Mar 18, 2016 · 24m · 20vc
Pre-YC Demo Day: Msg.ai's Puneet Mehta on The Rise of AI, The Potential For Messaging and Life As A Current YC Startup
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In this episode of The 20 Minute VC, msg.ai founder Puneet Mehta discusses his company's journey through Y Combinator and the transformative potential of conversational AI in enterprise commerce.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 37% of the talking time here. How this is scored →
Harry as informed peer 2.4 Guest teaching 2.5 Guest disagreement 0.5 Harry pushing back 1.1
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:37 Playful question deflection
When asked to name his dream investor for the next round, Puneet directly calls it a trick question and refuses to answer.
Hardest push from Harry ▶ 6:40 Challenging YC batch qualityHarry brings up community skepticism regarding YC's record-large batch size of 126 startups and questions whether mentoring quality can be maintained.
Biggest teaching moment ▶ 14:05 Framing messaging vs native app use casesPuneet educates Harry with a clear taxonomy, explaining that frequently used services warrant native app downloads while infrequent services belong in messaging interfaces.
Harry holds his own ▶ 13:44 Referencing Greylock and OperatorHarry demonstrates domain expertise by citing Greylock's investment in competitor Operator and bringing up insights from an upcoming Josh Elman interview.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcoming Puneet Mehta | 1 | 2 | 0 | 0 | Harry introduces Puneet and asks for his background. Puneet shares his transition from IBM Watson and Wall Street trading bots to founding msg.ai and raising seed capital. | |
| Elevator Pitch for msg.ai and Conversational Commerce | 3 | 2 | 1 | 2 | Harry asks for an elevator pitch and probes about YC growth metrics, citing community skepticism regarding YC's batch size of 126 startups. Puneet defends YC's network and mentorship quality. | |
| Investor Selection Criteria for YC Demo Day | 2 | 3 | 0 | 1 | Harry asks how Puneet selects investors during YC Demo Day hype. Puneet outlines his litmus test for investor chemistry and shares YC advice on letting the product sell itself. | |
| Key Takeaways and Enterprise Sales Challenges | 2 | 3 | 0 | 1 | Harry cites Puneet's phrase 'Turing test for money'. Puneet explains enterprise sales hurdles and how AI can automate customer support calls into messaging commerce. | |
| Messaging Interfaces vs. Native Apps for Commerce | 4 | 4 | 1 | 2 | Harry demonstrates ecosystem knowledge by bringing up Greylock's investment in Operator via Josh Elman. Puneet responds with a clear framework dividing daily-use native apps from infrequent services suitable for messaging. | |
| Human-Assisted AI Infrastructure & Supervision Models | 4 | 3 | 0 | 1 | Harry references Dennis at Amy.ai's human supervision model to ask how msg.ai handles supervision. Puneet details how brands configure human-assisted AI as a first line of defense. | |
| Risks of the Messaging Gold Rush and AI Connection | 2 | 2 | 2 | 2 | The conversation moves into quickfire questions. Puneet politely deflects a question about his 'dream investor' calling it a trick question, while sharing habits like meditation. | |
| The Five-Year Vision for AI and msg.ai | 1 | 1 | 0 | 0 | Puneet closes with a five-year vision for msg.ai quoting Steve Jobs. Harry thanks the guest and wraps up the podcast. |
Statements from this episode (17)
Mehta: WeChat and WhatsApp represent ideal platforms for AI applications
“When I saw the messaging revolution essentially take off with what WeChat is doing in China, and what businesses are trying to do by using WhatsApp in India, you know, instead of giving their phone number, they now give you their WhatsApp ID. And I was like, o…”
Msg.ai raised seed round backed by DeepMind and OpenAI founders
“We raised the seed round around October last year. We were fortunate to have you know, some of the best AI people be in that round. The founders of Google, DeepMind, Tamis and Mustafa the CTO of OpenAI, Greg Brockman, the chief scientist at the New York Times,…”
Mehta: Msg.ai achieved 100% month-over-month growth after joining Y Combinator
“After we started YC this year, we've been growing a hundred percent month over month.”
Mehta: Text messaging is the top user habit on smartphones
“Now consumers, if you look at the smartphone, their top habit on the smartphone is text messaging.”
Mehta: Best investor conversations focus on scaling rather than validating
“And the most exciting investor conversations we normally have all follow the same format. They start with saying, we can see what you're doing. We know it is going to be big. So let's spend our time talking about what would make it even bigger.”
Mehta: Choosing startup investors is more serious than marriage
“Take it seriously because in, in my mind it's even more serious than marriage. You know, you are really going to be working together in the long term, so, so make sure you get along well, not just you know, from an intellectual level, but really at somewhat of…”
Mehta: Startups should build products strong enough to sell themselves
“You have to build your startup enough where it does the selling and pitching for you, not the other way around.”
Mehta: Msg.ai signed up many Fortune 500 companies in 90 days
“We've succeeded at that considering that, you know, we've signed up Many of the fortune 500 in the last last 90 days.”
Mehta: 270 billion customer support calls were made globally in 2015
“Last year there were about two hundred and seventy billion customer service phone calls made.”
Mehta: 85% of support callers are put on hold, 67% hang up
“85% of customers were put on hold, 67% hung up, and 48% fell unhelped.”
Mehta: Consumers will transact directly with conversational AI assistants
“Not only would consumers be talking with an AI They would actually transact with one.”
Mehta: Top four messaging apps have over 3 billion users combined
“If you look at just the top four messaging apps, there are three billion people there now. So that's bigger than all of social put together.”
Mehta: Messaging is the best transactional interface for infrequently used services
“Our thesis on that is that for infrequently used services, messaging is the best interface. So what I mean by that is that if you use Uber every day, you would take the pain to download an app, learn an interface, and use it. You know, the other services for t…”
Sony Pictures logged 860 automated conversation hours using msg.ai for Goosebumps
“Sony Pictures used our technology for a hundred million dollar movie called Goosebumps, and there were no people behind that messaging ID. And that, that AI that they created had 860 hours of conversation with consumers.”
Mehta: Context-blind messaging bots will fail to deliver on AI promise
“What concerns me is not what could prevent growth, but what I call the possible messaging gold rush. And if businesses try to build messaging apps, you know, without truly understanding real-time customer context, or without leveraging human-assisted AI for sc…”
Mehta: Consumers apologized to msg.ai chatbot during Sony Pictures campaign
“Even with Sony Pictures, some of the conversations were so Personal at a consumer level, you know it's an interesting incident. There was there was some consumers that would use bad words or the AI would block them. They would come back and say, Hey I'm sorry.…”
Mehta: Messaging as primary interface shifted from contrarian to industry consensus
“You know, when we started Message.ai, that was the case. You know, our core thesis was this would become the next big interface, and not everybody agreed with us then, but now most people do, so it's exciting to see that change.”