Transcript 0:00 If I built you an AI-based tool that could write your documentation for you- Yeah, yeah... would you use it? And they said, "Oh my gosh, you'd change our life." So we built a, a prototype, um, in a weekend. 0:09 We rolled it out to them, and essentially it went viral. They started sharing it with their friends. They had private practices. They were using it. No kidding. 0:16 And we're like, "We got a pretty significant cloud bill now." Um- Yeah. Oh. [laughs]... we better, we better start a business. Hey, what's up? It's Jonah, the Howl Guy, and that voice you heard, that was Ross. 0:26 He's the founder and CEO of Clinically AI. They're a transcription company that helps therapists document the sessions, uh, that they're hosting. They help the people who help people. 0:36 It's a really important, important job. And so by helping them document these sessions, they, they really kind of support the people, keep them in the careers, and prevent burnout. Let's cue the theme music. 0:47 Calling up, it's D-Pac. Move low key. Found in the wild, yeah, they tracked me through the feed. Howl in the night, not a whole chorus sing. Two new names deep before we order a drink. 0:56 While been so low, now you walk out with friends. Social coyote, stepping to the den. S- Where, where are we right now? We are in a dream world. Okay. Go on. 'Cause this has been a dream. Yeah. You know, from, um, 1:14 starting, you know, the business out of my home and, uh, really just me and the co-founder. Um, and then not having room for people, but we love an office. So we started having people come to my house. 1:27 One, two, three, 10, 11, and then my 16-year-old daughter had a problem with that. [laughs] No, it is a lot of fun. Uh, and yeah, about five months ago- Yeah... we moved into here in the RB4S area. Yeah. 1:42 And we got way too much space. This is the den. This is the den. The Clinically AI den. Well, it's funny. 1:48 So what, like, tell us what you're, like, what you're doing, 'cause I do remember we met, we met actually, it was on your porch trying to plan a bootstrappers event- That's right... 1:59 or in your backyard, because you were actually bootstrapping at the time, but I felt like you were getting full. Yeah. A little bit full at that, that point. A little full, yeah. With this, like, downstairs living room. 2:07 But anyways, like, what, what is, what are you building and, and what, you know, like, why are you doing it in San Diego? Yeah. Well, first of all, San Diego is the best city in the world- Yeah... to live, number one. 2:17 Number two, there's a lot... There's quite a mix of talent here. Yeah. Um, and the lifestyle, just excellent. Yeah. Right? Really modern thinking. Um, 2:28 you know, great entrepreneurs with, that want to interweave work throughout their life. Um, so wanted to stay here and build here. 2:38 You know, and during COVID, a bunch of folks from the Bay moved down here, you know, really- Sure... just, wow, 'cause they realize how awesome it is. 2:43 Um, but ultimately, I believe in tech for good, and there's a lot of really good-hearted people here in San Diego. 2:49 So we built a tool that, you know, helps behavioral health providers stay compliant with Medicaid by using AI to, you know, check all the boxes and- Yeah... answer all the fields for, that they're required to, to answer. 3:02 So that's exploded, right? It's natural. Um, and we're sharing that in San Diego. We're in office- Yeah... you know, multiple days a week, and people love it. 3:11 I th- I thought that was interesting 'cause you've, you're like... 'Cause I'm looking at actually a lot of companies that are hiring, and specifically hiring here. That's actually what gets me excited. Yeah. 3:20 And that's kind of why I love your story, but they're typically more, you know, hard, there's a hardware component, right? Yeah. 'Cause you, like, have to get people in a room who are, like, turning screws on things. 3:29 Right. Or, or maybe there's research base, uh, type of thing, but you don't have to do that. No. 'Cause you're like, you could literally be anywhere, uh, as a, as sort of, like, an AI, a SAS-type product. Right. 3:40 Which is why sh- why I find the story the most interesting, because you actually ca- are choosing to be here, and actually somehow, no, limiting is the wrong word, but it's like if you are geographically limiting yourself, you have to, you know, operate a certain way. 3:52 It's true, and that is tough sometimes, right, to, you know, find very specialized talent. But I feel like San Diego is, you know, the ecosystem's really modernized. 4:02 I think that, you know, with what you've built and some of the other folks have built- Yeah... here in San Diego, um, you meet a lot of great people that have incredible talent. Right. 4:12 So there's enough here to do it in San Diego, and I think we're a good example of that. Did you know that, uh, when you decided to, to start to look here? 4:21 Because I'm kind of always finding that, like, the more you dig, the more you find, but you actually have to dig to find, especially in San Diego, 'cause we kind of have this sort of humbleness about us, where we don't really shout about our accolades in the same way. 4:33 Yeah. Well, I did have to dig a little bit. You know, I was involved in a tech startup here called iBoss, you know, years ago. Yeah. That was a really good San Diego story and, and whatnot. 