The Exchanges

Q I do want to dive into kind of the depths of AI, because I think it's important. If we just start from the top, the one thing that I'm always questioning is like, what's more important? Is it model size, or is it data size?

A It's a question that comes, yeah, often. It's a good question. Um, I think on data, what matters is quality more than size, and on, on the model size, it's a trade-off. So it depends on what you want to do. Like, bigger is, like, higher quality, but it's also a lot slower. And what Photom does is, like, being 10 X faster than everything on market, because we are focusing on one use case, so You can take smaller model because you have, like, a specific use case, and that's very, that, that, that's key. So it's kind of a product trade-off when you talk to your customer, and again, that's one thing we do is we talk a lot to the users and understand what are the trade-offs they want to have with the AI part.

AI assessment note: “And what Photom does is, like, being 10 X faster than everything on market”

Q Who do you think benefits more today? Is it incumbents or is it startups?

A Yeah, I think both benefits from it, like it's a reshuffling, but to be honest, one of the reasons I, I mean, I told you the exception story, but another part of it is like, I had been working on AI, so we were the first to ship like, uh, Carmel, before Carmel exists, so the iPhone framework, an app with AI to do video editing at GoPro. One of the frustrations for me is like you, it's very difficult when you have an existing audience and an existing, yeah, an existing user base, an existing product to just Kill it or destroy it and you, and like build something new. So I think long-term the most valuable, uh, like who made his most is all the entrepreneurs. And what I'm like paranoid about is more like, what is this new team of, uh, well, Matt and Elliot are going to build like in, uh, in, in 20, 23, that is going to be something we haven't seen in the space.

AI assessment note: “So I think long-term the most valuable, uh, like who made his most is all the entrepreneurs.”

Q Is it challenging when you have a slight plateau? As you said, you can't always be growing up into the right, like, continuously, as it's step functions. Is it challenging with team morale when you have a growth plateau?

A We're very, like, focused and driven by growth, so you can kind of, like, that's, I think, People don't improve something they don't look at, like, numbers they don't look at, so we, we, like, we talk about growth every week, and so people are happier when there is growth, so you have to be careful with that, but, like, the company is growing amazingly well, we are profitable, so it just, like, take a step back, and that's, and understand what are the kind of adjacent needs of your user, and go even deeper with that. I mean, it happens all the time, so you don't want to hire people that are here just for growth, you want To hire people that are here for the, the mission you're solving.

AI assessment note: “people are happier when there is growth, so you have to be careful with that”

Q What do you think are the biggest misconceptions that people have?

A It's only the, the beginning, like, product, I mean, so, not optimized, like, there's so much thing people are going to build on top of what's happening right now, so just one person done, like, it's opening so much thing you can build on top of, like, it's easier to build, new ways to build, new ways to consume content, so that's, like, People that kind of judge, like, this is not quality, high quality enough, like, people have spent, like, a few months on that. Photom is three years old, so, you know, it's, uh, it's only the beginning. A more, like, practical thing, uh, I think is a second misconception is people don't like to write prompts. Like, it's kind of a command line interface, and for a lot of things, it doesn't make sense to, like, uh, to input text, I would say.

AI assessment note: “People that kind of judge, like, this is not quality... a second misconception”

Q Got you. Yeah. Fantastic. And then final one, if we think about photo room in 10 years time, which is 2033, where are we then, Matt?

A You know, our vision is, I talked about Nike, but really what we want to give is every entrepreneur, every like professional, the power to create like Nike level visuals. So really, I mean, you have this kind of visual agency that's powered by AI that does the job and automate that, iterates. Design is, you know, a reaction from, so it's evolving fast. It will increase the quality of the content that's generated, segmented for all the If you're a small entrepreneur, like, the trend is, like, there are more and more, like, small businesses, very small businesses selling on, on Shopify, on Amazon, on marketplaces, so we're going towards a more diverse world in terms of e-commerce, and we're just helping people to be, to thrive in that, to be proud of what they do, like, good visual, I mean, good visual for your show, or, like, you're proud of yourself when you have good content, like, the TikTok content is amazing, for instance, so we want them to be proud of, proud of what they do, like, they start a, they're a chef, you start a restaurant, It's great to be proud of what you do and to be unique, like generating something unique for them.

AI assessment note: “our vision is... what we want to give is every entrepreneur... Nike level visuals”

Q And when I look at consumer subscription, I've had this out with Nico and Jason, and I do, when they're churning, 30, 35%, I'm not saying this is you, but just consumer subscription, 25 to 40% of their customers every year. How do we make that business work?

