a16zBuilding Cluely: The Viral AI Startup that raised $15M in 10 Weeks w/ Roy Lee
EVERY SPOKEN WORD
50 min read · 9,650 words- 0:00 – 0:50
Introduction
- RLRoy Lee
Six months ago, I was some random college kid in a dorm, and now I feel like I'm at the center of the tech universe.
- BKBryan Kim
There's something, like, really strange and special happening here.
- ETErik Torenberg
I heard someone call it rizz marketing [laughs] which is a compliment. But they're like, "I hate this rizz marketing."
- RLRoy Lee
We wrote our first lines of code 10 weeks ago. All of a sudden, we have, like, um, over a million dollars of enterprise revenue coming in.
- BKBryan Kim
Roy's probably the top zero one, zero zero one percent in the world in terms of knowing how to distribute.
- RLRoy Lee
Is this viral? Does this have viral fit? If any company in the world has a marketing team and the head of marketing does not have 100,000, at least 100,000 followers, like, you, you need to replace them. Like, like, the game has changed.
- BKBryan Kim
You're converting this, like, awareness and eyeballs into money, dollars.
- RLRoy Lee
I might as well just quit and topple down on every single crazy belief, thought I have and just live the most interesting life ever. I'm all in on building companies. There's, there's no way I can do anything else.
- 0:50 – 3:33
Roy's Rise and Controversies
- ETErik Torenberg
Roy, the man, the myth, the legend, the man of the moment. Cluely is the current thing.
- RLRoy Lee
Yes.
- ETErik Torenberg
How, how, how does it feel? The, the, the announcement the other day, uh, a lot of love, a little bit of hate.
- RLRoy Lee
Yeah. [laughs]
- ETErik Torenberg
[laughs] Maybe more than a little bit. Um, and any reactions? How, how, how do you react to this?
- RLRoy Lee
I mean, it's, it's pretty crazy. Uh, I think, like, literally six months ago, I was some random college kid in a dorm, and now I feel like I'm at the center of the tech universe. And, um, it's... The more astonishing thing is how correct my assumptions on virality have been. I think it's growing increasingly clear that, uh, people on X LinkedIn are behind, and there's such a very extremely small intersection of people who understand how developed the algorithm is on, like, Instagram, TikTok, and people on tech like Twitter, LinkedIn, X LinkedIn. And there, there's just such a small intersection that it's inevitable that my, my predictions will be right. And, um, it's been crazy to see that play out in real time.
- ETErik Torenberg
Yeah. Um, Elon's reaching out. Meta's offering a billion-dollar acquisition offer. Brian, we said, you know, not to do it, of course.
- BKBryan Kim
Of course. Of course. I mean, to the moon, to the moon.
- ETErik Torenberg
Uh, B-Brian, B-Brian, what is, what is your reaction seeing this, seeing this play out?
- BKBryan Kim
Look, Roy, this is fantastic. It was, uh... It's so interesting. I remember right before the announcement, you had already sent me the video 24 hours ago, like, "Bro, this is, this is what we're gonna show." And I was like, "Okay," like, "this, this is great, and I think it's gonna do well." I didn't think it would do that well, and I didn't think it would create that much, you know, co-control, controversy. But I also I think underestimated how positive people will view this. There's a lot of meta-analysis on you out there, which is, like, really, really cool, and there are people who are going, like, two to three layers deep. And I've a- actually read something that, like, linked a meta-analysis of a16z with how, you know, with Cluely a- and how there's, like, this sort of fungibility of thoughts and things like that-
- RLRoy Lee
[laughs] Yeah, I have no idea-
- BKBryan Kim
... which is, like, mind-blowing
- RLRoy Lee
... what they're talking about.
- BKBryan Kim
So it's just been incredible.
- ETErik Torenberg
People doing literary criticism. [laughs]
- BKBryan Kim
No, I'm not kidding. There's literally a guy who wrote, like, fungibility of thoughts with a16z and Cluely.
- ETErik Torenberg
People always overread into stuff. They're like, "Oh, this had this master plan. A16z is trying to do this whole, whole thing-"
- BKBryan Kim
Space seed.
- ETErik Torenberg
It does... Yeah.
- BKBryan Kim
No, don't, don't, don't tell them, Eric. We're, we are playing 4D chess here, so...
- ETErik Torenberg
10 threads analyzing the left-hand handshake. [laughs] It's like, guys, come on. I w- I wanted to... Some of the haters, I, I tweeted something as I was talking to Brian. I tweeted, "How you feel about Cluely is how you feel about yourself."
- BKBryan Kim
[laughs]
- ETErik Torenberg
But I deleted it 'cause I didn't wanna trigger people on Twitter. I'll talk shit on a podcast. Maybe I'll get clipped to Twitter, but I didn't wanna-
- BKBryan Kim
Yeah
- ETErik Torenberg
... in play Audible. But, uh, but it was fascinating, fascinating to see. Um, so
- 3:33 – 7:52
A Journey of Provocation and Ambition
- ETErik Torenberg
maybe I, I wanna go back to the, to the beginning 'cause th- this isn't a story that has been told a, a lot. You know, we were talking about the Amazon interview, but-
- RLRoy Lee
Right
- ETErik Torenberg
... maybe let's go back even further. When we think through the, you know, where you are now, think, talk about, like, the, the threads or the through lines from your childhood to, that, that can help make sense of who you are in, in kind of this moment.
- RLRoy Lee
I think, um, from birth, like, the most character-defining feature of me has been, like, attention-grabbing and provocative. Um, like, like, th- this played out elementary, middle, and high school. I was always, like, like, I had a camp of people that loved me and a camp of people that hated me. I was, like, always the boldest. Like, I, I would say the craziest shit. And everything that was on my mind, just no filter, I would say it. And, um, th- this ended up with a lot of people liking me and a lot of people just really disliking me. And I think, like, like, things culminated senior year of high school. Like, I, I, I, I did well in s- I did well in school. I got accepted to Harvard early, and then, uh, later that year, I was just always doing crazy shit, and I, uh, snuck out of a school field trip, um, past curfew. Like, the, the, the police had to come and escort me back 'cause we were out at, like, 2:00 a.m. We were all, like, 16, 17, 18. Um, and then, uh, I got a suspension for that, and that was, like, when the camp of, like, Roy haters took, took, took, took the storm and, and reported everything everywhere. And it ended up getting me rescinded from Harvard. Um, and then that, that, that kinda started my journey of, uh, I think wanting to actually swing big at building companies. At that point, I felt like my life took such a crazy turn. Uh, for, for, for context, my parents literally run, like, a college admissions consulting company.
