#2290 He’s building an AI media empire
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Ricardo Vice Santos is building DreamStories, an AI-powered platform that creates personalized children's books featuring individual families as characters. (02:19) While the company has generated around 70,000 custom characters and significant revenue, Ricardo's true vision extends far beyond books - he envisions a future where all media, from cartoons to movies, will be customized for individual consumption. (02:54) Drawing from his experience as an early Spotify employee who witnessed the power of long-tail content personalization, Ricardo believes AI will enable a new behavior where people create content primarily for themselves, similar to how smartphone cameras didn't replace professional photography but created entirely new use cases like food photography. (05:26) He chose children's books as his starting point because parents make purchasing decisions for content that aligns with their values, creating a sustainable business model where the buyer isn't the consumer.
- Main Theme: Building an AI media empire that starts with personalized children's books but aims to transform how all content is created and consumed through individual customization.
Speakers
Ricardo Vice Santos
Ricardo is the founder of DreamStories, a company creating AI-powered, personalized children's books tailored to individual families. Previously, he worked in consumer media and was an early team member at Spotify, where he developed a deep understanding of long-tail content and personalization. He also founded Kinko, a direct-to-consumer smoothie company, giving him extensive experience in subscription-based business models and customer acquisition.
Key Takeaways
Focus on Repeatable Customer Behaviors Rather Than One-Time Purchases
Ricardo emphasizes the importance of building services around naturally recurring behaviors rather than trying to force subscription models. (20:58) He identified bedtime reading as a sacred, daily ritual for families that represents a perfect opportunity for episodic content consumption. Instead of creating ABC books or educational content that parents buy once, DreamStories focuses on adventure stories that naturally lead to sequel requests. This approach allows the business to turn novelty purchases into repeat customers organically, similar to how people naturally want their daily coffee or internet service without being forced into artificial subscription models.
Start With What AI Can Do Well Today, Not What You Hope It Will Do Tomorrow
Rather than waiting for perfect AI capabilities, Ricardo chose children's books because current AI technology could handle them effectively while video generation remains prohibitively expensive. (24:08) He noted that OpenAI's Sora reportedly burns $15 million per day, making personalized video economically unfeasible for individual consumers. By starting with books, DreamStories can perfect the personalization engine, build customer relationships, and establish the infrastructure needed for future media expansion when costs decrease. This strategy allows the company to generate revenue and refine their approach while positioning for the bigger vision.
Solve Distribution Through Superior Unit Economics, Not Just Product Features
Ricardo's approach to customer acquisition centers on creating better economic models than competitors rather than relying solely on organic growth. (29:10) Drawing from his Spotify experience, he focuses on paid acquisition channels like Facebook and Google, treating them as level playing fields where superior unit economics determine winners. By optimizing for cost per acquisition equal to average order value while building repeat purchase behavior, DreamStories can outbid competitors in advertising auctions. This systematic approach to distribution acknowledges that in today's competitive environment, even great products need structured acquisition strategies.
Choose Markets Where the Buyer Isn't the Consumer
Ricardo strategically chose the children's market because parents make more rational purchasing decisions than consumers buying for themselves. (16:42) He draws parallels to Gillette, where women purchase approximately 70% of men's razors, creating different marketing dynamics. When parents buy content for children, they think about long-term values and educational benefits rather than immediate dopamine hits. This creates opportunities for products that might not succeed in direct-to-consumer markets but thrive when parents are making thoughtful decisions about their children's content consumption and development.
Talk to Customers Daily to Discover Unexpected Use Cases
Despite being an experienced founder, Ricardo maintains daily customer conversations to identify behaviors that could become product features. (47:28) He discovered that customers were uploading AI-generated images of their children as source photos, initially thinking this was misuse. However, this behavior led to a breakthrough: using AI-generated "synthetic data" to train better consistency models, ultimately allowing DreamStories to require only one input photo instead of multiple images. This customer insight not only improved the product but simplified the user experience, demonstrating how direct customer observation can reveal non-obvious optimization opportunities.
Statistics & Facts
- DreamStories has created approximately 70,000 custom characters since launch, with each book containing up to three characters and some customers purchasing entire six-book series. (00:55)
- OpenAI's Sora video generation tool reportedly burns $15 million per day on user experimentation, illustrating why personalized video content remains economically unfeasible for most businesses. (25:00)
- Approximately 70% of Gillette razor purchases are made by women buying for men, demonstrating the power of buyer-versus-consumer dynamics in product marketing and positioning. (16:57)
