- Duration: 35 min
- Platform: meet
- Source: Read.ai 01JS50DC0KSB89D55N0F1N7W84 (https://app.read.ai/analytics/meetings/01JS50DC0KSB89D55N0F1N7W84)
Transcript
[Shimon Shvartsbroit]: Just as you said, stress, sleep deprived, energy deprived. [Shimon Shvartsbroit]: What’s stressing you out? [Shimon Shvartsbroit]: Just a lot of random stuff. Too much to dive into. [Michael Houck]: But just a lot of moving pieces in my both work and outside of work life right now. [Shimon Shvartsbroit]: Oh, so you’ve got a life. Okay. Cool. So listen, so I’ll just jump straight into it. So let me know how you want to take this. So basically I have this new venture idea. I want to raise money based on a pitch deck. Okay. I can pitch it. I can show you the pitch deck so that you’ll provide me some feedback. But the context and my goal is basically to maximize the chances. So I can probably raise money from Israel EVCs because it’s very big tech. Okay. I do have some network in the Valley, but probably you probably have more and you can probably think of relevant people that, uh, I might want to add to my cap table. Um, so just, so my goal eventually is, is, uh, not only to raise money, but also to make sure that like the trajectory in the venture is successful, uh, based on, uh, the type of the project and the people, you know, so sure. Like, uh, this is the goal. So do you want to see the depth? Do you want me to pitch you? [Michael Houck]: Yeah, I mean, I guess it’ll be easier for me to give actually useful and good feedback. Maybe if you send the deck and then I’ll record a loom. Okay. A little bit that way it’s less off the cuff and more sort of thought through. [Shimon Shvartsbroit]: Okay, great. Yeah. Okay, so would it be okay if I send like the link after the call? [Michael Houck]: Yeah, yeah, just send me, just email me the talk and I’ll take a look. [Shimon Shvartsbroit]: Also, I owe you a reply on something too. I was thinking about this. Yeah, it’s fine. It’s probably like setting the valuation. Yes. I mean, it’s not really urgent, but don’t let that stress you. [Michael Houck]: Yeah, no, no. But I know that you bought it. I’ll figure it out and I’ll get that to you. [Shimon Shvartsbroit]: Sorry about the delay. Man, that’s like the list of my problems. I wish I could say I’m not sleeping because I don’t know what the evaluation should be. Okay, so let me just pitch it and you can share your feedback about the deck later. Nobody’s web, uh, white coding web apps, right? Yeah. Blah, blah, blah, blah. Uh, not, no, uh, nobody’s, uh, doing that for mobile apps. That’s true. That is true. And the question is why? Yeah. And the reason is that it’s way more difficult and it’s difficult because first of all, the LLMs have not been trained. Trained on mobile native source code. Right. Basically they were trained on the whole internet, so they know how to generate blogs and react to web apps. Right. But that’s not the case with mobile apps, especially for app store. Right. The quality bar is really high. Yeah. And even though the models can generate native code, they cannot generate a code with taste, polished quality bar, right? They can do something like buttons and blah, blah, which is fine for the web, not for the mobile space. That’s one reason. The second reason is the current LLMs using web-based technologies like React or React Native, but most of the consumer apps are built with Native. Right. Yeah, of course. Yeah, of course. And the third reason is that they cannot generate an app which will pass through a App Store review. Because App Store is a gatekeeper. And even though they share their guidelines, but only once you go through the process, you can learn what works and what doesn’t. So there is no such data online, basically. Ah, yeah, there’s probably like one off blog posts and things like that. But yeah, you You have the commentations blog post, but there is like no real answer you have no they know really like a I mean, I’m a very experienced app developer and one of my last apps I can show you like the whole log was just rejected rejected I’ve been in the I’ve been in the the trenches of that process I know how how arduous it is to sort of meet all the different uh, specifications that they, they require. [Michael Houck]: And yeah, they’re changing all the time too. [Shimon Shvartsbroit]: I would bet exactly, exactly, exactly. And, and so we actually want to solve this hard problem by creating a platform, which, um, a, which is going to target initially professional people like product managers, product designers, UX, UI people who have good taste. Right, for UX UI, want to build their own apps. So we want to create a no code tool, no code. You know, you’re just going to pump it. You’re going to get some skeleton of the screens, right? And we’re going to create a way to customize the UI through the web, some kind of like a workflow Figma layer. Okay. Which is also very difficult. Because, again, if we don’t do, the common way is to update the code, rebuild it, and wait like two minutes, right? So just building this infrastructure is also very difficult, okay? So this is what we want to do, and the more people going