The Exchanges

Q out of every guest, and every single founder of yours, consistently said what a joy it was to work with you. It's a great MPS for the VCs, actually, but it was wonderful to hear. But like, the subsequent question for me is, because obviously, for you, you're a former founder. So do you think you actually engage differently with your companies than other VCs because of that prior experience?

A I do, and maybe somewhat embarrassing, I'd say that I, in some cases, I'm less active because there's more empathy there for the role, and I saw both sides. We were fortunate to have tremendously good investors with my company, but there were times where I do felt like the investors were trying to run certain functions and get into product strategy or get into, you know, sales execution. That was a level that was just Taking up our team's time or getting them in uncomfortable situations. And my job as CEO then was in some ways acting as that buffer. And so I'm trying to remember that and be much more appreciative of the transitions that teams go through and companies go through so that I just, I'll pick my shots more. And it's, it's really two levels of engagement. One is the first I was talking about where it's sending over opportunities and leads. And I try to be very low friction, short text, short emails. We've got a whole BVP funded Solutions team that's constantly doing recruiting and marketing and those things for our companies, and so trying to expose a lot of at-bats, um, often directly to the sales rep or those things, and then on the board level or the strategic side, it's just trying to be very purposeful, and when I speak or where I share a point of view or where I ask for something, knowing that, um, you create some ripple effects from each of those requests and t…

AI assessment note: “I do, and maybe somewhat embarrassing, I'd say that I, in some cases, I'm less active”

Q very intrigued that you said about exceptional operators and you have absolutely worked with, I think it's hard to say some of the most exceptional operators we've seen over the past decade. So what are the kind of common characteristics you've seen amongst those truly great, uh, entrepreneurs and operators? Uh, and, and how do you kind of, uh, pattern match that into what you're looking for in the future?

A So probably two things jump out. Um, one is aggressive clarity of vision, and then, um, the second is really, um, hyper-aggressive execution. And, uh, people will argue which is more important. Um, I think that they both really come hand in hand for people that are going to build multi-billion dollar lasting franchises. Uh, you need to have a clear point of view that, um, can really drive product and go to market strategy. Uh, obviously an executive will hire up team members over time to own functions, but, uh, very consistently we found that Um, our best founding CEOs and, and long-term, uh, corporate CEOs are those who can plant the flag, lead the company, and really define what success will look like, and then it does come down to hours and energy, um, to some extent. Uh, people have to love what you're doing because it, it takes over your life in many ways, and, um, we tend to have A consistent theme across our, our founders and operators where they, they run through walls to get things done and have an attitude of, you know, I, I will make this happen regardless of what the market says to me or, or what gets thrown my way. And time and time again, they'll, they'll hit a dead end, uh, retreat, pivot and go and, um, find their way to building pretty fantastic businesses.

AI assessment note: “one is aggressive clarity of vision, and then, um, the second is really, um, hyper-aggressive execution.”

Q And you mentioned some of the incredible investments there that Bessemer have made in SendGrid, in Box, in DocuSign, just, you know, picking some out of thin air there. But what have been the biggest takeaways then, before we dive into a quick fire round, of seeing these companies go into hyper-growth mode and scale to be the ultimate unicorns that they are?

A Well, the industry takeaway is that these models are fantastically, uh, leveraged at scale, and I, I think that Wall Street's really just getting their hands around that. It really is a better model for the customer and for the company, um, because you don't need to support back instances. Your entire dev team can be focused on new features and new capabilities for your current customers, um, and the end of the day, you're getting paid fair economics. It's, It's just as sticky as licensed software, but everyone's happier about it because, um, they need to get implemented and in the production, uh, to actually be paying. And so I think as an industry that, um, it's really been fun and rewarding to see the maturation and to see that in scale as businesses are starting to get cashflow positive, uh, and really create results, um, from a company perspective and for, um, an entrepreneur or a potential founder, um, What I would say is that there's really two, um, vectors that we've seen businesses launch and create great value. Um, one is doing the SaaS version of X, um, and a lot of companies have come at, you know, Workday is a great example, come at the HR market, and, um, you know, they're, they're aiming to be, uh, the SaaS version of PeopleSoft, and they're doing a fantastic job at it. And you can go down the verticals with, you know, Cornerstone HR, or Intact, and Workday, and …

AI assessment note: “Well, the industry takeaway is that these models are fantastically, uh, leveraged at scale”

Q And I really want to latch onto one thing there in terms of the vision you said that was a common trait, uh, Amongst them. And, and so how do you broach the aspect of how to like inspire and hire with, with that vision?

