Today, I’m talking with Jesse Lyu, the founder and CEO of Rabbit. The startup company makes the adorable r1 AI gadget — a small handheld designed by superstar plan firm Teenage Engineering. It’s meant to be how you talk to an AI agent, which then goes off onto the net and does things for you, from playing music on Spotify and ordering an Uber to even buying things on Amazon.
Rabbit launched with quite a few hype at CES and a large organization in fresh York, but early reviews of the device were universally bad. Our own David Pierce gave it a 3 out of 10 in May, saying that most of the features don’t work or don’t even exist. And the core feature that didn’t seem to be was the most crucial of all: Rabbit’s large action model, or LAM, which is meant to let the strategy to open a web browser in the cloud and browse for you. The LAM is expected to intelligently realize what it’s looking at on a website and virtually click around to accomplish tasks on your behalf.
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There have been quite a few questions about just how real Rabbit’s LAM was, but the company yet launched what it calls LAM playground, which lets people usage a bare-bones version of the system. It does indeed appear to be clicking around on the web, although it is very slow.
So, I wanted to know how Jesse planned to invest in the LAM and compete with another AI agents that promise to do things for you. For example, Microsoft just announced a fresh agent-y version of Copilot, and Apple’s imagination for the next generation of Siri is an AI agent — and it’ll run on your telephone and have direct access to those apps and your data inside them. It’s the same with Google and Gemini and Amazon’s rumored next generation of Alexa. This is major competition for a startup, and Jesse talked about wanting to get out ahead of it.
But really, I wanted to know how Rabbit’s strategy works and whether it’s durable — not just technically, which is challenging, but besides from a business and legal perspective. After all, if Rabbit’s thought works and the LAM truly does go and browse websites for you… what’s stopping companies like Spotify and DoorDash from blocking it? You might have a strong point of view here — Jesse surely does — but at any point, there’s going to be a fight about this, and it’s not clear what’s going to happen.
To put this in historical context, about a decade ago, a fistful of startups tried to stream broadcast tv without licenses by putting a bunch of antennas in a single location and building apps that let people access them. This felt technically legal — what’s the difference between all those people having their own antennas and putting all those antennas in a single place and those accessing them over the internet? any of these companies were seriously innovative — the most celebrated was a company called Aereo, which spent a ton of money designing specialized tv antennas the size of a nickel so it could pack as many of them into a data center as possible. I wrote about Aereo back then — visited the antenna floor, interviewed the CEO, the full thing. Aereo then got sued by the tv networks, the case went to the ultimate Court in 2014, and you will note that Aereo no longer exists.
I don’t know if Rabbit is another Aereo, and I don’t know how all these companies will respond to having robots browse their websites alternatively of people. And I surely don’t know how legal systems around the planet will handle the inevitable lawsuits to come. I asked Jesse about all of this, and you’ll hear his answer: he thinks Rabbit will be so successful that these companies will want to show up and make deals. I gotta say, I don’t know about that, either.
I do know that this is simply a beautiful intense and occasionally contentious interview. Jesse didn’t back down, and that means we got beautiful deep into it. Let me know what you think.
Okay, Jesse Lyu, founder and CEO of Rabbit. Here we go.
The following transcript was lightly formatted for dimension and clarity. It may contain errors.
Jesse Lyu, you’re the founder and CEO of Rabbit. Welcome to Decoder.
Thank you, Nilay. Glad to be here.
I’m very excited to talk to you. Rabbit is simply a fascinating company. The thought for the r1 product is fascinating. I think quite a few people think that something that looks like the r1 is the next evolution of smartphones or products or something. And then there’s the company itself, which is truly interesting, and you’ve got a connection to Teenage Engineering, which is 1 of our favourite companies here at the Verge. So, just a lot to talk about.
And you’ve got any news to share about beginning up Rabbit’s large action model so people can play with it, and it’s kind of an early version. I truly want to talk about that. But let’s start with Rabbit itself. The company has not been around that long. The r1 just started shipping six months ago. What is Rabbit? How’d the company start?
Long communicative short, it’s a very young company. So here’s a small bit of past of it. I actually started a AI company back in 2013, which was called RavenTek, and we were at YC Winter ‘15 Batch.
And it’s fundamentally my individual dream to pursuit this grand imagination that, I guess, me being this generation, increasing up, we watched so many sci-fi movies, there’s AI stuff here and there. And I guess all geek wants to build their own Jarvis at any point.
So I think that’s precisely how I started RavenTek 11, 12 years ago. And back then, we had this idea, we had this direction, but the technology back then, obviously, there wasn’t like GPU training, there wasn’t transformer and stuff. So we worked truly hard on the early days of voice dictation and NLP and NLU, which is natural language processing and natural language understanding. So the technology 1 there, we tried our best. We actually built full cloud strategy and the hardware, which is akin to what we have in Rabbit today. But the telephone origin was more of a smart speaker, as if we all know back in 10 years ago, everyone’s chasing that telephone factor. Ultimately, the company got acquired so it’s not a fresh thought for myself, but it’s definitely a fresh chance that erstwhile I saw the advancement on the investigation side, the transformer, obviously, I got a chance to effort ChatGPT or GPT’s API very early time.
We were truly impressed due to the fact that we felt the timing is right due to the fact that being able to do something like r1 or more sci-fi, Jarvis stuff, you truly request to figure out 2 parts from the back end. 1 is that you want to make certain that by talking to the device, the computer or device actually realize what you’re talking about, which is the transformer, the large language model part. But we believe at around 2020, 2021, we believe that the transformer is absolutely the right way that opening, another companies are heading to. We believe that condition been solved, will be solved. So our focus immediately shift to after this device can realize you, can it actually aid you do things?
And the company that I started 10, 11 years ago, RavenTek, we were actually 1 of the first company that we designed a cloud API structure. That’s after the recognization, after the understanding, the query got sent into different APIs. The strategy has a detector to understand, “Oh, possibly you are looking for a restaurant on Yelp. possibly you want to play a song from this streaming software.” But I guess 10 years ago, there’s a large chance of APIs. There are quite a few company working on APIs. And if you remember 10 years ago in Silicon Valley, everyone was talking about possibly in the future the full operating strategy will be just HTML files. Right? But that didn’t live rather long.
I think now erstwhile we’re looking after 2020, the API business is not truly major business for most of the popular services. So we besides want to take an evaluation of whether we can build a generic part of agent technology, which is truly hard. due to the fact that I believe the current AI is all generic. Obviously, there’s quite a few people doing vertical stuff. Right? You can build an agent for Excel. You can build an agent for legal documentation process. But I think the biggest dream, what’s truly make us excited is the generic part of it. It’s like, can we build something that without pre-training, without knowing people want to do what, and they just taught whatever they want, and we’ll be able to smart adequate to handle all the tasks. So that’s why we felt the chance was right, and we started Rabbit right after COVID.
The thought that agents are going to be a large part of our life, and in peculiar general intent agents that go take actions for us on the internet. I’ve heard this thought from all kinds of folks, from startup founders like yourself to the CEOs of the biggest companies in the world. I want to come back to that. That’s a large idea, but I just want to stay focused on Rabbit for a second. How many people work at Rabbit today?