to use this, then the more data we’re going to collect about how good native apps look like, and since the whole approval is going to be through us, we’re going to start collecting the data, which is our mode. So we’re going to have like an increasingly large data set of highly polished iPhone apps that have been through apps review. And then we’re going to add like the whole machine learning cycle of reinforcement learning based on human feedback. So that like the new apps, like eventually like when non UX designers want to build something, then they’ll have like a quite a design version of the skeleton. Not as like, not as pale. Right. So this is one, what we want to do. And we want to take advantage of being the first mover in this space and handle the whole deployment cycle so that you don’t need to have an Apple developer at accounts like Nada, you just code, we’ll deal with the hardware capabilities, camera, GPS, digital payments, like this whole thing that exists on mobile and not really on the web. So if we do that, then by the time that the current players wake up, they will eventually realize that their technology choices are not good because they’re using web-based. Yeah. I’m happy that you get it, like, because some people don’t. Yeah, no, it’s, it’s very obvious to me. [Michael Houck]: I think just from a, like an extremely high abstracted level, if it is getting easier to build these things in terms of like product software, right. If it’s getting easier to build them and people are spending like they’re on their phones all the time, why are we still making them use the more complicated and like arduous and large and unwieldy sort of portal, which I guess is the laptop versus the phone, right? Yeah, yeah, yeah. Most of the people on the phone, for sure. But also, to your point, it needs to be separate. You can’t just take the ones that people are using for web apps and apply them to mobile apps. So I sort of see both sides of the coin. [Shimon Shvartsbroit]: I mean, this is hilarious, actually, because the whole tech space, they’ve realized, I mean, we’ve started with desktop first approach. We’ve been there, but we’re not really shrinking the apps and putting them on mobile. No, like the whole design concept changed to mobile first, right? [Michael Houck]: But for some reason, we’re still building these tools for web first, which doesn’t actually make a lot of sense. [Shimon Shvartsbroit]: It doesn’t make any sense. [Shimon Shvartsbroit]: I mean, I can get the sense because, uh, so the current players like lovable and bold, uh, they could benefit from the LLMs. Right. So they just had to do the prompting. Right. Right. It was well, I mean, it’s really easy to generate kind of web ops, you know, and, and, and basically like, this is the thing with the web, you can publish anything anytime. Like it’s like, it’s a demo. You can put like boobs, like whatever, right? Like it doesn’t matter, right? You don’t need to have any design, like bam, it’s on. Like one button, it’s published. But this is not the case with mobile. So, so to make mobile work, we have like, we need to have like a unique data set to generate the appealing production ready UX, UI with native code. We need to manage the data set. It’s like the whole build and deploy, test flight invites, blah, blah, blah. We need to manage all the external services, push notifications, payments, payroll, blah, blah, blah. So I mean, there is way more to manage. So it’s actually a more difficult problem. It’s a way more challenging problem. [Michael Houck]: It sounds like the kind of problem where if you just are the first person to pull it off, There is an actual first mover advantage in this kind of market relative to what we’ve seen on the web, where it’s just people spinning up these new competitors and they’re all pretty similar. [Michael Houck]: I feel like this is a place where the work to actually build it up is pretty substantial. [Shimon Shvartsbroit]: It is. It is. It is. So first of all, I’m happy that you actually got it, right? Because when I was telling some of the investors how much they wanted to raise, This is also happy to hear your opinion. So at the moment I’m targeting 6 million. Okay. I’m not sure it’s going to be enough because even the lovable and the cursor, which had all these advantages, they raised 8 million. [Michael Houck]: And what are you, what’s like use of funds? Like, is it just hiring like top talent or yeah, it’s mostly hiring the talent. [Shimon Shvartsbroit]: We need to spend it. It on LLMs on AWS and cloud. And we also need to, uh, open many LLCs and Apple developers account. I mean, I don’t know, but it is like, yeah. Yeah. I mean, if you want to, to be able to share it with your friends, uh, which is like the viral mechanism that we’re betting on, like everybody else probably. Yeah. Yeah. People should be able to install. All the app on the phone. Yeah. And yeah, I don’t want people to start paying money to Apple, getting like into, uh, being technical with the certificate and all this. No, no. [Michael Houck]: Yeah. You’re going to, you’re going to lose a lot of people there. [Shimon Shvartsbroit]: Yeah. I want