How Do You Build Safe AI for Kids? LivePerson Founder Explains

Thank you. Thank you very much.

Thanks. I'm glad to be here. The beauty of us discussing what you do and I am going to ask you to introduce yourself is that for anybody who's really looking to be an entrepreneur or who is curious about how to execute on certain projects and deliver value especially within the AI space. Rob, you sound like an individual who's worn all the hats that are possible to wear, but secondly, you've sort of rewound your clock and you are revisiting an earlier form of your youth in setting up Kidcoai.AI and I really am excited to jump into this conversation and tackle the idea of executing to deliver value. So without any further ado, Rob, I would not be able to do service in introducing you to our audience. So I'd rather let you introduce yourself.

Thank you. I've been in the technology industry for about 30 years, but my claim to fame is I invented when you chat on a website in 1997. I invented that technology. So you go to a website, you see a little chat box and you chat on it for customer care. I invented the technology and I ended up creating this company called Live Person and Live Person became the leading company for conversational AI. I turned it into an AI company and I ran it for 28 years. I went public in 2000 and ran it as a public company for 22 years. I started the company in 1995, slept on a couch, ended up getting a public company. I literally slept on a couch for three years and ate ramen noodles. I was broke. And then had that experience and then took it public and grew it to a little over 3,000 employees, about 550 million in revenues. It was a multi-billion market cap company. And then I left in 2023 to pursue building what I've built today. And I actually moved to Silicon Valley. I lived in New York and I moved to Silicon Valley. And then I started Kid Company, which is an AI device and experience for children. And I created a company called URAI, which is about small models for individual AI because I have a different vision of AI than I think most people are doing. And I figured I wanted to get back to my startup roots and build companies from the ground up versus running a big company with the bureaucracy and all the stuff that makes it not so much fun.

Invented chat. Yeah. Which has now become the most used interface. It became an AI interface, web chat. It became something even more than I thought it would be. But yeah, I invented that. It didn't exist. I was building e-commerce websites and there was no way to communicate with people except to call them and send emails. Then I thought of why not chat.

I saw that a lot of people would come to a website and leave. The people on websites could see all this, like 90% of the people if not more would just hit and go. I was like, why don't you talk to them? These are humans. And there was a perspective at that time that the internet was like a vending machine. You put products up on a website and people put their credit card in. You never have to talk to them. But the reality is we're human beings and we want to be communicated with. We build trust through connection. I want to bring that human connection onto the website. Put the salesperson on the website. That's really where I got started in the industry.

I have three younger children, 9, 7, and 4. When you have young children and you see what's happening today with our kids and devices, it's hard. It's a horrific experience. As much as I love my phone, when I hand it to my children, I feel like I've lost. Most parents with young children, this generation is a very different generation even than the teenagers. Something happened during COVID where YouTube and YouTube Kids decided consumption was the most important thing and they let this model happen. Children become addicts. A couple years ago, when I was leaving Live Person, my middle child, I remember this at 3:00 in the morning. I hear a noise, I go downstairs, and there's my at that time he was four years old, scrolling on an iPad watching YouTube Kids like a drug addict. He stole the iPad out of our room, snuck down at 3:00 in the morning. I go, 'What are you doing?' And he doesn't even know what he's doing. Then my younger one who's four now, he says the f word one day because he saw it on YouTube Kids because they think it's funny. They bring violence with characters. It's like funny to throw a baseball at some kid's head and you laugh about it because it's a baseball soft but children. What I started to see is that the value system of these influencers are influencing my children. I said enough is enough. I would like to create a device that can bring the power of technology and especially AI into the hands of children, but I'm going to do it in a safe way because these are my children. I had to think through how do you bring AI and how do you create models that are purposeful for a four-year-old, a 10-year-old, a 12-year-old? That's really what I set out to do with Kid Company.

