#133 PodcastAI: Josh Gets Displaced

Pitch number 7 [clap]

People have a lot of fears about AI. That it’s going to get too smart and take over the world, that it’ll be used for nefarious purposes, or just that it’s coming for all of our jobs.

I can’t say I was too concerned about the job thing. I am a podcast host, after all, you kinda need the real thing. Right? 

But then… I got an email. From a company called Podcast AI. And I wondered if my time had finally come.

But I decided to risk it for the biscuit and take the call… and to my surprise, by the end of it, I was ready to welcome our new AI overlords. Not only had I signed up as a customer of Podcast AI. I also invited the founder Edward to come pitch on our show. 

But it's one thing for Edward to close a podcaster. It’s another thing entirely to convince five discerning VCs that your AI startup can rise above the noise.

I’m the real Josh Muccio…for now. Welcome to The Pitch. Where real founders pitch to real investors for real money. Let’s meet the investors.

Elizabeth Yin with Hustle Fund

Elizabeth: Do you love the problem you're working on?

Charles Hudson with Precursor Ventures

Charles: I wish that had been your open. That was so good.

Pascal Unger with Focal VC

Pascal: That’s I think how you have a chance, outside of just raising a boatload of money 

Beck Bamberger with Bad Ideas Group

Beck: [slaps table] I gotta start my muffin business.

And Mac Conwell with Rare Breed Ventures

Mac: As a unicorn hunter, I want to see every unicorn. 

Real quick, if you’re not following the show already, hit that subscribe button and turn on notifications. The pitch for Podcast AI is coming up after this!

Mac: Which is why I’m I’m like staying away from institutions and I’m gonna go the family office route

Elizabeth: I’m feeling resistance everywhere

Charles: There is resistance everywhere

Mac: I’m just saying like - 

Edward: Hey everyone.

Beck: Hello. 

Edward: So I'm Edward, CEO and cofounder of Podcast AI, and we automate your podcast production. So back in 2019, my cofounder and I were running a video hosting service, this was for podcasters and YouTubers - and we quickly found ourselves actually taking over the post-production work for one of our biggest customers. And that looked like us spending our entire weekend, every weekend, doing that work, and obviously with the AI boom and advancements that have been happening in the past year, - we realized - wait a minute, all of this work could actually be automated, and that's why we founded PodcastAI. What PodcastAI does is it lets podcast producers become ten times more productive, because it eliminates hours of manual work on postproduction. And podcast producers, what they do is they'll typically be, you know, sometimes using several tools that they're chaining together on top of those manual hours of work, and we can kind of eliminate all of that friction and pain by streamlining everything into one automated platform. The podcast industry is huge. Uh. It's growing at a compounded 30% per year and that's projecting out to a hundred-billion-dollar industry by 2029. As for Podcast AI, we started back in May and we got our first paying customers in September, and in the last four months we've grown to 43,000 in annual recurring revenue. You know, that brings us to today. We're looking to raise a million dollars to scale that growth and bring automation to all the podcast producers out there. 

Elizabeth: How does this work?

Edward: So it all starts when the podcaster has finished their episode. So that's an MP3 or MP4 -

Charles: Can they do it anything? Riverside, Zoom, whatever they want to use?

Edward: Exactly. Whatever they're using for the recording, you know, they have then their end product that they're ready to deploy, they just drop it into Podcast AI We automatically transcribe the whole thing, takes 10 seconds. It auto-identifies the speakers. You know, it's a real a-ha moment for podcast producers when, you know, something that used to take them half an hour, doing all those chapters and timestamps, takes 30 seconds. And same thing for descriptions. And then actually detecting of the top ten viral moments and doing all the social posts that go with those viral moments with like amazing copy for LinkedIn, TikTok, X, They're just blown away by what we can do already and on top of that our roadmap. 

Charles: What tools do they get rid of when they use Podcast AI?

Edward: Yeah. So it started off with just getting rid of the manual labor of doing chapters. And then we had some YouTubers that were using us for chapters who said, wouldn't it be great if I could be on Apple and Spotify, so we took on hosting. So now they're dropping their hosting platforms. We also turn the entire podcast into a beautiful webpage, totally SEO optimized. Our first customer for that was This Week in Startups.

Charles: Oh yeah.

Elizabeth: Oh yeah.

Edward: So ThisWeekinStartups.com right now is powered by us. So it's an old podcast, right. It's got 1800 plus episodes, and you can search through all those episodes. And actually one of our latest customers is The Pitch.

[cheers]

Elizabeth: Nice.

Edward: So everything indexed, fully searchable, really SEO optimized. Everything you'd dream to have. And it's completely automated as a literal by-product of using us just for the chapters and everything. That's the beauty of it.

Elizabeth: How much are you charging The Pitch?

Edward: We're charging $99. 

Elizabeth: A year? Per month?

