No new friends

Pre-seed companies spending $1.8M on a domain. Founders dropping rap diss tracks. Absolutely zero product-market-fit.

We are so back, baby.

In case you missed it, a new AI wearable company launched last week called Friend.

First off, kudos on the successful launch (I think). The video was clever and went viral, which is what most people consider a success these days.

It’s an AI necklace (or pendant) that is always listening and sends you texts. And the team allegedly spent $1.8M to buy the domain friend.com.

Everyone on Twitter was busy ridiculing the founder for spending nearly 75% of their funding on a domain name. But to me that’s the least intriguing part of this all.

The market is absolutely flooded with pre-revenue companies raising tens of millions of dollars from AI hungry VC’s. And it’s never been easier to get there as a founder…

• Option A: Integrate an existing solution with OpenAI and leverage their API.

• Option B: Hire a team of people in Bangladesh to “do the AI” behind the scenes.

Regardless of what’s under the hood — just sprinkle some AI marketing on it, open a bank account, and let the VC dollars rain in.

When we were raising our Series B, our existing investors told me to “add something about AI'' to each slide of our deck. Note: beehiiv is not an AI company. That’s when you know.

But VC’s are going to VC. As long as they’re willing to fund pre-product, pre-revenue companies at totally absurd valuations, founders will continue to play ball. Money will be spent irrationally, Google and Meta will reap billions in advertising revenue, NVIDIA will continue its ascent, and the world keeps going ‘round and ‘round.

Unfriendly valuations

• Friend raised $2.5M on a $50M valuation.

• French startup, H, raised a $220M Seed Round.

See above: we are so back.

Now look, I’m not just blindly shitting on AI. The technology and applications will undoubtedly be transformative, eventually. I’m just calling out the absurdity of it all in the moment — when everything from our pitch deck to Samsung’s new refrigerator must have AI in it at risk of being rendered worthless.

The truth is, this current wave in generative AI will probably look a lot like the dot com bubble of the late 90s — a few huge winners, and lots, and lots of losers.

So to bring it back home… in this environment, spending nearly $2M on a domain name for your pre-revenue business is missing the forest from the trees. That may actually be the only thing anyone ever remembers about this company.

Why?

Because this product is dead on arrival. The easiest way to completely avoid ever having sex is by wearing an AI pendant around your neck.

I guess you can’t blame Friend for riding the trend. Sex amongst teens (and adults) has been steadily declining for decades. A recent study in 2020 reported that 1 in 3 U.S. men, ages 18 to 24, reported no sexual activity in the past year. With Friend, no one within the San Francisco city limits will have to worry about procreation ever again.

This launch comes hot on the heels of the Humane AI pin, which is more or less the same product, but instead of a necklace it’s a pin. A brilliant design choice — I can just wear it instead of the other pin I’ve been using for years.

The popular tech YouTuber Marques Brownlee (known as MKBHD) cited it as the worst product he’s ever reviewed.

Seems like we could be onto something here. Remember the Apple Vision Pro?

Yeah, neither does anyone else.

And that’s Apple, arguably the world’s greatest technology and status-symboling luxury company. No wonder the Oracle of Omaha hit the door.

There’s a difference between being a hater, and being right. The product is going to flop, but I’m only writing about it because the story somehow gets weirder. So, so, so much weirder.

Friend is being accused of being a total rip-off of another product built by developer and Thiel Fellow, Nik Schevchenko. And Nik does the only logical thing you can do in this situation, drop a rap diss track on Twitter.

If only Avi clapped back with a diss track of his own we could have had Silicon Valley's very own version of the Drake vs Kendrick beef. But that would have been too much heat for one calendar year, so instead Avi replied with a video of Nik putting the Friend necklace around a homeless dude who was absolutely zooted on the side of the street.

You really can't make this shit up.

It didn’t work. He probably didn’t have Bluetooth enabled.

Not one to back down, Nik asks Avi to take it to the ring.

This launch has a little something for everyone. No word yet on whether Avi has the time to step away from burning millions of VC cash to join him in the ultra featherweight ring.

If there’s a world where founders aren’t taking breaks from texting their imaginary friends to drop diss tracks on Twitter… I don’t want to know about it.

Have they tried launching Friend NFTs yet? We are so fucking back.

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