← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: GPT5: Sam Altman's Masterplan or a Gift To Anthropic | Palantir & Shopify Crush Earnings | Monday & Datadog Perform But Hit Hard by Wall St | Should Perplexity Buy Chrome for $34.5BN |
01:22:01
AGENDA: 00:04 – Was GPT-5 the Biggest AI Letdown Yet? 00:17 – Is OpenAI’s Real Target Anthropic’s $6B Revenue? 00:22 – Why Anthropic Might Secretly Be Worried 00:28 – The Hidden Business Strategy Behind OpenAI’s “Underwhelming”...
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- [00:00]
Jason Lemkin
It's like dealing with a deranged madman trying to estimate what the street will do. I spend no time on it.
- [00:06]
Harry Stebbings
You don't need half your company. And Palantir and Shopify are proving that you don't need half your company. He's ruthless. Zuck's ruthless, Carp's ruthless. And if you think you're going to win in B2B, if you're not ruthless, you're going to lose. Okay, let's look at Shopify for a minute. From peak employee was was 2020 to 11,600 employees. Since then, revenue has grown 91%. Pretty impressive for a company at 11 billion. Revenue and employees have gone down from 11,600 to 8,100. Gone down. While revenue is up 91%.
- [00:36]
Rory O'Driscoll
It's time for my favorite show of the week. This is 20 VC with me, Harry Stebbings. Now, today we break down the best.
- [00:43]
Unknown
Earnings quarters for some fricking insane companies.
- [00:46]
Rory O'Driscoll
Datadog, Shopify, Palantir.
- [00:48]
Unknown
Oh my God, what a quarter Palantir had.
- [00:51]
Rory O'Driscoll
We then discussed GPT5. What we thought of that.
- [00:54]
Unknown
We discussed Perplexity potentially buying Chrome. This was a fantastic discuss. So much fun here. I always want this to be as good as it can be for you. Let me know what you think. You can email me harry@20vc.com or DM me on Twitter. I love to hear your thoughts.
- [01:10]
Rory O'Driscoll
But before we dive into the show today, let's talk about agents. Specifically Piper, the AI SDR agent brought to you by Qualified. The agentic marketing era has arrived. And if you're a B2B marketing leader looking to scale a pipeline generation, Piper, the AI SDR agent.
- [01:27]
Harry Stebbings
Wow.
- [01:27]
Rory O'Driscoll
It is here to help. Piper is the number one AI SDR agent agent on the market according to G2. And hundreds of companies like Box, Asana and Brex have hired Piper to autonomously grow inbound pipeline. Fucking sign me up. Anyway, qualified customers see massive business impact with Piper. 3x increase in meetings booked and 2x increase in pipeline. Wow, that is some results. Hire Piper, the number one AI SDR agent and grow your pipeline today. Learn more@qualified.com 20VC that's qualified.com 20VC with the 20VC spelt out in letters for goodness sake. And while Piper builds your pipeline, Attio gives you the CRM power to close and grow those relationships. Attio is the next generation of CRM built for the AI era. Fast, flexible and powerful. No, it's not a sports car. It's a CRM system, baby. It is attio and it takes less than a minute. Sync your email, your calendar and you'll instantly get all your relationships enriched in real time with incredible data, no manual input needed. Attio also integrates with your existing tools and syncs with your product data to deliver an AI native platform that's tailored to how your team actually works. You can model your CRM around your business, automate complex tasks and surface real time insights all in a platform designed to scale with you. With Atio, AI isn't just a feature. No no, it is the foundation. It's powerful. It's AI automations. It's research agents that transform your go to market motion. It's a data driven engine. From intelligent pipeline tracking to smarter product led growth, fast growing startup like Flat File, Replicate and Modal are all experiencing what's next. So get ready to build without limits and start now. Attio.com20VC and get 15% off your first year. That's attioattio.com20VC. Okay, pipeline sorted.
- [03:25]
Harry Stebbings
Woohoo.
- [03:26]
Rory O'Driscoll
Now what about your own legal team? Enter Logora. Logora is the category defining AI platform that's fundamentally reshaping how legal work gets done about frickin time. Empowering lawyers across tier one law firms and in house teams to achieve more with greater precision and confidence. Ligura does this by solving concrete tasks such as document extraction, reviews against a firm playbook and suggesting well crafted markups directly in Microsoft Word based on your preferences. My word, that is a topic list of conversation that will not get a second date. But anyway, the adoption of legal AI is surging across the world and Lagora is at the forefront of this shift as the chosen partner to 250 industry leaders in law across more than 20 markets. The the likes of Goodwin, Bird and Bird and Deloitte are making daily use of Ligura platform to review and research with precision, draft Smarter and collaborate seamlessly. They recently also got an $80 million Series B from Iconic. They're backed by General Catalyst, Redpoint, Benchmark and yc. Also they operate out of New York, London, Stockholm. Yes, they're Swedes. Always a wonderful race. With over 100 employees from some of the world's leading global law firms and tech companies. The team is growing super rapidly. They're just freaking awesome. Just go use Legora. Honestly love Max, their founder. He's just a great dude. Go find out more. Lagora.com you have now arrived at your destination.
- [04:49]
Unknown
Guys, I am so excited for this.
- [04:51]
Rory O'Driscoll
We have a amazing schedule in place today.
- [04:54]
Unknown
I want to start with GPT5. I think it's the top story of the week. Consensus is it's slightly underwhelming. Before I lead the witness, I'd love to hear how you responded to it. Do you agree it was underwhelming and do you see it differently?
- [05:09]
Harry Stebbings
So my first experience was certainly underwhelming when it said we had the greatest market crash since the Tulip era. That's what I think. But when I look at folks smarter than me, if Aaron Levy's running this through box insane redline and document comparison and term extraction is materially better, maybe that doesn't make those of us who are using it for therapy excited. But if he thinks it's materially better, and more importantly, if it's materially better at coding and competes with anthropic, you know, that's 6 billion of revenue that they lost. But I get it does feel like it's a worse therapist at the moment, doesn't it?
- [05:44]
Jason Lemkin
My take similarly was, I think underwhelming is great. Let me tell you what I mean by that. Underwhelming kind of took a little bit of the air out of these, you know, the, the kind of techno optimist we're underway to AGI. It's all going to revolutionize everything, all that kind of noise. You definitely felt a little deflate here, which is great because we're now at the. It's a really great piece of software for doing business, let's make it better stage of life, right? It feels for me, I remember, you know, the first, you know, Windows 95, yay. It's amazing. You got a big launch and then there's just a steady or even the iPhone. Better example, the early one, you know, great launch is going to change everything and then you settle into 10 or 15 years of incrementally making it better until you plateau. Right? And from a zero to one perspective, that's not as interesting. But we're now in the grind it out, make it better, build a business stage of life, which I, I think it's a more normalized world. So there's two things in it. One, implicit in that is the statement, I don't buy any of this. They're going to keep on getting better. Exponential takeoff, all that AGI rubbish. I always assumed it's rubbish and maybe I'm wrong. But at least right now the evidence shifted a little more in the favor of perhaps not nearly as quickly as you think, because from a business perspective, there's a lot of interesting Shit going on here. And Jason nailed the first big one. The product is good though, I believe not as good as the high end Claude code the models, but a Damn sight cheaper. 10x cheaper than most expensive token load based on what it's maybe 8x to 10x on top of that it's noticeable. Cursor now is pushing a GPT5 based product, you know, and has free demos of that, pushing that on their user base. From a business perspective as this thing from a pie in the sky AGI stuff. This is exactly what Jason said. This is OpenAI going at a big ass pile of revenue that Antropic has and maybe Entropic overplayed their hand a little bit by kind of bullying Windsurf. And as we discussed, if I'm now Cursor maybe a month ago I'm sitting there going, my gross margins are set by my worst competitor, Antropic. And now I'm ecstatic because the big ass guy in the block is now another vendor of tokens significantly cheaper. I'm going to push the hell out of this. So it's a really big business comment. It's not as sexy as AGI making us all unemployed, but if you're trying to build a business and your cursor, this is the best damn thing that ever happened. We have a competitive product at 1/4 to 1/10 the price and I'm happy.
- [08:09]
Unknown
If I was Anthropic, I would be in that room rejoicing. Everyone, when I speak to the Anthropic team are bluntly laughing because I mean the demos were terrible. I think it was entirely underwhelming in terms of the presentation of features, model compatibility into one and model routing and we've now taken away. That's it. Seriously, we waited GPT 5 and you gave me better model. This is, this is disappointing.
- [08:34]
Harry Stebbings
There's a reason for it. Sam Altman, in his own way, is a marketing mastermind like Elon Musk. He knows what he's doing. Okay, we can make fun of this or that. He's everywhere in the entire globe. He's doing Stargate, Farscape, everything. He's. He's building everything. He is as perceptive as they get. He's dueling with Elon on who manages the X algorithm. Right. The fact that this would come out with a bit of a thud was known to him and the team. Right. So there's a reason they did it. Was it timing pressure? Was it to put pressure on the team? I actually don't know. I haven't seen it on the hundreds of Reddit some on this is like Figma saying Figma was dumb they didn't understand the IPO pop from last week this is that's neither is true the idea would come out with a thud is not a shock put me down.
- [09:18]
Jason Lemkin
Is not quite buying that you can be directionally brilliant and and entrepreneurially brilliant and it's hard not to argue some album is bold but it's always worth remembering the most popular product they ever ship they didn't know they were shipping a good product at the time ChatGPT which is 70 80% of the revenue dollars when they shipped they didn't even think it was a major release they were focused on GPT4 the following March so I think one of the bigger ha's on that and it's not we went to go but to go there is you see this in venture often if you're directionally correct and you have big ass vision and drive and the ability to raise money sometimes just that's enough and you kind of get the brakes on your side but I don't think you have this I don't think he or anyone has complete clarity on every step and the level of forethought that you're implying Jason on that but I actually don't think I can I wanna go back to what Harry said cuz I don't know the answer it's interesting you made the comment you think entropy are laughing they're definitely laughing at the thud and it's hard not to laugh at the funny stupid graph that was mathematically wrong and oh my God they must have burned someone after that at the stake literally I'm not sure I'd laugh quite as much cause I do think a renewed push on code and pricing and trying to get that biz it would be better if you're anthropic to be a monopolist and the best product than to be in an oligopoly where you still have the best product. The consensus is token for token dollar for dollar the anthropic products do more and are more efficient and this gets into a very interesting discussion is if the pricing of the entropy is low and good enough for companies really wrestling with gross margin you're going to have some kind of use the cheap shit where you can and use the dear stuff where you have to. So I do think no one ever said I'm really delighted my bigger competitor entered my market with a product 5x cheaper than us. I mean so I don't buy it at that level, Howie, to be really direct.
