This podcast episode delves into the evolving landscape of AI startups and the critical insights investors seek when evaluating these companies.

The discussion emphasises that a genuine AI business must be built on innovative technology applications rather than simply wrapping existing APIs around a problem.

Our guest, Andy Evans, explores the importance of traction and how founders should focus on solving real problems while leveraging AI as an enabler rather than the sole selling point.

He also highlights the emotional journey of being a founder, the significance of timing in business success, and the need for healthy collaboration within entrepreneurial communities.

Listen to gain valuable perspectives on navigating the startup ecosystem, particularly in the context of AI, and the potential pitfalls to avoid when pitching to investors.

Takeaways:

• Investors need to see and hear the founders' passion and articulation when evaluating startups
• AI should be seen as an enabler rather than the core business itself
• Startups must demonstrate genuine traction and problem-solving capabilities to attract investment.
• Founders often struggle with isolation, making community connections vital for support and growth.
• Relying solely on third-party AI APIs can pose significant risks to startups' business models.
• Persistence in pitching is essential; a 'no' today doesn't mean 'no' forever.

Links referenced in this episode:

• digitalfounders.co.uk

Companies mentioned in this episode:

• OpenAI
• American Express
• Thomas Cook
• Meta
• Anthropic
• ChatGPT
• Perplexity
• PwC
• Net Communities
• OnScroll
• Tumbridge Royals Media
• Techstars
• Digital Founders
• Adavow

It's really useful for investors because, you know, if they could just listen to a podcast or watch a video or something, which gives them an introduction to what it's all about.

It's great to see the deck, but you want to hear the founder, how passionate are they?

How do they talk about it?

How articulate are they about the way that they talk about their subject?

You're listening to with AI fm.

So what's the theme of this podcast?

The reason I started Startups with AI was because I think all these new AI companies have sprung up, and I think a lot of them in the beginning were just piggybacking off the back of OpenAI and using their API and putting a wrapper around it to do different things.

And I think there are a lot more companies that now have taken and are training their own models and are doing their own thing.

And there's a whole sub industry of startups.

Because startups is an industry.

Yes, it is.

Right.

And I think anybody who's done their own startup or, or worked for, you know, more than one startup realizes if you've gotten into that community, you realize that is a whole industry on its own.

Yeah.

And, yeah, so I wanted to start talking about particularly those companies that are developing really new and interesting technology using AI, because I wanted to try.

And when I started the podcast originally, I wanted to be a canary in the coal mine to just raise the flag and say, hey, this potentially can fuck up everything.

Right?

Like, we really need to think about that.

And over the intervening couple of years or 18 months that I've.

I've been working on that and having those conversations, I'm much more glass half full about it.

Yeah, there's huge potential issues with it.

Right.

There's a lot of ethical issues, there's a lot of, you know, bias issues.

There's all sorts of things that we could talk about.

But some companies are doing some amazing stuff and using that technology.

And so I wanted to have a place where I could go and highlight some of those companies and actually give them a chance to come in and talk specifically about what it is that they're doing.

So my grand idea was, let's find startups that are using AI.

Let's give them a vehicle to come in and do an extended pitch.

Almost.

My rough idea is the format of the show will be the first 20 seconds of every episode.

You get to do your elevator pitch.

You get 20 seconds.

That's it.

At 20 seconds, if they're still talking, I'm cutting them off and we're going to go into the, you know, the Stinger for the show and everything.

But then what I wanted to do was kind of walk them through the 10 sort of topics from the guy Kawasaki Classic Startup Pitch deck.

Right.

But in a more conversational way as opposed to, okay, slide one, what's the problem?

Slide two, why, you know, why now?

Blah, blah, blah, blah, blah.

But I just felt like if, if I could do that and maybe give them up to an hour to talk through that, then you've got five or six minutes to kind of talk through all the different topics that come up on those slides and we can have a conversation.

And at the end of it, what they get out of it, I mean, selfishly from my point of view is, is I get a, hopefully an interesting conversation where somebody's really passionate about the technology, really passionate about the problem that they're solving.

And you know, we can have an interesting discussion about why this is going to be the next biggest, you know, Facebook or thing in the world because they all believe it's going to be the next Facebook.

Right.

So for me this is really interesting because I built and sold three companies.

And then since then I've been investing, advising and mentoring, right.

And as you said earlier, I've invested in 21 companies and everything from aviation, kids, entertainment, restaurants, payment systems, a lot of advertising and marketing related stuff because that's the market I come from.

And most of what I've been doing the last five or six years has been sort of one to one, mentoring and advising and coaching, investing obviously with these businesses.

And I've learned a lot about what it is to be a founder from being a founder myself, working with founders and so on, and working with techstars and other great incubators like that.

And one of the things I've learned, I think is really important is that it's really important for founders to learn from other founders.

And it's actually really difficult to find other founders and to connect with them and to learn from them and so on.

So, you know, for example, If I'm at Techstars, you know, you'll get 12, 14 companies who have all been, you know, distilled down from a great group of people.

They're all fantastic businesses.

They go through the 12, 14, 18 week process of going through an incubator and learning and then at the end of that process, one of the Most valuable things they walk away with is the connections with the other founders that they can learn from.

