Noah spends 40% of his time on compute It's fascinating to hear how he thinks about securing it when Instinct is growing 10% a day "What does it mean when the amount of compute that you need access to is now doubling effectively every week? Do we buy 2x of what we have right now? Well, we're gonna consume that in a week. So then do you buy 5x? We're gonna consume that in less than three weeks. Do you buy 10x? If you can even stomach what it's like to buy 10x ahead, you're gonna consume that a couple weeks from now. It's not like a business where when you double the number of users, you can buy 2x more resources to power it. The resource has a lead time of several months. You can't just go out tomorrow and buy compute, because honestly, you get taxed like 3 or 4x. Let's say it slows down to 5 to 8%. But 5 to 8% compounding day over day for three, four months, which is the lead time to bring compute online, that's 100 million users. So then do you buy compute for 100 million users? If you're wrong, you're very wrong. You get charged 3-4x."

"My personal goal is to deliver this product for free to everyone for a lifetime." Instinct is already on pace for about $1B a year in transaction volume, and 50% of it is travel. Noah on Instinct's business model and how he plans to keep it free: "When I see transaction volume that is so high flowing through the platform, it's similar to Apple Pay or Amex, or any other platform that provides distribution to underlying services. The user doesn't have to pay for it. The user gets a free, great experience, and the merchants who benefit pay to be a part of that platform. So I see a blanket transaction take rate across the platform. We exchange distribution for serving products on behalf of merchants. Look at the take rates other major platforms achieve. Shopify, I believe, is between 2.5% and 3%. Amazon takes upwards of 10%. And the premier is Apple, where any in-app purchase is 30%. Can we provide so much value that we're on the upper end of this scale? I think it's possible because 50% of the transaction volume flowing through the platform is travel alone. Some boutique hotels are offering to pay upwards of 30% for every transaction you deliver for them. I'm not saying we're gonna be at 30%, but you can see the range. These are existing business models we can bootstrap off of early. But what would it be like to extend that to every major industry?"

40% of Instinct users give the agent a credit card within 3 weeks And once someone trusts it with something sensitive, they stay (retention hits ~80%) Noah on earning consumer trust and protecting user data: "It takes several weeks to build trust and I actually don't have a problem with that, because one of the core principles on our end is the user should always be in control of their data. They should share data with Instinct at the rate at which they feel comfortable with. And if they wanna take it back, they can certainly take it back. Within three weeks 40% of the user base is giving Instinct access to a credit card autonomously to be able to purchase theoretically anywhere. There are systems that we've put in place that are detached from Instinct, the agent architecture itself, that are put in place to be proactive about these things and to decouple the risk. Any piece of content, any piece of text, anything that might be consumed by Instinct goes through what we call these firewalls, which can intercept, can reject, can block malicious pieces of content coming in and trying to convince Instinct to do something. For every action that Instinct might take, or for every thought that it might have, that is being actively monitored by a system that is decoupled from Instinct itself, which is able to pause it, intercept it, to approve or disapprove of what might happen next before it takes the action. There's just so much more under the hood that is put in place to enable the agent to be as capable as possible, but also safe and trustworthy."

A list of surprising and mind-boggling stats from this conversation: - $1B+ a year in transaction volume (still invite only) - Growing 10%+ A DAY and has spent zero dollars on marketing - 40% of users shared a personal credit card with Instinct within 3 weeks - Compute demand is doubling roughly every week - At 5 to 8% daily growth over the months it takes to bring new compute online, Instinct would reach about 100 million users - On Instinct's own A/B tests, it matches Opus 5 performance at a fraction of the cost - Noah spends about 40% of his time on compute - Buying compute at the last minute costs 3 to 4x more - Background work runs on setups that are 3x, 5x and 8x more efficient on the same compute - 50% of Instinct's transaction volume is travel - Instinct plans to take a cut of what users buy (take rates, Shopify is~2.5-3%, Amazon ~15%, Apple 30%) - Noah's personal goal is to keep Instinct free for everyone for life - Some small businesses run their entire back office on Instinct - Users who connect at least one piece of sensitive information retain at about 80% - Some users send more than 90% of their messages to Instinct by voice - Say an app makes 70% of its money from ads and 30% from actually selling you things. Agents could wipe out the 70%, but Noah thinks the 30% gets much bigger, because people buy more when buying takes zero effort - Instinct launched to about 200 friends and family - Invites have sold on eBay for around $300 - More than 50% of Instinct's traffic doesn't run on iMessage - Instinct has proactively called Noah three times - The company is less than a year old - Raised $1B at a $10B valuation, less than a month after raising at $2.5B - Noah is 23

My conversation with Noah Shinn (@noahrshinn), founder of Instinct. Noah is building a personal AI assistant. It's still invite only, has spent nothing on marketing, and is growing roughly 10% A DAY. This is his first long conversation about the company. We discuss: - Why Instinct doesn't have an app - Buying compute months ahead of exponential demand - How users learn to trust it with a credit card - Safety and security - Agents coordinating with other people's agents - Instinct's business model - Apps built on consumer inertia - and more Enjoy! Timestamps: 0:00 Intro 4:11 What people are using AI agents for 15:07 Rethinking travel, reservations, and the internet 22:43 Trust, privacy, and personal data 27:50 The business model behind Instinct 38:04 How existing businesses will adapt 47:55 Designing a personal assistant people love 53:15 Growth, compute, and competing with Big Tech 1:11:44 What’s next for Instinct and personal AI

