#342 Pitching Sequoia: How Edward Brawer Built a Viral AI-Driven Podcasting Platform

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Mehmet: Hello and welcome back to a new episode of the CTO show with Mehmet. Today I'm very pleased joining me, Edward Brawer from Canada. Edward, the way I love to do it is I keep it to my guests to introduce themselves, tell us a little bit more about you, your journey and what you are up [00:01:00] to currently. So the floor is yours.

Edward: Uh, thank you, Mehmet. Uh, pleasure being on. Uh, so I'm Edward Brawer, uh, founder, co founder, CTO, uh, CEO of PodcastAI. Uh, so we're a podcast automation platform. Um, and just to tell you about myself, uh, been building websites, apps, um, software, uh, for the past, I'd say 25 years. And, uh, yeah, this is, I would, uh, my second startup, but my first venture, uh, venture funded startup.

Edward: And, um, yeah, that's, that's basically my background. Uh, and, uh, to, to make it more political, I'm a Mac user.

Mehmet: I'm a Mac user too. Like, uh, once, once you flip, you can't go back. It's my own opinion, of course, all respect to the other folks out there. So, uh, Edward, like, you know, when I was preparing to, to, for this episode and I see like you've done, you know, in your early career, some [00:02:00] transition from having a, uh, completing like an undergraduate degree in biology and then shifting and pivoting to technology.

Mehmet: So what was the main thing that attracted you to do this major change?

Edward: Yeah, so I was, you know, from the start just working on computers since I was five using my dad's Mac SE. Um, and then from there just making websites, I think I did my first website in 97, uh, and then from there I learned how to do PHP to have more interesting websites, of course, and that was about the time I was, uh, going to enter university, um, for those that know Waterloo is, is the best, um, University in, in Canada for computer science.

Edward: Uh, but I went into biology because I thought I wanted to be a doctor. Uh, it turns out I didn't. Uh, and I already, you know, knew how to program. I didn't, I didn't figure [00:03:00] I needed to, to take a CS, uh, uh, degree. Um, one funny story is, so, uh, you know, in my dorm, there were all the, uh, the engineering and computer science students.

Edward: And typically they would, they would start coming to me once they then knew I knew how to program. They would ask me for help with their, um, with their, uh, uh, their work that they had to do in first year. And, you know, I'd ask them, like, I don't understand you're in computer science, like, why are you coming to me to help you, you know, do software and, um, you know, what they would say is, oh, I thought they would teach us how to program and, you know, I had to tell them, like, Hey, guys, like, you're in the faculty of math.

Edward: You're going to learn algorithms. You're going to learn, like, some really conceptual stuff. You're not going to. You know, they expect you to learn this stuff on, on, on your own. So anyways, you know, by second year, they, they figured it out. But, um, uh, I ended up working actually with my grandfather's [00:04:00] cardiologist, uh, and just doing medical apps with him.

Edward: Uh, and you know through that I realized I actually did want to stay in doing software and not actually go into medicine

Mehmet: That's a you know For me, it was not like that big shift. So I shifted from electrical engineering to computer engineering and you know I had the same thing like I thought okay from day one We're gonna like be in front of these screens and we're gonna start to write code, which is not the case Of course So, and yeah, uh, the biggest, uh, surprise for me, like I thought after finishing high school, I get rid of math and, you know, the topics that I didn't like in science forever.

Mehmet: But the surprise was no, like you still have to do now, you know, fast forward. To your latest startup, right? So, um, [00:05:00] which is podcast AI. Now it's a common question that I asked every time I have a founder with me like you, Edward, I'm sure, you know, there was some moment or maybe a series of events. that led you to see that there is a need for what you have built.

Mehmet: So, um, I love to hear these stories because, you know, when we talk to any founder, we say, okay, what problem are you solving and why specifically this problem? So I would love to hear these, uh, you know, stories from you, Edward, and tell me more. Why you started podcasting?

Edward: Yeah. So, so the story it's interesting.

Edward: It goes, it goes a little bit farther back than just realizing what, what product was needed. Um, so, so me and my co founder, we were working on our previous [00:06:00] startup, um, which was doing okay, but it wasn't doing like venture type numbers or growth. And, uh, You know, I'm, I'm a fan of the all in podcast. A friend of mine introduced me to it.

Edward: So the all in podcast, for those of you that don't, that don't know, it's the number one, uh, tech podcast. Uh, and it's Jason Calacanis, David Sachs, um, uh, Chamath Malayapatiya, uh, and, uh, David Friedberg. And. I, about a year ago, this is after ChatGPT came out. Um, I started playing around with the text to speech models.

Edward: And I realized I could actually do their voices. And what I actually ended up doing is, uh, creating a parody episode of the All In podcast. So I called it the AI podcast, and I posted it on Twitter. And, you know, the premise was the four of them were reborn as a eyes and there, um, and it was pretty good cause it was like their usual dynamic, but a parody and it was pretty successful.

