SPEAKER_00: know what i think about for the last few years is yeah you have elements of the kind of first bubble just that that implosion but there just has been so much else going on um of course there's the you know zero rate environment what what effect that's had but you have just so many other things that you've had to contend with as a founder over the last few years that you know

SPEAKER_02: of course it's it was grow grow cash cash cash but in person not in person um having to handle so many of the uh kind of progressive movements that were coming along how do you respond as a ceo in those moments you have the silicon valley bank thing that's happening i never would have thought

SPEAKER_03: i mean it's it's a long list and certainly you know it's a resilient to be a founder now you have to

SPEAKER_05: you've had a lot of resilience this week in startups is brought to you by miro helps take ideas from in your head to out there in the world with its ability to democratize collaboration and input sign up for free at miro dot com slash startups vanta compliance and security shouldn't be a deal breaker for startups to win new business vanta makes it easy for companies to get a sock to report fast twist listeners can get one thousand dollars off for a limited time at vanta dot com slash twist and mercury 90 of startups fail just 10 out of every 100 make it mercury exists to close that gap helping companies succeed with banking and credit cards engineered for the startup journey join over 100 000 companies banking with mercury at mercury dot com all right everybody we've been crushing it

SPEAKER_07: with guests during this week in startups all star summer so many amazing guests that it's spilling

SPEAKER_09: into september that's right your summer's not over look at this lineup of murderers row rich from zillow nikesh from palo alto networks dave from mongo db scott from atlassian ryan from qualtrics darmesh from

SPEAKER_10: hubspot all the greats and uh you know one of the great guests we've had on doesn't like to do podcast she likes to work but she's quietly built up a little stub stack audience and um you know like my my bestie bill gurley she doesn't write often but when she does it's very much worth your attention uh so go ahead before we do anything here search for sarah tavel t-a-v-e-l sub stack and put your email in especially if you're a founder because you're going to want to read what she has to say because she's let's just put it out there she's brilliant uh she was the first product manager of pinterest uh and i i guess you left graylock to join pinterest and then you went on to join benchmark because let's be honest the economics of benchmark are equal and other venture firms uh they make

SPEAKER_13: you work for decades to to get to the top of the hill so welcome back second time show guest sarah

SPEAKER_15: tap always a pleasure thanks for having me a little intro there and then my sub stack's new so i'm

SPEAKER_03: like scraping my way so i appreciate you uh doing a shout out there trust me i know how to get guests

SPEAKER_20: back on the program i get to a thousand founders signing up that's a good start it's a good start

SPEAKER_21: i'll send you a thank you note the thank you note is just promising to come on every year or two uh and i guess the last time you were on we were in the studio so it was before i know way back when it was a world ago uh yeah and so and you had just joined i think um you were on february 2020. oh my god you were on that oh my god it was like the week or two before wow uh covet hit so it was

SPEAKER_25: when people just stopped shaking hands just for uh oh this is what we had the controversy where mark

SPEAKER_26: andreason put on his door no handshakes please no handshakes please and then everybody in the

SPEAKER_12: mainstream media said he's hysterical lunatic and then they told everybody to stay in for two years

SPEAKER_00: the world is insane that was such a different time it's wild to think you know i think a lot about founders who have gone through those last few years like can you is there a time in like the modern you know internet era where we've had a more thrashy crazy time to be a founder the only

SPEAKER_09: two you could ever put up against that would be the dot-com bust yeah and uh the great financial crisis

SPEAKER_10: which as great as it was was kind of like that happened on wall street and in housing so it was kind of like a bomb that went off that didn't hit us all that directly we just got the aftershocks

SPEAKER_34: right so this would be the only two yeah the the first you know what i think about for the last

SPEAKER_00: few years is yeah you have elements of the kind of first bubble just that that implosion but there just has been so much else going on um of course there's the you know zero rate environment what what effect that's had but you have just so many other things that you've had to contend with as a founder over the

SPEAKER_02: last few years that you know of course it's it was grow grow grow cash cash cash but in person not in person um having to handle so many of the uh kind of progressive movements that were coming along how do you respond as a ceo in those moments you have the silicon valley bank thing that's happening i never would have thought i mean it's it's a long list and certainly you know it's a resilient to be a

SPEAKER_03: founder now you have to you've had a lot of resilience and if you look at all four of the

SPEAKER_10: ones you rattled off the top of your head and man that's a great summary you know sometimes you just as a founder or a capital allocator like we do now um you just assume it's going to be hard but each one of those is like a grenade being thrown into the lobby of your building like okay

SPEAKER_12: now we've got uh silicon valley banks gone under we don't know if our cash is going to be there on monday

SPEAKER_39: yeah everybody run around all 72 hours you know doing caps all caps lock tweets number two okay it's

SPEAKER_40: coven your business is either airbnb and it's turned off or your door dash and it's went 10x and you can't deliver all the food then uh you got a bunch of insane people inside your company that are putting a gun to the founder's head and telling them whatever the social movement of the day is we'd

SPEAKER_42: like you to alienate half of our customers yes for the next six months and then your employees yeah

SPEAKER_10: it's madness and then oh yeah by the way um we don't want to come back to work uh and i'm probably working two jobs right i just saw that the other day somebody was on twitter and they found out their employee who they hired away from another company that they didn't actually hire them away from that company they're still working i heard those stories and there's a subreddit called over employed it is now a playbook there are playbooks on how to have multiple jobs let's start with that okay can great companies be built with everybody being spread to the four corners uh or is this is something missing here especially in the stage you and i tend to invest benchmark is the classic of the classic series and investors you're looking for a little inflection point in consumer you're looking for domain expertise and enterprise and that's when you like to slide in there and get your you know 10 15 slice of the pie and join the board most importantly can this be done at that stage or my stage when you're you're you're trying to find product market fit in the seed stage can it be done remote or are we missing something by promoting this remote culture man if i could go back in time

SPEAKER_00: and the companies that we and you know we invested in i would say the founders would tell you this if they could go back in time and be co-located instead of distributed they would they would

SPEAKER_02: do that obviously there's exceptions to all rules right and this is certainly no rule but i would say unless you're a really experienced manager already as a founder most cases the companies that we're looking at are founders and this is they're they're young they've never they in most cases have never managed people before starting a company and to do it distributed to me is like trying to

SPEAKER_00: sprint with a parachute tattoo your back you know it's just there's so and i i get you you get into

SPEAKER_02: this mindset of i want to i want to access the global maxim of talent and that talent has gone everywhere and i i get that it's a real trade-off but man in that beginning stages especially before you've really figured out product market fit and are starting to have that momentum build the cost of communication collaboration culture you know the intensity i don't know about you like i remember some of my favorite memories from pinterest were the late nights or coming into the office on the weekend and like seeing your buddies there and that just creates this intensity and identity with the company and i think more collaboration more throughput better decision making better ideas and so i i've been noticing in 2023 how many more companies i see these early founder stories where

SPEAKER_12: the founders live together yeah it's such an even more than way more it's having an office yeah it's in the

