20VC Newsletter - 4th August 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Monday’s episode with Delian Asparouhov, Partner @ Founders Fund:
Download the full transcript:
My 8 key takeaways:
How the US Has More Aristocracy Than the UK
In the US you have the Vanderbilts & Rockefeller families creating institutions while still enabling next generation disruptors.
We are okay with having an aristocracy & don’t try to pass a 90% inheritance tax.
How Western Europe Will Become Third World
The UK, France, Spain & Germany are turning into socialist states.
Eastern European countries still believe in capitalism & have an interesting trajectory.
They will rival first world countries in a decade.
The Best Companies Are Built Like Hollywood Movies
The best studios don’t A/B test their way into a movie.
They write a script they really believe in, find the ideal cast, and create the film.
The best companies should identify the core risks, find co-founders best suited for the role & start building.
SaaS is Dead
People like SaaS businesses because the marginal distribution costs are zero.
They need to realize the marginal returns are also zero.
Stanford kids with AI can replicate your plumber SaaS business in a weekend.
Five Core Aspects to Succeed in Venture
Five things:
Sourcing: A top-of-funnel way to source deals.
Intuition: Developing a nose for what deals you like & want to champion.
Internal selling: Championing deals within the firm.
External selling: Convincing founders to take your capital.
Servicing: Managing & helping the founder exit.
You need to be world-class in at least three of those, trying to be great at all five is impossible.
Which VC Firm Will Be the Biggest Loser in the Next 10 Years
Sector specific specialized funds will have a tough time.
Artificial constraints will prevent them from optimizing for generational returns.
Brian Singerman: “The only rule of Founders Fund is that there are no rules.”
Should Founders Ever Be Fireable?
You cannot deliver generational returns without the founder at the helm.
Professional CEOs do not have the same level of moral authority or capability to take risks.
Zuck took more risks in AI than Satya could & he is winning.
Biggest Advice to Young VCs
Extraordinary careers aren’t built behind a desk.
You have to be willing to meet with founders in person.
You need to figure out how to understand a founder’s business and convince them to spend time with them.
Wednesday’s episode with Ethan Mollick, Associate Professor @ The Wharton School:
Download the full transcript:
My 7 key takeaways:
Why Selling Picks and Shovels is a BS Analogy for AI
Steam engines did not add value until skilled artisans adopted them inside their factories.
We need to be skilled artisans and figure out how to convert LLMs into usable work.
AGI Labs Do Not Understand How to Make Consumer Products
Everyone is trying to build AGI
There is no documentation on how consumer can leverage and use AI products.
This is a lost opportunity.
Open Models Will Immediately Be Used for Bad by Bad People
The guardrails will be breached almost immediately.
Computer breaches will be a huge threat.
Too many people are worried about science fiction threats.
What Would Be the Best AI Regulation?
We need fast, follow up regulation.
We cannot pre regulate because we don’t know what's good or bad.
We need to closely monitor everything on the models.
OpenAI Abandons Products Like Crazy and Makes $3.2BN by Accident
They are putting all their resources into building AGI.
There are a ton of products like code interpreter which they abandon in order to pursue AGI. Big mistake.
They have a $3.2BN revenue run rate by accident on GPT.
What the Biggest Companies in the World Get Wrong with AI
A lot of people are secretly using AI but they do not tell anyone because they think they will get fired.
There is not enough incentive for employees to adopt AI without being cannibalized.
We need clarity around how you get rewarded for this.
The Ultimate VC Paradox: If AGI is Coming, No Startups Will Survive
Every startup is betting against AGI today.
If AGI is coming, there is no point funding these.
None of them will survive in an AGI world.
Friday’s episode with Ben Fiechtner, Chief Revenue Officer @ Clari:
Download the full transcript:
My 6 key takeaways:
How are CFOs Changing Their Software Spend
CFOs are consolidating enterprise tech & cutting platforms.
BUT they are also spending more on Gen AI.
They are spending the same but on different things.
What Are the Most Important Terms
Four things:
# of users: Bigger population = bigger price
Service start date: How quickly can you get them?
Contract length
Creativity around T&Cs
How Sales People Are Wired
They look at four buckets:
Create
Convert
Close
Churn
Salespeople aren’t lazy, they are just wired to find the quickest path from point A to B.
Biggest Advice on Verticalization
Speak the language of your client.
Understand their unique problems & how to solve them.
Play where you fit well, early-stage companies think it’s fun to go after the big banks but sometimes it is not a good fit.
Advice on Scaling from SMBs to Enterprise
Treat an enterprise account like 80 little accounts.
It’s a big global conglomerate with different P&Ls, regions, and problems.
Do the homework & it’ll scale into a big enterprise license agreement.
What I Look For in Sales Hires
Three things:
Attitude
Aptitude
Authenticity
Attitude over experience: There will be problems in any sales org & you need to look at them as opportunities.
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:
David Cahn, Partner @ Sequoia
Alexis Ohanian, Co-Founder @ Reddit & Founder @ Seven Seven Six
Dax Dasilva, CEO @ Lightspeed
Thank you for reading 20VC.
This post is public so feel free to share it.
Thanks for reading 20VC! Subscribe for free to receive new posts and support my work.