Transcription
WELCOME BACK EVERYBODY. AI STARTUP ARU IS A SIMULATION COMPANY THAT BELIEVES IT HAS CRACKED THE CODE FOR PREDICTING HUMAN BEHAVIOR WITH HIGHER ACCURACY AND SPEED. IT WAS FOUNDED JUST ABOUT TWO YEARS AGO BY TEENAGERS AT THE TIME. THE STARTUP IS NOW VALUED AT $1 BILLION, AND IT HAS CLIENTS THAT INCLUDE ERNST AND YOUNG, ACCENTURE, DRUG MAKER BAYER, THE FILM STUDIO A24, BOSTON BEER COMPANY, SPINDRIFT, AND OTHERS IN BUSINESS AND POLITICS.
JOINING US RIGHT NOW IS KAMRAN FINK. HE IS THE CEO OF ARU. NEDCO IS THE PRESIDENT AND JOHN KESSLER IS THE CHIEF TECHNOLOGY OFFICER. AND GENTLEMEN, WELCOME TO ALL OF YOU. JOHN, I THINK YOU'RE STILL A TEENAGER, AREN'T YOU?
I STILL AM. 17 YEARS OLD. THANK YOU SO MUCH FOR HAVING US.
WERE YOU GUYS ARE 18 OR WHAT? 19. WHAT ARE WE AT.
19 AND 18 WHEN WE STARTED THE COMPANY. 21 AND 20 NOW.
OKAY.
WOW.
WOW.
WE ARE BLOWN AWAY BY, FIRST OF ALL, WHAT YOU HAVE BUILT. SECOND OF ALL, HOW YOU HAVE BUILT THIS AT SUCH YOUNG AGES. THERE'S SO MUCH TO TALK ABOUT, BUT WHY DON'T WE JUST START ON HOW YOU GUYS DEVELOPED ALL OF THIS? AND I THINK THIS IS A SITUATION WHERE CAM AND NED, YOU TWO WERE RUNNING CROSS COUNTRY TOGETHER IN SCHOOL. WHAT WERE YOU TALKING ABOUT? WHAT WERE YOU WORKING ON? JUST TELL US THE STORY.
YEAH.
WELL, FIRST.
OFF, THANK YOU GUYS SO MUCH FOR HAVING US ON. NED AND I MET FIRST DAY, FIRST CLASS, FRESHMAN YEAR OF HIGH SCHOOL AND HAVE BEEN FRIENDS EVER SINCE. I MEAN, IN HIGH SCHOOL TOGETHER, WE USED TO PROGRAM COMPUTER PROGRAMS TOGETHER IN ORDER TO HACK OUR WI-FI SO THAT WE COULD AVOID TURNING IN HOMEWORK ON TIME. WE STARTED A QUANTITATIVE INSURANCE BUSINESS. I MEAN, WE DID ALMOST ANYTHING YOU COULD UNDER THE SUN, BUT NOTHING WE WERE QUITE PASSIONATE ABOUT UNTIL WE MET JOHN AND STARTED R2 TOGETHER.
SO HOW DID YOU MEET JOHN? THAT WAS ONLINE, RIGHT?
YEAH. SO IT'S A LITTLE BIT OF A RIDICULOUS STORY. I WAS APPLYING TO AN ACCELERATOR THAT THEY'D PREVIOUSLY GONE TO FOR A DIFFERENT COMPANY, AND TO CODEIUM, ONE PERSON OUT OF 296 ALUMNI ON THE LINKEDIN PAGE HAPPENED TO BE CAMERON. AND ABOUT TWO WEEKS LATER, WE DECIDED TO START THE COMPANY. WE RAISED OUR FIRST ROUND TWO WEEKS AFTER THAT, AND THEN WE MET IN PERSON A WEEK AFTER THAT. AND TODAY MARKS DAY 722 OF OUR CAMERON.
AFTER YOU SPOKE WITH HIM, YOU WENT BACK AND TOLD NED YOU THOUGHT YOU'D JUST TALKED TO THE SMARTEST PERSON YOU'D EVER MET.