A Yeah. So this is one of the points that I try to highlight in our 10 laws of cloud computing within, um, investment framework, pattern recognition across now our 105 cloud investments we've done. Really the primary job of the CEO obviously is to, is to hire a great team, but you do that not by outbidding your competition in this market. Um, that's an unwinnable, um, arms race. Uh, you need to pay fair market economics, but really what you need to do is compel them by the vision and opportunity to, um, not only really define a market and build something great, but also personally within their role to become great managers over time if that's their, their goal, become, um, you know, great developers, work on new exciting things. Um, and you need to paint a path for them that, uh, that they want to follow, and you need to set out a vision that inspires people to get up every day, come to work, and excited to be there, because, um, this market in particular is just too damn competitive, uh, with, with talent and with great opportunities all around you. Um, to attract and retain a team if you're not able to do that.

AI assessment note: “compel them by the vision and opportunity to, um, not only really define a market”

Q And do you think those firms then, you said they shouldn't be slowing down, should they then be placing great emphasis on unit economics and maybe not pumping the sales and marketing machine quite so much as they would in a potential boom time?

A Absolutely. The thing that our best entrepreneurs have done over the last couple of months in reaction is Re- evaluate their plans. Think about it in terms of current cost of capital and make any adjustments that, that, um, that, that falls out of that process. And so, um, I do think two things will happen. One, businesses with, uh, very low gross margins, in some cases, uh, negative gross margins that, um, uh, we, we've all been guilty of, uh, of looking at, in some cases, funding, um, those will be, uh, absolutely under attack. And in many cases, this will be a fatal blow. With the market correction, because the willingness to fund medium term gross margin negative businesses and arguably long term unsustainable businesses, I think, is going down dramatically. And there are a number of those in the consumer segment. A number of these delivery businesses, as an example, have been targeted. Um, and I suspect several of those will have, uh, unfortunate outcomes and will not have further capital available. In the cloud business, in general, we benefit from fantastic gross margin characteristics, and so that's not the issue as much as it is, um, where the equation solves for Rate and pace of growth relative to, um, customer acquisition costs, customer lifetime value, um, those sorts of elements. And in, uh, a period where capital is cheap, businesses rationally can afford to fund,…

AI assessment note: “Absolutely. The thing that our best entrepreneurs have done over the last couple of months”

Q of my friends in Canva, and they did, not Canva, Anthropic, and they did it at like four, and when it was done at 60, they had like a 3.8 X. Because of the dilution. And that really struck me. And my question then is, well, amazing businesses and yes, generational defining, but the opportunity cost on that multiple is pretty high. Uh, how did you guys think about that?

A If you believe that's the end state, sure. But, um, you know, current, uh, reports suggest Anthropic may be raising at one 70 and, uh, people are buyers at that number believing that they could be one of the next hyperscalers in a trillion dollar business. So, um, You know, 3.8 X will keep you in business for a long time, but the reason to do it is because you believe it could be a 30 X. And that's the basis of our anthropic investment is we believe that it is a generational company. Now, there aren't going to be many of those. And so you have to be right. And that's the scary thing right now is that the stakes are way higher than they've ever been. And these businesses in some cases could still go to zero. Uh, and so you've got this, um, These hyper power law outcomes that are scary, and it is changing the nature of the game. I do think that scale matters from a, for venture firms to be able to play over this arc of private life. And on the flip side, the outcomes are going to be bigger than we've ever conceived of. I mean, I, I sold my company years ago for hundreds of millions of dollars, and that felt like all the money in the world and was the top outcome for our software cohort in that vintage back in 2005. You know, now that's a seed round for some of these businesses.

