[woman] I have invested my life and my soul
and blood and sweat and tears into this.
[man] I genuinely believe we have a product that people want.
I love talking about it.
It is my story.
[man 2] Things are starting to pick up speed.
We've been laying a foundation,
and now it's time to actually add fuel to that fire.
[Zane]You have four advisors down there.
It's about making sure they understand how passionate you are.
You have 60 seconds on the escalator
to get them to choose to be a part of your project.
You'll know because at the end of your escalator ride,
they'll either go green or red.
[Zane] If you get four reds, you go home.
But if you have at least one green,
you'll get to continue your pitch and tell the story of your app,
in the hopes of partnering with one of the advisors.
If that happens, you'll spend the next six weeks
honing your app for a chance to earn a share
of over ten million dollars in venture capital investment
and featured placement on the App Store.
[pulsing techno theme]
[bell rings]
[man] Okay, guys. Coming in doors.
[Gwyneth] Okay. So let's do it.
-[will.i.am] Traffic cop Gwyneth. -Traffic cop.
[Jessica laughs]
-[Zane] Elise. Hey. -Hi.
-[Elise] How are you? -I'm really good. How are you?
-Good. -Grab a seat, please.
[Zane] Everybody has a story.
-[Elise] Yeah, definitely. -You had some rough times.
You lost your dad at a young age.
[Elise] Yeah. Like, my brother, my mom, and I are all super close.
My brother is older, and he's a fighter pilot.
He taught me how to code, actually, when I was ten.
Wow.
I'm Elise Graham.
I'm from Austin, Texas.
After my big brother taught me how to code,
I fell in love with computers.
I was just kind of hooked.
And so when I went to college,
I majored in information technology and marketing.
When I was in college,
I was diagnosed with a neurological movement disorder called dystonia.
I can't do a lot of fine motor movements,
like using my hands for a lot of things,
my arms and my shoulders.
But I don't want to be a great developer for someone with a disability.
No. I wanna be great at what I do as Elise Graham.
[man] 3, 2, 1.
Did you know that 76% of Americans live paycheck to paycheck,
with little or no savings and credit card debt?
Yet most are increasing their spending.
I'm here to tell you about my app, Olivia AI,
which is a personal finance app that will help you stretch your paycheck
and better spend your hard-earned money.
Powered by artificial intelligence,
she analyzes your finances and behaviors
and will show you real ways to save money in everyday life.
It's just like texting with a friend.
I'm on a mission to help people live better lives
so they can focus on the things that really matter
and not stress out about money.
So who's ready to see Olivia in action?
[tense pulsing music]
-[Gwyneth] Congratulations! -[Gary] Four for four!
-[Jessica] Wow. -Thanks, guys.
-[Gary] Wow. -Tell us about your app.
Okay, great. So...
Basically, I'm gonna show you guys a day in the life
of me interacting with Olivia as my personal finance assistant.
So I've already connected all of my bank accounts,
and she already knows my name.
So I'm gonna see what advice she has for me in the early morning.
If I go to my overview screen,
I can see how much I can really safely spend throughout the month
and then each day as well.
So you might ask what is a safely spend, and how do we calculate that?
So the safely spend is something that Olivia automatically detects
by seeing your income,
your bills and expenses,
other non-recurring spending--
Like, we know you're gonna spend more on weekends,
maybe going out to brunch, meeting friends for drinks.
But you may be a little bit more frugal during the week.
Those type of things.
And then you tell her how much you want to save each month.
[Gary] Is it completely passive?
Is it completely siphoning the data from your bank accounts?
-Absolutely. -[Gary] Okay.
[Elise] It's all integrated.
And we have bank level security.
And we don't house any of the information.
Security and transparency is really important to us at Olivia
because we see Olivia as a friend.
And so a friend doesn't share information.
So we're gonna be fully transparent.
So the biggest way that Olivia will help our users
is she comes up with actionable insights
for you to help spending.
So it looks like she has a couple of ideas to save us on groceries.
And she knows, through AI,
that Wednesday night is actually the best day and time to buy groceries.
Is that a macro level
or is that uniquely to that person, where they live,
around the retailers that they have?
That gets a little tricky.
Yeah. So what we do is we take both macro and micro detail.
We can see what stores are nearby,
and we also see where they're shopping as well.
So let's say you buy groceries at Orange Foods.
But there's another market right by your work
called Apple Market
that sells the exact same things at 20% less cost.
And so we can have her include that in that Wednesday calendar reminder.
So that way it's automatically on your calendar for next week.
And people already are committing to shopping at that time.
[will.i.am] How deep is this as far as the AI?
How deep does it go?
Like, I wanna buy Yeezys.
How would that affect my bank account next month?
Yeah, actually-- And I would love to show you guys a feature
that's actually the most popular with our beta users.
And it's called "Can I buy this item?"
