Speaker 1Well, our engineers stopped coding around a year ago. A great brand with a shitty product goes nowhere. I'm extremely demanding, like I'm a weirdo, but business-wise, like, no mercy. Sometimes people say, oh, I'm at the final stage with Anthropic and 8Sleep. And to me, that is a really bad red flag, but it means you're confused. There is no way that these two jobs are any way similar. Our revenue per employees is way higher than Apple. Kids that are being born now will never work, at least for money. I'm the type of guy that when I have a goal, then you don't stop me. Like, I become a beast.
Speaker 2This is 20VC with me, Harry Stebbings. And in the hot seat today, we have Matteo Franceschetti. What a fantastic surname. Now, he's done loads of shows. And the joys of doing a second show with someone is you get to ask questions that no one else can answer. The really kind of risque ones, which push someone to a place where they might not feel that comfortable and definitely haven't gone before. That's what happened today. We go into places where Matteo has never answered questions. We have a totally off the cuff, very unfiltered discussion with probably one of the most impressive founders in hardware. Having scaled the business to multi-billion dollar valuations, single digit churn rates, incredible global business, now open even in China. This is one of the most unfiltered versions of Matteo and 8sleep that you have seen yet. But before we dive into the show today, we used AlphaSense on an investment that helped us close an $8 million deal. $8 million, baby. That's a lot of money. That's why I'm genuinely excited to have them as a partner on 20VC. AlphaSense combines AI with one of the world's deepest libraries of market intelligence, including expert interviews, broker research, earnings calls, company filings, and real-time news. Every answer is grounded in this incredibly trusted evidence and fully traceable to the original source, which is so important. So you can make really high conviction decisions with confidence. But the best part, they're building super analyst and always on AI analyst. So instead of starting your day with. Another search, you'll start with work. You already done your coverage, monitored the important development surfaced and your investment brief already waiting for you. See for yourself. Head to AlphaSense.com/20VC. That's Alpha-Sense.com/20VC. While AlphaSense sharpens the strategy, MongoDB scales the product. MongoDB has always been the database developers love. Well, now is the data platform AI agents need. Agents need accurate context, fast. MongoDB stores, searches, and reasons over your data in real time. JSON native database, vector search, and Voyage AI embeddings all in one place. One system instead of 10, no data pipelines to maintain. Oh, this sounds too good to be true. Build and scale from your first user to billions of vectors. Run on any cloud, on-prem, or your laptop even. That's why 75% of the Fortune 100 run their most critical ads. And it's the same for apps on MongoDB, moving trillions of dollars every single day. And it's why AI-native companies like Eleven Labs run 40 million agents on MongoDB. So if you're building an AI, MongoDB for startups helps you move faster with Atlas and Voyage AI credits and dedicated support. Don't build agents that answer once and forget. Build agents that remember and learn from your real-time data. Go to mongodb.com/agents. That's M-O-N-G-O-D-B.com. While MongoDB scales the product, Frame App scales the story. If your team wants a website that looks and feels handcrafted but is still fast to ship, Framer is built for exactly that. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. Agents and humans work in tandem. Agents bring speed and speed. Agents can scale. You bring taste, judgment, and control. The work lands on the canvas and stays editable. Build custom code components, manage CMS content, optimize SEO, and audit for issues all in one place. Enterprise-grade hosting, security, and 99.99% uptime SLAs trusted by leading brands like Perplexity and Miro. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/20vc. For 30% off a Framer Pro annual plan, that's framer.com/20vc. Rules and restrictions may apply. You have now arrived at your destination. Mateo, it is so good to have you in the hot seat, dude. You know, last time we did this show and you had like a hiring playbook and I remember it went like insanely viral afterwards and so many people talked to me about that ever since we did it. So, I'm really excited for this as a second discussion. Thank you for doing it, dude. Yeah, thank you for having me. I think that hiring today is harder than it's ever been. Yeah, thank you for having me. I think that hiring today is harder than it's ever been. I think that hiring today is harder than it's ever been. I think that hiring today is harder than it's ever been. Just because of the prices on offer at OpenAI, Anthropic and some of the other places. Even the shiny new hot startups. How do you think about that? Am I wrong? Has it changed in terms of talent competitiveness?
Speaker 1We are back to 2021 and that I think is becoming a problem in the U.S., meaning salaries are going out of control, competition- What makes you say that, like engineer salaries? Any salary, even for product managers are out of control right now. They get insane offers from... Yeah. They get insane offers from any company. Obviously, there is a lot of money going around and so we are focused more and more on hiring in Europe and outside the U.S. Because the other problem is not even the salary and it's not even attracting them on T0, but it's retention. Because then they keep receiving offers. If you are a cool company with a cool brand, then they keep receiving offers over and over at a higher salary.
Speaker 2Have you lost people to OpenAI and Anthropic? You know, I'm invested in many companies and they're just like, "God, we're getting eaten alive." OpenAI, Anthropic, Cognition, you name these hot companies.
Speaker 1Yeah. A couple. The other ones could be AI companies that are doing extremely well or they just raise money and it's normal competition. But sometimes the delta in salary and in comp is so big that at that point, there is nothing you can do.
Speaker 2We mentioned Cognition a couple of times. We were talking earlier about your angel investing as well. How has being an angel investor changed how you think about operating?
Speaker 1It's a game changer for me. And I think that is something. I don't share enough, particularly on X. The amount of learnings that you get from being an investor is insane because it's essentially you build your own intelligence. As you receive investor updates, you understand how the market is moving. What are the valuation? What are the multiples? What kind of profiles they're hiring? What channels might be working? I received these from companies that are not competitive with a sleep, but as a founder, you just get a sense of the market and I find that super valuable. What's been the biggest lesson from angel investing? The biggest learnings is always on fundraising. You see how much they're raising and what valuation, what multiples, what investors. That's one. The other biggest lesson is for other companies that are still consumers to see channels, what channels work for them or what markets work for them.
Speaker 2What do investors not understand about hardware that they should? You're advising me. I'm your buddy. I have a fund and I want to invest in hardware. What do you like? Dude, before you do it, you should know this.
Speaker 1Probably. The founders in the first year of the company or in the first, probably, let's say three months, they don't fully understand what the cost of producing that device will be. They don't understand the return rate. And so everything they tell you about BOM and COGS will probably be off by at least 50%. Does CAC go down over time? It really depends. And so that is another thing you want to assess, which is word of mouth. In our case, word of mouth keeps compounding. We are around 40% of our revenue, even at our size. If we start being really big, it's 40%.
Speaker 240% of your revenue stays word of mouth? Yep. What's your second biggest channel?
Speaker 1Then you start getting into paid media. And that's just Meta? Yeah.
Speaker 2Then it becomes Meta, Google, TikTok, and all those channels. Can I ask, how do they compare? I'm a content, hopefully, specialist at this point. No one that I speak to has managed to make TikTok work. Have you?