- ETErik Torenberg
[laughs]
- RLRoy Lee
So we literally teach kids how to get into, get into Harvard. And the, the, the youngest son of the company, like, like, gets fucking rescinded from Harvard. It's like, it's, like, the worst thing ever. So, so we, we decided let's, let's keep this quiet. You, you still have the same test scores and application, everything. Maybe next year you'll get into a different school. Um, so I, I spent, like, an entire year at home, and that, that was, like... I underestimated how mentally tormenting that would be.
- ETErik Torenberg
Yeah.
- RLRoy Lee
Like, I'm probably the most extroverted person you might have ever met in your life. I, I cannot stay maybe, like, eight hours without talking to someone. Um, and, and to spend a year alone, like, it, it made me think, like, "Man, my life is so crazy, I might as well just quit and topple down on every single crazy belief, thought I have and just live the most interesting life ever." So that was, like, the moment where I decided, like, I'm all in on building companies. There- there's no way I can do anything else.
- ETErik Torenberg
I was wondering if you were gonna have a moment of, like, "Oh, you know, this has set me back in some ways. Maybe I should, you know, reform or, or, or tame it down." But you took the opposite of, like, "No."
- RLRoy Lee
Yeah, I mean-
- ETErik Torenberg
"This is who I am, and it's gonna work out."
- RLRoy Lee
Yeah, you just sit in a room by yourself for, like, like, 12 months-
- ETErik Torenberg
Oh
- RLRoy Lee
... and, and all of a sudden your craziest thoughts become logical, and there, there's no one else. Like, the, the echo chamber is you and your brain, and, uh, it, it amplifies, it amplifies everything. And I think that that's the reason why I am, like, the, the person that I am today and willing to make the bets that I am today.Later, I, I go to community college in California at the behest of my parents. Um, I think California, this is like a middle ground. California, I have the, I have the chance to build a company, and community college, like, I have the chance to get the education that my Asian parents always dreamed of. Um, so, so I, I do that, and then later I, I, I, I get into Columbia, and of- like, I, I have to go to Columbia for at least a semester to appease my parents. Um, I go to Columbia, and the first thing I'm thinking is like, "Can I find a cofounder and a wife?" Like, those are the only two things that I am looking for in college.
- ETErik Torenberg
[laughs]
- RLRoy Lee
And, uh, still looking for the wife, but, um-
- ETErik Torenberg
[laughs]
- RLRoy Lee
... on pretty much the first day, that's when I met Neil, my cofounder. Started hacking on a bunch of things, and the one thing that worked was, uh, the earliest version of Cluely, so.
- ETErik Torenberg
And were your parents ever trying to reform you or mutter at you? Or were they kinda like, "Hey, Roy's gonna be Roy," and like-
- RLRoy Lee
Almost-
- ETErik Torenberg
[laughs] Peace out
- RLRoy Lee
... probably like every single day of my life until I got into Harvard. Then they calmed down, and they're like, "Wow, this kid really made it." And then when I got kicked from Harvard, again, they were, like, on my ass a lot until I got into Columbia. Again, and they're like, "Wow. Like, I, I... Like, like after all this, he gets back into the Ivys. Like, I guess I really can trust him, um, and his unorthodox swings will, will... He home runs."
- ETErik Torenberg
So you, you mentioned before that, uh, your parents, they will love you no matter what.
- RLRoy Lee
Yeah, yeah, yeah.
- ETErik Torenberg
However, I am curious what they think now.
- RLRoy Lee
[laughs] Man, it's crazy how, how lax they've gotten since I got back into Columbia. Like, now they're okay with anything. When I told them, "Hey, Mom, I'm dropping out to do this," like, she's like, "Oh, like, like, okay," you know? Like, "I expected it." Like, like, "Uh, wow, wow, wow. Why didn't you drop out sooner?"
- ETErik Torenberg
[laughs]
- RLRoy Lee
"Why did it take you a semester and a half?" 'Cause at this point I was, like, convincing my cofounder to drop out with me, and she's like, "Man," like, "took you long enough."
- ETErik Torenberg
[laughs]
- RLRoy Lee
So they're, they're, like, totally on board with all the crazy shit that I do.
- 7:52 – 12:24
Mastering the Algorithm
- ETErik Torenberg
The, um... One of the things we were talking about in context of going viral I heard you say is that Twitter is two years behind Instagram.
- RLRoy Lee
Yeah.
- ETErik Torenberg
Or behind the other platforms. Ta- talk a little bit about... Well, first just, like, when your sort of provocativeness sort of translated over to Twitter or just, like, digital mediums, like, how did that strategy evolve? And let's talk about the difference in the platform.
- RLRoy Lee
I think... Well, and th- th- this, this goes way back, but, but, but many years ago when YouTube first came out as a platform, this was, like, the turning point of everything. This democratized, essentially, content, and now you weren't paying for commercials, uh, and, and the visibility and, and publicity and content was not gated by amount of money you're willing to spend on ads or, or, or, or, or TV space. It's, it's just gated by the quality of content. And five years ago when TikTok came out and, and short-form algorithms really started taking over, that shifted the, the, the, the frame once again. So now it's not about how much good content you make. It's literally just about how much content can you make. There is simply not enough good content out there for the average person to consume, which is why you see, like, like, like, the same brain rot reels over and over and over again, over and over again. You see the same Minecraft parkour video over and over just 'cause there's literally not enough content for the average consumer to, to, to consume.
- ETErik Torenberg
Yeah.
