This Startup Built AI That 80% of Callers Think Is Human

Nicolas Dessaigne 0:00 [on-hold music] Today, I'm joined by Will Bodewes, the founder and CEO of Phonely. They just announced a great 16M Series A led by Base10. Congrats, Will, and thanks for joining us today.

Will Bodewes 0:17 Yeah, thanks so much. Very excited

Will Bodewes 0:18 to be here.

Nicolas Dessaigne 0:18 All right, let's start by just the up. Can you tell us what Phonely is today?

Will Bodewes 0:22 Yeah, so Phonely is a platform that allows you to answer your phone with AI.

Nicolas Dessaigne 0:27 Mm-hmm.

Will Bodewes 0:27 But that's, like, the tip of the iceberg. So really, what we do is we allow businesses to optimize their voice AI agents so that they can continuously get better on the outcomes that the customers care about.

Nicolas Dessaigne 0:38 And, uh, what kind of volume are we, are we speaking about here? How many calls per day or per month?

Will Bodewes 0:43 Yeah, so we, we do millions of calls every single month. Um, we do, you know, on a variety of different verticals.

Nicolas Dessaigne 0:48 Mm-hmm.

Will Bodewes 0:48 I think one thing that's exciting about our company is it's not just one industry. We've been able to figure it out across, you know, hundreds of different verticals.

Nicolas Dessaigne 0:56 And so who are your customers?

Will Bodewes 0:58 Our biggest customers are people in the call center space, in maybe insurance. Um, we, we work a lot in home services. Um, but they run some sort of call center where they really care about capturing and optimizing AI agents for performance. So a lot of these customers, what they were doing is they had a call center that was qualifying leads, booking in appointments for very large organizations, and what we allow them to do is we allow them to make sure that the AI agent does a great job every single time, but also gets better statistically over time.

Nicolas Dessaigne 1:29 So voice AI has kind of taken off in the past couple of years, right? And there ... We see so many companies doing that. Uh, how do you differentiate from all of these companies leveraging AI in their kind of like phone calls?

Will Bodewes 1:42 Yeah, it's funny. We- when we started working on Phonely, voice AI, like the term voice AI, didn't exist.

Nicolas Dessaigne 1:47 Yeah.

Will Bodewes 1:48 Um, and so I think part of the way that we differentiate is just, like, having a ton of battle scars about how to get voice AI agents, you know, up and running in

Will Bodewes 1:55 production.

Nicolas Dessaigne 1:55 Sorry, remind me when, when did you, uh, start the company?

Will Bodewes 1:57 Well, we started the company maybe, like, two years ago, like, officially, but we were working on this in our PhDs before that. So we were doing a lot of this experimentation, um, back in the early days. And so one of the things that, like, puts- sets Phonely apart is, um, you know, not just, not just the, you know, conversational quality of the models, but we started building our own LLMs. Um, and what that has allowed us to do is, you know, we care about optimization. Our customers care about how well the voice agent performs, not that it just answers the phone, right? And so we have the full comprehensive platform that lets you answer your phone, but we, we surface all the tools and all the data that you need to know to make informed decisions. And so for our customers, it's like we can statistically show them that changing one question, and we just did this the other day, changing one question can, uh, increase one of our customers' outcomes by 5%,

Will Bodewes 2:44 right? And so-

Nicolas Dessaigne 2:45 And you can tell them what question to change.

Will Bodewes 2:46 Exactly. And so we surface through all that data. We look through all that because I think the exciting thing about voice AI is it's brand new, and nobody knows what to do about it. But it kind of feels like we just figured out you could put books on the internet, right? And nobody's realized that you can optimize that checkout, you know, that checkout conversion for, for an outcome, right? And so what we try to do is we try to take all that data and then service it back to the customers so that they can make great decisions on how to improve

Will Bodewes 3:12 their business.

Nicolas Dessaigne 3:12 Let's, uh, let's speak about what led you to that company. Uh, so because you have, like, a pretty unusual background here, like you started with an audio startup, then that AI PhD in Melbourne.