Edward: It got retweeted by them. [00:07:00] So it went really viral. Uh, I think the first episode alone had 600 K views. Uh, and I ended up doing six of those podcast episodes, those AI based episodes. Um, and the third of them was even a visually animated Elon Musk in there. So he became one of the characters in it. But, uh, you know, people were asking me, Hey, is this real?

Edward: Is there a GitHub repo? Can you publish it? How are you doing this? And at about the same time, uh, Jason Calacanis. So he's, so for, for those of you that don't, that don't know, he's, uh, the fourth investor in Uber, um, Calm and a few other companies, uh, that are really big and He has a, a, an accelerator, sort of like Y Combinator, but it's called launch, but he has an on ramp to that accelerator called, uh, Foundry University.

Edward: And so somebody who, uh, on his team, Presh had been asking [00:08:00] for applications to Foundry University and, you know, Sean and I, we just, We found the domain name, uh, podcast. ai. com. We bought it immediately. I was 10, 000, you know, and if you had told me 10 years ago, I'd buy a, uh, a domain name for 10, 000. I'd tell you you're crazy, but, um, we just looked at each other.

Edward: We're like, yeah, this is the perfect domain name. Uh, and we incorporated, so this is about a year ago. Uh, and we got into founder university, uh, and. That's when we were sort of working through, you know, the, the goal or objective of, of the company is to be able to create entire episodes synthetically. But then we started working through the problem of, okay, to get to that goal, what do you have to do?

Edward: Well, it turns out. A big thing is transcripts. So we can get a sample of a person's voice and we can create content in their voice. Um, but also we could get the transcripts of all their past podcasts and we could fine tune an LLM on that. And that way we could actually get [00:09:00] an LLM sort of speaking quote unquote in the voice, as in the text, uh, the way the person would speak.

Edward: And so that when we realized that was the premise, then we said, okay, what can we do? That's interesting here. Okay. And, uh, so Jason Calcas has another podcast called this weekend startups. That's been running for well over a decade, I'd say probably, you know, close over 15 years, even at this point. And it's one of those OG podcasts that covers startups.

Edward: So very interesting, like people from, uh, you know, you know, you see, you see all the, all the huge companies today, like those founders were on this weekend startups. So kind of like this show, but earlier, and, uh, you know, there's 1900 plus episodes and his problem was maintaining a website for that was nearly impossible.

Edward: So what we did was we made it so that podcast AI would have a backend where you could upload all those episodes, transcribe all of them and [00:10:00] automatically create a website. For the show. So this week in startups. com is powered by us and it gives you a vector search into all the past episodes. Um, and then that's when we started talking to, um, to their team and their, their podcast producer and some background on myself and our CTO.

Edward: Uh, we're, we're also podcasters with produced podcasts, um, been on, been co hosts on them. So a lot of experience in that domain, but also talking to them, we started realizing, okay, so we have all your episodes in our system. Uh, we're generating that website for you. We started doing that. Like narrowing down on what we could do for those websites.

Edward: Uh, but then we realized, okay, they're spending 30 minutes doing chapters for their episodes. We can make it so you just press a button and with an LLM, we can create all those chapters. Um, and so we implemented that as a feature. Uh, we got some, uh, YouTubers that I know. Using it for chapters. And then they were saying, Oh man, I wish I could be on Apple [00:11:00] and Spotify.

Edward: I just don't have time for that. And we realized, Oh, we have all your episodes in our system. We could just generate a feed. So he's added feed hosting. And so as we, as we went on, we started adding more and more features that people were asking for and what it turned into was really end to end automation of.

Edward: Podcasts and podcasting. So automating all of those, those things that take so much time, uh, generating social media clips, uh, we're adding push to YouTube. We'll have that in two weeks. So really, really doing all that stuff. And then we started working back on, okay. Uh, here's a few people that have a blog and that blog actively let's turn their blog into a synthetic podcast using their voice.

Edward: So we're, we're, we're merging back into that, but with, but with the backend of an entire podcasting SaaS platform.

Mehmet: That's very interesting because I was expecting something like this to happen. Even myself. Last year, um, you know, of course, chatGPT was still new. [00:12:00] I experimented. I know it didn't get any track cause I didn't, I just posted on, on the podcast platform itself.

Mehmet: I didn't promote this. So I prepared set of questions to chatGPT and I used, uh, What was that, uh, TTS that was, uh, uh, very famous last year. That's still, it's famous, uh, 11 laps. Yeah. So, so, so I took the answer from ChatGPT. Of course I did it manually. And then I recorded an episode with ChatGPT and, you know, I just wanted to, to, to explore, but then I find the idea a little bit silly.

Mehmet: I didn't want to take more. When Gemini, which was called Bard, I had this idea of. having these two, you know, Chad GPT and Gemini talk to each others. And then I found out that actually someone did that, you know, but not as a podcast, just they recorded this [00:13:00] freaking video. Maybe you have seen it, Edward, where they were like putting a conspiracy theory that AI gonna go and take over the world.