I believe at the current moment, we’re about around 50 people, 50 to 60 people if we plus the interns. But erstwhile we started, the company was seven, and by the time we launched, our CES was 17. So just by increasing the squad within 4 or 5 months, it was rather a challenging occupation for me.
So CES was the large launch. We were there, David Pierce was at the party. The Rabbit was introduced. You gave demos in a hotel room, I think. And then you had the launch organization here at the TWA Hotel at JFK, which is very cool. The thing’s been out, but you’ve been growing. You said you started at 17 people in January at CES, and you have 50 now. What are you adding all those people to do?
Most of it’s just engineers. We have a very tiny group of design/hardware plan or ID that we started from day one, and most of the fresh folks are working on AI and infrastructure perspective, like cloud basically. We not only ship the hardware. We build the full Rabbit OS for it. So I think the major work is always going to be in the software part.
How is the full company structured? As you go from 7 to 17 to 50, you evidently gotta decide how to structure Rabbit. How is that structured now? How has it changed?
We are primarily located in Santa Monica. We have a device squad of truly large folks in Bay Area, and we have a couple of investigation engineers here and there. So it’s kind of mostly in person, but somewhat hybrid system. And the way that we find our people is mostly by interior referring. So we’re not spending money chasing for agents, agencies to do the hiring. Most of the good folks that we fundamentally do interior recommendation.
But how are your 50 people that you have now, how is that organized inside the company?
It’s truly flat in a sense. We have different departments, obviously. The hardware ODM/OEM that part is in Asia. We have our IT squad in collaboration with folks in Stockholm. squad engineering in this case. And we do our own graphics and marketing, all of that in house. And then for the software part, we have the device squad that they request to work with, the ODM/OEM. And we have the cloud team, we have the AI team. That’s fundamentally how much squad we have. And each team, there’s evidently crossovers, and we fundamentally work project-based.
So there is no crazy hierarchy going on. I mean, the biggest company I always led was back in the Raven. I believe by the time we got acquired, we were 250 people. So this is inactive within my comfort zone, to manage 50-ish people. So, yeah.
Teenage Engineering is simply a large part of the Rabbit story. They evidently designed the r1 hardware, and then their founder, Jesper Kouthoofd, is your chief plan officer. How much more hardware are you designing right now? Are there iterations to come? Do you have a roadmap of fresh products?
The way we work together, evidently this is not the first time we collaborate. We did a collaboration back in Raven. First of all, Teenage Engineering is my hero company. It’s fundamentally a fanboy dream come actual communicative for me, and I truly appreciate their aid over the years.
The way that we work together is very intuitive. There are evidently many ways that considered to be the appropriate way of designing a task like this, but I think we’re out of the average way of doing this… I can give you an example. Back in the Raven, all we did is that we had most likely 2 meetings in person, a couple of telephone calls, no email, no text messages. We set up a secret Instagram account that we just share sketches, and we just hit on our Instagram account, and that’s how we designed the erstwhile Raven project.
This time, it was even quicker. I think I shared this publicly. I think we spent most likely 10 minutes on deciding the r1, how it’s going to look like, and we have fast sketches here and there. Ultimately, I pushed Jesper back for utilizing the current color, which is the orange from Rao. We do have possibly 2 or 3 projects in our mind, but I think by the end of this year, our current focus is to truly get this LAM pushed to the next level. So yeah, stay tuned. I think 1 thing people will realize is that this squad do hardware truly quick. due to the fact that erstwhile we start sketching the r1, it was like last year back in November, and we introduced that by January, and we start shipping by April. So if we want to launch the next project, it’s going to be roughly, I don’t know, six to 8 months timeframe. surely not like a year or two.
But that being said, I think… I was having my own community voice chat yesterday. I was talking to people about the current r1 due to the fact that I truly don’t like the current consumer electronics. Like, 1 year per generation by default, regardless. We’ve seen that from the smartphone companies and doing yearly release for all this stuff with insignificant changes. erstwhile we started designing the r1, the full Rabbit OS runs out of cloud. That means that this part of hardware, even though it’s 199 and not the latest chips, it’s truly capable of offloading the future features to this device. So I don’t think r1 is like a one-year life span device. So does our community, though. They think they can tweak so many things about it. So in that sense, we’re not in a rush to drop another version of it, but we do have different telephone factors in our head at the moment.
And is Jesper actively working on those designs, or as chief plan officer, is he working on something else?
He was virtually in our office 3 days ago. Yeah, we are actively working together. Correct.
How much money have you raised so far?
That’s a good question. I want to be accurate, but it’s somewhere around $50 million full in the full lifespan. Last part was $35 million led by Sound Venture and besides Khosla Venture, and Amazon Alexa, Foundation Synergist. So last circular was $35M, and if you consider all the money together, I think it’s around $50M.
When I look at the amount of money that another AI companies are going out to raise, right as we are speaking, OpenAI just raised the biggest circular always in past to go build, obviously, a foundation model, digital god, whatever Sam Altman thinks he’s doing. Do you think you can compete at $35 million a round?
No, but I think talking about competition money is 1 part of it. I think I’ve considered myself a veteran due to the fact that I’ve done startups before. I know how it works. Certainly, money is very important, most likely most crucial in the early couple of years.
But I think erstwhile we talk about competition, we yet want to ship products to consumers. due to the fact that the way I look at it is that people are not buying electricity. Electricity is fundamentally controlled by… Here in California, it’s confederate California Edison, right? You have an address you gotta pay for it regardless of how much electricity you’re using. But I think people are yet buying microwaves, cars, motorcycles, televisions. People are buying products powered by electricity. So research-wise, I can say very clearly, we have at this minute of Rabbit, there’s no way that we can compete over OpenAI, Anthropic, and DeepMind and Google, but how can we play the game?
We become partners with everyone. Right? So r1 is hosting all single model, the latest model from these guys. Their capabilities combined with our product innovation on the Rabbit OS and all the features offered to our user. So there’s no way we can compete over on a investigation perspective, but we ship product fast.
You saw OpenAI just released the Instant API, as they call it. I was actually invited to the meeting, but I’m launching the LAM playground yesterday, so I couldn’t be there in person, but they’re offering API for people to build an agent for it. But yesterday, we dropped a LAM playground, which you can go to any website and just do it by voice.
So I think competition is different magnitude. I think money is definitely important. We hope that we can rise more money, of course. But I think right now, if you talk about competition, we gotta play smart. They are good on the research. We are good on converting all the latest investigation into a part of product that user can usage today.
Let’s talk about what that product is today. So right now you have the r1. You can buy it. It’s a beautiful part of hardware. It is orange. It is very striking. It has a screen, it has a scroll dial, and then it has a connection to your service in the cloud, which goes and does stuff for you.
That costs $199. Are you making money on the sale of each individual r1 unit right now?
What’s the margin? What’s your profit on r1?
I have my r1 right here. It’s a very good margin, even though I can now tell you the details, but it’s over 40%.
Do you make over 40% on the hardware margin of the r1?
