There are these tempting startup ideas that you would better leave unpursued or pivoting away from fast.

Dalton Caldwell and Michael Seibel discuss these seemingly irresistible startup ideas that are almost too good to be true—and that's precisely why they likely are—or are they?

They are too good to be true because they might be so called tarpit ideas. Ideas that seem obviously awesome at first, but even appearing to be fantastic opportunities to many, they harbor deep-seated issues that could doom entire venture.

Therefore, you must have compelling reasons to pursue these apparent gold rush opportunities. Tarpit ideas metaphorically represent all projects that ensnare you in situations where you expend significant effort but achieve minimal progress.

I find these ideas fascinating because it often seems not to be the technological advancement that keeps great developments from happening, but rather human factors, as we discuss in the startup idea examples.

Perhaps my interest sometimes appears as default skepticism, but I am genuinely eager to explore these ideas and delve into (yes, I said it…) the crucial question of “Why now?”.

Don’t shy away from the fact that very smart, very well-funded, very determined teams have tried them before. Maybe now is just the right point in time for the idea to find its fitness.

One year after GPT-4 was released we are all excited for a monumental leap forward with GPT-5.

People who have close ties to or are investors in OpenAI seem to be traveling to San Franscico right now as their Twitter status updates show. Is GPT-5 close to its public release?

Sam Altman, CEO of OpenAI, shared his excitement for the most recent podcast with Lex Fridman.

"I'm excited about being smarter," Sam remarked, highlighting the holistic improvement of GPT-5 over its predecessor.

Altman emphasizes that the forthcoming iteration isn't just about isolated advancements. Instead, it's "getting better across the board."

I'm excited about being smarter.
The really special thing happening is that it's not getting better in one area and worse at others.
It's getting better across the board.
— Sam Altman

Lex Fridman eloquently suggests that the true magic lies in the notion of being "heard and understood" by an AI.

He hopes that GPT-5 will increase the moments of "intellectual connection," that mirror these magical moments of connection one feels when another person just "gets you."

This is insofar fascinating as Lex highlights that it isn't solely about raw intelligence or the mechanical processing of language. But the moments when the AI can grasp the deeper questions behind your questions, providing responses that make you feel profoundly understood, even when articulated imperfectly, in the way only a close friend or colleague only grasps one.

…it's just such a good feeling when it got you like what you're thinking about. And I look forward to it getting me even better.
— Lex Fridman

Both Sam and Lex share the excitement for an AI that does more than just compute or predict. An AI that can truly understand you, that can truly "get" you, making the interaction with it feel more like a dialogue with a thoughtful partner rather than strings of unsatisfactory query-response transactions.

As Fridman aptly puts it, "all of us love being understood, heard, and understood."

You feel like there's an understanding in your crappy formulated prompts that you're doing, that it grasps the deeper question behind the question that you posed. Yeah, I'm also excited by that.
— Lex Fridman

The anticipation surrounding GPT-5 centers on this very concept—AI that not only hears but understands and responds in a way that feels deeply connected to our thoughts and intentions.

With Altman’s remarks, that the enhancements are not confined to a single aspect but extends across the board the evolution from GPT-4 to GPT-5 promises AI interactions getting more empathetic, more intuitive, and more aligned with a human-like experience and not just a technical upgrade.

Arguably the best job ad in the world? Comes from Extropic in a very straightforward way.

"Yes, but Bastian, a sexy startup has no shortage of skilled specialists".

It's not a sexy ad either.

Because, curious people want to work on interesting problems - not on boring tasks that a computer could do but you refused to invest in.

And how do you spark curiosity?

By making an engaging video.

A good video has nothing to do with effects, VFX and SFX, or quick cuts that make you and your applicants feel nauseated as if you've just been on a rollercoaster.

A good video needs a compelling theme.

