Invest Like the Best with Patrick O'Shaughnessy
01:05:12 · S0, Patrick O'Shaughnessy
[01:05:12] S0: Do you want [01:05:13] S1: it to have a personality that's distinctive for each person? Like, I'm thinking now of the movie Her where there's this relationship that forms between this omniscient, omnicapable agent and the user. I think of instinct as this seamless, almost quiet, extremely capable, reliable thing, but not as having a cheeky personality or something. How do you think about that component of the product?
01:05:37 · Noah Shinn, Patrick O'Shaughnessy
[01:05:37] S2: Well, you mentioned her, I guess, comically relationship building or anything in that area is not something that we want instinct to do or to pursue or to develop with users. If I describe more about what it should act like and feel like and represent within the person's life, It's almost like that socially aware operator that knows no matter what room that they're in, what is the best for different people and what is the best interaction pattern, and it learns that over time. So if you even call this an app, it's one of the most customizable apps ever because we're not just able to serve different versions of it. It's able to evolve over time. That's why we put so much care into the softer pieces. Right? Pick up on when the user didn't like it being said in this certain way, or if there's a lower response rate in this certain way because it's just too much text or it's... They don't want to look into a huge file to be able to know what you're talking about, it's going to learn those over time and just become easier and more delightful for the user to use. We're not trying to impose certain experiences onto users. We want to solve this more from a higher level. It's just ability to adapt to exactly what is the best communication style and task execution style. [01:06:43] S1: Why is it called instinct?
01:06:43 · Patrick O'Shaughnessy, Noah Shinn
[01:06:43] S1: Why is it called instinct? [01:06:44] S2: Instinct, liked as a name for so many different reasons. I think the main thing is that instinct should not be this playful thing that you might bully once in a while and that you, like, think downwards on and that it's like this thing that only takes the dirty work off your plate. And it's this new creative, exciting, confident actor that there's, like, mutual respect and trust, and they feel safe, and they trust that it has their back, that it's intelligent, that it's competent, that it's socially aware to know how to act in certain situations. And it's a bet. But I like that instinct is not named someone's name or something like that to try to personify it into, like, a human. I don't even know what an instinct is. I develop my feel for what it is and for what the brand is through just using it. And, again, towards really thinking about this feeling of what it should be like, it's a benefit that every user is able to come into it with a fresh slate. There's no prior in their mind about what looks like or what it's named or anything like that. It's purely through the product experience itself. [01:07:41] S1: Who are your enemies and allies? Like, I can imagine in WhatsApp or something, you could get shut off. That's a Facebook product, and it's a key channel for you. IMessage is an Apple controlled product. Like, who are your friends? Who are your enemies? How do you think about some inevitable competitive realities here?
01:07:41 · Patrick O'Shaughnessy, Noah Shinn
[01:07:41] S1: Who are your enemies and allies? Like, I can imagine in WhatsApp or something, you could get shut off. That's a Facebook product, and it's a key channel for you. IMessage is an Apple controlled product. Like, who are your friends? Who are your enemies? How do you think about some inevitable competitive realities here? [01:07:57] S2: I would focus less on Instinct is an iMessage app or Instinct is a WhatsApp app or something like that And more about... Just very grounded from first principles. What are the interfaces that users trust today that they're familiar with interacting with today, and how can we deliver the experience of Instinct through the channels that they already interact with every day? We're not pinned to iMessage. Actually, more than 50% of our traffic doesn't actually run on iMessage itself, but certainly users that are comfortable with iMessage are very familiar with it. I think it's just more about thinking about what is most practical for the user, and we're going to shape shift as we see towards just delivering, again, that very simple, easily accessible, zero friction experience that it is today. [01:08:40] S1: I know your latest round is something like a billion dollars at roughly a $10,000,000,000 valuation. Some of the best investors in the world, Sequoia, Benchmark, Kotu as the leaders of the round. How do think about the future capital needs of the business alongside this, and how did you pick the partners that you picked?
01:08:56 · Noah Shinn
[01:08:56] S2: I'm just very lucky to be able to work with some of the most supportive partners around the table who have been through different but similarly shaped technology transformations in the past. And I would focus less on the numbers and more about on the demand in the space, the demand for a product like this or the demand for an experience like this. It's delivering on that AI experience or that product experience that we've all been waiting for. And so it's also capital intensive. Right? We're a new company. Right? We're trying to create something that's going to hopefully be distributed to billions of people on the planet every day and at a very affordable cost. When I say affordable, I mean, compute costs are high, and we're trying to deliver it in a very affordable way to our users. So it's just very capital intensive. There has to be some boot shopping, especially if you think about the business model that we're chasing after because we could very easily just say, hey. It's going to be a certain subscription, everybody on the platform needs to pay a $100 a month. There are shorter term rewards that we can chase after, or we could raise a little bit of capital, take a certain calculated risk towards... If there are small speed bumps that require a little bit of capital to get ahead of, to be able to prove transaction volume or to prove experience across certain industries, that's how you escape these local optimum of the subscription plan or other things like that.
01:10:10 · Patrick O'Shaughnessy, Noah Shinn, S0
[01:10:10] S1: When I do these, I ask the same traditional closing question of everyone. What's the kindest thing that anyone's ever done for you? [01:10:16] S2: I've been able to surround myself and be able to build such great relationships with so many different people, whether it's in the industry or outside the industry and where I work or in my personal life that I'm very grateful to be around. And hopefully, certainly, I can also extend the same level of kindness and thoughtfulness towards them as well. I know I'm not answering your question. It's more on a higher level. It's just the qualities of things that I noticed that I really appreciate. [01:10:39] S1: Noah, you're building a fascinating company, maybe the most fascinating company of today's AI ecosystem in the world. Thanks so much for your time. [01:10:47] S2: Thank you so much. [01:10:48] S0: If you enjoyed this episode, visit colossus.com. You'll find every episode of this podcast complete with hand edited transcripts. You can also subscribe to Colossus, our quarterly print, digital, and private audio publication featuring in-depth profiles of the founders, investors, and companies that we admire most. Learn more at colossus.com slash subscribe.