- [11:04]
Unknown
But I think that's a very moment in time perspective, which is everyone is aware that if you're looking at like cost of tokens today, we're seeing them reduce so dramatically within a 12 month period. I don't think Anthropic are looking at that thinking there's a permanent chasm in pricing and we're going to be unable to match it. I think they're looking going fine. They might have a slight inefficiency on us today, but if our models are better, we'll win.
- [11:25]
Jason Lemkin
Yes, you'll win, but it just won't be quite as easy as my point. I mean, that's my point. We've gone from the pie in the sky for everybody, going to be amazing flowers and sunshine to the okay, it's a slugging out war here. This is the advantage we've got. This is the advantage they got. So I say we're dealing now. Just business fundamentals. Are you better off with the slightly better Forex, more expensive? That kind of discussion.
- [11:48]
Unknown
Roy, what was your second point? I interrupted you.
- [11:51]
Jason Lemkin
No, no problem. I mean there's two or three you have to take seriously. They shipped the open source products earlier this week. Another interesting commercial move. So again, and the last one you were sneering at it, but moving away from all those models to the single model selector. Yeah, it didn't work at opening. It's the kind of thing you do when you're done with imagining being the next Robert Oppenheimer and now you're focused on what the product manager tells you will get 5% extra conversion among users. Someone in product marketing said, dude, we have to stop with these six different model names that make our users feel stupid and just make it simpler to use. All those things are okay, it's time to get business savvy, not just AGI's coming savvy. So I thought, yeah, that's what grinding it out looks like. That's what every iPhone release after the first one or two looked like. Similarly, what every Microsoft Windows release after the first two or three. It's like once you had tiling in windows, the next 15 years were just grinding it out. Same thing with the iPhone. Maybe it's the same thing here. We've got the idea it's a chatbot with AI and now we're just going to be grinding here.
- [12:56]
Harry Stebbings
I think GT5 didn't achieve what Sam wanted it to achieve by July 31st. And you got to manage the team even at the highest profile company on planet Earth. And everyone that's been a founder that's shipped software has had to make a decision. Do I give the team another month, another quarter? Anytime you do a release and it gets too complicated, your team always wants more time. At some point, as a leader, you got to ship it. And earlier on the show we had a calcium. When will GTP5 ship? Right. And it was all over the place. I think Sam said, august is time, boys. And if it's going to be underwhelming, I'm going to make the call that we're not going to wait for nirvana. I don't have a firm date on what it was supposed to be and I'm just going to box it up and ship it. And we're going to make some basic stuff better for Aaron Levy. We're going to cut some costs and that's it that I this maybe it's 4.9, right, or 5.000, but this is just my theory. He decided there's so much attrition in this industry, there's so many resources flowing back and forth to meta, to here, to there, that I think he just decided ship it.
- [13:55]
Unknown
I also think aligning to a $500 billion fundraise, it's actually better to get it out, to continue to press on, than to have continuous waiting.
- [14:03]
Harry Stebbings
Yeah, it's like the Replit $3 billion round. Just get it done.
- [14:06]
Unknown
Rory, would you do OpenAI at 500 billion? And do you feel more or less confident post GPT5 about OpenAI?
- [14:13]
Jason Lemkin
I'm going to say more confident and I'll tell you why. It goes back to what I said earlier, right? The grandiosity was totally necessary at the start because if you'd walked into people and said we need to raise 30, $40 billion, and at the end of it, we're going to ship this chat app that, trust me, people will use as replacement for search. That might work as well as we're going to change the known universe. We're going to exponentially eliminate all labor. When you have to raise 30 billion on nothing, you're selling dreams. The future of humanity. We're now at the I gotta make a business converge roughly, unprofitably over the next three to five years. So just go run the business. It's a combination of a just ship, run the business, make it better kind of next step. And the interesting thing is, and this is where I've evolved a little in the last few months just thinking about it, without any need for AGI or any of that rubbish. I think both of these companies can be plus or minus half a trillion to trillion dollar companies. The opportunity, it's just so obvious that everyone's going to be paying 20 bucks a month and people are going to be paying more. And you get an interesting discussion how big the high end will be, which matters more for antropic than these guys. But they have the mass market, everybody paying 20 bucks a month. That's a big ass company. From here the throwaway is such that you probably can see a 2, 3x just on that. Probably some noise along the way. You might be ahead of yourself, but they're on the destiny that's now locked in for them, which is to be the go to place for information for pretty much everyone on the planet.
- [15:41]
Unknown
I always think that actually AI is a bit like crypto which is like, hey, don't fucking worry about all the underlying assets. You'll make money if you just invest in the core, which is Bitcoin. And I'm like, the core unwavering Asset here is Nvidia. Do we think OpenAI or anthropic or Grok or you name it, are going to win? I don't freaking know. With each month the benchmarks change, the last humanities exam changes, next humanities test will come Nvidia. They all just Elon Nvidia.
- [16:11]
Jason Lemkin
I mean what you're saying is true, which is sometimes just keep the main thing, the main thing. And I often make that mistake because you and this is going to sound really cynical, but early on you listen to all the proselytization and all the crazy stories and I'm very much a rationalist and I try and take them seriously and I deconstruct them and I realize, oh, these crazy stories are bullshit, therefore the thing itself is bullshit. And that's wrong. Every single thing that people said they'd use bitcoin for in 2013, except maybe finding stablecoin payments, has been bullshit. But the thing itself totally worked because it's got this, you know, the store of value idea, the asset independent from everything else. Bitcoin worked. Everything else, Ethan, to some extent, everything else, all those little weird coins didn't matter. Same thing here. The main thing is the main thing you want to make the chips. You want to beat a company that's in an OpenAI's case, you want to be the company that's pretty much selling to every consumer. Looks like its market share is pretty hard to change at this stage. So you start multiplying, you know, you'll have a paid tier of 20 bucks times a lot of people. You'll at some point have an advertising tier and plus or minus your Google with a subscription business. There you are. It's one to two trillion dollars. Thanks for coming. Keep it simple. I am often guilty of overthinking to the point where I've now learned to watch myself when I overthink.
- [17:26]
Unknown
I'm very lucky I don't have the luxury of the ability to overthink. Rory. And so I'm always a simplistic thinker, which tends to do me, which tends.
- [17:34]
Rory O'Driscoll
To do me quite well.
- [17:35]
Jason Lemkin
You know those kind of Internet meme graph where you have on the left, total fucking idiot in the middle overthinking it and on the right not thinking at all, just like the other guy. And you win.
- [17:46]
Unknown
Listen, another element that's just like crazy is perplexity trying to buy Chrome for $34.5 billion. I spoke to Aravind before, he said legit, it's in their court.
- [17:59]
Jason Lemkin
How on earth is he?
- [18:00]
Harry Stebbings
Where is he getting the capital?
- [18:01]
Unknown
Just to confirm that was my question to you.
- [18:04]
Harry Stebbings
Elon had his, had his capital secured a while back, didn't he?
- [18:07]
Rory O'Driscoll
How is this possible?
- [18:08]
Unknown
Guys, what did you make of this when you read it?
- [18:11]
Jason Lemkin
1. I mean, you can get tactical and say, where would the money come from? But now, stepping back, why would Google sell just big picture points just to cover for people. Why would Google sell Chrome? Answer, they don't want in a million years. The Department of Justice says they have to if they can appeal. And at some point, maybe they have to. They don't want to sell this thing. The second question, it's interesting one is what's the Chrome business worked. And the totally interesting thing about that is it's so dependent on who buys it, right? Because the asset itself, it doesn't have like Mozilla has $700 billion, I think, of revenue, right? Reefer market share. You don't get paid for owning a browser, to state the obvious. Right? But the reason the doj is going on this is as well as owning Chrome, which was one of Sundar's crowning achievements that got him the big job building Chrome. Google also pays Apple for search placement on Safari, $20 billion a year. And the Department of Justice is looking at those two things together and saying, oh, so paying to be in the browser is bad, Owning the browser is bad. It allows you to continue your search monopoly. But the question is, so from Apple's perspective, owning Safari in the iPhone, where it's kind of a pain in the ass to change is clearly worth $20 billion of profit a year. How much is Chrome worth? Right? In other words, who would buy it, what would they sell through it and how locked in would the service be? Ironically, the person for whom Chrome is the most valuable, if it wasn't owned by Google, would be Google. In other words, if someone else owned Chrome, the highest person to monetize Chrome is Google because they have a search business. So they would probably. And the Department of Justice won't let them do it, but they would probably say, Harry, if you bought Chrome, you have no revenue source, but we will happily pay you $20 billion a year for all your search service and you'll be the richest single person company ever. So it's kind of a weird asset where intrinsically in itself it has no value, but it's kind of a gateway to some product that does. Which now gets to Perplexity. The thought process there is they're already building a browser. If they had Chrome, they could basically be the AI backend instead of having to build their business browser by browser. They would basically jam Perplexity into every Chrome user and every person who's using Chrome today, including me. They would have some version of Perplexity as their default AI engine. Great work if you can get it. And I totally get now, Is that worth 38 billion? Is it worth more? Is it worth less? Do they have the money? All those things A are unclear and B may not matter yet. To Jason's point, is it real? But would a AI engine competitor to ChatGPT absolutely kill to own the Chrome user base? Absolutely. So that's kind of a long winded answer, but that's kind of how you get there.
- [20:51]
Unknown
Do you think it's likely in any way or is it a complete.