A theme that captivates its target audience AND people who think "Oh, Charlie might be interested in this topic and they probably haven't heard of it yet so I am going to tell them about it…"

"That's an exciting topic!", even I thought to myself, who understands nothing of what the founders are discussing. Even though we were once invited by the researchers at Fraunhofer IAF to find out first-hand how research is being conducted at the bleeding-edge of III-V semiconductors. So yes, I may know a bit more about semiconductors than the average person on the interwebs. But I didn't study physics, computer science nor electrical engineering.

“A good video is all about an interesting topic told well and without cliches,” as Niko likes to say.

How do you make a great video?

IMHO: The easiest way is to simply explain it.

Explain it to an interested layperson.

Just like Guillaume Verdon and Trevor McCourt explain it to Garry Tan. Garry is asking these questions that we’d like to ask Guillaume and Trevor ourselves. And questions that the right applicant might be able to ask them very soon themselves.

The entire video leads with “what ground-breaking thing is going on here?”

Not the fact that they're going from stealth startup to launch.

Not the fact that Verdon’s anonymous X account had been "doxed" by the New York Times.

But the fact that they were able to keep my attention for 10 minutes, despite it quickly became clear that it was a recruitment video, makes it... arguably the best job ad in the world.

Last week I talked about the best product demo in the world.

This week I talked about the best job ad in the world.

If you don't want to miss anything "best in the world", subscribe now and click the like button.

Creating a Custom GPT: See how easy it is to create a Custom GPT yourself!

Taking the use case of a phonetic spelling application as an example to create a Custom GPT that you can use as your personal assistant.

BTW, you know what a fun prompt for the “Phonetic Speller” Custom GPT is?

Do you say "gif" or "gif"?

It told me that “[…] the creator of the GIF format, Steve Wilhite, has stated that the correct pronunciation is with a soft "g" (/dʒɪf/), like "jiff".”

I guess the longstanding debate over its pronunciation settled then?

Can somebody please fact check that?

For the entire instructions see Custom GPT documentation here.

Watch the video on YouTube and subscribe for more builds.

A marvel of modern engineering. And a marvelous way to demonstrate it.

I liked the Top Gear’s Jack Rix #Tesla #Cybertruck review and his interview with the VP of Engineering Lars Moravy and the Chief Designer Franz von Holzhausen.

But this? This is product demonstration done right.

This is a product demo on the next level and although wild and you would never do it, this product demo seems much more appropriate.

This is what we actually want to see doing a car like this. Not your 40-year-old driving it to go shopping and dropping your kids of at soccer practice.

This will take care of the “German E-Angst.”

If you want to see the entire video (parental advisory advised), go to YouTube and search for Danny Duncan “I Drilled Horns On My Cybertruck!” #CreatorEconomy #InfluencerAdvertisment #BrandIntegration

The new text-to-video AI model from OpenAI is capable of generating up to minute-long videos from text prompts, including complex scenes with accurate details and emotions.

Sora understands interactions in the physical world, but for now it has limitations, such as difficulties with physics simulation and specific cause-effect scenarios.

Despite these challenges, Sora represents a significant advancement in AI's ability to create dynamic and interactive video content.

Deep Inside the Minds of YC Leadership

Listening to the new YC Partner Podcast feels like being a fly on the wall within the pulsating heart of Silicon Valley.

It's as if you're privy to the very essence of the moment, tuning into conversations that resonate with the immediacy of the now.

The discussions unfurl topics that have likely been thoroughly explored in similar circles, hinting at a familiarity and depth only insiders possess.

Yes, the dialogue is moderated, and to the participants, it might tread over well-worn paths.

Yet, what captivates us are the underlying principles they navigate, principles that echo Paul Graham's essays and the inevitable intersection of business minds and administrative forces—highlighting a path to success that doesn't always necessitate their early involvement. Success, they imply, can be as simple as creating something remarkable.

YC has a long standing history shared their knowledge not just in essays and YC Startupschool and Garry Tan becoming a YouTuber.

But this time is different. It feels much more like in the present, they are talking about the now and the principles are the underlying truths, not the stars of the show. It seems they have become a media company not just a school where they as the professors graduate their students with a multi-million dollar evaluation on Demo Day.

This essence of being that proverbial fly, listening in on conversations that flow as naturally to them as breathing, offers a unique perspective.