YEAH, JOHN AND I SCHEDULED A 30 MINUTE ZOOM CALL. WE ENDED UP TALKING FOR 2.5 HOURS. BY THE WAY, THANK GOD THIS TIME I DID ANSWER MY LINKEDIN DMS, AND I REMEMBER CALLING NED AFTERWARDS AND I JUST SAID TO HIM, THE VERY FIRST THING I SAID IS, THIS IS THE SMARTEST PERSON I'VE EVER MET IN MY LIFE. NED AND I WERE ABOUT TO SELL OUR PREVIOUS BUSINESS AT THAT POINT, AND WE DECIDED TO SET EVERYTHING DOWN AND START A COMPANY TOGETHER, THE THREE OF US, AS SOON AS WE COULD.
YOU WERE ONLY 15 AT THAT POINT, JOHN.
YEAH, I WAS 15. AND SO SPENDING TIME AT THE MIT CITY SCIENCE LAB, AND I WAS WORKING ON SIMULATION RESEARCH OVER THERE. AND I FOUND IT TREMENDOUSLY INTERESTING, BUT I FIGURED THAT THERE WERE LARGER OPPORTUNITIES TO PURSUE IT. AND THAT'S HOW I GOT INTO STARTUPS.
OKAY. SO, NED, TELL ME WHAT YOU GUYS GOT. GOT YOU GUYS INTERESTED IN JUST TRYING TO PREDICT HUMAN BEHAVIOR.
YEAH, I THINK IT'S REALLY INTERESTING. CAMERON AND I AND JOHN ARE PROBABLY SOME OF THE ONLY TECH FOUNDERS WHO READ THE PAPER NEWS EVERY MORNING. WE'VE BEEN OBSESSED WITH POLITICS FOR YEARS NOW. IT WAS A REALLY INTERESTING TIME TO START THE BUSINESS IN EARLY 2024, BECAUSE WE HAD SEEN THESE MODELS GET MORE AND MORE PROGRESSIVELY POWERFUL, BUT BEING USED FOR MINUTE APPLICATIONS, SUMMARIZATION, RIGHT EMAIL WRITING, OTHER SORTS OF THINGS. AND WE SAW THEM BECOME MORE AND MORE HUMANISTIC. WE SAW REALLY INTERESTING OPPORTUNITY TO START MAKING THEM ACTUALLY HUMANISTIC IN THE WAY THEY ACT. AND POLITICS BEING IN 2024, PRIMARY SEASON BECAME AN INCREDIBLY INTERESTING TIME TO PROVE THAT OUT. SO PUBLIX SUPER MARKETS PREDICTION MARKETS ARE INTERESTING, BUT AT THE END OF THE DAY, THEY'RE ENTERTAINMENT. THEY FAIL FOR THE SAME REASON THAT TRADITIONAL HUMAN RESEARCH FAILS, RIGHT? THE AVERAGE HUMAN DOESN'T USE THEM, RIGHT? THEY HAVE INCREDIBLE SAMPLING BIAS BEHIND THE PEOPLE WHO USE THEM. SO THEY'RE PREDICTIVE IN NATURE FOR THE TOP 200 ISSUES THAT MATTER TO AMERICA. BUT FOR BUSINESS LEADERS AND OTHER FOLKS ACROSS THE WORLD, THOSE DON'T ALWAYS FALL WITHIN THOSE CATEGORIES. WE FOUND THAT THE MOST INTERESTING AND THE MOST ALPHA TO BE EXTRACTED FROM MOST PROBLEMS COME FROM AREAS WHERE YOU WOULD NEVER BE ABLE TO ACCESS THE HUMANS WHO UNDERLIE THOSE BEHAVIORS.
LIKE WHAT? GIVE US AN EXAMPLE.