On hardware margin, which we did the mass, we run the calculation. We might gotta redo the mass due to the fact that yesterday virtually after drop the LAN playground, the server crashed multiple times. So we might request to redo the calculation. But again, first of all, in the beginning we’re making money. Now we have these more powerful features moving forward. I think I haven’t heard a company that went bankrupt due to the fact that they got a popular service that is so popular that they couldn’t afford cloud bills. I think if you build a good product, there will be-
Well, hold on, I can draw that line for you. So it’s $199. You’re making over 40%, so that’s between $80 and $90, right? It’s not 50%, which would be $100 so it’s a small less. So between $80 and $90 in margin. That margin, you do gotta pay your cloud bills, right?
So is that margin all being fed into your cloud bills?
Obviously, we have this dedicated instance with all these cloud competitors. Right? I mean, don’t get me wrong. The Amazon AWS, they’re hosting on AWS, and there’s AWS, Google Cloud, Microsoft Azure. On the LLM partnerships, we have Anthropic, OpenAI and Gemini. So don’t get me wrong, it-
That’s quite a few companies that like to make quite a few money. I just want to be… They’re not inexpensive to partner with, all those companies.
They’re not cheap, but what I’m trying to point out is that they are competing so fierce in a way that they have quite a few good benefit for the early startups. I gotta shout out for all these companies. So they truly want to figure out a way to aid you on board and possibly making your money in the long run, but I think at this current scale, we can totally handle it. Yes.
So we get large deals from them. Yeah.
So if I buy an r1 from you, you take $90 of margin or $80 of margin. At what point, how much do I gotta usage my r1 to turn that negative for you? due to the fact that everything I do with an AI, that’s a token. That token costs money. It costs multiple services. Your bandwidth cost money. It all costs money. How much does a single r1 user gotta usage their r1 to take up $90 a margin or $80 a margin from you?
So I think of a average user utilizing it in a non-robotic way or a non-malicious way, it’s going to be truly hard to break down negativity. But —
Is that 2 years worth of usage? 1 year? Six months?
I think it’s definitely over a year and a half. I’m not certain about 2 year due to the fact that there’s fresh features going to implement into this, including LAN playground and teach mode.
But yeah, so I want to share my knowing to this is that yes, we did the mathematics. We are making money. No problem. We want we can sale more, which we’re hoping that we can sale more. That’s going to definitely help. But I think the mark of this full launch strategy is not set for making X amount of money on first six months. I think there’s another companies that truly gritty about how they want to launch their product. I’m not going to even mention a name, so that won’t work. That won’t work. So I think if you look at any fresh generation of product, if the founder and the company and the board decide to set up a strategy that, “Let’s compression all single penny out of the user,” it’s not going to work.
Because we know AI is very early, and we know that there’s going to be quite a few things that go wrong. In fact, I believe that all company, regardless of if you’re large or small, if you work on the latest AI stuff, the first 2 weeks, it’s going to be disaster due to the fact that you’re going to find quite a few the misbehavior about the AI. You’re going to find quite a few the edge cases by the model.
So I think the full thing is besides new. There’s no way that we want to charge for subscription. That’s even worse. I don’t like that strategy in general. So even though this sounds very concerning, that, okay, you can easy twist my communicative or individual might twist my story, be like, “Oh, Rabbit is doing everything large but they’re going to no substance what.” Right? I think there’s a very stupid way to think in that sense due to the fact that a large innovation, you gotta focus on the innovative part first. Then erstwhile you figure out the money part. If we start figuring out the money part, now this making sense. Really. Now this making sense.
I think there’s another people in the manufacture that they have a large knowing of everything, and then they decided to release a wallpaper app, charge $4.50 per month. Right? Hopefully that works. I guess you can go talk to that guy and you say, “Hey, there’s no way you’re going to bankrupt due to the fact that your money checks, all this equation checks. If you charge for this, you’re going to be making money.” But that based on the position that the full logic needs to stand up, right?
So I think I’m not truly wasting quite a few my time at this point on trying to fundamentally fine tune a small about mathematical equations to make this more like, 20%, 50%. Obviously, as a startup, we request to survive, and I think even though we have a roller coaster ride since launch. But we’re growing, and we’re surviving, and we’re inactive pushing the features that no of the another devices, including iPhone can do, which is simply a very, very good sign. So, yeah.
So one, I don’t think anybody has always linked criticism of Humane to criticism of Marques’ wallpaper app on our show before. Well done. I think Marques has a very different view of where his expertise is in what went incorrect with that app and possibly 1 day we’ll talk to him about it.
But my question for you, erstwhile you talk about growth and you talk about our unit, erstwhile you talk about growth and you talk about the unit economics of the Rabbit is on any curve, the hardware becomes unprofitable for you. Just me having a Rabbit for longer than 18 months becomes unprofitable for you. That’s the minute that you would charge a subscription. You would say to proceed utilizing this thing. It can’t be negative for our company. And that’s the thing that I’m pushing on here.
I think there are multiple solutions to that question.
One is that evidently if, let’s usage R1 for all user for more than 18 months. There’s a couple of solutions. 1 is that we are going to launch the next generation device, and possibly multiple devices are inactive profitable from the hardware. Two, I think we have this prepared for since day one. From last week we rolled out the alpha teach mode to a very selected group of testers. I would love to give you the access, so delight scope out to us later on. We’ll see if we can aid you set it up. But we rolled out a very tiny group of our testers, about around 20, 25 people to be honest. And then over the last 72 hours I saw more than most likely 200, more than 200 lessons or agents has been created through Teach mode. And if you look at the current Apple ecosystem or Android ecosystem, I think the hardware is not going to be the number 1 money contributor.
It’s truly hard to make on top of the margin of the hardware anyway. So at any point you want to convert that into services and software. That doesn’t mean that you’re going to charge a subscription for the device. What I think is very promising is that we are going to slow rotation out the teach mode to beta testers and hopefully by the end of this year we can grand open the teach mode as we promised on day one. So all these lessons created or Rabbits or agents created by each independent users or developers, they can be considered as a fresh generation of app store. On that, we can make large money.
Using the app store economics of taking 30%.
I don’t want to invent any — exactly. I think I’m not trying to invent any fresh business model. I think as a startup it’s very risky to invent your own business model, but there is simply a very large business model out there which is App store and that’s contributing like what, 70% for any income, right? So
I’m just curious, just as I’ve played with R1s and looked at the device, I’ve always wondered how on earth are we making money at 1.99? So that makes sense to me. erstwhile you think about what the Rabbit is actually doing, I ask it a query, it shows me the amazing animation. I ask it a query, it shows me a beautiful animation on the screen, which is adorable, and it goes off into the web and uses a bunch of APIs. And now the fresh large action model, which is the news, right? Yesterday you announced the large action model playground. People can watch it work. I’ve seen the lamb click around on the Verge website just to read headlines, which is neat. Is that the back end of this, I ask the Rabbit to do something and in the cloud it goes and clicks around on the web for me?
So we gotta separate 2 different systems here, possibly 3 different systems here. By the time before yesterday, let’s talk before yesterday due to the fact that yesterday is truly a large milestone. Before yesterday, what happens is that you talk to the R1. We have an intention triage system, which fundamentally we convert this audio to a text, we send that text to our LLM providers, and then we have an intention triage system. From there, after the LLM realize the intention we send to different APIs or different features. There are quite a few feature which is on device, right? Like set a smart timer or something like that. Or there’s a simple question, but we think that there’s another services or model most likely answers better than the default LLM. So sometimes we send a peculiar query to Perplexity. Sometimes we send a peculiar query to Wolfram Alpha So you can realize as intention triage strategy is dispensing on this to different destinations and then the comparative features will trigger.