And so, for instance, I used it last week
because I'd been eyeing this beautiful leather jacket that's $100.
And I was like, "I don't know if I can really get this or not."
So I asked her. So this is just a good example.
[Gwyneth chuckles]
I need this!
[Elise] And so I use it all the time.
Do you offer any financial services?
Yeah, and this is how we're going to monetize later on
is by offering partner offers.
We will never sell advertisements.
We will never ever sell user data.
The way we monetize is things that will actually benefit the user
and also being completely transparent.
And you'll take a percentage of that transaction.
-[Elise] That's correct. -Okay.
-Wow. -[Jessica] That's great.
If she hits scale
there's real biz dev on the back end of this.
Yeah
Why are you passionate about this?
Oh, my gosh. There's so many reasons.
But I think the main thing is seeing all of my friends
that are struggling to live day to day.
Whether they are making medium average income
or around or below the poverty line.
And they don't really know
how to spend their money or where to spend it wisely.
And so it was one of those things where it's like,
"How can we take all of this guesswork out for them?"
How much money have you raised?
We've raised 500,000 in seed funding so far.
How much do you want to raise?
-A million. -Okay.
How are you gonna spend it?
-That million? -[Gwyneth] Mm-hmm.
So ultimately, we want to use about 70% of it
for more AI developers.
Also a little bit of user acquisition as well.
Because we don't only want to have more data,
in order for this machine learning to be as valuable as possible,
but we want to have really, really great AI engineers.
Because right now we have great engineers,
but there's only so much you can do when you have so much data.
[ticking]
You got four greens to the circle. You kept them.
Oh, my goodness.
I'm super impressed. I'm staying in.
You had an extremely strong pitch.
You completely won me over with your grasp of what you're doing,
and I've seen enough here, I'm very impressed by you.
Thank you.
I heard you talk about trust.
That's how I built my whole business.
That's an intrinsic part of my brand.
And so I think I could lend you that trust
and help you leverage that as a key pillar of the brand,
especially when you're dealing with something
where security is such an important issue.
And so I'm staying in.
So I really believe in what you're doing.
I'm heavy in the AI space.
There's no real true AI yet.
Folks using AI really loosely,
and it's just a really cute chat bot.
So that being said,
you need somebody that connects you with great developers
to bring that depth.
Right.
I think this is big, and I'd like to work with you.
As a kid who grew up in a home that was living paycheck to paycheck,
if they only had this tool,
90% of the arguments in my house growing up
wouldn't have been about money.
Mm-hmm.
I built my brand since I was 12 years old as an actress,
and I built it on trust and transparency.
People, they come to The Honest Company
because they believe in who we are
and what we stand for and our values.
And I think I would be a great partner for you.
Thank you.
So it's time to make a decision. Who are you going with?
[light instrumental music]
I think...
I'm gonna have to go with Gwyneth.
[Gary] Wow.
-Thank you. -[Gary] Good job, Gwyneth.
-[Gwyneth] So awesome. -I'm so excited.
Oh, my God, me too.
[Elise] Thank you so much.
I'm so excited. You're amazing.
She crushed it.
[Gwyneth] Wow, what a girl.
She's so dope.
I'm in love with her.
[bell rings]
[man] All right. Reset escalator and please rotate.
And turntable, please.
-Ken. Hey. -Hey, Zane.
-Your wife's name is Jess. -Yep.
You've got an app called Jess, Meet Ken.
My best friend put me on a website
and Jess, who was just on this website,
saw that profile.
And she emailed my friend to ask about me,
and she forwarded it to me with the subject line,
"Holy [beep], it's your wife."
-[Zane] Could be a movie. -Yeah.
If it's a movie, I'd like Ryan Gosling to play me.
Sure. We all would, buddy. We all would.
But I look like him, so...
My name is Ken Deckinger.
I'm from Boston, Massachusetts.
As far back as I can remember, I've wanted to be an entrepreneur.
When I was seven, I started a comic book company.
I would draw comic books
and make everyone in my family buy them for 25 cents each.
It's always been in my blood.
[man] 4, 3, 2, 1.
Hi, guys. My app is based on the true love story
of how my wife, Jess, and I met.
Jess, Meet Ken is a dating app
for women to introduce their best guys to other women.
Guys can only be on our app
if they've been nominated by a woman.
When there's a match, the guy and the girl can chat,
or the two women can talk-- the nominator and the match first.
And we prevent guys from screwing it all up
by putting big pictures of themselves holding a fish, or their shirt off,
or their shirt off and a fish.
We're here today to ask for your help
to help us help others find love the way Jess and I did.
-[Gary] Good. -[will.i.am] That's awesome.
-Jess, meet Ken. -Hey.
Oh, my God. That's pretty awesome.
[will.i.am] Show me the app.
Okay. So this is the front level, top level of a guy's profile.
The whole idea of the woman in this equation
is really important to us.