SPEAKER_10: area i live uh the wider peninsula area san mateo ish there are a bunch of founder homes now and founders are renting giant mansions which are cheaper on a per bedroom basis and and they're just working seven days a week which by the way that's kind of what put silicon valley on the map that's what it takes

SPEAKER_51: yeah and it's it's such an interesting snapback from what we saw in 2021 as an example where it was always like two zoom screens you know two squares somebody's here somebody's there and man the the the

SPEAKER_02: bones that you set when you're living together or your team is co-located and that's such an important part of the culture i feel like that is like you have to it's just rare and and and special and one of the unique things that you have as a small subscale startup and to not take advantage of that in the

SPEAKER_65: beginning seems like uh you know that parachute yeah it's it's a wasted opportunity but you did say

SPEAKER_10: there's a trade-off so when you start thinking about hey we need this very specific talent and here in the united states we have record low unemployment of our lifetimes it's so it you know i have employees in canada as but one example i started a canadian company during the boom time um to hire people in canada because i found people in the u.s were turning over every 18 months you know just much faster and that canadians turned over at half the rate it's a slight discount uh but not ridiculous um but there was just much more talent available and you know what venture capital jobs are available in canada none you know like so if you can if you're hiring analysts it worked out pretty well but now

SPEAKER_40: i find myself longing for more in-person founders always ask me for pitch deck punch-ups and how to present their startup in a better way well i've got some great news we worked with a team at muro the

SPEAKER_75: awesome whiteboarding software to create an amazing pitch deck template for founders you can see it if you're watching the video right now or you can just go search for it you go to miro.com miroverse and search for pitch deck you'll find it immediately and this pitch deck will help you go from zero to vc ready our founder university participants they love using this template it starts them on second or third base and if you're hybrid or fully remote miro is incredibly useful to you it's like an old school in-person whiteboarding session but distributed and asynchronous so you can work on your time schedule miro lets you brainstorm ideas and collaborate on projects from anywhere in the world whether you're in the adirondacks or you're in cabo or you're skiing in lake tahoe when you think about miro think zero to one but faster and miro is so much more than a simple digital whiteboard your team can collaborate on planning research design and feedback cycles now remember faster inputs equals faster outcomes and velocity is how startup wins we look for product velocity in all of our startups so to access our new miroverse template and thousands of others sign up today for a free miro account at miro.com startups again miro.com startups miro.com is the firm you guys had a great office

SPEAKER_78: in the city at one point i don't know where benchmark is these days um yes are you and you

SPEAKER_10: were famous for the i think it was monday or tuesday night dinners you would do these dinners as a team monday night dinners at this like weird table it's the triangular table four or five tell

SPEAKER_51: us about those dinners and uh are they back we've been doing you know we i don't remember when we

SPEAKER_02: started coming back in person um after shelter in place but we were pretty eager to come back you know we just felt you just felt the difference of monday you know team of six people and what happens when you're all on zoom versus the you know the the it's kind of like being only being able to see two colors versus seeing all the colors that happen when you're when you're in person so we were pretty quick to come back as a partnership on monday on mondays and then the thing that was slower was bringing the dinners back um and the dinners you know one of the things that uh i think is a real cultural tenant of benchmark is that we're just deeply curious people uh and we i think also just really like being together and having you know some you know good wine good uh good food together and so one of the things that we do both to nurture that curiosity that we all have and then just to have fun together and have a good time is having these guests come on mondays that's one of the things that bill actually brought to uh benchmark i think inspired by benjamin franklin and how benjamin franklin also nurtured his own curiosity of bringing in people who are experts in whatever you know a domain that he was curious about at the time and and so for us it's like a it's a pretty broad spectrum of people i won't name drop but uh it's you know it's one of the things i i most look forward to

SPEAKER_12: and we try to do it almost every monday yeah i won't name drop names i know that have been there either but

SPEAKER_10: you know an author a politician a retired politician a former entrepreneur a scientist it could be anybody doing something very interesting in the world and i think the great investments you know i'm curious uh how you think about outliers they tend not to fit in a box they tend to be multi-disciplinary the founders tend to be difficult cantankerous uh you know i'm talking about the successful ones um you

SPEAKER_37: know driven uh mission driven driven because of whatever hap whatever trauma they went through in

SPEAKER_40: their childhood chip on their shoulder yes whatever chip they happen to have um but there is something about when you learn about other disciplines and you see innovation uh happen in other

SPEAKER_86: verticals that that really can help you in your vertical maybe talk a little bit about that kind

SPEAKER_00: of multi-disciplinary cross-disciplinary mindset it's um it's it's i don't have you read range by david

SPEAKER_02: epstein yeah i mean it's incredible yeah it's you know and it's such by the way it's it's such a great example of one of those books that you know i forget who read it first whether it was peter

SPEAKER_00: bill or eric or whoever it was but someone read it and comes to our group and says oh my god you have to read this it's so interesting and we're all you know just curious and and it's you know it's

SPEAKER_02: it's part of the fun thinking outside the box that happens is is being able to go down whatever rabbit hole uh or pull whatever thread you might have um from whatever you're learning or been curious about

SPEAKER_00: the recently and i love that book it's i highly recommend it to people because his the thesis you

SPEAKER_02: know he explores it was actually catalyzed by a debate he was doing with malcolm gladwell on uh the 10 000 hours specialization you know tiger woods studying you know playing golf from when he was four years old uh and becoming the great that he is uh today versus i think it was nadal or no it was uh

SPEAKER_95: was it no it was um the swedish andre agassi was it no not andre agassi it was somebody who had played

SPEAKER_00: multiple sports and came to it later yeah well he has i i'm terrible for forgetting his name he's one of the greats i just i'm not a sports person but he his he ended up playing tennis actually his parents for tennis coaches but what they told him to do was first to study to play all these sports you know they didn't let him specialize early and so he did he did a range of sports and then eventually yeah federer thank you it was federer you know how i know that how i i hate to tell people my secrets

SPEAKER_10: i literally just typed into chat gpt4 which we're going to talk about yeah i for the second half of

SPEAKER_104: this who are the athletes in the book range and literally put it in a table roger federer tiger

SPEAKER_02: woods vince vangali jack nicholas perfect perfect um great it'll be a great segue but so he he did a range and then he specialized and when david epstein studied uh these two opposing models what he found was that there was actually far more success going after the breath and then specializing then just specializing but then you know you kind of start to expand that you know thinking about teams and teams you know that are all specialists aren't as good at solving problems as like a team of people from different uh disciplines or or perspectives and similarly it's a type of thing that like i remember meeting a cfo candidate and i loved that he hadn't been a sas cfo or vp of finance his entire career he had done some e-commerce he had you know done a consumption model of company a sas model and when you when you have that breadth of experience what ends up happening is that your creative problem solving is better you you you're not a hammer looking for a nail you you see things in a way that other people don't see things and it's it's just a you know it's it's the ingredients that you need we think about a lot for our partnership construction too of just making sure we're always having people from different different areas perspectives coming in victor our most recent addition being a great example of that uh why is he a great example of it well he's you know he was uh the ceo and founder of uh an incredible company in the in the gaming space uh called wildlife and he uh we actually we were investors in it so he was a benchmark funded ceo from brazil natively and built this just incredible business and we both you know we recognize you know eric vishria is another partner at benchmark who had been a a founder ceo um you know i obviously spent a few years doing real work at pinterest uh but we we felt like we wanted somebody else in the mix who had you know had that experience and then also had this you know a different perspective both as someone you know he's natively from brazil having that more kind of global point of view but then very importantly also building a type of company that none of us really had deep exposure to and and then he has these you know these incredible relationships that he's built over the years with so many incredible founders the brex founders as an example whom he's on the on the board of brex and