Gabe Stengel on why every software company will eventually charge based on outcomes: "I look at how hard it was for Anthropic to sell to us. Very easy. And the amount that we pay them has risen exponentially without a human in the loop because it's a token consumption model. Every business needs to go through two different pricing revolutions. You need to move to some sort of usage-based, and then you need to move to some sort of outcome-based. For me, if I can figure out a way to skip the usage-based, and just wait until I can say, 'Hey Patrick, what if I just charge you for every good investment idea I give you? Or what if I charge you for the quarterly report you send to LPs that I can do perfectly?' I would much rather get there than have to figure out some random way of trying to assign dollars per token. You're going to spend $100,000 on tokens and say, well, did I get $100,000 of value? And I don't really know. But you know what the value is to you of a good investment idea because you can actually see how much money did I earn."

Favorite part of the episode was Gabe's pitch to talent: "AI is going to completely transform the world. The place that is gonna be the most interesting is applied AI, because that's where AI intersects with humanity. The companies that dictate how AI intersects with humans are gonna do the most interesting creative engineering and product work in the world. Finance is the catalyst for all human progress and innovation, and capital allocation is upstream of the financing of every company, every idea, every economy. If you can make that more efficient, you can supercharge the world. We're the category leading player who has the best shot on goal to not just be the $100 billion business to do it, but the $500 billion business that completely transforms capital markets. There's such a depth and a complexity and an amount of interesting problems that's so exciting, and we have a killer group of people that is super smart, hungry, curious, and low ego that's gonna do it."

A big part of an investor's job is making founders more ambitious "Pat Grady (@gradypb) was at our board meeting and we presented an extremely aggressive plan for next year in terms of hiring goals, commercial goals, product goals. He goes, 'Gabe, if everyone in finance is gonna make a buying decision on AI in the next 18 months, and they are definitely gonna buy something no matter what, even if you're not there, then the only thing that matters is that you can blitz the market as quickly as possible to make sure that you are there. Given that, do you think this plan is aggressive enough or no?' The answer was no. And the reason it wasn't aggressive enough is because I was being soft. My goal as a venture-backed business is to increase the tails of the distribution. It's fine if it gets 30% more likelihood that I fail if the odds that I become a $100 billion company also increase by 20%. But you actually have to be okay with raising both of those tails at the same time."

Gabe on why he doesn't think Anthropic or OpenAI will own finance: "The reason people get confused when they look at app layer businesses like mine or Harvey or Legora or Sierra is because there's a spectrum of perpendicularity to what the labs are building. There's a whole bunch of stuff underneath the surface that the labs are never going to build, that we need to build for finance. All of finance is a collection of different niches with different data sets, different regulatory requirements. And we can get to $5 billion in revenue by going deep across those things and creating the systems of record that help manage them. That for Anthropic would be like stopping on the side of the road to pick up a penny, because they're on the pathway of trying to go from $100 billion in revenue to a trillion in revenue. Say you are a big public company buying another big public company and you need to send data back and forth. You actually need some sort of data room, something that is compliant, safe and secure. And I don't think OpenAI or Anthropic will ever want to build a data room business. If you actually want to be the exchange for all of high finance, you don't just need to own the intelligence, you need to own the transaction venue, the communication venue, the workflows, and all the data inputs that go into it. Think about the fundamental difference between Claude Code when it came out versus ChatGPT. The models were actually fairly similar, but the harness and the way that it was presented from Claude was far better. The way that you harness these models is so, so important."

Being a founder is like "chewing glass" "When you spend six months recruiting a candidate and they don't join, that's chewing glass. When you spend a bunch of time working on a product that gets completely washed over by the next model and makes you feel like an idiot for expending all that time and capacity on something that was the wrong call, chewing glass. When you get rejected by 40 investors in a row before you're able to raise capital, chewing glass. My experience of startup building is it's like a rollercoaster where you have to feel the extreme highs and feel the extreme lows, and I'm a super emotional guy. I will feel on top of the world at the high and like everything is cataclysmic at the low. But then if I look back at the journey, the lows get lower, the highs get much higher. And I look back three months ago at the low I was dealing with, I was like, 'What a joke.' I could do that in my sleep now."

Almost every founder has to survive some version of what Gabe describes here Although Rogo has raised over $300M, 40 investors passed on their Series A (except @rabois) Gabe on why every pass at that stage is a pass on the founder: "I met with Sequoia, Kleiner, Benchmark, everybody, and 40 people passed. And it wasn't just, you got the email with the deck and it's not exciting. It was, 'Oh, this is interesting. Let me meet Gabe. Oh, I kinda like Gabe. Let me spend an hour with him. Oh, Gabe, come to IC. Oh, Gabe, let's go to dinner. Oh, Gabe, come in for the weekend.' You know what? We're gonna pass. And it's so personal, because at that stage it has nothing to do with anything but you. Keith Rabois came a month after everyone else had rejected us, and Keith was like, 'Gabe, this isn't a contrarian bet. It's basically just Harvey for finance. Why would I do it?' And I said, 'Keith, if it's not contrarian, why did every single one of your friends just say it was a bad idea and not believe in me?'"