Invest Like the Best with Patrick O'Shaughnessy
00:34:47 · Noah Shinn
And there might be traffic, so let me check the app to see how much traffic there is to see when I need to order. Instead, what if it was just proactive behavior? A car will always be lined up, and you will never be late because it's gonna calculate traffic. It's going to find these things. What would that do to Uber's business or any rideshare business if now the default for existing riders that love Uber or love Lyft or or any other rideshare business? What would it be like to have productivity now make the friction to have access to that good or service to be nearly zero? I think that that will result in that 30% looking a lot bigger. You talk food delivery service. Maybe you're coming home late off of an airplane and you need to be at your house and you haven't eaten yet and it just texts you and it says, are you hungry? Do you want the same thing that you ordered yesterday or five days ago? I can send it to your house. I know you're in the Uber and you'll get here at this time. So with very little friction, what will that do to the total transaction volume or the amount of times that a user interacts with the business? I actually think it'll go up. So it's this interesting game, interesting transition period between users spending a lot of time on apps, like, painfully spending a lot of time on apps, and that being a monetizable surface because that's where the user's attention is, to users actually interacting with the business even more, which is counterintuitive, actually interacting with the business more because the friction to do so is actually much less. So I think it'll be this interesting game. All these various industries are going to move in a different way, and we hope on our end the way to approach any big change like this is not to come in hot... We're a new company. We're just getting started. Not to come in hot and immediately just start disrupting certain businesses, but go to them and just say, this is what we think your business looks like. You guys certainly know what your business looks like. This is how users on Instinct are interacting with your business now already. What can we do in collaboration to make that a better experience for both sides where it makes sense for your business It makes sense for our business, and it's just a much better experience for the end user.
00:36:44 · Noah Shinn, Patrick O'Shaughnessy
That is something that we're exploring and we're learning across so many different industries. [00:36:48] S1: If you think about the things that traditional companies can be doing now to prepare themselves for an agent rich world, Let's just pretend half of Americans or something have an agent that's doing all the stuff you just described, which sounds incredible and magical and very democratizing. That's something to highlight. This is gonna bring to everyone capabilities that have been rare or expensive. I think that's a really cool feature of agents in general, but we can come back to that. What kinds of businesses are gonna thrive in that world? Like, what should businesses think about doing to prepare for that world to be successful in it, do you think?
00:37:23 · Noah Shinn
[00:37:23] S2: I think it comes again back to that breakdown. That's why I was doing that exercise the other day, which is just where is your revenue coming from? What proportion of that is the user spending time in your app? What proportion of that is the user having access to the underlying service? And it's clear if your business benefits from more transaction volume even at the cost of less time on the application, then you're gonna be in a really great spot because Instinc is gonna make it a 100 times easier to do that. And if you're in a spot where nearly a 100% of your revenue is due to the user's attention, in a lot of cases, against the will of the user and what they want to do, and there's so many games that... Or so many malicious product building almost trying to convince the user against their will to use the application more, we're thinking about a lot of these social media companies that the user, they don't feel happy when they're on the app. They're unwillingly giving their time to the app, and they can't get off, they keep scrolling. But it's because that underlying business is benefiting from the user's attention. It's almost liberating for the user. Again, this is why it's so important for Instinct to act on behalf of what's best for the user because it's able to deliver experiences like this where you can actually liberate the user from from being sucked into these infinite scrolling moments like that. Any blanket advice is probably not well thought out. I think it's a case by case basis, and it is certainly different within different industries. Very practically, there are early partners with very innovative CEOs or other executives that are really thinking ahead, and they're willing to be early partners. What we're discovering is, like, a playbook for how every business, no matter where they exist along that risk curve, can kind of discover, honestly, what are the risks so that they have a little bit of data to be able to work with, and then we can work together on finding ways where we can land in a happier spot for both sides. One of those things is you don't have to go all in. You don't have to say, let's just turn it on. Let's just go, and now you see 70% of your revenue going to zero, and then now you're stuck in this odd place. You can mitigate the risk. You can scale down the experiment.
00:39:13 · Noah Shinn
You can run AB tests to figure out, okay. If we enable this certain thing across 1% of users or something like that and we find how they interact with the business, and does the user like it more? Is it a more enjoyable experience? For the brand side too, does the transaction volume go up? Does the willingness to buy the product or access the product itself? There's a lot of work in product discovery too. There's a lot of times the user... They want to buy something, but they can't find it. So does that actually increase the user being able to find exactly what they want? So I think doing scaled experiments here is a really great playbook to run because you can scale the risk accordingly. At the end of it, you get the data. It's proportional data, so you don't have to run it across your entire user base. And that's what we're finding is really working so far. Again, it's still very early, so we're still discovering this in real time.
00:39:57 · Patrick O'Shaughnessy
[00:39:57] S1: Before I ask more questions about the world reordering nature of personal agents, I'd love to take a little side quest in the conversation and talk about what it takes to do all this, to provide all this. I wanna hear about what's been hard about building this, the technology itself. I wanna hear about compute. I think you said to me at some point that you spend a big chunk of your time just thinking about compute right now. And maybe that's different five years from now, but certainly in the moment when you're growing fast, this is a really important thing. I'd love to hear your thoughts on that. Talk us through what it's been like to build instinct itself and the key and hard things to do so. Maybe before we do that, just because I'm remembering all of our conversations, it would be helpful for you first to frame up what you want it to feel like and why it's so important to you that it has this distinctive quality and performance before we talk about then how you deliver those things. So maybe first just say a quick word on that, like, what you want Instinct to feel like as a product.
00:40:51 · Noah Shinn
[00:40:51] S2: I could talk all day about this because I think that is so important. And, honestly, as a product builder, it's, I think, a new muscle to flex and to build. But thinking beyond capabilities is something I really wanna push here. Over the last three years, we've seen all these different product launches and new products and saying, AI can now do this or AI can now do that. And did you know that it can do this thing because of this, like, small technical thing that happened under the hood? And I think the consumer is first, like, fatigued by all of this. They don't know how to access it. And then second, I think we're missing the point. So early on, actually, one principle that we held was let's not focus on capability. Let's only focus on understandability. So how much does a user understand about what's happening? What is their ability to predict? What will happen when they ask this or when they do this or when they interact with it in this way? I think that that is one of the major angles or factors that has led to engagement numbers that are completely off the charts or the viral word-of-mouth growth that is happening at 10% a day. It's understandable. For lack of a better word, it should just feel good in some way. In the way that it communicates to you, the purpose of communicating or sending a text message is not just the meaning of the text itself. It's down to underlying even what is the shape of the text message itself, and how will the user feel when they see that. If you see a big blob of text that requires the user to scroll a little bit to find what the next message is versus maybe you front load some of the information so that the user really gets it in the first 30% and then can optionally read the rest. Thinking about how the user might read or even read patterns. The way that most people scan big chunks of text, they might read 80% of the first line and then 50% of the next line, and then it tapers off so it looks like a flag. That's a consideration that should be made. Instinct has the ability to think about things like this. Okay. The user is going to spend most of their time reading the first two lines and then certainly the first part of each line. So how does it craft its message to deliver in the lowest fatigue way or with the least amount of cognitive load placed onto the user?