SPEAKER_114: so anyway it's a different way you got a continent you got a category in gaming uh and you got a skill

SPEAKER_10: set being a founder and let's double click on that last one seems like the industry is um and i listen i'm a beneficiary of this i was a founder um and a journalist so i kind of got two of the things that people look for in vcs these days um it used to be analysts like girly uh lifelong career venture capitalist fred wilson that was how vc worked you got a bunch of mbas you got a bunch of analysts and that seemed to be really good but then the industry pivoted and said hey journalists seem to ask really good questions they're very curious people let's give a couple slots to them

SPEAKER_37: and then now hey are you um a ceo founder there may be a little bit of a divergence like did you

SPEAKER_12: work at a successful company and because maybe vc got a little too big that doesn't seem like just because you happen to be at uber or happen to be at pinterest or whatever like what did you actually do there you know like if you're chamoff and you grew it from 40 million to 400 million of facebook okay you got the bona fides but it did seem like we just started taking random people from logos

SPEAKER_02: well i'll give a little twist on that which is that you know when you are an operator the parallel of an investment decision is the company that you join and and so it's one thing to be at a company and i just oh i got lucky i was just there and then it happened around me um and i think there's a lot of instances where that does happen or the company is already an inevitability when someone joins but then i think about you know my partner uh matt kohler whom was first five uh employees at linkedin and then made a very intentional decision to leave linkedin and join facebook um you know for me with pinterest like obviously invested at the series a and then i was just so excited about the company it was four people when we invested yeah and just so excited about what was possible there that i couldn't imagine a world where i didn't throw my hat into the ring and beg for a job basically and so there's an intentionality i think that you see for some people uh in the early like deciding to commit

SPEAKER_51: to a company as an operator that in a way is an investment is is a little sign of an investment

SPEAKER_12: decision it is you are placing five years of your life i mean four if we just are totally cutthroat about it and think about like a stock vesting you're trading four years of your life and you may have 30 productive years uh depending on when you start taking your career seriously and when you decide to retire so hey listen you're talking about 15 of your career you're making a bet yes cheryl sandberg made a bet on google and then she made a bet on facebook and you know she had that famous quote um

SPEAKER_132: it doesn't matter what seat yeah yeah like if there's a rocket ship take a seat if you're a sas or

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SPEAKER_10: and i love your framing of that's first time i've ever considered that framing of it is an investment decision and and hey four years of your life yeah if it doesn't go much stronger you know a lot of

SPEAKER_02: operators they talk to me about getting into investing and then their seed investing and our angel investing rather and there's it's a reflection of something like your network and sourcing but ultimately the strongest reflection of the type of investing we do which is one or two deeply committed investments every year there's that the closest parallel to that is the company you

SPEAKER_16: choose to join and one and that's one or two per partner per year correct yeah so and there's

SPEAKER_12: five partners a benchmark or six there's six now and victor so you're talking about if one or two means 1.5 so you're talking about the firm does 9 10 investments per year one every month or you know

SPEAKER_10: one every six weeks or so so it really is done incredibly thoughtfully um and you're joining the board most people excuse me in the industry uh think the deal flow is destiny obviously i think that's a big part of it but you are saying here selection is equally important or more important than deal flow

SPEAKER_02: i don't think in those terms because it's it's um there's two things at play or rather i would think of it this way which is like i'm a big believer every strength has a corresponding weakness and vice versa and so everything has trade-offs it's kind of like you know the the employees who complain about a company feeling like a show internally it's decent because it's decentralized and there's all this redundancy and all these things but the strength of that you can see the weakness but the strength of that is that the company is moving really quickly and scaling really quickly with revenue and everything else and so there's there's trade-offs for benchmark the strength i believe in our model uh is that we are you know we're a team of equal partners and all we want is to find the you know the founders that will be those generational founders and then partner with them in that shoulder-to-shoulder work that you know means that we're not delegating any part of what we consider to be the core work of a board member to an internal team of consultants to a platform team so we have you know deep commitment truth seeking as a partnership and all alignment that once we invest in a company we all are empowered and want that company equally to be successful so you have the full benchmark partnership behind you the corresponding weakness of that is that we don't have a team of dozens of junior people who are reaching out to to founders you know and so my fear always is that a founder doesn't hear from us you know and they consider they just assume that the fact that no person from benchmark has reached out to them means we're not interested in them when really it's there's there's a constraint that we naturally have with our model that just means that we don't have that you know that that army of people who are doing that work reaching out you know nurturing all the seed relationships and it's uh it's a paranoia i have and you know i'm all you know that's why we're always you know i'm writing or doing podcasts or reaching out to you know friends or you know developing notes hoping cold you know dm-ing people as much as we can but at the end of the day we have this constraint and we have to hope that the product that we do have which is that deep commitment where we're not delegating any part of that job means that when that really ambitious founder who wants the best partner that they can have make sure to to find an introduction to us or you know a a and some way of getting to us and by the way i'm sarah benchmark.com like i think sometimes people think that oh you know it's well go

SPEAKER_09: ahead well no i was gonna say you know a lot of vcs get high on their own supply yes this is when i know

SPEAKER_21: that a vc is about to crash and they should retire is when they start writing about how you should contact me here are the rules for contacting me and it's like uh hey dummy we're in a service business

SPEAKER_10: stop complaining about your email your dms uh that's the job you have to live because you don't have an army of people screening your inbound like i do or you don't have an army of people like uh listen injuries and horowitz you know it's the platform company you might you might not have mentioned their name but i will you know they got 50 recruiters 30 recruiters sitting there doing the recruiting job where you know hey benchmarks feeling is if and i've talked to bill gurley about this and bill gurley's email me you know any cfos for a company like this who do you think might be great i mean i've gotten 50 emails over the years what do you think of this person i see you're connected to them on linkedin that's bill gurley yes girl he's rich you don't need to do that but

SPEAKER_12: then you know when he brings that cfo or that person chief product officer you know whatever vp avenge to that founder hey yeah i check with jake al i check with this person and that's a super

SPEAKER_10: that's a superpower right there yes so different different strokes for different folks but you in your uh because i was just down the sarah table rabbit hole i read like all your sub stacks from this year really really worth uh checking out you know hey reach out dm's open email me if any you said in a very nice way if this sounds if this resonates with you or something like that you had a little hook that i thought was very charming uh and thoughtful talk to me about writing uh as clarity of thought and a way to find the mutants out there i i look at my podcast and uh you know that that happens to be my zone and i'm a writer too but you know i look at my podcast as a way for me to be professor x you know put on cerebro and go look for mutants right uh if they're listening to the pod they self-selected hey they want to hear us talk for an hour about the gritty details of this most people want a 15-minute interview i'm like yeah enjoy 75 minutes or don't i don't care uh but that's a way of me clarifying my thought and showing my intellectual curiosity your writing shows yours

