"One of the elements of people judgment is what is the right founder for the right market. I really like a certain archetype of founder. I call them the technical terminator. The thing that I like abou..."

"Obviously, the big topic that we're tackling and trying to figure out in the near future is the impact of AI. We've backed a ton of really exciting companies at every layer of the stack and we can tal..."

"You know, billion people using it. And they're only monetizing a tiny piece of that, which I think is a really exciting dynamic. But I don't think that the future of how we interact with AI is going t..."

"You know, I like to look at uh history of consumer internet companies and what were our perceptions and then what actually ended up happening reality. So I think it's instructive to look back at Faceb..."

"it's like, okay, how much time do people spend? What kind of value do they get? How much consumer surplus is there? And how do we think about valuing that? And it's pretty open-ended, uh, which is whi..."

"We never would have predicted what a feedbased advertisement is. Like no one would have known what that is because we didn't even know what the feed-based product was. It turns out it's probably the b..."

"Like, I would I would struggle with it. Amazon, no chance because of the ads. Deep Research was really, really, really good at it. and it kind of solved my problem for me. Uh, and so light bulb kind o..."

"So, you know, if I take a step back and I think about AI today, really active users spend almost 30 minutes a day in the products. Like for context, users spend like 50 minutes a day on Instagram and ..."

"Where do you feel the most different than your peers in what you think matters, what you think is exciting or or not exciting worries you have? Like where do you feel most divergent from your friends?..."

"Um, but maybe I'm slightly more skeptical about what their ultimate business models will be. So one of the really fun topics that people debate with with high degrees of confidence uh that I have very..."

"Like you can shift a business model from a seatbased thing for Zenesk or something to a new business model where if you successfully complete the task, you can charge on that. >> You know what it's wo..."

"Like just start with that as the assumption. whether it's consumer, whether it's enterprise, you know, like a a funny analogy that I heard from somebody else is, you know, how would how is the steam e..."

"So, you know, an analogy would be Apple, right? Like what would you pay for your iPhone? A lot more. >> I mean, yeah, that the sky's is the limit. Like 90% consumer surplus is probably low. Uh, you kn..."

"And the explosive nature of Whimo as an example is really cool to watch. There's all these other technologies. You might call them American dynamism and horiz, you know, small modular reactors or like..."

"It's often these are the ones that are the biggest market opportunity, >> right? >> Like robotics is the biggest market opportunity. Like we we were all obsessed with LL. >> Yeah, if you knew it was g..."

"I contrast that with what a robot has to do. Like what does a robot have to do in your home? >> Endless degrees of freedom. Like make a cup of coffee, uh, you know, go do my laundry. But it took Whimo..."

"So how do you invest in that? So we have an early stage team that is studying all the robotics companies. We meet them all. We're learning a ton. we're waiting for them to find, you know, the team tha..."

"You know, uh, like there will be things that start happening and customers pulling their products that we will have not seen before. What's the lesson from Whimo there on what it means to start to wor..."

"So the interesting thing about Whimo for us, I'll tell you the history of of our Whimo investment. We originally invested in 2020 in Whimo. They came to us uh to raise outside capital for the first ti..."

"Uh you know we knew they were going to be conservative about rolling it out. So Mark and Ben came to me and they said, "Uh, hey, you know, we we got to do this whim way investment." And I said, "Uh, I..."

"And so we compromised and we made a small investment in Whimo at the time and I was excited to to be a part of it. I just I I thought the returns would be stretched. Fast forward five years later, uh,..."

"By the way, one of the really interesting things about Whimo, so you said you see it, you're in San Francisco, you see it everywhere. >> Yeah. >> How many cars do you think they have on the road in Sa..."

"It feels like the appropriate time to disclose that you and I went to college together. The the reason I me the reason I mention that is usually when we get together we don't jump into talking about i..."

"Like and so I've studied, you know, the history of technology companies and why they outperform and how they outperform. Often in growth stage investing, >> it it's always on the growth side. It's lik..."

"And so how do we maximize our likelihood of doing that on the people side? I'll start there because that's probably the hardest to do and I've gotten it right a number of times and I think I have reas..."

"Uh but he started the open source project, right? >> Yeah. He was one of seven. One of seven. And so he was not the CEO. Uh there was a much more established uh guy who we've partnered with on a lot o..."

"Um, you know, Mark Zuckerberg is an example of this. Elon's a great example of this. Um, and then over time they learn the business side. So, it's it's been so fun to work with Ali because he knows mo..."

