He Sold His Car to Build This Startup, Then Pitched It for $1M 😳 #Startups #AI

One thing you learn that I didn't know is the CEO of a pre-seed startup gets paid last. That's part of what you sign up for. I had to sell my car, but I think we're in a great spot.

I don't have the eyebrows my dad has, so I'm gonna do this.

My name is Matt Harris. I'm the CEO and co-founder of a startup called Arcatar. So my career before being an entrepreneur was actually all on the investing side of the table. So I spent about a decade in later-stage private equity And then I spent the last 3 years investing in pre-seed, seed, and Series A startups, mainly as a deep tech investor. What

was that leap across the line like for you?

Yeah, it was, it was easily the hardest thing I've ever done, and it's the hardest, and it's still the hardest thing I've ever done. You really go from what is really an academic exercise, right? Investing is very academic versus running a company is very real, right? You're operating in You know, extreme uncertainty where you don't know if you're going to have the people and the cash that you need to make the menu of decisions that you need to make even 30, 45, 60 days from now. You know, one thing you learn that I didn't know is the CEO of a pre-seed startup gets paid last. That's part of what you sign up for. I had to sell my car, but I think we're in a great spot. I think, you know, my kids are getting to watch me do something that is hard, but I think very important. The moment that really stuck out to me that I kind of crossed over the threshold was when I was talking to my wife about this. We started dating when we were 14, and we've known each other since we were 10. But I was talking to her and telling her about the opportunity, and she basically said— I'm in. One thing that's great about Austin is it's a great place to raise a family and take big risks. I have a bunch of entrepreneur friends and, you know, we meet up at the playground on Saturdays and our kids play together and we talk about, you know, different issues we're having with our businesses. Mozart has always been famous, but I think for the startup ecosystem, During COVID a lot of the deals got done here at Mozart's and while walking around Lady Bird Lake. This is Lake Austin behind us, so it's one of the main places to go boating around here. It's becoming too much of an Austin thing, honestly. There's a lot of boats out here in the summer. I think one really cool thing about Austin is there's all these little sort of podunk country towns around Austin that are fun. Like Fredericksburg's one of the main ones, which I call Redneck Napa. It's a wine country town that's, you know, about an hour west of Austin. There's a lot of conferences here, right? So we're at one, Consensus, where you constantly have people all over the world coming into Austin. So it's almost— you can reach out to almost anybody in the world, let them know you're in Austin, and at some point in the year they're going to pass through. It's definitely out of my comfort zone, but I think when it's game time, it clicks on that this is a once-in-a-lifetime opportunity to be on a TV show. I rewatched Heavyweights this weekend, and I feel like I missed my opportunity to do an Uncle Tony entrance. I'm just thinking of that now. Blew that one. And so the heart rate's definitely, you know, 10x higher when you're the one pitching. My name is Matt Harris. I'm the CEO and founder of a startup called Arcatar. The story of Arcatar really started about a year ago when I was watching my 3 beautiful young daughters interact with gaming and the digital world. And I realized that it's going to be really hard for them to form trusted relationships alongside the rollout of all these new digital laws we're seeing across the world and alongside the proliferation of AI. At Arcatar, we've designed a native digital relationship structure that can actually thrive. We decided to solve the trust problem first in the area where most new digital relationships are being formed today, which is in the creator economy. Creators know next to nothing about even their most beloved and loyal community members. The trust and engagement level inside creator communities is super, super low compared to what it could be. And our solution is something that we've spent the last year building alongside 35 other creators. It's a cross-platform relationship and content management system that ports validated relationships and content. Now creator communities can have cross-platform relationships with other human beings. You know, imagine a gaming creator and they say, hey guys, there's this new platform, Arcatar, where if you'll come and follow me on Arcatar, I can actually— we can actually get to know each other and you can have more input into my streams. So it's really all about just strengthening the communities. And there's a ton of utility and functionality you can get from these kinds of relationships, but creators and game developers are using Arcatar To learn who their superfans are. Who are the human beings that follow me across all the platforms that I'm on?