A Yeah, the dynamic is, I, for us, it's really focusing on people who are deeply engaged and deep focused. I think you need to live with the idea of, like, mobile software is, like, tenx bigger, bigger than anything you'll do on desktop anyway. So you have, like, we're addressing, like, five billion people. Like, uh, I mean, my kids, the first app they use is photography. They use PhotoRoom. You know, it's, like, one of the first software you use in your life is photo editing, and probably the last one you'll use, too. And if you want to, like, be the number one, though, you have to embrace that. So, I mean, you're addressing five billion people. It's much bigger than anyone else, any, for sure, any SaaS business. Well, people will test the app, will try it out. Then you want to focus on the one that matters the most for you. And so that's, that's, like, get the question, get the usage, get the analytics to understand, okay, this one is one we really like, and let's focus and let's make a, make it, like, marvelous for them. Let's delight them. But it's really, the top of funnel is huge, and you shouldn't, like, you should embrace that for a mobile subscription.

AI assessment note: “for us, it's really focusing on people who are deeply engaged and deep focused.”

Q So how do you do it transitionally? Because you can't say, hey, we're going to replace you.

A Yeah. No, that's why I agree with your quote. Like, it's very difficult for the incubant to say, like, okay, we're going to, like, kill the product you've been using, make it totally different, and make you useless. So that's very difficult, where I think what's very interesting for the autopilot analogy is you address people that couldn't afford that before. That's what Photom is doing, and you're, you have a small business. You can't afford, like, a freelancer to, to help you. You don't have the skills. You don't have the time. If you take the copilot analogy, you don't, yeah, if you take the copilot analogy, you don't, Have the time to learn to drive, because they have, the copilot just tells you where to go, but you still need a driver, right? And so you spend, like, 10,000 of hours, tens of thousands of hours learning to drive, and then you're good. Well, for design, people don't have tens of thousands of hours when they're starting a restaurant. They should be cooking, you know? So what we give them is more like an autopilot, where they, they come up with, like, their restaurant, where it is, and we just, like, serve that to them. Like, we serve the visual, we, we automate that part.

AI assessment note: “where I think what's very interesting for the autopilot analogy is”

Q Is it challenging when you have a slight plateau? As you said, you can't always be growing up into the right, like, continuously, as it's step functions. Is it challenging with team morale when you have a growth plateau?

A We're very, like, focused and driven by growth, so you can kind of, like, that's, I think, People don't improve something they don't look at, like, numbers they don't look at, so we, we, like, we talk about growth every week, and so people are happier when there is growth, so you have to be careful with that, but, like, the company is growing amazingly well, we are profitable, so it just, like, take a step back, and that's, and understand what are the kind of adjacent needs of your user, and go even deeper with that. I mean, it happens all the time, so you don't want to hire people that are here just for growth, you want To hire people that are here for the, the mission you're solving.

AI assessment note: “the company is growing amazingly well, we are profitable”

Q So people, sorry, I'm fascinated by that. People don't like to input prompts. I totally agree with you. So what do you think that command line interface of the future is?

A I mean, like we have software today, like every use case, we have a different way of doing, uh, the input time for use case. We say for human, an image is worth a thousand words. Well, it's true for machines too. Like from one photo, you get like 10,000, more than 10,000 words of, uh, 1000 words of things you can, you can build on top of. So I think the input will depend on what's the job you want to get done, and we'll have a lot of changes in the way, kind of the atomic part of UX, like maybe keyboard doesn't make as much sense on a smartphone in, in six months or stuff like that.

AI assessment note: “the input will depend on what's the job you want to get done”

Q What does that mean for how they think about the world, culture, identity? How do you think about that?

A I mean, for product development, it's always been super interesting to see, like a good app is an app that a five-year-old can use it. We actually use that internally. Uh, we have this Armani model of, like, ideal customer, and one of, one part of that is, like, Five years old should be able to use photo in terms of accessibility. And you see them like all the natural thing. Uh, it's amazing how quickly they understand the UX. So I think a few things, like I mentioned the keyboard. Well, my kids are super literate at dictating to, uh, chat GPT app. Like, uh, can you answer this question about dinosaur? I'm curious, you know, to give you an example or about image editing, like they, well, dad, can you photo room that? So first they say photo as a word, and then they would just move around objects as it makes sense. Like that's, I mean, moving object and image, like, makes a lot of sense, and that's what we make. That's very different from other, uh, apps, uh, photo editing apps. Like, just select what you want to move.

AI assessment note: “for product development, it's always been super interesting to see”