All my life, I've been involved in starting businesses.
But this is the biggest opportunity in my life.
I was born and raised in South Central LA.
I just want to be a good example
for people that come from the same place as me.
I was expecting the birth of my daughter,
and the marshal comes knock on the door
and said, "Hey, here's an eviction notice."
What I'm pitching today is the opportunity that's ahead
and what inspired this idea.
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.
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.
All right. Everybody set.
So, two individuals come together as a team to create the app called Eight.
Who came up with the idea? Was it a group effort?
It really came out of something we were both working on,
which was we worked with a lot of YouTube creators, making videos.
They were talking about products a lot in their videos.
We think of ourselves a little bit like the modern day Avon.
How old are you, man?
-My name's Leon Crutchley. -I'm Chris Knight.
And we are the cofounders of Eight.
I come from a small town called Bendigo in Australia.
I learnt at a young age
that I could make money from building websites.
And then I got a job in an agency in London, building iPhone apps.
IвЂ™ve been building apps since 2010.
I grew up in a big family, and for pocket money,
we used to go to the Sunday market and sell things.
And so I think thatвЂ™s really where my passion for selling really started.
ThereвЂ™s a lot of financial pressures.
IвЂ™ve got a family. IвЂ™ve got two kids.
You know, we basically donвЂ™t really earn a salary.
WeвЂ™ve been living hand to mouth
for pretty much a year now on very little money.
And so the chance to meet with some of the investors involved in the show
is just a huge opportunity for us.
3, 2, 1. Doors.
Hey, guys. IвЂ™m Chris.
IвЂ™m Leon. Our productвЂ™s called Eight,
an iPhone app that lets anyone start their own video shopping business
by selling the products around them, whether they own them or not.
You can think of us as a user generated QVC.
All you do is record a video about a product,
then we recognize it and add it to the video.
What? Even that book I bought at the airport, #AskGaryVee?
Yeah, man. Now anyone can buy his book
directly from your video on Eight,
Instagram, Snapchat, wherever you share it.
Millions of products are already available to sell on Eight,
from diapers, to fashion, to the latest Bluetooth headphones.
Sellers on Eight will make more than $10,000 in income this month alone.
For centuries, selling products has been owning them as well.
Thanks to Eight, the game has now changed.
One green. Is there something wrong with the lights?
Nope. Those are right.
You got a green from me because I believe
that thereвЂ™s a lot of potential in this space,
-and IвЂ™d love to see the app. -Cool.
So you jump straight into the camera view.
Everything we do is about recording.
Hey, guys. Check out this product from the Honest Company.
Face and body lotion.
ItвЂ™s seriously some of the best body lotion IвЂ™ve ever used.
I love this. This stuff is really good.
Get on it.
All right.
Hey, guys. Check out--
The video plays back instantly,
and then we hit the attach product button down at the bottom.
And then we go into a scan view.
Now IвЂ™m just gonna add it.
Check out that. Super quickly,
we pulled in all the information about the product.
And if you swipe down, thereвЂ™s other people talking about the product.
We already support more than 200 million products,
including pretty much all the products by The Honest Company.
And, you know, products by Goop.
Cool. So letвЂ™s go forward, and weвЂ™ll just broadcast that.
I love this.
So right now, that broadcasts out to my audience on our platform, on Eight.
And then we pull up this sheet.
This is like the extra boost
so I can push it out to all of these platforms.
We call it screenshot commerce.
So every time, anybody that watches those videos
can simply take a screenshot of the video to be able to buy the product.
-Can you show us that? -How does that happen?
LetвЂ™s talk it through.
IвЂ™m following a friend of myвЂ™s page.
They did one of your videos. They uploaded it to Instagram.
-While IвЂ™m watching the video... -Yep.
...IвЂ™m able to screenshot in there?
-What do I do next? -WeвЂ™ve built our own QR code generator
that generates on the fly QR codes that get embedded.
That is really good.
Every video has a unique QR code embedded directly in it.
And weвЂ™re always reading the camera roll from our app.
ThatвЂ™s the punchline.
How does Facebook Live--
when you can shop the Facebook Live videos.
So that is QVC on the biggest social platform in the world.
So Live for the future is something definitely weвЂ™re excited about.
-Right now, we just broadcast and record. -WeвЂ™re a sales platform.
We allow people to make not ten percent affiliate
or five percent affiliate, but make 100%.
The brands that we work with directly, like Iman Cosmetics, Lipton, Unilever,
are realizing they need to just not pay influencers to get views,
they need to get the products in peopleвЂ™s hands.
IвЂ™m a little confused about the ROI.