Right.

To just know that it's a lonely place and there are other people out there who think like you and are going through what you're going through.

And so what's really interesting for me is that having thought about that a lot, I've been nurturing for a couple of years now this idea of Digital founders community.

And as you know, I run the Tumbridge Royals Media group, which is 5, 600 people now.

It's a hobby, it's a fun thing.

So community has always been at the heart of what I do.

And I'm really passionate about helping founders and getting them to connect with each other and helping them to learn from each other.

Because you can go out, you can get an advisor, a mentor, an ned, a chairman, an investor and so on.

I'm all of those people.

Right.

But it costs you money, it costs you equity, probably.

And it also takes time as well.

And, you know, actually in the journey, if you just picked up the phone and spoke to another founder who's either been there or going through the same thing, then you can get a lot of advice.

And so, anyway, I mentioned that because it's really interesting what you're doing with the podcast.

Certainly love to see if there's a way that we can work closer on that, because one of the ideas is actually to showcase, so all the members that come on board will be vetted by me.

And no disrespect to any startup out there, but there are a group of startups that I call entrepreneurs who want to be entrepreneurs.

And that's great.

And I, you know, you've got to start somewhere.

We all got to start somewhere.

But this community is very much about building a community for founders who are.

They're up and running.

They've got a business, or at least they've got an mvp.

They've got some investment, and they're really at the coalface and they're really trying to grow a business and so on.

And of course, the entrepreneurs at some point will move into that sector.

Or they'll fall out.

Or they'll fall out.

Absolutely, yeah.

And absolutely want to try and find a way of helping all of those communities.

A friend of mine Simon Squibb, you know, who runs a very big startup community and it addresses all kinds of startups and entrepreneurs.

But this community is very much almost like think of a Soho House style private members as a club you get invited to join, you go through a level of, you know, curation to make sure that you fit, but equally, not just to make sure you fit, but also to find how we can map you into other founders and join the community in a way that really, that really helps.

So, yeah, so I think that's, it's really interesting what you're doing.

I think it's.

And founders need to have a platform to talk, right?

Exactly.

And you know, I've been working in startups.

I was thinking about it probably about 30 years now.

I've worked for startup companies.

I worked for big companies very early in my career, like American Express and Thomas Cook and kind of in the travel industry, you know, one of where you're one of 300 people on a floor, you know, answering calls.

But I, I think because I grew up with family business, so my grandfather had businesses, my dad had his own businesses, my uncle had his businesses and I always worked for, you know, they were all small businesses.

And so I think that just fits with my kind of personality better.

But yeah, I think, I think another one of the things is that particularly, I mean, obviously my interest is in AI these days in particular.

And we'll get onto that in a minute about what you think about that.

But yeah, I think if I could just get a way for founders to be able to get their message out in a longer form kind of interview as opposed to.

Because we've all been to a pitch contest, you get seven minutes, right?

And then you might get 10 or 15 minutes of talking to a potential investor afterwards if they're interested.

And that's all the time you get.

And if you get a meeting, you get a first meeting, you might get a half an hour first meeting.

And it's entirely.

And you've probably been on the other side of the table where somebody comes in and you think, yeah, okay, the pitch deck looks interesting.

They sound okay.

You get them in and at 10 minutes you talk to them and you go, nah.

Oh, easily, yeah.

Or you go, these guys are onto something that I'm definitely in.

And what I'm trying to do is give the startups a little bit of a head start, I guess, and help them create some decent content that looks nice.

They can use it on their website, they can use it in their socials, but most importantly, they can send a link out to the potential investors and say, look, here's an hour long podcast I did talking about what we're doing.

And, and the investor doesn't need to know that the setup of the show was we're going to go through the whole pitch deck.

But if they sit and listen to, if they get past the 10 minutes and they go, actually, these guys might be onto something, we'll hit on all those different things that those investors want to know.

So kind of my audience that I'm aiming towards are the investors, the programs, the accelerators, all that sort of stuff.

So the startups can go, look, here's what we do, here's why we're doing this.

And all the, all the bits that.

Come off the, that's the platform that they need.

And they need just an opportunity to be able to talk.

And actually investors, it's really useful for investors because, you know, if they could just listen to a podcast or watch a video or something, which gives them an introduction to what it's all about.

It's great to see the deck.

But you want to hear the founder, how passionate are they, how do they talk about it, how articulate are they about the way that they talk about their subject, what's their background, they really know about the subject and so on.

So, you know, it's about the personalities and the people behind it and you can get that across with the audio.

And again, very similar idea, something that, you know, I've considered in the longer journey of digital founders is to do similar kind of thing, podcasts, but have a library of.

Because part of the community will also be.

So one part of the community is the founders, right?

Very, very walled garden just for founders, a private place for founders, right?

So that if you say, I'm having a bad day and I think I've got to make some people redundant or I've got to make some cuts or something like that.

And you want to get advice from other founders.

You don't feel like you've got investors, advisors, mentors and all that kind of looking over your shoulder and going, huh, they're not doing very well.

Because actually it doesn't mean they're not doing very well, it just means they're making decisive action to fix a problem.