So when you see a guy, we put her front and center
and we explain what the relationship is right there.
You can swipe yes or no on this.
If you want to go deeper, we have a "She says, he says."
"She says" is again what she's written about him.
And this is really important to us,
'cause we think that guys think they know what women want to hear,
but most of the time they don't.
What if it's a fake--
Like someone just steals a picture online
and says that, "Yeah, that's my homegirl,"
and then they write a nice message about themselves?
We use Facebook authentication.
And we validate the Facebook profile as it's X months old--
One hesitation is that kind of pervasive thought
that runs through, like, female mentality around this.
"Well, if he's so great, why aren't you going out with him?"
-Sure. -[Gwyneth] Right?
-Yeah. -That is so real.
Is there any component that sort of defuses that?
There's just a lot of men and women that are just not gonna date.
They're truly wonderful people.
Adele and I were never gonna date, because it just felt--
-You know, it wasn't there. -[Gwyneth] Right.
You're in the friend zone all the time?
-Yeah, I was in the friend zone. -That's King Friend Zone right there.
We call them Tony Friendzoneys.
Tony Friendzoneys.
[will.i.am] Meet my friend Tony Friendzoney.
-[Jessica] That's awesome. -Yeah, I was a friend zone guy--
-He's a good dude. -Adele and I were just buddies.
But what we do is-- If you see here,
it says nominated by Adette, his coworker.
You can pick the relationship.
So you can say brother or son.
And there are women that use this that are not single,
and they're only doing it to nominate a guy.
There's also a lot of them. When you think about the world,
there's so many women that just love matchmaking. Right?
Like it's genuinely a hobby.
Ken, give us a little update on where are.
Is this in beta? Has this been out?
Give me some math around the business.
-It's out in beta right now. -How long?
-We've been out about 12 months. -A year.
Yeah, about a year. Got about 2200 people--
-Why still in beta? -It's just in Boston.
2200 monthly active users?
No. Just downloads.
-Downloads? -[Ken] It's totally low, yeah.
We have some things we need to work on...
-Clearly. -...which is why we're here today.
We think we know what they are.
-Like? -Like virality.
-[Gary] Virality. Okay. -And how are you monetizing this?
That's the next thing we need to work on. We need to get that done.
You've listed off a ton of real things,
an entire year into execution, that you're still struggling with.
I mean, that's awfully scary.
[pensive instrumental music]
Ken, first of all, I adore you.
I understand everything that Jess saw in you.
But for me, where we're at and the data I've collected,
I'm gonna stay out.
This is a very vulnerable area for people.
I'm just worried that the VC
are gonna, like, fire a bunch of bullet holes into this.
And... I'm turning to red.
[soft deep drum beat]
[exhales]
The fact that you haven't had that much traction worries me.
Yep.
And so that's why I'm out.
[soft deep drum beat]
So I think you're relying on the hook too much,
and there's no verses.
-Like the chorus is an amazing chorus. -That's a good analogy.
The beat is all right-- I don't even like the beat that much.
And the verses, I don't really--
-But the hook is a nice hook. -[Ken] Mm-hmm.
But there's no other meat.
And I'mma go from green to red.
[soft deep drum beat]
Thanks, Ken.
-Okay. Thanks, guys. -[Gary] Take care.
I appreciate it. Thank you.
The torture.
[Zane] Ken wasn't the only one to leave disappointed.
I created Swing, the world's first social network
and analytics expert for all tennis players.
Its patented system broadcasts your scores live to the world,
so your friends and family can cheer you on.
[Gary] I'm so sorry, my friend.
The 60 seconds in the escalator sometimes...
just doesn't give enough time for people to jump on board.
What if you could create an app without writing a single line of code?
You could fundamentally transform who builds apps.
[will.i.am] Ooh.
We wish you the best.
We think there's thousands of great podcasts out there,
but they're just too hard to discover.
We have a machine learning algorithm
that'll feed you algorithmic recommendations for podcasts.
[soft deep drum beat]
I wish you guys tons of luck.
On KГјdzoo, students exchange their academic achievements
for real rewards.
Students don't need rescuing. They need opportunity.
[soft deep drum beat]
You're up against awesome competition.
We wish you guys well. Good luck to you.
[bell rings]
[man] Let's go, everybody. We are very, very good.
[Zane] Kemar. You've developed the idea
of being able to auction off limited edition sneakers
for an audience that is super engaged.
Yep.
First of all, the important question, what are you rocking today?
[Kemar] I'm actually rocking these Nike Air Forces.
For some people, they're just shoes.
For others, it's a little bit more than that.
I mean, what's the most expensive pair of sneakers
that's gone through your service so far?
The last pair auctioned off for $200,000.
I'm Kemar. I'm from Brooklyn, New York.
I went to college at Morehouse,
and my freshman year, Apple said,
"Hey, we would love to offer you an internship."