It's exhilarating to be part of a dialogue that embodies the optimism of a generational shift, the dawn of the AI Age.

This confidence, this shared optimism, provides a comforting reassurance that my own aspirations aren't misplaced, even if they seem to be navigating the future with a six-month lead.

In "The Reciprocity Advantage: A New Way to Partner for Innovation and Growth," authors Bob Johansen and Karl Ronn offer a visionary yet pragmatic guide that could very well be the Rosetta Stone for modern business growth.

At its core, the book is a clarion call for a seismic shift in how businesses approach partnerships, innovation, and growth in an increasingly interconnected world.

The Premise: A New Business Paradigm

Johansen and Ronn, both seasoned in the art of innovation, argue that the future belongs to those who can effectively find and leverage reciprocity in their business relationships.

They posit that the traditional competitive strategies are giving way to a more collaborative and mutually beneficial approach.

It's not just about beating the competition anymore.

It's about joining forces with them to create something greater than the sum of its parts.

Executive Summary

The 4 most crucial insights for business leaders of The Reciprocity Advantage are:

1. Identifying Complementary Partners:
   One of the book's most compelling insights is the emphasis on identifying partners with complementary assets. The authors guide readers through the process of finding and engaging with potential partners whose strengths can offset their weaknesses and vice versa.
2. Shared Vision for Mutual Benefit:
   Johansen and Ronn stress the importance of creating a shared vision. This isn't just about aligning goals but about forging a path where each partner stands to gain significantly from the collaboration, thus ensuring sustained commitment and effort.
3. The Power of Pilot Experiments:
   The book advocates for starting small – using pilot experiments to test the waters. This approach allows businesses to manage risks better and learn from early failures without jeopardizing the entire venture.
4. Scaling for Impact:
   Perhaps the most crucial insight for growth-hungry businesses is the strategy for scaling these partnerships. The authors provide a roadmap for turning successful pilot projects into large-scale operations, emphasizing the need for agility and adaptability.

A Real-World Approach

What sets "The Reciprocity Advantage" apart is its grounding in real-world examples. The book is replete with case studies from various industries, demonstrating how companies have successfully applied the principles of reciprocity. These stories not only illustrate the book's concepts but also provide a source of inspiration for business leaders.

A Call to Action for Future-Ready Leaders

Yes, Johansen and Ronn's book is a business strategy guide but it is so much more. It's a call to action for leaders to rethink how they approach business growth in a world where collaboration can often be more effective than competition.

It challenges leaders to be future-ready, to embrace uncertainty, and to be willing to share not just resources but also visions and aspirations.

This talk by AI researcher Andrej Karpathy is the busy person's intro to LLMs and a great introduction for anyone who wants to understand LLMs, “the core technical component behind systems like ChatGPT, Claude, and Bard.”

Andrej Karpathy's talk "Intro to Large Language Models" provides a comprehensive understanding of the current state and future potential of LLMs.

He emphasizes the models' simplicity in structure yet complexity in capability, highlights the expansion beyond text generation, underscores the importance of security, and anticipates future developments in AI that are critical for informed business decisions.

What insights does he offer for businesspeople?

Notes on Marc Andreessen with Rick Rubin on Tetragrammaton

Marc Andreessen had a key role in the development of the early internet by working on both the MOSAIC browser and the Netscape browser.

With Generative AI at the forefront of a similar technological revolution like the commercial internet

This is a very well rounded discussion between 2 titans of what one could consider an opposite spectrum. This makes for very interesting question by Rick Rubin, those you were not smart enough to ask but really make Marc Andreessen tell interesting aspects.

If you truly want to understand what makes Silicon Valley tick and how technology shapes our world this is will be the best 3 hours spend in 2024.

Happy to discuss with you afterwards!

On Startups

1. Founders tend to make similar mistakes, with the most common being internal dissension within the team. The pressures of money, fame, and high stress can reveal the true nature of individuals, leading to conflicts and mistakes within the team.
2. The success of a start-up depends on whether the team can stay cohesive and trusting through difficult times. If the team is not able to stay integrated, even small cracks can magnify and potentially destroy the company.