And so certainly there's one walled garden there, but equally on the other side, and let's call it a marketplace, right, of people who are investors, advisors, investment companies that help you get investment, you know, marketing people, salespeople, legal, accounting people that can help you sell your business people that can guide you through all that, lawyers and so on.

And so the idea is to make all that available and then to have a bridge in the middle that then connects those people.

But I think one of the things that would be very useful for investors is to have a repository of, let's say, here's 100, 200 companies who are out there at the moment looking for investment and they're profiled and so on.

Right.

And you can go on here and you can look at.

The one thing I would say, though is I would probably think about how you can it great to have an hour version of it.

I don't think many investors would want to spend an hour going through that.

And I know you can skip audio and so on and so forth, and you can transcribe and summarize with AI and so on, but I would, I probably think of making them, making them a little bit sharper than that, maybe even 20 minutes, which is more digestible.

And actually any, any good founder, they should be able to get through a deck in 20 minutes.

By the way, Guy Kawasaki, one is great.

I've looked at a whole bunch of these.

I actually have a deck that is themed Digital Founders, which is about.

It's a deck on how to write an investment deck.

So I'm happy to share that with you or anybody, anybody that's interested.

And if they just hit me up on online, go to digitalfounders.co.uk they can just sign up and ask for the deck and I'll send them a copy.

And it's useful, free for anybody that wants to use it.

But, you know, there is a.

There is.

It's an important thing to say as well in terms of the deck, is that if you ever read, you ever study speed reading?

Right?

Speed reading is about navigating a book, right?

What's, what's the journey you're going through?

You literally read a book, you go through and you map the book out.

What, how many chapters?

What are the chapters called?

You know, what's the top of the page, what's the bottom of the page?

And you sort of almost get, you get an idea of what it's about, right?

And then when you speed through it, you're much more efficient because you know what, you know, the journey you're going on.

It's almost like, you know, Google Maps for, for the book.

Right, okay.

And so the reason why I say that is as an investor, there is a very set methodology to the way that you like to see information, right.

And you have a muscle memory which is I have to see this information in this format and if I don't, that's one way to create abrasion where you're making it difficult for the investor who again they've put this slide before that one and they didn't answer this information.

So.

And it, it becomes a frustration that's much easier for the investors to go, I'll move on to the next one.

Because there are so many deals coming through.

Deal flow is just unlimited.

Right.

Ultimately.

And so you have to get this stuff right and make it super simple.

So to that point as well.

And an hour is lot for an investor to listen to even if they're really interested in the.

Not saying that that shouldn't be the main one, but maybe there should be a summarized version or a clipped version or something like that, which is like the fast forward for the investor, the elevator pitch.

So from a product standpoint and a feedback standpoint, there's the ex.

Exactly why I wanted to have this conversation with you as well.

There's a couple of things I want to touch on in there, but maybe that's part of the package is that we can do a, we'll do an hour long conversation, but we'll do a 20, 30 minute edit.

Yes.

Yeah, right.

That's the punchy bit and then there's the extended version if you want to take that out.

And maybe we'll deliver the whole version to the company and they can have the entire conversation.

But what we deliver them in the edited, you know, the final version that they get is an edited version that's been edited down to half.

And like you say, like the slicing and dicing of that content as well.

Because sometimes when you're talking about something and you're passionate about a subject, you probably haven't put everything in your head down on paper.

So the most amazing things come out.

Right.

And you say things and you, and you articulate things in a different way because you're in a free flow conversation and then you know, all that like say sound bites and you know, quotes and other bits and pieces leading back to the content would be really powerful.

Yeah.

So I mean, you know, we should, we should talk about that.

Anyway, aside, I can tell you what more and what I'm doing Digital founders another day.

Can I go back to pick up on something that you talked about a minute ago?

So you were saying, you know, investors like to have their information and they like to get tick certain boxes.

I mean, I know from my time in it there's there's probably four or five boxes that you have to tick.

Every single investor is going to want to tick, so you've got to get that information out.

But is it wildly variable from there?

There's like the four must haves and then there's like a whole bunch of nice to haves and are they basically the same for everyone or is it really just based on that particular investor?

There's clearly trends and I think again, the structures that Guy Kawasaki have put together and others, and including the deck that I have that I share, there are trends in there that you need to have.

And some of the most important.

I think, what, for me, one of the most important parts of a deck is traction, right?

What have you done so far?

Even if it's something small, you know, you're starting a cookery business.

Did you cook a meal for a bunch of people and test market it with them and what were their responses and so on?

How many of those people would then pay for it?

What would they pay?

Have you managed to get any bookings out of the back of it?

And so like, if you've got some traction, have you got something going on, right, Something rather than nothing.

Because a lot of people will have an idea and spend a load of time putting pen to paper, writing a business plan and so on and so forth and they just won't actually do anything, right?

And I mean, I started my first business when I was like 14, selling concert tickets and people used to say to me, how are you running your business so young and how you do?

I said, like, it's a bit like Nike, right?

I just do it, right?

Just do it, get out there, see what happens and fall over, you know, break your leg, get up and try again, right?

And so you just got to do it.

I think that's when you really start to form.

I was, I was interested in chatting with Bogdan this morning.

You introduced me to, right, fantastic business he has, creating AI solutions for video and other things for the events industry, right?