Speaker 1We did. Actually, this year and the past six months. How? It's usually a matter of amount of content. That you can generate with TikTok influencers. It's about getting a UGC program in place. Is there a big budget for you tied to it? The way we usually approach these channels is we start unlocking a small budget per week. We start looking at the CAC. We've set a cap to the CAC, and then they can deploy as much as they can within that cap. But then as they prove it, they can deploy more money. So to me, they could deploy $100 million if they're within CAC, the cap of the CAC. The important thing you need to do. Regularly, probably every six months is an incrementality test. And so we might turn off TikTok in certain states in the US or in certain geos. And we start A/B testing what is the growth rate or is the revenue rate. So we want to see how much each channel is incremental, because we don't look at the CAC from the platform. We have our own models now that determine the CAC of each channel. Sorry, can you tell me about that? You have your own models to determine the CAC from each channel. Why is that? Well, because you cannot trust there will be an excess of attribution from the same platform. We do the same with Meta. If you look at the CAC on Meta, it's probably 20% lower than what the true CAC is. And the only way you can do it is by doing this incrementality test. And so let's say you pick two geos that they perform similarly. Let's say you pick Texas and, I don't know, California. That is not the right example. Dude, you're speaking to a Brit. That'll totally work for this example. And so then you turn off Texas. and you start seeing what is the delta in performance of that state versus the other. So how much revenue you lose. So if they were both growing 50% year over year, you start turning off meta in one or the other, you can immediately calculate
Speaker 2the value of meta for that state. Does every brand need to have their own models to accurately? Oh, it's 100% because otherwise,
Speaker 1they just fool themselves. When did you start? Because it's one of those ones which you can't do from day one. No. And you will screw up multiple times. And the point is you need to keep doing it because as you add more channels, the incrementality of each channel will not be
Speaker 2the same. How did you think about that channel addition? Because I see so many founders try and be everywhere to everyone. How do you think about that? I disagree with that. So you need to go one
Speaker 1channel at a time. I was even talking to a common friend recently who was asking me about that and say, okay, can I go in all these channels? How much money should I put? Should I start putting 100K in each of them? And I said, no, no, no. You go one by one. Yeah. You start with meta is probably the biggest and the one that you should prove the fastest. And you start with based on the size of the company, a certain amount per week. You set the cap to the CAC that you want to achieve. And then from there, you start scaling only if you are within CAC. Because otherwise, you start throwing money out of the window. Your growth people, they will always want to grow faster. And so they will always want to spend more. And then you start losing control. And what happens then? Let's say by the end of the year, you realize you screw up. And so you start pulling back. And then the following year, you're not growing. Year over year because you're spending less. And so you need to be disciplined now if you want to be successful next year and keep growing year over year.
Speaker 2It's really interesting about how you kind of gamify growth numbers because you're right. You spend, you get 400% growth, you pull back hard and you get 70%. Good luck fundraising when you're going from 400 to 70.
Speaker 1We could be growing 50% more if we want a year over year this year just by spending more. But then next year, you're in trouble because your CAC is upside down.
Speaker 2Do we care about economics from day one? You said there about start with meta. Do we care about economics from day one in terms of optimization? Or actually is it like, hey, customers are engaging, they're liking product. If we're doing a one-to-one, for every dollar we spend, we're getting a dollar back. Great. Or should we be looking for optimal returns early? Well, in our case, we look at
Speaker 1immediate payback period. This is actually something where Keith was really pushy and he was correct since day one. So he wanted us to have an immediate payback period. And then we have what we call contribution margin. So what is the margin on day zero? Then we have a subscription and this subscription will compound on top of that. But we want to have that contribution profit on day one to be really healthy. If we were compressing that, we could be growing 50% more, but then the business wouldn't be public ready or as healthy as it is today.
Speaker 2What would you most like to do if economics were not a part of your business? It could be like massively increase the quality of a certain point. It could be poor fuel on the fire or metalite. Never mind. It could be poor fuel on the fire or metalite. Never mind. It could be poor fuel on the fire or metalite. Never mind. It could be poor fuel on the fire or metalite. Never mind. It could be poor fuel on the fire or metalite. Never mind. It could be poor fuel on the fire or metalite.
Speaker 1Take economics aside. Well, you could reduce prices and I think we will see an acceleration or you could just deploy probably more into marketing, which is probably what I would prefer. I'm never a fan of compressing prices. You know what Andreessen says that if you have a great product, people will pay for it. But at our stage as a company, even if we start fairly large, brand awareness is still probably the biggest bottleneck.
Speaker 2You have a subscription business as well, which obviously really provides a lot of juice to your margin. Because you have an upfront cost in the thousands, it's a relatively expensive product for a lot of people. Do you just inherently have very low churn rates on your subscription product because you have the buy-in of multiple thousand dollars invested upfront?
Speaker 1Yeah, it's world-class. Our churn is the lowest of any company you can think of.
Speaker 2What is the churn?
Speaker 1Is in the single digit, low single digit yearly churn. Even if you compare to other companies in the wearable space that are going public, we are better than them.
Speaker 2Who could that be? Who could that be? I don't know. That's absolutely hilarious. But it's world-class. It's unseen. Going back to the channels, and I'm sorry for focusing on channels. I'm a real nerd about channels. Has your Google spend changed in the wake of, bluntly, AI and AI-driven search impacting so much?
Speaker 1Yes. And so we introduced a new channel that now we monitor that is literally what we call AI SEO. Now in the report, we have a new channel that we monitor that is literally what we call AI SEO. Now in the report, we have a new channel that I receive weekly, twice a week. There is also AI SEO. And so we see how we rank in AI searches. What percent of traffic today is from AI searches? I don't have a number for that. I can check, but it keeps growing. But is it like 1% or like 20%? Probably somewhere in the middle. But then we start seeing an impact on Google. Our assumption is that Google is behaving differently because of AI searches.
Speaker 2What was your biggest channel mistake? Where did you spend money that you shouldn't have done? And you're like, ah, I learned a lot of lessons from this.
Speaker 1Out of home. Everything depends on the scale of the business in that country. So we tried to do a campaign, an out of home campaign in the Middle East, but we're not ready yet. So if we were doing an out of home campaign in New York, where we are decently known, it would perform very differently than the same campaign in the Middle East where we just launched a year ago. And so those are the things I'm learning that I didn't know. When are you big enough to do out of home?
Speaker 2Because I think one thing that we've seen in the last two years, so to speak, is tech companies realizing the importance of brand marketing, out of home, football shirt sponsorships, you name it, and it supposedly performing well. How big do you have to be to
Speaker 1do out of home? I don't think there is a hard number, but you want to be a brand that is decently well known. And so I make it up. If 100 people see that ad on the street, I know 5% of them knows the brand. And so that is one of the other things they monitor. That is this aided and unaided brand awareness to understand how many people know the brand. And if they know the brand, they know what the brand does. How much did you spend on out of home? Nothing now. But we created a truck now that goes around Silicon Valley. And so you can book the truck and it comes to your home and you can try the product live. So this truck has a bedroom built in the back of the truck. But now the truck also goes to specific events or to specific areas during the day. So it's a lot of work. And so I think that's one of the things that we're working on right now. And we're working on the weekend where there are many people and we are seeing pretty good success because there are a lot of people that wanted to try our product, but they couldn't. And now when they see the truck, they just get into the truck and try the
Speaker 2product and buy it. That's a phenomenal channel. And it doesn't, and you're going to have like high conversion rate on that. Yeah, it's doing pretty well. That's fascinating. I'm also really impressed that TikTok works for you because TikTok is
Speaker 1freaking hard. Yeah, it was not working in the past. Then we kept iterating and it just started a month ago. How big is the marketing budget today? In the hundreds of millions. In the hundreds of millions? Yeah. But the story I can tell you is, for example, before we had an email marketing team, now we have zero. Everything is done through AI and email marketing makes a very large amount for us and everything is run by AI. How? So what happened is we were forced to that, meaning we had a team of two. Then the person leading the team was leaving. And at that point, my co-founder, Alexandra, jumped in and said, let me see how I can use AI to really make this work. And within three days, she was able to build multiple bots that now run all our email marketing. And so now we have a team of zero and email marketing makes close to a hundred million. I just want to understand because we have an email
Speaker 2newsletter and there's people that do it. And it's still pretty average, I think. When you say bots,
Speaker 1what do you build your own? So for us, there is a calendar of what emails needs to be built and created and sent. This is based also on history. So we have historical data and our AI suggests, okay, when to send what email with what copy. And when you say your AI, it's like your models, it's using CloudBot, it's using... We probably, I mean, we should check, but I would imagine we are using Cloud for that. Then internally, we have probably by now hundreds, if not thousands of agents that we use internally at 8Sleep. So now I started measuring what I call the human employees, but then there is also the AI employees. And... And probably the AI employees are, I mean, without probably, we are probably three, four X bigger if you start including all our AI employees.
Speaker 2Where is it most significantly impacting the company?
Speaker 1Growth, because email is like that. Now also all our digital marketing, our team received a report every morning from our AI agents suggesting what changes to do or not to do, and they approve or reject. And so also all our marketing business is run, our growth is run by a few people right now.
Speaker 2I worry that in a world of infinite content supply, discovery becomes impossible and we just get flooded. Do you worry about that too?