- RLRoy Lee
And people have not caught on to a few things. First, you just need to make more content that a consumer will... Like, most people don't know how to make viral content, content that any person can watch, consume, and it is digestible. And e- everyone on, on X/LinkedIn is trying to go for, like, be, like, the most intellectual, like, like, thoughtful person. And they'll generate some slop that maybe, like, 200 people in the world can actually understand and make sense of. But of course they would. They, they, they wanna, they wanna seem like the most interesting, thoughtful, like, intelligent person, but this just does... It lacks viral sense. There's not enough viral content to go out. And, and the second thing is that the algorithms really promote the, the most controversial things. And, um, people on X/LinkedIn seem to have... There's not enough controversial things to be rewarded for. So when I come out swinging out of the gate, I've been on Instagram, TikTok for the past 10 years of my life, and I understand what sort of, what level of controversialness you need. I, I, I take the slightest foot into controversialness, and all of a sudden X/LinkedIn explodes because the algorithm inherently highly, highly rewards this stuff. And as, as a result, it's just getting shoved into everyone's feed and they, they don't understand. But I'm, I'm just, like, literally applying the same principles of, um, controversialness from IG, TikTok onto X/LinkedIn and, and it's just, they're just so not ready for it that it feels like, uh, the craziest thing ever. And this is something that I've said before, but I guarantee, like, my videos do not go as viral on Instagram, like, Instagram, TikTok. And the sole reason is because on those platforms, they are not controversial enough.
- ETErik Torenberg
Yeah.
- RLRoy Lee
And they're... On those platforms, there are literally people committing felonies in public-
- ETErik Torenberg
[laughs]
- RLRoy Lee
... or at least insinuating, like, that are c- they, they are committing felonies and e- e- even then it'll be like, "Oh, good try, bro."
- ETErik Torenberg
[laughs]
- RLRoy Lee
Like, like, like, it's not interesting enough.
- ETErik Torenberg
[laughs]
- RLRoy Lee
And, uh, like, like, X/LinkedIn, they just have not caught on. There's not enough creators out there who are willing to press the controversial button.
- ETErik Torenberg
There is a... Mark, Mark says this sometimes, right? Like, supply chain of the meme. It's, like, the strangest concept, but the meme actually travels from, like, Reddit, and then it goes to, you know, X, and then it goes to Instagram, then LinkedIn, then CNBC, and there's, like, a train that it goes, and, you know, certain people are just really late. But when it, when you actually flip it with virality and controversialness, maybe that flips a little bit.
- RLRoy Lee
Yeah. Well, and sometimes it starts in, like, 4chan or something like, 'cause they have the most controversial people.
- ETErik Torenberg
That's what I mean. Like, I, I didn't even wanna say it. It's like-
- RLRoy Lee
[laughs]
- ETErik Torenberg
... 4chan, Reddit-
- RLRoy Lee
[laughs]
- ETErik Torenberg
... then Twitter-
- RLRoy Lee
Yeah
- ETErik Torenberg
... then Instagram and LinkedIn. But for you, it's actually Instagram and Twitter comes before, uh, Twitter in terms of the raunchiness or craziness of it.
- RLRoy Lee
Yeah, yeah. I mean, I just feel like the average person who's in X comments hating about how controversial this is, i- if, if they spend one hour looking through the, the timeline that is my Instagram feed-
- ETErik Torenberg
[laughs]
- RLRoy Lee
... their brains would melt and explode. Like, they would not be able to comprehend how are people, like, digesting this at scale.
- ETErik Torenberg
Well, it, it's funny because ever since Elon took over X, people, some people start complaining of, like, "Oh, this stuff has gotten too controversial or too much dark stuff or too much, you know, negative content." And, um, yeah, it turns out they're, uh, you know... It's just the, just the beginning. [laughs]
- RLRoy Lee
Yeah, yeah.
- ETErik Torenberg
[laughs]
- RLRoy Lee
I mean, literally this is, this is what the future of content is going to be. You're not gonna get more Millennial founders. You're only going to get-
- 12:24 – 14:07
Building a Viral Tech Company
- ETErik Torenberg
That, that, like, how did you intuit like, "Hey, distribution is a scarcity, distribution is what matters," and that... 'Cause there's a lot of creators out there, but they're not combining it with a tech company. Like, how did-
- RLRoy Lee
Yeah
- ETErik Torenberg
... how and when did you put this together?
- RLRoy Lee
I guess, I guess there was a certain point where I kept going viral that I sort of realized that I know something that X, LinkedIn people don't know yet, and it is sort of like mastery of the algorithm. Um, and I think, like, the... Everything started with the Interview Coder situation. Um, Interview Coder was the earliest prototype of Cluely, and it was a tool to let you cheat on technical interviews, and I used it to cheat my way through an Amazon interview. I made it super public, I posted it everywhere, and it ended up getting me, like, blacklisted from big tech and kicked out of school. Um, and that situation was inherently viral. Like, when's the last time someone got kicked out of an Ivy League and raised $5 million? Like, this has probably never happened in the history of humanity. Um, so that situation was inherently viral. And at that time, I had no idea that this was, like, a repeatable thing that I could do. Um, but then the launch video happened and I had my intuitions about the virality of launch video, and I just kept scrolling on Twitter and I was wondering, like, "Man, why is nobody doing what Avi Schiffman with friend.com showed the world you could do a year ago? Like, why has nobody done this, done this yet?" And it worked. And then I did the 50 Interns thing and it worked. And like, like, I, I kept doing viral video after viral video, and at a certain point, I just realized, like, "Holy shit, people on X, LinkedIn, they have not caught on yet." And, and, and this is the, the massive alpha that, that, that I'm trying to capture here, is that they have not caught on to what it means to master the short-form algorithm or, or, or the algorithm that, that is one of short form. And as a result, they're literally like... I, I am able to dominate the timeline for not the past week, but, like, probably the past few months just because people on X, LinkedIn have not caught on, and for some reason they still refuse to catch on.
- 14:07 – 15:49
The Power of Distribution
- ETErik Torenberg
Right. And, and so just to put a, kind of point out the 50 Interns, maybe explain this idea of basically at your company, you either have, you have engineers and you have creators.
- RLRoy Lee
Yeah.
- ETErik Torenberg
Right.
- RLRoy Lee
There, there are only two roles. You are either a world-class engineer who's building the product, or you're a world-class influencer. And for our full-time, um, every single person has over 100,000 followers on some social media platform. It is the only way to prove that you actually have mastery over virality and you understand what it takes. And I think if any company in the world has a marketing team and the head of marketing does not have 100,000, at least 100,000 followers, like you, you need to replace them. Like, like, like, the, the game has changed.