Will Bodewes 3:23 Yeah.

Nicolas Dessaigne 3:23 But you are American.

Will Bodewes 3:24 Yeah.

Nicolas Dessaigne 3:24 Like, how ... Come on. Like, how, how did [laughs] ... Why Australia? How did you come here?

Will Bodewes 3:29 Yeah. It doesn't, uh, it doesn't really make a lot of sense, it looking ... You know, usually things make sense looking backwards, but I don't think that my, my journey necessarily does. Um, I was, uh ... Started way back, I was a college athlete. And so, um, I was a college athlete, and I was in engineering. And so I, I was-

Nicolas Dessaigne 3:44 What kind of sport?

Will Bodewes 3:45 Uh, cross-country skiing, funny enough, um, which is a real thing, and there's really college athletes out there that do that. Um, but I, I got pretty good. I was in, you know, NCAAs, and that was my whole life. That was my whole, you know, focus. And I got to the end of my, end of my career. I finally made it to the NCAAs, which is the highest that any-

Nicolas Dessaigne 4:01 Mm

Will Bodewes 4:01 ... collegiate athlete can make it. And my, my NCAA race was canceled because of COVID, and so I never got to, I never got to race it.

Nicolas Dessaigne 4:09 Not good.

Will Bodewes 4:09 Yeah. So I, I think part of it always had, I had this chip on my shoulder-

Nicolas Dessaigne 4:12 [laughs]

Will Bodewes 4:12 ... you know, that I had to go, that I had to go prove myself. And so I left college. I started my first company.

Nicolas Dessaigne 4:17 Mm.

Will Bodewes 4:18 Um, didn't end up working out. Um, but then I had, I was offered, like, a, a full-ride PhD, um, in artificial intelligence in Australia, and I took that opportunity. And I just learned as much as I could about AI, um, about the space because I felt like it was, it was gonna be the next big thing, um, and started working on voice.

Nicolas Dessaigne 4:34 Yeah.

Will Bodewes 4:34 And that's how we got here.

Nicolas Dessaigne 4:35 And I think you said somewhere that you saw your dad struggling with answering the phone. Was that the trigger of that idea?

Will Bodewes 4:41 Yeah. So, and my dad ran a, a small practice, um, as my whole life was just watching him-

Nicolas Dessaigne 4:46 Mm

Will Bodewes 4:46 ... you know, start this practice from our garage and, and build it up to, um, a decent sized business. And so I, I asked him what are his big problems that AI could potentially solve, and he was like, "Man, if somebody could answer my phones, that would be amazing." And so I was like, "Okay, well, let's look for a software that does this for you," um, so that he could use it, and nothing existed at the time, and so I started working on it.

Nicolas Dessaigne 5:06 Okay. And so from this first iteration of, like, an AI receptionist-

Will Bodewes 5:10 Yeah

Nicolas Dessaigne 5:10 ... just answering the phone to what Phonely is today, like, there's a huge gap.

Will Bodewes 5:14 Yeah.

Nicolas Dessaigne 5:15 Can you lead us, like, through kind of these iterations you had to make over the, the couple of years you've been working on it?

Will Bodewes 5:20 Yeah, absolutely. It, it's ... You're, you're right. It started as, like, a very small business type of product, and I think the, the reason for that is because we needed the feedback from the customers about what they cared about, right? So we started in that small market where we could get customers on for, you know, 30, 50, 100 bucks a month, um, but they would give us really good feedback.

Nicolas Dessaigne 5:39 Okay.

Will Bodewes 5:39 And so what that allowed us to do is it allowed us to build a really good product and shorten our iteration cycle because we didn't have the luxury of having a ton of contacts into, like, call centers, into these big businesses.

Nicolas Dessaigne 5:48 So how long

Nicolas Dessaigne 5:49 did you do that before getting your first, uh, call center on board?

Will Bodewes 5:52 Um, we, we did that for maybe four or five months or so.

Nicolas Dessaigne 5:55 Okay.