But after yesterday, which we have this playground and that’s a first stepping stone towards what we truly want to create, which is simply a generic cross-platform agent system. It should be generic, which on this case it is simply a generic. It is not cross-platform yet due to the fact that it handles only a website. It will be cross-platform very soon. But with this generic website agent system, fundamentally you can just talk to Rabbit, be like, “Hey, go to ABC website or go somewhere and then aid me do this.” So that’s precisely how we want to plan a product. And I think everyone in the manufacture is heading towards this direction, which is you say something, we realize you and we aid you do it. And what happens as we put a Windows on the Rabbit gap that you can see is that the agent will break down different steps.
I’m going to Google first. I’m searching for the Verge, I’m clicking to the Verge’s home website. I’m trying to find this title as you request it. I’m clicking the button to share this. And in explanation you can multiple steps, infinite steps, follow up queries to the system. So I gave you an example. I think I showed this to another reporter, is, hey, go to Reddit first and search for what are people recommending for the 2024 best tv for KHDR. Get that model, then go to Best Buy, add that to my cart. If Best Buy is out of stock, then search on Amazon.
If they both are out of stock, get me the second recommended model. So you can actually chain different queries and you can pause it, you can add, you can tweak it, you can fine tune it. So it’s truly just like a playground. You can freely research the strategy and the strategy is reasonably good adequate to do regular tasks. And people are evidently developers and our hackers in statistics… White hackers of course are giving us awesome showcases. There are people utilizing the LAM playground to make an app by just by talking to R1 due to the fact that there are 3rd organization AI destination that you can just usage prompt and make an app and download the code and stuff like that. So it’s truly amazing to see all this large showcases just within actually precisely 24 hours.
So I want to make the marker between yesterday and the day before it, right? You announced the Rabbit at CES in January with the LAM, but it wasn’t there. Why announce it without its fundamental enabling feature?
It is not accurate. I want to take this chance to address that. If you go to the connections, now we have 7 apps. By day 1 we have 4 apps. Those are the first iteration of LAM, which is not a generic technology. We never on the CS claim that you cannot go to Amazon order to something. We said we are working towards this part and present there’s 4 apps that you can connect. We are going to add more services. And over the past couple of months we did add 3 more services. So as if present there are 7 services in total, then we keep working on the current LAM playground and erstwhile the time is right, we swap it.
So there’s quite a few debate saying that wasn’t there. That is not true. I can trace back to where this rumor starts is where there are people hacking to the R1. They saw R1 is fundamentally powered by Android strategy on the local device. And evidently that should be the case. It would be more sketchy if it’s non-Android. So at the bottom of it is an Android strategy and they dump the code, which you can do that. In fact, all good part of hardware in past has been hacked.
So individual goes into this and jailbreaks the R1, which I guess all part of hardware is jailbreakable at any point. Obviously, that’s the origin to us. If you build a software and no 1 even bothered to jailbreak, it’s most likely not a good telephone origin anyway. So people jailbreak it, find out the Android code, they dump the Android code to another media and they say, hey, there’s nothing about AI here. There’s nothing about LAM here. Of course, due to the fact that all the stuff is in AWS. That’s where the rumor starts. And then there’s quite a few media and they just take that part and reiterate that.
The apps you started with, Spotify, DoorDash, there are a fewer others. Those are APIs, right? You were utilizing their APIs. You were actually beginning Spotify on the web in Chrome and clicking on it.
Yes. Yes. due to the fact that what do you mean, “why?” There is no API.
That’s the most brittle way to usage Spotify I can think of.
There is no API. There is no API.
You made a smart speaker. Spotify can run on smart speakers and another kinds —
That’s a partnership. That’s a partnership. Go to Spotify, read their documentations. There is simply a circumstantial line is that you cannot usage API to build a voice-activated application literally.
So Spotify right now on the R1, erstwhile I asked to play song, it goes and opens Spotify on the web somewhere —
And then you’re re-streaming the audio to my device through your service.
Does Spotify know that you’re doing this?
And they’re okay with that?
We have a conversation. They realize this is agent behavior. And we said, look, we ask the user to log in on your website and they’re a 100% legitimate user and they’re a paid user. And erstwhile we do the trick, we aid them click the button.
I’ve always been very curious about this. I’ve been dying to ask you these questions. So I ask my R1 to play a song. Somewhere in AWS, a virtual device fires up, opens a web browser, opens Spotify, logs into my Spotify account utilizing my credentials, clicks around on Spotify, pushes a button to play a song, and then you capture that audio and re-stream it to me on my R1?
Everything is accurate but we don’t aid you log in. You gotta log in for yourself and we don’t save your connection.
But the part where you are re-streaming audio that Spotify is playing to your virtual device to me, you’re doing that?
We are fundamentally giving everyone a virtual machine, which is simply a VNC, which is 100% within policy, and you have the right to access that VNC. And on that VNC, we fundamentally work straight on a website just like today’s LAM playground. So we’re not getting the audio from the server from Spotify or somewhere else. We’re fundamentally going to the Spotify website and play and do the things for you and play that song for you.
Okay, but where do the bits go? The bits come to the virtual device and then they come from the virtual device to my Rabbit.
So you are re-streaming the song to me.
I’m not re-streaming the song to you. I’m fundamentally presenting the VNC straight to your R1.
Wait, explain how that works. possibly I’m not method adequate to realize how that works. You’re presenting the VNC to my R1.
So it is moving locally on my computer?
Okay, I see what you mean. So I’m logged into a cloud computer. The R1 is the client to a cloud computer. And Spotify is playing on that cloud computer and the R1 is taking that audio. Okay. That raises a million extra questions, right?
Yeah. First of all, I see where you’re going. Okay. Before you go deeper, I just want to say first of all, we’re not utilizing API. Second of all to say LAM is not there, that’s false claim due to the fact that we have all these services, if you truly pay attention to their documentation, there is no API for like DoorDash. There is no API for Uber.
But I just want to be clear, that’s a choice those companies have made to prevent companies like Rabbit from automating their services and disintermediating their services from the user. So as you think about these agent models going out onto the web, nevertheless they’re expressed, whether it’s the LAM, whether it’s whatever you’re doing before the LAM playground hit, all of those companies are going to have a point of view on whether agents can usage their services in this way. That’s beautiful unsettled.
And I’m curious, you have a fewer services, they might’ve just said, okay, let’s see how this goes. But over time you’re going to enter into a much more complicated set of negotiations that will actually be most likely determined by the large companies making deals, right? You can see how OpenAI or Microsoft or Amazon would make a deal to have DoorDash successful by agents and DoorDash would say, we’ve made this deal, you can’t be accessible. How do you solve that problem?
It’s not a problem for now. We’ll see how this problem evolves, but I remember erstwhile Apple is comparatively not so big, not as large as today. erstwhile I read the Steve Jobs book, there’s 1 chapter. He said, okay, go talk to Sony from next day 99 cents per track, right? Remember that moment. So at any point this level of negotiation needs to be happening. I’m not certain if we’re leading this or individual else is leading this, but this is the working proof that we’re not utilizing API and I don’t think the services are not building API just due to the fact that they’re trying to prevent people from automating the company, just due to the fact that API to them is not making money. And they for certain will love to set up a negotiation in any phase later erstwhile we grow bigger. But I guess we effort to scope out to Uber with it before launch. They’re like, who are you? You’re besides small. That’s it. We don’t care.