SURE. ALCOHOL BEHAVIOR, GLP ONE USERS, RIGHT? THIS IS AN INCREDIBLY LARGE PROBLEM FOR THE INDUSTRY, BUT YET NOT A SINGLE PERSON WHO'S ON WEIGHT LOSS DRUGS IS WILLING TO ADMIT THAT IN THE GENERAL PUBLIC, PEOPLE DON'T WANT TO TALK ABOUT THEIR ALCOHOL USAGE. YET IT'S CREATING MASSIVE, MASSIVE TRENDS IN THE MARKET.
WAIT, YOU THINK ALCOHOL USAGE GOES UP WITH GLP ONES OR GOES DOWN?
I THINK IT'S IT'S COMPLETELY TO THE ANTITHESIS OF WHAT THE MARKET BELIEVES RIGHT NOW. WE THINK THAT PEOPLE ARE GOING TO BE DRINKING LESS ALCOHOL PER OCCASION. AND THE TYPE OF ALCOHOL PEOPLE ARE DRINKING IS CHANGING, RIGHT? SO YOU'RE SEEING PEOPLE SHIFT AWAY FROM HIGHER CALORIE ALCOHOLIC DRINKS LIKE BEERS AND SELTZERS, BUT THEY'RE STARTING TO GO TOWARDS SPIRITS. AND THAT'S SOMETHING THAT SIMULATION HAS UNCOVERED AS A CONTINUED TREND. BUT THE BIGGEST INSIGHT THAT WE PULLED OUT IS ACTUALLY THE NET NUMBER OF OCCASIONS IS GOING TO START TO GO UP. AND THE REASON BEHIND THAT, AT THE END OF THE DAY, IS THAT PEOPLE ARE ACTUALLY BECOMING MORE CONFIDENT ON GLP ONE DRUGS. THEY'RE BECOMING MORE SOCIAL, MORE OUTGOING, AND AS A RESULT, THEY'RE SPENDING MORE TIME AT BARS, THEY'RE SPENDING MORE TIME OUT AT RESTAURANTS.
AND ASK A QUESTION ABOUT THOUGH, ABOUT THAT ONE SORT OF PREDICTION, IF YOU WILL, AT LEAST THUS FAR, THE THE DATA SEEMS TO SUGGEST AT LEAST WHAT I'VE READ. MAYBE I'M COMPLETELY IGNORANT AND WRONG THAT THERE ARE MORE, THAT THERE IS LESS DRINKING GOING ON BETWEEN BEER, SPIRITS AND EVERYTHING IN THE COUNTRY TODAY THAN THERE WAS 12 MONTHS AGO AROUND THE WORLD, I BELIEVE. AND I THINK A LOT OF PEOPLE BELIEVE THAT THAT IS A FUNCTION OF GLP ONES. SO I HEAR WHAT YOU'RE SAYING, BUT I'M TRYING TO SQUARE THE CIRCLE OF WHAT'S ACTUALLY HAPPENING HERE.
YEAH. I MEAN, WHAT WE SEE, AND THIS IS SOMETHING THAT LIKE WE'RE REALLY GOOD AT PREDICTING, RIGHT? SIMULATION AND OUR TECHNOLOGY IS INCREDIBLY ACCURATE AT IS THE LONG TAIL OF PREDICTIONS, RIGHT? SO NOT JUST WHAT'S HAPPENING IN THE NEXT TWO, THREE, FOUR DAYS OR NEXT FOUR MONTHS, BUT RATHER WHAT IS GOING TO BE THE LONG TERM IMPACT OF GLP ONE S OVER THE NEXT TWO, THREE, FOUR YEARS? AND WHAT WE'RE SEEING ACTUALLY IS YOU LOOK AT PEOPLE WHO ARE ON GLP ONE S FOR A LONG TIME. AT THE VERY BEGINNING, ALCOHOL USAGE DOES CRATER. AND AS GLP ONE S ARE CONTINUING TO BE ADOPTED, YOU'RE SEEING THAT CRATERING OCCUR AT LIKE A MASSIVE RATE. BUT AS PEOPLE STAY ON GLP ONE FOR LONGER AND LONGER, WE HAVE BEEN ABLE TO UNCOVER AND THIS HAS STARTED TO BE EVIDENCED IN MARKET DATA. NOW. I MEAN, THIS PREDICTION WAS ALMOST SIX MONTHS AGO FOR US. WE STARTED TO UNCOVER THAT PEOPLE FIRST LEVEL OUT IN THEIR ALCOHOL CONSUMPTION AND THEN SECOND ARE GETTING MORE SOCIAL. I MEAN, THERE ARE WAYS YOU SEE THIS THE FIRST THING.
