Inside MrBeast's corporate structure
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I'm Yasmin Gagne. I'm Josh Christensen. And this is Most Innovative Companies.

On today's episode, Fast Company contributing writer Ryan Broderick. People can look at his videos and immediately understand that there's something icky here. Producer and musician James Blake. It doesn't promote a sort of cult of personality slash image. It promotes the music. And as always, keeping tabs. Oh, I want someone who's tall, dark, and handsome. That person is not dark at all, and most times they're not handsome. But first, here's the download. ♪

The news you need to know this week in the world of business and innovation. The GameStop news keeps coming. Meme stocks galore. The company reported its first quarter earnings ahead of schedule last Friday in the wake of the return of Roaring Kitty, Keith Gill. Rawr!

That's our roaring kitty. Believe it or not, that was Yaz, not an actual kitty roaring. The report showed a 28% drop in sales for GameStop, and the company said it plans to sell up to 75 million additional shares of its common stock.

That makes me sad. Anyway, United Airlines announced that it is going to start incorporating personalized ads and feedback entertainment screens. Hell yeah. About time. Oh, my God. The airline has formed a media network called Connective Media to handle passenger data and sell ads to brands. Connective Media has already made deals with several brands, including Norwegian Cruise Lines, Macy's, and Chase.

You know, I really hope Carnival Cruise Line gets in on the game. They really need some PR hope. And I think that the most likely people to buy a Carnival Cruise Line are people trapped in a long coach seat flight. It's so funny to be on a flight and have somebody be like, take a boat.

Next story. Walmart shareholders voted down proposals on animal welfare, racial equity, workplace violence, and others this past week. Shareholders argued that these proposals, quote, weren't necessary.

One specific example of a proposal that wasn't necessary was a human rights impact assessment that would better track supply chains to hopefully curb the cost and impact of human rights violations. Hell yeah. Elliott Management has taken a $1.9 billion activist stake in Southwest Airlines. The hedge fund is making a

pushed to replace Southwest leadership, namely CEO Bob Jordan and Chairman Gary Kelly, with outside talent. Elliott Management has stated that it believes Southwest leaders are not up to the task of modernizing Southwest. What company would you take an activist stake in, Yas? Dude, Maltesers, and I would make them make those cookies I mentioned before. More

Or widely available or Cadbury's with their chocolate fingers. That's true. This is very on brand for you. What's your activist stake? My activist stake would be a steak, I guess. Omaha steaks. A very unserious answer. But moving on to our final news story, Apple is getting into the generative AI game. The company who has been more cautious about jumping into the fray will be rolling out a product called Apple Intelligence.

The technology will prioritize things like messaging and notifications, plus feature writing tools and a major upgrade to virtual assistant Siri. Sorry to everyone whose Apple products just went off after I said that name. And that is the news you need to know today. So Josh, who is your favorite digital creator? You know, I don't even think I know his name, strangely enough, but I think I'm the biggest...

like most frequent stan of an account that does uh have i told you about roll for sandwich before no i've never told you about this i cannot remember this guy's name i don't think i've ever bothered to learn but i love this channel so much so for the past like

two years this guy has basically randomly generated sandwiches by rolling Dungeons and Dragons dice oh you have told me about this guy honestly I look forward to it every Monday Wednesday and Friday when he posts it out it's my favorite thing that many times yeah he used to do it five times a week and then he cut it down to three times a week but he has you know I think we're

nearly 300 sandwiches in at this point, maybe a little bit more than that. That's crazy. It's endlessly fascinating to just, uh, to tune in and watch him roll dice for bread and then main and then cheese and all of the random things and get some sometimes surprisingly great combinations and sometimes some terrible combinations. It's the escapism I need, really.

On my Monday, Wednesday and Friday. What about you? What's your favorite digital creator? Yeah. So there's this monkey that is a social media sensation in China named Sing Sing. And I'm obsessed with her. There's this monkey. If you start every story with there's this monkey, I'm on board. She's a Tibetan macaque and she has a really sad story. I can't.

She's a Tibetan macaque. I understand that's a true statement, but I just have to acknowledge how stupid that sounds.

She's a Tibetan macaque and she's so adorable. She has a really sad story, actually. So she was like she lost her arm when she was a baby in a poacher's trap. And then she got taken in to a Fujian circus and then she either escaped or got rescued. And she was.

basically got caught in another trap while she was pregnant. And then this Buddhist nun monk, this woman, they call her grandma on the channel, found her, rescued her out of the trap, and now they're best friends, and there's Instagram videos of them. And it's mostly like Sing Sing is like really sassy, and she eats tons of fruit, and she's like really large now. Yeah.

I'm obsessed with her and I cannot recommend it enough. So why are we talking about digital creators? We're talking about digital creators because this segment focuses on the biggest one around. That's it. Mr. Beast.

So basically, a nonprofit founded by right-wing billionaire Charles Koch was a key contributor to a recent video produced by the popular content creator. The video, titled We Schooled Hundreds of Teachers, was uploaded on April 30th to Beast Philanthropy, a second channel Mr. Beast uses to showcase charity work. Mr. Beast, whose real name is Jimmy Donaldson, lists the organization Stand Together as one of the main financial sponsors. Stand Together was founded by Koch in 2003 as The Seminar Network.

It describes itself as a philanthropic community dedicated to tackling the country's biggest problems, which range from education initiatives to what it calls freedom-minded solutions. You listeners can't see our script, but there were so many scare quotes around all of these, which really... Especially freedom-minded solutions. I'll let you fill in the blank on what that means with the Koch brothers. But

But what we're going to focus on today is how Mr. B's corporate structure operates. Here to tell us more is Fast Company contributing writer Ryan Broderick.

So I want to dive in and talk a little bit about Mr. Beast and Mr. Beast's philanthropy. And for those who don't know, who is Mr. Beast? Right. Mr. Beast is, as of last week, the most subscribed YouTuber in history. He is arguably the biggest Internet creator ever. His name is Jimmy Donaldson.

And he goes by Mr. Beast. And he's essentially a Gen Z game show host on the internet. But his videos are like very strange. And people don't like him because like of his personality. He doesn't have... There's a few things around here. Yes, I just...

Do you know intimately who Mr. I knew you know, I was like, I was like, he's this guy who's kind of dead in the eyes. And he hosts these really compelling YouTube videos. I will say for my personal taste, he's not like the most captivating person in the world guy like, yeah, but he's but his videos are more about the stunts in the videos is what I was trying to say. So why is he so popular? Ryan? I guess this is unpack why people like things how they'd like them.