4:44 So there was great talent here. Um, but, you know, when I started, you know, Clinically, um, we were, we were hiring a little bit remote- Yeah... to get going. 4:54 Um, but, you know, for the foundational, you know, early roles, such as, like, SDR and, you know, account executive and some engineers, you know, we only needed one of each to start. Right. 5:06 So we found that, and then we started finding some of the pockets, and then we started hanging in the... 5:10 You know, I think the ecosystem started to do some good events where, you know, you get to meet people and tell your story. And- Yeah... you know, the AI, um, you know, Tinkers setups and the OpenClaw weekends and... 5:22 I think there's, um, if you wanna find it, you can now in San Diego. Yeah. Yeah, no, it kind of felt like it wasn't like that. Yeah. 5:31 Maybe, like, pre-COVID or whatever, it felt like it was a little, maybe a little quieter or a little bit different, but I think that's... I don't know, like, were you, were you always in San Diego? Yeah. 5:39 I've been in San Diego 18 years. And then before, 'cause I found, I was looking at, you had come across, you had done some stuff in, like, Australia. Yeah. Or at least had that territory. I'm forgetting that story. 5:48 Wait, how did you get to, back to, like, starting- Yeah... Clinically here? Well, I li- I lived a little bit in Australia. Yeah. I worked for, um, an Australian startup out of Perth, of all places. Yeah. 6:00 Which is WA, which they call it. Okay. Um, and, uh, yeah, I, I was the first employee in North America-Um, worked out of my house originally. Okay, wait, the original [laughs] The original den. 6:13 Um, and we built a, a company up to about 100 staff here in North America. That's pretty good. Um, and yeah, we, we IPO'd in Australia, and then, um, you know, we ended up buying, like, six companies in two years. Yeah. 6:28 And we had offices all over the US, but, uh, San Diego's the foundation. It's still the headquarters of that company. Really? They're still here in San Diego, yeah. No kidding. Yeah. 6:37 Yeah, it's really interesting, 'cause I, I... At first I was curious. I was like, "Hey, how does... How do you go from, you know, company going public..." 6:42 I don't know what it's like going public in Australia, by the way, but, like, [laughs] something- Wow. Is the right [laughs] guy. Company going public- Yeah... 6:48 to, and a team of 100, to basically being, like, you and a co-founder- Right... in a house. Right. But if drawing the line back, you almost... It's almost like doing... May- maybe you can do it again with 100 people. 6:59 But it's almost like doing that a little bit in the same way, where you start in your house again, and you start to build up. But how do you get to actually building this product? Yeah. 7:08 Well, uh, essentially I found a problem in the marketplace. So previously we were building a tool that looked for early indicators of suicide- Yeah... school violence, sexual abuse in kids. Yeah, yeah. 7:18 And, uh, to pay for that, ultimately, and mental health departments to, to handle it, they ge- were trying to get Medicaid dollars into school districts. Okay. 7:26 Well, try asking a school counselor to write a Medicaid compliant document. I don't even know what that would look like. It's a lot, right? 7:35 Lot of check boxes, a lot of narrative fields, a lot of, you know, proving to get Medicaid funding. So- Wait, why? Just to, like, f- to, to... 7:43 You, you have to just do a lot of proof, or is it, like, you're obviously protecting kids, all the things? Yeah. So when we would... 7:48 So for example, if you found, you know, a child said, you know, "I want to, you know, harm myself," as an example. Right. And you meet with them as a counselor. Right. 7:56 The g- federal government will help pay for that in California. Okay. And the state will help pay for it as well. Yeah. 8:01 Well, to, uh, get the state to pay for that, you have to prove that you provided a service that qualifies for them to pay for that. So that's what clinical documentation- Yeah... is for. Okay. 8:09 Is to prove that you did a service so the insurance will pay you. And the service is, in this example, like a- A mental health support. Mental health support. Yeah. Okay. Makes sense. Yeah. Yeah. Right. Exactly. 8:19 So, uh, one of the, you know, school districts was getting so overwhelmed with alerts that they asked to turn their product off, 8:28 and basically their legal department said, "Hey, if, uh, we can't get to these, it's frankly a liability for us." Mm. "So if something happens to a child, and it was sitting in our inbox- Oh, gosh... 8:38 then that's a liability." Totally. So the, the department was upset that they had to say that. Right. 