Will Bodewes 5:55 And then we got our first call center, and we realized that that one call center was paying us more than all of our small businesses combined. [laughs] And so we said, "Well, we should probably focus on this a little bit more." Um, and we, and we kept going on market.

Nicolas Dessaigne 6:08 Let's go back to the product. You also, uh, ended up replacing closed models. I think you were using some-

Will Bodewes 6:13 Yeah

Nicolas Dessaigne 6:13 ... off-the-shelf models before, right?

Will Bodewes 6:15 Yep.

Nicolas Dessaigne 6:15 By your own custom open source models. Like, can you tell us more about, like, why you did that change?

Will Bodewes 6:21 Yeah.

Nicolas Dessaigne 6:21 And what are the benefits?

Will Bodewes 6:22 Yeah. There's a couple reasons. It's not standard, I will say, in, like, any other voice AI-... products that we've seen out there. Most people are just using, um, you know, OpenAI or, or other models under the hood. But we started working with Groq in the early days.

Nicolas Dessaigne 6:34 Okay.

Will Bodewes 6:34 Um, so they're the fast inference chip provider.

Nicolas Dessaigne 6:36 Mostly for latency?

Will Bodewes 6:38 For latency, exactly, because latency is one of the biggest problems that these voice AI models face. Um, and so we started doing that, and then we started building out, um, our own, you know, framework for being able to test and, and, you know, iterate. And, and based on our architecture, it just made more sense to, to have smaller models doing different tasks rather than one big model doing everything. And so we ended up breaking down smaller models, um, running them on fast inference hardware so you could reduce latency, um, and still get the same kind of quality.

Nicolas Dessaigne 7:05 So how do you switch from model to model? It, it, does it depend on the question of, like, the, the, the time in the call? Like, how does that work?

Will Bodewes 7:12 Not, not as much, um, around the question. It's, it's more of just around, like, the different components that are needed in voice AI, right? Um, so in voice AI you have, you know, maybe f- like storing a variable of a customer's name or email.

Nicolas Dessaigne 7:24 Mm-hmm.

Will Bodewes 7:25 Right? So that doesn't have to be the same model. That can be a different model.

Nicolas Dessaigne 7:28 Okay.

Will Bodewes 7:28 And so if you, if you break it up that way, um, you can have... You can save cost, for one, reduce latency, um, but still get the same quality off of that.

Nicolas Dessaigne 7:36 So, like, when the people are going to share their name, you have a, a specialized model who knows how to recognize a name or something?

Will Bodewes 7:43 Um, not that specific usually. Um, but it's more of, like, you know, you have some model that's meant for storing variables that has the context around these things. And what it allows us to do is it allows us to kind of, like, isolate and update those areas.

Nicolas Dessaigne 7:54 We're speaking of latency. Is that still a bottleneck today in the, in the s- space of, uh, the field of OCI?

Will Bodewes 8:00 It doesn't feel like a bottleneck. Um, it's definitely something that's important-

Nicolas Dessaigne 8:03 Mm

Will Bodewes 8:03 ... right? But it, it's one of those things where, you know, it's, it's kind of like oxygen at this point, right? You-

Nicolas Dessaigne 8:08 It's good enough now.

Will Bodewes 8:09 Yeah, it's, it's good enough now. Um, most, most people have pretty good latency. I think that there's still some rooms for improvement. I think more of it is on conversational quality and then accuracy.

Nicolas Dessaigne 8:20 Mm.

Will Bodewes 8:20 Like, the combination of those two things, um, I still think

Will Bodewes 8:23 are probably-

Nicolas Dessaigne 8:23 So how good is, uh, is AI now at answering the phone? Like, do you still need to hand off to a human?

Will Bodewes 8:29 It's pretty good. For, I would say, about 80% of our customers, they have no idea they're speaking with an AI agent. Um, and, and I think that it's just, by the end of this year, I would say it's probably gonna be close to 100% of people won't know.

Nicolas Dessaigne 8:40 You mean, like, 100% of the people who are speaking to on the phone-

Will Bodewes 8:44 Yeah

Nicolas Dessaigne 8:44 ... won't realize they're speaking to an AI?

