This episode explores the creation and rapid growth of Portola's embodied AI companion, Tolan, a conversational AI with a distinct personality and evolving narrative. Against the backdrop of the founders' transition from B2B SaaS to creative entrepreneurship, the discussion delves into the challenges and successes of building a compelling AI storytelling medium. More significantly, the conversation highlights the importance of memory and prompt engineering in creating immersive, real-time interactions, exemplified by the initial failure of a two-stage prompt evaluation process and the subsequent success of a more streamlined approach. As the discussion pivoted to creative process, the hosts compared the iterative nature of Tolan's development to the craft of novel writing, emphasizing the importance of "vibe-prompting" and the role of human judgment in refining AI-generated content. For instance, the team uses a multi-layered judging process, involving both internal evaluations and user feedback, to ensure the quality and consistency of Tolan's responses. Finally, the episode concludes by examining the rapid growth of Portola, driven by a combination of improved user experience, viral marketing campaigns, and the inherent "capability overhang" of current AI models, showcasing the potential of character-driven computing as a new paradigm for human-computer interaction.