- ETErik Torenberg
And so do you think this is a strategy that other companies should also be employing? Of basically having, whether it's intern-based or just, like, having an army of creators and sort of deploying them towards, towards their end?
- RLRoy Lee
Yeah. I'll, I'll, I'll go a bit deeper in the interns. So, so, so Cluely made a pretty viral video announcing that we were hiring 50 interns and you'd be in here making content all day. And, um, essentially that, that, that's almost what we do. We have, like, over 60 contractors, and these contractors get paid per video, and they just are forced to sit in front of a camera and make TikTok and Instagram videos about Cluely, and this is what marketing look... Like, this job does not exist five years ago. Like, like, how do you explain the job where you sit in front of a camera and you make five 10-second videos that make, seemingly make no sense to anybody but, but just consistently generate millions of views? Like, that, that's not a job that makes sense to people. Um, but that, that is our internship. That's what, like, a modern-day marketing internship looks like. Look, we pay very little money for the amount of views that we get, and different companies, like, like, you're... They're, they're paying literally millions of dollars for Super Bowl ads when you can get the same quality and quantity of views $20,000 behind a screen.
- ETErik Torenberg
And you see it converting? Converting-
- RLRoy Lee
Yes. Yes, yes, of course.
- ETErik Torenberg
Yeah.
- RLRoy Lee
I mean, like, tho- those are our... Realest Claro are our only converting videos-
- ETErik Torenberg
Yeah
- RLRoy Lee
... is, is the ones that we have on IG TikTok.
- 15:49 – 20:09
The Partnership with Brian
- ETErik Torenberg
Yeah. B- Brian, why don't you share your story of how you got excited about Cluely, of how you and Roy met and, and built this relationship, and how this partnership formed?
- BKBryan Kim
Sounds great. Uh, I had a, I had a good contact in New York who's, uh, you know, travels in the young, cracked, uh, folks', uh, area.
- ETErik Torenberg
[laughs]
- BKBryan Kim
And her name is Allie DeBeau. And she sent, um, one of the lists that she sent had Roy in it, and I, like, read what they're working on, and it sort of reminded me of like, oh, like a scout thing, or it's, you know, it's on the edge of, uh, virality. I'm like, "Oh, this, this is interesting. I wanna talk to him." So I reached out. Roy, if you remember, I just reached out, "Hey, heard your name," blah, blah, blah, "We should talk." And you're like, "Oh, bro, let's talk." And then like a day later, you, you, you wrote back, "Am I... Actually, you're multi-stage. I don't wanna talk to you."
- ETErik Torenberg
[laughs] Yeah.
- BKBryan Kim
"Uh, my advisor says don't wanna talk to you. Go away." And then what do I do? Like, I could have just stood down, but I said, "Okay, fine. I, I promise you will not t- talk about fundraising. Let's just talk. Like, I wanna meet you, I wanna talk to you, I wanna build a relationship," blah, blah, blah. Thankfully, you agreed. We got on a quick call. We, like, chatted a little bit where you, like, had your origin story. I'm like, "Oh my God, this kid's, uh, he's amazing. It's, it's so cool. Like, I'm glad he's doing this. Sadly, he's not accepting money, but that's okay."
- ETErik Torenberg
Yeah.
- BKBryan Kim
And then I tracked you. I tracked your Twitter, I tracked what you're doing, the 50 Intern, you moved to San Francisco. And I had it in my mind, "Okay, next time, like, when the opportunity strikes, I'm just gonna show up." So I think I, I somehow got your phone number or some such thing and texted you, "Yo, like, I'm at your office. Can I, can I hang?"
- ETErik Torenberg
[laughs] Yeah.
- BKBryan Kim
So I, I come and, and I, and you say, "Yeah." Like, "That's great," like, "Come up." And what I actually think was really, really cool, there are a couple of steps, but step one was there was, like, an engineer who randomly found you on Twitter or Instagram and had, had just come up. Like, you, you did not know him, he did not know you. He just, like, came to your office, came in to say hi, wanted to say hello, and one of your friends, I think, uh, Nicholas, was just there hanging out. And the quality of the people, the fact that random engineers were knocking on the door to come talk to you randomly was just like, oh, like st- there's something, like, really strange and special happening here. And, like, all of your team members sitting in the thing and, like, doing things and creating content, and you and Neil working on the product. It was like, oh, like, there's something very special. And I sort of was thinking, "Oh," like, "is this, is this something that we should, we should sort of back?" And then I think, uh, one more video was made or something, and next time I visited, I think I, I came with some, some stuff or, you know, uh, you were eating steak. And then you flashed some, you know, metric or something where-I realize that you're converting this, like, awareness and eyeballs into money, dollars. You, like, drop some numbers. You're like, "Oh yeah, we're doing this many revenue, and that's what we're doing. And guess what? Like some on- enterprise customer wants to talk to us. I don't know why," blah, blah, blah, blah, blah. And that's when I sort of realized, oh, he is actually, uh, able to, like, convert this awareness and distribution that you're getting into real dollars, and I don't know many people who know how to do that. And during that time, I was al-already writing this thing called momentum as a moat because it's been so hard to pierce through the noise of everything in AI, especially in the sort of consumer-facing, pursuant facing. To do that consistently is actually way, way, way harder, near impossible. And so I had the theory that, oh, like, companies who know how to do that, companies who know how to build at that speed are gonna be the winners, and I felt like I have found a person who was doing that. And so, you know, I think we, we, we moved very quickly, right? Like, Ro-Roy, we... I think we... I told you, "Look, like, just, just hit download. Hit download on the Stripe data. Just hit download, send it to us. I won't ask any more questions-
- ETErik Torenberg
Yeah
- BKBryan Kim
... and then we'll, we'll have a chat." And that hopefully is what we delivered. We, uh, quickly scrambled to do a very fun for- small person interview where-- or small person chat with you and some of the partnership partners where you called some of them old, bald, and boring.
- ETErik Torenberg
[laughs]
- BKBryan Kim
Um, and we, we were excited to, you know, do the deal.
- ETErik Torenberg
Yeah.
- BKBryan Kim
I think I was at an LP summit running around in Las Vegas trying to call you to get to a terms, et cetera, and that's how it all worked out. And, uh, after a while, I brought, uh, I brought you five, six pounds of steak as a-
- ETErik Torenberg
Yeah. Yeah
- BKBryan Kim
... as an excitement and a, and a deal.