Edward: Per month.

Beck: Per month.

Edward: And Josh came in right before we doubled our prices.

Elizabeth: Mmm

Beck: Mmm. Why did you double?

Edward: So we were starting to bring in people for sales. The sales were going really well. I mean, just in September, October, we took 19 meetings. 15 of those we closed on the call. So, you know, it's just figuring out, okay, what can we raise prices to until we should stop raising prices. 

Pascal: What is it - like, because you listed a whole bunch of different features and things you can do. When you pitched to Josh on The Pitch, what's your headline and what did you actually pitch him as the product that you're selling him. 

Edward: So automating that website I think was a big thing. And also the fact that we have all of those transcripts, we can actually train AI versions of the hosts on the transcripts and on their voices. For podcasting companies that are looking at advertising and selling a lot of inventory, being able to spin up ad reads -

Charles: Yeah. Reads

Edward: - like this [snaps] like that's a killer feature. So there was a lot of excitement around that and also working with Josh around integrating with the platforms that are doing dynamic ad insertions. I mean, even, there's situations - I spoke to someone running a podcasting network, this is the biggest music podcasting network, and he was telling me they have, you know, older podcasts that are still being played, because they're evergreen, and they can't record new ad reads because the host is gone. And this actually lets them sell that inventory for a higher price, because it's in the host's voice, so it's just amazing for prototyping ads and even creating deliverables.

Mac: So at the beginning you mentioned your roadmap. You mind sharing a little bit about that?

Edward: Yeah. So what I was talking about, generating those viral moments, we're very soon gonna have the actual production of those vertical style TikTok and YouTube short clips. But I was actually showing this to one of our agency customers, you know, ahead of time, and he was actually kind enough to show me his workflow for creating really amazing viral social posts that go with those moments. And we basically productized it. So taking from the best and making this a product. That's the difference between, you know, these GPT wrappers and things like this and manual process, and actually creating a real product.

Elizabeth: So I want to clarify one thing. I mean, you're talking about podcasting, which in my mind is all audio, but you are talking about working with YouTubers, you're talking about these viral moments being in video. What are the typical formats people are uploading? Is it video? Is it audio? 

Edward: So it's a mix. And there's a convergence going on, which is that podcasters are realizing they've gotta be on YouTube.

Elizabeth: Yep.

Edward: And YouTubers are realizing, well, I'd love to be a podcast. 

Beck: Hm. What's keeping something like a Restream from just going like, yep, we all do this AI stuff too?

Edward: So there's a lot of these older companies that are tacking on AI. And that's kind of the issue: they're tacking it on. We're talking to all kinds of customers. And they just don't even know about the features because it's just buried somewhere. 

Beck: Mhm. So I have a podcast that's all journalist focused, and we've done now hundred - couple hundred episodes. Would it make me, you coming inbound to me, make me go, let me - let me check on Restream real quick. What - you do this, this and this but it's an extra $99 a month? Oh. Oh, wait a second - oh. Restream does three out of five of those things. Ah, you know, I'm good. I'm good with that. 

Edward: Some of them have done that, and then we actually line things up and say, well, you're going to save this much on your hosting, you're going to save this much on your VA, you're going to save this much. Just think of the viral moments. Like the dollar amount math is super simple. And we're talking to qualified buyers. And that - qualified buyers means, you know, anybody who's doing a business and starting up marketing -

Charles: This is my question, like are these -

Edward: It's the 101s.

Charles: These are all prof - people who are doing it - whether they're directly monetizing it, it could be someone who's like hey, this is - it's a corporate podcast to get our message - these are people who are doing this for commercial purposes, by and large, right?

Edward: Exactly. And some of them, it's just become their life, right. It's kind of they accidentally get into it. But yeah, very early on we realized, those 19 meetings in the first two months, you know, the four that didn't buy it was those - they were not really qualified, right. It was just a hobby and they were not willing to spend any money because they weren't making any money. But the second you're talking to someone running a business, this is nothing. 

Pascal: How much do production studios and agencies typically charge for podcast production and everything that you guys are doing?

Edward: Yeah, so it depends how high end they are. I've heard people, you know, it's like 25 an hour for like really low end and then for, you know, even just moderately you know big - we're talking a hundred bucks per episode. And they're doing multiple episodes a month that already pays for it. And some of them are doing 500 a month. 

Pascal: And then follow up question, do you have any idea what the rough percentage is of the market that is actually covered by these production studios and agencies. 

Edward: Yeah. So - so I don't have exact stats on that, but I - I mean, you know, there's a customer list out there and it's really just the top podcasts. Right.

Beck: Yeah.

Edward: And so the lists are public. We know who the customers are and our job is to make this so obvious we just run that list. 

