Yeah, exactly. Um, anti-root as a service. Fortunately, we're more motivated than the average like Comcast SAS vendor. So, we we stay ahead. And then on the product side, um, when do not pay started, it was just like templates.

Now, you could just ask chat GPT to generate a template. So, we're trying to go deeper, try and go more in the background um and build really exciting things. Yeah. Have you been talking to founders about where prices are sitting?

Do you have any sense of of what what what a you know median valuation is for this round or or you know high end of the batch pricing. I remember when I went through uh you know raising at like 12 was great. I I think any company raising below 20 there's like a problem with it. So I think 20 is now the baseline.

20 is the base and then at high end what what are you saying 40 60 I mean some even 100. Yeah. Um I'm trying I'm I'm here to meet um 100 people at once and then I can relax. I'm very introverted. So this is my one social event of the year. So one of the year four badges. You got to keep this is my first YC demo day.

It's amazing. You can just meet everyone. That's great. Yeah. Uh, we've been doing a lightning round with everyone that comes on the stream today. Uh, favorite entrepreneur, someone you look up to. Um, who comes to mind? I guess in this batch there's an amazing founder from Kazakhstan, Nomio.

I think that's the name of his company. His name is Allan. He's just such a hustler. I'm not an investor in his company, but I wish I was. What about throughout history? History's greatest entrepreneurs. Who sticks out to you? Larry Ellison. Larry Ellison is an inspiration. He he's very um kind of pricing focused.

Did your other guest say that? No one said Larry Larry, but we've been talking about Larry for a long time. As a deeply underrated founder, just a fantastic animal. Oracle will sue its customers. Uh they're so focused on money.

Also, I mean, the fact that he's just like never really sold it and like really just the position that he has in that company is just remarkable. There's just a bunch of things. Also, he just looks great at his age. You can just tell that like a lot of things are going on.

There's a headline from the LA Times in the year in June 29th, 2000 called Oracle defends its spying on Microsoft as public service. I love it. I love it. They also called it their civic duty. That's great. That's great.

The other the other lightning round question, this one would be fascinating for you, uh, is how did you make your first dollar ever on the internet? So, I was jailbreaking phones and um selling themes on Cydia. So, this was before the days when the Apple operating system allowed you to change Apple icons.

And so, I would sell a Disney theme. And this was like a complete copyright violation because I'd take all of Disney's IP and make it, but I guess they weren't detecting it. And it was very lucrative. How old were you at the time? Maybe like 13. And there's different waves. So, Disney's worst nightmare.

So, I was in the jailbreaking wave and then there was the Minecraft wave. Then there was the how were people making money on Minecraft? Uh Minecraft server businesses. Okay. So you set up a server. So that was Adam Gild's generation with owner. That's the Wonder Founder, the amazing TBPN sponsor.

Um they were making money with servers. Then there was Sneaker Bots and that's the W founders. And now what's next? H Fortnite. Anything in Fortnite? I think it's right. Roblox. Roblox. You see a lot of kids doing well on Roblox. Roblox. Yeah. Fascinating.

people that are printing on Roblox today will be here in five years. Or maybe just SAS startups. I mean, there's like a 12-year-old who's viral on X with this in a few years. I don't even mess around with the video games.

I just went straight to enterprise, age 12, my first dollar uh a business deal between me and Oracle and Larry to build out a new data center. Anyway, thank you so much for coming on. Have a great day. Enjoy demo day. Uh, if you're just tuning in, we are live from YC Demo Day 2025. Nice to meet you. I'm John. Pleasure.

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