Speaker 1Definitely. But at the same time, I think that the personal agents will look for the best product. And so if you are the best product, you will still win. So yeah, so we'll be probably... For humans, right, the amount of content will be too much. And so we'll need to think about how we show up to humans, where humans go. That is how I think. But then you need a different strategy for the agents to make sure that their agents find you and recommend you.
Speaker 2We said there about the amount of agents that you have. Engineering is one where consistently across the board, everyone's engineering teams are being changed unbelievably. How is AI changing your engineering team at 8Sleep? What are you using? What are you not using? How do you think about that?
Speaker 1Well, our engineers stopped coding around a year ago. Since then, they didn't code. What they have is hundreds of AI engineers that they code. for them and that is how we can achieve what we are achieving at scale in 35 countries, including China, including Middle East, including Europe, where there are a lot of regulations in all of them, with a fairly tiny team. What tooling do you use? Mainly Claude. How much do you spend on Claude a month? It keeps growing so fast that I don't know.
Speaker 2Is it like 5 million? No, it's lower than that, but it's still in the millions. And the thing I'm trying to understand is Mark Benioff said that they spend 300 million a year on Claude, and they have a 6 billion budget for engineering. 5% of engineering salary is being spent on Claude in particular. And my question as an investor is, will it stay at 5%, in which case, we can justify the $2 trillion IPO, but it doesn't have massive expansion from there. Is it a case of the 5% is just the start, baby? We're going to go to 25%, in which case, Mateo, let's load up on Anthropix IPO. Or is it the case that actually we're going to see the commoditization by open models? Most of workflows are going to get taken by them, and that 5% could go down to 1% as we see efficiency.
Speaker 1Yeah. I think there will be two vectors in the opposite. The usage will increase, and so the 5% will become 50%, but the cost will go down. And so net-net, I think it will go down. I was listening to an interview to Sam Alman recently, and he was saying that in the early days, to pay for one hour of electricity at night, you had to work five hours, just to give you a sense of how expensive electricity was in the early days. And now nobody cares about it. I don't even know what's the cost of electricity at night in Miami, where I live. And so I think the same thing will happen.
Speaker 2Do you find it a bit scary that intelligence is now free and entirely distributed? Yeah.
Speaker 1It's something I think about all that, right? And how businesses will change, how our business will change once that intelligence is semi-unlimited.
Speaker 2I asked the Instinct this morning to do an in-depth analysis of three of our biggest competitors' Instagram channels, because I want Instagram to be a real driver for us moving forwards. What works, what doesn't, what themes work, what hooks work, what layouts work, what doesn't, what captions work. It was incredible. And I said, can you suggest three stories every single day for me at 8:00 AM to do? First one starts tomorrow. Yeah.
Speaker 1The amount of productivity will explode. It's probably like when we went from no computers to computers, or probably even bigger industrial revolution or agricultural revolution. We are facing one of those moments.
Speaker 2Knowing what you know now as a consumer and customer of Claude, would you buy Anthropic at the IPO?
Speaker 1I would probably buy. I still think there is so much upside in all these companies. I'm really bullish on SpaceX, personally. Why? What drives that? So here is another theory that I have, and ours is just my opinion. But I think with AI, the right companies will transform themselves in holdings. And so what it means is that whatever 8Sleep is doing today will be one of the businesses that we do. But with AI, as we build tools for ourselves, we'll discover other opportunities, business opportunities. And so the 8Sleep Inc. will probably own three, four, five, ten different businesses. Which, if you think, and if you look at Chinese companies, it's something they have been doing forever. If you look at Xiaomi, Xiaomi does 15 different things. I just watched their latest presentation from their CMO. I look at a lot of Chinese companies because they are geniuses, right? They never stop themselves. Xiaomi, instead of being just like Apple, they also do cars, for example. They do so many other things. And fridges and ovens. Literally. Anything hardware related, anything that is a smart home. But then they also get into components. Like some of the components, like BYD develops certain components well outside the car and automotive. So these companies have already proven that the concept of focus is not, "Oh, you keep doing the same thing forever." It's just, "I have certain capabilities. Then how can I use this knowledge and capabilities in any form?" And with AI, we will all do that.
Speaker 2I'm loving this conversation. And the joys of doing second choices, they're much more casual, which is much better to listen to and also much more fun to do. Do you worry when you see the excellence of these Chinese manufacturers, in specifically the kind of automotive industry, that it's just going to hollow out the European car market?
Speaker 1Yeah, I think Chinese, they really nail particularly automotive. And based on my understanding, what happened is around 10 years ago, they understood that they didn't want to compete with European manufacturers on standard engines. And that is when they decided to double down on electrical technology. And since then, they started doing that. They started developing their cars, but I go to China often for work. Now we sell in China, but we also manufacture in China. And when you see the quality of their cars, because in the past, we used to think that some of these products were just cheap and ugly. Well, instead, now they design cars. Xiaomi, if you go to their stores, it looks like an Apple store, but there are cars, there are no other devices for the home. These cars, they literally look like a Ferrari aesthetics, or they have these seats that turn. You can just sit and then... I've seen the Tito. It's so cool. It's incredible. Screens come down. Screens come down.
Speaker 2Stars on the ceiling.
Speaker 1Massage. Everything is voice control. So they're really focused on the customer experience, and it's incredible. And I think a lot of other manufacturers around the world, they don't focus enough on the user experience. I completely get you and agree with that.
Speaker 2But as your wonderful accent denotes, you are Italian, and a huge amount of the European industrial economy. It's rotating, centered around cars.
Speaker 1Do you worry about that? Well, I worry even more about another factor. I think all the Chinese manufacturers, they will become robotic companies. I think all these automakers should transform themselves and start building humanoids, because the humanoid will be what cars were in the 60s. If they don't do that, they will not lose only cars. They will lose also the humanoid market, which is trillions of dollars.
Speaker 2Are you seeing the advancement with humanoids in China in a way? That you really didn't expect? Yes.
Speaker 1I don't know if you saw the, I don't know what was the formal name, the Olympics of robots? The humanoid games. Yeah. It's insane. The way I look at that is, okay, you look at this thing, it looks a bit funny. They look a bit clunky. But they start doing these things. Knowing how fast AI is moving, if next year, those same games will be mind-blowing. That is what worries me. What I saw today, right, if you just look at that and say, oh, look at this thing. Like, these robots, you know, they are not really good at walking. Even if they did the records in the 100 meters, there was a robot that ran faster than Usain Bolt. So, they know how to do it.
Speaker 2I did a video on this. There was a robot that beat the high jump.
Speaker 1Yes, I saw that. And there were the fighters. Tennis. Like, real-time tennis. The tennis was really cool.
Speaker 2It's insane.
Speaker 1Yeah. But in one year from now, we will be blown away at this speed.
Speaker 2Did you see the paper last night, or essay or post last night, from someone at OpenAI, Sam promoted it, that basically said, we actually need to put a slight pause on this. It is getting too far too fast.
Speaker 1Yeah. I think the part that is worrying everybody is the part of self-learning from these models. And so, they are getting to the point where they train themselves. And that is when we start losing control. There is a point, even in our model. Do you not think we're already there? I think we are. Then, I think there is a big delta between what we see as users and problems. Probably what the frontier model companies have in-house, and I think they have already seen it behind the scenes. You have seen some of the things that are happening already in terms of cybersecurity, in these civilizations, that there were three attempts of civilization, I think, in an OpenAI model, where agents were building their own group.
Speaker 2I'm going to go there. You sell in China. You spend a lot of time in China. A lot of your investors, including Keith Reboy, who's a friend of mine, fucking hates China. How do you reflect on that? Is it as evil and CCP-driven as it seems? Are we in a de-globalized world that should hate China? How do you think about that?
Speaker 1Yeah. I don't have a specific opinion on that, so I cannot really comment. I can just tell you, for us, it's a key market. It's a big opportunity, and we decided to sell there, and it's doing really well for us.
Speaker 2Is it very different selling in China?