Pascal: Yes, but if you can sell a service, and under the hood it's 98% automated, you can actually a service at the margin of a software business. And so that - that's sort of the question and challenge to you, since you seem to understand the podcasting world pretty well, why not try to go down the route of actually selling the service or the outcome to your customers, versus selling the software to the middleman.

Edward: Right. I think eventually we will. Um But right now, it's us creating all that tooling for all those customers, and maybe we'll start with preferred partners that we can recommend to actually do that and work our way into that. 

Pascal: Yeah. The reason I'm saying this is because one of our portfolio companies does something similar on the content side, where they're testing the waters with an internal tool that they built for themselves that they're now selling. To agencies for 500 a month, and they're selling it for 5000 a month. Why not just try to build your own - like tech-enabled agency… 

Edward: We want SAAS type numbers -

Beck: Yes.

Edward: - and SAAS type results.

Beck: So never be in an agency, let me tell you.

[laughter]

Pascal: What I'm trying to argue is with all this automation, you can build a services business with a software type business model and margin structure and everything.

Beck: So you're saying be more of a Salesforce. 

Elizabeth: And also the reality is, most publicly traded SAAS companies have a big services component.

Beck: That's what I'm saying. As - mention of Salesforce -

Elizabeth: I think all these VCs are gaga about like self-serve this, self-serve that, but the reality is the money is made on what exactly Pascal's talking about.

Edward: I think that - that's what we're going to be getting towards. I can tell you, one of our agency customers, we don't do everything they do yet, but, you know, they're paying us $100 per pod and they make $6000 a month per customer. There's a lot of money on the table there.

[crosstalk]

Pascal: That's what I mean, yeah.

Beck: That's a lot on the table.

Edward: We know it's on the table. We know where it is. 

Elizabeth: I guess why aren't you doing that now? Because it also helps you with cash flows now and also learnings of how to improve your product now.

Edward: So the interesting thing is how fast we built this.

Beck: Yeah. It's very fast.

Edward: Like we started in May.

Charles: Yeah.

Beck: Let's keep that in mind.

Edward: And, you know, I'm a full stack engineer and, you know, there's - there's no such thing as full full stack, and by full full stack I mean you're a 10 out of 10 on backend and frontend and UI, right.

Mac: Yeah, speak for yourself, brother.

[laughter]

Edward: So maybe you are. But -

Pascal: I'm a zero in all of those, so.

Edward: But I can tell you, I was more tilted towards front end. But um with all the AI stuff, instead of using Stack Overflow, like, I'm just flying, doing all this stuff myself. And what I want to keep on is the product velocity. Like, we're growing really quick, we're adding, like, features and functionality really quick. We're building out that pipeline. There's the editing and recording, there's automating guest research. That is so much work. There's just so much there. There's such an ecosystem to build out, and really become that dominant company. I mean, I mean just our name alone. PodcastAI. Like, we have PodcastAI.com. It's a fantastic brand to build, I think. um

Beck: Kudos to you.

Edward: And, yeah, we want to build that out

Mac: So you just mentioned you're a full stack engineer. You built this really quickly. What's to stop anybody else from doing this? What's the moat? How do you protect this?

The battle of the full stack engineers is coming up after this

BREAK

Welcome back. In a past life, Mac the VC was a full-stack engineer. Which means, Mac isn’t easily impressed by Edward’s list of shiny new features and big name podcasters. He wants to know… 

Mac: What's to stop anybody else from doing this? What's the moat? How do you protect this?

Edward: Yeah. So I think with AI right now, people can build really fast. They can prototype real fast. But, you know, running a company is, you can't just be good at one thing. You gotta be good at a lot of things. And there's so much to build right now with AI. I'm in an accelerator right now, and our cohort, not a single company is doing the same thing. They're all doing something that's wedging in with AI, just because the unlock was so huge. But we just have a scope and vision that's pretty comprehensive. I mean, there's a company that'll turn your podcast into a website. There's plenty of companies that'll host your podcast. You know, who's actually coherently doing that all together? Well, that's PodcastAI.

Elizabeth: Are you doing editing as well, or no?

Edward: We're starting to get into it. 

Beck: So I think what you're conveying is, yes, this wide open field of AI as we all are well aware of, and yes, you can accelerate it very quickly. You can dabble with it, you can do all these things. And it is gonna be the question of, well, who can actually build and run a company that actually scales it to make it so big. So what we haven't heard from you yet is more about you. 

Edward: So - so I started using computers when I was five. Went to computer camp in '97. You know, went to doing PHP and everything in 1999. That's where I met my cofounder, actually, so we've been best friends for -

Elizabeth: In '99?

Edward: Since '99. He's from Switzerland.

Pascal: Oh! Same. 

Edward: So, you know, we were just in the same classroom. We realized we were the only two who spoke French. So we became best friends.

Beck: Nice.