to subsidize the whole thing and then establish a new category, which I call it app as a service. Right. Yeah. [Michael Houck]: Makes sense. Um, I mean, it’s very aligned to a lot of what I’ve been thinking about in terms of how, you know, software is getting more personalized. It will continue to get more personalized and we want to sort of let people use these tools to, you know, create their own software and then they can do whatever they want with it. If they want to market it, if they want to create businesses with it, great. Exactly. Use it for, you know, personal use. Like I would love if there was a version of Spotify that I built for myself that didn’t have all the crazy, weird design choices that Spotify makes. That’s so cool. [Shimon Shvartsbroit]: Yeah, it’s actually, yeah, it would be like a version of TikTok. You can just take templates, remix them to have your own. Yeah, 100%. [Michael Houck]: Yeah, I think it’s a very high leverage idea. Do you know anyone else who’s building in this space? Because I haven’t heard of anything else like this for mobile specifically. [Shimon Shvartsbroit]: Yeah, of course. Many are trying, but they’re following the same path like everybody else, because they don’t want to do the hard, heavy lifting of building their own data set. So there’s a, so, so basically everybody’s like betting on react native. Like this is the thing. Let’s see, you have bold doing react native, replit react native, RORK, which is R-O-R-K react native. And there’s also a recent one, I forgot their name, YC. Based, also React Native. Yeah. I mean, that’s the point of differentiation. [Michael Houck]: And it’s obviously a better strategy, what you guys are doing. It’s just self-evident that that is. At the moment, it’s a contrarian view. [Shimon Shvartsbroit]: People push me against it. I’m like, no, this is the right thing. But you don’t get it. [Michael Houck]: It makes sense to me right away. The moat and sort of 100% and being sort of able to integrate fully with their processes. It’s hard work and like it will take like you will miss out on sort of some of the viral early stuff that these other apps are getting for sure. But I think it’s a it’s a long term payoff because I don’t see how they I don’t see how they introduce that later if they’re not focused on it at all. Like initially, like they would need to basically rebuild from the ground up in order to do that. So, um, yeah, I think it’s smart. [Shimon Shvartsbroit]: I think it’s smart. Thank you. Uh, cool. So, so, I mean, uh, so aside of the, so, uh, I’m building it with my friend. He’s a very experienced product person is from California. Also, uh, sold a couple of these companies. Very good with product and UX UI. Okay. Um, so he’s like my soulmate in the venture. Um, yeah. And I mean, uh, I want to prepare to raise money as soon as humanly possible. Uh, obviously because of the, uh, it’s a very competitive market. So I want to, uh, launch as fast as humanly possible. And so I’m just happy to hear, like, peeps or maybe things you should, like, you think I should emphasize in my pitch. Or maybe people you think I should, maybe people you know that it’d be relevant to do some introduction and have them potentially being on my cap table. [Michael Houck]: Yeah, I mean, the way that we generally help out in these cases is if you have a hit list of folks you’d like to talk to, I then can go through that and be like, hey, I know these four people. Otherwise, it’s like, I need to think. So feel free to send that over, and I’ll take a look. But in terms of the pitch, honestly, I think it’s a strong framing the way you framed it to me. I really wouldn’t take too much and tweak it. Obviously, I might have different thoughts after I see the deck. But my initial thought is that explaining why that differentiation between doing it native versus just using React Native is so important. I think the right investors will get that very quickly if they believe in data as a moat, which most of them, I feel like, should and do right now. Yeah. I see this as, you know, who knows? [Shimon Shvartsbroit]: Every investor is different, but it’s definitely something that can pull in some cash for sure. So thank you. [Michael Houck]: That’s actually encouraging. [UNKNOWN_SPEAKER]: I think it’s cool. [Michael Houck]: I’m excited to dive deeper into it. [Shimon Shvartsbroit]: Very cool. Very cool. Any ideas how to approach the fundraising, like from how much to raise? I mean, ideally, I want to have good cash reserves, obviously, because I want to be able to move fast, right? I want to be able to hire top tier talent. [Michael Houck]: Yeah, I mean, the other angle would be that because the space is so hot, and you have to assume that some of the companies in the space that have been funded will get markups, that you then as a result will also be able to go go on and raise more rounds, assuming things are going well, with relative ease rather than if it was some unknown sector that you were trying to create from scratch. With that in mind, the way I see it is I honestly don’t see the cash in the first round being super critical. Just because again, there will be