- [20:54]
Jason Lemkin
I assume Google litigate this to the end of human time. I mean it's. Which actually gets to step back and say something else. I just got to get it off my chest. The Department of Justice gets around to killing American companies and technology just when they've become irrelevant anyway. We all had a long not irrelevant is the wrong word. Just when they're at risk. The idea is Google. Think about it. The whole idea here is Google is so powerful and almighty that we've got to smash their search engine monopoly with legal remedies when all of us here are talking about could Google be screwed because OpenAI and ChatGPT could be a better product. It's literally not kicking Google in the nuts when they should have Right, when they were evil bastards for the last 15 years, grinding everyone down like Yelp. And then finally when the backs are to the wall, now we're going to kick them just too late, when in fact they're now at risk at a zoom out level. All this is fricking stupid. It's the Department of Justice because they take so long to make decisions. It's like they only started kicking Microsoft when Google was in the ascendancy and Microsoft was on the defensive. It's the same thing here. Leave poor Google alone. They're just a simple, humble, trillion dollar company trying to survive. So, Dom as well.
- [22:00]
Harry Stebbings
Sorry, maybe just two things. One, on marketing, there's a huge amount of need in AI to do constant marketing. Constant marketing. And there's a huge need to be one of the top two players. And everyone's doing a lot of marketing. You know, lovable project lovable. Like, why are you doing these hackathons? Why is Bolt doing a hackathon in every city? Why is Sam Altman everywhere? Why is anthropic founders everywhere? I'm not even sure even with Nvidia. Jensen's everywhere. Right. And he probably doesn't need to be. But it's important for perplexity to be in that conversation because we can think of a lot of tools that aren't in the conversation. You know, we talked the last couple weeks about cognition, buying Windsurf. Right. At least it was in the conversation. I mean, I mean, two of my portfolio companies use Devin like their AI tool and they love it for niche use cases, but we never talk about it. I don't think it's cynical. I mean, it's a little bit cynical. I don't. Because even if he had 38 billion, I'm guessing another suitor might come out of the woodwork. Like, I think Satya would raise his hand and say, I got 39. There'd be a few other folks to grow at the pace the AI leaders are growing. Right? At this incredible pace. You do need to fuel the marketing engine, you need to fuel it aggressively. And you're not going to do it on AdWords, words and a few sponsored blog posts and SEO.
- [23:12]
Unknown
You absolutely have to. And I actually interviewed Aravind at an event and I said, to what extent do you feel like a politician or a state leader where you actually don't do anything in the machine, but you just entirely speak for the machine? And he said, that is completely my job. And that is the job of Dario, that's the job of Sam. That's job of me. We are on the machine.
- [23:29]
Harry Stebbings
Super important for them.
- [23:30]
Unknown
Shouting and then you also look at the poor performers and I hate to name people, but this is the show that we have, like coherent Mistral. And you also correlate that with who does next to no marketing or speaking publicly. Coherent Mistral? I have no idea. To the extent their models are good, not good, not good, whatever, but they are both incredibly quiet and don't do press and they are also the ones which people have deemed the losers.
- [23:54]
Harry Stebbings
You do have to do it. Virality alone isn't going to do it. I guess the other Captain Obvious point is one of the things that's very interesting in the media is where does Google stand today? Right. Is search under massive existential threat? Yes, but search revenue's up, right? It's confusing, right? The Captain Obvious theme is that no matter what happens, Chrome ends up being this accidental gem. Chrome was built very strategically in the old days, in the desktop focused days, to counter, you know, IE, which it destroyed. And then it's open source. So you know, Safari and Opera and everything's built on chromium. They gave away the open source version, they destroyed everything and then it kind of plateaued like a lot of software did. Right? We had plugins, we had cool, we took it for granted. Now it's the crown jewel in the age of AI. Right? Is the crown jewel again. It's the return of the. It's not just the browser wars, it's the return of the browser being this core piece of software that we forgot about for the better part of a decade only.
- [24:50]
Jason Lemkin
First of all, agreed, and I can't resist the Chrome wasn't built in a day statement, but moving right along. You're right. And it's only because for 10 years Google won in the sense that no one else could monetize traffic anything like the dollars they could, which is what you know. So why bother building? I mean, you could have these niche browsers, but you couldn't build a humongous business because the only thing you could do with that traffic was monetize it. And the only place to monetize it at scale was Google. And the interesting thing now to your point, Jason, is you can envisage a world where someone monetizes Chrome traffic via an ad supported product. But there's Also, you know, ChatGPT is the astonishing consumer subscription part. What is it, 20 million, like 700 million free users? 20, 30 million paying consumer subscribers I think is the numbers. That's a very profitable business where the Rate limiting constraint looks like your ability to sign up people. Which means. Which is why perplexity is smart. If you could get a billion people coming through your door, and if you know a billion of them were free users, and you have the same conversion rate as ChatGPT does, which is a leap, obviously, I doubt you would, but any kind of conversion, what's a 20 over 70? That's about the 2% plus a little under 2%, which is what you see with freemium. If you get 1 or 2% converting into paid users, it's a compelling business. Suddenly Chrome matters. Not because it got better, not because the browser is uniquely different, but because you can plug it into a machine now that can collect checks.
- [26:16]
Unknown
We're not talking about AI for normies, and this sounds incredibly condescending and patronizing, but AI for normal people. And normal people is kind of the slow lag to adopt. And what I mean by that is.
- [26:27]
Jason Lemkin
For the record, normal people is not patronizing, but slow laggards is. So you might want to work. Yeah, I'm willing to be normal. I prefer not to be slow, but keep going, Harry.
- [26:37]
Unknown
I'll keep going with this. A great example of that is Threads, something that we all deem in our circles to be like, who the fuck uses Threads? Threads is actually a massive success. And the reason I'm going there is because, yes, we all think ChatGPT is great and a massive hit, and 700 million is amazing. And yes, it is. That's unbelievably incredible and insane. I'm not doing a prior guest and saying it's not, but Gemini is great, actually, and it's getting better and better and better and they will plug it into the core engine and the core distribution channel. And actually for AI for normies, there's a real chance that they don't lose any market share.
- [27:13]
Jason Lemkin
You're right. For a good slug of the population, there are going becomes an AI answers meets your need on Google and you're done. Yeah, Gemini as a model is actually apparently pretty damn good, even for coding. Someone was walking me through. So they're going to have market share, they're not going to roll over and die, and the search revenues will go up. It's simply you've gone from a situation where you're the only game in town to a situation where these other guys are taking a significant slog. So it's always better to be a monopolist than an oligopolist, but it's still pretty okay to be an oligopoly.
- [27:42]
Unknown
I do want to move to an insanely hot deal, guys. That really, in Europe, was a talking point for everyone. N8N it was done at $3 billion. Reportedly it was at 40 million ARR. Ending the year at 80. Excel led the round. Massive. It was like, I think the last round was not too long ago at 300 or so, give or take. It's not a new company, it's a 2019 company. How did you think about this?
- [28:09]
Jason Lemkin
With envy. Let's start with that. Because in fact, we had talked to them in about 22 or 23, and you're right, it's. What we clearly underestimated was workflow automation. It's a category. Pre AI, it's a category. We'd looked at a lot of players. It's a noisy one. You have all the way from RPA to process mining to kind of low code, no code, and this big indigestible mass of things where every solution blurs into the next one. It was just hard to know what's what and therefore hard to build a big compelling business, especially with lots of competition. And clearly they did a brilliant job of co attaching to AI. Because when you go from automating workflows so people in a very deterministic way to actually getting more of the work done using AI, the value prop of your software goes way up. Instead of saying, you know, we're going to automate a little bit of shit now, we're going to literally do the work and you can get rid of all these people that were doing the boring work. So they clearly did an excellent job of that. And in the space of six, nine months, just massively accelerated and, you know, well done them. You know, it just shows you got to stay on top of these things. Good on the guys. Highland. I think Europe did the last round. Good on them.
- [29:18]
Harry Stebbings
As I've gone into vibe coding, right. Deep, right. I've like reused Zapier so much. I've got to hook stuff up, right, without wanting to code it. And if NAN is a more developer version of that. So I'm having a zapier renaissance. But today, man, with the explosion of applications, applications we're building and the explosion of things we want to connect with AI, it's like an order of magnitude bigger. Maybe Rory, when you met them, you couldn't predict, right? It was hard to predict the accelerant that would happen. And it's probably in the last seven months, right, from the revenue, right? And then boom.
- [29:49]
Jason Lemkin
And that's the aha. There are companies that you've tracked for a while, that you mentally might be writing off. You can either decide it's not knowable, you bet randomly, you can try and track them just based on metric, or the most logical thing, you sit down, you say, what, what areas will the model significantly impact in the next six, 12, 18 months? And what are the companies that could benefit from that? And then the second criteria, and you've talked about this before, Jason, it's all very well to say that There were probably 10 related workflow automation type companies. Which one of them will get the prize? I tell you, it always comes down to the founder who gets it the most, gets it the quickest and just puts everyone in the room and says, no one's leaving till we're shipping an LLM enabled version of this and we're going to get it in front of 20 customers by Friday. You know, in retrospect, that was the aha here. They clearly had those elements and if you tracked it, you'd have made a lot of money.
- [30:39]
Unknown
The thing that's really stuck out to me is index, index and making everyone feel like shit right now, in particular in Europe. Sequoia and Excel Accel have to win, otherwise the gap widens more and more and more and they won. Lovable. And now they're winning N8N at I think any price. It's a well priced deal.
- [31:00]
Harry Stebbings
But they did that Facebook back in the day when they were out of the game, they bid.
- [31:04]
Jason Lemkin
They.
- [31:04]
Harry Stebbings
I think they. What did they pay for Facebook, Rory? Maybe 200 million or something pre 500 million free. They were insane. People said Excel was washed up and they had to bid up this, this fledgling social network.
- [31:15]
Unknown
I'm actually praising them.
- [31:16]
Jason Lemkin
I'm not saying you're saying the same thing. Look, if you pick right, no price is wrong.
- [31:20]
Unknown
I think, I do think there is a retaliatory element from Excel of oh, shit, we have to.
- [31:26]
Jason Lemkin
And this is, you know your European market better than me. And maybe because of smaller. I don't. Humans are humans. So that kind of dynamic, it's a bad way to try and make money. And it's hard because we're all prone to, you know, regret formal decision about, you know, looking back at decision, you'd like to think you just make every decision on the basis of is it a good bet or not.