We trained the models and we created it just for 4 to 12 year olds. What happened is they created a consumption model for everybody because they want to make billions of dollars and they started with that idea. Then children started to get access to that technology. We've seen kids are creating chatbots and they've been instructed how to kill themselves because these big models were made for everybody based on the world's knowledge. We created models and we created a platform that's only for 4 to 12 year olds. It's just not made for everybody. It was purposely built from the beginning that when you talk to a character, it talks to you as though you're a six-year-old or a 10-year-old or a 12-year-old. It can't instruct you to do any harm. It won't do anything. There's a thing called COPPA, which is the highest standard of digital engagement with children. We're in the middle of getting certified. We will be certified. We're at the end. We're literally days away. What was interesting is a company called PO that certifies you on FTC certification. We started with them on day one. We started building the platform with PO as a consulting firm that certifies you from day one. I didn't come in at the end and say, 'We made this thing, can you certify it?' We said, 'What do we need to do to build everything from the ground up so we can get the certification?' They said you have to do this, this, and this. Great. And they watched us all the way through. If you start with the intention of no harm, if you start with the intention of not consuming but creativity, the device will have children create. You create something much different. We don't have scrolling. You can talk to characters and there are creative areas, but you can't scroll. There's no third party content coming in that you don't have control over. There is no third party content. You as a parent create the content, kids create the content. It's a shift in mentality of what devices normally are made for, which is distraction and disconnection from their family.

At Live Person, it was a B2B company. We were selling big corporations this software to chat and message and do AI. I had a board member called Peter Block. He wrote this amazing body of work around community and connection. He's world-renowned for this. I brought him on the board about 10 years into the company because I was very interested in our culture and creating a certain type of culture of connection. He was the foremost on this idea. We started to work on the company and how to bring connection and community into the company. Interesting enough, I was at a conference with him. Peter Thiel, the big venture capitalist, used to have a conference and he invited CEOs. I went one year and I felt really proud to be selected. Next year I brought Peter with me. I asked him could I bring Peter Block. They said sure. This changed my whole life. The whole conference was you go to small groups. At the end of the day, Peter and I met up. He went to his own small group stuff. At the cocktail party, I'm with Peter. I go, 'Peter, what do you think?' It's amazing. I felt like I'm with all these CEO leaders of the world. And Peter, he's like a Buddha, he turns to me and goes, 'I've never met a group of people who are so sure about what they're doing is going to create something impactful in the world.' The second thing he said to me, he turns to me and says, 'I'm going to ask you a question. Do you think what we're doing here and what you're doing is creating better community in the world? Because in the end, what we do as humans and what we're leaving in the world and what we're creating in the world, it's got to be about creating better community. Whether you have a company, your family, whatever it is, that's the highest standard. It's bringing people together, moving us together.' I looked him in the eye and I couldn't answer the question. I left the conference. I'm like, I'm never going back to that conference because I knew this was all... We weren't as a company able to answer a question. So when I left Live Person, one of the things I had the opportunity to do was create companies that I think could answer the question. I know this device is about bringing back the bond. I sit with my children and I'll make a story with them together. It's technology that is not 'I hand them the device and go get out of my hair.' This is a device where you are making things with your children. We've lost that bond. I wanted to be able to answer the question. Maybe it's a privilege because when I was running Live Person, I was just in the middle of a lot of things. I wanted to be able to definitively ask the question: is what I'm doing building better community and connection? That's what I set out to do.

The one thing that you get over experience is I have a filter of scale. I saw scale. When I look at problem solving and I put the filter on it, I can say, 'Can this thing we're doing help scale the business?' The second part is people. It's very interesting. I have a two-week rule here. If the team doesn't like you in two weeks or you don't like the team, then you've got to leave. In Live Person, we could keep people around for a year because there's all this thing you do when you're a larger company. You give people more tries because when you have 3,000 people, one person doesn't have as much impact, but one person in a 20 person team has a tremendous impact. The one thing that I've learned over my entire life, there are two main things I've learned about running companies and startups. The two most important things I think is one is you're only as good as your weakest person in the company. That's even in a large company. We tend to give people too many trials and too many chances. Number two is your job as a leader is to manage the energy of a company. Energy either flows or it doesn't flow. When it flows, it just flows and you don't have to manage much more than that. You got great people, energy that's flowing, ideas, and people are not getting in the way of the ideas, just supporting each other. The third one is a belief in God. Without believing in God, whatever God you want to believe in, it's really hard to build businesses if I don't have a greater sense of my connection to something better and bigger than me. I call it there's a CEO above you. There is something above you that is managing you. You may not want to admit it, but there's something out there that is instructing you to go about your business. Sometimes you want to not listen to it. Sometimes you don't want to believe in it. It's called gut and intuition. But it is a signal from the universe that you are on the right path or the wrong path. Without a belief in God, you have a lot of doubt. The biggest thing that kills entrepreneurs is doubt. I have doubt. I wake up every day with doubt. I'm like, 'This sucks today.' I wake up even after all I've done, I'm like, 'Oh my god, I'm not going to make it.' That's just being an entrepreneur because you're dealing with the uncertainty of everything.