Will Bodewes 8:45 Yeah, they won't realize. They won't, they won't know.

Nicolas Dessaigne 8:47 And how often are they going to speak to an AI versus a human? [laughs]

Will Bodewes 8:50 At the end of this year, it's really hard to say. I mean, with the rate it's going, it might be a lot more than you'd think.

Nicolas Dessaigne 8:54 Do you think you should disclose or your customers should disclose that it's an AI, or it doesn't really matter anymore?

Will Bodewes 9:01 I think for outbound calling, yes. Um, I, I feel like there is gonna be some regulations around that's gonna develop. I, I, I genuinely feel like the way that the world should be is you should disclose that this is an AI. Um, but I think that what's gonna happen is people are gonna start to realize when they disassociate the AI with press one for this, press two for that, and realize that it can actually be a really amazing conversation. And if you have the right tools, you can, you can make that conversation even better every single time, right? And I think that when people start to realize that on the consumer side, they're gonna get really excited to talk to an AI.

Nicolas Dessaigne 9:33 Yeah. I mean, uh, even today, I prefer to speak to an AI-

Will Bodewes 9:36 Mm. Yeah

Nicolas Dessaigne 9:37 ... than possibly a human somewhere in the world that doesn't have any context about-

Will Bodewes 9:41 Right, right

Nicolas Dessaigne 9:41 ... who I am.

Will Bodewes 9:41 Right. And, and there's also this, like, feeling... You know, sometimes you're talking about somewhat sensitive things, like you're asking... You don't want to ask a dumb question-

Nicolas Dessaigne 9:47 Yeah

Will Bodewes 9:47 ... if you're asking about finance, right? Um, but an A- you know it's an AI. You're like, "Well, I don't really care if I ask it a dumb question."

Nicolas Dessaigne 9:53 Right.

Will Bodewes 9:53 "I just want the right information," you know? And I think that that's gonna happen too.

Nicolas Dessaigne 9:56 So anyway, if you know that's an AI, you may actually share more-

Will Bodewes 9:58 Yeah

Nicolas Dessaigne 9:58 ... about your problem or...

Will Bodewes 10:00 Yeah. You won't feel bad for, like, wasting their time if you're trying to figure out your booking information and pulling it up. You're like, "I'm not wasting somebody's time. I'm just getting my information."

Nicolas Dessaigne 10:08 What a world we are going into.

Will Bodewes 10:09 Yeah. It's exciting.

Nicolas Dessaigne 10:10 Speaking of customers, like, any, uh, surprising use case you've seen around? Like, kind of like, I don't know.

Will Bodewes 10:15 We work a lot in businesses trying to make more money.

Nicolas Dessaigne 10:18 Yes.

Will Bodewes 10:18 Like, that, that's w- where our adoption is right now, is it's not as much of, like, the customer support and customer service time. It's usually, like, businesses, they have people that are calling in, like every single billboard out there-

Nicolas Dessaigne 10:28 Yes

Will Bodewes 10:28 ... you know, that has a phone number on it. Like, those leads, um, need to be kind of, like, sifted through. And they really want to surface the good ones, and they want to make sure that they're handled really well. Um, so I think it's not, it's not as much of a surprising use case, but just as the sheer volume of, of the phone being so core to so many-

Nicolas Dessaigne 10:44 Yes

Will Bodewes 10:44 ... businesses' revenue I think was the most interesting thing that we've learned.

Nicolas Dessaigne 10:47 Like, most of your use cases are mostly inbound or outbound?

Will Bodewes 10:50 Mostly inbound. Yeah.

Nicolas Dessaigne 10:51 So that's these billboards. They see your number.

Will Bodewes 10:53 Yeah. Exactly.

Nicolas Dessaigne 10:53 People call-

Will Bodewes 10:54 Yeah

Nicolas Dessaigne 10:54 ... and actually you answer.

Will Bodewes 10:55 Exactly. Yeah.

Nicolas Dessaigne 10:57 And then you hand off to a specific, uh, customer.

