E392: Avi Schiffmann, 21 years old, just spent 72% of his funding buying the Friend.com domain name.
Avi paid $1,887,843.00 to buy Friend.com.
And he spent $200,000 on a video from Sandwich Video.
This was a crazy gamble that is paying off - Avi and his video are going super viral.
But there’s more to the story than this.
I share Avi’s insane background - which he thoughtfully and consciously leveraged - and how Avi is secretly a master at branding.
Crazy story.
00:00 Buying Friend.com For $1.8 Million 00:39 The Video Gamble 01:27 Immediate Lessons 02:17 Avi Schiffman's Background 03:00 The AI Pendant - From Tab to Friend 06:04 AI Friend Concept 08:08 Funding and Valuation 13:12 Building and Branding 14:26 Final Thoughts
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This guy spends $1.8 million buying Friend.com, the domain name. Then he gives another $200,000 out of the total $2.5 million that he raised. He gives the $200,000 to sandwich video, which is the top video production company for making videos for startups. They've made videos for some of the biggest startups in the world. They've been around for decades now, gives $200,000 to them, so spends $2 million total on a stunt that could easily fail and waste all of the money that this guy raised. So he makes this video by his Friend.com, spends $2 million total, easily could fail. You may have even seen the video. There's a good chance that you might have seen the video, because the video is up to 11 million views. Probably more because of all the places that it's been shared. 10 million views on Twitter, several hundred thousand views on YouTube. It's being shared all around TikTok and Instagram. Again, easily could fail. Sandwich video does not always make viral videos. The reason this is going so viral is because a lot of people hate it. So I've been doing a deep dive into this for the last little bit. This only went viral yesterday, and I've been doing a deep dive on it. And there are so many details about it that is crazy. So the lessons that I am taking away is I get really actually super excited by this story. The lesson is build, build, build, because you can do ridiculously, you build up brand. Actually, I just made the video that I just put out on Instagram Reels and on TikTok is about how Pokemon Sleep, a mobile app that Game of Fire Sleep was released one year ago. And since then, it has made a hundred million dollars in revenue. Why is that? Well, Game of Fire Sleep has been proven now for many years as like a popular app. Then you take the Pokemon brand, which has been built over the course of decades. I've played Pokemon as a little kid. A lot of us did. And you combine those things and you make a hundred million dollars easily within the first year. And that's the power of brand and Avi Schiffman, the guy who started this company, friend.com, which is now going viral, Avi actually has a strong brand, a crazy brand. And a lot of people, I think he looks like an idiot to a lot of people for doing this. He's this guy with his dye blonde hair and people are like, oh man, this is this kick. He just spent two million dollars on this, but actually, if you look at Avi's background, this guy is unique and talented and he has invested in a brand. And so that's what I'm going to be sharing. It's investing in a brand why you should just always keep building. It's like this is a not give up story because you get your moment and this guy is getting his crazy moment right now. So now we go back to the beginning of this year. We go to January, January 10th of 2024, we're going back in time, a couple of months to January 10th of this year. And the headline of this fast company article is Avi Schiffman's tab AI necklace. It previously was called tab tab AI necklace has raised 1.9 million dollars to replace God. Schiffman describes his anticipated wearable AI as a superpower, Tamagotchi. If the meme of five response and recent layoffs or any indication are first piece of AI hardware, he means 240 million dollar AI pin from the ex Apple duo, Imrod and Bethany appears to be dead on arrival, but that hasn't stopped AI enthusiasts across X from buzzing about another entrant in the category. I'm actually not referring to the highly anticipated iPhone of AI being developed by open AI and love form with 1 billion dollars in funding from soft bank. And I'm not also talking about the rabbit R1. I'm referring to a relatively humble pendant, a wearable AI microphone called tab developed by 21 year old Harvard dropout of me Schiffman. And this is where it starts to get crazy. So I wasn't surprised to read that the guy who spent 1.8 million dollars on a domain name and then $200,000 on his video on a single video was 21 years old. I wasn't surprised to hear that personally, I think $2 million we way better spent on hiring an army of creators and just trying to pump out thousands of videos because I would bet one of them would be more viral than this single viral video and you would learn how to make videos and you would build a brand and it wouldn't just be a one off stunt because the hype around this could die really fast, but for now it's very exciting. Personally, I would again, I would use those $2 million to