Speaker 1Yes, because you cannot sell on 8sleep.com. Literally, you don't sell on a website. They don't use website. And so, for us, it was literally learning everything from scratch. What do you mean they don't sell on a website? Chinese don't buy on websites. There is no e-commerce as we know it. They only buy on their super apps, so on WeChat, Red Note, and Equivalent. We had to learn all that.
Speaker 2What the fuck? Where do they land? You send a referral link to your friend? Where's the referral link from?
Speaker 1I'm confused. Yeah. Imagine that everything, the equivalent is oversimplified, is like if you were buying everything on WhatsApp. They don't go on it. They're on any website. Websites are at the most just literally like if you just want to scroll and see some picture and read a bit more about the product, but all the purchases, all their credit cards are on Red Note or kind of Amazon equivalent and WhatsApp equivalent, or TikTok, obviously.
Speaker 2Does that impact how you think about how we should think about security for these AI assistants? Everyone now is like, "Oh, I would never put my credit card in Instinct. What if it gets hacked?"
Speaker 1Yeah. I think the solution for that to me is... For example, my GROK bot is buying things for me already, but is using Amazon on the browser. And so Amazon has my credit card. And so there I feel confident because I'm not sharing my credit card with AI yet. I think in AI where we were with credit cards on knowing spending and buying things on the internet 20 years ago where people, particularly European and Italian, I was still living in Italy, they literally didn't want to put their credit card on any website because they thought it was a scam. there was a scam back then. at the same point with giving our credit card or information to these bots. It's still a bit, you know, sometimes you feel uncomfortable, but I think in a year or two from now, our bots, particularly bots from frontier models, like from X, OpenAI and Cloud, you will start trusting them
Speaker 2soon. What seems crazy today that you think will be very common in five years? I totally remember I wasn't allowed eBay when I was young because my parents were like, no way are you putting credit card details online? I remember when it was like, you think you're going to find a partner online? These apps are ridiculous. Now 60% of relationships start online. And I think we live online
Speaker 1transaction wise. Probably your bot buying a cyber cab that will start making money for you. So you will buy a cyber cab that makes money for you with a bot and the bot runs the cyber cab. That would be pretty sick. I mean, it's not that far off happening now. No. And then there will be the health part. That is another. I hope that cancer can be solved within 10 years. I think companies like 8sleep will be able to save your life, save the life of millions of people. Does the 8sleep product actually change that much with the greatest of respects in a completely AI driven world? A hundred percent. We start seeing the likelihood you develop diabetes in our data, hypertension. We are becoming a medical device for sleep apnea. So your bed will become the most advanced medical platform you ever had. You said about research.
Speaker 2You said about retail earlier. I bet retail has been a question for you for years. And I bet there's been different board conversations had. How do you think about when's the right time? Because you're still not, still D to C. How do you think about when's the right time?
Speaker 1Well, let me step back for a second. One thing I'm learning as an entrepreneur is there is a time for things, right? Similar to what I was telling you about the out of home campaign. Nailing the timing of what you do. So when you do what is actually really important for CEOs, because it's not that. It's binary that I don't know, retail doesn't work or out of home doesn't work. No, it works. But there are some second or lower level conditions that are required to make that project work. And so I think for eight sleep that is happening now. And so you should imagine retail to become a meaningful part of our channels in the next month, years. But before it would have been too early. Same for China, right? Launching in China. One thing I spoke to a lot of Chinese founders and what they told me is sometimes when they start. Their consumer products, they actually start selling outside China first. And I said, why? You have such a big market and you know the market. And they say, because the Chinese market, they love to buy products that are already well recognized in the Western world. And so you want to build the product and the brand first in the rest of the world. And then you come back to China. Otherwise in China, you would be one of many knockoffs and it would just be a price war. And so I didn't know, we just decided to launch China. And so we were just doing it, but I didn't understand that for us was the right time to get into China because now we're already selling in 35 countries. We are well-recognized. We sponsored Charles Leclerc and I work with Ferrari through Charles. That is a very well-recognized brand. Many athletes use us. Elon spoke about us. Mark Zuckerberg spoke about us. Elon is really big in China, right? And so you have a level of trust where you command a certain price. But if we were doing the same thing five years ago, we will be destroyed by a knockoff that is 500 bucks cheaper.
Speaker 2I had Hugo Barra on the show, who was a former exec from Xiaomi. And he taught me something very important in hardware. And I'm intrigued if you agree with it. He said, you need to be one of two things. You either need to be price king, which is I'm the cheapest, or feature king, which is I'm
Speaker 1the best. Do you agree with that? So I agree and disagree. I agree that you can be the best price. That's not what we want to be. Or I would call it the best product and brand. Not so much about features, but the brand is really important. And so being a brand that is associated with, again, the Charles Leclerc, with Elon Musk, people they really respect, they want that. And the same happens in Europe, right? I grew up and I remember when I bought my iPod. It was impossible. And I was buying a second hand iPod on eBay back then, but because Americans were having this product and it was not being sold in Europe yet. There's
Speaker 2that kind of format. I completely agree. Listen, a thousand songs in your pocket in a beautiful poster. Dude, Samsung and all the others did a thousand songs in your
Speaker 1funky device too. It was the same in many ways. It was 100% the same. And Steve Jobs has always been a genius because he was coming with a great product after everybody else, sometimes one, two, three years later. But he was nailing the branding, the packaging, and the pitch, and everybody, and obviously the look, and everybody wanted it. What do you think people don't consider about consumer brand enough? The brand, particularly I think in Silicon Valley. I think in Silicon Valley, we understand really well building the best product, but I think we underestimated the importance of brand. Then a great brand with a shitty product goes nowhere. So first is product, but then you need to be able to build a brand that is aspirational and can command a certain price. Charles Leclerc is a phenomenal talent. For
Speaker 2those that don't know, in the racing world, one of the best. How does that come to be? You get a DM from Charles saying, "I love Eight Sleep. Do you want to sponsor me?" How does that come to be?
Speaker 1Yeah. Well, it's pretty incredible, the story. So we got connected. So Charles already had our product for two years before we met, and we didn't even know. And that is the best way, obviously, for us to start the relationship. Then I'm an F1 and motorsport obsessed fan, like obsessed. I know everything since when kids racing go-karts. So I knew about Charles six, seven years before he got into F1. And three years before F1, he was racing, two years before he was racing in F2. And at the time I reached out to his team in F2, and I say, "I'm a huge Charles fan. I think he will make it big. Is there any way where Eight Sleep can sponsor him?" But at the time, Eight Sleep was very tiny, and so we couldn't find any real deal. But when I met Charles, I still had the email where I was not going back and forth with his team. And I wanted to sponsor him before he even made it to F1, not to Ferrari, before F1. And then I shared with him our vision, our medical vision. He really cares about that. And he's actually really into AI. He's incredible. Super sharp guy, super into AI. And we had dinner together. I think it was the Wednesday of the GP in Miami. And before the end of the dinner, we said, "We are going to work together." And the deal, since then, was done in a matter of days. Can I ask how much it cost? No, I can't share. No, you can't. What I can tell you is that Charles invested in Eight Sleep. I was honestly, first, really happy because he was one of my heroes. But second, I think that proves what I was telling you, how smart he is on a daily basis. And second, I think that proves what I was telling you, how smart he is on a daily basis. Also, as an entrepreneur and a businessman.
Speaker 2Can I ask you, I think a lot more celebrities and athletes are obviously trying to be investors and wanting to invest today than ever before. What would be your biggest advice to other founders on how to get them and how to get the most out of them as a founder of a company?
Speaker 1Well, we made a lot of mistakes with that too. And now it's probably four or five years that we invest in sport because obviously we have Charles, but we were sponsoring the UAE team with Pogacar. Pogacar was installing our product, that every single night at each hotel of each stage of the Tour de France since last year. We didn't even know. He won last year and then he won this year. So they reached out after the first year and said, "Look, Pogacar did everything on his own. We bought the product. Now everybody in the team wants it. Can we do something together?" So we sponsor the UAE team this year. And then we are in Padel with Arturo Coelho and Federico Cingotto, so number one and number three in the world. We are in tennis where we sponsor a lot of coaches, including the coach of Sabalenka and many others. And then we are in tennis where we sponsor a lot of coaches, including the coach of And then there are a lot of top, top athletes that use our product. It's not public.
