 Hello, Minecraft community. I am Joshua Montgomery, the founder of Minecraft AI, and I am here to talk about all things Minecraft. We are doing a bunch of new things that are fun and I'm here to talk about them. So anyway, without further ado, it is a bit weird talking into my computer with nobody else around. You can see I'm here in the workshop. There are 3D printers and lasers and drones and all kinds of smart speakers right up here behind me. This is my preferred place to be working. As much as I like the office, it is nice being in a place where you can get up and actually do stuff during the course of the day and other than send email and talk to people on the telephone. Anyway, here I am. I actually just got done printing a cooling fan for a project of one of the printers behind me, which I might get out to clean up mid YouTube live. So anyway, so I have a couple questions that I'm supposed to talk to you about and answer. I think we're going to be doing a lot more of these in the near future as we work to better engage the Minecraft community. One of the things that's been really a blessing for the company and the team has been how wide and broad the community has grown over the course of the last six years as more and more people download and install Minecraft on their Raspberry Pi and on their laptops and, you know, on their Plasma TVs and, you know, all these other applications, whether it's Chatterbox or LumaCube or Cubo, the robot, you know, all without us, you know, having to do a big heavy lift on the community building side. Someday, I think we will have folks that travel around the world and just build community. I'm reminded of the folks at SendGrid who used to have a representative at pretty much every startup event that was going on in the U.S. and abroad. You know, it was their job to go to all these startup events to pay for, you know, parties in the evening and then to drink with founders. After talking to a few of them, it was pretty clear that their livers got a little damaged during the course of that career. But it did certainly help SendGrid to engage with a lot of startups, ours included, to help them send email. And I think that that's probably in the future, maybe minus the liver damage from Minecraft as we get closer and closer to being able to drop the technology stack into anything from a Kubota tractor to a you know, a SpaceX space capsule and start looking at ways to engage with all of these companies and getting the voice assistant on to them. So, so anyway, so let's start with some questions. So easy one, right? What does the Minecraft logo mean? So, you know, the original Minecraft logo, the O in Minecraft was actually a speaker grill and you know, the whole idea was to really tell the story of our company as a as an audio technology. Since then we've we've made a change. We've got the little O with the half circle and then we've got the hexagon around it in the in the larger logo. And we've got some really specific colors and fonts we use. You know, the the purpose of the the new logo was to make it easier to animate and easier to to tell the story of the technology. We wanted it to still be sort of speaker like but we wanted a bunch of components in there that we could flip and spin and change colors and and really engage with with our customers on and also something that looked nice in two color. I'm a big fan of logos and branding that involve the fewest colors possible because it makes it a lot easier to print those brands on t-shirts and on devices. So, you know, so yeah, the the Minecraft logo came from a design study that our design team did in the summer of either 16 or 17. We had three or four industrial designers some from the University of Kansas some from the School of Art and Design in Ohio. And they all came together and helped us do a lot of stuff around, you know, building the animations for the screen but also around branding for the company. And so, you know, at the end of that process we were presented with four or five sheets that really encompassed the colors and the shapes and the designs of the the logo and the fonts and and at the end of that we settled on the the logo that we use today. And you may have noticed that the catchphrase under the logo has changed. You know, we used to talk about being the open voice assistant and now we talk about being the private voice assistant. I think that that in many ways we still are open and and always will be right. So the source code is available online. The you know, you can download the stack and run it independent of us. You know, we even provide instructions for for standing up your own version of the Minecraft backend Selene. but you know as the other technology companies in the space started to open their stacks, meaning that they made them more developer friendly and provided APIs didn't really, you know, in many ways, they don't provide the underlying tech, right? They just allow people to access it. I think that that ceased to be as important a component of what we were doing as the privacy aspects of what we were doing. You know, the at the same time the technology companies, you know, kind of pseudo open their their source code or pseudo open their platforms. You know, they have a tendency to shift their focus or or to to focus on growth, right, to be the biggest player in the space. Even if that means that they're given the technology away for free. And, you know, the the way that they get paid for that is of course by by selling, you know, the eyes and ears of the people using their tech. Which, you know, they call users and not customers for the reason that, you know, users use your tech and might not pay you you know, customers pay you for your technology and they're the people you actually serve. And so as the the other technologies in in the space became more and more focused on growth and in adding users and being accessible, maybe not open, you know, and then began to focus more and more and more on, you know, figuring out ways to monetize those users, you know, either by by