AI assessment note: “the reason to do it is because you believe it could be a 30 X.”

Q If I were to push you in a camp, does it favor service Titan more or your pre-seed company more?

A Okay. So that's a great question. And I will confess we're in the challenger business. And AI gives the incumbent some advantages that didn't happen in Cloud One. So in Cloud One, you had a business model dislocation going from license to subscription, and you had a delivery model dislocation going from on-prem to single-instance, multi-tenant, you know, cloud delivered. In this AI wave, it's really the next horizon of cloud, and so you're layering intelligence on top of cloud delivery and business models. You're moving maybe to a token model or some other monetization of value, But essentially, it's an extension of cloud, and the incumbents have platform advantage, data advantage, you know, massive distribution advantages, and so the fast-moving incumbents are absolutely going to make a run at being the leaders in the next cycle, which hurts the challengers, and that is a reason to be scared. I still believe that the high execution challengers will beat them over time, and they also have some inherent advantages and innovators and all of them, and some of these things still exist. But when I look at our own portfolio, I look at a company like a Canva, or I look at a company like Intercom that's at a scale where in some ways they're already becoming an incumbent in those markets, and yet they're disrupting themselves at awesome rates and have AI products that are already, you k…

AI assessment note: “I still believe that the high execution challengers will beat them over time”

Q founder world class? One. And then two, can I see a three X by the time of the next round? If I can do the deal world class founder and I can see it. Don't try and think is Twilio going to be a ten billion dollar business? Cause no one thought Twilio would be a ten billion dollar business. Now it's much bigger. Just do the three X. Yeah.

A So I, I don't fully concede that, which is, um, and maybe that, maybe the tiebreaker here in my mind is I look for at least exciting adjacency. So you've got to have some killer unfair advantage to get started. You've got to have this mindset of, okay, they know what they're going to go attack first. They're going to build a killer product. They can get into some vortex of growth and, and launch. And the, I may have a lot of questions about the TAM, but there's enough adjacencies, enough things that could go right that they could layer things on. And so, you know, I want to see that the three dimensional cube of, of segments and products and users that, that can flex over time. And we don't have to have it figured out. We don't have to know exactly what it's going to be, but I have to believe that they're playing in a big enough pond where, you know, good things can happen. And I think that's the difference, and I will totally concede that, that there are times where we're not imaginative enough to go after it, um, and great founders will, will break through at times, but I think that combination is still powerful, and, and the investments that we're making today, and certainly that I'm making personally, tend to still overweight massively those two things, you know, team and TAM, and, and at least our vision of the TAM horizons, But I would say, um, like the analogy we were ta…

AI assessment note: “So I, I don't fully concede that, which is, um, and maybe that, maybe the tiebreaker”

Q Why don't you agree with the Walmart analogy?

A Well, actually, the direct analogy of the low cost provider, lower cost of capital, you know, sort of push to the bottom, um, I think you're seeing a maturation of the asset class, and I think the analogy might be the investment banking world, and that you have, you know, platforms like the Goldman's and Morgan's and JP Morgan's that are providers of, you know, broad, global, multi-asset, multi-stage, multi-sector, um, that can be full service shops. And that's very much the path that Bessemer's on. We have nine offices around the world. We manage tens of billions in assets. We're multi-stage. We want to be able to support our companies all the way through. Um, that's very much the mindset we're in. I do also believe that there are specialists and, and maybe, uh, you know, the Tiffany's analogy is maybe, I don't know, in the banking world, maybe that's the catalyst or, or what have you where we're very good at very specific things. Um, and that's, uh, that's, you know, very much the strategy you're running. That's the strategy that benchmark, you know, continues to run. Um, and I think that there's a lot of opportunity there, and so there can be a bimodal curve in terms of approaches. In particular, I think geographic firms or very specific sector firms, um, healthcare has been an example where, uh, sector expertise has been really an advantage, but you need scale, and so I thi…

AI assessment note: “the direct analogy of the low cost provider... the analogy might be the investment banking world”

Q the spin out time is, is up? We saw this like compressed time. Well, I, there were a lot of frickin' spin-outs very quickly. Do you think that was a new normal, or do you think that was a compressed time where people realized that carry would be less than they thought and it would actually be better to be a solo GP or a GP of their own fund?