SPEAKER_50: talk about getting on the horse here and trying to be disciplined about writing on a regular basis in

SPEAKER_167: your process yeah i mean i i'm you know i've been blogging since 2006. um i had a i remember blog

SPEAKER_02: spot and for me you know especially back then i was a year out of college starting in venture and i probably felt at the time i if i look back on my very first blog post i was struggling being the only woman at my firm it was just a brand new experience i had never i thought would be fine but

SPEAKER_00: actually was rather intimidating in the beginning i was you know 20 21 22 and so blogging in the

SPEAKER_02: beginning was a way for me to just find another outlet that was more comfortable for me and what ended up happening is i learned two things which is one exactly as you said that when you are forced to write you you you know you always have these ideas and they're little wisps you know and you have to really grab onto it and pull it all the way and it takes work you know writing as you know my you know i think about my hierarchy of marketplaces that i wrote that's actually on my medium where i've been writing before it took me hundreds like way more than 100 hours to work on that piece and it's one of those things that i in the beginning i thought i knew i remember i put it first draft together and showed it to bill and he came back generously with all these notes and you realize you don't really know something until you write it and so through writing it and synthesizing i find that it puts me in more of a learning mindset and i learn more and then the second thing that you have is the community or the you know the people who for whom those pieces then resonate and you know you talked about your selection bias for mutants i hope my selection bias is always looking for learning animals you know

SPEAKER_00: people who are just they're working on something and they're curious and they're learning and they're

SPEAKER_02: thinking about how to build something that's going to dominate you know the competition i want those people to read something i wrote and like they want to build an enduring business an enduring company where you're not just focused on you know getting to the series a and then the b and then c but you're focused on how do i build something great for my customer work backwards from there i want those

SPEAKER_00: founders to read what i write and have it resonate for them and that really is three things it's curious

SPEAKER_12: but they also have to have some competition in them absolutely yeah and that is and then uh they have to be decade thinkers so it's really those are the three things when you gave that answer that i

SPEAKER_153: immediately parsed um let's take the second one i've got a competition in me i don't like to see other

SPEAKER_21: people succeed uh that's there will be blood you've got a little competition in you you're a competitive

SPEAKER_78: person you were the head of your rugby team that's i think your avatar is you with like

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David Friedberg: trust members fdic talk about competition and the i think it was ruloff who said this to me like you

SPEAKER_12: know there's certain people who have like a little overdrive they can put it into fifth gear sixth gear they can hit the afterburners and get that little extra 20 percent uh which i interpreted as as that competitive spirit that that next gear um why is that so rare how do you identify you know i find

SPEAKER_00: why is it so rare you've got to have a chip on your shoulder there's got to be something you know i know for me i i my hypothesis for me is that i'm the oldest of five there were four of us in four and a

SPEAKER_02: half years and in a way i had to compete for attention for my parents you know and so for me achieving was my way of getting attention and all you know and so that was that was what it was for me everybody has their own thing that that that creates that competitive spirit and i think there's probably a feedback loop that also happens which is that you are successful and it it fuels it right and so whatever it is like you want someone oh this stuff it's really freaking hard right like building a company that indoors that is you know able to be eventually one of those kind of rare iconic independent companies it's a relentless pursuit of excellence it's you know you have to be so vulnerable and admit how little you know because you're constantly in the biggest job you've ever had like you're constantly growing being challenged you know feeling like all the things that you don't know or all the mistakes you're making like it's just part of being a founder being a ceo in particular and you have to have a drive that's going to get you through that mission is one of the most important drives right like just feeling so committed to the reason why you started the company in the first place and what your customer uh needs from you but there's there's another thing that i think creates that overdrive and it's that desire to win that pushes you you know winning is hard right like you i was a competitive swimmer and like man the hours that i put into the pool and like the race itself it there's there's so much discipline that comes there but it's really hard to answer your second question how do you see it i don't think people just become competitive out of nowhere i think people that are competitive have a track record of being competitive you know and so i'd seeing that it's it's um i remember when i used to uh interview for the analyst position at bessemer uh to be an analyst at you know one of these junior people cold calling companies uh you have to be persistent and i would always ask the candidate like tell me a story of when you were persistent and they would always have a story and then i would say tell me another one tell me

SPEAKER_193: another one you have a second one yeah a third one and the same thing i could do three hours

SPEAKER_09: total competitive moments in our life yes and i was i just somebody just did a retrospective of

SPEAKER_21: me of the silicon alley days and they're like oh we heard these four stories of your magazine or whatever and i said yeah i was deranged in my competitiveness i felt that anybody who had a win that meant i had a loss when i and it was even in categories where i had yet to build a product so there was some newsletter called at new york that was a weekly and i had the biggest magazine one of the top five magazines in new york so gonna report was booming 12 million in revenue but these guys had a weekly and they would beat me to news stories and i would stare at the ceiling if they scooped me on a

SPEAKER_09: story it would my teeth would grind and i went to my team and i said silicon alley daily i wanted up and running today and they're like this is in 1996 or seven and they're like what is that i'm like a daily email newsletter about technology companies and they're like hey boss we we need time to do this i

SPEAKER_115: i don't give a i want it out we're starting this week first email is going out today give me a

SPEAKER_45: story like that's competing with the magazine i don't care we have to destroy this company and this company was like two great journalists i was psychotic in my book and then you know my co-founders are all in now you know we're like okay we have to create this conference it's got to be the greatest

SPEAKER_200: one ever held it's got to be better than ted it's got to be better than everything that exists in the

SPEAKER_10: marketplace and you know the the three compatriots i have on that are also lunatic competitors and so it's it's either you have it or you don't and it makes people uncomfortable i know but you know that's that's the weird thing about entrepreneurship i think in 2023 versus you know i guess we're i think you're a gen x or maybe you're you're i'm on the cusp i'm a millennial you feel more gen x than millennial to me you're i'm going to i'm going to take you for the gen x side and the draft take it i'll do it but you know it's uncomfortable for people to talk about competition for some reason today yeah and with the you know uh what if you guys got participation trophies and all this kind of stuff like throw it in the garbage it's worthless your participation trophy means nothing

SPEAKER_50: why is it so difficult for people you think to understand that like there's winners and losers in

SPEAKER_167: the world i wish i understood that i wish i knew it's it's um it's it's it's part of this culture

SPEAKER_00: that if i were to reflect just you know you know there's a reaction against capitalism there's you know

SPEAKER_02: this this desire that you should be able to have your cake and eat it too you know success and and uh and life and you know and it's terrible even you know these are the types of areas where we could talk about where people get cancelled on twitter you know like all the time and i remember the stripe founders patrick almost sheepishly saying like just you know i had we had to work really freaking hard to make stripe a success i don't know another way of doing it and i'll say though i meet a lot of founders now young guys and gals that are really freaking driven and obsessed and so i think there is you know a a snapback i hope there is because i don't see how people build companies that matter