And when I first spoke to him, when you introduced me to him, the business was totally different.

And I gave him a few ideas and the hints and tips.

I said, try this, look at that, think about it, think about that.

And he sent me this lovely email saying, andy, thanks so much for all the advice.

We've actually taken it on board and we've done this, this, this and this.

And as a result of that, things are looking really great.

I'd love to give you an update.

We chatted with him this morning.

And the idea he had and what he's doing right now is sort of the same, but very, very different.

Why is it different?

Because he's gone out to market, test marketed, found out what people really want, and actually acted more as a consultant providing services to try and fix solutions as opposed to trying to build this great big product that may or may not fix a solution.

Jumping around here a bit.

But the last business that I ran was called on scroll, which is for digital advertising.

And it solved an issue called viewability, which is whether you can see an ad or not on the page.

Right?

And a lot of people used to pay for advertising that was below the fold, that would load and no one would ever see it unless you scrolled, hence onscroll.

Right.

And the, that company came from a problem I had with the previous company, Net Communities, which was we had a load of publishing websites ourselves, selling advertising on them.

We were representing hundreds of websites as well.

And I just couldn't work out, like, why some ads worked better than others.

So I studied it, looked at it, and worked out that there were ads below the fold that people didn't see, people didn't click on, and they were a waste of money.

So I invented some technology that initially started to stop the adverts loading, but then of course, you got a lot less inventory to sell because you're blocking it all out.

And then I worked out, well, actually, if people are scrolling, I can work out where they are, where they're touching the keyboard, moving the mouse, touching the screen, all those kind of things work out where they're on screen, if they're in, if they're, if they're in a screen, in a reviewable window, we can now load adverts, right?

And actually those adverts are much, much more valuable than any of the others, right?

That product was built from a need, from a problem, which was.

Got loads of ads and they're not working very well.

Why not?

All right, Built a bit of technology for myself to try and solve a problem, but then realize this is much, much bigger than being a unique selling point for my business at the moment.

This is actually a business on its own.

So I spun it out into separate business and it became seriously successful and I sold it to an American company.

And so I think that's a really good example of how it's important to really get out there and get into market.

But back to your original question, which is what are the important things?

What are investors thinking about what decisions they're making?

Investors are human, right?

And we all get out the bed the wrong side.

Some days, you know, you have an argument with your wife or, you know, you had a big tax bill or whatever it is, right?

And so we're full of emotion as individuals, everybody.

And so you can look at investment deck one day and just be.

Just not in the mood for it, you know, just.

Just not in the mood for a cup of coffee at the moment.

I love coffee.

I'm not in the mood for a cup of cup of coffee.

It's the same thing.

So sometimes they're just not in the mood.

So the important thing to remember is that when somebody says no, it's not always no, it's just actually just not today.

That doesn't mean go and pester people and be a pain.

But what it does mean is be persistent, politely persistent, and just try and understand the audience that you're talking to.

And did they just have a bad day?

And are you really convinced that this investment is something that fits their portfolio, that fits their investment type?

Because I invest in a lot of advertising, marketing businesses because that's my background.

That's what I know.

I also invest in SaaS and technology businesses is something I know as well.

And that took me into aviation and restaurant payment systems and so on as well.

So, yeah, you've got to understand who's going to buy your story.

Is it a right fit?

Is it the right time of day?

Are they in a great mood or not?

And then also, have you got a really good story that has a great traction message in there that gets people excited?

Because traction means if people like it, people are using it, they're willing to pay for it.

It's something you can scale and you can work it out from there.

Yeah, that's great advice.

It's kind of how my media, the media side of my business picked up.

But the whole media bit just came from people coming to me and asking me to help them and wanting to pay me for the time that I was spending.

I'm like, well, that's the way you want to start a business is, you know, people say, hey, can you help me?

Because they see you doing something and then they, you know, they're almost like, well, can I give you something for it?

And you're just doing it.

I did it to be nice in the beginning.

And I was like, actually, do you know what?

I can make a little business out of this.

And, and there is a gap, I think, in the market.

And you know, because you set up one of the very first podcast studios of it and you know, there is a gap in the market for those people who are moving from being able to record themselves at home and then actually going into a studio because they've now sort of proven to themselves they've recorded enough episodes, they've made the first hurdle, which is your fourth episode.

Because I think the stat is still only 10% of people make it past four episodes.

And then of those people that remain, only 10% get to 21.

Yeah.

So, but once you get past that fourth episode, you kind of, I find they get about 8 or 10, and then you, you start wanting to improve the quality.

You need to spend a bit more time on it.

You start to go, okay, I'm reaching the limits of my editing skill.

And you know, at that point you're, you're kind of invested and you want to do the next thing.

But you're not a massive, you know, you don't have massive budgets.

You're probably paying for yourself.

There's a little niche in the market and I kind of want to help those people because it takes my, it ticks my helping people box as well, you know, so it's like, am I going to get a 250,000 pound deal out of that to do a series?

No.

But I can help people.

And if I can make enough money to pay my mortgage and to.

And to make sure that my kid gets to school, then that's okay for me.

Who knows?

Big, big trees come from small seeds, right?