- [31:47]
Harry Stebbings
I don't know what you think, Rory. This is what I was taught. I'm not a growth investor. Right. If you're writing one of these checks, you believe it's a winner and you see a clear path to 5x and you can deploy enough capital, you do the deal in a certain moment in time. So if they believe 5x with dilutions a lot, it's got to be worth a $20 billion company, right? Or lovable has got to be 20. They all got to be 20. But if you genuinely believe it and you overpay it and it keeps you in the game and it's for your brand, like, you know, and it's not your whole fund, it might not be worth the bat. If you genuinely see a 5x the growth round zone, I'll have to be 10x or 500x. Right?
- [32:21]
Jason Lemkin
That is definitely true.
- [32:22]
Harry Stebbings
It's why to overpay to get into a good deal where you're not in a space. But it's not insanity if you see your way to 5x. Right? It just might not be a 5x fund returner. If that investment makes 5x in a growth fund.
- [32:33]
Jason Lemkin
There's actually two things to unpack there. One is the 5x versus fund returner. You're exactly right. Growth investors typically, when they're looking at something, can say 3 to 5x and the interesting thing is, and they'll say, and most of the time it's hard to go beyond that. And then by virtue of the power law, one in every 10 does. It's just like not dissimilar in a very. It's fractally similar to seed, but just when they're much bigger, it's harder to envisage. Right. But the truth, I mean, I remember a Facebook investor, an early Facebook investor said, you know, they bid another deal, they'd lost it, and they said they could see a 3 to 5x from here and obviously they made 100 times the money. So, yeah, you basically just operate on the power loan. Some of them turn into amazing. But you want to be able to say your base case is a 3 to 5x, that's totally absolute. That's the business they're in. Now, you went from there halfway through the paragraph into some kind of we should do it for brand that we need to be relevant at that point. What you're really saying is, I don't see a 3-5x, but I'm just going to convince myself to do it because I got to be relevant. And the sad thing is, sometimes that might be the right thing to do. I mean, I recoil against it, perhaps wrongly, to be perfectly honest. Maybe there are times when you should just do that, but it's just, it feels like I remember when they teach you in Catholic school about sin and they'd say, you start on little things and then it will just get worse and worse. It seems once you start doing deals, not for return does it just get worse and worse forever. So I don't love the I won't make my return, but it's good for marketing school of investing. But I also recognize that sometimes you can say, ooh, I can squint and get a 3X and it'll be good. And hey, sometimes you do what you do do.
- [34:06]
Unknown
You know, the funny thing is we have a like, YOLO segment of our funds, which is like 2 million or 3 million, whatever. But it's basically, we have amazing access because of the shows and people will give us positions at high prices. But we get into amazing names and it's good for marketing and brand. It's 7x as a pool right now.
- [34:24]
Harry Stebbings
No, I make sense. It makes sense.
- [34:26]
Unknown
When we did it, we were like, this is total brand. Never expect.
- [34:30]
Jason Lemkin
Yeah, but then you.
- [34:31]
Harry Stebbings
And it's great. And then. But then as you get later into the fun, you're like, well, so What? I got 12 acts you'll make. I believe it. Right. And then like in that. But it returns 5% of the fund is the problem. Right.
- [34:43]
Jason Lemkin
And I think that the other problem with that is the Machiavelli quote, which is I've used it before that circumstances change, but people don't. And what works in one market doesn't work in another. That same strategy, when you look back in 21, it felt really sickly. In 22, 23, it felt like, well, that wasn't the right strategy. Be more careful work. And then obviously, whenever you're accompanying a boom and you're leaning in, leaning in is the right strategy. And it'll be the right strategy until, you know, pricing terms.
- [35:11]
Harry Stebbings
This is super narrow niche. It has one small advantage. That strategy, though, thinking back, because I accidentally did some of it pre AI, right? It can get you early DPI in a fund. I accidentally did some of that from my 2017 fund. I got about 20% of it back early from these early exits that had a nominal large value. Right. And it doesn't matter at the end of the day so much, but you're going to hold some of your, your early stuff may take. Take 15, 20, 35, 40 years to get liquid these days. So it's nice if you can get. Get that early dpi, even if it doesn't matter too much in the long run.
- [35:45]
Unknown
Well, Jason, listen, you, me and you both are fortunate to have Horsey Bridge, who I think are one of the best of the best and I love them dearly, but they've taught me really that venture is a very challenging asset class unless you take advantage of very small windows of hyper liquidity. And so where I think about this is absolutely aligned to you. I'm leaning in being very cognizant of when to lean out and being very aware that this will fall off a cliff. But I need to time it well.
- [36:11]
Jason Lemkin
Yeah, I buy that. As I say, there's one year in seven where you make most of your money and the one thing you don't want to find is you don't have, you don't want to not have assets to sell when that year comes around.
- [36:21]
Harry Stebbings
If you want to be a little cynical about Venture, Right. I do think in your earlier funds it is like everyone on X talks about dpi, dpi, but you know, you don't want to sell your winners early. Like we, we, we've had that conversation too many times. And Horsley, you know, I had a conversation with Horsley, I had a winner. I had a chance to sell for nor a billion. And they're like, don't sell it, don't sell it at all. It's not enough of a return. But it is nice if you go out to raise your next fund and you've got some, some DPI, right? So if Harry's little sliver is at 10x and again it's 10 or 20% of the fund and you go out and it shows that this current fund is making progress versus all markups and no cash. It is, is cynical, right? Fundraising is just like founder fundraising for folks, for founders that are watching. Listen, like, you got to put some points on the. It helps to put some points on the board, right? So it's not bad to have to have returned some of your fund at a nominally very high irr and multiple. Even if the absolute number, if you squint and you're like, you know, that was only 11% of all that together is only 11% of the fund, let alone a 1x of the fund. Right. I think it helps.
- [37:25]
Unknown
It also does amazing things for relationship builds with founders. When I look at a macaw, when I look at a perplexity, when I look at amazing businesses. Honestly, me and Aravin chat a lot. Would we chat a lot if I hadn't have put a tiny check into the company? I don't think so. Not as much. There's no tie. That's enduring and so I think actually does outweigh. Moving on. I do want you guys can be exceptional on this. And it was nuts weak in terms of earnings in many respects. I want to start on Datadog. Wow. Best net new ARR quarter in company history. 260 million ARR in the quarter. Initial reaction pretty positive. And the Stock is down 10% in today and lower than before results. I just couldn't get my head around this, guys. Honestly, it seemed great and the market puked.
- [38:14]
Jason Lemkin
One of the things that when you talk to CEOs of public companies and you should do this thing other than the obvious major beat, major miss, and we'll talk about one in a second. But for all the middling things, if you talk to a lot of CEOs and I remember we used to play this fun game on some of the boards where you'd know your numbers and you wouldn't know the market's reaction to those numbers. And you try and speculate and at least half the time you're wrong. It's actually a very fun game to pay on a public board. You have the earnings call internally, the internal thing, you look at the numbers and you say, okay, the stock's 32. When we announce these numbers up or down and by how much, the error rate is massive. In other words, perfect information doesn't tell you shit other than the obvious. When you miss by 20% or you beat by 30, it's pretty obvious what to happen. But in the middle, it's very hit on this, which is the odd thing. I just offer that as a kind of a prelim comment. I remember watching my CEOs internalize that. So I actually, I stopped worrying about it because remember, you know what you did relative to your budget, so you know how you feel as a board member or a CEO running a company. They're comparing your numbers to two things. One, their internal estimate of what they thought you were going to do, which you've no visibility to. And then even more zanily, the Keynes quote, what they think everyone else thought you were going to do to try and figure out what happens. And if you look at Datadog, the stock went up in the aftermarket. In other words, people looked at it and said, oh shit, this is good stock. Up next day it's like, oh, it's not good. Go down. My big aha is it's like dealing with a deranged madman trying to estimate what the street will do. I spend no time on this utterly unknowable.
- [39:50]
Harry Stebbings
So there's Folks that are directly benefiting from the AI boom, they're selling AI products N8N and others. Then there's folks that are benefiting because AI is exploding. So apparently OpenAI pays Datadog 240 million a year. So what's happening is, and I'll give you a very small example, Harry and I are both investors in a company called RevenueCat that powers 40% of all mobile subscription. Okay. And it is already, its usage has already doubled this year from when it ended last year, even though it's not an AI company. Neither of these are AI companies, but revenue cat's more extreme. But all the AI guys are using their product, so it's very exciting. But it also has concentration risks because there's, there's only so many of these large players, right? There's pricing pressure and OpenAI has already said they're going to renegotiate down the Datadog deal, as they should. Right? So there's folks that are exploding not because they're AI but because of the economy. But I, I'm not sure that's why the, that's why it's up. One of the reasons it's up. But there's also a fragility when you're indirectly benefiting from this. But obviously that's, you know, that's a lot of incremental revenue for Datadog. A $240 million a year customers is high, but the incremental revenue and spend is from AI. Right? If you want, if you're a B2B company, you gotta go get AI revenue, right? Because you're not getting it from John Deere and the rest, they're spending the.
- [41:11]
Jason Lemkin
Same, in fact, probably a little less. No, you're exactly right. Because that's the meta point zooming out from this, right? Is that, I mean, you've seen the data. Almost the entire GDP growth is AI capex. So if you can co attach, even if you're not AI CapEx, if you're not Nvidia, if you're not, if you can just co attach to the money, you're going to get a pop. Now, it may not, but yeah, the spend is happening there. That's where all the capex is going. So if literally I always think of, of what is the bill of materials to build AI. If I wake up tomorrow morning and said I want to be safe, superintelligent, I want to build me one of those LLM models, you just make a list of the things you need. You need chips, you need a data center, you need Power, you need some coders. And then you're right, it's all the little things I need to keep this up and running. I probably need Datadog, I need all the other software tools to make it happen. And if you just co attach to that, it's showing up. Now. Funny thing is the productivity is not showing up, the revenue is not showing up at the app level, but the capex is showing up in the GDP numbers. It's so big. So you're exactly right. If you can get your piece of that, then I'd prefer to have it than not. I mean, people are saying, oh, It's a bad $120 million concentrated risk customer. It's a damn sight better than not having that $120 million customer.