SPEAKER_10: without without that drive i mean the world needs uh somebody to create innovation great companies to move the human species forward you know uh and competition is part of that like and it's actually a beautiful great thing you know there's been great moments in cinema where people were competitive with each other you know scorsese and francis for coppola and all of oliver stone all that generation they wanted to one up each other spielberg george lucas they all wanted to meet the next great film we saw it in poetry authors we saw it in rock and roll like people wanted to one up each other but it's a in a healthy way it you know it doesn't always have to be deranged and sociopathic and and the world must move forward ai is this incredible innovation that i don't think any of us saw and i'm

SPEAKER_216: interested in your position on this we all oh i predicted it all jason i predict yeah i mean we all

SPEAKER_40: predicted it's going to play a bigger and bigger role but did any of us predict it would do that

SPEAKER_10: in nine months because here we are we're taping this in september of 2023 and i think chat gpt 3.5 came out in october november when it wanted to come out last year yes turn the entire table over in our industry it would be as if broadband came in 1999 and everybody had it the same year

SPEAKER_21: so maybe talk a little bit about fun how fun this is and how much it's changing everything in every

SPEAKER_51: pitch and every startup oh gosh how could i synthesize that i mean you know most innovation

SPEAKER_02: you know most new experiences new product experiences happen usually are preceded by some technology catalyst right and you talked about broadband b that's a technology cows they the um you know adding the camera or the gps to the phone that you you hold is technology catalyst and so wow it's and what's what's also i think part of what is so transformative or just why it's so disruptive right now is that it used to be i always think of it as like a color palette like you're a paint as a founder an entrepreneur you're a painter and you you know what happens sometimes gps gets added to the phone or a camera gets out to the phone and all of a sudden you have this new color with which you can you can paint a new picture right what you know instagram uber like those are all kind of taking advantage of new colors that you have on your palette what happened with with large language models

SPEAKER_00: is that instead of it just being a color is it's you know metaphorically and and and literally giving

SPEAKER_95: you the picture and and the the and it just means that that kind of the ability of so many companies

SPEAKER_02: then to take advantage of this technology at the same time very quickly it's it's it's remarkable and it's the type of thing where we think about natural language right if you can have this interface to this incredible powerful model that is one that every single person can easily use and understand i mean you it's just the pure democratization of that type of technology when usually it was you know through the the the kind of interface that developer would create for you so

SPEAKER_237: it is it's touching everything um yeah and it's i have a punch up for your framing for your next

SPEAKER_21: sub snack the palette didn't change the canvas did um explain more well if you if you think about it like what you're putting all of these experiences and these features onto the whole thing has changed now where there's a there's a whole new platform that can solve the problem and you wrote a really

SPEAKER_37: good blog post about like augmenting people or just solving the damn problem for them yeah and

SPEAKER_10: i really liked your framing of this piece this is i think your best piece of the year um amongst you know good one yeah i give this one the uh because you went to a website for business

SPEAKER_21: process outsourcing and this is a very interesting device you used if you go to a bpo website these are people in india manila you know knowledge workers who cost a tenth of what the knowledge worker would cost here in the us a fifth whatever it is yeah with globalization and they can take something that a lawyer does that's on the low end of the spectrum and just get it done

SPEAKER_10: and you you can outsource to them just like you might be able to um amazon turk in a way this new canvas that we have can just do the entire thing you don't just make the lawyer at wilson cincini 10 or 20 percent better at doing some litigation task at doing some ip task or trademark task you can just do the task right so maybe explain your thesis here and what you're seeing um out there on the playing

SPEAKER_00: field sure and there's more we can you know let's bookmark just talking a little bit more about that because there's something about you know how much of the work is the large language model doing and how do you build enduring value if you're one of these companies the thesis like you know when you have a technology as powerful as as a large language model with so much of what we talked about before

SPEAKER_02: it's really a paradigm shift and what tends to happen when you have a paradigm shift is that the first wave of companies of applications of that paradigm are are in the mental model of the prior paradigm and usually you know we talk about skeuomorphism as

SPEAKER_00: as as a way of describing some of what you see at a design level and the thing i was reflecting on is that the first wave of companies leveraging large language models or generative ai generally

SPEAKER_02: were extending the mental model that we've had for the last 25 years in application software development which is about increasing the productivity of an employee the you know team collaboration the company the management's ability to man you know to better manage the team but all those things are about increasing productivity and all those companies they were you know all about increasing productivity and then charging on a per seat basis that was essentially benchmark to the price of that employee the cost of that employee and and your ability to move you know their productivity higher it's why an hr startup has a harder time than a developer oriented one because the hr employee is a lower cost employee generally than the the engineer and so you have we see this manifested in

SPEAKER_12: per seat pricing that this model has taken exactly per seat pricing is like hey if you're a salesperson two thousand two thousand dollars a year for salesforce if you're a developer four thousand dollars a year for this tool and it abstracts in some way as you're pointing out to their salary

SPEAKER_00: correct that's exactly right and and that actually also then has dictated where these

SPEAKER_02: application software companies have been built what verticals they can go after because you have to have a go to market that is getting software in employees hands having those employees you know start to use that that software actively whatever integrations you have to have in order to do that and there's a certain cost to that and a certain value to the seat and so it's meant that some verticals just haven't been penetrated by software companies which is you know very hard to find right now right now you've it's been feeling and this is you know parker conrad's point on compound startups is that there's been so many point solutions in sas now because everybody's been looking for these like little pieces of white space after the big opportunities have been taken and so then the first generation of these startups leveraging llms have been in that same mental model of let's sell software to companies that increase the productivity of their employees and you know the co-pilot for x idea is a reflection of that and and i don't mean to poo poo it it's certainly extremely valuable the risk that i feel is that you know there's always this feeling of um there's an expression the startup has to unlock distribution before the incumbent unlocks innovation and one of the challenges with playing in this kind of extending this mental model of productivity is that you're playing the incumbents game on the incumbents turf you know like who is going to be better positioned to offer this type of software to employees it's the company that already has software they're using every day and because of you know the analogy we described before of like the the canvas the large language model is doing so much of the work to create the step function change in productivity for the employee that it's been incredibly simple for incumbents to add this type of productivity improvement and you know go ahead no i just noticed

SPEAKER_153: it today because i use a wonderful piece of software called speechify oh yes and uh gwyneth paltrow's

SPEAKER_10: voice is in it she's an investor she told us something on summit and um i can take a new york

SPEAKER_12: times article that hasn't been you know and i can just listen to it in obama's voice or gwyneth paltrow's voice whatever it is and that's better for me if i'm walking around or my eyes are hurt from too much screen time uh and i noticed today in the app it said summarize this article with ai now i would

SPEAKER_10: normally do that by opening up chat gpt4 or bard and putting in the url now it's there so and then uh notion uh in coda which i love both of those products and we use them at all my companies

SPEAKER_12: that has it and then i just saw at dreamforce last week that slack is going to have and they've been the