SO YOU'RE SAYING OVERALL THERE'S GOING TO BE.
CORRELATION IS CAUSATION. YOU DO THAT A LOT OF THINGS. HOW DO YOU KNOW IT'S NOT ALL THE POT SHOPS THAT ARE OPEN. NO ONE'S DRINKING.
THERE'S A LOT OF THINGS GOING ON. BUT NO, BUT RIGHT NOW, IF YOU LOOK AT ALCOHOL USE AROUND THE WORLD.
BUT YOU IMMEDIATELY SAY GOP ONES, THAT.
THERE'S A LOT OF THERE'S A LOT OF EVIDENCE.
OF ELI LILLY HAS.
SAID THAT SEEMS TO SUGGEST THAT.
PEOPLE DON'T CRAVE IT. THEY DON'T CRAVE ALCOHOL AFTER ALL. RIGHT. I MEAN, IT IS A IT'S A REAL THING. FOOD OR ALCOHOL.
YEAH. WHEN WOULD THAT BEAR ITSELF OUT? THAT PREDICTION.
I THINK YOU WOULD SEE THIS PLAY OUT OVER THE NEXT 2 TO 5 YEARS. AND YOU ALSO SEE LIKE THERE'S AGAIN, A LONG TAIL OF NOT JUST GLP ONES. LIKE WE HAVE SEMAGLUTIDE, YOU HAVE OZEMPIC WEGOVY ON THE MARKET RIGHT NOW, BUT YOU SEE THE NEXT GENERATION OF DRUGS, THE PREDICTION BECAUSE.
ALCOHOL PREDICTION SUGGESTING THERE WILL BE MORE ALCOHOL, THERE'LL BE MORE. SO RIGHT NOW THERE'S LESS ALCOHOL TODAY.
YES.
WHICH IS I THINK EMPIRICAL. WELL, YEAH. AND YOU'RE SUGGESTING THAT IN FIVE YEARS FROM NOW THERE WILL BE MORE ALCOHOL THAN TODAY.
WHAT WE WHAT WE BELIEVE IS THAT TODAY THERE IS LESS ALCOHOL OVERALL, THERE ARE FEWER OCCASIONS TO DRINK ALCOHOL AND THERE'S LESS ALCOHOL PER OCCASION AS WE THINK MOVING FORWARD, THERE'S GOING TO BE LESS ALCOHOL PER OCCASION. I THINK THAT IS GOING TO DROP, BUT I THINK PEOPLE ARE GOING TO START DRINKING MORE IN TERMS OF NET LARGER NUMBER OF.
FAT ON SOCIAL MEDIA AT HOME RIGHT NOW. THEY'RE GOING TO TAKE DOPE ONES. THEY'RE GOING TO FEEL GOOD ABOUT WHAT THEY LOOK LIKE, AND THEY'RE GOING TO GO OUT TO CLUBS AND MEET OTHER PEOPLE.
WHEN PEOPLE FEEL GOOD AND WHEN THEY LOOK GOOD, THEY'RE GOING TO BE MORE OUTGOING, THEY'RE GOING TO BE MORE LIKELY TO GO AND, YOU KNOW, GO OUTSIDE AND GO TO THESE EVENTS.
THAT WOULD.
BE.
A GOOD THING. IF THEY'RE NOT GRINDING ON SOCIAL MEDIA. CHARLES LOWREY PARENTS BASEMENT.