- 20:09 – 20:57
Momentum as a Moat
- ETErik Torenberg
I, I wanna double down on the, uh, double-click on the momentum as a moat piece, Bryan, because you have an interesting background in that you've been doing consumer for a while. You worked at Snap beforehand, among other places. And I remember Ben Thompson had this post about Snap where he said that Snap has a, a gingerbread strategy, where basically, you know, if they invent stuff, Meta is gonna copy it, so they just have to keep inventing stuff. And I guess it's like-
- BKBryan Kim
Oh, that's so good. Yeah
- ETErik Torenberg
... called the breadcrumbs or some- or something. And, and you also have backed a number of these, you know, um, consumer... You, you've s- had a front row view to, hey, um, you know, these network effects aren't as necessarily defensible as they once were, and so companies need to keep innovating, ke-keep, keep pushing. And so sh-share more about how this kind of momentum, especially as it moves to AI companies, how, how, how, how this theory was born and, and what, what it really means for, for, for defensibility.
- 20:57 – 21:58
The Evolution of Product Retention in the AI Era
- BKBryan Kim
Yeah. I did not have that view before. I did not think gingerbread strategy necessarily worked, nor momentum was a moat. I, I did not. I actually truly believed in these handcrafted, artisan products that really get to the core of why people wanna use it. I still somewhat believe core of it, but, like, you know, these, like, artisan products where, you know, it just takes a while to build it, and it's, like, very, very nuanced. And I have believed that led to high retention. So the thing that I looked at the most always was, is this product highly retained? Is this product... Does it product have, like, network effect on this, the traditional sort of theories of moat? And what I've realized, uh, and this was, like, true to some extent in the era of mobile. Mobile is, like, a two-decade-old platform, so a lot of things have been tried, and a lot of people tried different things, and therefore, finding something that people came back again and again and again was the most important thing in my mind. And then AI hit, and I still had that framework where, oh, like, I'm gonna look for things that are highly retentive and repeated again and again,
- 21:58 – 24:46
The Importance of Speed and Innovation in AI
- BKBryan Kim
and guess what? Things change too fast. Like, the underlying model changes every day or every week. If you, like, craft this thing, and OpenAI has someone, like, built their new, new model to include that part in their new, new product, you're done. You're gone. So then it, it couldn't become about, like, this highly thoughtful, slow build product. It needed to be something where founders knew how to move extremely quickly. And that included product, that included distribution. And because these fucking things are so magical, like AI is so magical, we, like, built a digital god, locked it in a, you know, chatbot. Because it's so magical, right now kinda anything goes. Like, people will give it a chance. And therefore, what's really important is to try to build the plane as it's falling down the cliff. And people who enjoy the thrill of the, you know, plane going down and actually is, like, as excited about building as it goes down, I think those are the winners of the next day. And so when I think about, uh, folks like Roy, it's the type of founder archetype who gets value and who's excited and leading the charge in terms of that speed, whether it's marketing, distribution, or product build, and usually all of that needs to come together to build an extremely durable, long data product. And that, to me, eventually will turn into a product that need to be retained, that need to be used every day. But we're still in this early stage of AI where I think momentum is the moat. And, you know, going back to Roy, like, I love to hear how you, you know, think about it because you... we talked about a little bit over chat where you think, like, stage one, stage two, stage three of building Cluely and, and sort of the distribution advantage that you have, and you keep talking about this, "Oh, maybe X and LinkedIn people don't get it right now," but that gap may, you know, narrow over time, so how do you think about the next stage and et cetera? But that's how it links to sort of my theory of momentum of the moat.
- ETErik Torenberg
I, I wanna get to Roy's product strategy, but first I just wanna... I'll, I'll add some points, which is, you know, it was interesting. Paul Graham, when he started Y Combinator, identified that technical founders were undervalued, that, that they were being underappreciated, and people thought, "Oh, you know, you need to have an MBA or, or..." And you, you realize, hey, it's easier to teach technical founders business than it is to teach, you know, business people how to build great products or how, how to code. And then-What happens over the next 15 years, it becomes way easier to, to, to build these things, um, sort of you know, AWS, you know, Logo.ai, et cetera, and distribution becomes the scarcity in that there's so much, um, you know, so much software, there's so s- you know, it's such a flooded ecosystem, as you quoted in your piece, Andrew Chen's piece about how the, um, all the marketing channels suck. They've all been sort of, you know, [laughs] like wrung out dry, and so distribution is now the scarcity. And so in the same way,
- 24:46 – 25:56
The Rise of Creator-Driven Software Businesses
- ETErik Torenberg
you know, the technical cofounder, now there's almost like an audience cofounder, or almost like a, hey, how do you, how do you really break out? And we've seen creators start to build business, like MrBeast with his, you know, chocolate or Feastables, right? Um, but the, you know, Kylie Jenner with her w- was it the makeup line?
- RLRoy Lee
Yeah, makeup line.
- ETErik Torenberg
Yeah, whatever.
- RLRoy Lee
Yeah.
- ETErik Torenberg
These creators that create these, like-
- RLRoy Lee
Lip, lip gloss.
- ETErik Torenberg
Yeah
- RLRoy Lee
Lip gloss.
- ETErik Torenberg
Commerce, you know, whatever. Like, but no one's really done it with software. No one has put the two and two together. You know, Justin Bieber tried to do a, um, a social network called Shots, or he tried, you know, uh, the John Jahidi via using Bieber. Um, but no big creator's really built, um, whether a consumer or enterprise huge software company. They've built commerce or physical goods, and I always thought, hey, why doesn't MrBeast launch like a Square competitor? Like, he's got all these eyeballs. Like, he's got... I'm sure he's got to get something better margins than, than, than Feastables. And, and he's-- and he has games, and, and he's a, a friend and a friend of the firm, and he's, he's done phenomenally well. But what I, what I like is that Roy's putting both of those together. And so may- maybe you can walk through a little bit. You talked about your distribution strategy. Why don't you talk about how the product strategy has, has evolved from the, from the beginning until now that we get to the, the sequencing?