So, you know, these people you're working with, this is, this is why people like myself, like, why we invest in small companies, right, because we know that one or two of them are likely to become very successful.

You don't know which one.

You know, you love all your children alike and you want them all to be successful, but sometimes one.

One is more successful than the other.

Interesting point back to.

So, you know, if you're a podcaster and you're creating a podcast and you're doing episode four and five and so on, you.

If you're going to persist at it, there needs to be a good reason why you're going to.

So, like, what is it doing?

Is it assistive to what you're doing or is it just a bit of fun?

If it's fun and it's a hobby, that's great.

But equally, if you're doing it for your business, who are the target audience and do they really need it and is it helpful?

And if you're not getting traction, there's going to be a reason for that, right?

Because it's not useful to people.

And if it's not useful to people, it's not useful to you.

So, and I think that applies to any business.

I distill sales down to two simple things, right?

You find the need and you fulfill the need.

What do they want and give it to them.

I see it, right?

That's really what sales is all about.

And that's the same as running a business, you know, that you find what people need, or you find something that you need that you think other people are going to need, and then you.

And you build that.

Since 19 years ago, right?

19 years ago, there wasn't even proper RSS feeds.

And, you know, there were RSS feeds, but there were no, like, subscription platforms.

Eventually, Apple launched their podcast.

You know, we had a great relationship with them.

They were fantastic about putting our shows at the top because we, our production quality was very high.

But the moral of the story there is that timing is a really big part.

And in the deck that I share, the digital founders deck of how to write a deck for investment, there's a video on there from a TEDx video from one of the big Silicon Valley investors.

And he says, I looked at all of my investments, right?

How was it?

The amount of money, the people, the location and all these.

What was it?

And every day of the week is timing, right?

And so for me, I can tell the story of like, yeah, I was first, pretty much first company to launch podcasting, but 19 years ago, it's too early.

You know, if I did it five years ago, that'd be a different ballgame, right?

And after running that business for four years, I ran out of steam, spending my life evangelizing about podcasting and no one's listening, right?

It's just really frustrating.

Whereas when I launched on Scroll, I needed the technology myself, built it for me, then built it for other people.

And then PwC published a report saying 50% of all advertising are wasted because people can't see the adverts.

So all the publishers and advertisers are going mad.

What do we do?

How do we fix this problem?

And I'm in the corner there, go, hey, I can help.

And and so it's.

Timing is a really big thing.

And, you know, like, having been lucky enough to sell a few businesses, the only business I really made serious money from was the last one.

A, because I learned how to run a business by then, and B, because we were in the right place at the right time.

Yeah.

And that's an important moral of the story.

Yeah, 100%.

And.

And it can also work the other way.

And you.

I think you and I originally met because I was working on adaval, which was my ad tech startup that I was running, and I experienced the same thing.

So I worked in digital marketing, web analytics.

I'd been.

I've been doing data analysis of, you know, sort of digital marketing and ads and all that stuff for a long time, running teams of consultants and that sort of thing.

And I identified that there was a problem in that, you know, companies kept serving ads to people who'd already bought whatever that thing was.

Yeah.

And that's a totally wasted ad, you know, particularly where you can see it.

And all it does.

Not only is it a wasted ad because you're not going to buy it again, but it also just winds people up, something chronic.

So there was a great problem there to solve.

In fact, little aside, I ran into a guy at the Kent business event, like two weeks ago, and he came up to me and he said, hey, were you the guy that did that thing about seeing ads?

And I was like, wow, that's a great memory.

That was a long time ago.

He goes, I hate you.

And I was like, okay.

And he went, every week I see ads for stuff that I've already got, and I think about your product.

And he's like, what happened to it?

And I'm like, timing was bad because I tried to launch right when GDPR was coming into effect.

And my legal advice was that it was fine.

And what I was trying to do was within gdpr, and it would have been fine.

But the problem was is that the clients that I needed to have were not confident about what the rules were.

And every, you know, you probably remember at that time, everybody was scared because nobody wanted to be the first company to get sued for.

Well, they're trying to sort that.

They're trying to sort that problem out first.

Right.

And everything, these things become sequential.

Right.

So something that they all agree that's a problem.

We want to get to that.

But right now what we're getting to is sorting out gdpr.

Exactly.

And then you're in the wrong place at the right time.

And I was in exactly the right place, but totally the wrong time.

And I just, I couldn't make it work because the timing and I just couldn't get what I needed to do and so eventually had to wind it down.

But, yeah, it works both ways, which is a great segue sort of into this whole AI discussion.

So the companies.

So I will put a link to your deck for everybody so that they can.

So that they can find it for sure.

I know Bogdan as well.

Obviously, Bogdan's going to be the first startup that I'm going to have on the show as well.

So I'm going to interview Bogdan.

So I think he'd be amazing to talk to.

Very exciting guy to talk to.

And I like the technology and I like what they're doing as well.

So, spoiler alert.

Anybody listening?

Go listen to Bogdan.

He'll be the next episode.

So, thinking about AI in particular, is there anything that you, as an investor or you think the investment community is going to look for in particular around companies that are coming now saying, hey, we've got the next greatest AI product.

There's all those normal boxes that you have to tick about, why is this a problem?

Why are you the ones to solve it?