A Uh, the latter. I do think that this was a point in time where people were looking for that reset, where, um, for positive or negative reasons, um, they, they wanted, you know, a fresh start. And, um, because in venture, I do think partnerships and platform matter. And ultimately, um, a lot of those goals are to then go out and build up another firm. And so, um, you're, you're either running from something or to something, but, um, the end of the day, I think the best firms are pretty flat at the top. And so you're not seeking better economics. Um, you're really seeking, you know, a better environment or better structure. And so, um, I, I do think that a lot of great partners were able to, to launch out and get funded and, and kick off and we'll see platforms then built out of some of those new funds and probably more reinvention in the industry than we'd seen before. But it is one of the few asset cycles where past performance is an indicator of future success. Private markets are very much networking ecosystem based. And you see, you know, very analytically, I referenced my partner, Phil to Hardeman who taught at Harvard before he would quantify this and he wrote the private equity and venture capital textbook and we do the data, but I forget the exact numbers, but if something like eight out of the top 10 firms in one cycle would repeat in the next because there was this vir…

AI assessment note: “Uh, the latter. I do think that this was a point in time”

Q Final one before you do a quick fire. Everyone's always saying, like, PE's gonna come save the day. There's gonna be a wave of PE acquisitions. Um, do you think PE will come in and save the day? And do you think, number one, and, and do you think, number two, the roll-up strategy that they're trying now with your sales loss and your clarries will actually work?

A I think the next wave of liquidity is going to come from a combination of several buckets. I think PE will be one of them, and it's going to be a pretty fun time for PE as these, um, companies are long in the tooth. Vast majority are not going to get public, um, and consolidation will make sense because at the core, a lot of these businesses are very high gross margin and are run pretty inefficiently because we've got a growth mindset and we're certainly not optimizing for cost in the early days. Um, and, and so there will be A lot of opportunity to, to work through those portfolios, and I think, um, private equity will have a run there. Um, I also think big M&A is coming back. I do think that the, the incumbents responding to the cloud AI imperatives, um, are going to need to get back in the buying game. The FTC is finally taking a more rational posture on, um, antitrust and, and, you know, blocking deals and these things. I, I think they're gonna let market forces, you know, operate there again, and so there will be this buying imperative that rolls through the public markets, and companies like SAP and Oracle and IBM need to buy or they're gonna get crushed, um, and then I do think that the IPO markets are gonna open up again, and we're gonna see a pull through there, and the big wild card, this fourth bucket, is what we talked about briefly, and I thought that one of the gr…

AI assessment note: “I think PE will be one of them... and consolidation will make sense”

Q very intrigued that you said about exceptional operators and you have absolutely worked with, I think it's hard to say some of the most exceptional operators we've seen over the past decade. So what are the kind of common characteristics you've seen amongst those truly great, uh, entrepreneurs and operators? Uh, and, and how do you kind of, uh, pattern match that into what you're looking for in the future?

A So probably two things jump out. Um, one is aggressive clarity of vision, and then, um, the second is really, um, hyper-aggressive execution. And, uh, people will argue which is more important. Um, I think that they both really come hand in hand for people that are going to build multi-billion dollar lasting franchises. Uh, you need to have a clear point of view that, um, can really drive product and go to market strategy. Uh, obviously an executive will hire up team members over time to own functions, but, uh, very consistently we found that Um, our best founding CEOs and, and long-term, uh, corporate CEOs are those who can plant the flag, lead the company, and really define what success will look like, and then it does come down to hours and energy, um, to some extent. Uh, people have to love what you're doing because it, it takes over your life in many ways, and, um, we tend to have A consistent theme across our, our founders and operators where they, they run through walls to get things done and have an attitude of, you know, I, I will make this happen regardless of what the market says to me or, or what gets thrown my way. And time and time again, they'll, they'll hit a dead end, uh, retreat, pivot and go and, um, find their way to building pretty fantastic businesses.