learning their behaviors or selling them products. You know, the the privacy component of what we were doing became more and more and more important, right? You know, especially for a technology that is always listening that is is sitting in the corner of your kitchen and can see all and hear all within your home. You know, privacy becomes really really important and you know, we've been I think we've been doing a good job telling that story and and you know, openness is definitely a big component for privacy, right? Like I can tell you I'm private all all I want, but you know, unless you can see the source code that we're running, like how do you know that we're not violating people's privacy? So, you know, being open goes hand in hand with it. But in today's market, you know, with so many voice assistants, you know, being built by so many companies from, you know, Bixby over at Samsung to you know, Siri to you know, our stack, obviously to Alexa, the Google Assistant, you know, how do we differentiate? How are we different? And you know, the answer to that is, you know, not only are we not spying on on you for other people, right? The way that some of those brands do, but we're not spying on you for our own edification too, right? Like, you know, some of those those speaker tech stacks, you know, they advertise, we don't sell your information to anybody, but of course, they're using that information internally to sell you their own products. And we do none of that and and so, you know, adding that private voice assistant tag to the logo really helps, you know, us to communicate, but then also helps us to remember that that's really the focus of the company and that's the, you know, the underlying ethos to what we're doing. So anyway, so anyway, a couple questions out there from the the YouTubers out there. So here's one that's it's kind of interesting. Why did we choose Michael Lewis to be your CEO? So for those of you who have been following the company, Michael joined the company in January of 2019 as the as the CEO. No, I'm sorry, January of 2020 as the CEO like two months before the pandemic started and and, you know, I gave up the CEO hat and and really wear a founder hat. And we're still defining my role even two years later, but, you know, a big chunk of my role is, you know, facing the outside of the company, right? Talking to our customers, talking to investors, talking to partners, talking to the community and listening to the community. And so, you know, Michael put on the operational hat, which he's had at a couple of a couple of other companies and and I've said this before, but I'll say it again, you know, as the founder of a company on day one, it's you and maybe two or three other people around you. You know, when we founded Minecraft, you know, it was me and my co-founder, Chris Adair, who's also my wife, Ryan Sypes, who, you know, was doing projects in our in our maker space and really was plugged into the local Linux community. Derek Shweppy, who helped us with our original Kickstarter. So there were only a few of us that were there at the very beginning and you know, and with that small of a team, everybody wears a bunch of different hats, right? So, you know, in Derek's case, you know, he was doing design work and helping us with all the enclosures and things that you see behind us, but he was also helping with video production and branding and a series of other, other, a series of other tasks within the company. You know, Chris Adair was playing the role of social media maven and marketing and running the Kickstarter campaign, but was also doing all of the bookkeeping, for example, and, you know, handling a lot of the overhead and supervisory work. You know, me as the CEO, you know, I was working to help tell the story and writing copy for the website and you know, working to find investors and working to help manage cash flow and making decisions about technology. And so, you know, when you start a company everywhere, you go, where's a bunch of different hats? And your, your goal as an entrepreneur, as you grow your team is to look at each one of those tasks that you're performing and to find somebody who's better at that task than you are and to give them that hat, right? So, you know, for the CFO role, you know, finding somebody who's fantastic at, you know, as a controller and a fundraiser and giving them that hat for, you know, the technology development side, you know, finding developers that are really great at, you know, database stuff or finding developers that are really great at front end stuff and giving them that hat. And then taking them all off, you know, one at a time and in a perfect world as a founder, you know, your goal is to have the business that you're building or the project that you're building operate without, right? Like, there's nothing that's more limiting to your freedom than, you know, being the essential cog in a business because you can never go on vacation. You know, you're always kind of saddled with whatever hats you're wearing. So, you know, as that business grows and as it becomes more successful, the goal is to take those hats off and give them to somebody else. And, you know, in early 2019 or late 2019, early 2020, you know, we were having a lot of challenges. You know, mid 2019, we made some pretty substantial staffing changes because we weren't really happy with where we were on the technology side. And despite the fact that we were doing okay financially, it just wasn't clear to me as the CEO that the team that we had was going to take us from where we were to where we needed to be. And that wasn't the fault of any specific team member, right? It really came down to something that was almost undefinable, right? And so, to really push the software that we wanted to push out to get the hardware out that we wanted to get out to get something out that really met the needs or helped us to achieve the vision that we created when we ran the Mark II Kickstarter and developed the Mark II feature set, we needed to make some changes. And so, between