So if IвЂ™m spending $1,000 to get an influencer to do a post,
what do you do with my thousand dollars now?
So check this out. HereвЂ™s the video we just created.
All I do is I can swipe up on that.
HereвЂ™s the product. HereвЂ™s the "Buy it" button.
I hit that "Buy it" button.
Off to Amazon instantly.
-You should take people to our website. -We can do that too.
Every time somebody sells one of your products,
say for $100,
you get given $100.
You're taking marketing and turning it into sales...
-Yeah. -...and marketing.
Yeah.
What are you guys looking for?
How much money do you need?
We're looking for between 750,000 to a million dollars.
And what does that money go to again?
So for the three of us that will work on it fulltime now.
Three more developers that will work on it part time will become fulltime.
Think we're gonna spend about 250,000 on our video infrastructure.
Now how long has the app been out?
Three months.
And what kind of numbers are we looking at?
So we've had about 1,800 downloads. Just over 241 monthly active sellers.
Like, people that are actually building their business using our platform.
Okay. And then how are you gonna get people to download your app?
Are you gonna use some of that money for marketing?
The platform is built for sellers.
So people are incentivized
to build up their own community and network of people they can sell to.
The sellers are gonna tell people about it.
I understand that everybody is looking to monetize
this sort of influencer market.
I just worry that very quickly YouTube and all these other channels
will turn this on quickly.
-That's a very valid concern. -Yeah, it is valid.
But every business is trying to figure out their online component.
This is really interesting.
-Jess, obviously this is a dream for you. -Yeah.
When this happens, 'cause this will happen--
Whether these are the two young men that are gonna make it happen,
we don't know.
I like this.
Jess, I like what's happening here.
Hey, the light just got fixed, guys.
They fixed them.
-Very nice. -This is exciting.
It's really smart, and I know exactly what to do with this.
And I know exactly who to introduce you to.
I've been doing this from the beginning of this.
I understand it.
I believe in it. I feel like I can bring a tremendous amount to this.
And I feel like I've been pioneering this from the get.
Okay, guys.
It's decision time.
So, we've come to a decision.
Gary, we followed you for a long time.
And we love everything you do with video.
And we've been desperate to work with CPG companies,
and to have access, to be able to work with The Honest Company
would just be a dream come true.
So, it's like just a really, really tough decision.
Super tough.
In the end, we've gone for Gary.
He put his light on for us today.
And, you know, that means a lot.
So, you know, we'd love to repay the favor.
Bad decision. Bad decision.
-He's wrong. He hates me. -My man.
-What's up? I'm really excited. -That's awesome, man.
-Yeah. -Yeah.
All right, man. Good job.
Thank you.
I wanna hear your story. 'Cause it's an amazing one, man.
I had good grades and played football my entire life.
And I had the chance to attend and play football at Brown University.
And I double majored in engineering and economics.
Smart.
During my senior year, I actually picked up pre-med.
But after I graduated, I opened up a dispensary out in Compton.
And do you use marijuana today?
-Yes. I do. -Are you stoned now?
No.
My name is Robert Gillette.
I was born and raised in South Central LA.
I attended Palisades High School.
Took the bus, at five, six o'clock every day in the morning.
The value of the education at Palisades High School
was far more valuable than one that I could get in the inner city
and helped me avoid troubles
that kind of plagued the neighborhood that I was in.
My parents definitely pushed me to work hard.
Ready. Here we go. In 3,2,1.
I was an All-Ivy linebacker at Brown University.
And during my senior year of college, I tore my ACL.
And cannabis helped me avoid opioid abuse.
And that's why I created LoudCloud.
LoudCloud enables marijuana patients to upload their credentials
into a secure cloud database
to avoid the many shortcomings with paper-based systems.
LoudCloud gives patients greater access to medicine
and enables retailers to save time and money.
-Wow. -Yeah.
-Killed it. -Thank you.
Can we see the app?
Yes. Absolutely.
So there's a few steps. You scan your ID.
The reason why we do that is 'cause everyone has a government issued ID
with a barcode on the back.
Why not just use something that you already carry with you on a daily basis?
-That's good. -Very smart.
So you take your ID, you scan it,
you snap a picture of your medical marijuana recommendation form.
And then you sign a universal patient agreement form.
So when I walk into a dispensary and I show them my ID,
I'm giving them permission to access my medical health information.
So now this 15 minute process is now down to seconds.
Selling back time.
Yes. Time.
There's incredible opportunity for growth with marijuana.
Medical marijuana and recreational marijuana.
It's still-- On the federal level, it's not legal.