invest in a lot more long term work in the place SEO and video channels, but it goes deep because this guy has been building for the last four years, four and a half years now, you've been building a lot at age 17, Schiffman built a massively successful COVID-19 tracking website that welcomed tens of millions of users daily. He became a youth ambassador to the UN and received a Webby award from Anthony Fauci himself. Schiffman claims to have turned down the millions of dollars in advertising because he didn't feel comfortable profiting on the pandemic. Then at 19, Schiffman founded another helpful site Ukraine Take Shelter that he says matched 100,000 displaced Ukrainians with open homes. By the way, if you don't know what friend is yet, if you don't know what his like pendant is, it's going to be described in a moment. Schiffman has a knack for building critical, minimum viable products by focusing on the readily available technology of today. He knocked around the nonprofit sector with his own platform internet activism, hoping to scale his approach to other causes before spending nearly the entire last year turning his attention to generative AI and developing tab. So tab, it's called friend now, he rebranded it since then, but this is in the article tab is a small puck that hangs around your neck and listens to everything you and the people around you say, essentially just a microphone and a battery that lasts up to 30 hours between charges. It uses Bluetooth to beam your audio to your phone and into the cloud where chat TPT currently transcribes your conversations and various AI models will extract insights for you. Its user experience isn't final, but assume you'll use your phone screen for most anything you want to do. Ultimately, tab is meant to be an AI companion or what Schiffman calls a clarity machine that rides along in every moment of your life. Lots of other companies are doing this now, which I think is why Avi pivoted to having an AI friend because AI friends are ready making money. These AI bots that are friends are already making a lot of money and the competition for the pendants that just record your life and take notes for you, competition's really high. There haven't been AI friend pendants that have gone super viral, that I have seen at least, but I have seen many AI pendants as note taking companions that have gone super viral and it was a very easy pivot, it's just software. The article continues, again, this is from seven months ago, tab is not an assistant period. I'm not building something that's going to connect to notion or your emails anytime soon. I'm solely building a friend that morphs into your creative partner, life coach or therapist as needed. What I'm trying to do is create a new relationship in your life, radical transparency without concern of judgment. I think this is a relationship people used to have with God, but is lacking in the modern world. So crazy. And this is again, back in January, since pre-orders launched in October, tab has sold a hundred thousand dollars in early units at a six hundred dollar apiece price, which includes a year of service at fifty dollars a month. So it already has sold a hundred thousand and the people that he has raised from are in scene in this fast company article. It says shiftman also reveals that he's raised one point nine million dollars on evaluation of fifteen to twenty million dollars from caffeinated capital, Austin reefs reef capital, Corey Levy, some other people, Solana founders and the founder and CEO of perplexity AI. That was from seven months ago and from just yesterday tech crunch reported shiftman has raised two point five million in funding at a fifty million dollar valuation from the same investors perplexity CEO Solana founders morning brew CEO Austin reef. Now it's possible that one point nine million was raised at this fifteen to twenty million dollar valuation and then an extra six hundred thousand dollars was raised at a fifty million dollar valuation. My guess is that's what happened and that the journalists who are covering this are not doing a very deep job where they're just choosing to leave out the point because this is in tech crunch and tech crunch isn't saying anything about the one point nine million that he previously raised and this is from yesterday this story is going so viral. So this guy, Avi, he has a crazy background has done all these things and then he was able to use these connections and sell himself and raise one point nine million. My guess one point nine million at a fifteen to twenty million dollar valuation and then an additional six hundred thousand at a fifty million dollar valuation. That's my guess from top investors then he just does this crazy stunt he pays. This is now from yesterday AI friend company spent one point eight million and most of its funds on a domain name that's not a lie friend and AI companion company announced today's it's spent one point eight million out of a total of two point five million it raised to start the company on its domain name friend.com according to its founder Avi and a screenshot of the transaction I looked at the screenshot he paid one million eight hundred eighty seven thousand dollars for