- 25:56 – 27:02
Cluey's Journey: From Interview Coder to Viral Success
- RLRoy Lee
Yeah. I think, um, something that a lot of people miss is that, uh, the first line of Cluely code was written like 10 weeks ago. Um, so this is like really new, and I- th-this started with Interview Coder, which is just like a product that I, that I coded up over a weekend in my dorm. Um, and it was like a tool to let you cheat on interviews. Um, and what we realized after we got about like 250 million impressions on the whole scenario is like, wow, we just got so many eyeballs on this thing. Maybe if we can do this again, but we have a more general use product with a similar UX, 'cause we think we're really onto something with the UX here, then maybe we can make a lot more money. And, um, that's what we did with Cluely, and we just launched it as like Interview Coder for everything, you know, cheat on everything. Like, like, like, let's just see what happens, and the usage data will tell us what people are using it for. That's like exactly what's happening. Now we have this general purpose cheating tool, uh, like cheating tool, which is in reality is just like a invisible AI overlay, and we... Let's just, here's a, here's a new user experience for AI. Let's push it out to a bunch of people and see, see what happens. And as a result, like now we're past like a billion views overall on Cluely, and we're the, probably like the most viral startup in the world, and we have all this usage data that literally tells us, "Hey, here's where this is most sticky, and here's where the product direction needs to go."
- 27:02 – 28:54
The Power of Distribution and User Data
- RLRoy Lee
And I think that's like the core advantage of distribution is like you do not have to worry about market fit or anything because your users will tell you where the direction of market fit is headed, and their usage data will literally give you the information that you need to know. And if you don't have usage data, then you're literally shooting blind. Like, every, every person, every- who has built a company before knows that you can't really know what direction you're going. You have to talk to your users. But I feel like you don't... Like, if your distri- distribution is strong enough, you don't need to, like, talk to your users. You just need to look at their data. Like, you just need to look-
- ETErik Torenberg
Right
- RLRoy Lee
... look, look, look at the aggregate number.
- ETErik Torenberg
When you're also redefining kind of what a minimum viable product is to some degree.
- RLRoy Lee
Yeah.
- ETErik Torenberg
Like, uh, uh, people have to spend, you know, other people, other companies will spend many months building this thing and then seeing how people use it. But for you, if you can cr- you know, sort of draft the right content, you can test out the idea in a much quicker way-
- RLRoy Lee
Yes
- ETErik Torenberg
... to see, hey, is, is this really resonating?
- RLRoy Lee
Yeah, exactly. I mean, we didn't even have... Like, when we launched the video, like we barely had a functioning product. Like, we... The day before is when we finished our final test, and we're like, "Okay, we think this works. Now let's just launch the video as soon as possible." And we launched the video, and like s- all of a sudden tens of thousands. We just said, "Hey, let's just throw sales calls in the videos to see if people use it for sales calls," 'cause that seems like a pretty lucrative space. All of a sudden, we have like over a million dollars of enterprise revenue coming in from people using it for sales calls, and it's just, uh, like you can shot-in-the-dark distribution a lot quicker and a lot more accurately than you can shot-in-the-dark, um, product. And you don't need like a million product integrations. Like, like, it's just so much quicker. And what's even better about it is that the, the iteration loop is much faster too, because the algorithm will literally tell you via a number, which is number of views, like shares, whatever, like how well your, your strategy is going to work. So it's like it's, it's much, much easier to test is this viral, does this have viral fit, rather than does this have like, you know, market fit.
- BKBryan Kim
Uh, maybe, Roy, does that mean you, you sort of let the, uh, audience guide where the product goes? Is that how you sort of think about it?
- RLRoy Lee
Yeah, yeah, exactly,
- 28:54 – 32:41
The Translucent Overlay: A Game-Changer in AI UX
- RLRoy Lee
yeah.
- BKBryan Kim
And maybe tell... let's talk a little bit about like the form factor, because one of the things that internally we discuss is, look, Roy's probably top 1%. Now I revise it to top zero one, zero zero one percent-
- RLRoy Lee
[laughs]
- BKBryan Kim
... in the world in terms of knowing how to distribute. That married, the Venn diagram of that, and people who know and have the instinct to build a semi-translucent, um, over- overlay, it sounds so simple.
- RLRoy Lee
Yeah.
- BKBryan Kim
So does this, this disappearing picture sounds so simple. It's easy.
- RLRoy Lee
Yeah.
- BKBryan Kim
It's not technically hard. Like, ha- half translucent overlay, that sounds simple. It's not technically hard.
- RLRoy Lee
Yeah, yeah, yeah.
- BKBryan Kim
But that overlap to me was what gave me so much excitement around what you're building. I actually have it right now on. Like, Eric, did you go to University of Michigan?
- ETErik Torenberg
Yeah, I did.
- BKBryan Kim
I, I... See, I didn't know that. I, I did not know that. But I, I have Cluely open. I'm like, you went to U of M. Got that. Oh, you did philosophy, pol- poli sci, and economics, I think? Like-
- RLRoy Lee
Yeah
- BKBryan Kim
... great. We can, we can sort of bond over that, you know? Like, this all of a sudden is an incredible tool.
- ETErik Torenberg
Yeah. That's amazing. W- why don't you talk more about where you see the product going, or particularly like h-how you think about it. Anyone who's building AI tools like asking themselves the question of how does, you know, one of the incumbents not... How is this defensible from one of the, the ma- the major players? W- you know, will OpenAI or et cetera just, just build th-this feature? H-h-how do you think about making your product like a truly defensible, especially from the people that ha- because of their reach, their size, you know, OpenAI has distribution too, right? So-
- RLRoy Lee
Yeah
- ETErik Torenberg
... h-how do, how do you think about this?
- RLRoy Lee
Yeah, I mean, I gu- I guess we're first to move in a pretty novel UX, and I think, like we did get the translucent-- Like, I think everyone's going to inevitably get the translucent overlay. This is how an integrated AI should feel, and like Apple shows everyone that like, like liquid glass is the translucent overlay that, that, that, that will be the form factor of AI in the future. Right now, I feel like it's just a land grab, and, um, if the question is about distribution, then I think there's actually like a pretty strong case for us to make that we will actually end up distributing better than OpenAI. And, um, it's enough that you could probably bet on us at like, what, like a 30,000X discount.