Mehmet: Nevertheless. Um, so for me as a podcaster today, it worked like What would be like, you mentioned automation and I'm a fan of automation. So apart from doing many things in less time, how does it help from, you know, also, because when I'm asking the question, because people like whenever now we are using AI, they said, okay, where is the authenticity here?

Mehmet: You know, how I can leverage your platform while keeping also authenticity and, you know, without like letting people feel that, okay, everything is generated by AI.

Edward: Yeah. So this is a very common topic and question, obviously. And, you know, the answer is that what's going to be What's going to become important in the [00:14:00] age of deepfakes is provenance, because that's really the only marker that you have, um, to, to really, you know, discern from what's canon and what's, you know, fanfiction.

Edward: So, uh, an example. So this is the CTO show. I assume there's a fair number of, uh, Trekkies out there, uh, in the audience. Um, you know, there's tons of, uh, Star Trek. Content that is fan fiction, right? So, uh, and a lot of it, but because it's not canon, it doesn't have the distribution through official channels and people that are looking for it.

Edward: Sure. They can consume it, but most people won't simply because it's not the official content. And so, you know, take in the age of deep fakes and synthetic content that really becomes important. So for example, a celebrity, if they put out a statement, that statement is very unlikely to be written by that celebrity.

Edward: It's probably written by their press person. Um, so, but what's important is that [00:15:00] it came out through the official channels. Um, and then if we look at it through, you know, in different ways, uh, movies, right. CG. Um, now. Nobody really cares whether, whether they're made synthetically or whether it's really filmed on a film.

Edward: Um, and so that's really going to become the mindset, right? It's going to become, is this official content? Does it have the provenance because anybody's going to be able to create an episode of Joe Rogan, but it's only the Joe Rogan experience. If it's Joe Rogan in there and not, you know, uh, something that was.

Edward: Put out through, through another channel or, or rather, sorry. It's only Joe Rogan. If it came through Joe Rogan's actual podcast and actually it might even be synthetic, but so long as it has that seal of approval, it's, it's, it's just as good.

Mehmet: So [00:16:00] what I understood from you, Edward, like, And maybe this is kind of not a technical question because you mentioned a couple of times, you know, the LLMs.

Mehmet: So is that, for example, and I'm, I'm thinking myself, you know, I'm not, I'm not that very, I'm not yet there. Hopefully one day I'll be, but let's say I would put all the episodes of the CTO show, Over there. And then I can kind of have an avatar that can act exactly the same way as me and ask my guests and, you know, also doing the comments, same as I'm doing sometimes now with you the same way is, is this like what it can can be done with the, with the, with the, you know, podcast AI.

Edward: Yeah. So what we have right now is, so for example, we would generate an entire website based on the show, it would have all the episodes and then there's an AI chat button that you can press and you have access to the Slack like interface where you're talking with, you know, the, [00:17:00] the AI you, and you can ask any question about the, the, the current episode and you know, it'll respond as you, you could even turn on voice and it'll respond in voice.

Edward: Um, and you know, that's just our V1 and what we're working on is actually making it so that, uh, you can have, so for example, we just hired, um, a top level iOS engineer, um, Sean Allen, he, he regularly does actually tutorial content and everybody consumes it to learn how to use the latest Apple, uh, technologies and APIs.

Edward: Um, and his task number one is going to be creating the world's greatest podcast app. And we're going to be able to have a Siri like experience, um, in terms of, you know, I want to listen to more episodes like this. I want another show with, uh, this guest on, can you summarize this, this, uh, this episode for me?

Edward: Um, and if those shows are podcast AI customers, then that summary is in first person perspective in the voice of the host. [00:18:00] So really authentic, but then the other thing he's going to be working on is you put on your vision pro or some other, you know, VR headset and you can have, uh, using Gaussian splatter, we can do 3d models of the hosts and you could actually, let's say you're listening to all in, you can be at the poker table with the four of them and you could even ask questions back and forth on top of them replaying the episodes.

Edward: So essentially the holodeck. So, uh, yeah, the, the, the tech that's, that's coming with this is going to be pretty insane. Um, but V1 right now that we have, yeah, you can go back and forth with, with yourself as a host.

Mehmet: So you, you mentioned also Edward, like the use cases are not just sometimes for podcasters, it can go even for the YouTubers as well, but let's keep, let's keep the focus on the podcast.

Mehmet: So from your perspective and from all, you know, the, the, the, the, The thing that you have built and maybe the feedback you received, because you mentioned like you received feedbacks a lot from, uh, some of the, of the users. [00:19:00] How do you see the future of podcasts? And funny enough, I know that in the U S in Canada and You know, some other parts of the world.

Mehmet: Podcasting has been there for a long time. Uh, in my area here in, in, in the Middle East. So podcasts just started to pick up, especially in the past two or three years. So I'm starting to see like more podcasts on the global level. We started to see also like more corporates doing their own podcasts. So how do you envision, you know, Your technology would affect podcast production.