I'm gonna switch to red,
only because that's an unknown that I don't think I can get comfortable with.
This feels more recreational to me than medical.
And so that's why I'm gonna swipe to no.
Because I don't think the country is ready for recreational.
It's just not there yet.
You answered a question.
"I wanna know about your medical history." You solved it.
You say, "Here's my ID." Boom.
"Here's an app shows you my medical history.
I have a torn ACL."
But, the way it is now, you aren't gonna get funded.
So I'm gonna swipe red in hopes that Gary stays green.
What's been holding me in, to be very frank,
is I just think you're a winner.
I've looked at a lot of the POS plays in the dispensary space.
I think the tech that you're using at this point
is obviously very accessible to them.
There's companies positioned very simply to turn a couple of switches
and make it very difficult for you.
And that knowledge of POS and what some of those players are doing
is just a little bit too much for me to overcome,
and that's why I'm gonna say no.
But I really... I'm really excited I got to meet you, man. I wish you well.
I appreciate your time. Thank you guys so much.
-Thank you. -All right.
Oh, man.
Many other developers failed to secure an advisor.
We created Hutch to help you furnish your home.
-Because-- -Buying furniture sucks.
Hutch is a mobile design service
that connects interior designers with our users, over chat,
to help you furnish and design your home.
Thank you.
We're the cofounders of Drops,
an app that lets you round up any credit or debit card purchase
and donate the spare change to charity.
It's such a crowded space.
Tipster is the first virtual styling app.
We connect users instantly with stylists.
I feel like the name isn't connected to what you're trying to solve.
-Thank you so much, man. -Thanks so much.
You gotta get their attention.
All right? This could change your life.
-I'm Brian. -And I'm Thanasi.
We're the cofounders of Aux.
Still in high school.
I've been programming for like, the past three years.
I've also been programming for the past three years.
Started in freshman year, and we're both seniors now.
I really hope they don't see our age as a weakness
or see it as lack of experience.
Because we really think that we can put a great app out there
that everyone will love.
In 3, 2, 1.
We're software developers
who moved to Silicon Valley for our senior year of high school.
-Geez. -We write a lot of code,
but we listen to even more music.
And whenever we play music,
someone always wants to play their music through the Bluetooth speaker.
But you guys know how frustrating music sharing is.
Like, how do you determine what track plays next?
Do you disconnect from the Bluetooth a few times,
or do you risk passing your phone around?
That's why we made Aux.
With Aux, everyone has the chance to add their music to the live playlists
and vote up or down.
That way, the best music plays first.
Imagine Aux as your virtual aux cord
that lets you plug into a party and listen together,
anytime, anywhere.
Even if you're by yourself.
Holy moly.
I wonder why.
So, what made you guys wanna do this?
Yeah. So, it started after Apple's Worldwide Developers Conference,
-after the entire week was-- -This year?
Yeah. Just this past summer.
Are you seniors right now?
-Yes. -Yes.
-Let's go. I love it. I love it. -Literally 17?
-Eighteen. -I turned 18 last week.
-That's amazing. -I love it. Here we go.
I love it. Don't-- Don't-- Don't chime in, guys.
-Don't turn to green. -Here we go. I'm green now.
-I like 18. -Yes.
So after the whole conference, a bunch of us went to this hacker house
to have a party, celebrate the end.
And we were all playing music.
And I connected my phone to the Bluetooth speaker
and played my music.
But then other people wanted to play their music too.
So I just ended up passing my phone around.
But that still wasn't very intuitive.
'Cause, like, someone texted my mom too, and--
It was super unintuitive. We knew there would've been a better way.
So we decided to make Aux.
That's great. Who's the developer?
-We both are. -Both of us.
Awesome. Love it.
Show us your guys' app. Let's see the app.
Sure. Yeah. So we can do a demo of our real time music player.
So we'll start a party on this device.
Cool. And then on our own, we can add the party.
And all we need to do is type in that three digit code at the top.
And now we're in, and we can start adding music.
I can also add music from my device.
There are up and down vote buttons next to every song.
So we can start upvoting some songs and downvoting them,
and they will update on the host.
So you can see things are moving around as we vote on them.
My real question is, how is this a business
instead a cool thing that your friends are gonna use?
-So-- -No, no.
You guys can answer that. I could help you out later though.
-No, but you answer it. -Yeah.
Right now we've been focusing on the user experience,
like, this is something that we've wanted and find a use for.
All of our friends really enjoy it.
So we've been focusing on providing the best experience for our users.
But you're going into the pits of music business hell.
In addition, we're also using the iTunes API for Apple Music.