the summer of 2019 and the beginning of 2020, we limited the team to a very small number of people. We took a daily stand up, you know, we set really achievable short-term goals. And the goal was to make as much progress as we could as quickly as we could. And so, during that time, you know, we really did go from a technology stack that was where we were having a lot of trouble and a project management approach that, you know, just wasn't allowing us to meet the deadlines that we needed to meet to something that was quite a bit faster, right? And towards the end of that time, you know, I went out to the valley to talk to investors. And, you know, one of the things that's really challenging about being such a small company in such a big space is, you know, you have to overcome the hurdle of, you know, well, what do you do about Amazon? What do you do about Google? What do you do about Apple? Like, what makes you different? Why are you going to win in the face of competition from some of the most innovative, well-funded companies in the world? And, you know, to me, the answer to that question is obvious, right? It's, you know, we focus on privacy, we focus on community, a big open source community with a lot of diverse viewpoints and a lot of freedom can build software that is more stable, more reliable, and more engaging than, you know, these big tech companies can, simply using internal resources, right? You know, that's really the thesis. And, you know, one of the other things that we bring to the table is, hey, look, you know, our monetization strategy is built around, we provide something of value and people pay us for it, right? As opposed to this kind of oblique strategy of, you know, hey, we're going to dominate the user experience in this vertical and then use that dominance to, you know, drive business to one of our other business verticals where we'll make money. But of course, you know, that isn't instantly obvious to venture capital folks who've made admittedly huge fortunes in surveillance capitalism, right? Backing companies that, you know, as their primary mode of monetization, spy on people and sell that information or sell access to that information to others. So I went to the valley and was talking to a series of investors and really wasn't getting the response that I had historically gotten when I went to the valley. And so I reached out to some of our larger investors and said, you know, for the first time since we founded the company in 2015, I really don't feel like I've got a handle on, you know, where we're going to be tomorrow. And I really could use some help, right? And I sat down with several investors and, you know, when I sat down with Michael, he really clicked in a lot of ways. You know, Michael has a really strong track record, you know, at Stellar Semiconductor, he created a company that was very, very valuable despite the fact that they never actually even shipped a product, right? They did designs and they were, you know, working their way into becoming one of the early graphical vector graphics or GPU companies, right? And, you know, Broadcom, you know, viewed the GPU as such an important part of their technology stack that they acquired the company despite the fact that Stellar hadn't shipped its own chip at the time. You know, and then he went on later to found a gaming company and, you know, it was really early to the MMO space, like right around the same time that World of Warcraft was taking off and people were really getting into MMO games, Cryptic Studios published the heroes. And so it was just really clear to me in talking to Michael number one that our values aligned and that he was as committed to privacy and user agency and openness as I was, right? Maybe more so in a lot of cases. And I think that the reverse was true too, like he saw the, you know, a move mountains to build a company that is based on those basic principles. And then, you know, coupled with his experience, it just made sense for him to take the role of CEO and, you know, the chief operator. And, you know, at Minecraft, it's taken us a year or two to really define what that CEO role is, you know, typically, the CEO is outward facing, you know, they're the ones that are dealing with investors, they're the one who are dealing with bigger customers. And, you know, they might have somebody in house operating, but, you know, at the end of the day, the primary job of the CEO is don't let the company run out of money, right, which typically involves fundraising. Now, in Michael's case, he took a little bit of different approach to that because he had had so much success, you know, he reached into his foundation or his foundation reached into their coffers and, and provided us with, you know, the operating capital that we needed to really, you know, take the next steps that we needed to as a company. And so I was really happy to take that that CEO hat off and pass it on to somebody who is more capable. And, you know, when we find somebody who's more capable of telling our story, I intend to take that hat off as well. And when we, you know, finally cross the threshold of, you know, selling product to pay our bills as opposed to raising money to pay our bills, you know, I'm looking, looking forward to taking some of those sales hats off and those fundraising hats off as well. And, you know, if at the end of the day, the only thing I'm doing at work is working with the team, you know, helping to keep the company, company's moral compass pointed in the right direction and then solving, you know, bigger, more complex problems. I think that that would be a great role for me. And I'd be really happy to work with marketers and fundraisers and operators and, you know, product managers and project managers and developers, all of whom are more capable than I am in the same way that Michael is CEO is more capable than I am. So, so that's pretty exciting. So let's see, what are you doing about the global parts shortage? So there's a couple of things that are going on in the global parts shortage. Like there's