8:43 Um, so I thought, you know, kind of in my mind, and off, you know, on the side, um, asked them, "Hey, if I built you an AI-based tool that could write your documentation for you- Yeah, yeah... would you use it?" 8:54 And they said, "Oh my gosh, you'd change our life." So we built a, a prototype, um, in a weekend. Um- When was this? They, they tested it out. This was in, uh, probably May of '23. Okay. Yeah. 9:07 G- N- Not recent, not super recent. I'm trying to, like, gauge- Right... like, where, where was AI, like, publicly at that point? GPT-3, that's where we were. Got it. Okay. Right. ChatGPT-3. Yeah. 9:16 Like, early days, like, oh my gosh, and talk back to me. [laughs] Yeah, yeah. Right. Um, so yeah, we started playing with fine-tuning and, like, playing with the AI from technical perspective. 9:24 We rolled it out to them, and essentially it went viral. They started sharing it with their friends. They had private practices. They were using it. No kidding. 9:31 And we're like, "We got a pretty significant cloud bill now." [laughs] Um- Yeah. Oh. [laughs] "We better, we better start a business." [laughs] Yeah. Yeah. 9:37 It's like, yeah, like the good win where you're just like, "Oh, sh... Oh, but-" Yeah. Yeah, exactly. So we're like- There's a fire here. There's something here... we're like, "Let's go for it." 9:45 We're software guys, and, you know, really- Helping so many people, too. I mean, it's like- Yeah... you know? You weren't writing... 9:50 W- W- W- Were people writing, like, "How do I write my mom's name to, like, a song for her birthday?" It's like- Yeah... cool. Yeah. Cool, but not practical use, right? Yeah. 10:00 Um, you know, it's really become the new Google, which is quite interesting and how things have changed. But, but ultimately, yeah, so we rolled it out there and, um, saw the vision for enterprise. 10:09 We, you know, really looked at the market and said, you know, when you, when you start a business, you have to think about, you know, where am I gonna be, you know, in a year, as an example. Okay. 10:16 And you have to act that way when you start. Mm. So even though it's just you and your co-founder- Yeah... you know, you're building, you know, many departments that you wear the hat of when you're operating there. Yeah. 10:25 It's finance or it's sales or it's engineering or it's product design or, you know, support and all those things. 10:31 So you burn yourself out in that particular role, and then you replace that role, and then you add somebody, right? That's interesting. 10:38 Uh- That's actually a really interesting phrasing 'cause in a way you kind of have to do that- Yeah... 'cause then you can teach them how to actually do it once they come in to- Right... n- not new- You have to live it. 10:47 You have to live it. Yeah. I don't want to maybe not necessarily burn yourself out on it, but you have to live it- Yeah... to say, "Hey, here's what I've learned as I went through, like-" Right. 10:54 And you're juggl- There's a lot of plates in the air, right? True. True. True. You know? And, um- Well, especially this. 10:59 I mean, it's like, it's, this, this isn't like, this isn't like turn my dog into a Renaissance painting, you know? Yeah. 11:04 You're like, this is someone who's reporting something that's, you know, potentially harmful to themselves- Right... and you have to do something with it. Right. And, and, and act- probably flag it correctly. Correct. 11:13 Yeah. So it's, it's really serious in that regard, but it was Wild Wild West in AI. 11:18 You know, I think it's good that there's a lot of regulations coming out around AI and mental health and behavioral health today, um, which is also a moat too, right? That's very true. 11:25 Like, the more complicated the problem you solve is, the deeper the moat. And I think today, AI world, right, software's getting commoditized. 11:32 I think the application layer is starting to, you know, disappear into agent land. Yeah. Um, you have to be deeply connected in a niche, in an industry, um, build those partnerships and relationships, right? 11:45 And standard business. Um, and yeah, keep executing. So the complexity and the niche space you operate in is really your moat today. And then so, okay, so you're, like, two of you- Yeah... or sorry. 11:57 How did you get from the office of, uh, the school district to that next piece? 'Cause you obviously, it's starting to catch fire. Yeah. People are noticing and liking it. Right. Was, was dictation or transcription-... 12:09 happening a lot at that point? 'Cause I know it was like Whisper got really popular, but that's built on GPT. That was after. Okay. Yeah, right. 12:14 Yeah, the w- and the consistency of that model, you know, the length of the conversations, so you're talking about, in some cases, an hour and a half, two-hour, three-hour- Right... conversation and transcribing that. 12:24 Right. So the complexity was really high. Um, and we're, you know, have a phenomenal technical co-founder that was able to work through a lot of those technical challenges- Yeah... to, you know, deliver that service. 12:38 Um, and realistically in the beginning, you know, bootstrapping, you have to validate the problem that you're solving by the customer exchanging money for that problem. Right. 12:54 So we had to, and, and that's the right way to build a business, I think, in the beginning, right? You know, before it was go get a, you know, great g- uh, get a great pitch deck together. 13:05 Go, you know, tap on the shoulder to get warm intros to VCs. Yep. And then, uh, raise, you know, a pre-seed or a seed round, and then burn that money until you can hopefully race to product market fit. Right. 