I was like, "Yes. For sure. I'm definitely down."
How's Mom feel about all this? She had high hopes for you, right?
-From the very start, right? -Definitely.
She was pushing for me to be the first black president.
So it must have been an amazing moment when Barack Obama was president-elect?
Definitely. It was that moment I said,
I could have been on this track, but it sounds like this guy would have beaten me.
When I was nine, I started programming.
And my mom was like,
"What are you doing on the computer so often?"
And I was like, "I want to tell you something.
I don't want to be the first black president anymore."
And I was like, "I wanna be Steve Jobs."
[bell rings]
[man] ...in 5, 4, 3 seconds.
Yo. What's going on?
Remember the long lines outside the Apple Store?
The ones that formed around the block?
Well, dominating those lines are fanatics.
And sometimes they wait days if not weeks to get what they want.
I'm that guy, but for sneakers.
And we're the eBay for the Snapchat generation.
Limited edition sneakers are huge.
It's a billion dollar market, and it's not even optimized.
That's why I built Flip.
Flip is a 90 minute auction that's guaranteed to sell your sneakers.
That's it.
[tense pulsing music]
[Gary] Two yesses. Congrats.
Why don't you join us in the circle?
-[Kemar] Thanks. Thanks. -Tell us about yourself.
So I'm a software engineer.
Used to work at Apple and Google.
Sneaker enthusiast my entire life.
-[Gary] Love it. -[will.i.am] Can we see the app?
[Kemar] Yeah, absolutely.
So here are some upcoming auctions,
and you can see who--
This one's opening up in 55 minutes.
Is this actually live?
-[Kemar] This is actually live. -Okay.
So 40 people have signed up to get the notification
once this auction opens in 55 minutes and 17 seconds.
Everywhere else is essentially topped out.
The sellers set the price, and they have the power.
I think that's fundamentally wrong for a secondary market.
I think buyers should actually be able to set their own price.
We start the shoes off usually about 70% off of market value,
which forces all the demand on our item.
Kemar, you're forcing the sellers to be discounted to the marketplace?
Absolutely.
I like that. That's interesting.
So what you're saying is
because you're trying to think about how you're gonna get to scale--
If you actually create an environment that's a deal marketplace,
or the potential to a deal,
you think you're gonna actually attract people into the app?
-That's the psychology, right? -Of course.
Because people are hacking Instagram to sell things.
That's showing me that marketplaces are largely broken.
And what is your average amount of users?
Our daily actives are around 400 to 500 people
that just click and open the app.
And they're just waiting on the right size,
the right style, or the right cutaway to place their bid.
But what's the fine line of you becoming eBay then?
[Gary] If you become-
Curated. That's the fine line.
Because I don't wanna sell your iPhone charger.
I don't wanna sell your six year old iPhone.
[Jessica] And you do all your own fulfillment, or do you use--
Everything's peer to peer on the marketplace.
Okay.
We do have logistics where we print shipping labels on the seller's behalf.
So we don't disburse the funds to the actual seller
until the buyer confirms in-app that the item is as advertised.
Okay. That's interesting.
What happens when they're disgruntled when you don't have enough demand
and these shoes are falling below market
significantly enough that it's not as attractive to sell in your world?
Not everything on our marketplace goes live immediately.
-You wait to see how much demand you got? -We curate it based on demand.
How much you trying to raise?
We're seeking about five million.
-Whoa. What the whoa? -[Jessica] Wow.
But he's looking at competitors out there that have already raised--
We're looking at competitors that have already raised.
Again, you know, they're hyper-focused on sneakers.
[will.i.am] How big is the company?
It's four people. It's three engineers and one operations.
Dude, you are...
The user interface is freaking awesome.
-Thank you. -[will.i.am] I wanna connect you.
I'm your usher, chaperone,
the guy with the patch board to plug you into the folks that you know...
-[Kemar] For sure. -...I can plug you into.
For me, I have that authentic connection to my consumer.
And that's why I've been able to break through,
even though there's a monopoly on CPG.
Having that authentic voice and perspective
is ultimately what's going to push you through all the noise.
And the attention to detail.
And I think I could help you hone in even further
on how to scale this and expand this
and make those really special moments happen.
[pensive instrumental music]
I'm in.
[pensive instrumental music]
You've got a decision to make. You've got two unbelievable mentors.
Where you gonna go?
[pensive instrumental music]
Um...
I think...
[pensive instrumental music]
Can I add something?
2007, we came up with the concept of Beats.
There was a bunch of competitors.
There was Bose, there was Sennheiser,
there was Sony, there's Panasonic.
And then people of culture, that impact culture,
ignored that competition,
because we know what we mean to culture.
Um...
It's a tough decision, man. It's a tough decision.
I think...
I'm going with Jessica.
-[Gary] Wow. Very nice. -Nice.
I love it. Congrats.
-[Gary] Good job, Jess. -Come on up here.