Do you have any traction?

What's your finance?

You know, there's all those bits.

But what's the special AI bit?

Like, what, as an investor, what makes you nervous?

Or what's the thing that you really like?

What's the big hurdle that they need to get over when they come to talk about that?

All right, you might not like the answer.

Let's give some context, right?

You and I, we geek out, we talk about technology.

I'm also digital with Andy as my handle on social media and so on.

I love technology.

I've always got the latest technology.

I've got the Meta glasses, I've got the Meta Quest headset.

You know, I had Oculus Rift, I had Google Glass and all this kind of stuff.

I use all the latest AI as you do, and a geek out on this stuff because I'm always interested in how this stuff's going to impact business and maybe even businesses I'm investing in.

All right, so that's a bit of background.

Hopefully I'm qualified to answer the question.

The second thing is that I was at Web Summit in Lisbon recently that hopefully a lot of people in this podcast would maybe have been to or at least understand what it is, which is 70, 80,000 people in Lisbon getting together and celebrating the world of startups.

And it's a really amazing event, very educational.

And one of the things they do there is they invite startups.

And so it's a tip to startups, if you want to get some exposure, you can get like a, I think for the thousand pounds or something they charge and you can basically get tickets to the show which are normally like three and a half thousand quid each, right?

And you can also get an exhibition booth, very small booth with a little sign saying, you know, we are Andy Evans Inc.

Or something.

And, and, and over the three day event you get one day.

So they have all these startups churning every day.

So with digital founders in mind, I'm walking around looking at businesses, meeting companies, talking about my ideas, just checking out that my ideas are relevant and valid.

And I was just overwhelmed by the amount of companies that AI, AI, AI, AI, AI.

And it really pissed me off, to be frank with you, because for those of us that really know about AI, AI is an enabler, right?

It's something that enables us to do things better.

And the only AI companies out there are, you know, Anthropic, ChatGPT, you know, Perplexity.

They're AI companies, right?

They're building the AI, right?

Everybody else is using the AI Meta Llama, whatever it is, right?

We're using the AI to improve what we do because they're enabling that.

So as an investor, I was actually repelled from meeting with or looking at or talking with any company there that would just like, AI was upfront, because it's clever use of AI to solve a problem, which I think is exciting.

So you shouldn't be building an AI company unless you're chatgpt and anthropic and so on, right?

You should be building a company which is enabled by AI.

Now what AI is enabling us to do is do more things than we've ever been able to do before, right?

So definitely it enables us to come up with great ideas for businesses that weren't out there.

But I would not label it as an AI business and I would.

And you'll just end up getting caught into, you know, you know, acronym bingo, right?

And we've been there before.

Blockchain, right?

Blockchain.

I've been to Web Summit before.

Everyone's blockchain, we're blockchain.

There's blockchain.

Blockchain is brilliant for certain applications.

You don't have to put it on everything.

It works for some stuff and not for others, right?

And AI is brilliant, but it works for some things and not for others.

And some of the stuff will work now, some of it will work later.

So my advice to startups is that it's fantastic you're using AI and leveraging it, but it's how are you using it to solve a genuine problem?

That's fantastic.

And I'm not upset by that answer at all.

It does raise an interesting point, though, which is.

Excuse me.

It does raise an interesting point, though, which there's a couple points in there.

One is, I've done data and data analytics and done that for 20 odd, 25 years.

Most of the stuff that people call AI isn't actually AI, it's machine learning, first of all.

So they'd probably be better off sticking with machine learning.

And I get it, the engineers will tell you it's machine learning, but the sales team and the marketing team want to slap AI on it, because AI is the bell of the ball at the minute.

But the other thing that I think that a lot of founders and a lot of these companies that I see that are AI in quotes, AI companies, is all they're doing is they're putting a wrapper around an AI, sorry, an API connection to OpenAI.

That's hugely risky as an investor, because what if OpenAI decides to change their API or worse.

The thing that's happening right now that I'm seeing is that they just randomly make changes in the background to how the AI works and how the models work and the way it can answer questions and things that it will say and can't say.

And you might build an entire business around using OpenAI or Meta or Claude or whatever, anthropics like, whatever.

But if they just randomly decide to change something in their algorithm and the way that works, that may kill your whole business like that.

And you've got no recourse.

I mean, some people have been banned from it and they've been just turned off and there's no one, there's no one to contact and they just go, nah, we don't like the questions you're asking.

Look, history repeats itself, right?

So if you look at when Twitter first came out, Twitter was like silliest to a certain extent.

It's a feed of data and information, live feed of amazing data and information, right?

And very early on, you know, they.

Everything was open, all their pipes were open and you could lock into their pipes and APIs and data and so on, and people were building business on the back of that.

And I always had a theory, and I think it was all played out to a certain extent that Twitter, in a really, really great place because they could allow all these companies go out and do startups and find stuff, find really clever ways of using the data feeds.

And then if they liked what they did, they could do one of two things.

Buy it and roll it in, or copy it and close it down, right?

And they did both.

And if you go back and look over the history of Twitter, you can see exactly the same thing.

But one thing they did do in the end, close their data feed, their data hose, and there are maybe one or two or three companies in the world that eventually still have it in some way or form.