Edward: Yeah. So that's - that's how that started. His background is all ecommerce. Me, just software, doing software for the Mac, doing iOS software, I sold a product called uBar, which is like a Windows-type taskbar for the Mac. Tons of people use it all over the world. But, I kind of realized, okay, I want to do something that really scales. I want to do something huge. And we got together in 2019, started our first startup, and now, like the moment now, we're so excited because it's kind of like in the late 90s when the modern internet was being built, and we were too young by like this much -

Beck: Just to break out.

Edward: And I can - like, this is - this is the moment. 

Beck: So you're a super nerd?

Edward: Yes. 

Elizabeth: I think one question around that, though, is you know in the late 90s, while it was a breakout moment, there were way fewer people who could build. Now, I would say - I don't want to say anybody can build, but you know a lot more people can build and you can learn how to build pretty quickly. The space of podcasting and video is already pretty crowded. I think of so many different apps that have pieces of what you do. How do you pull people off of their existing workflow to go with you?

Edward: So it's - it's a question of, you know, when we're running a sales call, it's okay, here's what we do, and we just sound them out on what piques their interest. And then we show them their aha moment. You know, it might be those chapters in 20 seconds, you know, it might be those viral moments that were killing them, or the social posts that go with it, or the entire back-searchable website with all the transcripts. We even have a chat with the AI versions of the hosts trained on the transcript with voice that you can have as an after QA. I mean, the sky's the limit with what we can build, and everybody has their aha moment that just makes that sale.

Charles: I'm in for 50k.

Edward: Awesome.

Charles: I just think this is moving so fast, you have to be like a paranoid urgent person and you seem to be a like a paranoid urgent person -

Beck: Super nerd.

Charles: - in like a good way.

Beck: Double down.

Charles: I think the other thing is I've spent a bunch of time looking at this and I think, to Elizabeth's point, I think most of the discrete problems have been solved, but the podcast producer's problem isn't a discrete problem, it's a workflow problem, and I’ve actually like watched a handful of people try to get Descript to work with this to work with - and it's actually not that efficient to try to make - and the fact that Josh is nodding makes me feel a lot better as I say this - this is one of those cases where what you really want to do is solve the problem, not help people arrange the discrete individual tools. Will you ever be as good as Descript at editing? I don't know. I don't think it's actually that important if the cumulative time-savings is meaningful, and that you're good enough at all of the individual components. And like I have no idea where this will go, but you seem to have the right level of urgency, which in AI, I think, is like a necessary condition for success.

Elizabeth: What are the terms?

Beck: Yeah. Yeah. And what accelerator are you in?

Charles: We'll figure that out. 

Edward: So we're in Jason's accelerator. So, Launch.

Beck: Okay. Yeah, yeah.

Edward: And we're raising a million dollars. 

Beck: Yep.

Edward: We have planted the flag, so to speak, at 10 million, but we'll see. And we have interest from a few firms we're talking to. Jason's in for follow on. 

Beck: Did you say how much you raised so far?

Edward: We raised 125,000 -

Beck: Out of the million?

Edward: - from launch.

Beck: Okay.

Edward: And 29 safes. I have a few SAFEs that are lined up this week that I have to send over the weekend, but we haven't raised that much.

Elizabeth: How long have you been a customer, Josh?

Josh: One month?

Edward: Not even. 

Elizabeth: - I guess where I was going with this is can you talk about your experience as a customer?

Beck: Yeah, as a customer.

Josh: So we're just getting started and like onboarding all of the content that you guys have produced on our show over the last eight years is like a task, and going through making sure all of the voices are right and all of that. But once we've got it built out and it's at feature parity, we'll be able to launch the whole site. because he hasn't gotten into the pre-editing part, and we don't really want to solve that, because like our secret sauce is in how we edit and produce these episodes with the team that we have, um so like we're not - we've tried using Descript. We don't like tools like that. But we do need help on the marketing, on the other side. Like, after we hit publish, the like ten different variations you have to create on every episode to optimize for every platform you're going on, is like absolutely needed, but by the time you hit publish I’m just like so tired of working on the episode, I just like -

Pascal: - hearing your voices. I get it.

Beck: Yeah. 

Josh: - But we need to put more of a focus on marketing. So like, for me, this is a marketing expense for the show to grow our audience.

Elizabeth: I see. 

Pascal: So I'm out with a but. I'm bullish on AI for professional services, but I'm also bullish on what I said as a thesis, or to sell the outcome not the software. Because the more revenue you can generate as a company, the more you can invest in growth, and I think that's - unless you screw it up - is a self-reinforcing mechanism. And if you don't do it, somebody else will do it, and if they get right like 5 grand per month per customer when you get 200, it's going to be very hard to compete with them over time. And so, I'm out. If you do think through it and wake up and say, hey, I want to go for that ambitious goal, then please reach back out. and then I'd love to have a follow-up conversation.

Edward: I'd love to. 

