Waymo Madness in SF! Why robotaxis clogged the streets | E2227
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this holiday episode of This Week in Startups, host Jason Calacanis calls in from Lake Tahoe to discuss recent developments in autonomous vehicles, AI, and startup acquisitions with co-host Alex Wilhelm. (03:13) The episode kicks off with Jason's firsthand account of witnessing Waymo self-driving cars malfunctioning during a San Francisco power outage, where multiple vehicles blocked intersections when traffic lights went down. The discussion expands to cover the explosive growth potential of robotaxis, major tech acquisitions including Google's $4.75 billion purchase of Intersect, and Coinbase's acquisition spree. (47:00) The episode concludes with an impressive Gamma pitch from Lumix Ads, a startup that transforms delivery bikers into mobile advertising platforms.
- Main themes: The episode explores the intersection of autonomous vehicle technology challenges, the massive market opportunity in robotaxis, strategic tech acquisitions in the current M&A-friendly environment, and innovative go-to-market platforms for small businesses.
Speakers
Jason Calacanis
Jason Calacanis is the host of This Week in Startups and an early-stage investor who was among the first investors in Uber. He runs the Launch Accelerator program and has invested in numerous successful startups over his career. Calacanis is known for his insights into startup trends and his ability to spot promising entrepreneurs and business models early.
Alex Wilhelm
Alex Wilhelm serves as co-host of This Week in Startups and brings extensive experience covering technology and startup markets. He provides analytical insights into market trends, financial data, and industry developments. Wilhelm is based in Providence and contributes data-driven analysis to the show's discussions of startup valuations and market dynamics.
Jonathan Sherman
Jonathan Sherman is the co-founder and CEO of Lumix Ads, a startup that has built a platform turning delivery bikers into mobile advertising networks. Under his leadership, Lumix has achieved profitability and grown to over $55,000 in monthly recurring revenue. Sherman recently completed the Launch Accelerator program and successfully expanded operations from Miami to San Francisco.
Key Takeaways
Autonomous Vehicle Edge Cases Create Learning Opportunities
When San Francisco experienced a power outage, multiple Waymo vehicles became stranded in intersections without traffic lights, blocking traffic for hours. (04:27) Jason witnessed this firsthand and noted that while embarrassing, these edge cases will be quickly solved through emergency protocol updates. The incident highlights how autonomous vehicles currently rely on both internet connectivity and traffic infrastructure, creating vulnerabilities that Tesla's end-to-end model may avoid. This demonstrates that early autonomous vehicle deployments will face unexpected scenarios that require rapid engineering responses and regulatory cooperation.
The Robotaxi Market Represents Unprecedented Wealth Creation Potential
Jason predicts that ride-sharing will grow from its current 1% market share to 50% of all rides within 10-20 years, requiring approximately 500 million robotaxis globally. (24:04) This massive scale-up would represent one of the largest wealth creation opportunities in corporate history, as the current 1% market share has already yielded Uber a $168 billion market cap. The transition will be driven by dramatically lower costs per mile, from the current $2-3 down to $0.50-1.00, making ride-sharing cheaper than car ownership for most consumers.
Strategic M&A Windows Are Politically Dependent
The current administration change has opened a significant window for major tech acquisitions, with Google's $4.75 billion purchase of Intersect signaling the start of a major M&A cycle. (27:57) Jason predicts this could lead to even larger deals, including his bold prediction that Google might acquire Uber to compete with Tesla's integrated approach to autonomous vehicles. Companies looking to exit through strategic acquisition have approximately 24 months to execute deals before potential regulatory changes in future administrations.
AI Model Intelligence Has Doubled Across All Providers
Analysis of major AI providers shows that model intelligence scores have approximately doubled across the board in 2024, with improvements from 25-30 points to 60-70 points on standardized benchmarks. (40:18) This represents extraordinary progress, but also suggests that current benchmarks may soon become inadequate as models approach near-perfect scores. The uniformity of improvement across different companies indicates that the fundamental breakthroughs in AI development are becoming widely accessible, potentially shifting competitive advantages to implementation and application rather than core model performance.
Hardware-Enabled Business Models Benefit from Global Supply Chain Efficiencies
Lumix Ads demonstrates how modern entrepreneurs can leverage affordable electronics and global supply chains to create profitable hardware-enabled services. (56:55) With just $700 in hardware costs per unit generating $2,000 monthly revenue at 85% gross margins, the company shows how the convergence of cheap electronics, widespread connectivity, and established delivery networks creates new business model opportunities. This represents a shift from traditional software-only startups to hybrid models that combine physical and digital infrastructure.
Statistics & Facts
- Google purchased Intersect for $4.75 billion to build data centers and power infrastructure next to each other, eliminating grid interconnect dependencies. (26:37) This massive acquisition signals Google's urgent need for more compute capacity as internal teams compete for AI resources.
- Lumix Ads has achieved over $55,000 in monthly recurring revenue and profitability, with each bike display generating 200,000 views per month and earning $2,000 monthly at 85% gross margins. (50:04) The company requires only $3 million in capital expenditure to reach $100 million in annual recurring revenue.
- AI model intelligence scores have improved dramatically across all major providers in 2024, with Grok improving from 25 to 64 points, OpenAI from 27 to 70 points, and similar 2-2.5x improvements for Anthropic and Google models. (40:18) This represents unprecedented advancement in artificial intelligence capabilities within a single year.