Sure. Yeah, no. So he, he is a student of PewDiePie. He has admitted that he spent... I never knew that's how you pronounced it. PewDiePie. Yes. If you go to the very earliest Mr. Beast videos, the ones that he hasn't deleted or hidden,

you can actually watch him become Mr. Beast. It's really fascinating. He basically figured out that if he gave, this is gonna sound crazy, he figured out that if he gave $1,000 to a homeless person, he would make that much money and more back in YouTube revenue from going viral. And so his formula since this video, I think it was like five or six years ago, has been give people X amount of money to make Y amount of money back

in sponsorships and ad revenue. And so the whole MrBeast project is essentially converting internet traffic into money by putting money into internet traffic. And he has used that to become the most successful creator of all time. - And give us an example of some of his videos. - Oh boy, so he's got a lot of good ones, right? Like he locked a guy in a house for 100 days, I think it was, and then he destroyed the house while the guy was in there.

There's another one where people had to live in a room for a couple months. He's destroyed really expensive cars. Oh, my favorite one is he drove a train off a cliff, I think, or a train into a pit. It's a very simple video, which is the train goes into the pit. Really enjoy that one. It feels just two degrees removed from Squid Games, which he also spoofed. He did. He spoofed Squid Game, and he looks like...

How an alien civilization would torture human beings. That's what his videos remind me of that, like an interstellar prison, if you will. Like they look like they've been translated from other language. I also think they feel like a trailer for a TV show that doesn't exist because he's very big into what they call retention editing. So like his videos, you know, they might be 12 minutes, but no, nothing lasts more than a couple seconds. It's just blasting you with content nonstop.

Oh, he also, he climbed a mountain in Antarctica and then he sponsored the mountain with Shopify. So he planted a flag for Shopify on a mountain in Antarctica. That's another big one. So dark.

You sort of explained earlier how his philanthropy is kind of twisted, right? Like you're giving $1,000 to a homeless person to make more of that back. But let's dive a little bit into his philanthropic endeavors. He received some backlash over past projects. Tell me about those and tell me about his response. So it all started last year when he made a video about

where he cured like a thousand people's blindness, quote unquote. He basically paid for LASIK eye surgery for a thousand people. I actually found that video really compelling. I'm not saying it's good. I don't think there's anything wrong with his videos. They just are edited for YouTube children. So they look psychotic.

And this video, this video had a literal counter. So he has his own custom Comic Sans style font. I forget the name of the font, but it's like his own font. It looks like Comic Sans. And like there's a counter at the bottom of the screen of this video that's like counting blind people cured. Like that's the level of like nuts that his videos can get. So people are kind of disgusted by this video because it just feels very tactless. Yeah.

in a way that's very hard to describe. - Yeah, I think the question with that video came up with, okay, you wanna be philanthropic. A lot of his videos are like normal people doing kind of like hands on a hard body type challenges.

to win some money. But then when they cross into this, like... Do not pretend that is a normal reference. Hands on a hard body? No one remembers this? He's... You've told... You've talked about this to me. Is that where you put your hand on the car? Yeah, the last person with their hand remaining on the car gets the certain amount of money, which Mr. Beast has also done. Has he? Yeah, he has done. He did it with a private jet. What?

That shit would destroy me. The shitty part that some people like the dichotomy here is, yes, did he help some people who probably wanted that help? Yes. But he also like paraded people around like it's charity porn. There is an unmistakable exploitative thing. Yeah. And it has gotten worse. At the end of last year, he made a video called like I built 100 wells in Africa.

Which is when people got really mad and he tweeted back basically being like, why are you mad at me? I'm helping people. And that is kind of where things were left is that he doesn't seem to get why people are upset.

Right. And like just to put it in plain terms, like why are people upset? I would say that people can look at his videos and immediately understand that there's something icky here, whether it's the way that they're filmed, the way that they're framed. I mean, the fact that he calls it like Africa and not like the country of wherever he is, like he tends to take these big global issues like climate change or poverty.

And he diminishes them. He depoliticizes them. He shrinks them and makes them fit inside the format of a YouTube video. And he makes these videos to go viral. And he doesn't see anything wrong with that. And I think the average person, a lot of people watch these videos and they say like, it feels weird. It feels weird that you're doing this. It's basically like stunt...

turning charity into a stunt, if that makes sense. Yeah, there's something performative to it. And, you know, there have been like performative charity TV specials forever. Also, remember Kony 2012? I never forgot. We're going to get him one day. We're going to find him. I really think Mr. Beast has a shot of finding Kony. I think that's the next project he's got to embark on. So to go back to the videos,

How does this all end up happening? Like how do the Koch brothers get involved with a MrBeast video? Yeah, yeah. So I spent a few weeks trying to like get anyone involved to talk to me because he does not. Like MrBeast, if you email, by the way, if you email his philanthropy arm, which is called Beast Philanthropy, they just send you back like a JPEG, like a Comic Sans JPEG that basically says like we don't have the resources to respond to everyone.

And they sort of assume you want money. So they're like, we can't help you. So I didn't get a lot. I didn't get very far with them. It's what I should do with my out of office message. Yeah. I think it's a very effective outreach strategy. So I spoke to...

A press officer who worked at the school that Mr. Beast spotlighted in one of their videos. So there's like this school called Ron Clark Academy. It's in Atlanta, Georgia. And their press officer spoke to me and confirmed that what happened was Mr. Beast went to a football game at East Carolina University. And there he met.

the CEO of a Verizon retailer and the Verizon retailer connected Mr. Beast with Stand Together, which is the Koch brothers organization. From what I can gather, Ron Clark Academy is fine. It's like a good school. And like the only criticisms I've found of it is that its model is completely unsustainable for anyone that doesn't have an incredible amount of money to fund it. It's like a really,

well-funded nonprofit private school started by Ron Clark, who was a teacher and also a survivor contestant who was able to raise a lot of money to make this school. And the school, from what I can gather, is fine, and they go viral a lot. They were in like a Ludacris video, and they went viral with the premiere of Black Panther, I think in 2018. They get around.

And it's like a good, it's a good fit for Mr. Beast because it's a very Mr. Beastian looking school. Like it fit the aesthetics of his videos very well. But the video is funded by an organization that perhaps had political policy objectives that aren't the best. Yeah. What is the funding model behind his philanthropic endeavors? You know, like when Mr. Beast is making something, how does it happen? How does he give money to charity? Right. So...

We don't know a lot about how the Mr. Beast Corporation or the corporate universe of Mr. Beast operates, and I think we should. I know that he has Feastables, which is his candy company. I actually ate one recently. Is it good? Yeah.

