AI Revolutionizes Video Communication: An Interview with Carsten Kraus of Casablanca.ai

Management Summary 

This interview with serial entrepreneur Carsten Kraus, Business Angel of the Year 2024, delves into his latest venture, Casablanca.ai, poised to disrupt video communication with its AI-driven technology. Kraus shares insights on entrepreneurship, AI innovation, and his vision for the future of connection.

Introduction

Video calls have become an indispensable part of our lives, yet they often lack the authenticity of face-to-face communication. We've all experienced the awkwardness of not knowing where to look—do you look at the camera or the person on the screen?

In this insightful interview, we talk with Carsten Kraus, a serial entrepreneur and the visionary behind Casablanca.ai, a company poised to transform how we connect through video. Kraus, named Business Angel of the Year 2024, shares his entrepreneurial journey, insights into AI-driven video communication, and his vision for the future of connection.

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From Atari to AI: An Entrepreneurial Journey

Carsten Kraus's entrepreneurial spirit ignited at the young age of 16 when he built his first company. "The most important lesson for entrepreneurs is let's do it," Kraus advises, emphasizing the importance of taking action on good ideas.    

His early success includes selling a company to Atari, a major milestone that involved inventing a new architecture for programming languages. Kraus and his team developed a programming language interpreter that outperformed Atari's existing technology, leading to its acquisition.    

Kraus later founded FactFinder, a search technology company that served over 2,000 online shops. He highlights a key strategic decision that fueled FactFinder's success: offering the software for rent. This innovative "software rent" model, a precursor to SaaS, reduced the risk for customers and built trust in the company.    

Casablanca.ai: Revolutionizing Video Communication with AI

Kraus's latest venture, Casablanca.ai, aims to solve the fundamental problem of eye contact in video calls.    

The Challenge of Eye Contact

In a typical video call, participants tend to look at the screen, not the camera, creating a disconnect and hindering authentic communication. Casablanca.ai addresses this by using AI to reposition the caller's gaze, creating the illusion of direct eye contact.    

Key Innovations

• AI-Powered Gaze Correction: Casablanca.ai employs a virtual camera to adjust the perspective, making it appear as though the speaker is looking directly at the viewer.    

• Efficient AI Model: Casablanca.ai uses a compact AI model that delivers high performance without requiring a dedicated GPU, making it accessible on standard computers. This efficiency is achieved through a novel self-supervised approach and advanced facial understanding.    

• Realistic 3D Face Reconstruction: The technology enables the reconstruction of a 3D face from minimal data, compressing video information for efficient transmission.    

• Low-Bandwidth Optimization: Casablanca.ai's technology has the potential to facilitate video calls even over 2G connections by compressing video data.    

Casablanca.ai vs. Competitors

While other companies, like Apple with its FaceTime, offer gaze correction, Kraus asserts that Casablanca.ai provides a more comprehensive solution.    

"All the competitors currently can only correct the eyes, but Casablanca corrects the full face," Kraus explains. This full-face correction is crucial for maintaining authentic communication and conveying the nuances of facial expressions. Correcting only the eyes, especially at larger angles, can create an unnatural or even negative impression.    

The Future of Video Communication

Kraus's vision for Casablanca.ai is ambitious: "In five years, nobody will remember how video calls were before, when you had no eye contact.”  He aims to improve the world by making video communication more natural and engaging.   

Currently in the seed phase, Casablanca.ai is seeking angel investors to join their journey.  With its potential to disrupt video communication across industries, Casablanca.ai is a company to watch.   

Key Takeaways for Startups

Kraus offers valuable advice for startup founders, drawing from his own experiences:

• Start Fast: Don't wait for perfect conditions. If you have a good idea, pursue it quickly.    

• Embrace Experimentation: Scaling a startup involves constant experimentation, and mistakes are inevitable. Learn from them and move forward.    

• Find Your Niche: When leveraging readily available AI technologies, focus on a niche where you have a unique advantage, such as specialized knowledge, data, or market access.    

• Decision-Making: Combine logic and intuition. "Never without your brains, never against your gut." [cite: 243, 244, 245, 246, 247, 248, 249, 250, 251, ]

The Video Podcast Will Go Live on Tuesday, March 25th 2025

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Frequently Asked Questions (FAQ)

About Carsten Kraus

• Q: Who is Carsten Kraus?