Mehmet: So is it gonna, I would not say eliminate, but maybe reduce the reliance on some full house podcast production company to do it? Or is it going to still, you know, require Some production has to be involved. How do you, how do you imagine, you know, [00:20:00] the world in the future when it comes to podcasting?

Edward: Yeah.

Edward: So, so podcasting, you really have all levels of production quality. Um, you have people that are just doing a raw recording. They don't do any editing and they just upload that to a platform and that's it. That's their episode. And they don't bother with any metadata, like show description, show notes and stuff like that.

Edward: So that's your most basic level. And, you know, for that, the, the, um, the, the difficulty to start doing it very well, obviously, because it's, it's overall low effort. And then at the very high end, you have podcasts like, uh, the pitch or crucible moments. Um, you know, for example, these are all Fox media produced.

Edward: Those, those, those are the podcasts we would call like the highest end. They're almost like a TV show in terms of the production quality that goes in. And so. Podcast AI is going to make it so that the people that we're really putting in the lowest level of effort are going to be able to have a lot of the aspects of having a professional [00:21:00] production team because they'll have automatic descriptions, automatic chapters, automatic viral moments going out to their social media accounts, automatically having a website, so automating a lot of that stuff.

Edward: So it's gonna raise the the overall level of every podcast up um, and then for for Podcasts that are very high level production. It's not going to take that over, right? You're still going to have Um, you know someone heading production and orchestrating everything at the very highest level Um, but what it's going to do is just just um kind of up the level for everybody.

Mehmet: Yeah, absolutely Uh, you know just I can give example from myself because You know, when I, I started the podcast, I was just experimenting and, you know, I can tell you my first, maybe 10 episodes were horrible because I was doing solo by the way, that time. Horrible in a sense, of course, like I'm not saying I was bad, but I mean, I didn't put the efforts as you might mention, but, and then [00:22:00] I started to discover these things and yeah, like today I use.

Mehmet: Some AI tools that makes the job much easier. But from what you are describing to me, Edward, today is like, it's going to be like a one stop shop for doing everything for you. Like from preparing maybe the questions for the guests and then. If you want to use, you know, also like kind of an avatar to, to ask the questions and then the post production, uh, as well.

Mehmet: So, so that's fantastic. Now I want to shift a little bit gears and, you know, like you mentioned in your introduction that, you know, this is the startup actually that is funded, I mean VC funded. And while I was preparing, I saw that, you know, you, you mentioned in, in, uh, your profile that when you pitch to Sequoia, you had deleted third of the pitch tag.

Mehmet: Uh, funny enough that, you know, the topic of pitch tag I discussed it a lot on the [00:23:00] CTO show for a reason, because, you know, I know like first time founders, tech founders, maybe they are not experienced in this. And I like to hear the stories from successful founders who were, you know, who nailed it as we say.

Mehmet: So what happened there? And why you need, you felt like you need to do some, something like this during, you know, and Sequoia for people who doesn't know, like it's one of the biggest feces in the world. So why, why you did this?

Edward: So, um, the background is, uh, podcast AI. So as I was saying, we got into the founder university, which is the on ramp to the launch accelerator, which is competitive with Y Combinator that's run by Jason Calacanis and his staff.

Edward: And so we were in that program and what happened in December is, uh, the whole cohorts of seven companies. Uh, went to Sequoia, uh, to actually do a pitch, um, to, uh, uh, to, uh, uh, Roloff Botha, who is, uh, one, the head of Sequoia [00:24:00] and two is the person that brought in YouTube to Sequoia. So, um, arguably the greatest VC of all time, uh, in a sense.

Edward: And so, you know, Sequoia invests in companies a bit later on, um, not, not You know, that, that earlier level typically. Um, but you know, it was, uh, sort of, sort of like a pilgrimage, um, and six of the companies were able to, to make it to that one of them was in Macedonia and didn't make it. And so we were in that room, um, and it was 10 minutes from Roloff coming in.

Edward: Uh, you know, during the, the launch accelerator, what they do is every week they'll have a panel of investors and they'll have you do your three minute pitch. And so we would get really, really good at doing this three minute pitch, like almost like, like robots. Um, not, not in terms of delivery, but in terms of how good we are at just reproducing that pitch.

Edward: And I sort of realized that it was kind of like the one chance to, [00:25:00] to, um, to stand out. And so I did something pretty radical, uh, 10 minutes from, from him coming in. I deleted the last third of my deck and then I, you know, we have a, um, a feature called an ad read generator. So if you've seen ad reads on podcasts, that is the host doing, um, you know, a sponsorship basically saying, you know, this is sponsored by so and so and giving a call to action.

Edward: Uh, I had loaded Crucible Moments, which is Roloff's podcast into our system, you know, in case maybe there'd be an opportunity to demo. And I was realizing that was my opportunity to demo, basically. And so, uh, I used our ad regenerator. I, um, I searched Google for, you know, what is Roloff Bothell's favorite drink?