It's pretty good. Yeah. It's pretty good. I know. And you know your candy. I know. I'm a candy addict. And I grabbed it. It was like in the, you know, the area when you do self-checkout at Target. Oh, the impulse buy section. Yeah. Did it have the Mr. Beast golden ticket inside of it? Oh, no. Oh. I do think I would be here if it did. Yeah, right? Yeah. If I had Mr. Beast candy bar money, I wouldn't be podcasting. That's for sure. So, yeah, you were talking about how...

his philanthropy is kind of a black box. But what do you know? ProPublica has like this great resource where you can look up different nonprofits and see, you know, what their tax filings look like. And the most recent one for Mr. Charity, which is the corporate entity that owns Beast Philanthropy. Sorry, it's really hard to get through this stuff. But yeah, so Mr. Charity is

received, I believe, $10 million in contributions in 2022, and they spent $8 million in expenses. And the bulk of the revenue- I mean, yeah. I know there's a lot of overhead, but that does feel like a lot, a lot of overhead.

So the Mr. Beast philosophy, if you will, is that... And he's done a lot of interviews about this, where he'll say like... Oh, you spend money to get money kind of thing? Yeah, but he's gone further where he'll say like, you know, like, I sleep on the floor of my studio and all of the money I make goes back into making the best content possible. He talks about this a lot, where he doesn't have a life. He doesn't really... Like, he doesn't have interests or hobbies. Like, the only thing he focuses on is this project, the Mr. Beast project. And he's done a lot of interviews about this.

And so I wasn't shocked to find that he's receiving millions of dollars and he's spending millions of dollars within his charity. And in a certain sense, that is kind of why charities exist, right? Like you donate money to them and then you spend that money. And he's not paying his corporate officers a lot, like according to the tax returns. He's just spending it on viral content. The problem is, the black box issue here is that he is on Twitter right now, on X, I'm

sorry, right now telling people to just donate money and he'll do whatever they want. And that is the issue here because he is making videos about climate change, about school privatization, about wealth inequality around the world. And he's receiving money from institutions like

willy-nilly. And that's why this video was such a lightning rod, I think, because you have an organization like Stand Together, which is part of a larger network of right-wing dark money, let's say. And one of their big issues is climate change deregulation and also school privatization, or what they call school choice. So that to me was sort of the big issue here, is that Mr. Beast is advertising this private school

And it's being funded by an organization that believes quite strongly that there should be no public schools. So we had a debate in the newsroom when we ran an ad from the Kingdom of Saudi Arabia in our pages. To be honest, I was kind of on the side of like, I would really like to have a job and we're not making any money in media. But there was a clear separation between advertising and editorial content. Like that ad did not influence any of our editorial content.

Do you think Mr. Beast's project is different? Like, do you think people might, you know, confuse the two? Or how do you think about that? I believe in the editorial integrity of Mr. Beast. I believe he would never cross those lines. I don't think he thinks very deeply about this stuff. That is my take on it, is that he is not... He doesn't really see an issue because I don't think he's ever gone as far as, say, like Sam Bankman Freed in terms of, like, talking about a factor of altruism. But I do believe...

he is sort of influenced by this mentality. Based on the interviews I've seen of him,

He believes that if it can go viral enough and it can make enough money, it's a net positive. And I think that's kind of where he stops thinking about these things. I don't think... And, you know, let's be honest. He's, what, 26 years old? And he's been famous for 10 years, maybe? So I can kind of understand why he's not thinking about these things. He also runs his entire operation. It's not like a traditional media company. It's him. And then now literally a small town supporting him. So I don't really know if there's...

checks and balances in the Mr. Beast universe. And I think that causes problems for him. And based on his own sort of responses to those problems, they clearly bother him. But I don't get the sense that he understands why. I do want you to explain the draw for Mr. Beast to do charitable things. Like, do you think it's just an altruistic move or is there more behind it? Charities are a great place to put a lot of money if you're making a lot of money.

All right. That's just how the U.S. tax system exists. And there's nothing wrong with that. That's why they exist. So if you are a 26-year-old making hundreds of millions of dollars a year and you need a place to put some of that money, a charity is a great place to put it. And honestly, like the work that he's doing, I haven't found any sort of like Mr. Beast comes to town six months later. There's no indication that he's doing anything underhanded.

And I'm sure there's great incentives for parking money in his charity. He then films it for YouTube and makes everybody upset. That seems to be the main issue. It's a weird thing because I struggle sometimes to like, or at least I sit on the fence sometimes with, this conversation is not just around Mr. Peace. I think it's indicative of a larger conversation we have over the creator economy writ large of the sort of commodification of

just about everything for content. And there's a lot of like hacky opinions where people are like, oh, you know, all Gen Z and millennials care about is, you know, taking their phone out and putting things on the internet. And some of that is valid and some of that is not. But the larger thing with Mr. Beast that just makes people feel icky is...

Just that camera aspect of it, it just feels like a larger cultural touchstone for people that's really a wedge issue, what to put online and what not to put online. I also think that there is a certain amount of scrutiny that starts to pile up the more you go viral. And when you're operating at a level like Mr. Beast where he is always going viral, nothing you do is perceived as authentic anymore because everyone knows it can't be. Like,

Like he's admitted that he like A, B tested whether he should smile in his thumbnails. Like he's this level of obsessive about like the performance of his content. So you can't spin around and be like, look at me. I'm curing people's blindness. Isn't that great? And it's like, no, dude, like nothing you're doing points to the idea that you're doing it authentically. He's even said in interviews that he strips out moments that show his own personality because it's bad for traffic.

So you can't have both conversations simultaneously. That's the issue. That's so strange. How bad is your personality? Like it's of a medium that's driven by no, we need more personality and less. Hey, maybe that's why we don't. Maybe that's why our listener numbers. Yeah, that's why we don't have Mr. Beast numbers. We need producers strip out more of Yaz and I's personality. Clearly, it's off-putting.

I mean, you joke, but like I've spoken to some very big like creators on meta platforms in particular. And they'll say like the more you reveal your personality, the less traffic you do. And so there is this tension there. So we should all just be. We should all. Yeah. Flat. This is why AI is definitely going to replace us. So.

Just to talk about his business a little more, can you tell us kind of how it works? You know, it sounds like he bought a hotel at some point. He's obviously got this candy money. Like, how are his business finances structured? I do know that he is currently in a lawsuit against the company that is running his burger stand in the American Dream Mall in New Jersey because he was upset at how bad the burgers tasted.