"Okay. Interesting. >> Yeah. At Uber. >> Yeah. So one of the elements of people judgment is what is the right founder for the right market, right? And that market was just a pure battle. Like it was li..."

"You know George Curts from Crowdstrike is a great example of it. I I'll tell you one more example which is not as obvious. Dave from Roblox. you know when we met him I met him you know maybe 10 years ..."

"Um, you know, Dylan from Figma is a great example of this. Like he's so nice. He's one of the nicest guys in our industry, >> but he is brutally ruthlessly competitive. The new AI guys and and women l..."

"Uh so you know I love that sort of relentlessness, intensity paired with you know technological capabilities, product understanding. Um and you know backing people like that, >> they're going to like ..."

"Errors of commission are really painful. Errors of omission are really, really painful, too. And they're more costly just economically because you can lose one times your money uh if if you get things..."

"There's a scoreboard in this business and our expectation is that we win. Now, it's a very longdated scoreboard, you know, especially in the venture side, but on the growth side even, it's a pretty lo..."

"We do things like, you know, Ben runs every new employee onboarding and he runs through our culture document. When you sign an offer letter at our firm, you sign your offer letter, but you also have t..."

"And what I mean by that is not, you know, we're going to be arrogant or, you know, we think we're the best team or something like that. What I mean by that is we're lucky enough to be a part of a firm..."

"Like you better be doing your job really well. You better be working hard. This is one of the things that maybe is not as obvious to people. It wasn't as obvious to me actually until I joined the firm..."

"And I got in and man, it is a competitive place. Like we are very intensely competitive. We want to win. And everybody works really, really hard. like no one is resting on their laurels. We're all con..."

"But high expectations around performance on the, you know, why am I at A16Z? Why don't I run my own firm? I always tell people kind of have a dream job. Like this is awesome. I got to join a firm that..."

"Uh, but I joined a place that is full of optimism and I think you need that in growth investing. Like that is the number one ingredient is you got to be optimistic. You got to be able to see what can ..."

"And so, for example, one of the things that we set up at the outset, was a a bit of a different investment decision-making process than a traditional growth equity investment firm, right? So, most gro..."

"What we decided to do at the firm in the growth fund was do it totally differently. So, we were going to actually make the decision process just like our venture process, which is single trigger pulle..."

"But once you disagree, you disagree and then you commit. I think by doing it this way, you encourage people to fully explore the risks of investing and fully explore the rewards. You're never in this ..."

"Like you really like something and you really want to push. We don't have that dynamic. So I think it I think it allows us to more openly explore the merits of an investment and I think it's been you ..."

"The other thing I did that's a little bit different is when we hired the team, by the way, my I feel very lucky. It's one of the most special parts of the job for me. It's about 10 investors. So, it's..."

"But, you know, a cultural trait that I think we've done a pretty good job of building is just collaboration and and the willingness to roll up your sleeves and help people as part of the teams sort of..."

"If you think about the environments that are better or worse for growth investing of the type that you do what are those conditions like if you could cook up in a in the kitchen like the perfect envir..."

"Well, the optimal would be early product cycle, bad capital cycle, >> but those rarely happen in, you know, coincide with one another. If I had to pick, I mean, it's it's all early product cycle for t..."

"It means we're at the outset of a new technological change, >> beginning of that is going to propel. Yeah. A new market wave. And so maybe it's easiest to highlight uh in retrospect. >> It turns out t..."

"It turns out and it's it's obvious in retrospect. It's really hard to feel it in the moment maybe less so because AI is so well covered and you know the question is are we in an AI bubble now? not is ..."

"Um but you know it turns out that we had at the same time we had the mobile uh we had cloud SAS e-commerce all at the same time. Uh and that was a great setup for us. If you look at all the mistakes t..."

"I always tell people the biggest mistake from 2021 is that we were actually kind of late product cycle. And we just didn't realize it at the time. There was a bit of a head fake with COVID. We didn't ..."

"And what that means, you know, in practice is the ideas are just worse. The market opportunities are worse. It's just harder to go be successful right now. You know, when I talk to our investors, our ..."

"And I'm like, look, we're we're trying to be very balanced about this. At the same time, 10 years from now, there's going to be a bunch of really, really great companies. And so, we got to be in the m..."

"If you look at the last year of our activity, our portfolio dollar weighted is growing 112% and we entered at 21 times revenue."

"And so I'll have this debate. First of all, I recognize that revenue multiples are flawed and all that. Uh, especially for traditional investors. If I could invest for the rest of my career in 112% gr..."