  • A: Carsten Kraus is a serial entrepreneur, investor, and the founder of Casablanca.ai. He has a history of building successful companies, including one he sold to Atari. In 2024, he was named Business Angel of the Year.    

• Q: What were some of Carsten Kraus’s earlier ventures?

  • A: Carsten Kraus sold a company to Atari  and he also founded FactFinder    

About Casablanca.ai

• Q: What is Casablanca.ai?

  • A: Casablanca.ai is a company that aims to disrupt video communication using AI technology. [cite: 254, 255, 256, 257, 258, 259, 260, 261, ]

• Q: What problem does Casablanca.ai solve?

  • A: Casablanca.ai addresses the issue of lack of eye contact in video calls. [cite: 256, 257, 258, 259, 260, 261, ]

• Q: How does Casablanca.ai’s technology work?

  • A: Casablanca.ai uses AI to create a virtual camera behind the eyes of the person you're talking to, correcting the image to simulate direct eye contact. [cite: 256, 257, 258, 259, 260, 261, ]

• Q: What are the key features of Casablanca.ai's technology?

  • A: Key features include AI-powered gaze correction, efficient AI models, realistic 3D face reconstruction, and the potential for low-bandwidth optimization. [cite: 271, 272, 273, 274, 275, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, ]

• Q: How is Casablanca.ai different from other video communication technologies?

  • A: Casablanca.ai corrects the full face, not just the eyes, for more authentic communication. [cite: 300, 301, 302, 303, 304, ]

• Q: What is Carsten Kraus’s vision for Casablanca.ai?

  • A: Carsten Kraus envisions a future where people no longer remember how video calls were before Casablanca.ai, when there was no eye contact. [cite: 344, 345, 346, ]

Entrepreneurship Insights

• Q: What is Carsten Kraus’s advice for entrepreneurs?

  • A: Kraus advises entrepreneurs to "just do it," start quickly, be dedicated, and accept that mistakes are a normal part of scaling a company. [cite: 22, 23, 24, 25, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, ]

• Q: What does Carsten Kraus consider when making big decisions?

  • A: Kraus uses a combination of frameworks and intuition, advising to "never without your brains, never against your gut." [cite: 243, 244, 245, 246, 247, 248, 249, 250, 251, ]

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Automated Transcript

Narrator [00:00:05]:

Welcome to ai, your podcast and YouTube blog covering the German startup scene with news, interviews, and live events.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:00:20]:

Hello, and welcome, everybody. As you hear him laughing in the background today, Ai bring you another startup interview today with Karsten. Karsten is an entrepreneur, cofounder of Casablanca dot ai. We'll talk about it soon. He has been an entrepreneur since age 16 and also is the business angel of the year 2024, so called the golden nose because you can sniff pretty good investment. But we get to this afterwards because this is part one of a two part recording because usually we get through something like twenty, twenty five questions. And I was preparing for this interview. I was, I was getting to almost 50 question, and I was like, that may be a little bit long.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:05]:

Let's cut this into two recordings. So, Karsten, welcome.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:01:09]:

Yes. Hello. And now from Zanzibar, I'm currently on holiday, but I'm very happy to do this interview with you.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:16]:

Oh, very nice. You're doing a sundowner at the Africa House?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:01:19]:

No. Not the Africa. I'm I'm someone on the South Coast Of Zanzibar. And, I want to go diving tomorrow. So I'm going to do the sundowner. If we finish in time, I'm going to do the sundowner on the jetty here, which is also very nice. And tomorrow morning, I'm gonna do to do some diving and hopefully also to see them see some dolphins there.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:39]:

Mhmm. For everybody who's not been there, Sanzibar strongly recommended Ai spent a part of my honeymoon there with my wife. Wow. Yes. We also may tell that this interview is as in association with the Business Angel event back in 2024 at the German with the German Business Angel Association Band. Let's dive right into the interview. You built your first company with 16. What did that early experience teach you about entrepreneurship that still applies today?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:02:16]:

I think the most important lesson for entrepreneurs is let's do it. So don't get blocked by whatever rules, obstacles, something that you might not have and it would be better if you had it. Of course it's always better if you have more but if you don't start you don't start. And so the most important thing is once you have a a really good idea, you just do it.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:02:41]:

