Friend: The pre-seed AI startup that just spent $1.8m to buy the friend.com domain

(4 minutes)

Hi 👋, this is the Today in AI Newsletter: The weekly newsletter bringing you one step closer to building your own startup.

We analyze a cool, industry-shaping AI startup every week, with a full breakdown of what they do, how they make money, how much they’ve raised, and the opportunity ahead. 

Let’s get to the good stuff in this email: 

• This pre-seed AI startup just spent $1.8m to buy the friend.com domain

• This will either be one of the craziest marketing plays in tech history or a huge flop

• The founder is a 21 year-old Harvard dropout prodigy

So what’s the startup and who’s the founder behind it? Here’s the story of Friend and Avi Schiffmann 📈

💭 Did you know that 61% of young people suffer from serious loneliness in the United States?

Loneliness.

This is the problem Avi Schiffmann is trying to solve with Friend - an AI wearable companion that’s there for your emotional needs.

Everyone’s been trying to build an “AI assistant” for productivity where it could do things like book you flights or send out emails. 

Avi, however thinks that companionship is a far more interesting use case that incumbents like OpenAI won’t work on. 👫

Talking to AI about things going on in your life is the biggest winner in AI so far with startups like Replika and Character AI getting a ton of traction.

They say “you’re the average of the 5 people you spend the most time with”, so having an intelligent friend always by your side should make you an overall better person. 

Avi thinks that at least 10% of America aged 18-27 will consider AI a friend by the end of this decade…

Backstory 👀

Before Friend, Avi had been a bit of a teen tech prodigy.🤓

At age 17, he created a COVID tracking website that gained millions of users and became a crucial resource during the pandemic.

This won him the “Webby person of the year” award presented by Dr. Anthony Fauci.

In 2022, at age 19, he built “Ukraine take shelter”, a website which helped Ukranian refugees find housing by connecting them with hosts worldwide🏠.

It was basically a stripped down Airbnb.

In the first week of launch, over 4,000 hosts around the world offered refugees a place to stay 🚀. The site helped 100k+ Ukranians in total to find homes.

He then became really interested in AI after tools like ChatGPT started being released, and how he could use AI for good 🤖.

He then thought of the idea for an AI wearable device around your neck that would track everything you said and give you productivity advice.

Rebranding 🧨

Avi then founded “Tab AI” in May 2023 as a productivity-focused AI wearable. There was a clear use case for it: an AI coach that would set you goals and nudge you towards better behavior.

He then quickly developed the first prototype with zero experience in physically building things. He pieced the first “Tab” together with a Raspberry Pi and GoPro harness using an off-the-shelf camera and LTE module.

The prototype took pictures every 30 seconds and used pre-ChatGPT visual models 🦾 to make sense of your environment and activities.

Avi started using the device doing his normal day-to-day activities and was always thinking of ways to improve it.

Then came January 2024 when he went on a trip to Japan and found himself alone in a skyrise building in Tokyo where he kept talking to his AI prototype.

Avi was going through a lonely spell and wanted someone to talk to and connect with on an emotional level. Why couldn’t the AI assistant just do that?😔

In that moment he realised he wanted a companion that was there with him.

This is when he completely rebranded the AI companion from a productivity tool to a friend, AI that anyone could talk to anyone about anything.

💰 He decided to change the name of the companion to “friend” and raised a $2.5M round at a $15-20M valuation. Investors included Cory Levy, Austin Rief, Solana founders Anatoly Yokovenko and Raj Gokal, and Perplexity AI founder Aaravind Srinivas.

Avi then decided to use $1.8M of that money to purchase the “friend.com” domain…💸💸💸

This purchase will go down as either one of the greatest marketing plays in silicon valley history or a huge flop.

So how does the “friend” work? 💃

The friend is designed as a wearable around the neck which hears everything you say.

It has a pretty sleek design in collaboration with Bould, the company that designed Nest Thermostats. The design’s inspiration is from the Tamagotchi which was super popular in the early 2000’s.

The friend comes with a 15-hour battery life, in an array of bright colors, and costs $99 a piece (no subscription yet).

It was released on pre-order on 30th July, 2024 (intentionally on National Friendship Day), and devices should start shipping by January 2025.

Friend has pretty much gone viral on X (Twitter) with over 23M views and has already received 1,000+ orders since launch.

Before you go 👋

Thank you for reading.

Know someone who'd love this newsletter? Share the love. 🌟