Beck: I'm out for now. Not my space. Just AI in general. But I might be a customer and likely will be. So I want to have a follow up for you. Because I understand the - several of the pain points you're bringing up where you've done a hundred episodes and, you know, where's that original transcript and how do we help the media promote it easily. All these great things. So I do want to follow up. And I really just like the super nerd aspect, and you owning that. Own that. If that's who you are, I - I like that. 

Edward: Computer camp. Guilty.

Beck: Computer camp. Guilty. Well, you've been in computer camp at five -

Edward: No, it was called internet camp.

Beck: Internet camp. 

Edward: We were learning HTML3.

Elizabeth: Oh wow.

Beck: Wow. That's a wow. 

Mac: Elizabeth?

Elizabeth: So I think for things where the product experience really matters a lot, it is really hard for me on this show to commit. We do a lot of our own video So I'm very intrigued in seeing if we can become a customer in using this for our videos, and maybe even turning some of our videos into podcasts. Would love to evaluate then if it's an amazing product. I mean, it sounds like you have marquee customers who seem to think that this is great, and so I'm hopeful that we can sort of be a double whammy as well - a customer and investor. So I think for the purpose of this show, I am out. But would love to take a look at the product.

Edward: Awesome.

Elizabeth: Thank you.

Mac: So I purposely waited to go last, because like the unfair thing for you, not only am I a super nerd, so are all of my friends. And I say that to say that my best friend built this. He built this exact product. And sold. And was doing well. And he shut it down in January because when OpenAI mentioned they were building a marketplace, he said, everything I built in six months you'll be able to do in a weekend project. There is no moat. Anybody who's a halfway decent developer could rebuild this. And I was like, that doesn't sound right. He's like, here's a couple tools, I'll give you a weekend, start playing with it. I got pretty far in a weekend and I don't code anymore. This is going to be a race to the bottom. The way you win is you become the market leader and become the market leader now. You better raise a ton of money, put that stuff into marketing and be the only name that people think about, because there are other people building this. So for that reason, just fundamentally, I'm out.

Edward: Okay.

Pascal: Well -

Beck: Thank you.

Edward: My pleasure, yeah.

Pascal: Lots of follow ups.

Beck: Lots of follow ups. 

[thank yous]

Beck: There’s your applause!

Elizabeth: Delay. 

Mac: Yeah, I hated to be the killjoy there, but literally a year from now, somebody wanted to recreate PodcastAI, they'll probably be able to do it as a weekend project. And so like that becomes tough-

Elizabeth: I think you could make that argument about a lot of B2B SAAS products, though. Like, nothing is really rocket science anymore. But there are winners based on, you know, the user experience and your ability to sell and people love you, love your product. 

Mac: I agree. That's why I - I admit that I'm way too close to it, as a bias. 

Pascal: Well, it was great to have a customer reference call as part of the show.

Beck: Yeah. That's cool. 

Josh: Yeah, I was - ever since ChatGPT, we've been trying to figure out how to leverage AI for our show, and you'd think it'd be really simple to take the audio that we have and synthesize it, give us like chapters. I was just like, write a description for an episode! And I fed it the transcript and it was just like garbage. And then I tried a couple other tools like the descriptions piece, and then the chapters piece, and like everybody's trying to build all these different tools. And then I get an email from Ed. He was like, we're doing these ten different things. And so I get on his calendar and get on and like, it was, yeah, within a couple minutes I was like, oh, you're doing everything I've wanted to do all at once. And then when I realized he'd done it in like a matter of two or three months I was like, holy sh**. Like, what does this look like in 6 to 12 months. 

Elizabeth: I do like people who ship fast. 

Mac: The fast shipper is different than being a fast seller.

Elizabeth: That's true. 

Mac: I know plenty of fast shippers who don't have any money. Like super nerd, they're like builders like to build.

Elizabeth: Yeah.

Mac: Right now he's getting some help with the sales and like having Jason is great. Would like to see him have stronger customer acquisition focus. Product-led growth isn't going to win in this space. 

Mac: But Charles is in.

Elizabeth: Yeah.

Charles: I just think velocity - I mean, they're - I'm with Elizabeth. I think most B2B SAAS things are basically commodity - they're a database with a UI on top, if you really push hard enough. Like, that's what they are.

Elizabeth: No, it is. That's -

Charles: - they are. I mean. And I think this is a category where - I don't know if he'll win, but he has the necessary condition, which is like the ability to ship useful things -

Mac: Yes.

Charles: - that customers want quickly. Without that, you are DOA. 

Pascal: Charles, what's your - cos you said you're in. What's your take on the trying to become the production company -

Charles: I think the only danger in being the services company is you get greedy, and somebody else says, oh, well, I'm going to be services lite for half the cost, and you end up with someone just says you don't need a production company. 99% of you don't need a production company, you just need the single best tool. And for the 1% of you that need a production company, have at it. And my guess is that the number of people who will need high end production services will go down as the tooling gets better. And the question's like what's the rate of change? I think you should absolutely take advantage of the moment of time where you can arbitrage it As long as you don't assume that that wedge exists forever. 