So that's a little... That's actually awesome. Yeah. Hell yeah. This is the thing. I don't think he's malicious. We're used to this idea of like the Logan Pauls of the world, like doing these insane things that are like awful. But the further you dig into Mr. Beast, the more you realize it's weird. It's not like on its own. He's malicious. He's a weird guy. Yeah. Yeah. That's why I don't know really how to feel about this. Like everything with Mr. Beast. Like I have an underlying sense of like...

uneasiness, but then I'm like, what's really bad about this? I guess it's more about nuance, really. - I like to think of them as, the unease that we feel is because we're sort of staring at YouTube's algorithm stripped raw, right? Like we're seeing exactly what you need to do to be the most viral person on YouTube, and it feels strange.

Looking at the face of God. Yeah, we're staring. To look at Mr. Beast is to look into the abyss. Like we're seeing the bottom of the void. That's the title of episode right there. It is the true beast that we are seeing. He's at talks with Amazon to launch a game show, right? He's crazy.

got a whole bunch of random things going on. So he definitely seems to have reached a plateau. Like if you look at his numbers for his videos and his subscriber counts, he's not growing as fast as he used to. He's still growing, but the rate has definitely slowed. And I think he's the type of person to notice this. He's clearly trying to find an off ramp. The other thing is that 26, 27 is kind of the line in which you can no longer really be

a YouTuber for the demographic you're used to. Like you kind of age out or you become a child performer. And I don't get the sense that he wants to be that. What if he does like dad content, like pivots to, you know, like. You joke, but that's what PewDiePie is doing right now. He moved to Japan and he got married. And I think he has a kid now and he just does like dad content. He's learning to draw. He's learning to draw anime.

And he's in Japan. I'm not even joking. That is the most recent videos is that he's learning to draw. That's the pivot I want to make. You sort of talked about this a little bit, but it sounds like he has a whole bunch of businesses, possibly in part because he doesn't want to pay that much in taxes. Is that fair to say? What I would say is fair to say is that if you make a lot of money, you need to put that money places.

And, you know, a good businessman figures out vertical integration and, you know, he's got his candy company and his charity and real estate and lots of fingers and lots of cookie jars.

And it all seems to be kind of going towards this idea of making the best quote unquote content. He's trying to produce the biggest, best YouTube videos of all time, which is, I think for anyone born before 1998, a bizarre idea. Yeah. But for him who was, who grew up watching video game streamers in which YouTube was top of the world, like that's actually not that crazy. Like he just, for him, YouTube is everything. Right.

Right. I feel like you could totally buy a hotel, get people to sign waivers, put a bunch of cameras in it, and just, like, call it a reality show. Oh, yeah. You could. You know? Like, I don't, I feel like that's, like, a very solid business model. I'm sure he, if he hasn't already done it, he probably will. It's coming. So, Mr. Beast is the richest and biggest internet creator. What's his net worth, by the way? Do you know? Over $500 million. What the fuck?

As of this year. That's crazy. Yeah. He's making a lot of money. But he claims that he doesn't have any because it all goes back in to the operation. That's the important thing. Well, Mr. Beast famously hates being, I don't know if it's written about or talked about, you know, and he'll tweet things like he mostly says, like, I know I'm going to get canceled, but this doesn't matter. Do you think he's read your article yet? Uh.

I mean, I spent all weekend, you know, waiting to see if at least his fans would find it. And a few did. But I also think that if I had made a video, maybe. Mr. Beast can't read. You heard it here. I just think if you're a certain generation, you get your news in different places. And I don't think he may have read the article. What do you think of the vibe of his fans?

Like, who do you think they are? Just like weird white guys. That's sort of my... And teens. That's my impression. And my husband. It's really weird for me to think about it because like these type of people...

I don't think really existed when I was in high school, but like there is like a whole bunch of Gen Z and Gen Alpha kind of young men who idolize CEOs and sort of treat them like celebrities and like want to be them. And I think...

You know, if Mr. Beast is like the Charmander and Elon Musk would be like the Charizard of these people. Right. Yeah. I guess the equivalent would be like, do you remember like the first kid in your high school, like bring a laptop to school? Yeah. Yeah. It's like those kids. They were just rich. Yeah. Just like, oh, fuck. I imagine the average Mr. Beast viewer is like 15 and a half.

and owns Bitcoin and doesn't tell their parents they own Bitcoin. Yeah, that makes sense. Well, this has been a very weird story, but thank you so much for telling it to us. Super weird. But it does matter because this guy is really, really powerful right now. And we're still treating him like an influencer, like kind of like a culture curiosity. But he's at a level where he's taking money from the Koch network. And that's, I think, something worth scrutinizing. Yeah, for sure.

All right, we're going to take a quick break, followed by Fast Company Associate Editor David Salazar's interview with musician and producer James Blake and Vault founder David Greenstein. Okay, now we're going to hear an interview with David Greenstein and musician James Blake. Greenstein is the founder of the music subscription platform Vault, and Blake was the first artist on Vault and has been vocal about its potential as a new way for fans to engage with their favorite artists.

Associate Editor David Salazar chatted with them about experimenting with new ways to monetize music. Thanks for joining me, you guys. Thanks for having us. Thank you for having us. I am very interested to hear sort of what your thinking is behind Vault and sort of the circumstances that you think are making a good time to launch something like this. So yeah, I would love to get from both of you where the idea come from. I know that you also work

with another music discovery platform. Would love to hear where the idea for Vault came from. And then James, if you could talk about how you got involved.

So I'm David, I'm the founder of Vault. Got lucky as a kid working at Atlantic Records when I was 13 because Craig Kalman, who still runs it, went to my high school. And I've always been obsessed with new ways to monetize music. I think music is one of the most under-monetized media assets in the world, which I'll get into. And I think the way in which music is discovered and released today is incredibly stressful and wanted to create new ways for artists to be able to put out music.

And Vault was really initially meant as an experiment on how do you get people to spend more money on music in a world where music has basically been devalued to essentially zero. Most of my friends are not trying to spend any additional money because they get all the music in the world for 10 bucks a month. And so

Vault was an experiment around when thinking about which music people would pay for. It was really centered around unreleased music because that's the only music that people don't already have access to. And we wanted to experiment with like new ways to monetize music because today, you know, it's a one size fits all solution with streaming where obviously the

there's different streaming rates in different countries and everything, but let's just say that there's one giant streaming rate for almost every single song out there. And I have always found that, and we at Vault found that like very inefficient because hardcore fans, you know, end up spending pennies per year. And not only have to spend pennies per year, but they have to spend 10,000 hours or 10,000 streams

to basically give an artist, you know, a dollar or a couple of dollars a year. And so we wanted to change the way that how do we actually have hardcore fans be able to support artists through their music? What do hardcore fans want in return? Oftentimes that's new music. And how do we change the way that not only we just want, we monetize music, but also the way we release music

And the other thing I always say is like, I think a lot of artists are sitting on the biggest song of their career, sitting on their hard drive. And we've made putting music out very stressful because, you know, if you don't get enough plays in the first couple of weeks, they tell you the song's dead. You know, it's not resonating. If you don't get enough TikTok views or plays, they tell you you don't have enough engagement. The same thing with Instagram. And so we wanted to make it a very, we wanted to just change the way that artists can release music directly to their fans.

without the feeling of being judged, all while owning their data and their access to their audience, which is something that is not currently present in the current time view. So that was basically an experiment that we wanted to test specifically around unreleased music. And we were getting ready to launch. And, you know, I saw James's tweets about the music industry, and hopefully this is a good segue. But I basically said that is a way more articulate version of why I'm building this.