And so lots of companies fell by the wayside, right?

So of course there were some winners, right?

There were some people that built stuff really cool and Twitter went, you know, in fact, there's a guy, a friend of mine, who actually invented the retweet button, right?

It wasn't a retweet button, wasn't natively in Twitter.

He invented it and put it out there, and people started using retweet and then Twitter then did a deal with him and then onboarded it and turned it into.

So.

And that's a good example of, like, how people were building around Twitter, and Twitter were just like, we're just going to go really fast and do one thing really, really well and let everybody else come and have a go at it and have a play and use a sandbox and do clever stuff with it.

But eventually these businesses become very big, very controlling, very expensive, and also very rich.

So they can either buy you or close you down.

So absolutely be careful of that.

And, you know, and investors are wise.

We've all seen these things over and over again, right?

You know, I'm 54 now, so I've been through a few cycles and you can see, you know, what repeats and what happens.

So, and, you know, not to suppress, you know, people's enthusiasm about building, but also, I want to say as well, is that, you know, again, one of the reasons why I'm doing digital founders, it's a lonely place.

But being a founder is a very, very, very difficult thing.

People see the Rosie stories, they see the YouTube influencers or whatever that have got all the followers.

Oh, I can do that.

They see the podcaster that got big traffic.

They see the people that have built businesses and raised loads of money, sold their businesses, made lots of money and all those kind of things.

But those stories are few and far between, really.

And they're the gold at the end of the rainbow that doesn't really exist.

And I would say to Any founder.

Look, just be absolutely prepared to potentially have a divorce with your wife and go broke, be homeless, be mentally unstable, and many, many other difficult things that go, go gray, become unhealthy, put weight on all of those things.

Right, because that's what's going to happen to you as a founder right now.

I spend a lot of time with my founders that I work with, encouraging them to be fit and healthy and eat well and sleep and so on.

Because, you know, you think that working 10, 12 hours a day is like, really amazing.

Look at me.

Aren't I working hard?

No.

Right.

So there needs to be, you know, a mindset change for people if they're building a business.

But I just want to, you know, warning alert.

Right.

You know, it, you know, and also, one of the things that I don't think people always fully appreciate is that, you know, I've built and sold some businesses already.

I still work, I still go out and do things.

It's not necessarily about the money necessarily anymore.

It's about I need a purpose.

I need to get up in the morning, I need to do something that I'm interested in, I'm excited about and just need to have a purpose every day.

So even if you build a business and you sell it and you get money in the bank, right, what are you going to do next?

You're not going to sit in your hands, do nothing.

You know, if you've been an entrepreneur, you are generally always going to be entrepreneurial.

You'll always want to do the next thing right.

So, you know, that's something to think about.

Maybe you don't need to sell your business.

Maybe you just need to build a business that throws off cash that gives you enough money to have a nice life and do other things as well.

So, you know, the idea that building a business and selling it is like, that's the utopian scenario.

It's not necessarily so.

Just be aware that it's really difficult.

If you're really lucky, you might end up at the end.

And I've been one of those few lucky people.

And I'm not going to say I'm any better than anybody else, I'm any cleverer.

I've seen people work harder than me.

I've seen people with better products and so on.

I was just in the right place.

At the right time timing.

How many domain names do you own?

Well, you.

Yeah, I mean, that's a great question.

I love that.

And nobody's actually asked me that before, which is brilliant.

That's absolutely brilliant.

I've got so many weird and wonderful domain names, right?

So I actually own things like deliver pizza.

I actually used to.

I move home and move house and I forgot to renew them.

It's very early days, right, when it was much more difficult to renew your domains, right.

I have dear Santa, Dear Santa Claus, dear Father Christmas.

So I think somebody can own Santa as a brand, right?

So I had an idea around that.

I have some very, very weird and wonderful.

I've one that's called short, but The S is a 5.

And that's how you can tell a true entrepreneur.

Just we own like 50 domain names because we get crazy ideas and we're like, I want to do something with that someday.

So you go search around and you spend half a morning looking for the right domain name and then you get it and you reserve it.

And then I don't like, if my wife knew how much money I pay for domains.

I don't know.

Each year all the renewal fees come and you go, oh my gosh.

And especially these new ones around the media ones.

So the dot like the fm because obviously with AI is fm, so those specialist ones are quite expensive as well.

So then you're like, you know, 100.

Well, if anybody wants to buy it, one of my favorite ones that I really should sell is entertainment.info oh, that's a good.

That's a good one, right?

That is a very good.

So I think that's a really good one and.

But just weird.

I've got a one called Stido S T y d o shop till you drop online.

Oh, nice.

That's quite good.

Oh, and the other one, you know what is the really, really funny one?

I don't, you know, it's.

I just thought it was funny, so I bought it.

One day is page one of the web dot com.

Okay, nice.

I like that.

I just thought it might be fun.

I've got.

I've got ideal day out, best day out, all these kind of lots of fun stuff like that.

But you know what?

They're of no use to me really.

So if anybody wants to make an offer, let me know, I'll probably take it, you know, but I should probably, you know, it's one of those things I've got on my to do list, like list my domain names for sale.

Because most I'M not going to get around to do anything with and they're probably more valuable to someone else than they are to me.