SPEAKER_10: slowest of everybody i mean my god that company's product velocity is horrific right now um they really gotta and benioff's gotta you know uh really get somebody down into the the trenches there and get slack uh grinding again but they added something that will summarize all your what you missed you know

SPEAKER_12: while you were away here's what happened on slack you know the little catch up when you watch the next episode of your favorite streaming show like i need that if i'm off for two days or something or i'm off for

SPEAKER_10: 10 hours i love that little uh recap but it's just that that copilot to your point it's de minimis to

SPEAKER_271: add it to any product so it's it is and so startups must do more what must they do yeah yeah they have

SPEAKER_02: to do more and there's um what i think about and you know i wrote in my blog posts even up as just probably the best example i've seen of this so far is don't play you know in a way you always are looking for if you're a subscale startup you're looking for the jujitsu move and what's the jujitsu

SPEAKER_00: move it there's an element of the monetization model of these incumbents being on a per seat basis

SPEAKER_02: is is an achilles heel it's a vulnerability you can take advantage of um but you also kind of think about it as like there's there are some verticals some areas where actually if you leverage a large language model you can pick off work products you can pick off something that you usually need a human to do but it's it's transactional and transactional enough it's uh kind of more of a repeat repeat oh yeah thank you rinse and repeat thing that you do that leverages some of what you know large language models are so good at if you can find find those work products and then translate that into a product that you sell a work product that you sell to a customer then you're going to be better off and so

SPEAKER_130: let's take even up as an example here on the screen even up uh perfect law.com if you want to go

SPEAKER_51: check it out and play along at home so these guys are you know incredible and i i i talked about them

SPEAKER_02: in my post because i feel like they are well on their way to escaping competition um so what happens when you're a personal if god forbid any of you ever have to hire a personal injury lawyer um my mom had to she got bit by a dog and what happens is that you you know you hire a personal injury lawyer there

SPEAKER_186: they get a contingency of a third of whatever your settlement is from the insurer and you uh my mom gave

SPEAKER_02: the her personal injury lawyer all her medical records you know you talk about pain and suffering lost wages whatever it is and then what the lawyer does is they summarize all the medical records into something called a demand letter and the demand letter is a summary of the case you know lost like everything and then has a demand on what they think the settlement should be now this is a work product that personal injury lawyers who are super busy spread across so many things are usually trying to fit time into their schedule to get done and what even up realize is that they could use different techniques including llms to automate the creation of these letters and they sell that to a personal injury lawyer if on a you know on a think of it as as if you were selling it on a per demand letter basis and it's a completely different paradigm of selling the go-to-market you know i'm just selling a product you send me the the medical records will give you the finished product it's the pricing then is based basically as you know you think about it not as a productivity improvement 15 productivity improvement you think of it as like a 95 productivity improvement yes and what would the cost of the head count have been if they were having to do it themselves you know the loss the

SPEAKER_282: you know it's a pretty simple thing i have a company like this as well and so you you can't sell

SPEAKER_12: it on a per piece per seat basis correct because this can do an infinite number of them uh and so selling it on a per report basis makes more sense and if your cost to do it internally was 10 hours of a person's time at 40 bucks an hour that's 400 hey we'll do it for 50 we'll do it for 100 whatever it

SPEAKER_09: is that's right and if you have 10 this month great if you have a busy month next month you have 30 great but you're not paying for seats that makes no sense we're just going to charge you 5 or 10 percent of

SPEAKER_12: whatever your cost is i'm making that up but you see this in other arduous painful jobs and there are white collar jobs that are repetitive arduous and nobody wants sdr comes to mind sales development

SPEAKER_287: rep you're in sdr you got to get leads you got to warm them up perfect job for ai lead iq is the

SPEAKER_13: company we have that's doing this kind of thing and i think everybody's got to just start thinking

SPEAKER_10: about these businesses and maybe a new business model and per seat business may you know work for some co-pilots and stuff like that but that could be a big change huh and it's and it's you know it's so

SPEAKER_30: interesting to me to think about what even up could have done they could have sold software and instead

SPEAKER_02: selling the work product you know when you think about personal injury lawyers there's it's not exactly like there's a software company that's going after that you know they have changed the equation on a market that it you know wouldn't have otherwise been profitable to go after but when you've changed the product that you sell instead of selling software you sell work you actually open up markets that wouldn't have otherwise been viable for a software company and that creates you know blue

SPEAKER_12: ocean opportunities for it just clicks for me it just clicks for me there's not enough seats to sell

SPEAKER_21: but there are enough reports to run so we're we're changing um our perspective on what's possible you're not just because again you go into personal injury attorney paralegals or assistants or whoever's doing this work how many of those are there how much do they get paid what is 10 of making them more efficient

SPEAKER_10: right it's a blue ocean uh opportunity startups see you know were able to launch for a fraction a fraction of the cost uh of sort of just a decade earlier when the cloud came out um and startups that weren't even possible uh like youtube uh maybe instagram you know these type of um dropbox comes to mind as well they required massive storage was expensive bandwidth was expensive uh and even processing power and cameras were expensive if you wanted to do a filter on a photo my god photoshop and a powerful macbook pro is what was necessary and then maybe you got to get the creative suite from adobe and then instagram abstracts it into a phone smartphone wow incredible so i guess my question to you is you see startups needing less money to achieve greater goals and

SPEAKER_294: then what does that do for your business uh as a series a investor oh i would like to correct the

SPEAKER_296: record i'm not seeing startups need less money not i mean if you if you were to compare uh in 2021

SPEAKER_02: but if you were to look at a you know regression over the last 10 years it feels like you know even there's a lot of companies right now and and that are playing with large language models that think that they have to eventually find train their own model fine-tune

SPEAKER_299: that's not cheap um right and so yeah go ahead well as i say that yeah it takes a lot of big rn

SPEAKER_10: at this moment in time but we did see cloud computing lower the cost of having to buy a million dollars

SPEAKER_268: in servers right absolutely i guess i'll i'll i think it's a good point because those ai companies

SPEAKER_13: are an exception but the average startup might they need less developers if developers are going to be more you know uh effective at what they do or is it just going to be steady state they'll just redeploy

SPEAKER_306: that money into marketing or something like what i see is that the average round is larger now than it

SPEAKER_297: was in 2018 and you know there's more companies more competition more venture capitalists with bigger and

SPEAKER_310: bigger funds yeah that seems to be a big driver huh it's a big driver and then of course like a lot

SPEAKER_02: of these ai companies like we are still so early we're so early and one of the things that you know i see is that a lot of the tooling that you rely on when you're as an apple as an application developer to be able to build and scale something still hasn't been built and so a lot of these companies are having to recreate the wheel on a lot of different things in order to try to leverage large language models in a production system an example of this the model the underlying model that you use is changing you know you don't control if you're using open ai you know there's there's something that can shift beneath your feet all the time or there's the old work that you're doing to fine tune that can have so many downstream effects that are harder to anticipate and so you build kind of test queries as an example that you use to then understand or is the experience that my users are getting from our our the large language model consistent with what we've had in the past and so these are things that you kind of have to build from the ground up the human evaluation how are you going to get a human in the loop on a lot of these things and it's all all pieces that companies have to build from the ground up right now in order to deliver on an application experience and that takes