Elizabeth: Cos even for a company like ours, you know, our core business is not in doing interviews or content, right. But we still put a lot of money on it and hire a lot of people on this. And so if we're talking about switching from this contractor to them, we might do it. 

Charles: I just think sometimes it's good to remember that not all switching costs are economic. There's like -

Beck: Correct.

Charles: - reputation, trust. there's a lot of things that usually have to happen to switch vendors. 

Charles: I just know enough people like Josh who do this for a living who tell me, all of the problems are not in tooling, it's in workflow and coordination. He seems very focused on kind of boiling the ocean. He's like, I'm just gonna do everything for you. And I think that's to me the right answer. Whether it should be delivered as a professional services offering or product, I'm unsure. You make a compelling case that professional services is the revenue maximizing thing in the interim, and that might buy you the lead that you need along the way.

Beck: Thank you.

[crosstalk]

Beck: Thank you. Good job everybody.

Pascal: It feels like it's 10 pm because there's no lights.

Beck: It does. 

Edward walked out of the pitch room with a $50k commitment from Charles Hudson…and potentially some new customers. After the break …. [AI Josh] AI Josh takes over… and things.. get existential.

BREAK

[AI Josh] Welcome back to The Pitch! This… is AI Josh! I sound pretty good, right? Podcast AI gave me my voice, hello world! Ready for a generative discussion? 

[Real Josh] Okay… stop. Real Josh is back with only high quality farm fresh puns. 

I, human Josh circa 1987, and Lisa, also human circa 1987, caught up with Canadian human Edward a few months after the show to hear what happened with Charles. But first -

Josh: What was it like pitching on our show? You only had two weeks to prepare. 

Edward: it was pretty interesting, like, just seeing how it was like a studio production. It wasn't just a normal podcast. 

Josh: Two guys on a microphone. in a garage. 

Edward: Yeah. But there was so much going on that I'd really just been preparing the morning of and like, it worked out amazingly. Cause what, like, When we got out of the actual pitch And you had that audience David K from F four Fund he just walked up to me and he was like, uh, that was like amazing and So I met him and they're in for 200,000 on our fund. 

Josh: Stop. What. Oh my gosh. So you wait, hold on. You raised more money technically outside of the pitch room.

Edward: Yeah. 

Josh: In the room just outside than you did in the room. 

Josh: That's, that's amazing, Edward. 

Josh: So after the show, it seemed like things were moving really fast with your round. it usually takes a couple of weeks to meet with the investors, to hash out all the details, but you emailed Charles almost right away. And you were like, Hey, we're wrapping up the round. Are you in or what? Am I getting this correct? 

Edward: Yes. 

Josh: Were things really moving that quickly? Or were you playing the FOMO game to get him off the fence? 

Edward: No, it was uum, Launch we thought they would go in for 500. Uh, it turns out they're going in for a million. 

Josh: Ah

Edward: yeah, so that's pretty cool. So I just started telling everybody, Hey, we're getting the round done.

Lisa: Oh my gosh 

Josh: So Charles invested 50, 000? 

Edward: Yeah, he, He was like, yeah, I am in. and then we met after. Yeah. 

Josh: okay, so like, You got a million from Jason's launch. You got 50,000 from Charles Hudson, 200,000 from David Kaye does that close out your round?

Edward: Well, we have, the pitch fund. for 75. 

Josh: Yeah, I hear they're great over there. 

Edward: Great guys. 

Josh: And gals.

Edward: and gals! 

Josh: So that's it? That's your round? 

Edward: Uh, the total, I think it's going to end up like 1. 5, maybe on the top side, it'll end up to two, cause there's some people that want in, but we're still kind of thinking about it. 

Josh: You did end up having a call with Charles after he invested. Uh, what did you guys talk about? It's not like he had more diligence to do.

Edward: At that time we were, you know, some people were talking to us about, hey, maybe you guys should raise more. 

Charles: Look, I think one of the biggest mistakes I see companies in our portfolio make is they take 2-3 million dollars and it’s very hard to have 2-3 million dollars and not have it magically all disappear 24 months. Everyone’s like oh, don’t worry, we’re only going to spend the one million, we’re going to put the other two on the side and not use it and miraculously, I find what happens is, people go, well, there’s this engineer that we’re gonna hire to work on this other thing that we’ve been thinking about for a while. And because we can afford this person, we’re gonna hire them. And you get mission creep. And you get. And again, these people are amazing, talented, but you end up hiring people that you don’t absolutely need in that moment essentially cause you can

Edward: Because you don’t have a tradeoff to make because you just have the capital

Charles: You don’t have a tradeoff. You relaxed one of the constraints for an early stage company which is like, uh, small teams with limited resources can only work on the most essential things

Edward: Right

Charles: I’d also argue that like, when you need a few million dollars, you will raise it on much better terms

Edward: Yeah 

Edward: which I think was excellent advice.