And so I actually tweeted at him saying something along the lines of like, imagine if NBA players got told to play in the NBA for exposure. Because one of James's tweets was about how everyone tells you that music is just this exposure tool and you should be grateful when things go viral. And then that's how we connected. And, you know, that's the start of how James got involved.

Yeah, I think my sort of frustrations with the way things are, what I didn't sort of account for is how much support I'd receive when I said those things. And look, I'm not the first person who's ever, you know, complained about the setup of the music industry, of course. And I'm also not the first artist to go independent or try and look for alternatives. And there are alternatives to releasing via the major label system and

all that stuff and streaming. But I think the...

Currently, the way the situation is at the moment, I don't really know anyone who loves pulling out a song and then having to make 4,000 TikToks to promote it, to feed the algorithm and to kind of game the algorithm and basically and kind of remind it that they exist. Because obviously, if you're not posting constantly, then the algorithm decides that you don't. And that's just a fact of our existence as artists. I talked a lot about payment and how

Artists aren't really being remunerated a lot. And if you look at the current setup, if an artist wants to release a song, you know, you're uploading it to Spotify, but I mean, or whatever, but then your options are use Instagram to promote the song. So you're not being paid there. Your Instagram sends people to your TikTok, Twitter, all these other places, none of which pay you.

YouTube, whatever. I mean, it's like, what is this ecosystem that we live in? It's like each one we send people to pays us a nominal amount. And it just becomes kind of impossible to want to release through that kind of system for almost any artist, apart from the fact that we have to. Now,

And I think this is happening with general industry. I think what's happening is the top-down system is in question. I think it's kind of panicking across multiple industries. We're in a time where if you notice around you, people are starting their own production companies, they're starting their own businesses, they're starting their own situations to take control, liberate themselves from these kind of unpaid situations, really, in creative industries especially.

If we could just recap a little bit about what you were talking about on Twitter, which is a lot of what you just said, but just...

sizing up the difficulty with the music industry. Even if you're not a major label artist, the idea is you put out a song and then you do your best to get exposure for the song so that people will stream it, but then there's a difficulty of even getting traction and then getting paid by streamers. That's a lot of your frustrations. What else are some of the big barriers? For a musician, if you're signed to a major label,

then your label probably has shares in the streaming platforms. If not some, then a huge amount to the point where essentially when streaming took over and we were left with pennies rather than what records used to sell for. So if you sold a decent amount of records in the 90s, we all remember that those artists went on to make a lot of money. Now, whether they got ripped off

as well in other ways. That would have been a sign of those times. But the fact is that records make more money. And now the only thing that really makes decent money is live shows.

And the live industry is really struggling because obviously since the pandemic, supply chain stuff, all that, you know, people, flights are three times as expensive. It's very hard to get bands. A lot of bands are canceling their tours right now because it's very difficult to fund them. Certainly to profit, it's difficult. But if you look at just the record sales aspect, artists were not consulted when streaming platforms took over as the...

main method of listening. And the deals that were made between the streaming companies and the record companies, we were also not consulted about. And our catalogs were diminished in value while equity in those streaming companies was bought, essentially, without copyright, without intellectual property. And so now we have a situation where the musicians don't have equity in the streaming platforms,

But the labels do. And the musicians are getting paid a tenth of the amount. But the labels are not. The labels are having some of the best years they've ever had. I've been told that many times by people who work at them, which is ironic. You know, during the pandemic, having a conversation where, you know, most musicians can't even tour and streaming has decimated their income. And I'm having conversations with labels and the label managers and bosses are saying, oh, yeah, we're having an amazing year.

And it gets worse and worse. Obviously, something needs to change because we're not getting any more equity in these things. What do you do? And I think most artists are eventually going to find another route because or labels will in some way evolve and adapt to the situation. But I think it's very difficult when we just don't have any equity. It's like, who cares what they do?

to outline the problem. I think one is like music today is a very one size fits all solution. So it's not to say that streaming, like, and I think streaming does work for some artists, obviously, if you're one of the biggest artists in the world, right? Then the business models get tons of people to pay you micro amounts of money. And if you have millions and millions of fans, then like, obviously it's going to,

to pay dividends. I think the main thing is that there doesn't necessarily need to be a one size fits all solution for music or for artists. And if you have a fan base that's small, but really powerful, you should be able to make a living off your music too. And I think too often I've heard stories of like artists that basically just think that music is a loss leader, either because they're in a bad recording contract or because they don't have enough millions and millions of fans. And so they just use music for exposure. And then they rely on other revenue streams like merch and touring in order to make a full-time career.

And that always bothered me because music is the reason why I go to a tour. It's the reason why I buy merch from an artist. And so it feels weird that the thing that is like the centerpiece of like what we all love, billions of people around the world love music is one of the more under-monetized things when it comes to music. And so they make a piece of art and then, you know, for various reasons, if they're in a deal, they might get told,

"Hey, we're not ready to put out this song because you just put out a song last week," or "We don't think this song is your best song," which I always found really weird because I don't believe anyone actually knows what is going to be a quote-unquote hit song or what's going to resonate. And you see this all the time where sometimes a song gets really big on the internet that nobody thought was going to get big, not even the artist, the label, the manager, the fan, whatever. Stopping music from coming out is the only way to guarantee that songs don't see the light of day or don't have a chance.

You know, I grew up around the SoundCloud era where artists were dropping music prior to coming out on Spotify. It was very like freeing in terms of like you could just put out music when it was ready or whatever you felt like it, regardless of whether it was ready or not for something like Spotify. And the goal is not to stop it from going on Spotify. In fact, it's probably going to end up there, you know, because it's a...

great way to reach millions of people. The goal is like, if an artist wants something to come out, like it should come out. And I think they should have control. Again, it's their art, it's their career. They should have control over the way that we release music, which is point number two. And then point number three is I always found it bizarre that it's 2024 and artists don't have control over their data. So, you know, a lot of fans and like the mass market consumer assume, hey, I listened to James on a streaming platform. He must know who I am.