And so then you have Uber on the R1 now, that’s beginning the Uber desktop app?
No, the Uber website, which is very janky, which is very —
That’s what I’m asking. Sorry. What I meant by desktop app is in the web browser you’re calling an Uber on. If you’re moving on Android, why not open an Android virtual device and usage the Android app?
It is simply a small bit more method to accomplish that, which we are working on the another platforms, I think I showed a group of people a working prototype that LAM is operating on the desktop OS specified as Linux with all the local apps. So we’re definitely heading in that direction.
Is there a anticipation they can detect the fact that these are not human users, but in fact agent users?
I guess there’s always a way that you can detect, but I think the question is, this is actually a very good subject that we’re talking about here. Think about CAPTCHAs.
LAM playground or any capable AI models now can go there and solve tech-based captures. So their old strategy to prevent automated systems like this are presently failing. This is an manufacture effort to push everyone in the manufacture to rethink about now with this AI, now with all this agent, how their business is going to improvement or how their business… How all these policies request to be changed. I do agree, this is simply a very complicated topic, but what I can see is that this is not Rabbit doing any truly fancy magic here. all company is doing this. We have another agent companies like Motel, even the GPTs are doing this. So this is simply a fresh wave emerging for all this old services that they gotta think about. But I can tell you my individual experience dealing with scenarios like this. erstwhile we first started building 1 of the first smart speakers back in 2013, all this music label, they don’t care.
They don’t care until everyone’s building smart speakers. They’re like, okay, we gotta resell the full copyrights for this peculiar telephone factor. I guess at the end of day, it’s about money. They want to sale the same copyrights to as many telephone factories as they want if there’s a popular one. So we’re okay to have this kind of negotiations, but surely like you said, there’s bigger companies that are doing akin things or even more advanced things that needs to be addressed. I give you another example like Siri and Microsoft, there’s a feature called Microsoft Recall, which they pull back that feature now and I think they relaunch it.Which is very aggressive. That is taking screenshot of your local computer.
So this is what I saw was happening in AI in the early days. There’s going to be quite a few different takes and tries and yet people will reconcile and agree on single part of terms and agreements. But if you check how we automate the website to their interface, the most crucial part is we don’t make fake user. We don’t make spam user. We don’t log in on your behalf and you are you. The way I aid you to do things is by aid you click the buttons and mouse. It’s equivalent of if I want my buddy to aid me, I’ll give you example. So if I’m busy, I’m about to head into a meeting, I want my buddy to aid me order a burger from DoorDash. All I request to do is I unlock my phone, I pass my telephone to my guy and my guy helped me click that.
And in this process, I’m not sharing my credentials to my buddy. I’m not telling him my telephone password, I’m not telling him my DoorDash password. I’m not even sharing my credit card info. All he has to do is just add to the card and click confirm. That’s it. So this guy is the equivalent of the first generation of LAM, which is unfortunately we don’t like it. So that’s why we work so hard. Now we have playground, which is more generic technology. Yeah.
Well, let me ask you about that difference between the first generation of LAM and the playground. The playground sounds like the thing you’ve always wanted to build. You actually have an agent that can look at web pages, realize them, take action on them. The first one, it might have been a LAM in the broader definition, but as technology was expressed as investigating software that was moving in an automated way through these interfaces. You weren’t actually knowing the interfaces. You were able to just navigate them. due to the fact that that’s beautiful average robotic process automation stuff. Were you just building on that kind of technology while the LAM came into existence?
We’re working on neuro-symbolic, right? So the thought is that —
But even in the first versions?
But you could only realize —
Well, so for example, the question I’ve always had is, what happens if Spotify, before the LAM exists due to the fact that I realize that the claim is that this version can realize all website, but if Spotify changes its interface or DoorDash changes its interface, Rabbit was kind of getting tripped up, right?
I’ll tell you, Spotify changes its interface all the time and I think in the past six months, 5 months since the first LAM was adding the Spotify with the connection since launch. I think we most likely put Spotify under maintenance for possibly 2 times, 1 hr in total.
That’s a very hard proof. Yeah.
But that’s a hard proof, but I just take it for what it’s worth, I think that means it’s not good enough, right? The Spotify app on my telephone never goes down for maintenance, and if the claim is the agent can go take actions for me, I gotta trust on that at 100%.
And so I think the question for me that I have, this full thing is the delta between what you want to do, which is have agents go and crawl the web for me and the reality of what we can do now. Actually the mediate ground is APIs, the mediate ground is not so brittle. You —
It makes more sense to me that the agent would, alternatively of utilizing an interface designed for my eyes, usage an interface designed for computers.
I truly want to laughter hard.
Really. 2 things. I disagree that Spotify is not working good. Spotify has been working amazing.
Five months, possibly 2 times we put it under maintenance and the full amount of time put under maintenance is most likely under 1 hour. You can ask any R1 users, and that’s not through API, which is impressive. That’s through agent.
That’s through agent to handle to —
I get that it’s awesome for an agent. I’m just saying that API —
You said it’s not good.
Good enough. I said it’s not good enough.
Right? Where’s the curve where it’s 100% percent?
Okay, now that’s my —
That’s my second part. Yes, API is 100%, but you’re relying on, they gave you the API that’s stable, that works, that never break-
I’m the user, I don’t care. That’s what I’m getting at: as the user, why should I care?
The user doesn’t request to care. We request to care.
We request to care and we request to care due to the fact that we checked what are the good APIs we can use, don’t get me wrong, Perplexity API’s had being great.
OpenAI’s API breaks all day or 2 and they said , “We observe an issue.” You can follow the, Is ChatGPT Down? It’s very detailed… how many breaks per day, it’s, I guess more than 10 on average that ChatGPT API breaks or unstable, whatever it takes. We have a notifier. So, first of all, API is not stable. It is not stable.
And you gotta pursuit for the services people, what we want to offer this music feature and we think Spotify has the best experience overall, and we want to pursuit for this partnership and we’re inactive chasing for this partnership. But to talk from method perspective, why I said I don’t like API is due to the fact that think about Alexa, Alexa talker are all utilizing APIs and you virtually gotta go there and negociate due to the fact that like I said today, not everyone’s beginning API, quite a few the conventional services don’t have API and then startups, for startup, it’s impossible, erstwhile you go talk to them, they think you’re besides small, right?
We did that, we just did that to everyone. They think we’re besides small, they don’t care, so we can’t get an API, and does that mean that we’re not going to figure out an alternate way to make it work? No, hell no! We’re going to make it work and this is precisely how we make it work. So we care about users to usage this feature. We don’t care about how to do it. In fact, due to the fact that we know that you don’t care how this has been done, I don’t want to spend six months, 8 months suiting up to talk to Spotify people and Uber people 1 by one.