On Corporations

1. Corporate executives have the authority to prioritize long-term brand value over short-term profits and are increasingly considering the impact of their decisions on a broader scale.
2. Businesses that can afford to spend money on marketing likely have a good product, as it indicates they are making money and have a healthy budget for advertising.
3. Companies face pressure to grow in order to add new valuable features and capabilities for users, but achieving optimal growth rate can be challenging.

On Technological Change

1. The tension between valuing tradition and embracing innovation is a natural aspect of human society. Technology not only changes the tech industry but also disrupts the social hierarchy and status of people.
2. Entrepreneurial personalities require resources, money, and partners to realize their ideas. Criticism of venture capitalists and disruption process is misguided as it is necessary for progress and change.
3. Taking personal responsibility, prioritizing impactful conversations, and building trust are crucial in communication and relationships.
4. The computing power of modern laptops allows individuals to conduct groundbreaking scientific and artistic work from their desks or pockets.
5. Andreessen acknowledges the sharp limits to the explanatory power of science and technology and remains open-minded to new ideas and underlying truths that are not yet known.

This already is the best podcast of 2024@pmarca with @RickRubin on @tetranow https://t.co/ao7hu70Kz0

— Mx Moritz (@mxmoritz) January 13, 2024

These principles, identified through Cialdini's extensive research and experiences, highlight key psychological factors that drive human behavior, particularly in contexts of persuasion and influence.

1. Principle of Reciprocation

We feel obligated to return favors or behaviors we receive.

The Hare Krishna Society often gives small items like flowers before asking for donations, leveraging this principle.

2. Principle of Scarcity

Items that are rare or limited in availability become more desirable.

Marketers create urgency through limited-time offers, enhancing the attractiveness of a product.

3. Principle of Authority

We are more inclined to follow the lead of credible, knowledgeable experts.

Authority figures or experts can influence decisions and behaviors more effectively.

4. Principle of Commitment

Once we take a stance or make a choice, we're more likely to act in ways that are consistent with that commitment.

Small initial commitments can lead to more significant actions aligned with the initial commitment.

5. Principle of Liking

We're more likely to comply with requests from people we know and like.

Tupperware parties use social relationships to facilitate sales, as purchases are made from friends or relatives.

Biases and Tupperware always reminds me of Charlie Munger; stack a couple of those biases and you have the Lollapalooza Effect.

6. Principle of Consensus

We're more likely to do something if we see others doing it too, especially those we identify with.

Products marketed as "best-selling" or "most popular" often use this principle to encourage purchases.

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More:

The Best Summary of Robert Cialdini’s book “Influence: The Psychology of Persuasion”.

We also applied Robert Cialdini's insights on influence for salespeople and how marketing professionals can use the psychology of persuasion.

Reid Hoffman's lecture at Stanford's CS 183 provides a valuable introduction into the concept of “Blitzscaling”, particularly in the context of Silicon Valley's startup culture.

The Premise of Blitzscaling

To understand the Blitzscaling concept and decide whether it is applicable to your business we should understand the premise and philosophy this framework is built on.

The Abundance of Startups and Globalization of Venture Capital

The accessibility of venture capital and entrepreneurial knowledge has globalized, making it possible to start ventures in various parts of the world. However, Silicon Valley remains unique in its ecosystem's ability to support rapid scaling.

• The Unique Position of Silicon Valley:
  Hoffman emphasizes that Silicon Valley's strength lies not just in starting businesses but in rapidly scaling them. This ability to scale, more than just the abundance of startups, sets Silicon Valley apart.
• The Necessity of Capital for Blitzscaling:
  Significant capital is required for blitzscaling, either from revenue reinvestment or external financing sources like venture capital or public markets.

The following are the 7 key takeaways to remember. They provide us with a foundational understanding of blitzscaling and its critical components.

Before we dive deeper to into Hoffman's and Yeh’s book Blitzscaling, these concepts from their lectures offer an understanding of the strategies and decisions necessary for successful rapid scaling in a startup environment.