AI assessment note: “So probably two things jump out. Um, one is aggressive clarity of vision”

Q Final one. What have you changed your mind on most in the last 12 months?

A It's probably, um, the what can be from the scale of the opportunities. Like, I thought we understood this next phase we're going into, and, um, how big this was going to be, and, um, Like very sincerely, we've probably added a zero to everything. I think there's going to be a lot of trillion dollar businesses that are created from this. And it just, I mean, I, I, I said, it was kind of embarrassing when you look at our, uh, scenario analysis and our memos that we published on our website before, because, you know, we, we talk about a billion dollar outcome as a big, as a big deal and the great success case in these businesses went on to become 10 or a hundred billion dollar companies. That exact thing's going to happen where, you know, we talk about some of these investments and we, we, you know, we hesitate and we, you know, we, we, Get really close, and we invest, but we're anxious, and nervous, and whatever, and the end of the day, these things just blow through everything that can be, um, and we're, we're seeing it real. Like, when you actually see the anthropic numbers that he's now sharing, and, and like, this is real, and, you know, their path to, um, billions and billions in revenue, and, you know, really compelling unit economics, I, I just, we have never seen this in the history of our industry. And it's playing out.

AI assessment note: “we've probably added a zero to everything”

Q great, three weeks later, new demo from a new company, and oh wow, it really is quite average. It seems like the, uh, defensibility is completely gone, the commoditization is almost across everything, and so it's very difficult to know where to play. How do you think about just playing the game on the field, being aggressive because you have to, versus kind of pausing to see what shakes out?

A So I would phrase it a little differently. I would just say that the pace of innovation is incredibly compressed right now, and the best teams are using that for their advantage and just iterating at mind-boggling rates, and the, the marginal companies are getting passed faster than ever. And we're going to keep seeing that because the, the tech and the enabling tech is so damn good. Um, I don't worry about commoditization in the sense of price erosion, which is often implied. It's often used as a derogatory term, but sure, you can think of, uh, perhaps foundation models as commodities in the way that hyperscalers are. And, and by the way, the best business in the history of software is sitting there with AWS in, in what people refer to as a commodity. And so I think the same playbook is going to be run in the foundation models. I think that the layers on top of those models are going to extract phenomenal value because they're going to deliver phenomenal value, and I think we're going to see great businesses built at multiple layers in the stack.

AI assessment note: “best teams are using that for their advantage and just iterating at mind-boggling rates”

Q the payments for toast, which completely unlocks a business that was never there before. You said about 28% of Shopify at IPO. My question to you is famously you guys sold pretty early. And the outcome since has been so astronomically larger than anyone anticipated there. Do you sit and reflect on that as a partnership and change your go forward stance on liquidating positions once public as a result?

A So importantly, we distributed early. We didn't necessarily sell. So what we did is we gave people the choice. Um, and a lot of RLPs mind you do sell, um, pretty quickly after getting stock by mandate. And so that, um, that did Uh, you know, that left a lot of money on the table for a lot of folks. We absolutely wish that we had, you know, held on to, uh, Shopify and not distributed, you know, when we did, um, and, and hopefully some of our LPs and, and certainly some of my partners have held and, and been able to benefit from the run-up. Um, but, uh, but the end of the day, you know, it's a fantastic company. I think there's still a long journey ahead, and that's why you see people still buying even at these valuations.

AI assessment note: “We absolutely wish that we had, you know, held on to, uh, Shopify”

Q the spin out time is, is up? We saw this like compressed time. Well, I, there were a lot of frickin' spin-outs very quickly. Do you think that was a new normal, or do you think that was a compressed time where people realized that carry would be less than they thought and it would actually be better to be a solo GP or a GP of their own fund?