And we're also using the Spotify API,
so we don't have to deal with music license issues.
Because you have to be a premium subscriber to one of those services.
Yeah! That's why you're the-- That's why I like you.
-Okay. -Exactly.
That's the right call. Then what?
So what's the business? How does this business make money?
Yeah. So, we have been brainstorming about some things.
But this was one of the main things that we wanted to reach out to you guys for.
Because obviously you guys have so much experience in business.
Like, we're engineers. We can build something really cool.
But making it a business is what you guys could help us do.
You guys are so cute.
So cute.
Very cute.
But asking, on an app show that the purpose is to build a business,
for the mentors to create the business model
is not as cute for me.
No, no.
So, how much money are you guys asking for?
We were thinking about this.
And we could hire some people
and sustain ourselves for a year with 300K.
But obviously, to grow the app faster,
more money and more people working on it would obviously do that.
So you guys solved the problem that we all experience
when we go out to people's houses and go to parties.
Or in the car. We all have that problem.
-So, great. Congratulations on-- -How big is this problem?
-It's a huge problem. -Yeah.
-It is. -You probably don't go to house parties.
I live at parties.
I go to house parties, and I have them at my house.
After every concert--
He's going to a house party after the show.
After every concert I do, backstage, or after every--
Sorry I'm not the coolest and go to house parties.
I just don't know how big of a problem it really is.
It's not just house parties.
It's a big enough problem for them to solve, which they did.
Sonos and other things do this.
-No. -No. Not in this way.
I toured the whole freaking planet, and no one was able to crack
"This is what I want to listen to on a freaking laptop."
I'm sorry, Gary Vaynerchuk. That's not the truth.
Mazel tov, you three. Keep having fun.
Look. L'chaim.
Here we go. You need to turn that to red.
Okay. Boom. Let's go.
-Let's do it. -All right.
I love it.
Here we go.
I love it.
Amazing.
My dumb ass just slipped and fell in these freaking gold ass boots.
Good luck to you guys.
Thank you for listening.
It's true.
-That's awesome. -Good job, kids.
The best.
They're so adorable.
What year were they born in? 1998?
Okay, we're good. We're good.
Does it feel like this is a life-changing moment for you? Potentially?
Yeah. Every opportunity. I mean, waking up every day.
I've beat the odds, man, since I was a kid, right?
So, yeah, I'm excited. For sure. Let's do it.
My name is Ali Abdullah. I am one of the cofounders and CEO of Claim It!
My personal struggle--
At 22, I left a job in hopes of getting another position.
But I had $1,200 in the bank.
Six months later, we were struggling.
We bounced from homelessness to single room occupancies.
The most challenging part during that time
was the fact that I had a child on the way.
So I just went back to the drawing board.
That's when I really came up with the idea for Claim It!
For me it was an opportunity that was hidden in plain sight.
Here we go. In 3, 2, 1. Action.
Everyone loves free things.
Claim It! offers brands the opportunity
to get free stuff into the hands of millions of people.
Since launching the company in 2015,
we have well over 400,000 app installs on the iOS platform,
just in New York City.
Now it's time to go national.
We make it easy for brands to publish their virtual offers in minutes,
targeting customers wherever they are.
In order for users to claim a prize, they simply have to watch a 15 second ad,
which is how we make our money, and a lot of it.
Download Claim It! Thank you.
Yes!
-Let's check out the app. -Cool. All right.
What you see here is a fun and simple demo of Claim It! version 2.0,
which scales to a national audience.
Any brand, any size, can now geo-target an offer.
So based on where you are, we can target an offer to you.
"Hey, you're here in Burbank, California."
-If your push notifications are on? -Yes.
It's defaulted?
The brands have the opportunity to be able to target you,
wherever you are, to give you free stuff.
And this is all New York right now, right?
Yeah. We're going national now. So national is all completely virtual.
So the history behind the app was we started from a Claim It! truck.
Yeah. There used to be a truck running around New York City--
-With lines of people. -Yep.
How many users do you have?
Just New York City, we have over 460,000 app installs on the iPhone platform.
-460,000? -Yeah.
That's not bad.
What I find fascinating is media is changing so much,
the advertising model's changing so much.
Yeah.
The idea that you're incenting somebody to go all the way through a commercial,
and then there's a reward for it--
That's a very millennial psychology in a way. Isn't it?
I understand why it's getting so much traction.
So what got you into tech?
Yeah. So my background is in software development.
So we grew up in my--
We grew up in--
So--
During a period of time we were homeless.
And so as I got to high school,
I didn't have many friends.