- [42:21]
Unknown
Is this a gift or a curse? And forgive me for my naivety, but the concentrated risk of 260.
- [42:26]
Rory O'Driscoll
Yeah.
- [42:26]
Unknown
And if OpenAI continues its trajectory, it'll be 520 in a year's time.
- [42:30]
Jason Lemkin
Yeah, whatever. Exactly. And yes, it's a gift. We agree. I think both of us are saying the same thing, Harry, which is the people who are worrying about it. That's why you're getting into the second order derivative thing. The people trying to value the stock, they're not just saying, I mean, if you were the operator, you would be coming into your board and you're saying, we killed it this quarter. We signed $100 million ARR deal with the most exciting company on the planet. It's fricking amazing. End of conversation. And no one is going to say, oh, I'm really worried that they might kind of reduce the price in two years. That's bad. They'd be like, dude, we're so happy. And as a board member, I would be too. Wall street, as I say it has this different role, which is not just guessing what you are now, but guessing how you're going to be compared to what they thought you were going to be. And they're paid to second guess themselves. As I say, my best advice is ignore it. Maybe two years time you'll be dealing with a renegotiate, but as you point out, maybe you'll be dealing with the fact that OpenAI is growing so quickly that the contract has doubled and they don't have the engineers to waste. I'm kind of engineering you out and.
- [43:28]
Harry Stebbings
You just take the check.
- [43:29]
Unknown
Are we just seeing like big ish tech just win, like just invest in biggish tech. And what I mean by that is like applovin crushed, you know, HubSpot Gains. Shopify are ripping. Palantir obviously ripping. These are not mag7 quite. They're great companies. They're not belong bigish tech. The AI wave is mega.
- [43:50]
Jason Lemkin
That's true. I mean I'd say, I think there's maybe two things going on. One is the AI wave is mega and I think definitely Palantir probably Datadog not so much. I would argue HubSpot and Shopify benefiting from that. But then the second thing is rather than this whole oh my God, SaaS is dead thing, I think what you're saying is, and I think it's correct, is that these markets are big and huge and if you're the winner and you're public and you've got scale and you execute well, add a little AI, you can defend your position, grow nicely, kick off a ton of cash. I wouldn't like to be a little startup trying to enter the HubSpot space or the Shopify space. But the death of SaaS has been overdone for the public market winners. Which is a very different thing than saying you'd want to invest in quote the next Shopify at a million in revenue. No, these guys, they have clear market leadership positions. They in every case have strong founder CEOs, they have profitability. And yeah, the growth re acceleration this quarter has been pretty real across the board. As I said, I'd put HubSpot if I was to rank them in terms of their AI. HubSpot and Shopify are in that. Yeah, they're using AI but they're not direct beneficiaries. Datadog in the middle because they got a big ass contract from the biggest company in AI. So it kind of caught that. And then obviously Palantir, white hot in terms of their AI story. They have brilliantly become the way large corporate America implements AI at scale. It's a beautiful position.
- [45:13]
Unknown
Can you guys help me on Palantir? I always look at it and I go amazing company but oh my God, look at it. It's so overpriced and every time I do that I'm proved wrong and it goes again. How do you think about that and legitimately? How would you advise me? I love these shows because I learn from you both.
- [45:31]
Harry Stebbings
I mean, Jesus, I mean the growth is friggin breathtaking. It goes from 12% growth at about 2 billion revenue in 2023 to almost 45% growth at 4 billion in AR.
- [45:43]
Jason Lemkin
Good.
- [45:43]
Harry Stebbings
I mean this has never happened. Forget about the fuel, right? The secular fuel. The contracts are getting bigger. Record number of 5 million and up contracts, the fact that they are the AI solution for both commercial and military. If you. If I didn't even know how to spell Palantir or what it did, which I think most people didn't Even know until 12 months ago what it did. When you see going from 12% growth for a public company building billions in revenue in 2023 to almost 50 today, I mean, maybe Rory can come up with an example. I don't think in enterprise software we've ever seen that level of RE acceleration ever. You can either say it's going to decay, like all curves do, or you can say, good God, this is my, you know, everyone in the public markets, they're 10 baggers. That's what. That's what my social media is full of. What's your ten bagger, Rory? What's your. What's your ten bagger? And it's this. You know, if the chart keeps going, this is unprecedented. Enterprise software software.
- [46:34]
Jason Lemkin
Across 20 years, about only one in three companies re accelerate for one year. And about one in nine, one in ten re accelerates for two years.
- [46:43]
Harry Stebbings
So that's just the data that's daunting.
- [46:46]
Jason Lemkin
These guys have re accelerated significantly at scale for two plus years already. So I can see how you can build a model that's if you go from 12 to 23 to 45. You're right. The next question is, do you fill in 55 or do you fill in decay at that point in time? And the problem is, is any exponential curve up can justify almost any valuation? I mean, my gut, Harry, is your instincts are right. Which is it's an amazing company, smack in the middle of two huge trends. We'll come back to them in a second. At the same time, 120 times revenues, plus or minus, is probably not sustainable. I mean, I saw the data. It looks like it was a good statistic. Someone says, five years of 40% to 50% growth, and then they'll be valued about the same in terms of a revenue multiple as Google is today. And you can have 2 responses to that fact. Part of me says, oh, my God, five years, where you got to pull it off. That's a lot. And then you got to go. It's not crazy. I would be terrified of buying it at that price. But the interesting thing about that calculation was you go, oh, yeah, it's the beauty of compounding 5 years times 1.5. You just ended up in an amazing place. Now, I haven't checked that map fully, so that's kind of. It does feel Incredibly lofty at scale. I mean there's that great Scott McNeely quote about, about trading at 10 times revenues where he just walks through how absurd it all is when sun was trading at 10 times revenues in 99. And every once in a while you should reread that quote because he was totally correct and it went in tears. So intuitively, 122 tons revenues is not a sustainable place. But they got three huge trends on their side. They're the AI solution for large corporates. They are the AI solution for defense, which is having a boom. And they got the administration on their side.
- [48:26]
Harry Stebbings
Just this last quarter they closed 843 in US commercial bookings outside of up 222%. So help me with the math. 222% at 843 million. I mean this is, this isn't quite lovable growth, but this is pretty good. And this was 222% at 843 million in their commercial division.
- [48:45]
Jason Lemkin
And you got to again step back and give credit to the founders and obviously Theo and book in 2000, I think we saw three of them, four with a sense of mission around 911 built this stuff, then moved into commercial. It was a slog for a while. Some of the early commercial customers weren't wildly successful, but they've ended up now. Whereby one of the things you figure out is when big companies want to do big things with a project like this, it's not the kind of thing you can give to little SaaS companies just starting out. Big companies need to spend big initiatives with big vendors. And the point is all the other big vendors are old and stodgy like IBM and Accenture. And now you can have these dudes who've been working for the US government. They've got their whole forward deployed stick. I see how it's working because corporate, I mean I went through the last earnings and actually went through a bunch of the use cases in corporate and it's all over the place. Yes, supply chain planning, scheduling for an airline. It's a whole bunch of very different stuff. And a single SaaS app couldn't do that. But what they have is a platform that's been around 10 or 15 years. They have another platform they've added around enabling LLMs and take that, take the four deployed engineers. You can squint and say a lot of its services, but who the hell cares? The margins are 50%. And the reason they can get it is they can look the CEO or the CFO of a Fortune 100 company in the eye and say, We've done 10 of these. You give us the $10 million, we'll get this puppy done. The other two competition is a little staff startup that says, we have $100,000 product that's way more efficient than Palantir. It'll work, but it'll need a lot of work. And they're like, ooh, don't know about that. And the other competition is Accenture saying, we're going to build it from scratch. They're just in that sweet spot of they can make the pain go. You can get your AI initiative as the CEO of a large corporate company. You give them $10 million, you got your AI initiative, they'll probably get it done. It's a golden place for the next couple years.
- [50:37]
Harry Stebbings
You know what the other crazy thing about Palantir is? I thought this was fascinating with Alex Karp. So they're a rule of 94 company today, right? Pretty good. So he said, I mean, he's, he's on fire. Just watch his body. Like, he knows they're going to crush it, right? But he said that when they will, they will be when they're 10x bigger. So at 40 billion, they'll have 10% less employees than today. And they're already on the trend of that. And I think when we, there's a meta point, I don't, you know, maybe, maybe needs a few more. But I think this has been well thought through. And this, this is a hint of the future in Palantir, right? This efficiency level. Microsoft has already reached peak employee, right? Google's already reached peak employee. But Alex Karp going on record saying at 40 billion in revenue 10 times, we will have 10% less employees. I think it's the journey we're all kind of on. But he's, he's out there because he doesn't give a rat's ass what anyone thinks in his farm in Vermont and sandals. Crushing the numbers, right? But to me, this is the future of B2B companies. Just trying to get to this massive, massive scale with few humans.
- [51:37]
Jason Lemkin
Yeah, I wouldn't pencil into my model, but it doesn't matter because as you point out, 50% operating margins today, don't bother getting more efficient, just scale.
- [51:46]
Harry Stebbings
So he's not doing it obviously directly for the margins, right. But it's, it's how to structure the company. But this may be where the future is. Like, he just, he's just so. He's so far ahead, he can make these visions and bets, right? And not. Not be hiding in 7% growth. You know, as some others. I just thought that's the future. I think this age of these bloated companies is just. And same what you talked about. Shopify. Shopify is at 1.3 million in revenue per employee now. And it's re accelerated. And it's re accelerated. I don't think it has. We could talk about Shopify if you want, but the efficiency at Shopify is not at Palantir lows, but it's. It's breathtaking, the efficiency. Toby's ruthless on this and founders should be too. Founders should be ruthless on this. You don't need half your company, and Palantir and Shopify are proving it. You don't need half your company.
- [52:31]
Jason Lemkin
Company.
- [52:31]
Harry Stebbings
You literally don't need half the people working at your company. You don't need it today.
- [52:34]
Unknown
I'm glad that half isn't listening to this show.