Like he can reach me, you know, market to me or whatever the case may be. And artists still have no control over their listeners. And that's one of the things with Vault that from day one, I wanted to install is like artists have access to their fans, their data. They can message them. They can export the data. It's not like locked into the Vault platform. They can take it to whatever CRM that they're already using, you know, on their own. I think it's about pushing the music industry forward. And I think, you know, if there's a world where artists have

control over the pricing of their music. They have control over how they release their music or when they release their music, and they own their audience in terms of the data and not having to conform to any algorithm. I've been talking about this with a few folks at the industry, which is that this year,

partially driven by some Luminate data that came out early in January is that everyone's going after the super fan right now, right? Whether that is independent artists, whether that's labels, you know, there are a ton of sort of various efforts there.

And James noted that there are a few other, you know, there are different places to do this. There's Patreon, there's Bandcamp. There was until when Defunct was dripped on FM. What is the differentiation here for artists and fans that you are hoping will bring people on? Both are...

artists and fans. I think most of the other fan club platforms that you named, they're not specifically built for music in small details. It's like the music player, a chat system that's like obviously like incorporates music and you can attach songs to the chat. It's the idea of fans getting texted online.

about the song. It's very geared for like a music artist's life cycle. And I think meant, you know, one thing I'm particularly proud of is like what James talked to is genuinely true. James runs this vault by himself. There's no other person involved that's like running it with no social media person. Not because like,

That's not an okay thing to do. But I think the goal was to make it so simple that, you know, an artist that has a million things going on like James could actually run it, you know, himself. But it's also private. Let's say I'm talking to 100 people. However many people have subscribed to my vault, it could be 100 or 2,000.

or 100,000. The point is that it's not going to spin out of control. So you're not going to tweet something and then like two weeks later, you're still having your words fucking taken out of context. Like people reading into things you didn't say out of the context in which you first said them. You're just talking to people like you would in a group text.

Right. Which is a completely different scenario to speaking online about things or saying things online or comments online. I don't know. I'd like, I just hate the way I am forced to communicate with everyone.

for everyone possible in the world at one time. It's like that is not good for your brain as an artist. You wanna, or even just generally as a human. Like I don't say everything I say for absolutely everyone on the planet. I say it to the people I'm talking to. And I think what a chat room does is it creates a very strong division between, or a dividing line between you and the people who came to this place because they love your music

and because they want to interact with you specifically. And the endless exponential potential engagement of something like Twitter or Instagram, it's a safer space to speak about music and speak to your fans. I find it personally, I can't speak for other artists, but I find social media extremely overwhelming.

because of that phenomenon. I think we've seen it over the course of the last few years, where it's like, it's actually not easy to engage when as soon as you develop any kind of platform at all, nevermind a huge platform, any notoriety for your music, it becomes harder and harder to be yourself. Because being yourself, you've seen routinely, people's heads get chopped off.

So you just want to speak to the people you want to speak to with some degree of control and privacy. And I think that

helps. Yeah, I actually think the reason why Vault is different or unique is like actually very similar for artists and fans. I think for artists, it's like the best way to release music that you want to release directly to your fans and engage with them in an intimate way. Similar to like, you know, what a concert is. And I always say concerts are one of, if not the best experience in music where people gather around to talk or to hear music and

and hang out together. And then for fans, it's the best way to receive music from an artist directly to your phone and engage with your favorite artists in intimate ways that maybe you aren't able to do today on something like social media. And the reality is like the majority of artists are not currently able to do that even on something like Instagram today. I think a lot of the other subscription platforms focus on like exclusive content, like behind the scenes videos, which is amazing and awesome. But really, you know, if you, most fans like,

What they want from an artist is more music. And so this is, again, really centered around the music and not around, I'm not saying we won't include or we haven't already included, you know, other things outside of it. But the centerpiece is definitely the music, because we think that's the best place to stir up conversation, the content that artists actually want to make. There's no exclusive content that we need to ask artists to make for Vault, because it's already sitting there on the

you know, on the hard drive or they're currently already making music every day and, you know, studio every week. It's an endless supply. Yeah, it's not yet another content task. Exactly. I wanted to be involved with a platform

that doesn't, it doesn't promote a sort of cult of personality slash image. It promotes the music. It's about the music. And I think that as an artist who makes music, and that's my primary concern, I don't know if you've noticed, but it's not my image. I just feel more comfortable on a platform like this. And not everyone is going to, you know, I mean, listen, you can still upload images and video and all that stuff.

but it's not primarily about scrolling content and grabbing the maximum amount of attention in the smallest amount of time. It's about music. And there hasn't, to me, been a centralized place for all of those things that I've discussed, plus a focus on mostly that and the connection between your fans until now. Another thing that I think a way this kind of involves and benefits fans is that I don't think a lot of music fans...

right now, why would they realize how much great music doesn't come out and how much music that is marketed to them is based on an algorithm that doesn't necessarily select quality, but grab attention. The average music fan is missing out on a huge amount of music. And

I want them to have it. Certainly from my catalog, I want them to have things that I love that didn't suit streaming, as well as things that do and will come out later, and also things that I just, I wanna show them first. I wanted a waiting room for the outside world where people could actually experience this stuff in a low pressure environment too.

somewhere I can put music out and see how it feels to have other people hear it. Why is there no middle ground? We either basically have the studio where we can play it to our friends and our family and maybe get some comments and whatever and some feedback, or we have the entire world.

It feels like there's no sort of place for that music to kind of live in the outside world, but in a more kind of curated and enclosed environment. It's a very vulnerable thing to do to release music. It is involved in all of your emotions and the things you've written about and all that stuff. And to just like stick it out there and just, and go, Oh, it didn't do a bunch of first weeks. Okay. Well,

"Shit, I'm trash, forget it then." It's nice to be able to just play it to some people who already love your music and already care. That could be five people or it could be 500,000 people, it doesn't matter. The point is that that space is there. Regarding the thing about scale when it comes to artists, something that comes up a lot is, well, if you're not a huge artist,

then how is this going to work for you? And what I'd say is that the economy of scale works across all of those streaming platforms. If you don't have a lot of Instagram followers and you don't have a lot of Spotify listeners, then you're going to struggle to make money. And those platforms are making it harder and harder to actually reach the people who are your followers through algorithms being throttled. And now you've actually got to pay to promote your posts to actually get all of those people to hear it or see it.