You said this, uh, something about your daughters at the beginning, and I was like, I'm not sure I understood the link to what you're doing though.

I tried to open with heartstrings, you know, talking about my kids and how— and tried to tie that into what we're doing. Usually people like stories, and Adam kind of called me out on that. They're the people that I care about in terms of relationship structure, and I want them and all of us to be able to have trusted relationships.

And who pays for this?

So there's— the opening business model is freemium. It's $10 a year for gamers, $20 for creators, $30 for game developers. And that's one of the ways it's human only, right? Because bots don't pay. There's a couple other ways that it's human only. And then when we bring in brands, it becomes enterprise SaaS. And then we bring in the models, it becomes a transaction fee. So we've got 3 revenue I'm not quite extroverted enough to be comfortable pitching live in front of hundreds of people, but you can force yourself to have fun.

What's the user experience of having Arcitar? If I'm on one of these networks, how do I know that this relationship is more trusted?

I thought Josh asked a really good question, and I got turned around a little bit because there's 3 different personas in the app today, and the user experience is a little different for each one. Our view of the future is that what's going to happen is what is already happening, is that there's a new platform every 3 or 4 months. So you've got like Bluesky and Threads in just the last year that already have millions of users. And there actually are livestreaming platforms in Asia that nobody's ever heard of that have millions of people on them. So I think what's missing there is something that links everything together. Father of 3 daughters, so I think a lot about Taylor Swift. They all love Taylor Swift. There's no place where you can share just a link and they can just come click the link and go to where everybody is. We're really, we're really integrating the platforms together so that people can live, kind of continue to thrive on multiple platforms.

So once you conquer gaming, what's the next industry?

So gaming's huge. Today there are 3 billion gamers. I think healthcare will be next. Part of the reason that we started in gaming is, one, there's a lot less gatekeepers than other industries that need cross-platform validated relationships like healthcare, finance, and education. It's always fun to be around Adam. He's got great energy and just a very encouraging guy to be around. You get a lot of energy When you look out in the crowd and you see someone just nod, like you say something and you see someone nod, or when you see one of the judges kind of nod and approve, it just opens up the— it takes the conversation to another level. To get people used to this new form of relationship in gaming, they're going to take this new relationship structure out into their jobs. They're going to take it to their doctors, to their financial managers, and they're going to— it's going to change the expectations. And so we're gonna take it to every industry.

Well, Matt, thank you so much. Let's give Matt a round of applause.

I think I made it through the pitch all right. I went a little long. I got a little flustered with some of the questions. I'm gonna get back to work. Lots of work to do. No celebration until the money comes in.

What are your thoughts on our guitar?

As he said, it's really ambitious, right? Create a layer over all these other platforms. Everybody would want to be in that position. And it seems like over the course of Just the evolution of the internet, there's this swing between, is there going to be kind of one map, one big thing, or lots of things, and do you use an aggregator? There are services like text.com that let you kind of interface with all your different messaging systems from one place, and there's always a trade-off to that.

I love the thought that he wants to kind of personalize access to this kind of connection, especially on the internet where, you know, we know a lot of kids don't connect. To monetize that would be huge. I'm still not clear how it works. How do they have to grant access? How does that work? Is there a price to pay on that? I'm not quite sure. Matt's a very, very smart guy. He obviously knows what he's doing. But I'm not sure he is the first person to think about this. If he could scale this and get the buy-in of those other platforms, this could be huge.

The secret thing that he says very trivially throughout his pitch is Figure out who your superfans are. It feels like that's the message that I would probably encourage Matt to say. Let's see what's happening behind the scenes. It's a million-dollar crystal ball.

Hi, my name is Anirudh Flynn. I'm the CEO and co-founder of Failsafe.

Hi, I'm Larry Medvinsky.