And so I started studying programming,
and that gave me the hope and the confidence to start building.
I did attend Alfred State College, Columbia University, and MIT.
And I started hacking out ideas.
I left school to help my mom basically pay bills.
And so was homeless for about 11 months.
During that period of time, I was expecting the birth of my daughter,
who's now seven and a half.
This is how I came up with the idea for Claim It!,
to be able to not only fuel the economy
but also provide entrepreneurs and brands of all sizes
the opportunity to get free stuff into the hands of people.
Yeah.
That's amazing.
I believe in you, man.
-Thanks. -I gotta be honest with you.
I'm staying in, my man.
Thanks.
I think this is great.
I love your story.
I think you're wicked smart.
I'm in. I think you're awesome.
Thanks.
One, your story--
Your experience,
the things you've overcome--
America needs you.
And you've educated yourself and beat all the odds.
I had to say that.
Because I felt bad going to red.
So. Now is the time for you to choose between...
the two greens that are on stage.
Jessica, I think that when you look at what you have accomplished with Honest--
And to some degree your platform is a marketplace for goods that you create,
as well as a consumer platform.
I think that gives us the ability
to be able to partner with a company right out the gate
and to be able to do something magical.
Plus you're here on the West Coast,
where it can now open us up to conversations,
whether it's VCs, credibility, the media.
So--
I will go with Jessica.
That's what my hunch was.
My hunch was that.
I'm so happy.
This is awesome.
Huge mistake, Ali.
I'm so happy. Not that I don't love you.
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.
Jessica invites Ali to meet Brian Lee, cofounder of The Honest Company,
to work on Claim It!'s growth plan.
How did you get the 500,000 users?
We had the Claim It! truck
that went around sort of the five boroughs of New York City.
And each and every day, the truck made a stop.
And for four to five hours, the truck was in one location.
The user was able to discover that location on his smartphone, right,
to see where the truck is.
And when in proximity of the truck,
you're able to instantly win a prize.
How did you even get people to download the app in the first place?
We have an awesome team that works the trucks.
The team is out and about.
We were doing over 300 to 400 downloads a day.
-Are you still doing the trucks? -Not anymore.
But it's so good at--
-Yeah. It's something that-- -The virality of it sounds amazing.
When we launched, it was the Claim It! truck.
Now our offers become virtual.
Users can instantly redeem these redemption codes
and use them on websites, in stores.
We dominated New York City.
Now it's time to go nationwide.
And you're gonna grow this city by city.
-No. It's going national. Happens-- -National--
My question is,
why go national if you haven't even truly conquered New York?
Why not solidify New York heavily
and then extend city by city instead of just going national?
Thinking about bottoms-up approach.
Showing that, okay, this is not only working in New York City,
but it's now working everywhere.
It's not even working in New York City yet.
You're doing $20,000 a month.
We haven't focused on revenue for us.
It's always just been proving out our concept,
which we believe we did a pretty good job at that.
I acknowledge Brian's advice,
but when you see there's a market, you attack it.
And we know that there is a big opportunity.
Moving forward, version 2.0 is inherently national.
So anyone can use it.
So we don't have to build out these cities.
Within three months, we'll show you a hockey stick of
not only people downloading our app, but retention.
I think Claim It! is a little bit too early
to be looking at going nationally so quickly.
It's very similar to Uber.
Uber dominated San Francisco.
And once they had a truly proven concept,
then they started to scale, city by city by city.
Never did they say,
"I need a few million bucks, and I'm going nationwide right away.
-Awesome. -All right. Thanks, Brian.
-Thank you. -Thanks, Bri.
Thank you.
Gary invites Chris and Leon to VaynerMedia
to discuss the use of influencers in their growing app.
We're reaching out to a lot of influencers.
We already have a small number of influencers,
sellers, people that are creating videos.
And we're actively growing that.
We already have around 40 people who are actively working with us,
who are a mixture of friends and sort of smaller influencers.
I understand why you guys went that route.
I have a funny feeling we might be able to hit pay dirt
in a little bit of a different way.
When you take an influencer from FameBit or Instagram
who is pretty, and I have 100,000 fans--
Or I'm a teenybopper, and I have 100,000 fans--
These are people that are talent that you and I have ambition
to turn into salespeople.
-Yep. -Right.
The reason influencer marketing works is it doesn't take sales skill
to say, "This is a bottle of Lipton Tea."
Or it's creative talent to integrate this tea
into this one-minute video
that my audience is gonna love and care about this tea.
You want people who want to sell and make money.
Be first, because they're gonna use it feverishly
and hack it and break it.