Edward: I found, uh, a Quora article from, um, a question from 13 years ago, Uh, asking, you know, what, what's a good South African wine and roll off himself answered 13 years ago. Go to, I think it was go to African hunt. com to find a good South African wine. [00:26:00] So I went there, uh, I found, you know, a random one, Konatel Pinotage, and, um, I put it in our system.

Edward: I said, roll off was the reader. I, you know, just wrote, um, investing is hard. Uh, relax with a good South African wine. Use code BOTHA for 10 percent off at checkout. And then I said, you know, generate 60 seconds. And, um, so I hit generate and so it, it ad libs in Roloff's voice, meaning it knows what the show is and it knows it has his bio, so it knows who he is and it generates the, the ad read text and the audio that goes with it.

Edward: And so I didn't have time to, you know, preview it to myself or anything. I just, um, I just kept it there and, you know, it came time to, to pitch. And so, uh, I was first up. Um, and I, I like being first up, you know, you want, you kind of want to be first or last if there's a few pitches, uh, so you just don't get lost in between.

Edward: So lucky enough I was first, uh, and so I got to that two minute point and what I deleted was our go to [00:27:00] market and roadmap. And so I said at the two minute mark, I said, okay, and, um, you know, let's just listen to this. This is our ad regenerator. So I hit play and everybody was kind of floored. It was Roloff listening to himself, uh, pitch, uh, South African wine for his show, uh, as a, as an ad read.

Edward: Uh, I don't think Jason Calacanis knew, knew that we had that. Um, in fact, nobody in our cohort did. Uh, and, uh, you know, it ended, it ended that, uh, that ad read, uh, you know, we had the three minute mark. And, uh, uh, so Roloff, he goes very, he goes very good, but, um, it's pronounced couldn't top, you know, and, uh, so that's pretty funny.

Edward: Um, and then Jason, what he does is whenever we have these, uh, these sessions, uh, you know, with, with a round table of investors, he'll ask them to rate the companies. You know, three, two, one meeting the best. And, um, so he asked them to rate the companies and we got number one from [00:28:00] Roloff. Uh, so that was pretty, pretty cool.

Edward: He put us in touch with this, uh, content team. Um, and, uh, yeah, we just seized the opportunity basically.

Mehmet: You know what, what you, you know, you did something, um, I keep repeating to people. I know I tell even myself, So you do this whenever you're going to pitch to an investor or to a customer. So what you did, Edward, is a masterclass.

Mehmet: I wasn't with you, of course, but I was imagining the face because, you know, this is something they teach to all salespeople, like know your customer. And when they say know your customer, it's not like just, Okay, what's his name? You know, how long have has he been or she been in the job? No, but you went the extra mile to do all this research.

Mehmet: And I think the reason that whatever you've done resonated with him is because he felt special. Of course, he doesn't want You know, [00:29:00] someone to make him special. He's special already, but you know, these special, these small touches makes a lot of difference. And this is proves, you know, I see pitch decks right, left, and center, as they say.

Mehmet: And they say, if you can tell it in a story way or related to the investor in somehow, you can have the best graphics. You can have the best, I don't know, numbers, statistics that you have. Collected from here and there. But what you have done is a masterclass, Edward. Really, I'm, I'm, you know, I'm trying just to visualize the, how was his reaction when he saw over here, he heard like his own voice there.

Mehmet: So absolutely fantastic. Now you mentioned a couple of times about, uh, Jason Kalanickis and, uh, And you mentioned that he was like, he's, he's known as a, an angel investor. You mentioned that he put, uh, he was the fourth in, in Uber. Uh, [00:30:00] so what is, you know, the main, in addition, of course, to be introduced to investors and so on, um, so I'm interested to know, like, how did you get to him in the first place?

Mehmet: And. Like, other than being in that cohort, which for people, maybe they would know about, uh, Y Combinator more. And, you know, of course the, the founders university, but I mean, what did you learn from someone who's veteran, I would say, uh, in, in the startup world?

Edward: Yeah. So, so, so it's interesting, but the way we got on his radar and it wasn't, it wasn't necessarily intentional or anything.

Edward: It's just, I was a fan of the all in podcast. Those AI tools came out and I did that parody of the AI of the all in podcast. And he's the one who actually retweeted it. So I did six episodes and then his team was asking for companies to apply to founder [00:31:00] university. And then that's, that's how I got in and got on the, on the radar.

Edward: Now, founder university is especially interesting because, um, the number of applications to Y Combinator, there's 40, 000 per cohort applications. Um, and very few companies can get in. There's not that many slots, right? There's maybe 100, 200, something like that. And so it's very hard to get in. Foundry University has a wider aperture and that gives you an opportunity to stand out.

Edward: So what's the common denominator here with that podcast parody that I did last year, I was able to stand out to Jason Calacanis. And get myself into Foundry University in Foundry University. We stood out as having the fastest shipping velocity in the cohort. And so we got a 25K investment in Foundry U, which is just a bookmark for them.

