Jesse Lyu, co-founder and CEO of Rabbit, exhibits no fear of his company’s potential failure. In a conversation with TechCrunch, he acknowledged the precarious position startups like his occupy, especially when faced with competition from giants like Google, Microsoft, or Apple. However, he firmly believes this is no reason to abandon ship.
During his appearance at StrictlyVC LA, Lyu shared his philosophical stance on facing competition from tech behemoths, emphasizing the importance of perseverance (with some quotes adjusted for clarity).
Rabbit’s innovative product, the r1—a pocket-sized AI assistant unveiled at CES—has garnered significant attention. This device, smaller than a smartphone, serves purely as a voice-activated assistant capable of managing apps and executing complex tasks, akin to ChatGPT’s conversational abilities, through “intent” and “action.”
Lyu recounted how the vision for such a device has been a decade in the making, waiting for technology to catch up to make it feasible. Initially, attempts to prompt a language model into performing tasks were disappointing. For instance, using an LLM to comment on a YouTube video proved cumbersome, taking several minutes to complete a task that, in Lyu’s view, fell short of delivering a satisfactory user experience.
The breakthrough came with the development of the “large action model,” trained through extensive footage of users interacting with popular apps, enabling the AI to automate tasks by understanding and manipulating app interfaces.
Despite potential concerns about API costs threatening the startup’s financial health, Lyu is optimistic. He highlights the success in not only making the r1 profitable—a notable achievement for a first-generation product from a new startup—but also in exceeding sales expectations, with orders reaching nearly 100,000 units.
Lyu dismisses the idea of a subscription model for the r1, aiming instead for affordability and simplicity. He mentions a future possibility where users could develop and sell app-specific models, with Rabbit taking a commission, though this plan remains in the early stages.
Facing the reality of competing against the biggest tech firms, Lyu maintains a Zen-like perspective, acknowledging the high failure rate of startups but emphasizing the importance of resilience and focus on one’s own path. He views the intense competition not as a deterrent but as a motivator, underscoring the “grow faster or die faster” nature of startups and committing to the survival game that entrepreneurship entails.