1. Blitzscaling as a Key Differentiator

The core of blitzscaling lies in the capacity to grow a company quickly and significantly. This involves scaling the business model, customer base, and organizational structure at a pace much faster than traditional business growth strategies.

2. Importance of Networks in Blitzscaling

Networks, including those of talent, capital, and know-how, play a crucial role in the blitzscaling process. Silicon Valley's success is partly attributed to its rich and intertwined networks.

3. The Role of Speed and Risk Management

Hoffman discusses the importance of moving faster than the competition, even if it means accepting higher risks and potentially higher error rates in the short term.

4. The Evolution from Generalist to Specialist Roles

As a company grows through blitzscaling, its workforce evolves from generalists to specialists. This evolution is necessary to manage the increasing complexity of the business.

5. Continuous Innovation During Scaling

Innovation doesn't stop with initial success; it needs to be an ongoing process even as the company scales. This includes innovation in product development, market strategies, and operational processes.

6. Adaptability and Operational Excellence

There's a balance to be struck between maintaining adaptability and striving for operational excellence. Sometimes, rapid scaling requires prioritizing adaptability, even at the cost of efficiency.

7. Product-Market Fit and Customer Focus

Understanding and achieving product-market fit is essential in the early stages of a startup. This involves not only developing a valuable product but also understanding and catering to the needs of the customers.

Highlights in Daniel Kahneman's Lecture on "Thinking, Fast and Slow"

Highlight 1 "One Way Thoughts Come to Mind" (Timestamp ~6:06): Kahneman introduces us to the spontaneous generation of thoughts, an intriguing aspect of our mental System 1. This segment highlights how certain thoughts and ideas seem to appear out of nowhere, providing a glimpse into our mind's fast, intuitive, and often subconscious workings.

Highlight 2. "Another Way Thoughts Come to Mind" (Timestamp ~6:53): Diving deeper, Kahneman explores another facet of thought generation, shedding light on how our mind's System 2 operates. This part of the lecture underscores the slower, more deliberate process of thinking, emphasizing the logical and methodical aspects that contrast sharply with the impulsiveness of System 1.

3. "Another Function of System 2" (Timestamp ~9:05): In this segment, Kahneman expounds on an additional role of System 2, which involves oversight and control. He articulates how this system steps in to moderate and sometimes override the impulses and snap judgments of System 1, highlighting a crucial balance in our cognitive functions.

4. "Substitution: How to Jump to Conclusions" (Timestamp ~37:58): Perhaps one of the most intriguing parts of the lecture, this section delves into the concept of 'substitution.' Kahneman explains how our mind often replaces complex questions with simpler ones, leading to quick but sometimes erroneous conclusions. This phenomenon underscores the hidden biases and errors in our fast thinking.

5. "A Perceptual Illusion of Attribute Substitution" (Timestamp ~40:05): Finally, Kahneman presents a compelling demonstration of attribute substitution in action, illustrating how our perceptions can be misleading. This part of the talk vividly brings to life the pitfalls of intuitive judgments, showing how easily our senses and intuitions can deceive us.

Chris Anderson's Insights into the Long Tail: The New Dynamics of Consumer Choice and Market Behavior

Chris Anderson discusses the concept of the "long tail" in the context of consumer choice, markets, and the influence of digital platforms.

To exemplify the "long tail" phenomena, he delves into how digital platforms and the internet have transformed the dynamics of choice and market behavior, highlighting both the challenges posed by this new landscape and the tools that have been innovated to address them.

Paradox of Choice: Drawing from Barry Schwartz's theory, Anderson highlights the potential pitfalls of overwhelming choice. Barry Schwartz's theory suggests that having too many choices can be paralyzing and often leads to dissatisfaction with one's final selection.

Abundance of Choice with Help: The internet offers an overwhelming number of choices. However, tools and platforms like Google and Amazon help navigate this abundance by ranking, categorizing, and curating content or products, effectively assisting consumers in making decisions.

