Talk Session with John Whaley, the founder of Inception Studio, an AI accelerator in San Francisco
We had a talk session with John Whaley, the founder of Inception Studio, an AI accelerator in San Francisco. The event was held by Glasp in Tokyo, Japan.
About the Event
We had a talk session and networking event with John Whaley, the founder of Inception Studio, an AI accelerator program in San Francisco.
Since the start of the program in November 2022, over 27 companies have been formed through Inception Studio, with over a dozen successfully raising funding from top venture firms and angel investors. This is an extremely valuable opportunity to meet the founders of San Francisco's local AI accelerator in person. We hope you will join us!
* The language used in the event is both English and Japanese.
Application to Inception Studio Japan:
About John Whaley
Co-founder of Inception Studio and Redcoat AI and Adjunct Professor of Computer Science at Stanford University.
- SVP of Emerging Products at Prove
- Founder of UnifyID and Moka5
- Stanford PhD in Computer Science and MIT BS
Follow John Whaley on social:
- LinkedIn: @joewhaley
- X: @joewhaley
- Bio: tiny.cc/john-bio
About Inception Studio
Inception Studio is a non-profit accelerator built for the most experienced world-class entrepreneurs and builders at the earliest stages of starting their next AI company. We organize exclusive 72-hour cohort retreats and other events to help our Inception Founder community find cofounders and launch their companies. Inception specializes in stages from "I just became fully committed to starting my next AI company" to "Our company is ready to raise a pre-seed round".
Organizer
Kazuki Nakayashiki
Co-founder and CEO at Glasp
X: @kazuki_sf_
Kei Watanabe
Co-founder of Glasp
X: @KeiWatanabe17
Transcripts
It filled up faster than any other class at CNS Stanford. So within three minutes, it was like the enrollment was full. LLMs are extremely popular now in the Bay Area and among Stanford students. The backstory here is that my last company got acquired about three years ago, and I was looking for my next thing to do. I was not making very much progress because I had no deadlines, my life was too comfortable, and I had no pressure. So, what I ended up doing was starting this accelerator program, where I just tried to bring together the very best people that I could find, including Kuk, who was one of the people in our very early cohorts of Inception, and just tried to find people who are interested in generative AI and wanted to build things using generative AI but were still very early in their journey.
The main reason I did it was because I was looking for my next thing, and there wasn't really anything like this. There are programs like Y Combinator or Tech Stars, but I wasn't going to join a program like that. I'm not going to give 7% of my company just to join some type of founder community group. There weren't many programs like this, so we started one, and it's actually ended up being quite successful. So, yeah, anyway, that's just a little bit about me, and then I can talk a little bit about Inception and what we're doing.
It's a new type of accelerator model. The traditional accelerator model is typically run by an investor like a VC firm. In exchange for you joining the program, they will take some percentage of your company, like 7% or 10% or even more, and then they'll give you some investment. But usually, the investment is not really a good deal economically. It's not a good economic deal, and they try to make up for it by having the program. The problem that I saw with these types of programs is a problem called adverse selection, where basically those style programs, the best people decide not to go, and so you're not getting a representative sample of founders. You're systematically excluding the top end and the very best people. We wanted to design a program where we avoided that problem altogether.
The model is very neat because we take no equity in the companies and we don't charge founders either. We want it to be pure upside for everyone to join, especially the very best people. We designed the program, and it's kind of like a retreat. We go to some house for about 72 hours, like three days, and just get people together who are all interested in starting companies. It's kind of like a hackathon, but the output is not just a project or a hack. The output is a full pitch deck that you deliver in front of a room full of investors.
The very first event we did, we had about 20 investors who showed up. The most recent one we did, we had 250 who came to our demo day, and actually 600 applied to get in, but we didn't let them in. It's gotten quite a bit bigger now. The events we do, they end in a demo day. In fact, the reason I'm flying out tomorrow is that we have one that starts this week, and it's going to be on July 11th to 14th, so it's happening this weekend. So, I'm flying back to the US for that.