SPEAKER_297: engineers um and so there's just a lot of investment that still has to happen in these companies

SPEAKER_12: how does uh benchmark or how have you stayed competitive in a world in which there's many more

SPEAKER_10: venture capitalists many more people trying to get to the series a stage uh you know when bill was at the you know whatever 10 years ago like 20 years ago even it seemed like a much different playing field now you're you're not just competing with sequoia and kleiner and whatever you know little clubby sandhill road uh you know hop that founders could do you got funding from sovereign wealth ones who

SPEAKER_21: want to invest direct you got people all over the globe competing you've got all these new funds competing and let's face it people are running up the valuations because they don't have a reputation so what they do is they will offer more money than benchmark they can't beat you on reputation or track record they can beat you on price so how do you maintain discipline when you know

SPEAKER_10: people are running up the price versus you in competitive deals how do you think about it you're

SPEAKER_310: close with bill you know how he says you always play the game on the field um i'd say though that

SPEAKER_02: part of my answer to that and part of the conversation we always have with founders and you know in the very beginning of this conversation you talked about how one of the selection biases i hope i have is a founder who's thinking you know a decade out working backwards from there and there are founders for whom getting the the cheapest capital at that financing and like great if there's no board seat even better there's some founders for whom that's the right fit we don't need to play for that founder what we want is the founder who is going to be thinking about that decision on a decade-long journey that they're going to go on and that they want to build the best because they're that competitive person who's who knows that they don't have all the answers that wants you know to be surrounded by the best people they possibly can be at every step in the way what's the partner look like that they can they can work with through that journey and and so it's not looking at it just as an optimization for that round it's an optimization over the course of the journey that you're going to be going on and that calculus for the founder for whom we want to serve and and attract uh tends to be a clearer

SPEAKER_86: decision yeah i i have my own filter for this as well it's like if you're going to argue over meaningless

SPEAKER_10: points in standard documents and we have a discussion about like i've gotten back the standard documents with you probably had this happen you know 20 changes in them and you're like why are we not using the standard documents and you know all these changes to these documents going to screw up the next round it's not actually in your best interest i mean forget about like you're taking away some of our rights whatever as investors we can debate whether those are important or not but

SPEAKER_21: the next set of investors is going to want the same thing so now you're gonna have this battle again and then what does it say about a founder who doesn't want to build proper governance in a company and doesn't care about who's on the cap table that's a level of um you know um myopic thinking

SPEAKER_10: and optimization that is likely going to send them off a cliff because a lot of times the people who would take that deal are stupid or they're as cutthroat and then now you got two people with myopic thinking and cutthroat thinking on the same cap table the person who's like i know i'm overpaying i know i don't have rights but screw it i need to get into this deal and then this founder's got this couple of things like what is that what is that company going to look like in three or four years i

SPEAKER_02: mean you didn't say it as it can be challenging but and look like you know at the end of the day like the reality is is that in the opportunities that we you know are spent time with the founders

SPEAKER_310: that we're getting to know i don't think i've ever seen one of these like sovereign wealth or

SPEAKER_02: you know big multi-stage strategic arms yeah it's never it's it's never come up and i and there's probably some filter that happens before we even see it of you know the founders that want you know a partner and that and with whom we end up really wanting to serve and and the vision that they have they're they're already thinking about the game a little differently yeah the strategics i'm curious

SPEAKER_13: like how often you see those come in but man when i see them come in i'm just like red flag red flag like this person these strategics man they they cause so much problem if they get in too early and uh too early

SPEAKER_51: it can be it can be tricky the you know like this explain why to people who you know a founder who for

SPEAKER_12: the first time has some you know big handset manufacturer or you know social network want to

SPEAKER_10: own shares in their company at the series b you know and they want to do the round instead of a you

SPEAKER_30: know classic financial interested party explain why that is it's it's a few things um number one it's like

SPEAKER_51: you know at the end of the day do you want to do you want a partner at the board who is going to be

SPEAKER_02: you know thinking about the only the company and it's you know what's best for the company working backwards from there or you're going to want someone on your board who has this other incentive structure usually um because of whatever organization they're part of that ends up affecting kind of the the counsel that you get from that from the partner the second you know and it's kind of related um which is i remember when i was at pinterest we you know one of my first jobs at pinterest actually was to close our series c financing which was with um with with rakuten and rakuten's of incredible japanese conglomerate and and then like my next job was you know localizing pinterest we did we were only in english and and so what were the first law first languages that we were going to support japan is a very unique world right there's a little bit of a galapagos effect there and in terms of kind of consumer social and so there was this you know influence you know a small kind of on the scale of which countries to launch first this you know light thumb pushing on japan you know and and there's no question we pulled forward japan to in my recollection we pulled forward japan ahead of when we would have otherwise done it because we had rakuten saying we're you know let's do japan we're excited to support you we'll help you in all these ways and it's a very subtle thing but you know these you know building a company is already difficult enough and when you add any distortion in your decision making to serve a third party that you might not have to otherwise have served it creates some challenges

SPEAKER_65: and then the last thing is is always just the complexity that it creates when you're thinking

SPEAKER_339: about m and a um you know and we could you know open well i mean in that case with pinterest if you

SPEAKER_12: were going to sell the company it went an ipo obviously but if you were going to sell it yes rocket hand would be like okay we'd like to buy it and okay well what's the price for them and they're on the board and then who are the other buyers just the nature that there are other buyers would tip off rakuten and make them be able to compete better in the bidding process so now you've distorted the

SPEAKER_02: bidding process right and it's what what acquires worry about is oh there's a strategic they probably have a right of first notification and and so if i spend all this work do all this work internally to get people excited about this uh acquisition and then i make an offer and they tell their strategic uh investor and then they counter did i just was i just a stocking horse you know and so there's a little bit of that uh effect that you have to neutralize and to translate the first point you made

SPEAKER_10: for the audience the compensation you and i get uh as being fund managers gps general partners in a fund uh well you guys get 25 30 because your benchmark i get 25 and then most get two and 20 and it's

SPEAKER_21: management fees and 20 carry what that means is your stock price goes up in pinterest or whatever startup it is uber we only do as well as your stock price does and oh by the way you have stock price too oh you have you have shares as well okay all of our shares go up we all win equally now you get

SPEAKER_12: somebody who's on it they're the vp of biz dev corporate development at some big company they're just

SPEAKER_21: trying to make the board and the ceo happy that's how they get a raise and a bonus they don't get 20 or 25 or 30 percent of the increase in our share price value they get some strategic value from this

SPEAKER_09: and then they're taking their product roadmap your product roadmap and then they're putting them up on a board and saying when does this company hit our strategic interest and now you're i'll add that as a fourth which is when do these things start overlapping or competing against each other and rocketans like you know what we learned so much on this board that on our e-commerce site we added a share button but don't worry just a share button right and then oh you know what but you can share