Gary is the first person that made us really think fundamentally
who are the right people to have, in the early days, on our platform.
We kept thinking, "We need influencers that will talk about products for brands."
All these geniuses that are on the cover of all these business magazines now
were wrong about a lot of stuff.
You know who helped them? The users.
Twitter didn't invent the hashtag.
Chris Messina did.
If you start thinking long-tail in scale
before exactly who will help you in the first inning,
you won't get to the next part.
-Yep. -Yeah. I love it.
-Makes a lot of sense. -Okay. Good. Awesome.
What have you guys been up to since I saw you guys last?
We launched last week.
We're trying to work with users, seeing how they approach the app.
Another thing we want to do in our next sprint is
we were thinking sliding over to the right
would have a messenger in here.
Just to engage users so they know they're not listening alone.
I wanna be able to...
listen to a song...
with someone, at the same time, far distances.
I see. Yeah, I like that.
Yeah, that sounds awesome.
See what I'm saying? I be coming up with ideas and ****.
It's gonna take a ton of work to build Aux up to be what it needs to be.
We still aren't entirely sure what we're doing.
But we'll get there.
I think we're probably not gonna get too much sleep.
So we're figuring out how much money to raise.
Okay.
The amount we're looking to raise will be around two and a half million.
Having money now could be the difference
between a big competitor coming in and developing this functionality
and us being able to develop it ourselves.
I've got no money left in my bank account. And I need to pay rent.
So there's tremendous pressure.
Selecting a song isn't enough.
Selecting a song is, like, a picture.
How do I personalize it, like a filter?
It's very difficult for us to build all these features,
program everything, and support our users.
Especially as we approach the pitch to the VCs.
How you get to the nuts and bolts of what your business is--
One of our important strategies of going national
is to shut off version 1.0 for version 2.0.
I'm ready for the pitch.
After six weeks of intense incubation,
Aux, Claim It!, and Eight
head to one of the world's premiere venture capital firms,
Lightspeed Venture Partners.
Lightspeed was the first investor in Snapchat
and currently has over four billion dollars under management.
They're your potential customer.
Right? They're not VCs.
Take that off your mind, right?
You're not two young kids, like, "Give me money." No.
Listen, you guys developed it.
Freaking celebrate the **** out of it.
You guys are gonna be straight.
And you guys, like, are matching.
-Hi. -Hey.
-Hi, guys. -Hi, guys.
I'm so thrilled to introduce you to these young wizards,
the team at Aux.
Take it away, guys.
-Hi. I'm Brian. -And I'm Thanasi.
Aux is an online platform
for sharing, discovering, and listening to music together.
Our users use Aux in two ways.
First way is parties.
It allows one person to create the party and connect to a Bluetooth speaker.
Then everyone else can join the party on their phone.
They just open the app, tap on the party,
then they can add music from their Spotify or Apple Music account
or any music that's available on those platforms.
But our users aren't always together.
And that's why we made Sessions.
So if I wanna listen to music with my friends back home in Florida,
I can just open up the app, start a session,
and then invite my friends.
That way everyone can listen together, in sync, even if they're miles apart.
Okay. Cool. And can we go through your ask today?
So it's a SAFE of 300K on a three million cap.
The majority of these funds would be used to expand the development team.
Right now it's just us and no one else.
So far we've only soft launched.
But to do our growth in the future,
we want to start off with college campuses.
So we'll target, like, frat parties at first,
where there's a bunch of people, and there's always music playing.
So they'll be introduced to the whole Aux experience,
and they can then use Aux and spread it to even more people,
allowing it to take over an entire campus.
There was this product-- It was called Turntable.fm--
that I thought was super cool.
But they ended up going down the tubes.
And I don't know exact details,
but I think the licensing costs played into it.
The main reason why they shut down was licensing fees.
And with Aux, we side-stepped this
by utilizing existing users' Apple Music and Spotify accounts.
Since almost everyone has a streaming service now,
we figured that we'd just source licenses from these services.
Is there a difference between the license
that Spotify or Apple Music gives you to play music for yourself
versus playing it-- what is essentially a performance?
I know for a fact that it doesn't matter if you're hearing it in your headphone,
you're playing it on a loudspeaker.
This is no different from playing it on a loudspeaker
or at a dorm room party or in a car.
I think there is a really good idea here, but I'm not sure that it's a new idea.
There are a bunch of apps that already provide this functionality, aren't there?
So, there are...
other music sharing apps out there.
But we like to think of Aux as a social music platform.
For an example, there's one app
that allows multiple people to add songs
and have them play through a speaker.