But just, it just came up because entrepreneurs were like that and it's like you said, you know, if, you know, feature head media grew massive and somebody wanted to buy off the podcast business or whatever, I'd sell it off and I would immediately start working on something else.

Yeah, right.

Like, and I think the people who, the founders and the people who want to work in those businesses and have that desire have a thousand ideas and all we, all we lack is enough money to do them all at the same time.

Because I think if given enough money, I think all of us would probably start four or five companies and hire a team just to start working on it.

Yeah, maybe.

I think that's an interesting, there's an interesting moral in that story.

And having been through that.

So my, my first business Net communities, I had that entrepreneurial spirit.

Still had to.

But what I would do is if I saw something new, I'd want to go for it.

And we even had like a, we have a creativity night where it'd be beers and pizza.

Staff would say behind and go like, let's just come up with crazy ideas and see what comes out comes out of it.

And ultimately the onscore business really came out of that idea, those, those idea sessions.

But the challenge is as a, as an entrepreneur you always see lots of shiny things and there's always like the next thing is shiny and new and exciting and, and actually the challenge is to hold yourself back from that and to just be focused on one thing.

And so if you're an early stage entrepreneur, it's your first business.

Absolutely stay focused on that one thing.

Either do that really well or not at all and move on to something else.

And either, you know, just, just absolutely focus on that thing.

And having on my third business, I'd learned that and my business partner Babak and I used to have a little code name.

There was an advert on TV many years ago in the uk.

You may or may not have seen it is for Roncil and Ronsil is face paint.

Sorry, fence paint.

Ronsill is fence paint.

And you know, the advert was, it does what it says on the can we just do fence paint.

That's all we do.

Right.

And so Babak and I used to just, you know, if we, if we sat.

Saw that we were going off piece of it, we'd go Ronsill, you know.

You know, and it was just a nice Little reminder of something that.

And so.

But maybe later on, if you've built a business, it's thrown off cash and the business is running itself and you want to play a little bit, that's the time to go out, like, let's try three or four things and get some people and do all that.

So because there's only so many hours in the day, just do one thing really well or not at all.

Exactly, yeah.

Andy, thank you very much for your time today.

I'll put links and everything in the show, notes, certainly, to your pitch deck and that sort of thing, but where can everybody find you?

So probably the easiest place to find me is@digitalfounders.co.uk or on social media.

Igitalandy.

So lots of digital going on there, obviously on LinkedIn.

Andy Evans.

So, yeah, always happy to chat with people and love to hear ideas and what people are up to.

And, you know, I'm a connector, so, you know, if I can't help, I probably know somebody that can.

I'll try and help, you know, interface people.

So I can't always help everybody.

I've known so many hours in a day.

I'll try and reply to everything, but, yeah, that's how you can find me.

Appreciate your time.

It's been a lot of fun.

Hope you've got something useful here for your listeners.

We'll do this again in a year and see where we're at.

Appreciate it.

It's fun.

Yeah, let's do it.

Definitely.

Yeah.

Hello, David here.

The chat continued after we finished recording the podcast, so I thought I would just include the extra bits here at the end.

No, that was.

Yeah, that's really good.

And I have a personal feeling about the AI stuff, which, again, which I think it's really risky and I suspect we didn't get to it in this one.

And I was interested that you didn't bring it up.

I always suspected that investors would be also quite nervous about the potential exposure of using copyrighted data and all that sort of stuff that are built into the models, because there's almost like a downstream risk of that.

If you're using ChatGPT, you don't know where that data came from.

So if you build your own model, which is different, so you're building your own AI, that's a totally different thing.

And that is an AI company.

Getting back to what you said, and I think that, again, there's potential risk in that.

And I think the message that I want to get across to the startups in the industry is that they need to be really careful, particularly when they talk to investors about talking about AI, because they just open up a whole nother can of worms, which is a whole nother block of reasons that investors will say no.

Yeah.

And now this guy.

Because if they can't answer that question confidently, yeah, right.

Off with, nope, it's not a problem.

We've done this and this and this, and this is why you don't have to worry.

And if they go in with any doubt whatsoever, the investor is going to sniff that and go, yeah.

And I think.

I think actually, in fairness, it does go back to that conversation we had around the Twitter feed.

It's the same example of, like, relying on a business, relying on a feed in whichever way you might be relying on them, and you're relying on them getting it right, or them actually allowing you to have the feed and so on, or giving you the space to do the things you want to do.

And if they start changing that, or if something happens that's legally challenging, then you know you can be involved in that.

Although I would say that I think early stage investors depends on what stage they are.

And most of the AI companies right now are going to be reasonably early stage.

I think there are enough investors out there that are willing to just take a risk, because we're going through a learning process right now.

AI is a child and you've just got to take a punt.

And so I don't think it's going to be a massive blocker for a lot of investors, unless you're going for a much larger round and you're further down the road, you've really got traction and then people will then start to look in the due diligence.

They'll look much, much closer at those issues and challenges and, like, what are you doing about it?

So it's definitely something to consider.

I wouldn't say it's as much of a blocker as just trying to pass yourself off as an AI company, unless you genuinely are in some way or form.

But, yeah.