Now, these platforms, people have been building these followings that they have for, I don't know, how long, 10 years, 12 years? In a few years' time, where instead of uploading content every day that doesn't really relate to you or your music particularly, or maybe it's something that you just felt you had to do because that's what the algorithm demands, you were building a following on Vault through all the different methods, right? Now, you can imagine that the monthly income you're going to derive from that

is going to be a lot more relevant than say 100,000 Instagram followers

we haven't done the maths for what that equates to in terms of vault listeners but i mean the economics are just almost laughable yeah definitely i can totally see the appeal of whether it's for artists or fans to find the space outside of the the algorithm or or you know mainstream social media like i said in a moment when basically every major label and music organization is really trying to hone in on a super fan and

and unlock as much value as they can from the sort of ecosystem that they've locked themselves into with streaming. It's interesting to see something that could be a new model or even not even a replacement model, but something that can exist outside of that. It's really fascinating. It's also super cynical, isn't it? Like the idea of like going for the super fan. It's like, what?

What? Like, just trying to squeeze as much money out of them as possible just so you can fund a dying model. It's like, no, just give people the best experience. Okay, we are back with Ryan and also joining us is our video and podcast fellow Melina Scott, who's been super helpful but is sadly leaving next week. Now it's time to wrap up the show with Keeping Tabs. This is where each one of us shares a story, a trend, or a piece of pop culture we've been following.

And Ryan, since you're our guest, what are you keeping tabs on? I have become very obsessed with the Redditors that are fans of AI music generators like Suno and Udio. Are you familiar with these platforms? I mean, I knew the music platforms and generators were a thing, but I didn't know they had fans. Like legit, like these are legitimate fans, like earnest fans of the music or... Both. So it's like people generating songs

and sharing their songs and talking about the problems and the things they like about these platforms. But the reason I am so obsessed with these two communities is because I've been a musician since I was a kid. I can play a bunch of instruments. And what I think is really funny is that these people...

are generating AI music and they're kind of complaining about the same things that any musician would complain about. Like they can't change certain things and it doesn't sound right. And they're kind of going crazy, like obsessing over like minute details. And I'm like, welcome to the club guys. Like this is it. That's what music is all about. Making something and then hating it. It's the same thing. Yeah. That's the AI. What's the AI equivalent of tuning your guitar between every song on the set? Yeah.

Apparently, the big one is that it can't do D sounds like it has a real problem with like the D consonant sound. And it's driving these guys crazy. I hope they get that fixed soon. There was a thing, but I had played piano growing up and still that dabble a little bit now. But I always remember my music teachers and my piano teachers complaining about synthesizers inability to correct.

correctly capture the warmth of horns in the synth version of horns. And I think about that all the time. You know, I was in a ska band very briefly in the mid-2000s. And I can tell you, that is a problem. The horn sound in a synthesizer is not very good. Still, to this day. Were you singing? You know, a little bit. Ska's not really a lot of singing. Well, that's what I'm saying. Do you have like a good ska voice? It's a lot of yelling and like a hot, you know, nasally voice. So yeah, you know, it's...

Hell yeah. Yeah, I remember Scott had a moment when I was in high school. You were about to launch into a Scott performance just then. I saw you take a breath. I was just going to jump into some mighty, mighty boss stones. That's it. Some lemon lime tennis shoes. I don't know if anyone remembers that very small New England band that was a Scott band. I was playing Scott in New England in the mid 2000s. So it was like... Are you serious? I was...

I was going to one of my friends' scotcha. Two white guys on a podcast both played in the same scotcha? Get out of here. Get out of here. What are you keeping tabs on? So something totally different. I'm keeping tabs on Love Island, Love Island UK. It's back. It's back. It's back. Yes. Wait, on what channel? I was trying to find it yesterday.

Basically, for American viewers, they've only released up to episode three, but I've done some smoothing and through the help of Reddit, a VPN, and a private browser, I'm all the way caught up on one episode seven. I'm waiting for tonight's episode, but

Yeah, so what's really cool about this season or like what's really cool about one of the Islanders this season is that she has Erb's palsy, which is really cool. Well, it's not cool that she has it, but it's cool to see like representation on Love Island. What is Erb's palsy? It's like cerebral palsy, but I think it just affects your arms. So she has like

some muscle weakness in her arm. One of her arms is shorter than the other. It's not like a super visible disability, which is, I mean, I feel like it's on brand for Love Island, but I think it is cool to see some sort of representation. Last season, they had someone who was like deaf in one ear. And then the season before that, there was someone who was

completely deaf and have like a cochlear implant. You mentioned the hot deaf lady. Yeah, definitely. This has been a trend in reality television lately. And I'm interested and I would be interested. I think it kind of relates to what we were talking about with Mr. Beast.

a little bit with some of the, you know, because the inauthenticity sometimes of it. I would love to do a deep dive on like who's casting these reality shows and the trends in casting on things. Because like there's been a lot of that on The Bachelor. That's been a major thing. I like him.

Riding into like a school for people with disabilities. Hey. Who's your hottest student? Yeah, because these things are all, like they go out to agents, they go out to things like that. You know what I mean? Like it is interesting. It's a net good thing. I think everyone deserves the right to be psychologically tormented for ratings. And I think that that's really good. Exactly. And to get some sort of like B minus influencer deals. Yeah. Well, that is true. Everyone deserves to be a micro-influencer. Yeah.

I think the thing is that they're still struggling with like their racial diversity. Like I think I can count on three fingers the amount of islanders that have been Asian. But like we love to see some other sort of diversity in the cast. So, yeah. Honey, I've been talking about this. So my parents live in London. I went to high school in the UK and I've watched the US and the UK love islands. The US one I had to give up on. Brag. No, no, no. What I'm saying is.

People are way more open to interracial dating in this country than they are there. Yes. A hundred percent. I also used to live in the UK, not to bond with both of you, but Scott and British stuff. Yeah. And no, it is definitely a thing.