the obvious stuff, which is, you know, COVID has messed up supply chains. You know, we have some, some climate change related issues, you know, drought in Taiwan, where a Taiwan semiconductor is located, has caused problems with production. You know, both of those are the obvious things. But then there's some second tier effects that come from that that are also causing some problems within that, within that market. You know, one of them is, one of them is duplicate orders. So, you know, as the Silicon market started to get constipated for lack of a better word, companies that needed chips started putting in orders of multiple vendors. So, you know, if you need 10,000 chips for your automobile, let's say, you know, you have your typical supply chain, and then you probably have some supply chain redundancy, you know, companies like Toyota made that a huge priority after the after the tidal wave in Japan. But, you know, those companies started to go outside of their standard supply chain and put in orders for the parts that they needed with other vendors. And so a company that needs 10,000 microchips might have put in an order with, you know, one vendor, two vendor, three vendor, four vendors, and to the upstream microchip manufacturing manufacturer, that might look like an order for 40,000 chips, right? Because they're selling through distributors, and they don't necessarily know who the end customer of that part is. You know, as those orders are fulfilled, you know, as those orders were dropped, it made the semiconductor supply chain look more and more and more behind. And what we're finding is that as those orders are being fulfilled, so, you know, you ordered 10,000 from four vendors, one vendor finally delivers, the other three orders are getting canceled. And what that's doing is it's freeing up supply for other people who might have ordered that chip or something like it. And so, you know, we're already starting to see some loosening in that supply chain. And, you know, recently, I think on the Raspberry Pi side of things, we found a vendor who was able to cross fingers, meet our needs for the upcoming, you know, initial production run. But the same is true of audio chips, the same is true of some of the supporting chips that are going on the SJ201 board. And so, you know, we're navigating it to the best of our ability, you know, we're working with our upstream supply chain. And then, you know, we're doing what a lot of those other vendors are doing, you know, ordered the same parts from five vendors, you know, with the goal of getting parts in-house at a reasonable cost as early as possible, and getting those Mark II out the Mark II def kits or production Mark IIs out the door. The def kits actually are out the door effective last week. So I'm super excited about that. So next question, why are you doing another raise? So that's a good question. A healthy startup will be raising money even after it's profitable, right? So, you know, the whole concept behind a startup is a bit different than, you know, a local ice cream shop, right? A local ice cream shop probably plans to lose money for some period of time. But, you know, they look at the market for ice cream in their space, they look at the rent on the place that they're going to be, on the venue that they're going to occupy, they look at the labor rates within their local community, they do a little bit of math, they set aside enough money to get through the initial startup period, right? And ideally, after six months or a year or 18 months, that company has no longer, that little ice cream shop is no longer burning cash. They're now profitable and, you know, maybe they start looking at either franchising or expanding into other locations, right? A startup is very different from that. So, you know, a typical startup in the modern startup economy, you know, the life cycle might be 10 years, right? From the time that the company is founded to the time that the company exits either through an IPO to a public market or through to a sale to somebody else in the industry or, you know, failure, which is a real outcome in a lot of different cases. And, you know, a lot of times the difference between having a successful outcome and failing is the availability of capital through that process. You know, when a startup initially gets started, what it's doing, especially if you're developing new technology, is seeking a customer base and a market that matches the capability of the startups and then once the startup finds it, you know, doubling down and growing into that marketplace. In our case, when we first got started, as smart speakers weren't a thing, right? Like, a Minecraft pre-exists Amazon Echo or Google Home or Apple's HomePod, we used to have to explain what a smart speaker was. But we had this concept that, you know, given modern machine learning algorithms and modern natural language understanding and modern speech transcription methods that we could build, you know, an artificial intelligence that interacted with people exactly like a person, right, which is the end goal of the technology that we're building. And, you know, for us, it became really clear that in order to do that, you needed to have some mechanism to touch the customer, right? Like, you know, smartphones really weren't going to be a good solution for us because we don't control the microphones. We don't control the operating system, you know, either for Android or for iOS. And as a result of not having access to the hardware, you know, it makes it very, very difficult to have a wakeward activated technology. You know, the other thing that they kind of, and that this is still the case with voice assistants on smartphones, you know, a voice assistant really occupies a space, right? And so when we got started, the first thing that we did is we went to explore that market. We did a Kickstarter to see if anybody wanted a smart speaker. It turns out lots of people did. And then we started, you know, building the technology while simultaneously looking for investors that shared