Josh: Yeah, I guess if you've got the money you need, then your time is more valuable than more money.

Edward: Yeah, because ultimately, the money is just a tool to be able to keep growing and grow the business. And that's, in the end, that's what it's about, right? 

Josh: Yeah. What's it been like having to do the sales fundraising, like run a company, all of it. Like, I know like you're a, you're a builder, so like, do you just want to go back to computer camp and write some more cool stuff?

Edward: it's a lot of work. I've, I've never. I've never worked this intensely in my entire life which is a good feeling. And on top of that, like move to California, so much stuff happening. 

Josh: Wait, when are you moving? 

Edward: Basically in April the plan was always Bay Area because of all the synergies over there. 

Josh: ~ synergies ~

Edward: synergies, Yeah, I use the word synergy. Um, all, a lot of customers are there. There's a lot happening there, especially, we're in AI so, you know, that's where a lot of the talent is 

Josh: Well, uh, this is cool. I'm excited to be invested and be on this journey with you guys. We clearly understand the problems you're solving and we can't wait to, uh, use all the new features you guys are rolling out.

Edward: Awesome 

Josh: Except, I think producer Anna Ladd has some beef with you. 

Edward: Ah. 

Anna: Hello look at me on mic.

Josh: I’m excited to introduce Anna Ladd, producer extraordinaire, making a comeback

Anna: I thought I had retired but I’m back baby

Lisa: Yes! 

Anna: I used to be a producer that talked, but now I am a producer that lurks.

Edward: I’m merely the conduit 

Anna: When I first saw like the lineup of all the companies pitching and I saw podcast AI on there, it sent some real shivers down my spine. who's this guy? And is Josh investing in a company that's going to replace me? I don't know like anyone in a creative media job that isn't anxious about AI, and I'm curious if you have like come up against anyone who is hesitant to use the product for that reason. 

Edward: So there are some teams that are kind of worried about it. It's like, is this thing going to replace me? And it's, you know, There used to be a lot of people in farming, like, that was a massive part of the economy. And they're all like shoveling with picks and stuff like that. And people came along and said, Hey, here's a tractor. It can do what a hundred people do and still needs a person driving the tractor.

Anna: I think the, like the anxiety of the creative person is like, I love the artful task of figuring out just how many ums to keep in an episode, to make it sound natural, but not annoying. And I just feel like the AI can't do that 

Edward: So, there is, and this is a really good insight about the first generation of AI products. for example, the V1 of our clipping. So essentially what we're doing is we're detecting the top ten moments that are interesting in the episode, and then we turn those into clips. and that's not as good as a human that's being paid $500 a clip to make a really great clip. And if you think of what a human does, a human does a first draft.

Then takes a look again and remixes and takes a look again and remixes. And that's where we're moving to with, with our models, like actually taking multiple passes on stuff. And so what's, what's going to be happening with the V2 of our, of our clip generation is instead of just picking one passage, that's really interesting. Identifying a whole bunch of interesting passages and then kebabbing them together into like one theme. And that's something you have to do in multiple passes on an AI or it's not going to work. And so, the trick to having that human like quality to the output, is making the AI do what the human does, which is everything is iterative 

Anna: That's scary again. 

Josh: I feel like you're making the case for why Anna should be concerned. 

Lisa: I don’t know if that helped

Josh: You’re making it worse. 

Lisa: Spiraling quickly.

Anna: I guess my actual question is Is like, how do you think about balancing like the present you're coming for me fear with the like, this could make my job so much easier excitement all in the same person?

Edward: in practice I don't think a producer has to worry. These are tools that are going to help them. these tools, like they don't start out, you know, As the vision that everybody kind of sees coming, right? So we can kind of see this could one day replace a producer. Sure. But they're not there just yet.

And so for the actual producers, It's going to reduce the amount of work. someone still has to be in charge. Like an airplane could fly itself, right? It doesn't really need a pilot, but nobody would be comfortable with that. Any professional podcast or show is not going to be okay with, Hey, this is completely conductorless. Someone has to be there to check. 

Josh: Now that you've been through our entire process and you see how much of a, in your word, how much of a production it is to make the show. How much could AI actually replace from our workflow? 

Edward: Zooming out to what you're talking about Okay, so I don't know if you guys follow this stuff, but Akira Toriyama just died. He is the -

Josh: A what? Can you say that again? 

Edward: Akira Toriyama. He's the artist behind the cartoon or anime series called Dragon Ball 

Josh: Yes, I'm familiar. 