I see that as a slight upset, Will.
It's not an upset. I think it's gonna win.
He's just gotta figure out how he's gonna meet the right people.
[Gary] I hear that. Good luck.
-[Kemar] Thank you. Appreciate it. -[Gary] Good luck with you, man.
Good job, Jess.
All right. Thank you, guys. Good luck.
[Gwyneth] Thanks, guys! See you soon!
[Zane] With six weeks until their final pitch to the venture capitalists,
the developers move on to an accelerated incubation phase.
Their goal: to make their businesses bulletproof
before they ask for funding.
-[Gwyneth] We have a little work to do. -[Elise] Yep.
Before that, I feel I want to know you better
and understand what motivated you to start it.
So actually when I was in college,
I was diagnosed with a neurological movement disorder called dystonia,
which is kind of similar to Parkinson's but...
Oh, my God.
But the one thing I could still do was type,
and I realized I have a choice.
I can either be bitter and upset,
or I can take it and use it as a platform.
It's incredible too that you used it as an opportunity
to launch yourself into something.
Yeah.
It's very inspiring.
What I love so much about Elise is her spirit.
Do you have a deck?
-I do. Yes. -Can I see it?
This app could be massive,
and her disability would have been essentially
the catalyst towards her development of it.
So you know, God works in very mysterious ways, I think.
Anywhere you can tell me and the VC
where you're using your proprietary tech
and you can weave it into this language, that's gold.
[Elise] Okay.
So how does she do it, like, using artificial intelligence.
So you can kind of amplify your unicorn-ness, if that's a word...
Yeah. That's a really good point.
...all the time.
Gwyneth really impressed me with how much she knew essentially in the VC space.
Anticipate the questions and where they're gonna poke holes.
Okay.
[Elise] And she would be like, "You need to change this slide and this slide.
You need to brag on these accomplishments more."
She knows her stuff.
-[Elise] Yeah. -This is great.
So you go through how it works, the artificial intelligence.
Amazing. So cool.
[Zane] Since customer acquisition is
one of the biggest issues Kemar faces in scaling Flip,
Jessica enlists her friend Neil Blumenthal
who overcame a similar hurdle as co-founder and co-CEO
of the eyeglass retailer Warby Parker.
How are you getting customers?
How are you getting people to download the app?
We've grown organically to this point and driven our own social platforms.
And now we're at like 12,000, I believe, on Instagram.
[Jessica] Kemar is so impressive.
He is a developer.
He is the marketer
and the visionary and the CEO.
I mean, he's like the full shebang.
The challenge will be expanding his idea to a real marketplace.
How are you gonna find your customer without having to spend a ton of money?
And how are you going to get people
who are going to be your natural ambassadors
and spread the word?
We're working on an actual experience right now.
It's gonna be called the Flip Arcade.
And it's a popup.
-Cool. -[Kemar] Yeah.
And we want to actually do a retail experience based around games.
The theme of this popup is an arcade.
So we'll have virtual reality,
classic arcade games,
and more importantly,
we're unveiling the sneaker claw for the first time ever.
Essentially, it's this claw machine
where you can grab a sneaker for effectively ten dollars...
-[Neil] Wow. -...per play.
We're saying here's this Yeezy, here's this Air Mag.
Normally it's thousands of dollars. You can't get it anywhere else.
Now you can have your chance to play at it,
and now you can resell that, you know, on the spot.
That's what you gotta push with investors,
'cause it shows that you have that creative and innovative side
that creates the magic.
It's like we were able to create this experience that nobody else could.
And it drew...
Now if you can get some numbers behind it,
like X thousands of people walked by it,
there were this many posts about it, right.
Yeah, some way to deliver the data on
we got this many more people on Instagram,
on, you know, Snapchat following us, or whatever that is.
That's what will get investors excited.
'Cause as much as investors try and think
that they're these highly rational beings, right?
They're human beings and they're influenced--
They're influenced by us entrepreneurs and our dreams.
The VC pitch is right around the corner, so if I'm gonna do this popup,
we have to do it now.
We need to attract more users to show the VCs we're worth five million.
Because our runway, it's about six months.
It'd be nice to have more money than you need.
So that you can be comfortable in your growth.
That dynamic between knowing how much cash you have on hand
versus how much cash you need--
You still have to perform as if there is a tomorrow,
but then be realistic with your resources
that there may not be a tomorrow.
-[Jessica] Cool. -[Kemar] Thank you.
[Zane] Since Yelp has seen great success utilizing a form of AI,
Gwyneth sends Elise to San Francisco
to meet with their cofounder and CEO, Jeremy Stoppelman.
So I heard you guys are building out something with an AI component.
We do use a lot of machine learning techniques.
We've found it to be really powerful if you have the data.
So one really cool example was trying to identify
both what's in a photo
and then which are the really good ones.
