20VC Newsletter - Apr 21st 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Monday’s episode with Open AI CEO & COO Sam Altman & Brad Lightcap:
Download the full transcript here:
My 10 key takeaways:
Sam Altman on Will All Startups Be Killed by OpenAI
There are 2 strategies to build on AI right now:
Assume the model won’t improve.
Assume OpenAI will stay on the same growth trajectory.
95% should bet on #2.
We have a mission to improve the model, so we will steamroll you.
What Makes Sam Altman World Class
There are usually 1-3 things that matter in a company.
He has an incredible ability to be focused on those.
It helps us maintain velocity at scale that most companies don’t have.
Core Bottlenecks to OpenAI Growth
We have the best researchers and research culture in the world.
Not having enough computing resources would slow us down.
Building the best models won’t matter if we can’t meet the demand.
Sam Altman on Decisions as a CEO
CEO decisions are either WHAT or HOW.
WHAT: 1-2 strategic decisions per month.
HOW: 10,000 mini-decisions to make WHAT decisions successful.
Single Question to Know Whether You Will or Will Not Be Killed by AI
Ask whether a 100x model improvement is something a company’s excited about.
If it can accelerate their product, most companies can tell that story pretty clearly.
OpenAI COO on What Every Business Leader Should Ask About AI
They need to be asking about how steep the rate of change is.
A lot of companies think GPT-4 is the best model we’ll ever get.
It’s not mobile or cloud where the tech hasn’t changed in 10 years.
Sam Altman on the Commoditization of Foundation Models
Only a handful of companies will be doing large scale models in the future.
The long term differentiation won’t be the base model.
It will all be about personalization.
Sam Altman on What He Looks for in New Investments
I look for founders going after something that seems big if it works.
Founders that are good at generating new ideas with fast iteration cycles.
I rather lose 9/10 times & win big than doing okay 7/10 times.
Why Sam Altman Looks for Great Communication Skills in Founders
A lot of the job is communications driven.
Communication isn’t about giving a polished interview.
It’s about clearly explaining your vision & why people should care about it.
What Sam Altman Has Learned From His Portfolio Founders
Brian Chesky @ Airbnb taught me how to talk & build products.
Collison brothers @ Stripe gave me new deep insights every time I speak with them.
I have a long list of incredible founders I’ve invested in & I try to learn a little from every one of them.
Wednesday’s episode with Partner, Product at Sequoia Capital Vickie Peng:
Download the full transcript here:
My 5 key takeaways:
Biggest Lesson Scaling Instagram's SMB Ads to $1BN
Always ask “What problem are we trying to solve?”
We focused on acquisitions first, but retention was terrible.
If we didn’t fix early we would’ve run out of advertisers.
How Pre-Product Market Fit Should Set Their North Star Metric
Pick a number that represents customer happiness in your product.
Buttons, dashboards, images…
It should suggest that the user is finding value out of it.
Why The Best Product People Build Less Product
You will always overestimate the amount you need to build to learn.
The goal of building is to move an impact metric or learn something about it.
Both of those things require way less building than people think.
The Delta4 Framework for Competing Against Incumbents
Every business service has a rating of 1-10.
Compare your startup’s rating to an incumbent.
You need to be at least 4 points higher to compete.
Biggest Product Hiring Mistake to Avoid
There are 3 layers to product:
Vision
Strategy
Execution
Taking over vision & strategy too early can cause tensions.
Lot of founders think they’re ready to give them up but they’re actually not.
Friday’s episode with Girish Mathrubootham, Founder & CEO at Freshworks:
Download the full transcript here:
My 6 key takeaways:
Why Indian Companies Have to Win Globally Before Winning India
Doing business in India is extremely difficult & customers will hijack your product roadmap.
Winning globally first will give you a higher chance of success.
It is easier to make a dollar than a rupee.
Price Low and Move UP
We first targeted SMBs with limited budgets.
Our cheapest product is 1/3 the price of our competitor’s.
You can always build more & move into enterprise later.
Why Start High and Go Down Does Not Work
No single SaaS company started in enterprise & won in SMB.
Freshworks, Salesforce, HubSpot…
Companies always start small then build their way up.
Why Freshworks Lost to Slack
We created FreshConnect as a Slack competitor.
But we were late & took more than 2 years to launch.
Slack & Teams have already dominated the market.
One of the Most Important Lessons for CEOs
Your #1 OKR for new management hires is to get them to succeed.
Be hands-off but closely involved in big decisions.
Observe they are treat their people.
What This Billionaire Looks for In Founders He Invests In
Three things 👇
Right to win the market: They need to spend considerable time in the problem domain.
Craftsmanship: They can’t be world-class without a world-class product.
Ability to hire: You need to build a great team to go far.
Let us know what your big takeaways from this week’s shows were in the comments below!
Thank you for reading, and don’t miss the great guests we have next week:
Daniel Dines, Co-Founder and Chief Innovation Officer for UiPath
Rujul Zaparde, Co-Founder and CEO of Zip