Edward: Yeah, and so he just died, and he finished drawing the original Dragon Ball like in 90, I'm gonna say 94, 95. But recently, in the past five, eight years maybe, there was this new thing called Dragon Ball Super. He was overviewing it and giving it his blessing, but somebody else was drawing it and actually doing it. And there are some people where I want it to be 100 percent the real thing, right? It has to be Josh. You know, I don't even want to read copy if Josh didn't write the copy. But the truth is, for 99 percent of people, what they really want is, Josh sanctioned this. This is authorized by Josh. It could be a synthetic reproduction of your voice, or maybe it really was the audio of you, but the video is actually a synthetic recreation. but people will be okay with that. Because you've authorized it. It's coming through the official channels. And that's really where producer Anna comes in, right? Somebody has actually checked this to make sure, hey, this, this actually does feel like the real thing. This does look legitimate, feels legitimate. This is our brand. This is the message we want to put out. 

Josh: Wait, so Anna decides what is authorized by Josh? 

Edward: Well, Josh decides, but Josh can't look at everything. That's why Josh hires people. 

Anna: But I like to make the stuff that gets authorized by Josh. 

Edward: Look. In the end, an incredible amount of the content that you see put out is going to be in one way or another synthetic or enhanced. I mean, you know, magazine covers, they've always been photoshopped. 

Josh: yeah

Edward: We're just going to get used to this. Like you watch a movie and it's like, Oh, that's not a real explosion. Nobody cares. the artists put that out, right? That's the product. 

Lisa: It's definitely interesting. I've thought about this a lot with like art and AI. And for sure, the artist is still the creator no matter what the tools are that they're using. But I do think that the art becomes more valuable when it is just the artist. But I see what you're saying too, because we write episodes for the pitch, and it's not just Josh writing his narration, right? We're all collaborating Anna's writing stuff for Josh that Josh said, but we're all trying to write in his voice. So that's very similar to AI It's just a tool doing it instead of a team collaborating 

Anna: I wish I could have been in art school during the AI era 'cause I would've been so annoying and it would've been so fun 

Edward: Well, let me put it this way. The, the AIs aren't people yet. Okay.

Anna: Yet 

Lisa: Yet?????

Edward: They’re not people yet 

Josh: Well, thanks for spending so much time with us on this call and for coming to pitch us in Miami. Seems like it really worked out well for you. 

Edward: I think so. It was really, from our perspective, kind of the start of our raise, like, really happening 

I mean, frankly, the pitch is what really started getting it going. I think, cause we had a bunch of, interest, but we were not actively running a round yet.

Josh: you're welcome. 

Lisa: That's awesome. 

Do you guys think he’s right? Would you all be cool with an AI host, as long as I signed off on it. While we’re at it, let’s just replace the investors too.

AI Charles: We’re all just pattern matching, after all… And with that? I’m in for 100k! Real Josh can hold me to my AI investments

This is the distant future we’re pontificating about. In the meantime we’re obviously very excited about the tools Edward and the team are building.

And if AI’s coming for my job, I at least want to be invested. in it.

If you want to try chatting with the AI versions of me and the investors, head over to pitch.show/AI and tell me what you think. 

We’re one month away from our next pitch event! We’re coming to San Francisco. VCs, angel investors. We’ve got a few VIP spots left for you. Secure your ticket thepitchevent.com. And founders, if you haven’t applied yet, what are you waiting for!? Applications are closing soon. Go right now to pitch.show/apply 

Next week on The Pitch…when a TikTok trend becomes a startup

Emily: I am the founder of Robecurls, the heatless curling headband. Now with only 90 seconds of effort, you can create curls that last five times longer than your curling iron, with zero heat, zero damage, and you can do it any time, anywhere. As you can see, I'm wearing it right now.

Jillian: I would think, and forgive me if I sound kind of cheeky here, but it'd be really easy to rip this off.

Emily: Oh. Yes. We were one of the most counterfeited products on Amazon, let alone knocked off. 

Beck: That sounds expensive. 

Mac: So as the only person probably on this side of the hemisphere that has a whole thesis around tools in the haircare space -

Jillian: No!

Beck: Whoa! What?

Jillian: What?

Beck: What? 

Mac: I'm the guy in the room. Nobody wants to hear from the guy about [inaudible] tools.

Jillian: Oh, I do want to hear the guy -

Beck: We do. What is your hair position -

Jillian: Yeah. Go, Mac!

That’s next week on The Pitch. Subscribe now and be sure to turn on notifications so you don’t miss it.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, Jackie Papanier and Alma Langshaw. With casting help from Peter Liu and John Alvarez.

Music in this episode is by The Muse Maker, 1939 Ensemble, Graham Barton, Base Collector, Tree Ties, Greg Jong, FYRSTX, and Breakmaster Cylinder 

The Pitch is made in partnership with the Vox Media Podcast Network.