When Cluely, a startup claiming to be building a product that helps people “cheat” on everything, announced that it raised a $15 million Series A financing round from Andreessen Horowitz, some people o X criticized the VC firm for backing the controversial company.
After all, Cluely isn’t just offering a product that may have questionable uses; the startup has also become famous for using what many people call rage-bait marketing.
But Cluely’s ability to grab attention is precisely what attracted a16z to the startup.
Even before meeting Cluely’s founder Roy Lee, Andreessen Horowitz’s partner Bryan Kim thought that startups need new marketing tactics in the AI era.
Kim, like many investors, previously thought that building a superb “artisan” product with highly desired features was the key to a startup’s lasting success, he explained on the latest a16z podcast episode.
But shortly after the emergence of generative AI, he noticed that offering an exceptional product might not be enough.
“If you craft this thing and OpenAI or someone builds a new model to include that part in their product, you’re done,” Kim said. “So, it couldn’t become this highly thoughtful, slow-build product. It needed to be something where founders moved extremely quickly.”
That realization has led Kim to believe that speed, whether in marketing or product building, is paramount to creating a successful startup.
Earlier this month, Kim published a post explaining his theory of why, for consumer-facing AI startups, “momentum is the moat.”
When Kim met Lee and saw that Cluely had been able to convert awareness into paying customers, he instantly knew that he had discovered a founder he had theorized about.
“It’s been so hard to pierce through the noise of everything AI, especially in consumer, and to do that consistently is actually near impossible,” Kim said.
How does Lee explain why his polarizing marketing approach has generated so much buzz?
“Most people don’t know how to make viral content,” Lee said on the podcast. “Everyone on X is trying to [sound] like the most intellectual, thoughtful person. But this just lacks viral sense.”
Lee, instead, had studied why some posts on TikTok and Instagram blow up.
“Algorithms promote the most controversial things,” he said. “I’m just literally applying the same principles of controversy on X and LinkedIn.”
What many people don’t know, Lee said, is that Cluely barely had a functioning product when the startup launched in April with its slickly produced video of Lee using its hidden AI to lie to a woman about his age and knowledge of art while on a date.
Despite having some semblance of a product, the startup has yet to unveil the solution it has been hyping.
“The internet is up in storm saying, ‘Where’s the product?’” Lee said. “We’re earlier than the latest YC batch of companies. Yet, we’re generating more views than every single one of them.”
Lee is convinced that once the product launches, it will generate even more excitement than if Cluely introduced it without “marketing” the company for the last two months. (The official launch is set for Friday, June 27, he posted on X.)
Kim sees Cluely’s approach as a perfect embodiment of his “momentum as a moat” theory.
Since time is of the essence in AI, the a16z partner is certain that Cluely can figure out its product on the fly.
“What’s important is to try to build a plane as it’s falling down the cliff,” Kim said.
We’ll all see soon if that plane soars or crashes.