13:18 Um, whereas in today's world, like pre-seed, they want revenue. Right. Today. Your Stripe account, you know, go to the upper right. Oh, that's, yeah. Very exciting. How do you double down on that? Yeah. 13:28 And, you know, make sure that you're not hiring, uh, beyond, you know, your, your cash intake. And it's, uh, doing it on expert mode is what I would call bootstrapping, um, really builds the right fundamentals- Right... 13:45 of a business being in business and generating, you know, revenue and solving a real problem. You have to get it bullseye accurate. Yeah. Or you miss and you're out of business, right? Oh. 13:56 Especially- Right, 'cause you're kinda walking a little bit of a tightrope in a sense. You are, totally. Interesting. So did you... 14:02 Okay, so you were already kind of talking to th- are they ther- They're therapists at the school. Yeah. At the school. So you could- Therapists, psychologists, you know, um, uh, school counselors- Yeah... et cetera. 14:14 But that's not our core business today. I was gonna say, it feels different from- Right... from when you read it, so like that moves in, that moves from there. Right. Yeah. 14:21 So they started sharing it with, you know, private practice owners, folks that, um, had substance use disorder facilities- Yeah... and rehabs, residential, outpatient, et cetera. 14:31 And then, uh, because we were already dealing with, you know, the complexity of Medicaid, behavioral health in, um, me- Medicaid-funded organizations is massive across America. Yeah. 14:43 Um, and there's very large organization that serve, um, really the, uh, the, the safety net of our society- Yeah... 14:52 of folks that are at the poverty level or below, um, that are, uh, struggling with housing, struggling with, you know, uh, their parents passing away and foster care- Mm... 15:03 and, you know, adults with, um, you know, Down syndrome and, and schizophrenia. You know, that's all Medicaid funded. Yeah. Oh. Um. Interesting, yeah. So- So obviously to, you have to, to get it, you have to- Document. 15:17 And, and the goalpost moves a lot for them. So, you know, very large organizations, some of them doing 150, 300 million, you know, dollars in, in revenue, um, as a nonprofit. 15:29 Uh, to keep that, you know, going to support their programs and services, they have to do significant amounts of manual work and extensive documentation- Mm... to continue their mission. 15:41 So they burn out in two years, um, on average. Literally just- Right... pa- paperworking. It, yeah. They don't teach you how to do that. 15:48 So the, it's a great use case from an AI perspective, and n- very niche and complicated- Right... highly regulated. 15:55 Um, we wanted to solve those problems, and we're making a significant impact today, and enabled us to get here. Right. Right, which is massive. I know, I, 'cause, 'cause I remember 16:05 we, like going back to that porch, I mean, I remember you're like, "I could..." W- we had gotten like 20 people or so to, to boot, to talk about bootstrapping and kinda come together there. 16:14 But it's like w- and we always come back to that, like, "Do I keep bootstrapping?" Right. "Or do I go the other direction?" 16:20 And in many ways, and I, and you know, I don't know your future, but it's like the further you can get bootstrapping, I think the better off you'll be when if you do decide to go the other route. 16:28 But I don't really know, maybe not everyone needs to kind of make a choice at that point. But we always talk about those crossroads and how you think about the directions. Yeah. 16:37 It's such a interesting crossroad, because in the beginning, you go, "Do I do a pre-seed or not? Do I self-fund or not? All right, let's just get some revenue." Yeah. "All right, I got enough revenue. 16:47 Now I can potentially qualify for a seed." But, you know, what percentage of the company are they gonna take? How many rounds do I need to... How much capital do I need to get- Yeah... 16:56 to get, you know, to where I wanna be, to where I'm a bigger business? And, um, you know, you look at some of those numbers and rounds and requirements and you go, "Well, I could potentially make it to there." Yeah. 17:07 "I can make it to there." But then you look at your market, and the speed of your market, like in AI, for example, is it's the fastest moving industry in the history of mankind. Right. And capital shrinks time. Yeah. 17:20 So you go, "Okay, well, how big is my window potentially to execute and/or Anthropic, you know, coming out and- Right... you know, building slides better than my product did," or whatever it is. Right. 17:33 So, and now you're beholden to that. What comes with the capital, right? It's not just, "Here's money, no strings attached." 17:41 It's, "Okay, now I have preferred either voting rights or shares or amounts that, um, uh, multiples of the money that I took that I have to sell at." 17:52 Um, so, you know, some of these preference stacks, what they call them. So let's say, for example, let's say you raise a seed at $20 million valuation, and they have like a 4 or 5X pref stack- Right... 18:03 which means you have to sell at five times the valuation of the money, uh, of when you took it, even if you only took $50,000. Right, right, right. 