Edward: And then by September, we got invited into their accelerator. And that was a hundred K investment. Um, and now, uh, launch is actually leading [00:32:00] around and that's a million dollar investment. And so, you know, the, the way Jason Calacanis, uh, so I did a podcast with him on this, we can start up very recently last week and the way he put it was, you know, what did it take me?

Edward: Maybe 10 hours, let's say, um, to do that first, uh, parody episode. And he's invested over a million dollars in the company. So in terms of effort, that's maybe a hundred thousand dollars an hour. So, you know, obviously we have to build the company, so there's a lot more work work than that. But the point is you actually have to get, you know, what's the common denominator again, getting noticed.

Edward: Right. So getting noticed by Jason at Sequoia, what did we do? We got ourselves noticed we, by, by doing that thing where we actually deleted the last third of the deck and actually did a live demo, um, using, using, uh, Roloff's actual voice. Uh, and, and so getting noticed is the common denominator because.

Edward: What is there like seven or 8 billion people on the planet? How are [00:33:00] you going to get noticed? Like there's so many people pitching companies to actual venture capitalists that there's too much noise and they need filters. So you have to get yourself past the filter and there's a few ways to get past the filter.

Edward: Uh, you can go to Y Combinator, Launch, Techstar. So there's a few other accelerators. That's a way to get in and then you're venture qualified. But you have to venture qualify yourself. And so it's really up to you to do something to get yourself noticed in terms of what you can do, right? You have to show what you can do, show something interesting that actually gets their attention.

Edward: And now you've got their attention and then you can get any meeting with any VC you want because you're a venture qualified, you can get a warm intro from, from, you know, whoever's starting to back you and then, and then you can network yourself that way. And, you know, it's, it's kind of hard to hear, but like.

Edward: You do have to network yourself in because cold deck emails, you know, those are just not going to cut it. Right. [00:34:00] Like there was a pretty famous VC that was being interviewed. It was sort of like a 60 minutes type interview. And I remember this. The host was asking, you know, do you, uh, do you respond, you know, do you value cold, cold decks that are sent to you, cold emails?

Edward: And, um, the, the VC said, Oh yeah, they're very important. They're a measure of how popular our firm is. So what does that, what is he saying there? He's basically saying, yeah, we don't necessarily pay much attention to them as such, but we actually measure the volume to see how popular we are. Right. So what that means is best case, worst, actually worst case scenario is.

Edward: You're successful. They fund a competitor of yours. And now, they have, maybe in their archive, they have a deck from two years ago giving them insights into how you were thinking two years ago. That's, you know, worst case scenario, basically. Best case scenario is nothing happens, essentially. Um, a fluke could happen, I'm not saying nobody's ever You know, funded a cold, uh, a cold, uh, [00:35:00] deck email, but it's relatively rare.

Edward: Uh, and then there's another, um, I'll, I'll just add one more thing, which is there was another, um, video I had seen. This was Mark Andreessen. This was several years ago. So the numbers have changed, right? Maybe you can double all the numbers I mentioned. You know, someone was asking, uh, Mark Andreessen, like, how do you decide who to invest in and, and, uh, how does that work?

Edward: And he was saying, well, you know, there's 4, 000 venture qualified startups a year and keep in mind 40, 000 applications to YC, right? But there's 4, 000 venture qualified startups a year. Um, 2000 of which we see through our internal deal flow, 200 of which will get funded, 15 of which will be successful and two of them will make a portfolio.

Edward: And remember double those numbers, because this is from a few years ago. And when I heard that I understood what I was hearing, right? It's just English, right? You understand those words, but you really have to understand what he's saying. 4, 000 venture [00:36:00] qualified means, yeah, there's 4, 000 companies that want fun for 40, 000 companies that might want funding, but only 4, 000 of them are venture qualified, meaning we would never look at the other ones.

Edward: So there, you already have a 10 percent cutoff of the venture qualified. He's saying 2000 of which we see through our internal deal flow. What is he saying? He is only looking at 2000 of those that are referred from his, uh, angel stage partner, SV angels and SV angels is on an application. Uh, there's no way to apply.

Edward: You have to network yourself into SV angels. So how hard is this already? You have to network yourself into SV angels. To have to be seen as one of 2000 by, by this firm. And. Of those he goes 200 get funded. So of the 2000, 200 of the 4, 000 venture qualified deals, 200 get funded in the valley. And again, double the numbers.

Edward: Um, [00:37:00] that means by any top tier VC. And then of those 15 will be successful. That means like relatively successful in their eyes. And you have to keep in mind for venture, they don't care about, Oh, you doubled and you tripled. They're not in for double, triple. They want, they want to make the portfolio deals.

Edward: Right. Um, and. Of those 15 that are successful, two of them will make a portfolio. So maybe that's for today. Those are companies that are going to become super unicorns that are going to return the entire portfolio to make up for all the other companies that are going to be losses. So if you look, if you look, and it took me a while to actually realize what all this meant, um, but it's a, it's a huge funnel.

Edward: It's so hard to get in and you have to get yourself noticed.