A Uh, the latter. I do think that this was a point in time where people were looking for that reset, where, um, for positive or negative reasons, um, they, they wanted, you know, a fresh start. And, um, because in venture, I do think partnerships and platform matter. And ultimately, um, a lot of those goals are to then go out and build up another firm. And so, um, you're, you're either running from something or to something, but, um, the end of the day, I think the best firms are pretty flat at the top. And so you're not seeking better economics. Um, you're really seeking, you know, a better environment or better structure. And so, um, I, I do think that a lot of great partners were able to, to launch out and get funded and, and kick off and we'll see platforms then built out of some of those new funds and probably more reinvention in the industry than we'd seen before. But it is one of the few asset cycles where past performance is an indicator of future success. Private markets are very much networking ecosystem based. And you see, you know, very analytically, I referenced my partner, Phil to Hardeman who taught at Harvard before he would quantify this and he wrote the private equity and venture capital textbook and we do the data, but I forget the exact numbers, but if something like eight out of the top 10 firms in one cycle would repeat in the next because there was this vir…

AI assessment note: “Uh, the latter. I do think that this was a point in time”

Q I think it's this completely naive utopian view of like, oh, we're just gonna give you tools, you're gonna do more with, with them, and how beautiful. It's a reduction in force, Byron. It's not like, hey, just do more. Toby's cut thousands of people. Which has been a good decision for the business, but these 23 to thirty-year-olds are about to get hit with a train. Do you disagree?

A There's this, ah, awesome history going back to, ah, Bessemer Venture Partners namesake, the Bessemer Steel Process, which many people don't know. You look at newspaper clippings from a hundred years ago, and there's these great headlines and articles about the coming workforce dislocation. And factory workers, you know, being displaced because the Bessemer steel process is so much more efficient and the, the struggles the economy is going to face and society is going to face. And yet literally fast forward, you know, a few years later and buildings are built into the sky because skyscrapers are impossible with stronger steel and railroads are built across the U S and transportation and connectivity and commerce unlocks. Um, you read the articles about, you know, the phone operators, and I think it was four percent of the female workforce was Um, doing manual switchboards, and this idea of this huge dislocation of the workforce when that was automated. Um, you know, there's, there's hundreds of these micro cycles that have gone through with different tech disruptions and things. Um, it's coming, definitely, and at the same time, more opportunity is going to be created as a result, and the potential for these new workers to leverage technology to do amazing creative things. The, the micro, Film producer that can now, you know, release a, a, a movie that they can create on a lapt…

AI assessment note: “it's coming, definitely, and at the same time, more opportunity is going to be created”

Q founder world class? One. And then two, can I see a three X by the time of the next round? If I can do the deal world class founder and I can see it. Don't try and think is Twilio going to be a ten billion dollar business? Cause no one thought Twilio would be a ten billion dollar business. Now it's much bigger. Just do the three X. Yeah.

A So I, I don't fully concede that, which is, um, and maybe that, maybe the tiebreaker here in my mind is I look for at least exciting adjacency. So you've got to have some killer unfair advantage to get started. You've got to have this mindset of, okay, they know what they're going to go attack first. They're going to build a killer product. They can get into some vortex of growth and, and launch. And the, I may have a lot of questions about the TAM, but there's enough adjacencies, enough things that could go right that they could layer things on. And so, you know, I want to see that the three dimensional cube of, of segments and products and users that, that can flex over time. And we don't have to have it figured out. We don't have to know exactly what it's going to be, but I have to believe that they're playing in a big enough pond where, you know, good things can happen. And I think that's the difference, and I will totally concede that, that there are times where we're not imaginative enough to go after it, um, and great founders will, will break through at times, but I think that combination is still powerful, and, and the investments that we're making today, and certainly that I'm making personally, tend to still overweight massively those two things, you know, team and TAM, and, and at least our vision of the TAM horizons, But I would say, um, like the analogy we were ta…

AI assessment note: “I don't fully concede that, which is, um, and maybe that, maybe the tiebreaker”

Q private markets. Um, in a way that we've never seen before. You know, Horsey Bridge taught me that, you know, fundamentally venture is a very challenging category or asset class, unless you know the small windows of hyper liquidity and can recognize and act on them. Do you think we are in one of those small windows of hyper liquidity in these assets today? And do you act on them?