This accelerator program, especially for these types of people like serial entrepreneurs or people who have a particular type of specialized skill or deeper experience or work in really hot areas, traditional accelerator programs are not really a good fit for them because they have higher standards. They're looking for things where the quality bar is kept really high. They're looking for opportunities that are extremely early stage, where you can meet co-founders. They don't want to join a company that's already going. They're looking for opportunities to be a founder and get in at the very earliest stage of a company. They don't have a lot of time, so they don't want to waste a lot of time. They don't want to join a program that might not be good that will take three months.
Their time is very precious to them. These types of people thrive in the highest pressure environments. This is how we intentionally designed the program to hit all of these points. We keep the bar extremely high for the people who get in. We don't charge them any equity, but we focus on trying to get the very best people that we can. We focus on co-founder matching and ideation at the extremely early stage, like pre-incorporation for the companies. It's at the point where I think I want to do my next startup, and we find people who are like that. The program is not three months; it's only three days long because good people are busy and have other things to do. We want to be respectful of their time, so we compress it down as short as possible. They thrive in high-pressure environments because when you're there for three days, it's very intense. At the end of the event, we have a big demo day with a huge room of investors. These are not no-name investors. We have all the top VCs like Sequoia, Andreessen Horowitz, and Khosla Ventures come to our demo days now. We have a great reputation for quality and quality founders.
Putting it all together, we've been quite successful. This is some of the organizing team that we have. The retreat, this is the type of thing we do on our retreats. It's like a hackathon. I love going to hackathons. There are many hackathons in the Bay Area and around, associated with schools like Stanford's TreeHacks, Berkeley's CalHacks, and MIT's HackMIT. I go every year. I love that type of intense environment where having a deadline forces you to focus on only what's important. This is true in business, sports, and many different areas. What separates good people from great, All-Star, Hall of Fame people is how they operate under the highest pressure environments when the game is on the line, and it's the fourth quarter. Do they crumble under the pressure, or do they unlock some new store of energy and perform the best when the spotlight is brightest? When you encounter people like that, these are the type of people you want to work with because they're likely to be successful.
We do this as well. It's a very high-pressure environment, which is intentional because finding a co-founder for your company is a lot like getting married. You probably spend more time with your co-founder than your actual spouse. You want to know how people operate under pressure. The only way to really know that is to go through the experience with them, working on something real with real stakes on the line, where there's a deadline you can't blow off. You really get to see and know people well. That's the type of relationships you want when looking for co-founders. That's also where the deepest bonds are formed, through shared experiences. This design has been a highly successful program so far.
The first event we did was in November 2022. We've done 11 of these cohorts so far, with a total of 134 founders coming through. We've had over 40 companies formed so far. At least 22 of them have raised a substantial amount of money from top-tier VCs. The founders are 71% serial entrepreneurs, with an average of about 13 years of professional experience. These are not people fresh out of school; they have a little more experience. Quite a few have PhDs from top schools like Stanford, MIT, or Berkeley. The best teams are also the most diverse. Right now, 25% of our founders are women, and we're working to increase that over time.
We're very focused on finding the very best people, bringing them together, and running these events where they can interact, work together, and have successful companies come out of it. We really focus on the experience, ensuring it's pure upside and only good for the very best people. Our NPS is 88. NPS is when you ask if you've ever gotten a survey asking from 0 to 10 how likely you are to refer this product or program to someone else, like a friend. If you say 9 or 10, that means you're a promoter, a fan of the service, and you refer other people to it. The best brands in the world, like Apple, Costco, and American Express, typically have an NPS of about 40. Our NPS is 88. People who come through the program become super fans and refer other people. In fact, 77% of the founders we've had were direct referrals from other founders who had been through the program before.