But it's very clear that it is very much a utility.
They don't want to have a social aspect to it.
-Which one is that? -It is Flow.
When I looked on the App Store, it looked like the functionality that they have
and the functionality that you have are almost identical.
The technology that they're using
only allows for up to ten people to be adding songs at a time.
And in addition to that, you can't listen to music with people remotely.
So, from my perspective, I think that what you're building is really fun.
I like the fact that it builds on inherent consumer behavior.
And also the fact that it could spread very, very quickly through word of mouth
if you have these big parties and everyone within the party is using it.
I think you two are exceptional.
You're in high school.
You built a product and have leveraged an existing social behavior
and turned it into a digital behavior.
And that's how big businesses are built.
And I think that's exciting.
So, Jeremy, what do you want to do?
So, in this instance, in music,
having Will on board as an advisor
is a big advantage.
For a couple of kids who are good hackers
but not insiders in the music industry,
that's a real asset.
Yeah. I agree, Jeremy.
Okay. We'd like to make an offer.
We'd like to offer you $50,000...
on an uncapped convertible note...
at a 50% discount to the next round.
And then, if it is working,
we'd like to do a more conventional investment
into the business at that point.
This is really our belief in you...
and showing you what conviction we have in you two as entrepreneurs.
What do you say?
-I think it's reasonable. -Yeah.
All right.
Yeah. We think the offer is perfectly reasonable,
and we'd like to continue.
-Great. -I think that's a yes.
-Tremendous. -We're excited to work with you.
-Let's do it. -Congratulations.
-Great. -Thanks so much.
-I'm very excited to work with you. -Appreciate it.
This has been an incredible experience.
We've just been used to programing in our rooms, all day and night.
And to come out here and work with so many amazing people--
It's nothing like we've even done before.
-Hey, guys. -Hey.
-How are you? -Hi.
This is Ali.
And his business is Claim It!
How this idea came about was during a difficult time,
in 2008, when I was homeless.
I had nothing to lose, essentially.
And I had a child on the way. With no money.
So I saw an opportunity hidden in plain sight.
Everyone loves free stuff.
The most preferred method for brands
to be able to get someone to try their product
is to be able to give it away for free.
So give me an example of an offer and what happens.
You're notified that, hey, there's an offer nearby, right?
And so, in order for you to claim the offer,
you watch a 15 second ad,
and you can instantly win that prize.
It just creates buzz and excitement,
and it's a new way to get my customers to have
a different and innovative experience with us.
Can we move forward, perhaps?
Yeah. Why don't we go to the ask of what you're looking to raise?
We're looking to accomplish a Series A round
of three and a half million dollars.
Some of the goals and some of our milestones--
We obviously want to be able to hit about 18 employees.
Ali, how much have you raised to date?
-Two million. -Two million. And what's your burn?
-Burn is right under 40K per month. -40K.
And how much do you have left?
We have about maybe a five-month runway.
Great.
I was on the App Store recently, looking at your app,
and it seems like...
the ratings have fallen significantly for the most recent release.
The reason why, because we're under maintenance
to release the new version of the app.
So that when we launch--
What does it mean to be under maintenance?
-What is under maintenance? -We basically put the app on hold.
Just put the app on hold.
Meaning that you're now making changes to it,
or meaning that it doesn't work right now?
We're making changes to the app.
-Does it work or doesn't it? -Right now, it doesn't work.
Okay. It doesn't work at all.
Right now, when you launch the app,
it says that we'll be back soon
and we're launching version 2 of the app.
I realize startups have a lot of priorities and fires to fight,
but, like, you just can't stop running your business
while other things happen.
We do know up until the time he took his app down, he was growing.
But we don't know if that was profitable growth.
Ali, thanks so much for telling us your story
and introducing us to Claim It!
We really like the direction you're going in.
You have this incredible background,
you've accomplished so much,
and I'm impressed by what we've seen out of you as a founder.
Thank you.
While there's a lot to like here,
because you effectively put the business on hold,
unfortunately, we don't really know
what the business is gonna look like in the next few months.
So we thought the most logical thing for us to do
would be to pass on the opportunity to invest at this point in time...
but to watch you go through the second app launch,
and hopefully you're able to beat the retention and growth
that you've experienced so far.
And at that point, we would love to reengage
and discuss your next round of financing.
-Thanks. -Thanks, Ali.
-Thank you. -Thank you so much. Appreciate it.
-Thanks. -Good luck with the launch.
Thank you.
We need to go back to the drawing board
to figure out an approach to turn the service back on
as we build version 2.0.
-All right. -Thanks so much. I appreciate it.