So we were able to use machine learning techniques.
You could say,
"What do the drinks look like at this place, the food?"
Then also the ones that you see first are the most beautiful photos.
And so it's very powerful technology, but it requires a lot of data.
And you're only as good as the data that you've got.
[Elise] I've heard great things about Jeremy.
He's been through fundraising more times than I can count.
And I've been a Yelp user for ten years now, probably.
It's how I found a lot of my doctors.
So I hear you've been working on an app.
Yes. So basically, my app is called Olivia AI.
We're using kind of all these open source technologies.
-And then just piecing it all together. -Yeah.
That is a huge value add for us,
because that's what sets us apart.
And we also are able to have a certain depth
when it comes to our insights that we're giving our users.
AI's kind of a funny term.
It encompasses a lot of different possible technologies.
And so when someone says, "Hey, this thing has AI in it,"
you don't necessarily know exactly how sophisticated or complicated it is.
The key is you need a lot of data to hone those models.
When you're a startup,
that's one thing you don't have a lot of,
which is data and users.
Any other advice you might have for me, going into my pitch?
I would say don't overthink it.
Okay.
It's not necessarily a performance art.
It's really about is the idea sound, is the team solid?
And if things aren't going perfectly,
do we believe that the team can course correct and figure it out?
No good VC would really expect you to have every last detail,
but they want to hear the story, they want to know what is the possibility?
If all of the things that you say are true,
is it gonna be a billion dollar business or not?
Thank you so much again for taking the time to meet with me.
I love connecting with entrepreneurs that are just getting started.
And I wish you so much success.
Thank you. Thank you very much.
[Zane] In order to enlist new users for Flip,
Kemar works night and day to bring his popup shop to life
for an audience of LA's biggest sneaker fanatics.
[Kemar] Executing a popup is not only hard,
but it's risky because
there's a lot of upfront investment.
[Kemar] It's now open.
[clapping]
[Kemar] Jessica really believes in me,
and I can't help but say that I do feel this pressure not to let her down.
[indistinct chatter]
[crowd] Oh!
Due to the cost of all the prizes that we have in the machine--
We have Yeezys for $1,000--
We don't want it to necessarily be giving these things effectively away for free.
Oh, my--
No way.
[crowd] Oh!
-In your size? -Yeah.
Lit, lit, lit. You gotta wear 'em out, man.
No, it's raining. It's raining. It's all good.
-[Jessica] Hi. How are you? -Hey.
-I'm good. How are you? -Good. Nice to see you.
Good to see you as well.
-This looks so cool. -Thanks. Thanks.
It's so cool to see his brand come to life.
You feel that it's so true to the audience and the culture.
It feels right. He is killing it.
Oh, no!
[Jessica] This is rad. And to be able to experience technology in a new way--
He's representing the new school way of thinking,
and he's very progressive.
[man] Congratulations. It looks good.
[Kemar] People are showing up, enjoying themselves,
and they're downloading the app.
That was even crazier, 'cause it's like there's no branding.
And they're like, "Yo, what is this?"
And as soon as we tell 'em,
they're like, "Okay, cool. I'm downloading the app."
Going into the pitch, we just have to be cautious
'cause at the end of the day, like,
there's expectations from raising this type of capital.
It's not just free money.
I'm totally nervous.
-Thank you so much. -Yeah.
So we're wanting to change the algorithm
when it comes to both the safely spend and the projected spending.
I'm expecting to be grilled a lot,
because these are people that really know their stuff.
My advice when you meet with the venture capitalists
is really focus on the size of the market.
[Kemar] Definitely.
[Brian] 'Cause it's such an underground world.
[Elise] I'm feeling a lot of pressure,
because I'm representing the work of five incredible people
who have all worked day and night on this.
If I don't know anything about this, I really wanna understand how she works.
Right.
I'm just kind of ready to go in guns a-blazing
and just do my best.
[Zane] After six weeks of incubation,
Olivia AI and Flip arrive for their final pitch
to Lightspeed Venture Partners.
Lightspeed was the first investor in Snapchat
and currently has over four billion dollars under management.
The great thing is you have answers to every one of their questions.
I've never seen someone pose a question to you
and you not be able to handle it with incredible ease.
Yeah.
So just know that, know that you have the answers.
Thanks.
Should we get this show on the road?
-[Elise] Let's do it. -Okay. Let's go.
[tense pulsing music]
-Hello. -[Alex] Hello again.
-[Elise] Hi, guys. -[Gwyneth] Hi.
Guys, I would like to introduce you to the amazing Elise.
I'm very excited for her to present to you Olivia AI.
Thank you.
So like she said, my name's Elise,
and I am here to hopefully receive one million dollars of funding.
Okay.
Olivia is an AI-powered personal financial assistant
that helps you stretch your paycheck and your hard-earned money.
So you'll have more money to do what you love, like traveling,
going to concerts, those type of things.