Um, it's my, it feels much more segregated. Yeah. My parents are different races and they were like the only interracial couple I really knew aside from like one of my, my aunt and uncle. Yeah. And when I was in high school, I remember I had this conversation with a friend of mine who's a white dude. I mean, look, I was like a huge loser. So no one was interested in me, but I was also like, I came to the U S for college and like,

guys were way more interested in me. And it's like, just because I went to like a high school in London that was all white. It's like a real thing. And so in the two love islands, like in the US one, people of different races couple up. In the UK one, it's like the black people couple up. And they're always like,

oh, I want someone who's tall, dark, and handsome. And that person is not dark at all. And most times they're not handsome. Yeah. Yeah. Yeah. I definitely agree with that. Josh, what are you keeping tabs on? So I'm keeping tabs on, I obviously spend way too much time on TikTok, like we've talked about before. But one of my favorite new accounts is this creator who started doing this series that he's calling Country Drag. And it's this

A person who would do this fun character as like a young, like queer man where you do like a super aggro male country person. But he started doing that character and then started learning how to do drag. So watching someone be really terrible at makeup and really like charming and self-deprecating about it has been very fun. Their name is Glennie Devi.

on TikTok. And it's really fun content and it's starting to blow up. And it's just fun watching someone do basically like makeup influencer style videos, but be awful at makeup. And the funniest thing is that like, so drag queens, if you don't know anything about drag culture, a lot of drag queens will block, it's called blocking out your eyebrows because you basically draw in like a higher eyebrow. So it requires doing like a shit ton of like

Elmer's glue, calming down, foundation, powder, then like repeating this process. This guy has such thick eyebrows that it's just the biggest struggle in the world watching them try to block out their eyebrows and it always looks like oatmeal brow. It's yeah, it's great. It's a great account. Yaz, what are you keeping tabs on? So I don't know if you've heard the song of the summer.

But it's called The Spark, and it's by a group of Irish tweens. Yeah. And it's a banger that they created together. I have heard that. It's so good. They're called Cabin Crew. I think you sent this to me. Yes, it rules. And they've gotten a lot more attention lately. I search for my spark. And I body in the crowd. About what we do, I don't. I search for my spark.

crowd start bouncing anyway look absolutely they have the best accents in the world i do have to say we've been sitting for you to the page it's so good yeah the the vowel sounds alone are just perfect like it's so good and the video is just all of these like young pasty irish kids just absolutely like going

off i love this so much yeah i do have to say we've had three people including yourself now pitch a song of the summer first was ellie stevens our former intern pitching espresso by sabrina carpenter which i think is the mainstream pickle right uh then we had uh aj hats pitching bbl drizzy uh which came out of the drake uh uh kendrick uh feud and then you're pitching which i think is the

ultimate hipster pick for Song of the Summer. The spork. Irish children. And that's it for Most Innovative Companies. Ryan, thank you for joining us. Thank you guys for having me. This was super fun. And Melina, thanks for joining for Keeping Tabs. Yeah, of course.

Our show is produced by Avery Miles and Blake Odom, mix and sound designed by Nicholas Torres, and our executive producer is Josh Christensen. Remember again to subscribe, rate, and review. But before you go, we've got a special custom segment from our partners at Fast Co Works and Elastic. ♪

It's in the news, in the boardroom, and on the lips of every business leader. In fact, 99% of organizations surveyed by Elastic say it has the potential to drive change within their companies. We're talking about generative artificial intelligence, and it's a lot more than chatbots. But what must business leaders do right now to leverage this opportunity for success?

Elastic, the search AI company in partnership with Fast Company will expand on this and more. Joining me for this conversation is Matt Riley, general manager of search at Elastic. Matt, welcome. Generative AI technology is multifaceted. So many new applications, particularly in business. But the question is how leaders can use these to succeed. And you say that the answer is twofold.

Please tell us about that. Well, thanks for having me. And I think the answer is really about, you know, harnessing the power of data and all of the data inside of your company and then how you search through that data in order to make sense of it and then provide it ultimately in a

clean and coherent way to be processed downstream by some of the large language models that we've seen, you know, emerging over the last year or so. You're saying it's about the right data, but also viewed through the right lens. So break that down a little bit for us. First, what does the right data mean?

Well, in general, if you're trying to provide an answer to a question, whether it's about your own business for an internal use case or in the service of an external facing use case, the right data is whatever's relevant to the question at hand, right? So they might ask a question of your app

application. In order to find the most relevant data through your internal systems, you need a search system to be able to do that, to be able to first have indexed all of that content and data, but also to then take the question and find the most relevant pieces of content to provide an answer to that. So the answer for a particular question might exist across multiple documents in multiple different systems.

And it's the job of the search engine to find all of those disparate documents, pull them together and show them in a relevant result list and then provide that for processing downstream. So that's really the focus that we have at Elastic is being that centralized place for finding the most relevant content that you need in order to answer the questions that are being posed. Could you give us a little bit about the process of finding the most relevant content that you need?

us a real world example of what that looks like, you know, when it's done right, how generative AI can provide insights that are relevant and contextualized? Yeah, absolutely. So the generative AI models that are out there, the foundation models that we've all, you know, interacted with, like ChatGPT and others, they were trained on the public internet, basically. They read the data that's on the public internet and

vast, vast amounts of it. And through that, they learned reasoning and how to understand natural language. But they didn't necessarily learn anything about your business or about your internal customer data. That's kind of a blind spot for them. And so when you want to start using an LLM,

for example, for helping a customer support scenario where a customer comes in and wants to ask a question. What they need is there needs to be a bridge between that internal data, what your company knows about your customers and what the foundation model is able to reason about. So if a customer asks a question about a product that they've recently bought and maybe

they want to buy another copy of it or they want to return it for a different size, when they ask that question, you need to be able to marry the internal data about the inventory that you have, maybe about the past purchase history of that particular customer, and all of the sort of contextual information that a human would take into answering that question. That's the kind of stuff that a search engine can do on behalf of the company to provide that context for the LLM to ultimately process and then provide a coherent answer that's grounded

meaning it won't be a hallucination and it will be something that's accurate to the customer at hand. That's one of the better examples I can think of really marrying that internal data of the company with an LLM that was trained primarily on the public Internet and doesn't necessarily have knowledge of the specific situation. Sure. And I know that's, as you say, it's one of so many examples. So, you know, for folks who are listening in and they're thinking about generative AI at their own organizations,

Just briefly, you know, what are some of the things they should think about or a top question for them to ask themselves to ensure that they're implementing generative AI right for them and for success? Yeah, I mean, I do think that the applications are very, very broad, but in general...

The idea of being able to make your employees more efficient, I think, is probably one of the most the biggest opportunities, at least immediately. And again, that's where you'll leverage internal data with an externally trained LLM. And as you do that, you need to think about things like privacy, security and the compliance posture of making sure you're only your data is staying secure and not being shared externally. You also need to be thinking about how you scale that up.

In many cases, you have large scale needs and a lot of this is very compute intensive. And the tools that you choose in order to build these applications are going to rely on a variety of different underlying technologies. You need to be able to scale that out in a very effective way.

Matt, thank you. I so appreciate you being here and sharing these insights. Thanks to our partner, Elastic, the Search AI company, for making this discussion possible and to our audience for joining us. I'm Julianne Papitone. Thanks for listening. To find out more about Elastic, head to elastic.co.