18:11 They'll get the ability to say, "I need to make 5X on my money, so you have to sell for 100 million, or I'm gonna block you."Right. 18:18 Not all capital's that way, but that is- But that's- That's how it sometimes is played at that level. And you're giving away some power at that point- Right... 18:24 of decision-making, which maybe you don't always wanna do, or you have to be cognizant of. Correct. So, you know, you're not always thinking about exit, but you, you know, you think like, "Okay, what could happen here? 18:33 How, what's the- You are if you're going that road. Yeah. Well, you are, and you talk about returning their entire fund. Right. Oh, I see what you mean. Right? Yeah, right, right, right. 'Cause they'll invest in 100. 18:42 Yeah. And four or five will make up their fund, and the other, you know, 95- Yeah... you know, die off. Yeah, yeah. It's, it's, you know, win or go home, um, in some of those. 18:52 So, you know, your capital partners, um, are a marriage. Yep. Right? And what's the contract in your marriage you're signing up for? There's a significant prenup in it. [laughs] Yeah. [laughs] Fair. Uh, on their side. 19:04 Fair. On their- Uh, so it's like, what, you know, what path do you take? Yeah. You know, do you continue to bootstrap it? Do you go friends and family? Do you go angel? Do you go, you know, uh, growth equity is- Yeah... 19:15 really coming down right now to lower valuation or lower amounts of revenue. Yeah. Um, so there's a lot of routes, um, to take. Where are you, where are you now? 19:25 Um, so right now we're right in the sweet spot for growth equity. Okay. You know, we're under 10 million. Yeah. We're over four million, so I'll leave that to ambiguity. Yeah. 19:34 Um, and within two years' time, uh, we got nominated, um, and honored to be part of Connect, uh, Cool Companies in San Diego. Nice. Congrats. Uh, so we're p- we're super pumped on that. 19:46 They're a great organization that doesn't have any strings attached, that really just wants to help companies they think- Sure... they can fund. So, uh, they're a great organization. 19:55 Um, and voted, you know, most, uh, those companies they choose are most likely to be able to raise an A round or greater. Yeah. Um, and we're at that point where we have choice. Yeah. 20:05 Because we put our heads down and executed well on the fundamentals of the business, it gives us options. We can go get primary balance sheet, you know, capital and v- with venture capital. 20:16 We can go get growth equity, which gives secondary and primary capital to where- Yeah... the founders and some of the staff, you know, can sell some of their equity to- Yeah, cool... to those as well. 20:25 So there's liquidity options available. 20:27 Um, but we think about, you know, the amount of success that we've had as an organization demands support staff and other staff to deliver on the promise of the, of what you made to your customers when they bought your product. 20:42 Yeah. It's not just sell the product, great. The journey starts when, um, the first day of deployment. Yeah, right. You gotta keep earning that. 20:51 That's true, because they, 'cause every single time they use it, they're in some ways, if they're talking to the government agency or whatever to process the paperwork, that's how they get paid. Right. 21:01 So these, you know, so if there are, it, things that kind of come a- along the way, you know, they, they have to kind of, you have to maintain and keep, keep improving it, I would imagine. 21:09 Yeah, you keep, yeah, you know, AI models are coming out every other week, and things are changing, and you have to stay on top of your product, right? 21:16 You know, Apple makes an update on the iPhone that affects the mic and how that works and the application. Oh, interesting. That's true. Uh- Well, we were talking about, like- Yeah... that's a road you go down. 21:25 You know, when we're putting on these mics, you're like, "Is that something to think about?" Right. For, like, our customer, 'cause it is something that's interesting to think about. Mm-hmm. 21:32 Does that, I mean, it, that's probably something you can easily see the data, right? I mean, you're like, you're like, "Huh, this transcription is bad because of X, Y, and Z reasons." Right, 'cause of variable factors. 21:41 It's loud. There's no internet. Yeah. There's this, there's that. Right. 21:43 So there's so many variables in it, and you wanna help, you wanna create consistency of use so you're not solving, you know, 1,000 problems to, for, for one result. Um, yeah, but these mi- you know, everyth- 21:55 v- everything is moving towards voice, right? Yeah. Voice is the new interface for AI. Right. Which is interesting. So yeah, these mics, you know, are blowing up. But increased cost too. Also true. Well, what do you... 22:06 It's kind of interesting, 'cause when you talk about the mics and, and kind of, 'cause it, 'cause you have this, like, delicate balance, right? 22:10 It's, like, two humans in a room talking about something that's beyond intimate. Mm-hmm. 22:17 You're bringing AI into the room, which I'm, I don't, I actually don't know the relationship between is the therapist kinda just b- having it there, or is it like, "Hey, I'm"... 