“Let’s do that.” Right? So it’s —
Well the promise here is you’re going to yet have a general intent LAM that is just utilizing the web for you, right? You said you hand your telephone to a buddy, which is why you can make the Rabbit device and just talk to it and it goes off and does stuff in the general case. I think the tremendous Death Star that everyone sees is that Apple has announced substantially the same feature for Siri on the iPhone.
And Apple can get the deals and Apple can pull developers into an API relation locally on the telephone with Siri, and Apple honestly can just burn money until it chooses not to build a car or whatever it wants to do. And getting people to buy another device that doesn’t just fall back to the Spotify app on iOS erstwhile it breaks seems very challenging. How do you overcome that? due to the fact that if the technology isn’t 100% better 100% of the time, that feels like a challenging sale.
Yeah, this is the fun part of the game, really. I think —
I think, first of all, speaking for myself, I’ve sold my company before erstwhile I was 25. I don’t want to build another app. I should pursuit my same dream due to the fact that I truly think that the grand imagination that I have and our squad was working on is actually the current direction everyone’s chasing and it just feels so bad if you don’t pursuit the same dream no substance how hard it is, really, and in reality, we feel blessed and happy to say the exact situation due to the fact that we don’t have any serious competitors from startups to be honest. erstwhile everyone —
Well there’s one, and they seem like a beautiful spectacular failure, right?
Humane launched with quite a few money and a large T-Mobile partnership and a subscription fee and — Time Magazine and all that stuff and it doesn’t seem like that has gone very well.
So I said as of right now I don’t think we have serious competitors from startup and then erstwhile we talk about competitors, evidently there’s Apple, there’s all large companies out there including OpenAI. So first of all, I think this is good for us due to the fact that it validates our direction is absolutely correct and I besides are curious about what are going to be the definitive way for the generic agent technology due to the fact that different people in the manufacture might have different ideas. There are inactive debatable state, there is no evo for agent systems yet, there is no very good evo yet, and you can see quite a few different investigation houses and companies trying different routes.
Obviously there’s API routes like GPT’s, which doesn’t truly take off, there’s pure neuro-symbolic routes, there’s Hebrew routes, there’s all this multi-modality. So we’re inactive in the phase of everyone trying their own recipe and hopefully that can become a definitive recipe, including Apple. I think the benefit for Apple to do that is that yes, they realize the user better, much, much better than any companies out there and they have infinite money, theoretically infinite money, and they have the very closed ecosystem. The way that they’re rolling this out is that they have this SDK called app intent, right? So different companies or app developers request to choose to enroll or not enroll with that to have the fresh Siri to control stuff. I guess my comparative advantage as a tiny group, as Rabbit is that we decision fast.
We decision fast and we keep growing. I think if we put all the cards on our table, we had a spectacular launch. We are the most sold dedicated hardware yet, and we have make good profit, we fix all the day 1 problems and the company actually quadrupled the size. So we’re growing, we’re moving fast, and now we drop this, I think like you said, put a marker between present and yesterday. I think present I can say quite a few things that you can do on R1, you cannot do it on a iPhone, I believe yet everyone will be able to come to the same solution that all the device can do same kind of akin stuff, but I firmly believe at least this remaining half of the year or the Q4 of 2024 and most likely the Q1, 2025, it is inactive a game of you have something that they don’t have versus you guys all have the akin stuff, who’s done better?
So I think comparatively we have a good six to 8 months ahead of start, we have our small area here, but evidently I besides believe erstwhile a large company wants to kill a startup, they have a million way to kill you. That’s just the reality. People keep talking to me and ask me questions, “ What happens if the hazard is besides high? What happens if the company dies?” I truly don’t think that all these questions substance due to the fact that we’re on this course, we’re going to see the end, whether it’s a good end or bad end, and I don’t think any answer to this question will change our course to be honest. I can go here and tell you and be a cry baby like, “This is super hard, this is impossible. Everyone in the manufacture can kill us easily.” Or a YouTube reviewer can kill us by posting a review.
It doesn’t change the course due to the fact that we are doing things, we’re launching, we’re shipping things, we’re moving forward. So it’ll be interesting to see what Apple came from. I was on the Apple iPhone upgrade program, so I automatically get a fresh iPhone all year by paying the same monthly fee, but I truly don’t find any reason to upgrade that due to the fact that people are talking about Rabbit being launched besides early, now you have a company like Apple, if you go to the… What is that called? Sunset Boulevard in Los Angeles where it’s close to here or I guess Mission Street in San Francisco. You go to any major cities, you see these gigantic posters, billboards that Apple put there, right? iPhone 16, iPhone 16 Pro, what are the another lines underneath? It says Apple Intelligence. Is it ready? Is it out? No.
Let me talk about growth for a second. You mentioned you quadrupled and I guess you mean by worker size?
You told Fast Company last period the R1 is only being utilized regular by 5,000 people. Is that higher or lower than you expected?
First of all, you saw that article from I guess Verge? I think —
No, it’s Fast Company, that’s what it says.
Yeah, no, yeah, but there’s —
I’m reading it, I’m looking at it.
No, but there’s a Verge says R1 only has 5,000 users daily, which is from-
That’s a quote from you.
First of all, I think that what I said there can be misinterpreted. What I said is that if you go look at the data doc right now, you most likely will find 5,000 people utilizing R1, at least 5,000 people.
I’m just going to quote you, Fast Company, “Lu said, ‘Right now around 5,000 people usage the R1 daily.’”
I said it can be misinterpreted. Okay?
First of all, I think we saw a very steady growth of all the people interacting with R1 and each time with fresh features, there’s going to be more people utilizing it. I will give you any numbers that I want to throw to you and possibly I can share very detailed usage sometimes in the future. First of all, there are about 5% of people that have their R1, they’re not happy, that return it, little than 5%.
Which is simply a very good number, and I think the top features that people are utilizing are asking questions and visuals and visions and all that, and we truly are hoping for people to discover more usage cases, but unfortunately we have like 4 or 7 apps on the connections, that’s 1 of the bottleneck. So if you check for the full query, most of the cases you ask a question, you forget about it, so it’s not about how many times you ask R1, it’s about what kind of task you ask R1 and is R1 actually going to aid you? So I guess, yeah, very unfortunate, it seems that that’s a misinterpretation. So, what I can do-
So what’s the number? What’s the regular active number? We’ll issue the correction tomorrow, what is it?
I will go back and get you a very accurate number, but I can tell you yesterday our server actually crashed, so I think —
Is it double? Is it 10,000? Is it 25,000?
Oh, yesterday our cloud cost actually, I think… Actually, let me check right here, due to the fact that I can check right here.
This is why I love having a founder on the show.
Lots of people most likely charged their R1s and played with this yesterday.
Is this video going to be exposed or this is only going to be podcast?
We’ll run the video if you want.
Oh, no, then I can just tell you the number. I can share it to you, but, I don’t want people to see my shared screen, if that is okay?
Okay, tell me the number and I will agree that we won’t show the screen. But I’d like to see it, yes.
Okay, so the past 1 day is 33,760.
So 33,760, yes. So almost 34K yesterday.
Okay. 34,000 active users yesterday. Okay.
What percent of your sales is that?
Yeah, 33,760 people. What percent of your full sales is that?
I think we delivered more than 100,000 units, and that should be around 33%, 34%.
Sure. That makes sense, and that I’m assuming yesterday, due to the fact that it was a launch of LAM playground, this is simply a large spike. What were the days before that?