SPEAKER_40: multiple things so we just made a profile page with a couple of things you've shared before but it's not competitive and then oh yeah now we make collections but they're not called boards but

SPEAKER_92: they're yes they're collections yes you know you're right to highlight this amazon was in particular

SPEAKER_10: notorious for these types of moves in the beginning yeah and then lena khan came along and wrote her thesis on why amazon is horrible uh what's happening with m a in the era of lena khan and the eu

SPEAKER_12: basically saying whatever you want we're gonna say no just because we hate we hate tax so by all means you know we don't give a uh uh we we don't care uh we put an expletive there but we don't care expletive

SPEAKER_10: of your choice uh what the law says we're just interpreting tac m a equals bad and we don't even care that it's great for a consumer that these companies would be part of the same group but some maybe some relief with microsoft winning their case and offering more to consumers than was asked right they're like yeah you can be on xbox or whatever we don't care so maybe talk about your thoughts on that and what's the back channel in our industry on m a uh you know well i think a lot of

SPEAKER_02: people are watching what happens with figma and wondering uh what's gonna go on there you know i think the bigger challenge is that you have most public companies that would be acquirers still in a bit of a defensive crouch you know like there is still this transition that a lot of companies are going through where there's a little bit more defensiveness in their posture as opposed to thinking offensively of what are the moves that we can make to really you know expand our opportunity and it's a natural you know aftershock or kind of effect of just this change in in the interest rate environment and all the the subtle things that that tends to to affect and every every decision to make an investment is just much more expensive than it used to be and so i feel like that's the bigger thing you're starting to see some you know more offensive moves more kind of kind of people thinking more about the future as opposed to reacting to some of the decisions they felt like they maybe

SPEAKER_358: made uh in you know in the past that got them into a you know over hiring being the big one but um

SPEAKER_10: we're still thawing from them yeah this we had whoop on the show this summer met with amazon wanted to invest passed on investing after meeting with them and then wound up launching competing products that's up to episode 1786 1786 for super fans who want to double click on it do you think about macro as an

SPEAKER_21: investor or do you just think great founders product market fit company building you know we obviously

SPEAKER_02: are affected by the macro like you know all of our companies that were invested in can't ignore it but ultimately you're investing in a great founder who sees something other people don't see if there was you know i there maybe the one thing that you do feel is certainly i think it may have been bill who said this that you can almost feel how much you're into a bull market by the gross margin of the startups that people are investing in and the you know certainly with the zero rate environment the bull market you've tolerated lower and lower gross margin businesses uh that's not the case today you're you know i i can't tell you how many companies i meet now where on their slide they talk about burn ratio you know how much did they have to burn in order to get to the arr let's call it that they're at now and i love that people are thinking that way like it's healthy we kind of it's so healthy you know ultimately this is you know what what startup businesses should be venture businesses are opportunities where you can take small amount of capital and have a huge multiple of like value that you drive from that and we got we lost that a little bit over the last few years and so now people

SPEAKER_67: are really coming back to it my big trio cpg becoming a venture business like really i'm not so sure

SPEAKER_12: about this one yeah i mean there could be differentiated products that have technology in them i think eight sleep falls into that category very you know high gross margin business

David Friedberg: but then like 15 minute delivery like okay nobody needs a 15 minute delivery like even if i forgot my

SPEAKER_12: shaving cream like i actually don't eat 15 minute like yes uber eats delivers doordash delivers grocery

SPEAKER_21: stuff like one hour just fine 45 minutes just fine 15 minutes like what am i this very few things that somebody needs in 15 minutes uh yeah and then yeah of course like buzzfeed is worth like 50 million dollars right now and it you know like who is investing in a media company at least i'm a media guy i love media i build many businesses it's no media businesses are for people who are passionate about it who want to build a 10 20 30 40 million dollar a year business if you love it great or if you're

SPEAKER_10: a rich person you're bezos and you want to own or you're benioff you want on time magazine or washington post or i guess um lorraine powell now owns the atlantic you know like if you love it and it's like you know owning a hotel or resort you know kind of thing and yeah great it's a bespoke you know business

SPEAKER_21: for you but that is not where we should be spending our time there is no gross margin in those

SPEAKER_153: businesses all right sarah it's been an hour plus sarah tavo read her sub stack go to sarah tavo oh and you know i asked you about your portfolio you never want to talk about your companies

SPEAKER_21: well let's go well why don't you want to talk about your investments you're trying to keep them stealth or you just don't want to be taking credit for them what you're thinking here i i think 99 times

SPEAKER_02: out of 100 announcing of financing serves the ego of the investor over the purpose of the company and you know especially you know i'm a student of dominating competition right like how do you build one of those businesses that you know is isn't just number one in a pack but like number one by a mile i have this usain bolt uh image that i love uh on my twitter and there are there are very few things you get out of doing an announcement at the very early stages of a company besides educating

SPEAKER_51: people who are thinking about what they want to start yes yes and and you know i i could imagine

SPEAKER_02: someone saying and and by the way the other big thing for it is that it catalyzes incumbents to compete with you you know like i you know i i hate hype i think hype hurts companies so much and i can't help but think about kind of the clubhouse early days where yes this small company small team incredible founders trying to build something and the hype cycle that got created around clubhouse was so great that it catalyzed twitter that twitter is not a company that builds things quickly and wow holy cow was that activating to twitter that hype felt existential to twitter and it got them to to act and added you know spaces to twitter and here we are all these people and here we are and so it's just particularly in consumer social hype is the worst thing but generally and especially in this world we live in now where it's so much incumbents are not fools they are moving really quickly they are innovating and i would rather keep something a secret as long as we possibly can and then surprise

SPEAKER_92: people then pound my chest about the company i like super great though can i mention i love those guys

SPEAKER_86: i love those guys what is it why did you make that investment for me you know the first thing was the

SPEAKER_02: founders which is tyler and dan just incredible founders whom had a great partnership were you know really committed to what they were doing and had a unique point of view um to what they want to do with super great and the second thing was i think there was a you know a little bit of unfinished business for me but from pinterest which was like pinterest was this ugc site but you couldn't control what people brought into pinterest it was yeah you know and so you would click through on a pin and it and it could be to you know a dead link or whatever it was and so it made it difficult for pinterest to get into commerce um because you didn't you never know what you're gonna get never knew what you're gonna get yeah you never really trained the users to trust clicking through i think and super great was a hundred percent products and a ugc site around that and you know makeup and beauty it's awesome around beauty and and what was cool about beauty is that super long tail of products you know kind of the shopify world uh has made it so that there's like so much more fragmentation new brands coming around all the time high gross margin products easy to ship and felt like there was an opportunity to

SPEAKER_86: build something awesome an hour and a half but sarah tavel uh will you come back next year can i get

SPEAKER_318: you can i get you to pre-book for next year all right that's all i ask this is my new thing with my all stars i just say hey one year from now because you'll make that commitment and i'll my team

SPEAKER_21: will hold you to it um now the audience is in on it so they can't wait for september 2024 to get an update from sarah you're amazing to see you and we'll see you next time bye bye awesome thanks jason