There's this concept of discernment. We all have a voice in our head and it's talking to us all day. Most of the time as an entrepreneur, that voice is providing a lot of fear, uncertainty, and doubt. 'I don't know if this is going to happen. This could probably fail. I don't know if I'm going to raise the money. I don't know if I'm going to sell.' All of that is potential truth and potentially not. What you find is if you can separate the discernment between that voice and the voice of God. Think of God as a best friend. Would God talk to you in a way that you're not going to make it? In May, I took a trip in Spain and did a walk of St. Ignatius Loyola. I'm not like a big church goer or anything like that. But I felt I needed to get closer to God and have a more direct conversation with God. I can't tell you why. I did have some profound experiences as I did this walk. When I came back, I continued on this. He wrote this thing called the Spiritual Exercises. It's like a meditation. You meditate on scripture. What it taught me was when I'm feeling that sense of uncertainty, sometimes it's very strong especially in the morning on a Monday. It's not about the money. It's about your reputation. It's about your ability to succeed. People rely on me. I've got shareholders. I've got these venture guys. One of my venture guys in this company was my original one in Live Person. He was my first investor in Live Person and he came back. I feel a sense of responsibility for all these people. That puts a lot of weight on your back. In the end, I have to be able to say, 'Would God say, 'Oh my god, I'm not going to make it'?' No. That little talk track you have is not real. It's not God. It's not the universe telling you you're a failure. The universe doesn't talk like that. The universe is like, 'I put you here to do something good. I want you to go in the world and make something of yourself. No matter how hard it is, keep going.' You have to discipline yourself and say, 'Stop it.' Because God would never talk to me like that. God doesn't talk in that tiny little voice. Whatever you think God is, you have to discern between the voice of God and the voice of that little person with your little reptile brain trying to think you ain't going to make it. I think you can have a much more peaceful experience. I'm much more at peace now because starting two companies is a lot. I have a family. When I was young, I was sleeping on a couch and even if nothing worked out, it was just me. I didn't care. Now I have kids and a wife. I have a responsibility there. I don't want my children to think I didn't make it. There's a whole other psychological thing when you have family. You got to be able to say, 'Okay, I'm on a path for a reason.'

There are three levels of obstacles. One is the macro. I went through 9/11 in New York City. Before 9/11, we terminated 90% of the company to stay alive. It was during the dot-com. I survived the dot-com but it was a very painful experience. Then we experienced 9/11. From our offices, we watched the towers come down. There were only like 30 of us there at the time because we let a lot of people go a few months before. It's scary. It's a macro event. Nobody can teach you anything about it and everyone in the world is experiencing it at the same time. The financial crisis, everyone was experiencing that at the same time. COVID, everyone's experiencing at the same time. In those situations, what I found through my first experience with 9/11 was you got to pace differently. You have to slow everything down. You have to slow time and let the macro event play itself in front of you. You have to be slightly behind it and not try to guess. When COVID hit, I remember everyone was like, 'Oh my god, revenues are going to go down because no one's working.' I had meetings with the full company. I was at my home and I'd be online. It was just like, 'Slow it down. Just slow it down and see where it plays out.' A couple weeks later, our volume went up by 40% on our servers because the contact centers got shut down and they needed AI. We grew faster than we ever did. What I learned was in macro situations, you can't control them. You got to let them play but don't play in front of them. Play way behind them. Let them play out and then you respond as they're moving forward. Then there are the operational events that are happening in a company because you're operating a business and executing on a plan. Those are a little bit more interesting because there are numerous factors that can go into a challenge inside the business. Some mean you need to pivot and move somewhere else. Some may be an operational issue. My strategy there is what I call 'cow in the ditch.' Anyone who works with me has heard this. I'll sit my team down and go, 'We have a cow in the ditch.' There's a story about a cow in a ditch and there are three people around the cow. One person is pointing at the cow and going, 'I can't believe you fell in the ditch. You're so ridiculous cow. You're the worst cow in the world.' Another person's analyzing, 'I wonder how the cow got in the ditch.' And then there's the third person who's just freaking out, 'Oh my god, the cow's in the ditch.' What do you do when there's a cow in the ditch?