our vision. And, you know, we raised a little bit of money. You know, the first Kickstarter was like $125,000. We joined Techstars, which was another $120,000 check, raised a little angel round that, you know, $350,000. And then kind of started down the path of building that technology, hiring the team, you know, getting ready to go into production. You know, shortly after that, we went out and raised another round, right? We ended up raising, you know, I think it's now nearly $7 million over the course of four or five small rounds, some of which are discrete, some of which kind of flow together. You know, I'm a big fan of always being in a position to bring on board a new investor into the company, never being shut down on fundraising, which puts me a little bit in opposition for some other founders who like to do fundraising in discrete rounds. And as long as the company is growing in value, and as long as the share price continues to go up, you know, that becomes a blessing for everybody involved. You know, when we originally raised money from Mycroft, it was on a par value of like 0.0001 cent per share. You know, today we're raising money on $1.70 a share value, which makes the, you know, the before money value for our latest raise $38 million. So, you know, and we're selling that stock in arms length transactions to investors that we're in no way related to. And so that really does set the value for the company, right? And, you know, the next round, we might raise, I don't know, another $5 million on a $50 million pre or a $60 million pre. And then, you know, at the end for our company, or at least the part where we go public and start providing some liquidity, will probably be a Series A plus or maybe even a SPAC, you know, that allows us to tap into public markets and, you know, continue to grow the company. And so, you know, the idea of the startup is to explore the market, find a niche, you know, double down and invest in that niche. And, you know, at the end of the day grow to become a company that has meaningful revenue and a meaningful place in the market so that you can either go public or be acquired. And to do that involves raising multiple rounds at higher and higher evaluations over time. And that does a couple of things. Number one, it shows early investors that the company is growing in value. It makes sure that the founders don't get diluted too deeply out of the company. And then, of course, it makes capital available so that the company can grow and expand. And so, we're really excited right now to be raising on start engine. You know, we're raising $5 million, which we're looking to do over the course of the next year or so. The first few weeks of that campaign have been very, very successful. You know, we're on track and on pace. Actually, we're ahead of the pace that we had originally set to raise money for this round. And, you know, we're raising at a higher evaluation than we did last time, which is great for existing investors and should be an indicator for other investors as to what the future might hold for Microsoft provided, you know, the market remains the same and, you know, forward-looking statements should be taken with a grain of salt clearly. So, yeah, we're pretty excited to be raising another round and, you know, making the shares of the company stock available to people other than VCs within the inside track. You know, one of the things I read in the news recently, which kind of blew my mind, was Peter Teal's Roth IRA, right? So, here in the United States, you know, the maximum you can contribute to a Roth IRA is $5,500 if you're under 50, and then I think it goes up to $6,000 if you're 50 or over. Anyway, something like that. So, you know, from the time you're born until the time you retire, if you're contributing the maximum amount to your Roth IRA, and you're keeping it in cash, right? The total amount of money you can contribute to a Roth IRA is about $300,000, or $350,000, something like that. You know, Peter Teal's Roth IRA has something like $5 billion in it, and the way that he was able to build that kind of value for his IRA was by, you know, initially putting eBay stock in it, which was valued at a very low value, exiting eBay, taking a million, million, five, and investing it early on in Facebook. You know, and that Facebook investment, you know, returned huge dollar amount for Peter Teal. The thing is, is that you and I, as normal investors that are not plugged into the PayPal Mafia or the Silicon Valley VC scene, you know, today we don't get access to those types of early stage deals. And so, one of the other reasons I'm excited about raising money through crowdfunding and through, you know, some of the other mechanisms that we've raised money with over the years is that it gives normal people access to our early stage startup. And, you know, that might have a catastrophic end for them, right? Like the company, there's no guarantee of success. But if we are successful, you know, that means that they're able to get in involved in the company at a time where for a typical startup, you know, they may only have three or four or five venture capital firms on their cap table. And ideally, you know, whether it's us or some other startup, some of these crowdfunding mechanisms will create opportunities for early stage investors to create the types of outsized returns that guys like Peter Teal have gotten by being, you know, Silicon Valley insiders and making investments that way. So, super excited to be making that available to the general public. So anyway, it looks like I've been sitting here long enough. My motion sensor just set the lights in my shop off. I'm really happy to be here at my craft talking to folks. You know, if you want to submit some questions for us to answer in the future, I'd love to love to engage. And I think we'll be doing a lot more of these as we're continuing to try and engage with our community. So thank you so much for watching the YouTube live stream. And I'm looking forward to talking to you again in the future. Thanks so much.