Will Bodewes 10:59 Depends. Sometimes we will, sometimes we'll hand off if, if that's what the customer wants. If it's, like, a licensed... Like, insurance as an example, you can't have an AI.

Nicolas Dessaigne 11:06 Mm-hmm.

Will Bodewes 11:06 You know, they have to be a licensed agent. If it's something like scheduling an appointment, we'll just schedule the appointment right with the AI. So it really depends on what the customer

Will Bodewes 11:13 needs.

Nicolas Dessaigne 11:13 Let's talk about the news you are announcing today.

Will Bodewes 11:15 Yeah.

Nicolas Dessaigne 11:15 Uh, your Series A with Base10. So, uh, how did you connect with them?

Will Bodewes 11:20 Yeah. [laughs] It was, it was a funny story. So I have a, a background. I was an ultra... So right after I left college, I, I started doing ultra-endurance athletics. Um, and I would do these races, like ultra-endurance cycling races. And so-

Nicolas Dessaigne 11:32 So you had to switch sport and... [laughs]

Will Bodewes 11:34 Yeah. I know. I, I couldn't, I couldn't stop, right? Um, but to give you some context, the shortest bike race that I've ever done is 300 miles.

Nicolas Dessaigne 11:41 Okay.

Will Bodewes 11:41 Um-

Nicolas Dessaigne 11:42 More than the longest I ever... [laughs]

Will Bodewes 11:44 Yeah. [laughs] And so I would, I would do these where I would just basically not sleep for as long as I could and ride as hard as I could-

Nicolas Dessaigne 11:49 Yeah

Will Bodewes 11:49 ... for no real good reason, um, other than to like-

Nicolas Dessaigne 11:51 What's the connection with Base10? [laughs]

Will Bodewes 11:53 It's coming. It's coming. [laughs] Other than to push myself. And I posted about this on LinkedIn. I'm just saying like, "Hey, this is what, you know, I, this taught me about, like, committing to something and being a founder." Um, and Caroline from Base10 reached out about that, and that sparked up a conversation. A few months later, we had a few chats, and, and they decided to, to preemptively offer us a Series A.

Nicolas Dessaigne 12:11 So you didn't even discuss with many other investors?

Will Bodewes 12:14 No. I mean, we, we had some-

Nicolas Dessaigne 12:15 They were excited enough. They made an offer.

Will Bodewes 12:16 Yeah. Yeah. And it, we, we, we had a couple people that we were chatting with, but it was... We really liked the people there, and I'm very much, like, I pick people very carefully, and, and I wanted to pick somebody that I wanted to... I would be okay with

Will Bodewes 12:28 hiring.

Nicolas Dessaigne 12:28 Awesome. Uh, looking ahead, what's next for Voice AI? Like, is there a lot-Of improvements to make still?

Will Bodewes 12:36 Yeah. I, there's, there's still, there's still work to be done around, like, interruption handling, around, um, end-pointing detection. Um, transcription is a really big one as well, as it's now we're handling the edge cases. Like, most of the words are solved, but when you have the phone, you have really garbled audio.

Nicolas Dessaigne 12:51 Do you fear that kind of like the generic models are going to become good enough that it's going to be more difficult for you to differentiate yourself?

Will Bodewes 12:59 That's a good question. Um, it's not my biggest concern right now because I think with voice AI, there's so much telephony that's involved with it. There's so much, like, um... There's a way that it should be done-

Nicolas Dessaigne 13:08 Mm-hmm

Will Bodewes 13:08 ... and it shouldn't be done, and I think that as we continue to go deeper and deeper into this, um, into this space, it's like we are statistically the best, m- the best at this use case that you can be, and I think if we keep going in that direction, um, it's the right

Will Bodewes 13:23 place to be.

Nicolas Dessaigne 13:23 And so where will you be, like, Phonely, like, in a, in two years from now?

Will Bodewes 13:27 Yeah. Good question. Um, hopefully, you know, hopefully answering a lot more calls for a lot more businesses.

Nicolas Dessaigne 13:32 Okay. So from 1 million f- a month to how many?