Speaker 2But what would you advise founders on lessons from how to get great talent, and then it can be celebrity ambassadors too, pop stars, DJs, you name it, and how to get the most out of them? Or do they just not have that?
Speaker 1Well, there are two conditions for any deal now. First, they need to use the product. If they already use it, they bought it on their own, perfect. Now we can talk about not doing a deal. If not, they need to try it and then we want to hear the feedback. They need to know the product. Otherwise, it's just a pure business transaction and I don't like it. Second, I want to have a direct relationship with them. Usually, sometimes managers, they don't want that and they want to try to be in the middle. But if I don't have the direct relationship with the athlete, we're not going to do the deal, because then it's just a financial deal. And at this point, we don't care. I want to be connected to the athlete. I want to know that they love our product. And if they don't, it's fine. But then the relationship will never work, particularly in a product like ours, where these people, the biggest value they do is just by talking to their friends about how good our product is. They really need to be bought in. If they just have a stake in our company because they put a few million dollars, you don't go anywhere. Who would you most like to have on the cap table who you don't have? Probably...
Speaker 2Do you have Cristiano Ronaldo? No. He would be amazing. Yeah. Have you seen pictures of him training? I'm a straight man. My God, this guy's body is incredible. I looked at it and then I looked at myself and I just felt like, oh dear Harry.
Speaker 1For us, there is a big difference between the athletes that we can disagree with and the athletes that use the product. Some of the top, top tennis players, they ping us, then in all the grand slam, they sleep on our product. In F1, we have probably 80% of Formula One drivers sleeping on the product, including the people that are winning. But we are not allowed to share that, right? It's a private, confidential relationship.
Speaker 2Do you have any wild stories of delivering it somewhere crazy for someone last minute because they need it before? You don't need to say the person.
Speaker 1Yeah, yeah. I'll not share the name, but there is this really, really famous football player. And so he tries the product at a friend's house, and then his team reaches out and say, "This No, the athlete wants the product, can you install it for him? Can you come and let him try it at home? So the team goes, but once they get there, he has this very unique, special-sized 300K mattress. And our product doesn't fit because we have, I don't know, the queen, the king, not the standard sizes, but this was unique and customized. And so the team is leaving, but then the athlete says, no, no, no, no, okay, would you mind installing this in my kid's room? They say, fine, because that was a standard-sized mattress. And so we install it there. A week later, the athlete calls us and say, look, I'm going to give away my 300K mattress, but I'm going to move 8Sleep in my bedroom. I need it for my own performance. And so he threw away the 300K mattress, and now he sleeps on 8Sleep. That was really sick. Oh, there is this other story that is really cool. So we give one of the most famous actors in the world gets our product as a gift, and he loves it. He absolutely loves it. And then he buys. He buys 10 of our products for everybody in his family. Then I go to this dinner, and this famous actor comes in, and there is me and some top, top CEOs, but CEOs of 100 billion-plus companies, right? He starts shaking hands, and he spends literally three seconds with everybody, like three seconds. Then he comes to me, and he realizes I'm the CEO of 8Sleep. And at that point, we start talking together for literally five minutes, to the point where the other CEOs before, they were looking at me like, who is this guy? And after that, they were looking at me. With a lot of respect. What is the most amount of 8Sleeps one person has bought? A very famous person that everybody knows has 55 for his houses, but then there are other people that buy through embassies, and they bought in the hundreds.
Speaker 2Someone bought 55 for their houses? What? Yeah. Do you get a discount?
Speaker 1No, these people don't ask for a discount. They just reach out, and they add their team, and they just... They just ask to help for the setup, or not to play such an order, because that is wild. I love that. Well, there is another story. There is this couple, and they reach out, because wherever they go, if they stay in a hotel for, I believe, longer than three or four nights, they buy an 8Sleep to install in that hotel. Yeah, because they can't sleep without that, and obviously they're... Do you mind that 8Sleep is such a premium product? Would you like it to be more for everyone? We want to democratize. We want to democratize sleep. So the way I always say is, imagine if we were Tesla, we are the Model S. There will be the Roadster, so there will be something even better, but you will also see us coming out with the Model X and Y and 3.
Speaker 2Do you worry about income inequality? I know it's kind of a... But we've talked about people just buying 55. You operate in a world where you see extreme wealth. I do as well.
Speaker 1Do you share the concerns? I do. The way I think is, okay, how do I democratize better sleep? If our product was $100... Well, probably by now we will have sold billions, literally, because people really, really like the benefits of what we do. And so it's our job as a group of, you know, an engineering group, even if I'm not an engineer, to make sure that we can keep reducing prices so everybody can get better sleep.
Speaker 2You said earlier about your co-founder, Alexandra. I hope it's okay. She's also your wife. Yep. How does that work most efficiently? What lessons do you have? What works? What doesn't work?
Speaker 1Yeah. So we have two different channels. So one is Slack for work, and one is WhatsApp for private communication, so our life. And we never mix them. And so I might be screaming on Slack, we have to get this done by the end of the day, and let's review this at 9 p.m. And then on WhatsApp, it might be, oh, what do we have for dinner? I'm craving pizza. I don't eat carbs. We cheat on Friday. Friday night is when we have pizza. But as a joke. So that is one. Second is I could talk about work. All the time, like literally 24-7. I love that, and it helps me. For her, instead, like a certain point, she really wants to operate like if she was an executive that you wouldn't bother after a certain time in the night, like at 10, 10 p.m. Okay, if it's urgent, you can talk about that. But otherwise, if we are on the couch watching TV, don't just keep talking about work, because my brain needs to digest the information from the day, and that is how she performs. But then what I can do, I can Slack her. So sometimes we are on the couch watching TV. I start coming up with ideas, and I start Slacking her, and her phone might be vibrating next to me, and I know that it's me, and it's completely fine. And we don't talk about that, even if I'm there writing a couple of messages. And that doesn't irritate you? No, because I think the way she framed it was extremely smart. And she says, if I was an executive that was not sitting next to you, would you call them for this thing at 10, 15 p.m.? I say, no. And she says, so just treat me how you would treat our VP of Ops. Who is in New York? Would you not? I will call people at 10 or 11 p.m. Well, it depends on if it's urgent, or it's a random idea, or it's something that we need to remember. If it's urgent, I call you at midnight, 2 a.m., 3 a.m. Like, trust me, I'm going to come to your door at 5 a.m. I'm that type of guy. But if I just have an idea that maybe for the next launch of the next product in the video, we should talk about this, I can just send you a note. When was the most challenging time?
Speaker 2For the company? For the scaling of... Your relationship in the company? Because there's always, like, break points, you know?
Speaker 1In the early days, I think. Now, probably, I don't know, four or five years, I think we are really fine-tuned. Even because I'm extremely demanding. Like, I'm a bit binary on this thing. Like, I'm a weirdo. And so I can be a husband on one side, but business-wise, like, no mercy. We have to do what we have to do. And I can be the CEO if I deserve to be the CEO, and she can do her job if she deserves that job. Where were you not demanding enough where you should have been more? Where were you not demanding enough where you should have been more? No, impossible. If anything, I do the opposite. I'm way more demanding than what I would do. What I probably had to learn on my side in the early days, when you're so close to a person, you might act or behave in a way where you still pretend the same things, but you're not as professional as you would be with another executive. That is no... On the line. Yeah. And so that was one of her points where she pushed me in the early days and say, I have no problem in you being extremely demanding, and pretending this by this time of the day, but the words that you use and how you say it, it cannot be just like I'm your buddy. You need to treat me professionally like an executive. And there is where I had to step up.
Speaker 2I get in trouble for treating mine like an executive. She's like, I'm not an executive.
Speaker 1Don't treat me like one. No, for us, it's that. To the point where I think Deleon and Keith, when they invested for the first year, I'm not sure they didn't even know we were married. Obviously, you disclose it when you do a round. Yeah. It has been disclosed in every round. But because of the interaction in the board meetings, they didn't even realize that. You could ask Deleon. My brain works like that. I'm very binary on these things.