Not quoting an international, apparel brand here. You you now, some people because we do know, we're usually pretty popular, eight thirty five and up. Some people will get nostalgic because you sold a company to Atari back in the days, very popular. And a lot of people would get, oh, yeah. I remember those games with the joystick and all that stuff.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:03:07]:

Oh, yes.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:03:08]:

Can you tell us a little bit the story of selling Omnicron basics to Atari and because it was a May major milestone in your life. Right?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:03:17]:

Yes. It was. Yes. So, the key thing was, we invented or I invented new architecture for programming languages. And, so a principally new structure how to build a programming language interpreter, and, built this together with two friends. They wrote most of the code, and we were 70 times faster than what Atari had at the time for the Atari ST computer series. So that was a new processor from Motorola with a 68,000 processor, very fast process that was also used by user packet and some other, high end manufacturers. And Atari and and also the Apple Mac, And Atari launched a computer for about $1,500 at the time.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:03:59]:

That was, like, one tenth of the price of the of the unit packet and one fifth of the Mac price. And, so, and we launched a new program languages, which made it faster than all the other machines with the six to 8,000 processor. And, we first sold it separately, and then Atari offered to buy it from us. And we had hard discussions, and then they negotiated very well. And and in the end, they they bought it from us, and they bundled it with all all their machines at the time.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:04:30]:

And the processing capacity t one computer had there at the time you now have on a smartwatch, I assume.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:04:39]:

Smartphones are far beyond. So when you take a look at Oh, smartwatches. Oh, smartwatches. Yes. So probably yes. So, my comparison actually is when you take a look at the computer that brought the Apollo eleven to the moon and you compare it. So many many people have an iPhone. Now don't compare with the iPhone.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:04:56]:

Compare it with the charger of the ai. And the processor built into the charger that controls the voltage is about the, the compute power of the Apollo 11 computer.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:05:10]:

Okay. I see. I see. Getting to the next milestone in your life, Ai, scaled to 2,000 plus online shops. What was the single smartest strategic move you made that led to this success? And can you tell us a little bit about what FactFinder is or was?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:05:29]:

Okay. So you you mean, an additional strategic move just outside just building ai far the best search technology at the ai? So because that was also very important, I think, because, else it's difficult to sell something if you, if you're a small company and, and nobody knows you. So, what we did we do we we built a search technology in the year February. Ai actually built the ai with, an intern. So the intern coded. I did the algorithms in six weeks. And, the prototype prototype showed that we can solve this the question of how to find things that are misspelled better than anybody else. It was the prototype was very slow, and we had to make a lot of additional inventions, which were made mostly ai my my best programmer, Arm, at the time, to have it fast enough.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:06:22]:

But I could show that, we have an understanding that was also Ai. It was just not machine learning and understanding how humans perceive similarity and how we can, represent this in the computer. So that was the new thing, in fact, finally in the year February, '2 years before Google, launched its did you mean. And did you mean from Google had a totally different approach. They just asked millions and millions of users, did you mean this? And then if they said yes, they, they they saved the synonym. So they saved ai this is in in fact that, and this is in fact the other thing. And they were very often wrong in the beginning, but then they improved with all the users, and that was a totally different approach. And we solved it from the ground up.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:07:06]:

We didn't have the resource. We didn't have the millions of and billions of users. So we had to do it with AI, and we did in the year February. And we solved the similarity problem with for miss misspelling things. So, what was the most important strategic decision besides the very, very good product? I think the most important thing was that I started, not offering it for sale only but also for rent because we were a small company with seven people at the start. I had some other products before, but then I started fact finder. And we put a lot of resources in that was almost killed us. And, and then people did not trust a small company.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:07:47]:

So, if we said it costs up to 60,000 Deutsche mark to buy this, so that $30,000, many were still reluctant at the time because ecommerce was not as big as now, and things were not so important as now and not so expensive as now. And, so people were reluctant. Ai said, okay. I can offer this for rent. You can you can rent it instead of buy it, and you pay only one and a half percent of this amount per month. And, so of course, so four and a half percent per month, four and a half percent per month. So, after twenty two months, this pays off the full purchase ai. So you should switch after a time and we offer until half a year, we offer you to, to deduct 75% of the rental of the rent you have paid, from the purchase price.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:08:39]:

And so people said, okay, I can decide this. I can risk that, and we will test it. And we just throw it out and cancel it immediately if it doesn't run-in practice, if it doesn't run well in practice. And so that reduced their, their, their their their threshold a lot, and made us also trust us because they said, okay. If they are offering it for rent and not for purchase, that means that they believe that we will keep it. So it wasn't both directions. It was it was good for for trust. And, because it was so good, everybody kept it.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:09:14]:

And some purchased immediately after a month, and some actually tended to not buy it because they were CEOs who did not own the company. And so they said it's better for my bonus if this year Ai don't have full purchase price on my expenses and just just to rent. And that's how I kind of invented SaaS, but we didn't call it SaaS. We called it software rent at the time. That was quite new. Software as a service was not usual at the time. That was very, very uncommon. Mhmm.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:09:47]:

I see. You you obviously do a lot with, Omicron basic and FactFinder. You had two huge successes early on, and you also do have 25 patents pending. I would be curious.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:10:06]:

Some ai, some still some still granted. Yes. So

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:10:10]:

Ah, okay. Okay. How how do you get to all of them? And if you could just pick one that would change an entire industry, which one would it be?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:10:21]:

So actually, I have lots of ideas which, just keep coming when I'm under the shower, going through the park, when I'm, sleeping. I suddenly wake up at night, have to write something down, then fall asleep again. And, sometimes I make a patent out of it. Not all of the ideas are worth a patent because some are, just rubbish commercially. Some are also not good ideas technically, and some have already many have already been invented by other people and just not put into practice by them. So I have patents, for example, a granted patent for a new, for a new ai, sorry, on screen keyboard which will make significantly less miscorrections. So very often, you type something, you mistype and you get a correction, and the correction is actually worse than what you mistyped. And I have a Ai have a granted patent, to significantly improve this by some additional measurements which I do because I get more of the intent the user has rather than, just the characters he types he or she types.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:11:32]:

So, that's a granted patent where I have not, actually started developing yet, because I don't have the time to to build up a new company right now for that. I have other patents also for understanding if a picture is reality or, if it has been manipulated, which also applies for pictures which are in, printed magazines. So you can use this on printed pictures as well. And there are several other things where I have not built a company yet, but they also might do a lot of good for the world. So, which is the one patent that can change entire industries? I think I most of my patterns don't go for one industry. So, like, when you look at Casablanca, it has the potential to disrupt video communication throughout the world, so in all industries. But, of course, video communication is just a small part of the work mess mostly of the work for internal meetings, sales, recruiting. But it's not for, for example, for production in the, in in not for fabrication.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:12:40]:

It's not for programming. It's not for all these things that produce the things. It's just for the communication. But, of course, communication is also an important part of of our lives. So Casablanca can, disrupt video communication, but it will not be limited to one industry. Same goes for things like this, better on screen keyboard. It's also not for one industry. It's for many industries.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:13:03]:

Mhmm. I see. Given that you have so many ideas, built so many successful companies, when, when do you decide now it's a time to implement one idea or step away from something and sell it or, give it to another, to another leadership team?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:13:27]:

That depends. So in some cases, I have an idea and, suddenly, I find somebody who would be the right person to implement that idea. And, if I can get hold of her or him, then I start a new company with them. So that can be one point when I start. With Casablanca, it was different. So I decided I sell FactFinder in order to start Casablanca. I, use Ai I I wrote the patent. I registered the patent.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:14:00]:

I still have not sold FactFinder yet. But I knew I needed to shift my attention to that project because it's a huge project. It's a huge work also to to get it done, and I underestimated it even though I thought it was a lot of work. I thought it would be, like, one year for five people, and it took us four years with five researchers plus me, so six people in total maybe. But the researchers are doing more of the new patents than I did. So, in total, we are we are 20 now with Kala Blanca. So, including people like marketing and administration people and so on. And besides the researchers, we also have developers now because we want to implement the the software and not only build the technology.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:14:46]:

So, so sometimes I have to, to to dedicatedly start a new company, and sometimes I can just, pick the chance and do something. So I just started the, the biggest German AI. What's this thing in English? I I just started the the biggest German AI directory, called aliceminuscare.com. And, Ai had this idea several months ago because I thought the ones I had seen in Germany were all so small and so, difficult to find things. And also the Americans ones were not so easy to navigate and not so easy to find the solution you actually need. And, with Alice Kai, with our German AI directory, which is also usable in English, actually, We have built everything on an AI stack. And when I had the right people, I started. That was in, October.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:15:53]:

And I did some pretest before if my ideas work, my AI ideas. But, but then I have the right people together, and we started with two people currently. There are three people in there ai me. I only put very little work into it. Mostly, it's the other people who do it. So I mainly had the idea. But so sometimes it's this way, sometimes it's the other way. It depends on the idea.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:16:19]:

So sorry for our audience. We get we get we have some very bad Internet connections here. And, actually, I I can only understand all of the stuff Karsten is saying after his file is uploaded, so not during the video. Really sorry about that. But my next question is, many startup founders focus on scaling fast. What's the biggest mistake they make when trying to scale quickly?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:16:44]:

So, actually, I think there are some people who do it accidentally. And, I'm just a mediocre scaler, I would say. So I'm not the worst but also by far not the best. There are people who really know how to do this. And, so in terms of scaling, I would love to learn more. So but some mistakes, that that people make at the very beginning is not being dedicated enough. Also not starting quickly is often a mistake. If if an idea is somewhere already somewhere in the air, then, and then you wait until you have more resources, more something, more something, then somebody else will just do it.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:17:26]:

So, you can save the most time in the very beginning of an idea when you're when you're the first one to do it. Of course, you will will get people who copy you and, that's there is, you have to prepare for that. And maybe the idea is just not working and somebody else does it much better. But, generally, it's rather ai start fast. I think that's the that's a bit big mistake that people wait too long until they start. And then, of course, you have to be able to make mistakes, and you have to understand that everything you do when you build when you scale a start up, everything is a is an experiment. And that means many, many things will go wrong, not just some things. And it's not, so ever tolerant work in in German companies normally is seen as, yes, I accept that sometimes people also make mistakes.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:18:17]:

This is not what we're talking about. I'm talking about people do experiments every day, and many of those experiments don't work. So they don't just sometimes make mistakes. They, consequently make mistakes. And you have to accept that many things go wrong. So in marketing especially, but also in lots of other things, you just have to accept this. What you don't have to accept and you shouldn't accept is mistakes out of, negligence, mistakes out of laziness, and so on. But mistakes out of you think this is right, but you were wrong in thinking it's right.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:18:54]:

Tough mistakes you have to learn to accept when scaling company, else you cannot scale it.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:18:59]:

So bottom line is do mistakes but learn from them.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:19:03]:

Yes. And but be prepared that many, many things go wrong when you start something.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:19:10]:

Ai from Casablanca, if you were to launch a startup today, what market or problem would you go after?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:19:19]:

So if I would launch something just because I want to launch something, not because I have a specific ai, because if I have a specific specific idea, then I would do that. So but generally, I would build something on the basis of AI technology that is here, and it's going to be available easily for the next year. So like LMS. And, the problem is, of course, that everybody does this. So what you need to do, and I wrote this in an article also, what you need to do is you have to find some niche where you have more expertise or more knowledge, more data or something else that other people don't have or more market access, where other people don't have this. So when you build something new on the basis of, let's say, a large language model or some other AI technology, could also be ai object identification or, other things. But you build it on top of an AI technology that's easy to use, and there are many AI technologies right now which are easy to use. So they have APIs.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:20:25]:

It's easy access. You can use them without much difficulty. And, and then you just go for some niche where you have the better market market access than anybody else or the better knowledge or some data which nobody else has and so on. So what yeah. Yeah. Okay. So so so this ai yeah. So so this this this comp this kind of company is not a world changing company in in all industries.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:20:50]:

This is going to be something that changes a specific industry or a specific topic probably, because that's the thing where you have more knowledge. So, if you are the best person for, let's say, ai or so, then you build something built on your knowledge of spices that nobody else has and maybe your data on spices that nobody else has and your market access to spice suppliers and maybe ai, users, which nobody else has. And, spice could be a big market, but it could also be something very specific ai, the pumps for fire sprinkling, what for fire watering, or something. So it could be something very specific. But you build it fast and you build it in your area where you have better mark market access, better knowledge than anybody else. Mhmm.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:21:46]:

And we just talked about mistakes, doing mistakes. And I ai I was curious looking back, what's the biggest bet you've made that didn't work out? And what did you learn from it? You're talking about learning from mistakes.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:22:02]:

Yeah. So there are probably thousands of small mistakes I made. And, and there are a few big ones. And I would say the one that cost me the most money where I went in the wrong direction and stopped it, completely. So not just did a turn or something is, fact ai travel. So the idea in the year 2011 was that we have sold FactFinder at that time to, I don't know, ai, thousand something ecommerce shops, 53 of the top of the top top 100 in Germany. And, there were no travel in no travel sites on it. And the point is when you search for, let's say, an iPhone charger, you type in iPhone charger or maybe iPhone charger for iPhone at that time eleven or something.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:22:56]:

And, when you search for holiday and you type in Christmas holiday with my little daughter on the beach, then what you would get with a standard keyword search is, something where Christmas appears in the text, daughter appears in the text, also beach appears in the text and Christmas. So, the the thing is keyword search brings you the wrong results because that also might be something like, closed on Christmas, and the word Christmas is still in there. So you would not want that. So, so what you need is you need understanding of the text. And we produced the world's first semantic search for the tourism industry, which really worked so we could find those things. So we thought, okay. So beach probably means swimming. Swimming means warm.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:23:50]:

Where is it warm over Christmas? And we reasoned these things at the ai, so that was over ten years ago, and, launched the product. And the industry actually was enthusiastic about us. So, we got six customers, within a few months who built it into their their, into their portals. And what happened was the end users did not use it. 98% of the end users just typed in one word one word like, Mallorca or Caribbean or something. And they did not type in long sentence because at that ai, they had just been trained by Google that the best thing you can do for searching is type what just one word. And so they didn't understand what it was about. And, none of our our our travel portals, really trained the users to change their behavior.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:24:42]:

So we had about so we were only participating in success. So things that were booked at a higher rate than normally. So we if it was just as good as normal, we would not get anything. And in in the test, we made tests in the usability studio. People were much happier about our search, but after we explained it. And, so in, effect ai travel, the end users didn't use it. We got a number of prizes for for the software. So we won, like, the innovation prize of Deutsche Borse for the most promising, startup, which is going to be an an IP soon.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:25:20]:

Sorry, Ai IPO soon, and so on. So we got a a number of prizes for it for the for the innovation we made because it was really to slap with innovation again. But we made €50,000 revenue, and we invested about 1,000,000 within three years and, didn't get the market running. So we tried with some press releases, and the press people just published the, the funny stories, but never published, like, this is a game changer for you. And we didn't have the money to really do TV advertising or so else we might have changed it. So that was hard. And, I stopped it after spending roughly 1,000,000 in three years.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:26:06]:

Okay. Talked about stopping that funding, talked about big decision, management decisions. What is your go to decision making? Is it gut instinct? Is it data? Or do you have a certain rigid framework where you make your decisions?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:26:26]:

Yeah. All of them. So I do have, two kinds of frameworks. So and and one one, sentence to remember. So, if if you do a big decision and you have thought about it, for a while, then the the one sentence is, never without your brains, never against your gut.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:26:50]:

Yep. So that sounds reasonable.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:26:53]:

If you cannot find a plausible reason, so, like, when you calculate it also so that you should do it, you shouldn't do it. So you have to have some reasoning why it should be done. And if it still feels bad even though you have the reason, then don't do it. Because your the gut feeling takes on takes in a lot more, factors. And you take the factors, which you you can't you cannot reason over 20 factors. But you can, you can actually you can take your gut feeling for 20, for 50 factors because it will take all this into account.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:27:27]:

We'll be back after a short ad break, and then we'll talk about Casablanca Ai technology, AI differentiation, and your future vision. Okay, guys. Thanks for sticking around. Welcome back to now we are talking with the business angel of the year 2024, Karsten Kraus, currently in the first of two interviews about the, about his most exciting startup right now that he does himself. It's called Casablanca.ai, and it claims to be 20 times more efficient than Microsoft or NVIDIA. What does it do, and what's the secret?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:28:09]:

Okay. So what does it do is simple. So, when you do a video call, normally, you don't look at each other. You normally look somewhere down or on the side and so on because you look look at the other person on screen, you want to see their reactions but the camera is somewhere else. It's not behind their eyes their eyes where it should be. So what we do is we put a virtual camera behind the eyes, No hardware. It's just software. We put a virtual camera behind the eyes of the person you're talking to, and our software, produces the picture in a way as if the camera would look from that perspective.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:28:46]:

And and what's interesting for me, it also enables you to do some eye tracking, which you can also do with other competitors always, to what's the camera. So for recording, it's pretty interesting. But you but we have to admit, it's made it a little bit more for saving bandwidth. So therefore, it's not for, high fidelity, for high, resolution recordings like we're doing now. It's not made for that yet.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:29:16]:

Okay. Yes. So generally, it's, the because of Ai model is a is a we need to keep the model small in order to make it fast enough that you can use it without an extra GPU on a normal current computer. So an Apple m1 or a Pentium starting from end of twenty twenty two beginning beginning of twenty three is enough on AMD from that time also. So so that's, why we need to make it small, and that means the, the resolution is not as as good is not good enough for for a high quality video. But in video calls, you always have bad resolution anyway, so you don't see the difference. So when when you do a normal video call, Casablanca is good enough, and it's fast enough to run on a normal computer. So why why are we so fast? It's not only because we have, we we we save time on resolution.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:30:18]:

So it's also because we built a very, very efficient model. And we could do that because, and we built this much smaller model than others do, and we could build a smaller model because our model understands the faces better. And when you have more understanding, you can compress better. So if you have, if you have no knowledge of a language, then you have just to listen and you have to record the audio and you have to, like, remember the audio by heart if you want to repeat it. When yeah. That's very hard. If you understand the language, you can compress the audio to words, and that's much less information bits you have to put, and you can just put much longer texts into into the same kind of sequence. And our model understands faces better than any other model.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:31:08]:

And that's mainly because we, we have built a self supervised approach, and, and we have built a new way how to how to build face models. And thus we can make a very small small model, and this very small model also allows us to make it very fast. And we will also launch higher resolution models, which will also be faster than all other high resolution models, but they will probably require GPU if you want to use them on your personal computer. Mhmm. Mhmm. Mhmm.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:31:46]:

They also your Ai technology also enables a realistic three d face reconstruction using minimal data. How does this work?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:31:56]:

So that's part of our small face model. So it's it's a number of new inventions. So we also made a new GAN with, which doesn't need perceptual loss, which makes it, faster and at the same ai, better in quality, actually. And we made a lot of inventions and registered a number of patents. The first one has been granted. The others are still pending. However, so to to sum this up, what we do is we can compress a video picture of a person. So all their expressions, everything they do in in a, in a vector of less than 300 data points.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:32:34]:

So 300 dimensions of the vector. And so if we have 25 of these vectors per second, that would be seven and a half thousand data points. And that's fast enough for making a video call with this compressed data, over an edge communication. So there's a two g communication that will be it will be fast enough for that. If both sides have Casablanca, and it would be a direct communication. So it's currently not integrated into this kind of communication into Zoom or Teams or anyone. But if they would integrate it, they could enable video calls also in areas like where I am now where the Internet connection is not so good or Germany where the Internet connection is also not very good outside the big cities. So very often you only have edge connection, and you always say, oh, I can't do anything on the Internet.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:33:26]:

But now with Casablanca, if both sides had this technology, and it was probably built into video communication, you could do video calls even with only this bad connection.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:33:37]:

Every major tech company and non tech company is investing in AI, especially talking here about AI driven video communications. What makes Casablanca stand out there?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:33:49]:

Well, the thing we are solving, we solve best in the world. So, making authentic communication with a full face turning and head and eyes turning. So all the competitors currently can only correct the ai, but Casablanca corrects the full face so that you have an authentic, communication as if the camera would be behind the eyes of the person you're talking to on screen. So we're the only ones who can do this at the moment. That's, that's what we do better. But, then how do we do it better? By a lot of inventions again. Some have been made by me, but most have been done by my by my team of researchers. And that's actually one of my talents.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:34:31]:

So I start with an idea, and then I find people who understand the details even better than me. And I can understand if they do or they can't, Because mostly, the CEO does not understand enough technology to to realize if the person, who claims to be an AI expert is just okay with AI or really good. And I'm one of the few CEOs who can do that. And I've done this all my life. So Ai I've I've, mostly, I have made some part of the invention myself, where you needed a lot of things to come in together, but for, that that does not complete the product. So also in fact finder, as I told you, the, we started out with this very slow, implementation, which already showed that the idea of how to how to represent similarity in search, is really understood well. But in order to get the speed, somebody else had to do it, and there had to be a lot of additional inventions. And I find those people who make the details, who, who it's not a small detail.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:35:39]:

It's an important detail. Speed is essential. So and, I find those people, and I can decide if they are really so good or not. And I bring them together and I make them work together and then I make them work with me also, but also work together very well. So I think that's my my secret sauce here. I've done this all my life in all my companies. Mhmm.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:36:03]:

Apple's FaceTime now offers Ai powered gaze correction. Why is Casablanca a better solution here?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:36:11]:

As far as I know, Apple only corrects the eyes again. So, so that means it works well for a small angle if you have a very small angle. So you're like, on a smartphone, normally, you're, like, this far away. So and you talk. And then the angle between, between the, the eyes and the and the camera is very small. And if you correct only by small angle, just the just the just the ai. So, I'm trying to simulate this now. So, so Ai should do a small angle.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:36:44]:

It looks good. If you do a big angle, it looks crazy if you just correct the eyes. And, so it looks like this is a different, a different emotion you're showing. Yes? Yeah. Yeah. So, yeah, maybe that, but even if they don't appear on your head, if you if they're just correct, but, just looking at somebody from the side is like, oh, he's giving me an a side eye view. So what does he want to say? Is something wrong? Is he, not believing me? That's that's also a mimic or expression when you when you look from the ai, and you don't want this. You want the true mimic or expression.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:37:23]:

That's that's the essence of communication. We are we humans are so fine in reading all the small movements of the mouth, of the eyes. If you move the lower eyelid half a millimeter down, people say, oh, now he's skeptical.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:37:39]:

So

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:37:39]:

or he's ironic when you move it further down. So, so there are some things which, where very small mimics changes give making it, you know, make make an expression. And you want to avoid this. And Casablanca changes the full or corrects the full face so that you don't have this involuntary eye expressions. And it works well what when you just correct the eyes if the angle is really small, and it does not work well when the angle is bigger bigger ai when you have an additional screen or even just a big notebook screen.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:38:11]:

Mhmm. I was I was wondering seeing that you put so much thought, so much energy, and so much future potential in this company, what is your ultimate vision for Casablanca AI? Is it an IPO, an acquisition, or a long term standalone company?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:38:29]:

So the first vision is ai in five years, nobody will remember how video calls were before, when you had no eye contact. So I want to improve the world here. So Ai mean, people will probably remember, but they will they say, oh, yes. Long ago, it wasn't like this. And, so that's my my my first vision. And then, Ai think I will go with what is a good offer. So, at a certain size of the company, I think other people can run it better than me. And, so, right now, I'm open to everything.

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:39:09]:

But we are currently in a seed phase, so we're taking up angel investors. So far, I invested about 2 and a half million euros myself. And now we're we're, we're currently, gathering 1,000,000 for the seed phase, but we also want very good angels in there, so people who can also advise us and also open us some doors and so on. And then probably, like, around the end of the year or so, we will go into into into a VC phase. And then probably, it's more the VC who decides, where we are going because they know better how to make the most money wise out of it. It could be all of them.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:39:47]:

Anybody who's now interested, about working with Ai or investing into it, They can reach out to you on your LinkedIn profile, which we link down here in the show notes?

Carsten Kraus | Founder Casablanca.ai | Business Angel of the Year | Serial Entrepreneur [00:40:00]:

Yes. Please do. So we already have some people we're discussing with now, so it will not be endless, the the time we will have. But, but we are also very interested to have international people because internationalization is one of the topics I personally, would love to have somebody who advises us on this, much better than I know myself. Mhmm.

Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:40:21]:

I see. Awesome. Closing words to our audience. What questions do you think we missed? Let us know in the comments down here. Kasen, thank you very much for the first interview. For everybody, it will be, the next, one of the next interviews published, your interview number two, and we only take, like, five minutes break.

Narrator [00:40:47]:

That's all, folks. Find more news, streams, events, and interviews at ai. Remember, sharing is caring ai.