Physical vs. Digital Marketplaces: While there might be an abundance of choices, we have inherent methods and tools to help us decide, especially online. To make this point Anderson compares the number of product choices in physical supermarkets with online platforms like Amazon.

Micro Hits: Within broader and expansive categories, there are niches that have their own "hits" or popular choices. This segmentation allows consumers to make more informed choices that align with their specific interests.

Content Creation: The rise of platforms like MySpace, YouTube, and blogging is driven not necessarily by monetary incentives. Anderson argues that the drive comes from the human desire for personal expression, reputation-building, and genuine passion.

Oligopoly in Digital Marketplaces: Addressing the digital realm, Anderson touches the dominance of a few major players in various online markets, such as Google in search, eBay in auctions, and iTunes in music. He suggested in 2007 that this dominance might be a short-term phenomenon, with more competitors emerging over time.

Airbnb's approach embodies the customer-centric idea that businesses should not just sell products or services but should aim to create outstanding experiences that resonate emotionally, foster loyalty, and turn customers into brand advocates.

For that you need a deep understanding of your customers and a holistic view of the customer journey.

Airbnb's realization that – just like Disney – their product isn't just the app or website but the entire experience indicates a holistic view of the customer journey. Every touchpoint, online or offline, is an opportunity to delight the customer.

Watch minutes 30:33 to 36:55, to find out how Brain storyboards an 11-star AirBnB experience.

Your growth potential is limitless if you overcome the notion that you compete in a market.

With a mindset of abundance, you realize that the business universe consists of more than one kind of markets.

In Kim and Mauborgne theory two kinds of markets to be exact: red ocean markets and blue ocean markets.

Red oceans represent competitive or market competing strategies. As a red ocean player you do everything to outperform rivals and grab a bigger share of existing demand.

By contrast, if you strive for a market creating strategy, a blue ocean strategy, you create a new market that is un-competed or define a new category from a demand-side perspective.

“Most blue oceans emerge when a company alters the boundaries of an existing industry”, or as Drucker would say a type 2 innovation where you either attract a whole new group of customers or your biggest competition is non-consumption.

Lessons Learned: “When you break the bounds of existing industries, competition becomes irrelevant.”

Jeff Bezos on Fighting off "Day 2" and Avoiding Stagnation

As the founder of Amazon.com, Bezos has spent decades reminding his employees that "it's always Day 1" at Amazon.

"What does Day 2 look like?" This was a question posed to Jeff Bezos at a recent all-hands meeting that inspired his 2016 shareholder Letter.

According to Bezos, "Day 2" is synonymous with stasis, leading to irrelevance, painful decline, and ultimately, the death of a company. To stave off this fate, Bezos states that companies must retain the dynamism and customer obsession that characterizes Day 1, even as they expand.

Bezos addresses this question head-on, sharing his philosophy on how to maintain the "vitality of Day 1."

I share an analysis of Bezos's Day 1 Masterclass in maintaining a relentless focus on the customer.

"Tenacious D's 'Tribute' music video hits all the right notes – a comedy rock opera distilled into a bite-sized cinematic gem. Blending reality with the absurd, Jack Black and Kyle Gass channel their palpable charisma into a potent mix of hilarity and rock 'n roll reverence.

Their lively performances ignite the screen, fueling a zany narrative that seamlessly oscillates between live-action and animated sequences. It's a heady visual cocktail, perfectly poured to match the raucous rhythm of the song.

This isn't your run-of-the-mill music video; it's a captivating mini-feature that commands your attention from the first chord to the final laugh. The unexpected twist from humdrum to supernatural leaves you reeling, transforming the mundane into an unforgettable musical misadventure.

Cleverly edited, the video's pacing echoes the heartbeat of the song, each quick cut amplifying the energy while the visuals stay perfectly in sync with the lyrical rollercoaster ride.

'Tribute' is more than just a music video - it's a testament to the imaginative spirit of Tenacious D, their ability to create a visual spectacle that's as audacious and entertaining as their unforgettable sound. This is not just a music video in the world. This is... a tribute."

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