friend.com in response to a question on Twitter from someone who asked him how much he paid for the domain shiftman tweeted one point eight million which I assumed was a joke because fast company previously reported that he raised one point nine million to start the company tech crunch reported today that shiftman raised two point five million at a fifty million dollar valuation shiftman confirmed to 404 media that he has raised close to two point five million I'm assuming it's total because it doesn't say that it is an additional round and the game changer feature was that this a friend sends text to you so if you buy it you have it it's listening and now it's just going to send random texts you kind of like a friend based off of what is going on in your life what it is what it is hearing like it is there with you and that is what the video this viral video is viral video is like you're going anywhere and you have a friend with you and the tagline for this is so funny it is friend not imaginary this guy is a master branding seriously a master of branding he calls it friend not imaginary what he does is he takes this anger that a lot of people feel about how popular ai companions are becoming because a lot of people feel like these people who will have ai friends they should learn how to make real friends they will be a lot happier and more fulfilled there is anger over that because lots of younger people are adopting ai companions and ai friends and avi makes this video he pays two hundred thousand dollars by the way I know it's two hundred thousand because my friends almost decided to go with sandwich video to make a video for their company they raised seventeen million dollars and they talked to sandwich video bunch they were quoted two hundred thousand dollars and they decided not to do it they said it wasn't worth it and now actually what they're doing is they're hiring an army of creators just like I said they're paying the creators a hundred dollars per video they're gonna learn to make great content across TikTok and Instagram reels and YouTube shorts they'll probably make a lot more viral videos with two hundred thousand dollars spent on two thousand videos rather than just gambling on one video I have made only around twelve hundred to thirteen hundred videos so far since starting November 1st 2022 and I've had hundreds of billions of views on my videos since then however this is crazy because here's what's gonna happen Oveni's gamble paid off first of all he actually is getting a lot of people buying the product and now he's going to use this hype to raise an insane round at an insane valuation and he's gonna be set like clubhouse he's gonna be set this company is gonna be set for a long long time an obvious a smart person you might actually figure this out this is such a wild stunt such a wild story to a start of what could turn into a big company and it really feels like a gamble the guy is smart and I gotta give him credit that's what I wanted to share today the lessons in this are build a lot because you learn obviously he's probably been building way before 17 years old 17 years old is just when he had his first hit but he's probably been building for a long time before then build build build I share all the time in the show I don't think you need fundraising to do anything I've convinced many of my friends that that is not necessary but the more you are building the easier it becomes to raise money I actually had I don't want to name this person but one of my close friends is an executive at one of the biggest companies in the world super connected and he wanted to raise around for me he just he's like I know all these people like can I raise money for you and get a slice of the company and I'm like I just don't want to raise money and I told him that I just I don't need it I don't want to do it but he's like oh there's crazy momentum behind Edward oh my god I want to be part of this my point is the more you build the more you talk about it I say all the time talking about it is very important you want to get top of my awareness building in stealth is dumb it also prevents you from learning but the more you build the more you talk about it the easier it becomes for you to raise money if that's something you want but oftentimes you discover you don't even want that if you do it becomes easy to do that and I like obvious story you did some crazy things and it worked out this is a crazy stunt it doesn't always work out but it didn't this case I just think it's a it's a cool story very interesting there are lots of things to learn the reason I knew this was a good story was because every different line that I would read in these articles I would send to my friends like this is crazy so I'm happy that I got to share it with you today this is episode 392 of my daily digital marketing podcast I do this thing every day seven days a week this is your first time listening literally I have done 392 episodes in a row every single day without missing a day since starting thank you so much for watching thank you so much for listening go check out the friend.com trailer if you haven't already it's very entertaining and I will talk to you again tomorrow bye now