"I think that's way less risky than something where you're buying, you know, a 12% grower in PE for 15 times Ebatop because growth just takes takes care of so much for you."

"I think it's just hard to model uh you know my conclusion. I' I've studied all these companies that are you know I called them the model busters but like I've studied all these companies. It is just s..."

"You and I have talked before about this idea of like push versus pull companies. Can you describe that difference and how that's an idea that you care about when evaluating them? It's it's magic when ..."

"I have a post-it note on my computer in the office that says, 'Is the market demanding more of your product?' It's the most special thing when it happens."

"And the shocking thing about that one, by the way, is it doesn't have a network effect. Like that was that was one of the more surprising things for us. Is the market demanding more of your product is..."

"One of the things that I say about push businesses which is you know you got to go sell it like sometimes those are really successful and there's industries where this is the case like cyber security ..."

"So right now we talk about this in the age of AI. If you gave us I think there's sort of like how do we assess AI businesses right now is an interesting thing. One is ease of customer acquisition and ..."

"The second is customer behavior, customer retention, customer engagement. There are some head fakes that we've seen of things that grow really fast and then they kind of fall off and they're experimen..."

"And we kind of give a little bit of a pass on gross margins. Right now, we're in this funny environment where, you know, latestage SAS cloud. We would look at a company and it's like, oh man, if you'r..."

"The expectation is the cost, you know, is going to continue to go down. >> Just the inference cost. >> Inference cost is going to go down over time."

"You basically just not care like if a company has 0% gross margin for example but the revenue growth and the customer love and all this kind of stuff the poll is all there does it round to we don't ca..."

"There's sort of a foundational point which is every great company either has unique product or unique distribution. The best companies in the world have both."

"I'll use a recent one um that you know the product you know is so good that people just naturally have gravitated to it is cursor like you know and again maybe in the fullness of time that'll get hard..."

"Just imagine if you had talked to them on the phone. Like what would they have paid you if you just called them on the phone? Like they probably would have paid you $4 million."

"So, you know, the AI founders like I'm not the one involved with cursor uh but you know Michael is a very special founder and his team they recognize what they have and then they are aggressively purs..."

"What are the tradeoffs of the way that Andre is structured? Like no firm is perfect. Like there's there's choices for how you have structured and nested the team."

"Our strategy for scaling is pretty well covered. But effectively, we think scale allows us to bring more power to the entrepreneurs and give them a greater chance to be successful in the market."

"When I joined every single Monday and every single Friday we used to sit in the room together all of us and we'd hear all the pitches and then we'd have long meetings to talk about each of them all as..."

"So we decided to decentralize Benmark decided to decentralize the firm sort of put you know more power down into the investing teams that ran each investment fund and uh the reasoning behind that is t..."

"One, we thought it would allow us to have better expertise around the table. Like if you're only just fully deep in infrastructure or applications or American dynamism or crypto or bio, that's an adva..."

"And then secondly, if we are going to scale, you can't scale an organization with like 25 or 30 decision makers around a table."

"We want to be flexible and say, 'Hey, if we're super excited about a new investment, it's fine. Just keep going.' We have no target metrics for inside the inside the fund verse outside the fund."

"Can we talk about selling? This is such an interesting topic to me because you can ask lots of investors that invest in private markets like when and how they sell and most of the answers you hear are..."

"Selling is it's so hard to do this job. We've tried a number of different variations. So I think it's different at the venture stage."

"We also try to overlay an assessment of how it's valued versus performance, which is really, really hard."

"Why don't you buy whole companies? One of our folks in IR asked me yesterday like, why haven't we done a buyout fund? I think culturally it's totally different than what we do."

"What are the most interesting strategies or things that Upstarts do to beat incumbents? Like what are your favorite ways that company compan companies beat incumbents?"

"Business model shift is a super powerful thing that's very hard for incumbents to react to."

"The two simple components that I'm looking for, which generally we're not really seeing yet, is completely re-imagined UI and then completely new sources of data."

"So, if you look at the SAS and cloud wave basically the whole story was a 7xing in the amount of revenue in the market there's this question of like who wins the incumbents versus startups."

"It's incredibly fun to explore all this with you in like a formal way, having done it like so informally for 20 years or whatever it is."

"I do know that question and I I've thought a lot about it because there's a lot of things that I consider, you know, in my life that have kind of broken my way. You know, I grew up in Kentucky, far aw..."