LET'S TALK ABOUT WHO SOME OF YOUR CUSTOMERS ARE. WE MENTIONED ERNST AND YOUNG AND OTHERS. WHAT DO YOU DO FOR YOUR CUSTOMERS THAT THAT SURVEYS? YOU THINK YOU'RE BETTER THAN THE SURVEYS?
LOOK, BEHAVIOR IS SUCH A STRONG PROBLEM AND IT IS SUCH A OBVIOUS PROBLEM WHEN IT GOES WRONG. LAUNCHING INTO THE WRONG MARKET. PEOPLE WON'T BUY YOUR PRODUCTS, THEY WON'T PAY A CERTAIN PRICE, THEY WON'T CLICK ON AN ADVERTISEMENT. THERE ARE A HUMONGOUS SLEW OF PROBLEMS THAT COME OUT OF THIS, RIGHT? SO YOU CAN SEE OUR APPLICATIONS GOING EVERYWHERE FROM AD TESTING ALL THE WAY TO PACKAGING, ALL THE WAY TO PRICES, ALL THE WAY TO DISTRIBUTION, RIGHT? YOU HAVE COMPANIES, YOU HAVE DIFFERENT ORGANIZATIONS WHO ARE USING US TO UNDERSTAND WHAT POLICY WILL BE RECEIVED BY DIFFERENT ORGANIZATIONS. SO IT'S A REALLY, REALLY LARGE SPREAD BECAUSE IT IS SUCH A LARGE PROBLEM. IT STARTS WITH THIS IDEA OF CONVINCING PEOPLE THAT MAGIC IS REAL, RIGHT? IT'S AN INCREDIBLY CHALLENGING PROBLEM TO GO TO SOMEONE AND SAY, HEY, WE'RE GOING TO BE MORE ACCURATE THAN PREDICTING HUMAN BEHAVIOR THAN YOU ARE EVEN WHEN YOU TALK TO YOUR CUSTOMERS.
THAT SOUNDS LIKE A HARD SELL.
IT'S INCREDIBLY DIFFICULT, RIGHT? AND SO WHAT WE DO VERY, VERY EARLY ON IN THESE STAGES WITH BUSINESSES IS SAY, LOOK, DON'T TRUST THE MODELS DIRECTLY. LET US PROVE IT TO YOU. WE'LL GO TO A BUSINESS JUST LIKE WE DID WITH E, JUST LIKE WE'VE DONE WITH ALL THESE THINGS. IT'S ACTUALLY A PUBLIC CASE STUDY WITH THEM. THAT'S QUITE INTERESTING. WELL, WE'LL TAKE SOMETHING THAT THEY KNOW ABOUT THEIR BUSINESS AND ADD THAT FAILED OR SUCCEEDED, A PRODUCT THAT THEY LAUNCHED, A PRICE THAT THEY LAUNCHED, WHATEVER IT MAY BE, WITHOUT TAKING ANY DATA FROM THEM. WE'LL RUN WHATEVER PROCESS GOT THEM INTO THAT, WHETHER IT WAS TRADITIONAL SURVEY, TRADITIONAL RESEARCH WORK, ETC. WILL RUN THE EXACT SAME QUESTIONS, THE EXACT SAME GROUPS THAT THEY ACTUALLY SPOKE TO IN THE REAL WORLD WILL SIMULATE THEM IN OUR MODEL, AND THEN PREDICT MORE ACCURATELY THE BEHAVIOR OF THE CUSTOMERS THAT THEY ACTUALLY HAVE. AND WE'VE BEEN ABLE TO USE THIS TO GROW AS QUICKLY AS WE HAVE, RIGHT. BEING ABLE TO PROVE OUT THIS TRUST IS THE ONLY REASON WE'VE BEEN ABLE TO BUILD THIS BUSINESS THIS QUICKLY.