Speaker 2When I'm working, I'm working. You know, I had this brilliant statement the other day, and it's vulnerability is sharing something that you're scared to admit in spite of the consequences, in spite of them. What do you think you're kind of scared to admit in spite of the consequences today?
Speaker 1Well, I think for me, a lot of things were also... I moved to the U.S. I'm coming from Italy. I graduated in law. I didn't know anything about Silicon Valley. I didn't go to Stanford. I didn't go to Harvard. We are three immigrants funding AIDS sleep. So in the early days, it was very challenging, right? Because I didn't know anything about that world. I didn't know anything about how the U.S. was working. So thinking of creating a product that consumers would buy and they would also love to scale, I had a lot of question marks if I could really do that. And I think it was also in the early days, this... This fear of, can I really scale the thing, you know? Okay, you can build a product and hundreds of your friends might buy it because they are just nice to you. And maybe you sell a thousand because it's a crowdfunding campaign. But can you really build a true business that people buy the product because they want that product? I love it. But what are you scared of today? Today? Yeah. Do you know the story of when I had to move to China in the early days for manufacturing or I didn't tell you?
Speaker 2No, I didn't.
Speaker 1You told me. So it was after the YC demo. Today, right? We just raised five, six million dollars, whatever. But manufacturing was not happening. So we had all these beautiful prototypes. None of us had any experience about manufacturing. So we thought, oh, you have a prototype and now you build it at scale and we are done. But things were not happening. And so I go to Alex and I say, I have to go to China. And she says, why? And I say, because manufacturing is not happening. And she says, when do you go? I'm going to go tomorrow. And she says, when do you come back? And I say, once I fix manufacturing. I came back three, four months later. And now, still today, the longest tenured employee in the company is a Chinese person that I hired during those months while I was living in China. And she just put up with that three to four months away.
Speaker 2How did you do that? How did you make that work as a couple?
Speaker 1Well, when the relationship started, she was living in Mexico and I was living in Italy for our first year. But that was by then probably five, six years before. I don't know. It's just for us, if the business requires that, you do what you have to do. One thing that I'd be nervous.
Speaker 2I'm scared of if I was you is like the ways in which you work may not be transferable to having a child going to China for three to four months. You can do it. You're a lovely human and I really appreciate our friendship. I don't think that's the type of dad you want to be.
Speaker 1I think we would figure it out. I think we would brainstorm. That is how it works at our house, right? We would brainstorm. And if I have to come back for a weekend and go back, I do whatever it takes. I go hardcore, whatever it takes. And then I try to do it in a smart way for whatever is possible.
Speaker 2We said before about the travels. You can travel anywhere to any hotel. What is the favorite hotel in the best place and why? I love Maldives.
Speaker 1Do you not find it boring? So here we have another problem, which we call, Alexander and I, we call it the scene. And we say we have the scene. And so I never took a vacation since when I sleep started. We didn't even have a honeymoon because we set the date of our wedding to be exactly one week after the end of the crowdfunding campaign. And so I get bored in any place for longer than, we calculate that longer than two nights in a place. I start feeling like I'm bored. Let's move to the next big thing. So what do you do in the Maldives? I was literally there for a weekend because I had to be in the Middle East for work. So we just feel that.
Speaker 2So you did a weekend in the Maldives.
Speaker 1Yeah, because we had to go to Middle East for work and Friday night. But then what happened actually is that the guy who was leading hardware, he calls me that Friday. And he's saying he's leaving. And so I spent the whole weekend trying to save him because we wanted to save him. And I saved him, but I spent not the whole time. I had dinner and I went snorkeling once during the weekend, but dealing with the guy, but then we retained him. So how did you save him? Because of our culture. The company was paying him way more, giving him RSUs, so liquid stocks, plus paying him probably 3x more. But he loves so much what we do, how we work, and what we want to be. And so he started to build that at the end, decided to stay. But he literally decided five minutes before going to the conference room to tell his team. So it was out, out, out, out, out, out. And then comes to me five minutes. I was in San Francisco, he was in San Francisco, five minutes before going into the conference room to tell his team he's leaving, he says, "I thought about that. Can you do this for me in terms of offer?" And we say, "Yes, I'll do it."
Speaker 2And then he stayed. Can you advise me, I'm a founder of an early-ish stage company today. And I'm a founder of a company that is getting poached by hot companies, top labs. Should I pay the same as what they're paying to keep them if they're great? Or do you just have to accept that it's out of our league?
Speaker 1Well, I'll tell you something slightly different. I think you cannot even compare, meaning if the people are really comparing the options between a company at a total different scale to you, they're probably the wrong people. Or it's not that they are wrong fundamentally, like in our case is this person was tired. Yeah. He was tired of not, there is pressure at his sleep, and he does hardware, so he needs to go to China, Vietnam, travel all the time. And so it was becoming a personal choice. But he's a hardcore guy. And at the end of the day, he realized that this is what gives him energy. And so he didn't even want that life. And so sometimes it's still happening today. Sometimes people say, "Oh, I'm at the final stage with Anthropic and Eight Sleep." And to me, that is a really bad red flag, not even for the salary, but it means you're confused. That these two jobs are any way similar. And I'm not talking because we are hardware versus software, it's just, man, get your shit together. Do you want to work at a very large company that has no certain standards and probably a certain profile, or you want to work at Eight Sleep? But here I tell you another thing that we are seeing, actually, you will love this. There is another trend in Silicon Valley where there are people that have been laid off. Obviously, I don't want to generalize, but we have seen this in the data. And so what they do is they start talking to a lot of companies, and sometimes, some of these, at least with us, they took one of our job offers. And then two weeks later, they switch to another company. And the reason is because they didn't have probably income or salary for a few months, they want to try to get a salary or income. And then they keep certain conversation open, and then they might take another job. Does that not look terrible, switching so quickly?
Speaker 2Yeah. But then they don't even disclose. Do you think the value is too money-oriented? Chamath said on X recently that it's become too transactional. It's too financial. From Chamath, that really is something. Do you agree with that?
Speaker 1Yes. But with the caveat. I think people that join a startup, they should be driven, and it's important that they are motivated by potential financial success. And I agree. But that success will come by increasing the equity value from X to 10X. That is also why, to me, it's so important. You cannot really compare us to one of these big companies that are already so big, where they are way more stable, and maybe you do two, three X. At this leap, you should come. You should come to try to do 100 or 1,000X. But the team size, there are so many details that are totally different. And so we actually want people that are very driven and ambitious, but they need to be driven and ambition because of the right things.
Speaker 2Do you think people care today more about upside in terms of 10, 100X, or actually just certainty of cash? Yes, it may be more capped, but you will get a tender next year, and that will be done as they are every year.
Speaker 1I think it's completely fair. It's completely fine. But then it goes back to get your shit together and understand what you need, and probably what your family needs. Another thing that I learned as a CEO is sometimes now, we just promoted one of our best guys to VP of engineering. And we were running a search for VP of engineering, but he wanted the job. And what I told him is, "Look, we will run the search, but you have your own shot, so prove yourself." He did insanely well for three months, and then we decided to go for him. But I think it was very good that we run an external search. We could see other people as well. I found that not the professional way to do it. But what I told him is, "I'm going to give you the job, but I don't want you to answer tonight. You go and you talk to your wife, because she has seen how hard you work over the past three months. You were already working hard. The last three months, you went like 130%. And so here is not just you committing to this life. If I give you the job, I expect you or I would like you that everything equal, you stay with us for the next two, three, four years. Otherwise, I'm not going to bet on you. Go and talk to your wife. She has seen how hard you work, and you guys, both of you need to commit, because it's not just you. It's your family."
Speaker 2I completely agree. I call it the power of pillow talk, which is why I will always spend time at a dinner party or a drinks party, speaking to their partner, because I want them to actually know at the end of the day why I'm doing what I'm doing and how important my family is to me and what we build is together. And so when they come home and have a shit day, it's like, "But I do like Matteo, and I know he's a good human." Yeah, exactly.