So past 2 days, 5206, so if you minus 33, that’s another 20,000.
Wait, I’m sorry, I don’t think I followed. You said numbers, but I don’t think I followed them. Past 2 days, say it again.
So past 2 days, 5206, so —
That’s the full of 2 days?
Okay, and 1 day is with the LAM playground on, so okay, I got what you’re saying.
So you’re saying it’s 5,000 active users at any time, not daily.
Okay. And then you’re getting about 20,000 users regular and then we’ll see if that goes up —
… due to the LAM playground.
Correct. Then there’s an article by the Verge that utilized that title, 5,000, which is wrong. I can tell you, that’s wrong. That’s very wrong. That’s me saying —
Well, you tell Fast Company and then we will update it, but we —
… ran your quote in the magazine, so we feel good about that.
He wasn’t there and he… he or she. That writer wasn’t there and that’s not what I said in the quote, okay?
Now that we have the number, we’ll run it, but my question to you is, you’ve got to sale more R1, you’ve got to get more people who’ve already bought them to proceed utilizing it, and you are, in fact, whether or not Apple Intelligence has arrived or not, it will arrive in any fashion in the coming weeks. There’s a study just a week or so ago that Jony Ive is working with Sam Altman in OpenAI on a hardware device, something will happen with Humane, something will happen with Google, something will happen with Samsung. As that universe of competitors expands, it feels like the core technology you’re betting on is being able to automate a VMC with a large action model, right?
You’re going to open up user sessions for people in the cloud and then your LAM is going to go click around on the web for them and that will get you out of the challenges of needing to strike API deals with various companies, with another kinds of deals, copyright deals with various companies, whatever you might need. Is that durable? The thought that this will keep Rabbit distant from needing all of the deals that the large companies will just go pay and get? due to the fact that that’s the thing that I think about the most. I can think of 10 companies that came up with a method solution to a legal problem, and even if the method solution was amazing, the legal problem yet caught up with them.
Yeah, yeah. We’re assured that this technology is the current technology way that it will work, and I haven’t yet seen another approach that actually makes any generic agent strategy work in any another manner. That doesn’t mean that we’re locked in to 1 method path. If you talk to any company, it’s most likely not a smart thought to say, “Hey, we just bet on this for the next 10 years.” The technology changes so fast, you gotta adapt.
But right now, I think we’re off to a good start, we launched a concept with playground with free off charge that you can research so that we realize how this strategy can be improved. In fact, I believe the velocity can be improved very fast, but we’re not here to say, “Hey, we stuck into this.”
We do have patents about this, but we’re not saying, “Hey, we think this is the correct way to go.” I don’t think anyone in the AI manufacture can give you very definitive answer, be like, “Hey, if you just do this, here’s the structure. This is going to warrant you the best consequence in the long run.” I think that’s not a good way to think of it, but yeah, I agree. Everyone in the manufacture are experimenting with something fresh and quite a few companies that we saw are going to, like you said, run into any kind of legal problems. There’s music generation platforms, there’s —
… problems. There’s music generation platforms. There’s —
I mean, this feels like the communicative of the AI manufacture probably, right?
There’s a YouTube training video can be utilized by this or that. There’s all sorts of things like this. But I think it’s not just the builder are adapting, the manufacture are going to adapt to the builder too. At any point, there’s going to be a conclusion that, “Okay, this is simply a fresh policy, this is fresh terms that we request to follow.”
Are you building to that goal? I think, again, this is just the large question I’m reasoning about all of these things. fundamentally all AI product is simply a method solution that is ahead of wherever the legal strategy is or wherever the business deals are. At any point Spotify might show up on your doorstep and say, “You know what? We’re not going to let agents. It should be a human user, and we’re going to change our terms of service to say it should be a human user.” DoorDash might say it, whoever might say it. Are you ready for that outcome? Do you have the budget socked distant to go lawyer up and fight that fight?
No. At the minute we don’t have the resources to fight that fight, and at the moment, that’s not a real threat to us due to the fact that they said we’re besides small.
Fair enough. erstwhile do you think the turn hits?
I don’t think that it’s a dead end for us, right?
No, I’m saying erstwhile do you think it’s a turn? erstwhile do you think that becomes a conversation about whether you can have agent users or human users?
Yeah, that’s precisely what I’m talking about. I don’t think that they are not willing to change their terms.
And I think it’s improbable they’re going to put terms like, it should be a human. It cannot be. There’s quite a few automation tools out there already. There’s no turning back. I think what they would like to work with any companies, including us, is that erstwhile they see a popular request from this fresh kind of agent technology, they want to charge for it, and then we ask our user and us to pay for them, and that’s a business deal. That’s more like a money terms. That’s what I can see. But as for now, we’re not breaking any of their terms and agreements. And if they change the terms and agreements tomorrow, we’ll take a look and we’ll see how we adapt. But the agent is out there yet already. There’s quite a few agents moving already, so I think there’s no turning back, and it’s very improbable to say, “Hey, we are going to halt agents utilizing our services.” That’s not going to happen.
Think on the longest timeline you can, let’s presume everything works out and it’s all solved. How much time and money is it going to take before the general intent agent you’re trying to build is simply a 100 percent reliable and can just do all the things that we all imagine them being able to do?
I might have a different opinion here. I think financial models like OpenAIs, evidently they’re raising for a crazy amount of money. I think we take benefit from what they’ve been worked on due to the fact that their primary services is selling their models as APIs, which saves quite a few money. We don’t want to recreate retraining like an OOm. I think it might not as scary as quite a few people might think. I think there’s a immense gap between converting the latest technology into a part of product versus pushing for a more advanced technology. evidently I’m very proposed to do high-end research. We want to have a investigation home here set up at the same scale as OpenAI and DeepMind, even though they’re already far, far behind. But I think what we’re trying to do right now at this current scale, due to the fact that here’s the money we have. We don’t have $1 billion, we don’t have $2 billion. We have this very limited budget. Is that how can we convert the latest technology and research, and build to a product that we can ship early and collect feedbacks and learn from it?
So quite a few people have different definitions of AGI. I don’t truly talk about this word due to the fact that I think so many people have so many definitions for it. But I do think that AI realize what you say and can aid you do things, and possibly here we’re talking about virtually aid you click buttons and stuff. There are quite a few companies doing humanoid Android that they’re actually giving a hand and legs for the AI to do things. I think it is an full human’s effort, and quite a few the resources can be shared alternatively of each company has to go rise for this amount of money and take that amount of time to accomplish the same goal. So it’s truly hard to say, but we know we request more money and resources, that’s for sure. But I think you’ve seen how efficient this squad has been performing from 7 people, 17 people till today. We raised evidently much little than Humane or any large companies out there. I think it’s actually 1 of our advantages that we can do things in a comparatively cost-efficient way and fast.
Yeah. Timeline wise though, again, assuming everything goes your way, is it a year from now that you can build on all the foundation models and all the another investment in this thing? Just does whatever I ask on the web, is it 5 years? What do you think?