- [52:37]
Harry Stebbings
Work hard, work harder. Learn your product. Ask yourself, are you actually valuable to your company? Be honest. Not just. Are you a people person?
- [52:45]
Jason Lemkin
What.
- [52:45]
Harry Stebbings
What are you doing at your company where you're irreplaceable? It's not that you're going to get fired or anything. You just, I mean, maybe moved out. It's just your future is uncertain. If you're not irreplaceable, it's just uncertain.
- [52:55]
Jason Lemkin
You're not getting fired how you're just getting moved out, you know.
- [52:58]
Unknown
Oh, there we go. It might be slightly hard to move me out, Rory. I feel slight protective layer around me.
- [53:04]
Jason Lemkin
But there's.
- [53:04]
Harry Stebbings
Your team should be uncertain. You may not need them for investing or content production. And in two years, you may not need anyone else helping you to invest.
- [53:10]
Jason Lemkin
I was more giving Jason a hard time on these.
- [53:13]
Unknown
This is an interesting question. Do you want your team to feel uncertain? Do I want my team to be scared that they might lose their job? Now, it in one hand forces them to find the irreplaceability of their roles. And it also can make some people uncomfortable. Horribly uncomfortable. Scared. It's not a nice thing.
- [53:30]
Jason Lemkin
Yeah.
- [53:31]
Harry Stebbings
My learning is it doesn't matter anymore. There's so much uncertainty out. Like we coddled people for since 2020, late since. Since the middle of 2020. And then we coddled them like there was no tomorrow until early 2022. Take three jobs, work two days from home. Life is easy. Like, take care of yourself. And if you can, come to work, but take of the care. Care of yourself, everybody. Shopify had twice as many employees at the peak as it has today. Shopify, forget about Them twice as many. And Toby was, was telling everybody to, to relax guys in, in. In. In late 2020. Take. Take it easy, guys. The. The commerce will come now. He's freaking ruthless, isn't he? He's ruthless. Zuck's ruthless, Carp's ruthless. And if you think you're gonna win in B2B, if you're not ruthless, you're gonna lose. So I don't think you should scare people. I don't think you should tell people, hey, if you don't step up, your job's over. I actually think that that's a dated approach. Just step up and they'll quit. I'll give you a small example. If you want this interesting, they'll just quit. There's a tool, for example that we use. We use 10 AIs now at Saster, up from zero at the start of the year.
- [54:30]
Jason Lemkin
Okay.
- [54:31]
Harry Stebbings
But one is a niche tool called Momentum IO. Okay. It's a cool startup. Rory, you should do the next round if you can. Maybe. And it basically mashes up everything. Gong granola, everything, so that you have real time insights to everything your sales teams do. Doing okay. It's.
- [54:46]
Unknown
And I, I found that Pre Seed.
- [54:48]
Jason Lemkin
Is it good?
- [54:49]
Harry Stebbings
It's good product. It's a good product. It's not perfect, but here's my point. Here's what's interesting. It's not that any. It's like a lot of AI products. It's not that any. Any individual components all that interesting. It's how it synthesizes it elegant through AI. But I'll tell you, every company and I got turned onto it then through Kyle Norton at owner and I brought it into other companies. Every single time it's been brought in, someone on the sales team has quit the first day. Day quit. Every single time they quit the first day, including on our little Saster team, someone quit in the day we brought it in. He quit that afternoon. Because the gig was up. The gig was up. And so that's why Harry, I don't know if it matters whether you prepare the team because there's going to be so much AI around us, the gig's going to be up one way or another. You're gonna. If you're not productive, if you can't, if you were too busy to get the podcast out this week, if Harry had to do it himself, if you forgot to do the tick tocks, the gig is going to be up across tech so you don't have to coddle people or scare them. I think they're just Going to get a report every day that you didn't push out enough code at Shopify, you're going to get pushed out.
- [55:48]
Jason Lemkin
I'm going to go back to the scared thing. And I'm thinking about it a lot. As you mentioned that. Because it's always funny, Harry, we start off with the prepared script and then you just take a. So off script, buddy. And I haven't spent any time thinking about this until you asked it. But I think there's a couple of different categories. I don't think it's great for society if everybody's scared all the time. At the kind of level of there are jobs where once upon a time I run a manufacturing company. And at that level the blue collar jobs are pretty interchangeable. If it doesn't work out in employer A, you can go down the street to employer B. I think it's good that the mass of people don't live in terror of not being able to put food on the table. There's a whole bunch of jobs where it might work out with this employer, but I can get roughly the same wage from another employer. So I got to follow the rules and work hard. But I'm not sitting there every day terrified. But what you're talking about. So that's one category. And frankly most of the people have those kind of jobs. I mean I don't want my teacher, teach my kids in Nashville to be terrified. They should know that if it doesn't work out in this school they can go somewhere else. That's most jobs. But there's two categories. Maybe it's only one. Here is if you're holding down a well paid to extraordinarily well paid job and in an entrepreneurial, in an entrepreneurial company and let's be fine, Anyone getting paid 100 million over 4 years at Meta is extremely well paid. If you're pulling down those kind of salaries, if you're an entrepreneurial company, you should be afraid.
- [57:11]
Unknown
But ironically this doesn't affect any of those. This affects the 100 grand a year marketer. This affects the 100 grand a year SDR, which is. I'm not saying 100 grand.
- [57:20]
Harry Stebbings
Yeah, they're going to be out of jobs, man.
- [57:22]
Unknown
But it's them that it affects, not the 100 million.
- [57:26]
Jason Lemkin
The good thing about what the hundred grand a year person. There are other white collar jobs at 100 grand. I'm going to say this. I think I'm a compassionate person. If I thought that 100 grand person, their next best option was 20 grand, I'd feel real empathy for them. But if, you know, if you got 100 grand a year job that's going to be automated and your next best job is 95k doing something else. That's life. That's American capitalism. Get over it. I mean, you should feel the need to hustle there. I don't think that's called fear. You understand me? You're putting on a weird face like as if you disagree. You think that?
- [57:55]
Unknown
Well, no, I just think there's like a generation of 23 to 30 year olds who aren't really masters of the craft in any way. Don't really know what they want to do. And so they're doing SDRs or marketing and they're about to get a train, hit them in the face and they're gonna go, oh, and I don't.
- [58:12]
Harry Stebbings
Let me give you, let me just give you a quantitative version of it.
- [58:14]
Jason Lemkin
But they'll pick themselves up and keep going because you're young, you got a good education, you know. Yeah, it'll be a little bit hard.
- [58:21]
Harry Stebbings
Now they're checking out just to pull the numbers because Toby, Toby did do the night the black and white at Shopify. Okay, let's look at Shopify for a minute. From peak employee was in was 2022 11,600 employees at Shopify. Since then revenue has grown 91%. Pretty impressive for a company at 11 billion revenue. And employees have gone down from 11,600 to 8,100. Gone down while revenue's up 91%. So I'm sorry if like Toby and now was early on this, he went, he went into Beast mode. Okay. And he Destroyed the competition. BigCommerce doesn't exist. WooCommerce doesn't exist anymore. Amazon was never a threat, even though it wasn't direct competitor. He went into Beast Mode and he just got there earlier than the, the cracked kids in San Francisco. He just got there earlier and Shopify is doing 91% more revenue with 30% fewer employees. And if you want to fight that, like people would say I was toxic or it was hurting their feelings. A couple months ago on LinkedIn, I'm like, I'm trying to help you. You want to be one of the 8100 at Shopify or not? You got to decide because you can't leave work at 3 o' clock to get your salad and go and go work out. It's just not going to work. You're never going to learn the product and even worse, you're never going to beat the AI that knows your product cold. This is the common reckoning for these people is that the AI knows this. Every Shopify feature and every Shopify. Every AI. The Shopify merchant knows the products better than the humans. AI is smarter than most humans. Pre AGI. It is smarter. Have you ever talked to an SDR that even understands the product they sell? Any 20 year old. Like once in my career have I Talked to a 20 year old SDR that knows the product better than me. It's worse with AI. These people are gone. Shopify is going to be at 7200% bigger. You got to adjust. The Shopify numbers are stunning if you think about it. Isn't it? 30% employee reduction. 91% revenue growth. And it's just starting. It's just starting. And that is before all the AI mandates went out. Right. It's concurrent. But it started before everyone. Everyone in tech is now before you replace someone. Find an AI first. Aren't they? It's become the mantra. So it's going to accelerate.
- [60:26]
Jason Lemkin
And I think that we. But I'm going back to the scared comment because it's funny, I sound like I'm arguing but I'm actually great. I think my guess is that person's paying 100 grand. Maybe they only get at 80, but whatever. The thing you should be scared about is you. And you should be scared is if you're on board something like Shopify what you've really lost there is the opportunity to participate in four years of equity that could have made you 4 million bucks. Right. That's where fear. Anyone who's in the kind of job. I'm scared every day. Because you should never take your job for granted. Especially if you're in the kind of job you can make millions of dollars if you do it well. And I think that's the level at which you can be scared. And those folks, they should have been scared. I think not because they went for the 100 grand a year job. I'm just trying to think of the equity. The thing I get you Roy.
- [61:08]
Unknown
The opportunity cost on the upside of the equity is insanely real. But having come from some a family that's lost everything. I worry about downside. Quite frankly. I don't think there's a ton of employers that are queuing up for a 23 to 30 year old grad from a mid university that's not a specialist in anything. In a world of AI cost cutting and economic questionability.
- [61:31]
Harry Stebbings
No one wants to hire them. No one wants to hire them.
- [61:33]
Jason Lemkin
They'll have to suck it up and learn to do different things. But to a rounding hour, they'll be fine. I mean, if you look at the gradual, the anecdotes are there and it is higher than it's been. But I'm not gonna cry for someone in their 20s who has to adapt. It's a very different feeling. The kind of fear someone feels at 55 when their job as a fill in the blank could go and they've got nothing ahead of them them for 10 years. That's fear. Right. And I've seen that kind of fear too. Right.
- [62:00]
Harry Stebbings
It's going to grow.
- [62:00]
Jason Lemkin
With all due respect, you're right. I think we're actually hitting again saying the same thing. You were slightly overpaid. You could probably get another job. It won't be as good. It won't have the equity upside.