Speaker 1Changes everything. Yeah. Everybody has a family, right? So we need to take care of them, but they also need to be bought in. Can I ask you, when we look at the team today, how big is the team? We're only 160 people. Wow. That's small. Our revenue per employees is way higher than Apple. One thing I can tell you is, without disclosing our revenue, but other similar companies are probably in the thousand people at our revenue stage. Our output is 5x what is average in Silicon Valley.
Speaker 2Can I ask you, when we look then three years out, it's a reasonable timeframe. It's not crazy. It's not crazy out, but it's decent. How many people will you be then? 250 people making a billion.
Speaker 1Which function does not exist today that will be very important? Or job? Well, we saw a change in email, but what I think is, I started thinking in terms of teams of two. That is how I think for certain parts of the business, where I think you still want two people to have redundancy, and you want two world-class people overseeing that area. But that area could be really big, right? So right now, our paid media team makes hundreds of millions. And there are two people, but like two, 300 million, just the group. So the way I like to keep the organization is extremely small and flat. And that is how we can be 160 people instead than a thousand, and similar companies are in the thousands.
Speaker 2So which function today or which job today will be gone in five years' time, and which will be created?
Speaker 1Again, I don't think anything will be gone. I think you can do what you're doing with way less people, or the same people be spread more horizontally to cover more areas. And so maybe it's AI SEO, or maybe the same person oversees this other section and this other section. So you can be way leaner. Now I have an AI internal tools team that didn't exist until six months ago, and are the guys building these thousands of agents for internal. And you have a separate team for that. You don't expect horizontal groups to do that. No, because this team needs to be very connected to the data engineering team. Because the agents needs to have access to data backend. Data pipeline of everything we do. And so, I don't know, the marketing agents needs to make sure that has perfect access to the revenue by country and the CAC by country. And so fine tuning that, that is the real true challenge because you want to make sure that the agents are a hundred percent correct. Other than email marketing, what agent has had the most significant impact? Well, the one for paid media, right? Now we make hundreds of millions with these paid media agents. Now the other big one is in finance, particularly in all these groups is where we save a lot. We have a lot of head counts for compared to normal companies, right? Probably a company like ours, you have, I don't know, a team of 20 people in finance. Our team is four people. I just really like to keep teams small and try to see if I can 5X the output. I really have love when I talk to investors to ask them to compare each of my teams and the quality of the output of each of my teams to other companies they have and the Delta in size.
Speaker 2You're in 35 countries. Yep. What's the hardest country?
Speaker 1Well, China, because you don't sell on the website. So we had to reinvent everything.
Speaker 2Dude, I want to do a quick fire answer. I say a short statement, you give me your immediate thoughts. How many hours of sleep do we really need today? At least seven.
Speaker 1Biggest sleep tip for me? Consistency and amount of hours. If you just nail those two things, you will be good. Eating before bed. Any advice? It's very personal. For certain people, it makes a difference, for others, no, and it will change as you age. What have you changed your mind on most in general in the last year? Probably in health in general. I think really 95% of the value is just to be consistent and do the right things without going too crazy. in terms of, I don't know, products that you can take and supplements and all that. If you just have a very balanced life in terms of eating well, training and sleeping, then the score will take care of itself.
Speaker 2What's a kooky prediction, weird prediction you have about the future that you do stand by?
Speaker 1That kids that are being born now will never work, at least for money. Then they might do it because of their passion. Can you just explain that to me? Well, I don't think if a kid is born now, by the time they are 20 years old, they will ever work. By then, I think AI will be at a point where humans don't work. They will do activities, social activities, even to help other humans. What will we do then? That is what we need to discover. I also have this pyramid of life about the importance of life. And to me, it's a pyramid. At the bottom, you have health, and then you have relationship, and then you have purpose. I think this is what drives happiness. So the first thing you need to nail in your life, it's to be healthy, because if you are unhealthy, almost nothing else matters, right? If you have a cancer and you risk to die in the next two, three months, you can't be happy. Once the health is on track, you focus on relationship. Doesn't matter what kind of relationship, it could be a partner, it could be your family, it could be your friends, but you need to have relationship of other people, right? If you are extremely rich and healthy, but completely alone and nobody wants you, you can't be happy. The third is purpose, and purpose is extremely important, right? So once you're healthy, once you have great relationship, you need to have a purpose. You need to work towards something, and it doesn't need to be, you know, financially related. It could be anything that you really enjoy, but you need to have a purpose. And I think that is the part that we need to pay attention to.
Speaker 2What would you advise someone asking whether they should go to university today? No, 100% no.
Speaker 1It's useless. Well, if you want to have social activities, there is the social part, but I'm just talking in a very pragmatic way. If they want to do, have a career, particularly in Silicon Valley as entrepreneurs, I think it's totally useless. Do you believe in universal basis? I think it will have to happen, and I think probably as companies will get more efficient, and probably they will need less people working for them, probably they will get taxed more to make sure that we can distribute universal income to everybody. Do you think Bill Gates' suggestion was right, that we should tax agent usage and token usage? The bottom line of a lot of companies will improve meaningfully over the next 3, 4, 5, 10 years, and so I just think we will need to readjust part of that bottom line to be, you know, distributed to people so everybody can have a comfortable life. Would you let your children use social media? That is a good question. I don't have an answer yet, but at some point I will have to figure it out.
Speaker 2What do you not know yet about parenting that you are wanting to know?
Speaker 1Well, I'll tell you something that I'm actually trying to do that could be slightly different. So with 8 Sleep, we are lucky that we work with a lot of people that have been successful in sport, but it could be ballerinas, it could be chess players. Or it could be even a great businessman. I'm trying to talk to all their dads, and I want to learn from their dads what they did, what they thought worked and didn't work in how they raised their kids, to then learn how I can be a dad one day. What did you learn? I'm starting now to do my due diligence and interviews.
Speaker 2God, that would be a fascinating exercise.
Speaker 1It's amazing, right? Because nobody thinks about, it doesn't need to be like the dad, it could be the mom. I just want to learn what do they think they did right or wrong for their kids to be successful, and to me, successful could be even a doctor, right? I'm not talking about athletes or sport. But I want to learn from people that just went through that, and I'm sure they made mistakes. You know what my mother did?
Speaker 2She dropped an image of perfection or morality or goodness that most parents have. You know, you kind of view your parents as good and always well-behaved and generally, you know. She will talk to me in depth about all of her fuck-ups and the lessons that she learned. Things that you really wouldn't talk to your child about, but in the depths of mistakes, you have lessons, and how do I learn from her fuck-ups? Do you know what I mean? But most would be like, "No, that was a dark episode of my life that I'm not going back to."
Speaker 1That I really appreciate in her. You made me think of the thing, I don't remember the exact words, but I think there is Tony Robbins saying that a lot of people that are very driven, they are always trying to please someone since when they were kids, and I think it's one of their parents. He says, "You're always trying to please one of your parents," or maybe, you know, it might be slightly different based on childhood. So that is another thing, particularly when I hire chief of staffs, I always make them these questions, and I say, "You don't have to answer to me, but if you feel comfortable, think about that."
Speaker 2Do you want to hear something even more specific that everyone gets angry at me for, but honestly, I don't really care anymore? It's actually much more specific than that, and I've spent a huge amount of time studying it. Oh, really? Which is actually, most often, it is boys, and it is boys' relationships with their fathers, and it is a broken relationship with their father where they're trying to prove to them that they can be something they're worthy, and that is how it most often manifests, very rare, as I used to with my mother. Yeah, it makes sense. Really interesting.