I think the AI model will get very smart very fast, but I think we’re talking about a generational shift. I think evidently we don’t want a 2024 part of technology operating on eBay’s website, which is fundamentally designed back in 1990, right? So I think quite a few the infra needs to be refreshed, and the biggest gap as I can see here is productionized. So I think in our roadmap we think that it’s very likely that we can get all this separate part of technology we have like land playground teach mode and rabbit OS at any point possibly next year, merge into a fresh rabbit OS 2.0.
And that actually will push a immense step forward towards this generic goal. But my general take is that AI model is smart enough, but the action part is simply quite a few infrastructure. There’s a immense gap between investigation and productionized, so that’s what we learned. So I will say I’m very optimistic in the 3 years term, but I think, like I said, right now and starting of next year is everyone trying different approaches, and we’ll see which 1 works, but I think we’re assured on the approach we’re take right now.
Yeah. And then I just want to end and ask about telephone factors. evidently the Rabbit is simply a very distinctive part of hardware. People truly like the design. We’ve seen just quite a few interesting glasses lately. The thought that we’re all going to work cameras on our face and someone’s going to build the display. Do you think that’s correct? I was wearing the Meta Ray-Bans yesterday. I was like, why would I wear these all the time? I’d alternatively have a thing.
Yeah. I am not against any telephone factors. In fact, I truly think that there will be quite a few telephone factors. But erstwhile we were trying to plan R1, the reason is that we know it’s not going to be a smartphone due to the fact that we know people are going to do quite a few another things on smartphones, which the current AI cannot do. So we deliberately avoided the smartphone telephone factor. Talking about pings with lasers and glasses, I have different comments for each telephone origin due to the fact that there’s no universal rules here, due to the fact that let’s talk about pings. I think my general pushback for making it as a ping with a laser like Humane, I think first of all, I think it’s truly cool, but I think it’s besides risky. You are trying to offer a fresh way of utilizing your technology. You utilized to have user usage software, and that’s already fresh to them, and you don’t want to just introduce a sci-fi kind of gear.
So 2 fresh things stacked together that’s besides risky. So if you look at r1, it’s a very acquainted design. You know there’s a button you know you’re going to push, you know we will most likely can scroll. There’s a screen, you can look at things. So the r1 telephone origin is very conservative in the sense that it directs the software. It’s just like people haven’t figured out how to interact in a virtual world, and all of a abrupt back in 2016, there’s 200 different companies making goggles and they all fell. So I think I’m very, very conservative on the hardware telephone factor.
Talking about a glass, that’s a different story. I think your skull actually grows to fit the frame, not the another way around due to the fact that I utilized to wear prescription frames. I know the pain, your skull is increasing to fit the glass frame, not the another way around. So I think there is truly no generic fit on the glass frame. I was having fun with my plan squad joking, I’m like, “Maybe if we do the glass, we’ll most likely do the Dragon Ball style, like the power reader or whatever that is.
Old Google Glass telephone factor?
But I’m truly like, I can’t wrap my head around, I gotta put a frame that doesn’t fit, so we’ll see. I think even the current smartphone is perfect. I truly like the state of a glass or a screen telephone factor, but the real problem here is not about the telephone factor. The problem is about the apps, right? due to the fact that now we see all this agent technology, AI stuff, and they’re doing things that app are doing, and they’re doing things that apps can’t do, so I think the problem is with apps.
I forgot to ask you the main question. You’ve had a number of startups, you’ve done a number of things, you have a large thought here. How do you make decisions? What’s your framework for making decisions?
I am a very intuitive person, and I like to trust my intuition on large directions like what’s going to happen in the long run. But meanwhile, I’m rather conservative that I hatred to foretell things. So I think erstwhile people replay this episode, they’ll hear probably, I got truly tricked by any of your questions. It’s just my brain couldn’t work for predictions. It’s that I don’t like to make predicts. What happens if this happens, if that happens, what do you think? I think erstwhile I manage my team, I tell people, “We make decisions based on current fact, and we find the best solutions to it.” If you spend besides much time, at least, if I spend besides much time reasoning about what if Apple knocks on your door, what you’re going to do, and what if this A happened, then B happened, then C happened, what you’re going to do?
Most likely you’re going to get a different strategy, right? due to the fact that if you think about if B is simply a solution to A, erstwhile A happens, you just do B. But there are also kind of people they’re like, “Hold on, have you always thought of erstwhile A happens then D happens, then E happens, then F happens, are you inactive going to do B?” If you think that way, most likely not. So I just choose not to foretell quite a few what ifs and I make short, clear, concise decisions based on current fact. And in fact, if you do the recap for what we launched back in the CES, it was most likely the best timing. The price is most likely just right, the colour most likely just right, and the decisions of not negotiating, spend six months negotiating with T-Mobile is most likely just right. I make current decisions and that’s my style.
And I talk to people, everyone talk to me. I told everyone in my team, they can find me anytime. Talk to me anytime. I spend quite a few time talk to my peoples. And we’re, in general, just a very real team, down to earth, and I truly don’t like any of the another kind of startup that they spend besides much time enjoy the feeling, if you realize what I’m indicating. But there are quite a few people that they say, “Oh, I’m a founder. I’m cool.” No, I’ve grown adequate to get free of that. most likely the same way as if I’m 21, 22, but now I’m 34. Startups is truly tough. It’s a war. It’s about survive. It is really, truly tough. And it doesn’t truly substance if others want to do something like whatever. You should be survived, and just last by your own is tough in any sense.
So that’s why quite a few people ask me, I got asked a lot like, “Okay, what if they do this? What if they do that?” Well, end of the day, there’s nothing you can do. You gotta do your thing and they will respond to it. I think it’s fair to say that with Rabbit and another startups like us, biggest company like Apple, they respond to us. They respond to us in a very hustle way, very different way that they have this fresh phone, but all those things are inactive not there. Well, we’re making very tiny dent, but that even doesn’t matter. I think for us, we care about our customers. 1 thing I want to say is that yes, there are quite a few misinformation, there are hates, there are all that feedbacks, criticisms. If you talk to the r1 user, they’re happy. That’s what I care. That’s what I care.
Otherwise, there will be quite a few returns, there will be quite a few refunds. We have little than 5% return. Put that word in any consumer marketplace electronics device, it’s a good benchmark, and we are going to keep releasing all the stuff. And in fact, we pushed 17 OTA within 5 months. The another company pushed like, what? 2, 3, 4, 5 OTAs. So I truly hope people can see us as we’re a bunch of underdogs.
Our solution isn’t perfect, but it is David versus Goliath on day 1 due to the fact that it’s a reality, and don’t anticipate perfect stuff from us due to the fact that we are not perfect. We rise very small amount of money and we’re a tiny team, but we decision fast. What we can warrant is that erstwhile Rabbit shows you something, you most likely couldn’t even find somewhere else. Just like the hardware, just like the playground or even the very janky day 1 version of LAM. We are the first company that has Apple Music can be streamed to our device.
Yeah. Does Apple, due to the fact that you’re beginning it on the web?
Yeah. I mean, I don’t get legal papers to my door. possibly I will get one, but possibly they think we’re besides small, but we do things in our way. I guess, that’s what I want to say. We’re truly down to the ground team. That’s my style.
Yeah. Jesse, thank you so much for coming to Decoder and being so game to answer these questions. I truly appreciate it.
Decoder with Nilay Patel /
A podcast from The Verge about large ideas and another problems.