- [62:09]
Harry Stebbings
Not even get another job.
- [62:11]
Jason Lemkin
They will. They'll be fine.
- [62:12]
Harry Stebbings
Until maybe 18 months ago, if any seasoned B2B executive that I knew needed a job, okay, that I knew reasonably well, I get him a job by an email. I could reach out to someone not even in my portfolio. Extended network founders I met that I knew. You met on 20 VC. I could get them the job today. Odds like are 10. I can get them a job. One, the fire is not there. Two, they're not willing to be cracked. Three, they're not willing to come to the office. Four, they don't know the AI tools. I can't get them a job anymore.
- [62:39]
Jason Lemkin
You're interested but you jump. Are you talking about the 50 year old guy? Are the 20?
- [62:42]
Harry Stebbings
Yeah. Now I'm talking about 38. 35 to 55 to 95. No, those folks, I can't find them any jobs. The veterans and I totally do. Not a single job. I say go to Cisco before Cisco realizes they don't need you.
- [62:54]
Unknown
The thing I love about these shows is learning from you. I learned from you on Palantir. I don't freaking get Monday. Dot com has a good quarter. It's down 30%.
- [63:03]
Jason Lemkin
What?
- [63:04]
Harry Stebbings
Well, Rory may have a more nuanced view this one. I mean, I know the Shopify data and Palantir. I think Monday is actually the one that should worry us more as investors. Right? Which is that Monday was priced to perfection but growing to perfection. I don't think it's this quarter. It's that it came up a little soft and where they thought the growth would be. But it's still elite. The bar this 50% at 500 million AR and never missing a quarter. And keeping it going. We throw around all these numbers that shmovable and lovable and nan, but man, the bar's high. That's the only reminder to me is like, you know, just the expectations are so high today for the top performers that the ones that have those outline revenue multiple multiples, it's just so high.
- [63:47]
Unknown
Rory, I'll give you an unfair question because you love unfair questions. Datadog, HubSpot, Palantir and Shopify rank one through four on what you'd buy.
- [63:57]
Jason Lemkin
I hate giving advice where I don't feel informed.
- [64:00]
Harry Stebbings
I can give you a guess if you want to thinks about it. That's what I love. Jason, I'm gonna. I'm gonna take Shopify. It is gaining market share at scale. Palantir is growing at scale and maybe it's gaining, you know, it is gaining a certain type of market. It's dominating government contract is, don't get me wrong, so some people could criticize me for being simplistic, but E Commerce. Commerce is the biggest part of our economy, right? Even bigger than. Than the enterprise. Roy's got the numbers and the fact that they continue to gain share is breathtaking. What if Shopify is 80% market share and the economy is 80% e commerce, like help me do the math. Right, versus 13% of all commerce already goes through Shopify. Right? And it has essentially 90% of the platform market share. So platform lock in even in today's AI world is kind of exciting, isn't it? It's kind of exciting to have lock in.
- [64:53]
Jason Lemkin
Calvin, I buy your decision. I don't buy your logic. Let me tell you what I mean by that. If they're all being bought in the same revenue multiple, I think the Palantir opportunity in terms of gross margin dollars is way bigger.
- [65:05]
Harry Stebbings
I was comparing 108x ARR to 17.9.
- [65:09]
Jason Lemkin
Exactly right. That's what I was going to say.
- [65:12]
Harry Stebbings
That was implicit in my analysis.
- [65:13]
Jason Lemkin
No, and that's where it gets. That's exactly right. Because you have to say to yourself, and that's why I apologize, because you got to say to yourself, a VC would say, and this is perhaps the difference between the questions, if you were to rank the size of the opportunity from here, I think it would probably be Palantir, Shopify, and then the other two is really top of the tier SaaS companies. And that's pretty obvious and straightforward.
- [65:35]
Unknown
You'd have Palantir one even with the entry price.
- [65:37]
Jason Lemkin
And that's the size of the opportunity, not valuation. And please don't miss Coffee, right? Yes. Because yes, shop commerce is huge. But gross margin dollars, the ability to sell $5 million projects to Enterprise to implement AI just strikes me as a wonderful place to be for the next five or 10 years in a way that while Shopify is huge, you do have. It's a more mature market. Palantir are on the white heat of this is new, this is exciting and we have it, no one else does. Which is where Shopify, Datadog and HubSpot were five, ten years ago. But what I can't do in my head, and I'm not going to do because I'm not, is as Jason says, how do you adjust that for the fact that the market is well aware of this issue and it's trading at 120 versus 18. What are the other two trading at? You? I know Datadog is 15x revenue and then I haven't checked out in a while.
- [66:27]
Harry Stebbings
Here's the brutal one Monday, which we talked about off the charts good, right after the correction, 8.4x.
- [66:33]
Unknown
ARR, dude, I bought the shit out of it. I'm going to be honest.
- [66:36]
Harry Stebbings
I know, but think about how many companies do we have in our portfolios that are not as good as Monday, that may be priced around higher than 8.4x. It just Monday is the one. It's kind of soul crushing. It's like, you sure your portfolio is so good if it's trading at 8.4x? Right. It's a, that's a tough compression to go down there, isn't it?
- [66:57]
Jason Lemkin
When the growth dies, all these businesses become very uncompelling at. Yeah. In terms of valuation, you're exactly right, Jason. And that's why you have to be just growth biggest all the way on these deals because once they flatten out, it's four to five times if you're lucky.
- [67:14]
Harry Stebbings
But even they're still at almost 30% growth. It's just we're too optimistic about our portfolio companies compared to Monday.
- [67:20]
Jason Lemkin
For 20 years, up until 2019, the median SaaS multiple was 6.3 ish and the median growth rate was almost 30%. And now the median multiple is closer to 6 again the growth rate's 20, but the profitability is more. But yeah, I mean for the longest time it was you only got 6x for 30%.
- [67:39]
Unknown
Well done, Roy. I think you did an amazing job there articulating the 4. You have Palantir 1, Shopify 2, Datadog 3 and HubSpot 4.
- [67:45]
Jason Lemkin
That's not what I said.
- [67:47]
Unknown
I think it is.
- [67:48]
Jason Lemkin
I said in Terms of. You're such a unpredictable reason I didn't get in that. Dude, I did not say that. And if you say that. I did not say that. I said in terms of unpenetrated.
- [67:58]
Unknown
We're gonna title this Rory's public leaderboard with your face.
- [68:02]
Harry Stebbings
I look forward to seeing the new.
- [68:04]
Jason Lemkin
Guest on your next show. Howie.
- [68:06]
Unknown
Mark Benioff is coming. He's. And he wants to hang out with you, Rory.
- [68:11]
Jason Lemkin
Okay, well, then you have to be nicer to me.
- [68:13]
Unknown
Oh, I'm gonna be nice to you. Do you know what's amazing after last show? Cliff from Canva. Done.
- [68:19]
Jason Lemkin
Yeah.
- [68:20]
Unknown
What'd you call him? Aravin from Perplexity. Done. Jeff from Twilio. Done. Mark Benioff. Done. All wanting to come on the show. All fans do they know that when.
- [68:30]
Jason Lemkin
You come on, you just get asked stinker questions where you have one of your most successful CEOs in the mix and you're just a jerk.
- [68:38]
Unknown
Harry. Guys, we mentioned that actually. Where is the upside and where's the opportunity? Carter's State of VC Q2 2025 came out. Couple of things I want to dig in on and then we'll wrap. But highest valuations ever for seed and A. And it goes back to what we said there about actually comparing to Monday.
- [68:56]
Rory O'Driscoll
How do we feel about risk adjusted.
- [68:59]
Unknown
Where dollars are best? And how do you feel when you see highest valuations ever for seed and A. Do you see that reflected in your daily work?
- [69:07]
Harry Stebbings
But the Carta data and everyone else data also says there's fewer seed rounds been done than 12 months ago and 24 months ago. Everyone that doesn't read the stuff, founders especially. Be cognizant. There's fewer deals being done. And it's worse than that because the deals are very specific. Forget about the breathtaking growth of AI native leaders. It makes sense. If you're concentrating into winners, this would happen. We're also just concentrating into winners across the board. It's not just 10 deals for 40% of dollars. It's everywhere. We're seeing concentration.
- [69:34]
Jason Lemkin
Agree. And that to me, was the much more interesting point. The concentration in late stage rounds.
- [69:40]
Unknown
It's called revenge, Roy. Don't worry, it's fine. The leader will come at this.
- [69:43]
Jason Lemkin
And the concentration in late stage rounds is just amazing. We run an internal process. We look at every deal done with the total dollars. We do it every quarter. For the last couple of quarters, we've literally had to back out one or two deals because they just make the statistics so weird. Like in Q1 the deals we forecast in total, you know, deals in our sweet spot, Enterprise B2B totaled I think $12 billion in total dollars raised. OpenAI raised 40 in the same period. It's just like twice our entire addressable market for US and 100 other A& B firms was done in one deal. That's a huge level of concentration. Same thing in Q2. I mean you have interestingly enough in some deals, Meta gets reported as an investment in scale AI because they put the money in. So in theory it's a venture investment, which is absurd. But you have big rounds for Entropic X AI where literally your entire sector is smaller than one round. At the super late stage I've seen concentration, but never to that extent.
- [70:43]
Harry Stebbings
It's concentration is unprecedented. Right. It just is what it is.
- [70:45]
Unknown
Is that a momentary element of time where we are in the cycle or is that going to be a continuing feature of a new age of venture and technology?
- [70:54]
Jason Lemkin
It's probably not going to complete. It's not going to go back completely to where it was. Do I think there's going to be a $40 billion round every second Monday? No, but there's no doubt. I mean there's a couple of industries now that are now appear to be venture accessible, that are fairly capital intensive. Obviously LLM, model creation, obviously a lot of defense. So there does appear to be a higher propensity to do more capital intensive industries. That's one thing. And then the second thing is the more you stay private for longer, the more this becomes a phenomenon. It's the effect of holding them longer means they become bigger companies, bigger companies just to run their balance sheet. You know, if you're running $100 million revenue company, you can have 20 million bucks on your balance sheet, cash flow cost of your fund. If you're running a $10 billion company, even if you're profitable, you probably need a couple of billion bucks on the balance sheet just to manage fluctuations. So as these companies stay private for longer, there's going to continue to be this steady stream of fairly humongous later stage financings. And as I say, and then add to that the nature of the businesses, the model companies, the defense companies are capital hounds in a way that SaaS or consumer Internet even wasn't. So yeah, I think it's maybe not as pronounced as now, but it ain't going back to everything. When A's, B's and C's and nothing be more than $100 million race, it.