momentum in this space over the next 12 months and you will be able to go out and raise second round, as long as things are going well, and you’re seeing investors are happy. So what I would do if I were you is if the goal is just let’s get some cash in the bank, let’s go as quickly as possible, get things started, get build the team. I wouldn’t worry too much about whether that number is six or eight. Talk to as many VCs as I can see what’s the sort of landscape is right now for this. And just take what you take what you can get. And whether that’s 6 million, whether that’s five, you know, like, it’s one of those, it’s one of those situations where unless you’re burning like an insane amount of money, and I feel like you’re responsible founder. [Shimon Shvartsbroit]: I am responsible. Yeah, I am responsible. [Michael Houck]: I feel like you’d be able to, you know, go out and raise more when you need it, as long as milestones have been hit for the business. So I guess like I get the anxiety around that, because you always want extra cash reserves, especially when you’re going to be hiring top talent pretty early on. It’s going to be expensive and all that stuff. I get that. And server costs and whatnot. [Shimon Shvartsbroit]: But honestly, I would say that. I mean, the thing that scares me is assuming things are going well. I mean, I wouldn’t want to have a focus towards fundraising as opposed to focusing on the product. I mean, emails and decks, like what’s even a product? Like all I’m working is a Google sheet and Google slides at the moment. Like this is why, I mean, previously I was like hands on doing mobile apps and now like, no, only that. Yeah. I mean, yeah. [Michael Houck]: I mean, look, I, I would, yeah, I think that I think you’re fine. I think spend as little time as possible fundraising. Get as much in the bank as you can during that time. Set a timeline for yourself. Be like, I’m going to spend the next one or two weeks or whatever it is just on this. And then build a product after that rather than trying to have your feet on both sides of the net. Especially for hot spaces, that strategy tends to work the best because you can actually motivate investors to move quickly. Unlike, you know, if it was just like an interesting idea in a different space, it isn’t like insanely hot right now. [Shimon Shvartsbroit]: So I think because of this problem, because like, there could be new competitors and they could lose the opportunity like this. [Michael Houck]: Just because they’re sort of aware that other investors will be interested in something like this, right? Like it’s sort of, it’s sort of like common knowledge. These AI tools are going to be hot right now. And so the rounds will be hot. And so if you’re presenting a genuinely interesting opportunity, which sounds like this could be, you will be able to motivate them to move quickly rather than having to be in flux for a month or two or something like that. [Shimon Shvartsbroit]: That actually makes sense. I mean, as a cool man. Very good feedback, thank you for that. Actually encouraging. I was afraid that I’ll need to be persuading you about native versus React Native. No, you’re good. [Michael Houck]: I have the battle scars to prove it. [Michael Houck]: You mean from the previous venture? [Michael Houck]: Well, no, I just mean not regarding that company, but just other things that we had tried to build. I know how much better it is when you build native. So applying it with this sort of meta lens, I think, makes a lot of sense to me intuitively. [Shimon Shvartsbroit]: So yeah. [Shimon Shvartsbroit]: Awesome. Cool. So listen, I really appreciate the talk. So I’ll send you the deck later after this call. And yeah, I’d be curious to hear your thoughts. It’s very bold. Let me put it this way. [Michael Houck]: That’s good, man. We love bold. Send the investor hit list when you have it too. Happy to help out with both. Go ahead, sorry. Yeah, cool. [UNKNOWN_SPEAKER]: I will. [Shimon Shvartsbroit]: Cool. [Michael Houck]: And then we have a lot of investors in our network who I can soft float this to a few of them and see what they feel once you give me the green light to do so. [Shimon Shvartsbroit]: Super cool, man. Thank you. [UNKNOWN_SPEAKER]: Of course, dude. [Shimon Shvartsbroit]: It’s a cool idea. [Shimon Shvartsbroit]: I like it. Thank you. Yeah. And hopefully we’ll be able to help you fulfill your dream and have your own Spotify and maybe your own Airbnb. And your own… I can’t make my day, let me tell you. Yeah. Fifty Shades of Spotify. Yeah. I’ll send an email and thank you. I mean, if there’s anything I can help you with, I mean. No, I’m good, man. You’re like all in content business right now. Yeah, I don’t want to put anything on your plate. [Michael Houck]: You sound like you’re pretty swamped to get this off the ground, too. So no worries, but I appreciate it. And I’ll find about the course this weekend as well. [Shimon Shvartsbroit]: It’s really like, no worries about that. No, you’ll get an email for sure. [UNKNOWN_SPEAKER]: Awesome. Okay. [Shimon Shvartsbroit]: So have a good day. So talk soon. You too, man. Appreciate it. Thank you. Bye. Yeah.