Speaker 1Yeah. Do you have a relationship with your father? Yeah, he died, but I had a relationship, but I still think he set the bar, and part of what drives me is also probably, if I had to guess, something that, you know, almost to meet that bar, but I don't know. Did he see Eight Sleep become successful? No. It's funny, because if you go back to when my dad died, I was still a lawyer in Milan, so he wouldn't know. I live in the U.S. He wouldn't know I'm in Silicon Valley. He wouldn't know I'm an entrepreneur. He wouldn't know I'm married to a Mexican woman. Like, it's funny, because if you had the cutoff on that date, my life would be so different from what happened after that. I'm the same person, but in two different worlds. I'm sure he'd be so proud. Yeah, yeah. The early days was hard, because when I started becoming an entrepreneur, my mom didn't want, because my mom was a teacher in high school that, you know, in Italy, you make, like, probably 1,000 euros, something like that, 1,500, and so she didn't have any means if I would fail as an entrepreneur. But I was doing well at the law firm, and so I knew that probably my boss would take me back if I would fail as an entrepreneur at Allen & Overy, and so I took the risk. But I had the nightmares for many years after that that I had to go back to the law firm.
Speaker 2What advice would you have to a young person in their career on taking risk? I was a law student, too, by the way. Oh, really? I didn't know that. Because I was told that that was a secure life. We didn't have that much money, either. And it's like, you know that you'll do okay as a lawyer. Exactly.
Speaker 1What would you advise them? So we talk about this with Alex, with my wife, a lot, because we imagine this moment where I'm working-- so I come from this city called Ferrara. Ferrara is a 150,000-people city in the middle of Italy with a castle in the middle, and there are the walls from 1600-ish all around. And so now sometimes we joke about, you know, when she comes to Ferrara and we go see my mom, she says, "How the hell did you go from this city to the U.S. and Silicon Valley, AI, and everything you do?" And so we joke about, if you were meeting a kid now on the street, and he would ask you how to get where you got, what would you tell them? And the funny thing is, I thought about this a lot, but I don't have an answer. I don't know. I just kept moving things. I saw opportunity. I went for the opportunity. I failed here, but that opportunity unlocked that other opportunity. I had this connection, and so it's impossible to explain how you go from-- I didn't even speak English until when I was 24. I almost knew nothing about computers until then. And then after I graduated, I saved enough money with my first tiny startup-- call it "startup" in Italy-- and then my dad took a loan to send me to San Diego to study English. And then with that loan, I was able, because I graduated with honor, to get into the big law firms. But even then, everything changed. I'll tell you this story because my mom, one day, brought me back home. I was around 20-- 21, right? No, I was 20. It was my first year of college, and Italy was four years. And I was not a great student. I hated school. It was terrible. And so, I started university with just, you know, mid-level grades. But I didn't like the idea of becoming a lawyer, just a traditional lawyer in this small town doing tiny things. I wanted something international. And she brings this magazine that was coming with this-- a journal called "Sole 24 Ore," which is the Italian Wall Street Journal, right? And this magazine was talking about these big law firms that they were doing these international transactions, doing IPOs and securities. So I started learning about these law firms, and I discovered that the only way you can get in are two conditions-- you need to speak English, and you need to graduate with magna cum laude. And then, in my typical fashion, I said, "Okay, if those are the two conditions, I'll get it done." And so, in Italy, this course, when you go to college, are from 18 to 30. I was averaging 23. From that moment on, it was 30 with magna cum laude almost every single exam. I graduated magna cum laude, we take the loan, I go to the bank with my dad, they give him the loan, I go to San Diego, learn English, and then I get into Freshfields, then Allen & Overy, and then I become an entrepreneur.
Speaker 2But why? I can tell you, we used to go to Chelsea Football Club every week, and we didn't have that much money, sat in regular seats that weren't very good. This sounds really descriptive, and weird, I hated the smell of beer, and it was horribly aggressive in football stadiums back in 2000. You could never pee at half time, because there were too many men trying to get in, and I was five, six, seven, eight. And then one day, a friend of mine, who was very rich, took me to their box or corporate, and it was beautiful. It didn't stink of beer, it wasn't aggressive and horrible. You could pee at half time, and don't laugh. My eyes were open to like, "Oh my God, I hated it before." And life was so much better with money. And it gave me drive. Yeah. Where do you pin yours to?
Speaker 1well I think I always had that drive because I was doing a lot of sports before right so when I was
Speaker 2a teenager I was playing tennis but you've got to change your life to go from 23 to 30 and to get magna cum laude and speak English and go to San Diego why I don't know I just clicked and it's
Speaker 1funny because at least in terms of anything school related I never had that but then I'm the type of guy that when I have a goal then you don't stop me like I become a beast like I will outwork you like you can't stop me and something clicked and that is what happened back then then the why I don't know I just think I didn't want to work for the tiny two people uh law firm of my dad
Speaker 2doing um things in Ferrara that your greatest weakness because I too am like you but that's why I'm having a hip operation at 30 my shoulder is fucked and my knee is unrepairable I can't run anymore because I ran 100 mile races so often that my body's just so broken
Speaker 1I'm a beast I'm a broken beast it's the scene is what I was telling you before I have a scene I can't stop if you can put me on a boat in Sardinia I'll I like so much what I do that then the downside is I don't stop and I get bored after a few days and so that is why we call it the
Speaker 2scene can't relax right do you ever want to like one thing for me is I lie in bed at night and actually like my mind races and it's kind of sometimes very lonely alone in my head at night
Speaker 1now the people I admire the most not outside business not right people that you want to emulate are really people that you might find in many places in the world but call it in Italy because I'm Italian that are on the beach that they're just walking actually there is this guy we were having dinner like last week my wife and I and we we see this this gentleman and he's having dinner in a pretty nice restaurant we were in Milan for work and he's having dinner in this nice restaurant and he's there drinking his glass of wine I don't know I don't know I don't know I drink alcohol and he's eating a I don't remember but a beautiful meal and he's there perfectly dressed without the phone alone just thinking and obviously I know nothing about the guy I know nothing but I just say I admire the guy so much that he was there treating himself without looking at the phone just thinking and enjoying his meal in this apparently to me peace that is something I admire from people because I struggle with that. Matteo listen I so appreciate you being
Speaker 2so open I love conversations it's almost it's nicer the second time because you're able to have a friendliness that you don't have the first so thank you so much for being so amazing and this has been awesome of course thank you so much but before we leave you today we used AlphaSense on an investment that helped us close an eight million dollar deal eight million dollars baby that's a lot of money that's why I'm genuinely excited to have them as a partner on 20VC AlphaSense combines AI with one of the world's deepest libraries of market intelligence including expert interviews broker research earnings calls company filings and real-time news every answer is grounded in this incredibly trusted evidence and fully traceable to the original source which is so important so you can make really high conviction decisions with confidence but the best part they're building super analyst and always on AI analyst so instead of starting your day with another search you'll start with work you already done your coverage monitored the important development surfaced and your investment brief already waiting for you see for yourself head to AlphaSense.com/20vc that's alpha-sense.com/20vc while AlphaSense sharpens the strategy MongoDB scales the product every serious AI company right now has the same problem agents need accurate context fast most infrastructure though it wasn't built for it well MongoDB is 11 labs runs 40 million agents on MongoDB 75% of the fortune 100 run their most critical apps on MongoDB trillions of dollars moving through MongoDB every single day instead of stitching together 10 different tools you get one JSON native database vector search and voyage AI embeddings in the same system and it runs anywhere no lock-in if you're building an AI MongoDB for startups helps you move faster with Atlas and voyage AI credits and technical support to help you ship don't build agents that answer once and forget build agents that remember you want to learn from your real-time data go to MongoDB.com/agents that's m-o-n-g-o-d-b.com/agents while MongoDB scales the product Framer scales the story if your team wants a website that looks and feels handcrafted but is still fast to ship Framer is built for exactly that Framer is the AI website builder that helps creators teams and businesses ship production ready sites faster than ever while getting every detail right prompt inspect to edit and publish in one place at a whole new pace agents and humans work in tandem agents bring speed and scale you bring taste judgment and control the work lands on the canvas and stays editable build custom code components manage CMS content optimize SEO and audit for issues all in one place Enterprise grade hosting security and 99.99 uptime slas trusted by leading brands like perplexity and Miro learn how you can get more out of your site from a Framer specialist or get started building for free today at Framer.com slash 20 VC for 30 off a Framer Pro annual plan that's Framer.com slash 20 VC rules and restrictions may apply
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