22:25 So when you start to be like, "Oh, and, uh, during this therapy session, let me just, like, attach this lapel mic- Right... and then, oh, tell me that, that really- [laughs]... personal thing. 22:33 It's gonna, it has, like, this feeling to it. But how are you no- are you noticing anything that from, from your seat, kind of like bringing... 22:38 'Cause, you know, people are kind of afraid of AI in some cases in public spaces, or are people, have you seen the, you know, AI pins or people are, like, at a party, and they're, they come, come talk to you, and you're like, "Oh, your shirt's glowing." 22:48 You're like, "Yeah, yeah, I'm transcribing everything." Yeah. You know, so it's, y- what do you, what do you see in, like, bringing it into the most intimate, one of the most intimate- Yeah... r- rooms, you know? 22:56 I think- It's a ch- it's a challenge, and it's all about the communication, but there's laws around that. Mm-hmm. You have to get what's called informed consent- Okay... 23:03 to where they sign a document stating that, you know, "I recognize that this is being transcribed- Yeah... you know, in the room," et cetera. And then also to your point, if you have a laptop out, right- Yeah... 23:14 that's capturing- True... while you're talking about, you know, significant sexual trauma or, you know, physical abuse or, you know, um, substance use disorder and things of that nature, it's very private. 23:25 It's different than when you walk into a doctor's office and they're talking about your blood work. True. Right? Fair. Fair, fair. 23:30 You're sharing, to your point, very intimate information that is affecting your whole life and has. So, uh, very careful about communication. Yeah. Right? 23:42 So we train, you know, the providers, you know, to have that discussion, and it doesn't always get, um, uh, approved to use. So you need other alternatives to do that. Yeah. 23:52 I would say in about 90% of cases it does, but, you know, there's, if you talk about a schizophrenic population- Mm-hmm... and you're recording something, that's something- Yeah... 23:59 a lot of them have, you know, had, uh, significant challenges around. 24:03 So, um, they are sensitive situations, but we've done a great job, I think, of, uh, hiring the right people that have been in that space that know how to communicate to the providers that are in those situations. 24:16 So, um, again, the harder the problem, the, the deeper the moat.I was gonna ask you that, yeah, 'cause like, did you pick, did you pick because of Moat? Was that a part of the reason you went that direction? 24:26 It sounds like there was a little bit of passion- It-... there, you know, previous to this, then you sort of like happened into Moat. Yeah, missionary versus mercenary, right? 24:34 If you do it for the money, you're not gonna be successful. Yeah. We do it for the problem. Yeah. We're obsessed with this problem. Um, in tech for good are, you know, we help the people who help people. Mm-hmm. 24:45 Um, you know, we could have went and built a, an AI-based tool that helped you trade stocks better or whatever, but- Right... we really wanted to solve, you know, society's challenges- Yeah... in that regard, right? 24:56 No one thinks about the mental health of their therapist or their doctor. Oh, that's interesting. Um, and- That didn't really- Yeah, right. Right... so they're out 25:06 carrying the burdens of these really challenging situations. Then when they write it down, they do it again. 25:11 It's called, you know, secondhand trauma, and then, um, they stay up, you know, after their 8, 10, 12 hour shift and have to write additional documentation, and then there, there's a mistake in it, so their quality teams go, "Hey, fix your notes or documents- Mm... 25:26 three days later." And then they- I mean, it's a lot, so they burn out. So we wanna help those people that are really doing the safety net of society's work. That's funny. 25:34 I never really thought about that 'cause I thought about it as you're making their lives easier by eliminating paperwork. My dad was a, a family practitioner. 25:43 I remember he'd give a lot of people time, and he'd come home, and he'd have stacks and stacks of paperwork to do. Mm-hmm. 25:48 So, oh, from that an- standpoint, you're like, great, that's, it's giving him a lot of time back, but you don't think about that, that burden- Right... 25:55 that you're picking up when, you know, someone tells someone something pretty, pretty personal. Or if, or, you know, maybe they're not finding a solution as easily or, or whatever. Yeah, that's true. 26:05 And also, you know, those professionals that are providing care, they'll miss their kids play- Mm... or they'll miss a practice that they could help coach. True. So their quality of life is affected. 26:17 Um, and you know, not a lot of people are looking out for that. Well, no, and if they're dropping out of that sort of system, then that, everyone else kind of loses. Right, and those families don't get help anymore. 