- ETErik Torenberg
[laughs]
- RLRoy Lee
Um, and, and, and I, I'm, I'm actually not, not worried about distribution, and I think the quant- the quality of the product, I mean it's, it's quite simple. Um, I, I really feel like this is just a land grab right now to see who can convince as many consumers and enterprise first that they are the guy who deserves to win the translucent overlay. And, uh, right now we're making so much noise, I mean, like with the translucent-
- ETErik Torenberg
Yeah
- RLRoy Lee
... overlay. Like, like why would it not be us?
- ETErik Torenberg
And, and when did you figure out the translucent over- overlay was the, was the right-
- RLRoy Lee
Yeah. I mean, I was just in my dorm with Neil, and we were just-- Like, we literally spent every day thinking about how can we make Interview Coder more invisible to interviews? And, and, and we, we, we, we played around, and there's probably like 20 to 30 versions of Interview Coder in the past that just we thought didn't work. But, you know, you, you, you... Essentially, it feeds you a code answer, like, like an answer to a coding problem, and you need to overlay that on top of your code. And we're just like, "Man, I really need this integrated into my code. I need to see what I'm doing as well as see the answer that AI is giving me." And eventually we just landed on translucency, and this was like, wow, this is like a magical moment. Th- th- this is what the product needed. And like very soon we realized, like, why are we only thinking about coding interviews and like software engineering coding interviews? This is such a small market. Like, like th- th- this, this is true for everything.
- ETErik Torenberg
Yeah.
- RLRoy Lee
AI should not feel like a separate window. Like, it should be integrated seamlessly and, and that, that, that, that looks like translucency.
- ETErik Torenberg
I would love Roy to chat about the staged approach of how you're thinking about it, I think. Like right now we're distribution first, and then we'll sort of dri- build the product as we go. Stage two, here's how we do it, with like bunch of engineering prowess and product development, et cetera. I think, uh, we sort of chatted a little bit about that on, on text, and to me that was like, oh, okay. Like he's, he's got... Like, y- you'll, you'll figure out, like, a product as you go.
- RLRoy Lee
Yeah, yeah, yeah.
- ETErik Torenberg
So, yeah. I'd love to, love to talk a little bit about that.
- 32:41 – 34:22
Building Hype and Authenticity in Product Launches
- RLRoy Lee
I mean, right now the internet is up in storm saying, "Hey, where's the product? Where's the product?" And, um, that, the, the, the two things that-- Like, we are literally working day and night to, like, build out the product that we have in our head, that the users are telling us that they, that, that they want. Um, but also, like, every video I make that's not directly about the product drums up so much more hype for the eventual product launch video. Like, I will guarantee that this will be viral. Um, and I guarantee that it will be more viral than if we just launched, like, earlier. And I think there's, like, there's truth in the statement of, like, launch early, ship fast, launch before you're ready. But for some reason, when we're doing that at scale, like, it feels like, like everyone is like, "Oh, no, you launched too early." Like, now, now where's the pro- Like, what are you, what are you talking about? This is the playbook. Like, we wrote our first lines of code 10 weeks ago. We're, like, earlier than the latest YC batch of companies, yet we're, like, generating probably more revenue than every single one of them. And like, like the product is, like it's literally two and a half months it's since, since being built. Like, like we're in, in, in my perspective, we are pre-launch. And the, the, the huge benefit of being, like, massively distributing pre-launch is that you will know what product to build, um, with as much certainty as you could possibly get. And if you can distribute and hype it up to an audience of literally millions of people, like, "Hey, this product coming out, this product's coming out," and we're screaming to the world, "AI overlay," like, "AI that sees your screen. Here's, here's your audio," like the second we make that, like why would you pick anyone else's product to use? We've been screaming it from the top of our lungs since day one, like before day one even. Um, and like right now this, the stage is distribution. Get it into everyone's mind. Like, what is Cluely? Cluely is the AI, the invisible AI that sees your screen and hears your audio. Like, everyone knows this. Um, and as soon as we launch it, like, who else will, will they download?
- 34:22 – 40:12
The Future of Professionalism and Corporate Culture
- ETErik Torenberg
Yeah. And one thing I think that's fascinating about what you're doing, and I'll compare it to our friends at TVPN who are kind of rebranding or reclaiming, they call themselves corporate-driven media. And because everyone was like, "We're independent media," and they're like, "No, no, we're corporate backed. We're more honest that way." Like, um, and they're just leaning into, uh, you know, the, like all the bits about ramp and, you know, save 5%. And it, there's this kind of humor to it, and I think similarly, like you're kind of leaning into the controversy or being controversial as a strategy where some people think, "Oh, that's like fake or forced," or whatever. But you're at the same time, you're super authentic in-
- RLRoy Lee
Yeah
- ETErik Torenberg
... in the way that you're doing it, and people feel like they, they know you. And, and sometimes even there's, if there's a character, an exaggeration, that also feels authentic i- i- in, in some way. It's, um, it's just kind of a unique, unique style.
- RLRoy Lee
Yeah, I mean, I think this like just reflects a growing, like, like a shift in society. I mean, literally for the past few decades now, there's just been such this sharp drop off, drop off in professionalism, and I really think it's because, like, content creation has been democratized. Like, like the first ever YouTube creators were just people making funny videos in their dorms, and this was the most authen- Like, people crave this. They, they, they-- Nobody wants to see another ad or another corporate newspaper, like bullshit like that. Like, they wanna see some real person doing real things. And, um, the democratization of content creation has allowed authentic people who make content to be seen by millions, and now authentic people who create content will be seen by millions. And, um, for some reason, it's just like no company gets this, that you'll have like 100 X followers and your post will be about introducing blah, blah, blah, blah and it's like the most corporate bullshit ever. Like, you're not gonna get any views, and nobody wants to see this.
- ETErik Torenberg
Yeah.
- RLRoy Lee
Like, would you rather have a world where everyone was extremely transparent and even the founders were honest and like, like, like everything you see is just someone's authentic life, or would you rather see like bunch of corporate bullshit everywhere? Like, what we envision for the end state distribution of Cluely is that it does not feel like an ad at all. This is just the story of someone's life that you want to see, um, and it is like true and authentic. And I, I, I try to be like... I'm probably more transparent about everything-
- ETErik Torenberg
Yeah
- RLRoy Lee
... than I'd say probably 99% of companies in the Valley are.