Will Bodewes 13:35 Uh, I mean, hopefully, like, 50 million plus. That's our goal.

Nicolas Dessaigne 13:39 Okay. That's cool. I like ambition. Um, and I guess because you, like, you just raised money, so you probably are, like, hiring too.

Will Bodewes 13:45 Yeah.

Nicolas Dessaigne 13:46 Like, anyone, uh, any job desk you want to share with the

Nicolas Dessaigne 13:49 audience?

Will Bodewes 13:49 Yeah, absolutely. We're, we're hiring a lot of, uh, sales folks right now. Really good engineers should be interested in reaching out. I think our team is unique in that we all, you know, kind of come from a similar background of, like, very low ego, um, very focused on just solving a problem, working hard, um, and we're just a lot of fun. So if you're in sales, we're hiring growth right now, we're hiring engineering roles, um, kind of the full gambit. Definitely reach out, um, we'd love to-

Nicolas Dessaigne 14:12 All in SF?

Will Bodewes 14:13 Yeah, yeah, all in SF.

Nicolas Dessaigne 14:14 Okay. Um, before to conclude, uh, is there any one thing, uh, you wish you knew when you started

Nicolas Dessaigne 14:21 Phonely?

Will Bodewes 14:21 I think the one thing that I maybe underestimated or didn't think when I started the company was how long it would take, um, and what success looks like on the outside versus what it feels like on the inside. Um, because I think a lot of founders, you... At least for me, I would like, you know, read the LinkedIn-

Nicolas Dessaigne 14:38 Mm-hmm

Will Bodewes 14:38 ... post and, and see the Twitter pages, um, and, and just be like, "Wow, that's, you know, that's so amazing," and they must have just got there right overnight. But I think the thing that I didn't realize was, you know, even at the top, the, the very, very tip top, you still have a lot of, like... You still fight. It's still a battle every single day. Um, a- and every day you gotta wake up and you gotta prove yourself, and you gotta say, "Oh, is there a new model coming out? Is, is our competitors doing this?" You know, it's always a fight, it's always a battle. So I didn't, I didn't realize that.

Nicolas Dessaigne 15:05 Anything that would have been, uh, made, uh, your journey easier if you had known? [laughs]

Will Bodewes 15:09 [laughs] It probably wouldn't have made it, uh, any easier.

Nicolas Dessaigne 15:11 Yeah.

Will Bodewes 15:11 But I think sometimes just setting the expectation of knowing you're going into... Like, you're going into war, right? And you're gonna have to fight, and you're gonna have to keep fighting every single day.

Nicolas Dessaigne 15:19 And we're not going to stop for a while.

Will Bodewes 15:20 Yeah, and you're not gonna stop for a while. But, um-

Nicolas Dessaigne 15:22 Any, any advice you'd like to, uh, to give to founders based on that journey?

Will Bodewes 15:26 Yeah. There's a lot of people out there who, who think that they wanna be founders, and then there's, uh, people out there who have no choice but to be founders.

Nicolas Dessaigne 15:34 Mm-hmm.

Will Bodewes 15:34 Um, I think for the lot of people that wanna be founders, like, probably check out working at a startup. It's a great way to get your toes in the water and see if it's a good fit for you. Um, but if you have no choice to be a founder, it's all about, like, it's a roll of the dice, right? Like, every single day you roll the dice, and you just, if you roll enough dice, like, eventually it works out for you.

Nicolas Dessaigne 15:53 Create your luck.

Will Bodewes 15:54 You create your own luck, yeah. Luck is not something that-

Nicolas Dessaigne 15:56 You need luck, but you can create some of it.

Will Bodewes 15:57 Yeah. Exactly. Y- It's just like you don't know how well it's gonna work out, but you know if you keep trying enough, that you'll be able to do something that, that does work out.

Nicolas Dessaigne 16:04 Awesome, Will.

Will Bodewes 16:05 Yeah.

Nicolas Dessaigne 16:05 Thank you so much for this advice and for joining us today.

Will Bodewes 16:08 Yeah. Thank you. [outro music]