So the way we've set up the app is that you can chat with Olivia
the same way you do with your friends.
So it looks really similar to a chat interface,
but in a very secure app setting.
This is just a demo version,
and so at the beginning she needs to analyze your bank accounts
to understand how you spend your money.
She connects your bank accounts using bank level security.
We use a third-party aggregate to where we only see transaction level data.
Um, so--
You're using Yodlee or are you using Plaid?
We're using Plaid and we're looking for a backup as well.
Okay.
So Olivia automatically detects your income.
Just based on finances,
we have an algorithm that is trying to get someone
up to a savings of around three times their monthly costs.
And so this is just a recommendation of how much they save.
It's usually around 20% per paycheck,
but you can toggle it up or down.
So let's just say we want to save $685 a month.
And that shows that you can safely spend $2100 a month or so.
So then it creates essentially a safely spend calendar.
And when you swipe left,
it shows you how much you can really spend each day.
[Aaron] Mm.
So we've seen really encouraging stats so far,
with 20% of our users stretching their paycheck by 5%,
which is essentially a 5% raise.
But our ultimate goal is to have 40% of our users
stretch their paycheck by 10%.
Since we're making six to ten financial decisions a day,
it really comes down to things like where you're getting gas,
how you commute, where you grab coffee,
what kind of coffee you get.
Those things really add up over time,
and so, for instance, the day you get groceries really does add up.
So if you shop for groceries on Wednesday nights instead of the weekend,
you can save around 5%.
I'm just trying to figure out where the AI part of Olivia AI is coming from.
'Cause the things you're talking about, which make a ton of sense to save money,
it sounds like they're sort of rules-based.
Like you understand that Wednesdays are better than this or whatever.
So where does the AI part come in?
There's a feature on Olivia that says "Can I buy this?"
and "How am I doing this month?"
And she also gives you daily and weekly updates
with how you're doing with your money.
The app itself is social, because you're chatting with Olivia.
-[Gwyneth] She's-- -A robot.
-Right. -Yeah.
So when you say artificial intelligence,
you just mean that it's a decision that's made by the computer.
-Yes. -[Jeremy] You don't necessarily mean--
When people talk about neural nets and deep learning
and all the sorts of cutting edge AI,
you're not applying those sorts of techniques?
We do apply--
Could you give an example of one?
So we know with 80% confidence,
'cause we have proscriptive and descriptive insights,
that someone will save this on groceries due to where they live
and due to their habits and their past data.
You know, for me, I was betting on her as the jockey.
I think she's incredibly impressive,
and I think as they grow and get traction,
which I know they will,
I think they will have the data that they need
to kind of amplify what they're already doing.
As somebody who went back to school at the age of 30,
I do certainly resonate with this issue.
And feel like I wish I had this product at the time.
This idea that you can literally be walked through your financial life by a machine
that understands the ten transactions a day
coming through your bank and credit card statements--
That could actually be a really powerful thing.
[Aaron] So it sounds like to me, classification on credit card data
to create some weighted activities that I do every week.
Which is sort of existing open source stuff,
and on top of that the insights.
Today appear to be human generated.
Maybe in the future will be more.
So it's not that they're doing no "AI,"
but I think there's more they could do.
It sounds like at the heart of it, you're using a set of business rules
that's the key to actually figuring out how to save people money.
The product strikes me as more of a vitamin than a painkiller.
Hmm.
[Jeremy] Something you should be doing every day,
and it has a diffuse benefit over time.
In our experience as venture capitalists,
we've found that it's much, much harder for products to feel like vitamins
to reach scale and be successful
than products which are more like painkillers
where the user is grasping for any solution right away,
because they have a burning, pressing headache of some sort.
So at this point, I think we've come to a decision.
We are going to pass on investing.
-Okay. -Okay.
-Thanks very much, guys. -Thank you very much for your time.
-Thank you. -Thanks.
-And good luck. -Good luck with everything.
-[Gwyneth] Are you okay? -I'm good.
[Gwyneth] Okay.
I feel like I could say a million different things about Olivia
and how unique we are.
Um... and sometimes you can say it over and over again,
and it just doesn't resonate with the right people,
and that's okay.
We really should have prepped more on the AI portion of things.
[Elise] Oh.
-[Gwyneth] Come here. -Okay.
As I'm thinking through what kind of feedback or pushback--
what I would get,
it's definitely centered around daily actives,
what is your cost per acquisition.
Whatever data you can give them...
Got it.
...to address the business metrics is great.
Make sure that you hit them over the head
with the things that really matter.
-Definitely. -You ready to do this?
-I sure am. -Let's do it.
All right.
[tense pulsing music]
-Hello. -[Alex] Hey there.
-[Nicole] Hey. -Hi.
[Alex] Nice shoes.
-Thank you. -[Nicole] Very cool.
[Jeremy chuckles]
[Jessica] This is Kemar.