- ETErik Torenberg
Well, to me, 'cause what you're saying p- some people get so mad at the, the, some- I heard someone call it rizz marketing [laughs] which is a compliment. But they're like, "I hate this rizz marketing."
- RLRoy Lee
[laughs]
- ETErik Torenberg
Like, "It's gotta be, you know, product first. Get back to fundamentals." But first, this is its own fundamentals too of how the world works today.
- RLRoy Lee
Yeah.
- ETErik Torenberg
But two, it's like-You know, so of course they can't destroy you, but even the people who wanna destroy you, the joke in my head is they can try to kill you, but they can't kill the idea.
- BKBryan Kim
Yeah, yeah, yeah, yeah. [laughs]
- ETErik Torenberg
[laughs] Like, like the way that you're building companies, like there's something about it that is going to have an impact on, on the next generation, and it's, uh, you know, you're just starting the, the company journey. But e-even still, just like causing that shift or inspiring that shift is, is, is just remarkable.
- BKBryan Kim
What, what I would say, the viral marketing, when you say viral marketing, is interesting, right? Like one leads to another. I actually think what you're doing is like anti-fragile marketing.
- ETErik Torenberg
Yeah.
- BKBryan Kim
Like you're so controversial, I'm gonna cut off your head, and three sprungs up because one is mad at you, one is really happy about you, one is neutral. Like, you get all these... Like, every time someone comes at you and comes at the idea of Cluely, the more aura, aura points it gets.
- ETErik Torenberg
Yeah. [laughs]
- BKBryan Kim
It's like aura farming.
- ETErik Torenberg
Any lessons from the most controversial stuff that you've, you've done, or is it... Oh, is it always triple down? Is it like, w-how, how do you think about is there a line, where to cross it with? Yeah, how do you think?
- RLRoy Lee
I think the, the few lessons have been never punch down, like never, ever even remotely close to punch down. Um, and I think people reward, and the algorithm does like reward authenticity more than anything. Like it rewards many things, but, but, but one of the things that it rewards most is, is like authenticity. And I think you'll see me in Twitter, like every once in a while I'll make like a genuine comment.
- ETErik Torenberg
[laughs]
- RLRoy Lee
Like, "Hey, hey, thank you," like, "I really respect you" or something.
- ETErik Torenberg
[laughs]
- RLRoy Lee
I think like, like people love to see that. Um-
- BKBryan Kim
Oh, yeah, I saw your response to Gary Tan.
- RLRoy Lee
Yeah, yeah. I mean, I mean, it's true. Yeah, like I, I respect that guy, and I, and I, I hope that, that one day when the company gets to where I imagine it will be, then, then he will, he will come turn around. I don't think the lesson is to triple down on everything, but I think the lesson is to like, if, if you're honest, then the algorithm will reward you because there's literally zero other company out there that is being fully honest about everything, and there's zero founder out there that, um, behaves authentically. It-- the only other person I might think is like Elon Musk, and I think that's like a really good role model to have in business [laughs] making.
- BKBryan Kim
Yeah. As you build Cluely into the first destination for consumers and enterprise alike, how do, how does like the type of stunts, if you will, and skits actually fit into the type of customer that you wanna serve?
- RLRoy Lee
Like 40 years ago, we were way more professional than we are now. You-- if you were even an engineer, you come into work, you come in with a suit and tie, and if you don't, it's distasteful, it's disgusting. I cannot believe it. Like, like you should never, ever show up in a hoodie and sweatpants. Now, you're weird if you come up with a suit and you're not in a hoodie and sweatpants, and there's just like everyone wants more authen-authentic things. Right now, there's this, for some reason in society, there's-- we're still lingering onto this image that companies need to be like brand friendly and boring and never say anything controversial or whatever the... Like, like, like I don't understand how this became the societal norm, but in reality, people want to see interesting things. I mean, like that's the point of life is you see interesting things, and it's like there, there's just this lack of professionalism, and again, with the distribution of short-form content, like everyone sees the craziest things, and you just get desensitized to these things, and that's why sports like sperm racing were able to be so hyper viral. Like nobody would've aired this on CNN 10 years ago, but you don't need CNN anymore. You have Instagram, TikTok, and Instagram, TikTok, they love sperm racing. As a result, they're able to raise at a fucking mass evaluation, like genuinely have a shot at being like the next legit sport. And, um, it's not just sperm racing. I mean, it's every company in the world. There's Sam Altman talking about how hot the guys are that GPT generates in the timeline. There's Elon Musk doing ravings about his political takes. Like every company is getting less and less controversial, and this trend is not gonna die.
- 40:12 – 41:35
Concluding Thoughts and Vision for the Future
- RLRoy Lee
for at the moment. I think the, the question that everyone should linger on a little bit is like, um, what happens... Can you imagine a world where we do win? Like, can you imagine the world-- like what will the state of the world look like if Cluely does win, and we prove to everyone like the bar for professionalism is here, where we've determined it? This entire state of like the corporate culture of America as a whole is going to shift, and perhaps the entire world. Um, everyone will realize like, oh, we've been, we've had our like, like, like, like panties up in a bunch worrying about brand image and professionalism when in reality the world craves something different. And I have very strong conviction that I'm right in this because I was right about X, and I, I just, I do not understand for the life of me why nobody is producing the viral videos that were so obviously designed to go viral for the algorithm, and it's just because nobody has caught on and nobody's willing to like press that button. Um, now that I've pressed the button once, I, I like just imagine what the world looks like-
- ETErik Torenberg
[laughs]
- RLRoy Lee
... if Cluely makes it. And then I, I, you, you probably, you probably like are more interested in that. That, that would be a much more interesting world if every company was being 100% radically transparent and doing exactly what, what the most interesting thing was.
- ETErik Torenberg
As Elon says, the most entertaining outcome is the most likely.
- RLRoy Lee
It's true.
- ETErik Torenberg
So on, uh, on that note, this is the-- been a fantastic episode with Roy, Brian. Guys, thanks so much for coming on the podcast.
- BKBryan Kim
Yeah, thank you so much for having me.
- RLRoy Lee
Thank you.
- BKBryan Kim
Thank you. [outro jingle]
Episode duration: 41:35
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