Rational Exuberance
Would you rather have a magical pendant or a sock puppet?
An AI startup recently bought the domain name friend.com for nearly 2 Million dollars. Names are important but that’s a lot of money especially if it’s nearly everything you have in the bank.1
Friend’s product is a pendant that’s always on, listening to you and what’s going on around you. Press the button in the middle to talk to your friend, it will respond with a text to your phone. It’s your constant buddy and hype man.
You can tweak it’s personality from supportive to snarky. No data is saved and everything personal is on the device - lose it and you’ll need a new friend. That’s it. Put down $99 and you’ll get one next year.
Avi Schiffmann is Friend’s founder. Before Friend, Avi created one of the most popular COVID pandemic tracking dashboards and after that he created sites to support Black Lives Matter protests and the 2020 Presidential Election.
Avi went to Harvard but dropped out after a semester to create a site to help Ukrainian refugees find safe places to stay during the Russian invasion. Now 21, Avi decided he wanted to build more than web sites.
Watching the video is a little uncomfortable and invites mockery but loneliness is a real worry. Friends tagline - not imaginary. Remember pet rocks? Remember virtual pets? Tamagotchis are still around. Do you talk to your cat or your dog? I can see it.
It takes a lot to build a product especially one that pushes the bounds of social norms and technology. I’m happy to see new AI products coming to market. I wrote about the negative AI hype cycle a few weeks ago and we need AI products that try new features and form factors to validate what will work with consumers.
I’m bad a predicting what consumers want. I sold all my Apple stock when they released the iPod! Regardless, I think some of Avi’s decisions are genius.
Avi has already gotten a ton amount of free publicity by buying friend.com. I’m not the only one writing about it - earlier this month Avi posted he already had over 5100 backlinks. Backlinks are a measure of a sites popularity - they’re links to your site from another one. I wonder how many pre-orders Avi has by now.
$99 - great price point. Friend is almost disposable at that price. No subscription required. I want one to play with.
It’s simple. It’s the perfect first release or Minimum Viable Product that’s squarely in the sweet spot of what AI does well today. If Friend succeeds in any measure you can bet they will iterate and Avi has time to build on what he learns.
One of the first AI wearables to the market is a lapel pin from Humane. You tap it like one of those little communicator badges everyone has on Star Trek. The Humane AI pin has a lot going on - camera, microphone, even a laser projector and it’s meant to replace your phone, not work with it.
Humane’s story is as different from Friend’s as their product. Humane has two high profile founders from Apple (they worked at Apple longer than Avi’s been alive) and they raised 100X more capital from big names like Sam Altman (CEO of OpenAI) and Marc Benioff (CEO of Salesforce)2. Humane built a full SDK or software development kit so it aspires to be a new platform for AI Apps.
The Humane pin is $699 and requires a $24 monthly subscription. Unfortunately for Humane, they enticed buyers with a liberal return policy and more people are returning it than buying it to the tune of over $1M. Reviews have been bad.
Last year I wrote some history of the Wacky World of Wearables where the Apple Watch ultimately emerged as the winner. Will a new AI wearable unseat Apple? What might it look like? A pendant, a pin, a watch, something else?
This all takes me back to the .com boom and Pets.com. Like Friend.com, Pets.com acquired a ubiquitous .com domain name for an ecommerce website that sold everything your pet could want. They also had a marvelous marketing run with their mascot the Sock Puppet:
Unfortunately it all ended badly for pets.com:
Pets.com was an SF sensation. It collapsed months after going public.
It’s not that ecommerce wasn’t a good business model (check Amazon) but Pets.com was ahead of it’s time.
A couple of other .com companies I personally fell for back then were eToys which was another ecommerce play (I had two little kids at the time) and eTrade democratizing financial markets. eTrade lives on as a division of Morgan Stanley and online trading is table stakes today for every brokerage; eTrade paved the way for a new wave of fintech disrupters like Robinhood.
The .com boom wasn’t so long ago, kicked off by the commercialization of the Internet and the advent of web browsers. While there was no shortage of irrational exuberance like Pets.com, companies like Amazon and eBay were forged in that fire.
We’re in the middle of the AI boom now, and while not everything is rational, things are moving fast and I’m rooting for Avi.
best, Andrew
Avi bought friend.com from $1.88M and he has raised $2.5M in venture capital.
Humane has raised a total of $241M in funding.
Friend is kind of great and disturbing at the same time. I can't help but get a weird Black Mirror vibe from it, though.