And when we come back, it'll be a bigger and better way.
And I'm excited about that.
Can't beat me.
Just can't.
-Hey, guys. -Welcome.
This has been really fun for me because I'm a big fan of this space.
And this is Team Eight.
Eight lets anyone start their own TV shopping business
without capital or inventory.
-So we're asking for two million dollars. -Great emoji.
Great emoji.
So one of the things we've really noticed
is that selling through video absolutely sucks.
Now, the best place to sell on the web today
is the marketplaces:
eBay, Amazon, Etsy, Poshmark.
But what those marketplaces absolutely suck at is video.
They don't let you upload videos at all?
No videos on any of these marketplaces.
Amazon has videos on every product page if you--
Video shorts, but they're not user generated, right?
Well, but if you're on the marketplace, and you're a seller,
you can upload whatever video you want.
But as you know, in the UI and UX of where video sits
on a product page in an Amazon environment,
it is not secondary, it's not third-ary.
Sure.
You can go in, you can create your video that you can use for the marketplaces,
as well as linking directly to any products that you're selling
on the four marketplaces we integrate with today:
Amazon, eBay, Etsy, and Poshmark.
You can sell absolutely any product anywhere at all
just by scanning the barcode or adding the link.
And you can then generate affiliate revenue
by selling absolutely unlimited inventory.
So you have a utility app right now which allows you to create this content.
It's got utility in there. It's also got the social network aspects in it.
But right now, if you're pushing it out to Instagram,
and Instagram doesn't have native links, how do you buy from the video?
So check this out, right? So when you push a video to Instagram,
at the end of the video we've got this QR code overlay, right?
So that's a video that plays first.
And just by screenshotting, we make that shoppable.
That's clever.
So we actually really started working
with the sellers, the resellers, the thrifters
after a conversation we had with Gary.
We were, like, "Let's find the people that are the real desperate sellers."
People who actually have to sell this stuff.
The biggest thrifters and resellers in the United States right now
are starting to use our app.
How many users do you have right now?
Over 100 active sellers.
But the users who watch the videos also have to get the app.
So how's the loop working?
In the last month, I think we've had 1,300 people come in.
So this graph basically tells the story for us.
On the left-hand side you can see daily views.
On the right-hand side you see engaged sellers.
And you see there's a pivotal point here.
The Gary moment.
We then started really, really focused
on this community of people that want a video platform
that they can sell anything.
And at that point, the view count really started to go up, like, a lot.
There's a big idea here.
But it seems like everything that worked
came from your insights,
not from you two.
If Gary rolls off at some point in the future,
then do you guys flail around in the dark for a little bit?
He didn't ask us to add any integrations. We did that ourselves.
-Got it. -So, how many people in the team?
There's three engineers, myself and Chris,
and then two people doing social and content.
And what's your burn?
Right now our burn is like $6,000 or $7,000 a month.
-Wow. -Wow.
So no one's getting paid.
-Basically no one's getting paid. -Ramen, baby.
We're coming into this at our bank account negative $73.
Today our bank sent us a message saying we just got overdrawn $73.
Real entrepreneurship, boys and girls.
There's this new thing called thrifting, where you can buy stuff--
-Do you know what? -My man.
But honestly? Honestly, they're hustling.
These guys are emailing me at insane times.
I do think those guys are hustlers. They've got some technical ability.
-They work hard. -Right.
But there is just no scalability in this thrifter opportunity.
Completely agree with you.
And listen. The competitive dynamics are really tough out there.
Instagram do like to copy things.
So, I feel like it's only a matter of time until they make it fully shoppable.
Having said that,
I've been really impressed with you two.
Yeah.
And I do think this is gonna be the future of the way people shop.
It is gonna be these native shopping channels,
exactly what you guys are doing,
through an app.
So we would like to offer you 250,000
and 73 dollars...
on a SAFE with a four million cap.
We accept your offer.
-Nice. -Congratulations.
That's awesome.
-Great. -Fantastic, man.
I think you guys are doing some really good stuff.
I was nervous going in. Now I'm feeling pumped,
like I'm ready to get stuck into a beer.
I am so happy for you guys.
So proud.
To have the money that we need and have the vote of confidence,
it's life-changing for us.
If it's all me, that plays out over the next six months.
But we all know that's not true.
So now you gotta prove it.
Whether we have Gary Vaynerchuk advising us or not,
it's just a business that we are gonna make succeed.
Now's your chance to share your playlist using Aux
and shop with your favorite influencers using Eight.
You can also download Claim It!
and all of the apps featured in this episode
on the App Store now.