26:28 So sustainability in the market's big, so it goes, you know, beyond, you know, just writing notes, so. But yeah, to your point, um, we ended up in arguably the highest regulated industry you could be in, right? Yeah. 26:40 You have mental health data, you have HIPAA, you have SOC 2. You know, for example, there's 19 pieces of legislation in medical AI, and only one of them are for physical medicine AI. Huh. 26:53 The other 18 are all behavioral health related. Really? All of them, and it's only 10% of Medicaid spent. So it's a, you know, interesting, you know, niche market that's highly regulated, scrutinized, and challenged. 27:06 Are you heavily governmental, like, dependent's the wrong word, but are, you know, is like, is, are the decisions based on behavioral health, are those very important to how your business sort of succeeds? 27:19 Does it make it e- exponentially bigger, or is it maybe just a piece? The more... Well, there's a crackdown a little bit on Medicaid right now, right? Medicaid was cut- Yeah... I think almost a trillion dollars. Rough. 27:28 Sure. Huge. Um, and uh, you know, frankly, their budgets are getting hit, so they have to create efficiencies- Mm. Oh... to sustain their mission. So you're almost, yeah. 27:36 So it's, yeah, a little bit counterintuitive in that regard. They need our technology to continue, right? You know, you think about auditing a chart. I have to answer 100 questions about a 300-page chart. 27:47 That's a perfect job for AI, and they can redeploy those resources, so. That's a really good point. So even with a budget cut, you're kind of positioned really well. Yeah. 27:55 Um, and this is the first time I think, you know, regardless of my industry, that technology, it's not just technology budget now. Yeah. Now you can tap into human capital budget. Interesting. Right. Okay. Right on. 28:06 Yeah. Which, which is scary- Potentially... you know, but, with layoffs and things like that. But you c- if you can make an employee 10X more efficient, 28:14 you know, what does that do for your bottom line, especially when you're bootstrapping? Mm. You know, you look at RPE or revenue per employee, you know, as a core metric- Yeah... 28:23 of like, you know, hey, you know, uh, most, most tech companies were big time cash burn- Yeah... 'cause you had to put tons and tons and tons of bodies- Yeah... in there. Um, now I think, you know, what'd Jason Wang say? 28:35 He was managing over 100 AI agents- Yeah. Oh... himself. And you know, I have five myself. Okay. You know? Wait, what are they doing? So quite a few things. I have Ross Bot- Okay... 28:46 um, which is like, you know, a partial assistant, um, and manages other bots. So I have Barney Bot- Okay... which is, we named him Barney because we just felt it was a cool CFO name. 28:55 [laughs] He does, uh, he does our financial controlling. Okay. Accounts payable, accounts receivable- Yeah... revenue recognition, uh, based on ASC 606, um, which we learned the hard way. But, so we have him doing that. 29:08 There's a story there. We'll leave that. [laughs] Yeah. Uh, and then, uh, have another bot, uh, helping with the sales management, right? Yeah. Cleaning up our CRM. Oh, that's nice. 29:17 So we're deploying these agents, you know, across the board. They go do the monotonous work based on the strategies that we set as leaders, then go perform it- Yeah... 29:25 and check back and forth, and you have bots managing other bots. So we become a cyborg organization kind of. It's- It's kind of interesting... 29:31 it's really interesting, and it's like one of those things, you know, it's like y- yes, a hu- a person would've done that. Would someone have liked to have done that? Right. 29:41 Going through and cleaning up CRM, it's like probably maybe not. Right. I don't know. I, you'd have to ask. But, like, that doesn't sound like, it's not the glamorous stuff that, that you're kind of replacing, so. Right. 29:50 And it's happy. If it makes- Yeah... a mistake, it goes, "Hey, I made a mistake. Do you want me to fix it? Sorry." Yeah. Yeah. You know, versus some humans, right? 29:56 And they make a mistake, and they're like, "Oh, did I say anything?" Like, "What did I..." So- That's right. Yeah... it's, it, it's interesting in, in, in that regard. 30:04 Um, but it's created massive amounts of efficiencies. Yeah. You know, um, and I think that, you know, a lot of folks used to just celebrate how many staff they have. True. 30:15 Um, or how much money they've raised, but it's about how efficient is your business. Right. Right? What kind of impact, you know, are you making? Yeah. Um, and how are you leveraging technology today in a modern way? 30:27 Yeah. I feel like, you know, probably a third of my day is managing my AI agents to go do the things throughout the day while I meet with people. Yeah. I think that AI actually makes us more human.Hmm. I like that. 30:36 Well, you said, you said, um, having impact. Well, what are you trying to... 'Cause now you have the space. Yeah. I know you've been bringing people in here. 30:43 What kind of impact are you trying to do on, you know, for San Diego specifically? 30:46 'Cause for a while, and, and you know, you can correct this specifically, but you're saying, you know, you're kind of just heads down building, and then recently we had run into each other, and that's partly why we're sitting here. 30:54 You're like, "I think I wanna get out there, do a little bit more for San Diego." Right. Which I thought was awesome, which leads to this. Or bringing, you know, communities into your space, which is awesome. 