- [72:10]
Harry Stebbings
Ain'T going back and everyone that wants it to go back or give that dated advice we had. Brian, Brian Halligan was so good right before. If folks got this far and haven't watched him, that was s tier go watch that one. And his point was when he's talking with school he's like at best half of what I learned at HubSpot matters today. It's true. And venture, right? We're not going back. The AI is so much bigger than cloud and so different and unless the LPs cut off the valve, we're not going back to the old venture.
- [72:36]
Jason Lemkin
You know, has been a good fact for the large firms. The synchronicity of people having a lot of money putting it out in lots of deals in 2021 that not working. I might even have guessed that the next stage of the movie was kind of real retrenchment on those firms. You know, you'd seen that doing 100 deals at 10 billion per E deal and maybe you can't deploy that much capital. But along come this crop of extraordinarily good companies like OpenAI like Entropic where you can deploy large amounts of capital. I think it really has provided justification for the opportunity for those larger funds to say hey look, you can put a billion dollars to work in two or three model companies and you all rule of thumb in ventures. Oh my God. There's no diversification. That's terrifying and it's not our business. But I can totally see talking to an LP and saying this is the only way to access that risk. If you want to access that risk, you need this vehicle. And that's why they exist. It's been marvelous for them.
- [73:32]
Unknown
We're going to do a Kalshi quick fire. Kalshi is obviously this prediction marketplace bets on cool real life things. I'm going to create my own first one and following our conversation because I.
- [73:42]
Rory O'Driscoll
Really want to Palantir over or under.
- [73:46]
Unknown
5 year market cap. 2 trillion. Its current market cap is circa 455 years from today. So that would be in 2030.
- [73:55]
Jason Lemkin
I love the company and they've exceeded all expectations. I just think compounding to 2 trillion from here is pretty damn hard. So I'm a no Jason.
- [74:04]
Harry Stebbings
I'm pretty decisive. I'm just comparing that to Salesforce. Salesforce at 40 billion worth 222 billion. And now I'm feeling gravity when I'm looking literally I'm looking at the number one and number two by market cap it's, you know, Palantir is worth almost twice as much as Salesforce as we Write this. And Salesforce is number two, right, at 40 billion. So the AI is bigger than cloud. So that's the reason it's going to happen. But I'm worried about a gravity when Salesforce is only worth 222 billion as we record this. So I want to take this bet, but I'm going to go the. I'm going to go the under.
- [74:36]
Unknown
Okay, we've got. When will Stripe officially announce an IPO? Before 27-6-1 or after the correct response is.
- [74:45]
Jason Lemkin
Does it matter anymore? I mean, they're so post public. I don't know. It trades all the time. I mean. Yeah, I'm sorry. I mean, they're cash flow positive. Wily. So they're just doing their thing.
- [74:56]
Unknown
But do you think they will go public in the next two years?
- [74:59]
Jason Lemkin
If the cost of capital gets markedly cheaper in the public markets, then maybe. But they seem to be more resistant than most and there's nothing going to make them do it because they're strongly cash flow positive at huge scale and there's liquidity. So the truth is it's an idiosyncratic bet and the Collisons haven't shared their opinion with me, so. Hell, I don't know.
- [75:19]
Unknown
Very honest. Thank you, Roy. You're not chatting to them in an Irish WhatsApp group.
- [75:24]
Harry Stebbings
Over a beer in the studio, over.
- [75:27]
Rory O'Driscoll
A cheeky pint with Dario.
- [75:29]
Unknown
That was a very, very important sign. I thought one of the best fintech founders in the world is a moderator to Dario. I just thought it was ironic. Ten years ago people were like, harry, media will never work for you, dude. Just to let you know, it's not a thing.
- [75:43]
Jason Lemkin
True. I think they, for one, I think Stripe do a super interesting job in media with the publishing and all that. They're just more than most companies. There's an intellectual curiosity there which I find the most attractive thing about that company.
- [75:55]
Unknown
And I don't totally agree.
- [75:56]
Jason Lemkin
Public, which is.
- [75:57]
Unknown
No, I meant it as a compliment. I didn't mean it badly.
- [75:59]
Jason Lemkin
I know you did. I just want to pile on that one. Yeah, it was two smart people talking to each other.
- [76:03]
Unknown
Final one. Will X AI sue Apple? There's odds for this one and I know you like us, so yes, $100 gets you $209. No, $100 gets you $151. Elon has made it pretty clear he's.
- [76:19]
Harry Stebbings
Very unhappy with Apple and He's already sued OpenAI. There's a precedent there, right?
- [76:24]
Jason Lemkin
Yes. Not a. Because he appears to have a propensity to pick fights with everyone, which is just fun to watch. B because it's all about the dispute with ChatGPT and to some extent you could. I saw a good tweet that basically said elon's wrong because the whole idea that Apple's going to favor any one. They don't need ChatGPT to be wildly successful. They need to figure out their. So it's a marriage of convenience. Maybe the better answer is this. If Apple continued to be, quote, aligned with ChatGPT, then probably they get drawn into it because the ChatGPT versus X AI fight is going to be existential for a long time because that's both. It seems to be both personal and business because you have the old X AI business. So that fight ain't going away. So. So anyone getting sucked into that could get pulled into the mess. So to the extent they are, then yeah. So probably not a bad bet. It's kind of like getting named in the lawsuit. You know, you didn't do anything wrong, but you're dealing with someone that did something wrong to me. So I'm just going to pull you into this mess and depo all your executives anyway.
- [77:22]
Harry Stebbings
Jason, I think it makes sense. I mean, epic suing them was sort of worth it, right? At the margin. He's incensed and he's got a lot of money in xai. He's the richest man in the world, but he doesn't have unlimited limited capital. I think it happens.
- [77:34]
Unknown
Guys, as always, I so appreciate this. I want one final question from you. You gave me a target of, like, someone to get for the show. I think I delivered with the people that I've lined up. If you were to add one more name, who would you say it is?
- [77:48]
Harry Stebbings
Well, look, for what it's worth, Alex Karp's always been my dream since the beginning of Saster, asked every single year since like 2015. So personally, if he has the energy to do it from his farm, that would be my. That would be my dream.
- [78:01]
Rory O'Driscoll
I love that.
- [78:01]
Unknown
I agree. Alex would be amazing. Now, I want to make those shows.
- [78:06]
Rory O'Driscoll
The best shows they can be.
- [78:07]
Unknown
So please let me know what we can do to make them better. Improve them. If you want us to have a guest on the show, I'd love to hear your thoughts. Email me harry0vc.com and you can find the show on YouTube by searching for 20VC.
- [78:21]
Rory O'Driscoll
But before we leave you today, let's talk about agents. Specifically Piper the AI SDR agent brought to you by Qualified. The agenti marketing era has arrived. And if you're a B2B marketing leader looking to scale a pipeline generation Piper the AI SDR agent.
- [78:37]
Harry Stebbings
Wow.
- [78:38]
Rory O'Driscoll
It is here to help. Piper is the number one AI SDR agent on the market according to G2. And hundreds of companies like Box, Asana and Brex have hired Piper to autonomously grow inbound pipeline. Fucking sign me up anyway. Qualified customers see massive business impact with Piper Piper 3x increase in meetings booked and 2x increase in pipeline. Wow, that is some results. Hire Piper the 1 AI SDR agent and grow your pipeline today. Learn more at qualified.com 20VC that's qualified.com 20VC with the 20VC spelled out in letters for goodness sake. And while Piper builds your pipeline, Attio gives you the CRM power to close and grow those relationships. Attio is the next generation of CRM built for the AI era. Fast, flexible and powerful. No, it's not a sports car, it's a CRM system, baby. It is Attio and it takes less than a minute. Sync your email, your calendar and you'll instantly get all your relationships enriched in real time with incredible data, no manual input needed. Attio also integrates with your existing tools and syncs with your product data to deliver an AI native platform that's tailored to how your team actually works. You can model your CRM around your business, automate complex tasks and surface real time insights all in a platform designed to scale with you. With Attio, AI isn't just a feature, no no, it is the foundation. It's powerful. It's AI automations, it's research agents that transform your go to market motion. It's a data driven engine. From intelligent pipeline traffic working to smarter product led growth, fast growing startups like Flatfile, Replicate and Modal are all experiencing what's next. So get ready to build without limits and start now. Attio.com20VC and get 15% off your first year. That's attioattio.com20VC. Okay, pipeline sorted. Woohoo. Now what about your own legal team? Enter Logora. Logora is the category defining AI platform that's fundamentally reshaping how legal work gets done about fricking time. Empowering lawyers across tier one law firms and in house teams to achieve more with greater precision and confidence. Lagora does this by solving really concrete tasks such as document extraction, reviews against a firm playbook and suggesting well crafted markups directly in Microsoft Word based on your preferences. My Word, that is a topic list of conversation that will not get a second date. But anyway, the adoption of legal AI is surging across the the world and Lagora is at the forefront of this shift as the chosen partner to 250 industry leaders in law across more than 20 markets. The likes of Goodwin, Bird and Bird and Deloitte are making daily use of Ligora platform to review and research with Precision, Draft Smarter and collaborate seamlessly. They recently also got an $80 million Series B from Iconic. They're backed by General Catalyst, Redpoint, Benchmark and YC also also they operate out of New York, London, Stockholm. Yes, they're Swedes. Always a wonderful race. With over 100 employees from some of the world's leading global law firms and tech companies, the team is growing super rapidly. They're just freaking awesome. Just go use Lagora. Honestly, I love Max, their founder. He's just a great dude. Go find out more. As always, I so appreciate all your support and stay tuned for an incredible episode with Max at Lagora tomorrow.