Mehmet: Um, again, you know, like, uh, Edward, like to your point and because here the ecosystem is still new. I mean, like if I [00:38:00] compared, uh, the Middle East startup ecosystem compared to Silicon Valley or, you know, some other, uh, older, uh, spots. This is why it's important to learn from this experience because, you know, like we know.

Mehmet: that usually they say between 10 to 15 percent and the numbers you mentioned you said double but I think from percentage perspective that will still the same. So probably 10 to 15 percent of the startups will succeed in the eyes of the VC. I mean, yeah, they would become unicorns or they would be acquired, you know, they would have a good exit.

Mehmet: Now, to the point of You know, getting noticed again, uh, because at the end of the day, when you pitch a startup to AVC, you are selling actually. And I relate this to sales because it's a sales process and getting noticed is very important because there's a [00:39:00] huge difference. And I've seen it with some of the startups here locally that, and the founder that I spoke with even here, there is a huge difference between someone who get.

Mehmet: a warm introduction versus someone who's trying to just pass through unless you know they're doing something really special like something which I don't know no one else have done it and they were consistent persistent you know and you know pursuing also these vcs this doesn't happen because to your point they receive probably a lot of emails but one thing that you mentioned that's what that I'm not sure if many people thought about it, which is about like, let's say if I have a startup, I sent that, uh, pitch deck, it stayed there and then they would remember two years later.

Mehmet: Oh, like there was this guy who sent us, like, he's doing something, let's say in, I don't know, in food tech. Let's, let's see what he was trying to do. So I never thought [00:40:00] about it. So they have a bank, but, and because, you know, just food tech, People knows this. VCs, they hate NDAs. They don't like this. So don't, don't send NDAs.

Mehmet: So, yeah. But again, to, I'm always believer, Edward, and maybe you'll agree with me, that here it's not the idea only, it's like the execution. So for you, you, you, you had a flawless execution by having a hundred, uh, k. recurring revenue in just six months. So now tell me how this was like easy for you? Is it hard?

Mehmet: And at the same time, how this also, you know, uh, reflected in your discussions with the investors, whether before or, or after that happened?

Edward: Yes. So it's, it's an interesting, it's an interesting thing because before you have revenue, okay. [00:41:00] There's different stages of a company, right? There's just the idea and the founders.

Edward: There's we have revenue and we have product and we have, we have product. And then there's, we have product and revenue. And so really the, the proof and the requirements to be able to pitch at that stage are different for, for all the different stages and all the different scenarios. So, um, if you just have an idea and a team, the only metric for a VC.

Edward: is how good is this team? How well do they work together? Do I like the idea? And what they're all thinking in the back of their heads is what they're doing. Tam calculations, total addressable market. They're trying to figure out, okay, if this is a winner, is this going to be worth a few million dollars or is this going to be a billion dollar company?

Edward: Okay. They need to be able to see how is this going to be a billion dollar company. And so for recurring revenue, you want a hundred million recurring revenue annual to have a billion dollar company. Cause [00:42:00] usually you have 10 X revenue as that's sort of a baseline for this. And so they need to be able to see that.

Edward: And all they have to go on is your team. So if you're, uh, from Stanford, MIT or something like that, okay, great. Or, or you're the X, uh, head of growth. At Facebook or the X, whatever, at Google, okay, you can probably get funded on team, which means you can get funded on idea stage, right? But you're likely not that, right?

Edward: Those are very rare situations. So you probably have to have an MVP. And by the way, you can get funded, um, in, in terms of an accelerator at that stage. If you have an interesting team, right, you don't have to be from the top universities or whatever. You could apply to Y Combinator. Um, you could apply to launch, uh, remotely just at that stage.

Edward: Um, [00:43:00] but, and that's kind of what Foundry University is for. It lets you get in much earlier when you just have the idea stage. Um, but to get to like Y Combinator or, or Launch or Techstars, um, you really do have to have an MVP that you can show. Uh, and if you're talking to investors, okay, maybe they'll fund you on MVP.

Edward: But it would really have to be an unbelievably impressive MVP. It would have to be, um, Game changing technology that you can show as a, as an MVP without having revenue. Okay. For them to take that bet. So they'd have to be feel very comfortable about what you're building, be very impressed, um, to fund it at that stage.

Edward: And then you get to the, okay, we have to have revenue stage. If you start getting revenue, now you're no longer judged on those proxies for future performance. You are being judged on the revenue and the growth and the revenue specifically. Right. Growth is what matters, um, and their confidence in your ability to keep up the growth.

Edward: And that's called your go [00:44:00] to market. And so in terms of execution, we had, again, like you're saying near perfect execution, I would say our, our, our error was, um, was like the graph is like, you know, perfect graph top, right. Um, very nice graph and that graph was very effective in terms of dynamics with investors because every time I would give them their monthly update and also prospective investors, I would put them on our investor update, uh, you know, uh, monthly email and so every time they would get those updates.

Edward: You know, they would see our progress. And so I would cover traction. I would cover product. I would cover revenue. I would cover team and all those different aspects of the business. Just bullet points for every section and the graph showing our AR growth. And because we were able to get our first customers in September, we were able to.