HOW BIG IS YOUR BUSINESS? I REALIZE YOU GUYS ARE STILL PRIVATE. YOU HAVE $1 BILLION VALUATION AT THIS POINT THOUGH. WHAT CAN YOU TELL US ABOUT HOW HOW MANY CUSTOMERS YOU HAVE, WHAT YOUR REVENUE NUMBERS MAY LOOK LIKE?
WE WE HAVE OVER 100 CUSTOMERS OVER THE LIFETIME OF THE BUSINESS. WE HAVE BEEN GROWING INCREDIBLY QUICKLY. SO I MEAN, AS YOU SAW FROM LAST YEAR INTO THIS YEAR, THE POWER OF THIS TECHNOLOGY HAS ACCELERATED INCREDIBLY. IT RAN UP ON THE SCREEN. WE HAVE 21 EMPLOYEES. I CAN NOW PROUD TO SAY WE'VE GROWN UP TO 24 SINCE THE LAST TIME THAT WE PROVIDED THAT. BUT, YOU KNOW, WE HAVE SEEN INCREDIBLE GROWTH IN THIS BUSINESS. AND I THINK CUSTOMERS LIKE THE ONES YOU MENTIONED ARE ONLY GOING TO CONTINUE TO ADOPT THIS FURTHER.
WHAT'S THE WHAT'S THE PLAN? WHERE DO YOU HOPE TO BE TWO YEARS, THREE YEARS, FIVE YEARS FROM NOW?
I MEAN, THIS IS SOME OF THE MOST POWERFUL TECHNOLOGY ON THE GLOBE, RIGHT? AS YOU AND I CAN PROBABLY AGREE, HUMANS ARE THE PREEMINENT SPECIES ON THE GLOBE. SO IF YOU CAN PREDICT HUMAN BEHAVIOR, YOU CAN PREDICT THE FUTURE, RIGHT? WE CAN PREDICT HOW PEOPLE ARE GOING TO SHIFT MARKETS. WE CAN PREDICT HOW INDIVIDUALS ARE GOING TO CHANGE THEIR PRODUCT PREFERENCES. WE CAN HELP COMPANIES CREATE GENERATIONAL MARKETING CAMPAIGNS. THAT IS ONLY GOING TO BECOME MORE POWERFUL FROM HERE. AND SO AS WE SEE THIS IN THREE YEARS FROM NOW, IT'S NOT JUST THE POWER TO PREDICT THE FUTURE, BUT INSTEAD ACTUALLY THE POWER TO SHAPE IT AS WELL.
IT'S NATIONAL HAPPINESS DAY. CAN YOU HELP?
WELL, NATIONAL.
HAPPINESS DAY, CAN YOU HELP?
LOOK, I THINK THAT SHAPING BEHAVIOR ENABLES US TO DO A WHOLE LOT RIGHT. WE ACTUALLY SPENT A FEW DAYS AT A UNIVERSITY LAST WEEK. WE WERE SPEAKING TO A LOT OF BEHAVIORAL ECONOMICS PROFESSORS AND ASKING THEM WHY THEY DO THE WORK THAT THEY DO. AND WE WENT PERSON BY PERSON IN THIS ROOM, ASKING THEM WHAT MOTIVATES THEM TO UNDERSTAND AND SHAPE BEHAVIOR. ONE PERSON SAID THAT THEY WANT PEOPLE TO INVEST MORE MONEY WHEN THEY'RE YOUNGER, SO THEY LIVE MORE HEALTHIER AND PLENTIFUL LIVES WHEN THEY'RE OLDER. ANOTHER PERSON SAID THEY WANT PEOPLE TO UNDERSTAND BEHAVIORS SO THAT THEY WILL TAKE MORE VACCINES AND BE A HEALTHIER AND HAPPIER COMMUNITY OVERALL. THAT'S WHAT DRIVES US, RIGHT? WE DO A HUMONGOUS SPREAD OF PRO BONO WORK. WE'RE VERY, VERY EXCITED TO SAY THAT OUR SIMULATIONS TODAY HAVE IMPACTED HUNDREDS OF MILLIONS OF