If you bring together a bunch of amazing people who want to start companies, they end up starting companies, and because the people are good, those companies end up doing well. That's the whole point and focus, which is a really different model from most accelerator programs that are more of a spray-and-pray approach. They take a large group of people, not knowing who's good or not, give them all some opportunities to compete and join, and maybe one of them will do very well and become a unicorn. But those programs ignore the problem of adverse selection, where the best people don't want to join because the economics aren't good for them, leading to fundamental misalignments between the people running the program and the participants.
People say lots of nice things about us, and we've had some good companies come through, including Glasp here as well. That's a little summary of Inception Studio.
Can you explain the other companies? Yeah, I can talk about a few of the companies that have been through Inception and the interesting things they're doing. One of them is Ventrillo, doing generative AI for software testing. The founder, Andy, is a Stanford PhD and used to be the founder of a company called Sensity, which was sold for $350 million to Synopsys. His new company focuses on using generative AI to help with software testing and quality processes. Their vision is that in the future, every developer will have a virtual QA agent helping them test their product as they develop it. They raised $10 million from Andreessen Horowitz.
Another company, CoFrame, was founded by a two-time founder who started Autograph, a unicorn company, and another company that got acquired. CoFrame uses generative AI to generate new variants of user interfaces and test them automatically with users to find the best ones. They raised $9 million from Khosla Ventures and Notion.
There's Gondolo, applying generative AI to the travel space, using generative AI agents to automatically book travel. Travel is a tricky market, but they have an innovative approach.
I started my own company out of Inception as well, called RedCo, a cybersecurity company preventing social engineering attacks. Scams have gotten worse with generative AI, creating highly targeted attacks. We build defenses against these attacks, using generative AI to detect malicious content and scams.
We have around 40 other companies, many of them B2B and using generative AI because it's very popular and opens up new possibilities.
For those interested in joining Inception Studio, we run these events in Silicon Valley every six weeks, and we've had international founders fly to Silicon Valley to participate. After my trip here, we're planning to make Inception Japan to run events here for founders interested in doing these things in Japan. The community part is a big important part of Inception. Having a great community helps founders succeed and push themselves to be better. Inception is a global program, but we want to set up a branch in Japan to support the Japanese founder ecosystem. We're planning to do the first event this fall.
If you want to apply, we have a link on our website with a short form to fill out. You can find more information on the website.
Does Inception Studio accept founders who already have co-founders? Yes, we started by taking individual founders and helping them find co-founders. Recently, we expanded to accept those who already have a co-founder and idea, as long as they're at the extremely early stage. If you already have customers and have taken investment, you're too far along. The focus is on getting companies off the ground, even if you already have a co-founder.
How do you manage your time with an acceleration program, security company, and teaching? Embracing generative AI tools makes you more productive. Developers using tools like GitHub Copilot are five times more productive. Delegating effectively is crucial. I have amazing teams I trust to handle the work. Teaching at Stanford, 80% are guest lectures, which benefits the students and me. In my cybersecurity company, I'm more like a chairman, and I have co-founders handling operational roles. Delegation unlocks a lot, allowing you to achieve more.
For those who have an idea and business plan but no product due to high costs, is it still possible to get investment in Silicon Valley? Yes, especially for generative AI, which is very hot right now. You can raise money with just an idea if you have a good team and a big market. However, your time is more valuable than money. Be careful about what you commit to. It's a good time to build, and builders have an advantage because they discover what's possible with these models.
Do you have criteria for application? Yes, we look for three criteria: impressive accomplishments, serious commitment to starting a company, and a good fit with the other people in the program. We do one-on-one interviews to understand motivations and ensure readiness to start a company. We curate the group to fit well together. This hand-curated approach is why we're a nonprofit, allowing us to focus on quality over quantity.
What's the difference between going to an MBA program and Inception Studio? The true benefit of an MBA program is the network of people you're connected to, not necessarily the knowledge you gain. Practical experience, like starting and growing a company, is more valuable than an MBA.
If you want to connect with me, you can find me on LinkedIn or contact me via email.
Application to Inception Studio Japan