Edward: Uh, hit a hundred K I believe it was like mid February. Um, we ended last month. We ended it, uh, one, [00:45:00] I think it was one 62 K, something like that. Um, and this month we'll be in the 200 something at the end of the month. Uh, we're pretty close to the end of the month. So, so the growth is the growth curve is really great.

Edward: So in terms of round dynamics, yeah, that is absolutely helpful. If you have really amazing growth. So the danger kind of becomes, okay, you've done this and now you don't have great growth, right? Let's say you don't have great growth. It's going to be hard to get the investors to invest in it because they just don't have that proof point.

Edward: But here's maybe another point. That's important. If you don't have great growth, why would you want to get the venture funding? So this is kind of, it's hard to kind of accept this as, as a founder, cause I'm just thinking of myself and it's like, maybe I would have said, Oh, but if we had the investment, then we would be able to get the growth, but you're thinking of it the wrong way.

Edward: Really what you [00:46:00] and the investor should be in mind on this. If there's explosive growth, then pour money into it because you're going to fuel even more expensive growth. And that's what the investor wants to do. That's what you should want to do. Because a startup is like, if it's a successful startup, it's like a minimum 10 year investment of your life.

Edward: So do you want to be spending 10 years On an idea that doesn't really have traction and you keep stubbornly trying to make it work and it's just not going to work No, not really What you want to do is be in a situation where you can actually put a really good effort at getting something going And once you actually get a thing going that is actually having a really nice growth curve Then the investors will love you Um, you're going to be super happy because you're, you're, you're investing your time in something that's growing really fast and you're going to be able to close those deals for your first, for your first round.

Edward: So, um, [00:47:00] make it work first, get people's attention, be really good at doing something impressive, first of all, useful. Getting customers and work your work your way that way and then you'll get into these programs You'll get the the investors don't don't don't don't think oh, I'm gonna raise a ton of money and then no You're not gonna raise a ton of money It's it's you're not gonna it's not gonna happen, right?

Edward: Um, Unless you're your venture qualified some way, but that that's the exception.

Mehmet: Absolutely Edward like you know, like this is another master class in when they need to go to you know to raise funds from vcs Um, we discussed a lot on on the podcast here as well with some of the founders So some for some of them to your point so they had the growth they were happy with that growth And they didn't feel the need for going to a vc at that stage because they were bootstrapping actually the company Some of them they had to go to Um, you know, to angel investors, [00:48:00] right?

Mehmet: So the ones that went to VCs, as you mentioned, it's where they were VC ready. So there are some metrics that they can show. They have good traction and then they could took it up from there. So absolutely, it's a, it's a, it's a another masterclass, I would say. Now, Edward, like, Final words from you. Also, maybe some, some advice to, to fellow entrepreneurs and where people can find more about you and podcast AI.

Edward: Yeah. So, uh, most recent episode of This Week in Startups, uh, which is a popular podcast, uh, is an interview with me. Uh, you can find me on, on Twitter or X at, uh, Edward Brawer. Um, podcastai.com, of course. Uh, and, uh, yeah, it's been an absolute pleasure, Mehmet, being on the show and, uh, going through these stories with you.

Mehmet: It was my absolute, absolute pleasure also as well, Edward. Um, you know, people by now, they know I'm passionate about anything related to startups. I'm passionate about hearing. Successful and even sometimes unsuccessful [00:49:00] founder stories. We had, we had some of them because I don't believe in failure. I believe in learning, continuous learning.

Mehmet: So this is why I know that you had your first startup at this one. You're just, you know, uh, absolutely rocking it, I would say. So congratulations, Edward. And, uh, I believe. You know what you're doing, especially because I'm a podcaster now. I used to say I'm doing it a hobby, but now I can say I'm a podcaster.

Mehmet: So absolutely something which resonates. I need, I mean, the market needs it and it has a lot of potential. You mentioned YouTube also as well. Um, It was very interesting to hear from you also about, you know, building LLMs, large language models, just for podcasters, which is something also new. It was, sorry, it was also good to hear the story of your fundraising, especially how you did the homework, searched about the investors.

Mehmet: And then attract their attention as well. And at the end also, you know, the part that you just ended with are really, really [00:50:00] very helpful for the audience. Thank you very much, Edward, for sharing the knowledge here today. And this is how I usually add my episodes. This is for the audience. If you just discovered this podcast by like, thank you for passing by.

Mehmet: I hope you liked it. If you did so, please subscribe and share it with your friends and colleagues who are available on all podcasting platforms. And we are available on YouTube also as well. And if you are one of the loyal followers who keep coming, thank you very much for your loyalty, for your comments, for your, uh, Questions you ask me sometime.

Mehmet: I'm always looking forward to answer you also. And if you are interested to be on the show, don't hesitate, reach out and I will find a way to make it happen. Thank you very much for tuning in and we'll meet very soon. Bye bye.