31:02 So k- how are you thinking about that at least to kind of make more happen in San Diego with at least the success you've had to that point? Yeah. Well, one, our, our office now is way too big. Yeah. 31:11 So we wanna bring people here. We wanna do events here. We wanna have people get together of the certain sects of technology or other industries- Yeah... 31:21 et cetera, um, to build, you know, really relationships here so that folks like myself that are, that were, are building, you know, in their basement- Yeah... 31:31 right, know where they can go to tap into talent and meet co-founders and do that type of a thing. 31:36 So, you know, we wanna offer up what San Diego's given us and g- give back in that regard of having events, you know, sp- uh, mentoring other entrepreneurs, um, you know, having technical, uh, workshops, doing, you know, hackathons- Yeah... 31:53 and, and whatnot, uh, really across San Diego. We, you know, we're a San Diego native born company, you know, we breathe it, we hire here, we're in office here. 32:01 And we want people to really, you know, uh, feel the vibe of that. Love that. Uh, San Diego's so unique. We have so much fun. 32:09 We do, you know, ping pong and basketball and, you know, play music in the office and challenge each other and, you know, uh, hang out together, go to Padre games. 32:20 And, you know, we're really, uh, having a good time in San Diego, and it is a phenomenal place to build, and we wanna be an example of that and tell that story. Yeah, I feel that, too. 32:32 That's kind of why I wanted to do more, more, uh, stuff like this is, like, we don't always do a good job of, uh, shouting is the wrong word, but, like, uh, highlighting our successes in San Diego, which is, you know, good and bad 'cause it leads to a really nice culture of humbleness. 32:46 But I think it doesn't always help either elevate people who are doing really awesome stuff or help other people find them as examples, and I think we can probably all of that, you know, all, all do a better job of, you know, finding and sort of sharing- Right... 33:00 the really cool things that are happening. Um- Well, I think you've done a great job of that. 33:03 Like, you know, for you came, you know, from a big organization and, you know, really, uh, you know, promoted San Diego ecosystem. Um, you're a celebrity here in San Diego now. Um, and you connect a lot of people. 33:20 Like, I've gotten random texts from you, like, "Hey, Ross, meet so and so," and, "So and so, meet Ross." And we've helped each other along- Awesome... 33:28 along the way, and it's actually, it makes material impact, um, of you posting, "Hey, there's some roles here." We get a lot of inbound from that. I love that. 33:37 And I think that we should definitely, I think we can all do that 'cause that's kind of the... Someone- Right... someone was teasing me for the other, for this the other day, but I was like, "Well, here's the thing, 33:45 if you can be humble and I can be humble, I can shout for what you're doing." Yeah. 33:49 "You could do my stuff and then around, and then we could keep that sort of feeling of we can lift everyone up and sort of brag about each other without actually talking about ourselves." Right. 33:58 It keeps the San Diego kind of culture the way that we want. Um, I don't know. You wanna land the plane? What do you, uh, what do you wanna leave in the den? 34:06 What is something that you wanna share with, uh, with San Diego? What's something that you wish we had more of? What, how can we be better as a city? Yeah, I think more events, you know, together. Yeah. 34:19 More, you know, kind of micro events. I like that. Um- What would you like to see? Well, I'd love to see, you know, m- more dev specific, you know, events with, you know, the business component, you know- Yeah... 34:33 involved as well. Like, you know, bringing in, you know, VPs of sales with devs and spinning companies out of things and- That's cool... um, you know, not a lot of pay to play. 34:45 It's get together, talk about ideas, you know, have little hackathons together, build with AI, um, and, and then go have a beer. I like it. Yeah. That's fascinating. 34:58 It's kind of funny, I like the idea of, I've been running across people like this, but they, highly technical people building, but it'd be so interesting to get the VP of sales on the other side to say, "Okay, I like that. 35:07 How, here's how I would sell it-" Mm-hmm... to the community. Totally. And keep getting those sort of, like, types of personas, uh, intermingling a little bit more. Yeah. I love that. And then get a beer afterwards. 35:18 That's right. Or during. That's not the worst thing. Yeah, that's fair. You know? Yeah. But no, this has been good. 35:24 Um, I, uh, love, um, our relationship and what we're both, you know, doing in the city is I'm building and you're building, and we're bringing people together and making friends while we're doing this. 35:36 This has been good. Thanks for inviting me into your den. Oh, for sure. Awesome. Yeah. [upbeat music] Hell yeah. Thanks for stepping into the den. We'll be back next week with another conversation. 35:53 But until then, get out there, meet someone new, and go build something.