He is a pretty incredible entrepreneur,
and he will tell you everything.
We're Flip. What is Flip?
We're the eBay for the Snapchat generation.
Now I know you might be a little confused on what exactly that means.
It sounds awesome, though.
[everybody laughing]
Yeah. Essentially what it means is we're essentially creating eBay 2.0.
Sneakers are huge.
It's a billion dollar market at least in the US,
and it's growing year over year.
How much are you thinking about raising this round?
This round we're targeting a five million dollar raise.
Five million.
So, you know, what is Flip?
Basically, we guarantee that your item is sold in 90 minutes.
And how we do that is very simply.
We price the actual item for you,
giving us some very specific details like the SKU and--
-Sorry, who prices it? You price it? -[Kemar] We price it.
So say, for instance, Yeezys, they retail at 250 bucks.
Then they resell on average for a thousand dollars.
So that's a huge markup.
We don't know if that actual clearing price
is not something that somebody just listed at.
We don't know what it closes at.
So what we do is we offer it on our platform for our users
at up to 70% off.
And that creates this rabid consumer.
Wait. At 70% off?
Starting at 70% off. 'Cause it's an auction model.
So on average,
what is the discount that your shoes sell for on your site,
versus you know, market?
Usually, the listing closes at a 159% over our guaranteed sales price,
meaning the initial offer we agree with the seller.
But for-- Let me actually--
So 100%, you offer it at 30%.
So one and a half.
It closes at... 50% of the market price.
Yes. So usually they're getting it at half off right now,
which fuels more users telling other users and bringing in.
Which is why we-
So it's great for buyers.
But as a seller, I got a $1,000 shoe.
-Yep. -I can get paid $500 for it tomorrow,
or $1,000 for it in seven days' time.
For sure.
I think the guarantee of the cash and the 90 minutes--
And then what I really was attracted to
is you gathering data on your user
and understanding what your user wants.
So when they sign up,
they come into the experience saying I'm this size,
I like these colors, and these are the brands I like.
So then you already know when you have a seller coming in,
I have these people lined up
that I know I'm gonna put a push notification out
and say these are on sale, you got 90 minutes.
[Alex] So I got a question for you.
It's about a billion dollars of gross merchandise value
in the secondary sneaker market.
At a ten percent take rate, that's about $100,000,000 of addressable TAM.
For sure.
Typically, we look for multi-billion dollar TAMs.
-Absolutely. -[Alex] Your run rate GMV in February
if you hit your numbers is about a million on an annualized basis.
Typically, by the time you raise a five million dollar series A,
the run rate's sometimes 10X that.
I'm curious why you think five's the right number at this moment in time,
versus a smaller round?
Well, our target is five.
We're willing to entertain what investors have an appetite for.
But realistically, when we're building a budget
on how it's gonna get us past the next 18 to 24 months,
'cause again we haven't done anything in marketing.
And with this hyped-up, very fanatical user,
we can grow legs.
As I think about the entrepreneurs that we've backed who've been successful,
many of them are just like you.
They're technical, they can write their own code,
they understand the problem viscerally because they felt it themselves.
And I really like the insight that you've come to,
that people are willing to trade off money for time when selling in a marketplace.
That's an insight that comes from having lived it.
And that's why I think it is so special.
On the other hand, I really have questions about the market size.
At a billion dollars in GMV, a hundred million in TAM,
that's just not the size of market that we usually go after.
We would need to see how you have a path to a much bigger addressable market
to really see a venture scale opportunity.
Traditionally, when we're gonna give a founder or a team five million,
we're expecting a lot higher GMV than what you have.
That said, I really like you, and I think we really like you.
What's your burn rate now?
Our burn is sub 20,000 dollars a month.
If your burn is about 20 or 25 a month, and we give you one year of runway
that's about 300,000 dollars.
We'd like to offer you that opportunity,
to give you a shot at figuring out how to go from an idea to an app at scale,
where we can than participate in the next round.
Kemar, do you accept that offer?
I mean, we're super ecstatic to have you guys as partners.
And we're more than happy to have you guys join on board
to help us get to where we need to be.
So I'll gladly accept.
Think that's a yes.
-[Alex] Awesome. -[Nicole] Wonderful.
Definitely. Definitely.
[Aaron] Great.
-Thank you. -Okay.
-Congratulations. -Thank you.
I am-- I can't even really put it into words, honestly.
I'm so excited. This investment means a lot to me.
I can finally breathe, 'cause, I mean, honestly we're a startup.
We're struggling. We don't have any money. We need money.
I needed that money yesterday.
Probably I would argue six months ago,
but now we're good. We're good.
It's a dream come true, honestly. Honestly.
[Zane] You've heard Kemar's story.
Now's your chance to download the Flip app.
You can also look for Olivia AI
and all of the apps featured on Planet of the Apps
on the App Store.