A I love that question. And I hope you continue to ask that question to, um, to LPs and later stage investors as well, because It's looked down upon right now. Um, you know, it's sort of a dirty word. If, if we went and sold, um, you know, a part of our position in some of these companies, people might think there's signal risk there. There's issues. Um, and to be fair, Bessemer has, you know, this awesome, um, history and we've generated billions for our LPs. And so we don't have DPI pressure that some emerging funds might or whatever, but, um, I think that stigma is wrong. And if, if these businesses went public, um, As they used to. I mean, my very first IPO, Cornerstone On Demand, you know, went public with fifty million of ARR, and I think with seven hundred million market cap, and they traded up to billions over time. But, you know, that used to be a really successful IPO back many years ago. Um, and now you look at, you know, Canva, you know, forty billion plus, and Anthropica with seventy billion plus, and perplexity, you know, uh, deep into DekuKorn status, and like, these businesses, you know, aren't going public anytime soon. And yet, From an investor standpoint, there's a, there's an argument that they should be handed off to later stage investors and hedge funds and things. Um, and so I do hope and believe for the industry that liquidity in the secondary markets is, …

AI assessment note: “I do hope and believe for the industry that liquidity in the secondary markets is”

Q What element of your investing style would you most like to change?

A My partners would probably say I should be more detail oriented. Um, I am much more team and gut. Um, And so I'll confess, I don't intend to change it, but, but I do miss some of the small things at times. Like I'm not a guy that's going deep in documents and details and things like I'm not, I'm not going to be hung up on, you know, some, some usually deal term or financial thing or whatever. Like I, I, I'm all about working with great people this phase in life. It's too short. I love this job, but I just, I want to have fun. I want to do big things with great people. And, and, um, and that'll get me in, Sometimes I'll do crimes of, of commission where I'll just fall in love with some things and miss some details, but like, I, I don't think I'm going to change that.

AI assessment note: “I'll confess, I don't intend to change it”

Q great, three weeks later, new demo from a new company, and oh wow, it really is quite average. It seems like the, uh, defensibility is completely gone, the commoditization is almost across everything, and so it's very difficult to know where to play. How do you think about just playing the game on the field, being aggressive because you have to, versus kind of pausing to see what shakes out?

A So I would phrase it a little differently. I would just say that the pace of innovation is incredibly compressed right now, and the best teams are using that for their advantage and just iterating at mind-boggling rates, and the, the marginal companies are getting passed faster than ever. And we're going to keep seeing that because the, the tech and the enabling tech is so damn good. Um, I don't worry about commoditization in the sense of price erosion, which is often implied. It's often used as a derogatory term, but sure, you can think of, uh, perhaps foundation models as commodities in the way that hyperscalers are. And, and by the way, the best business in the history of software is sitting there with AWS in, in what people refer to as a commodity. And so I think the same playbook is going to be run in the foundation models. I think that the layers on top of those models are going to extract phenomenal value because they're going to deliver phenomenal value, and I think we're going to see great businesses built at multiple layers in the stack.

AI assessment note: “So I would phrase it a little differently.”

Q Does it remind you of other cycles? The thing I love about you is your wisdom, honestly. You've seen so much. Does it remind you of other cycles?

A It does, and there have been, there have been some hard miles here. We've been through a lot, Harry, um, but the, the curve is still up into the right, without a doubt, and I do believe that we will cross over this term. You know, people use, um, you know, uh, various different terms about, uh, you know, levels of reasoning and awareness and, um, and AGI and the like. Um, I have no doubt we're, if we're not there, we're gonna blow past it very soon, and that we will get to this notion Of, you know, higher level reasoning that does mirror, you know, the world's smartest scientists, and I think that's coming in the next 18 months, um, and that these curves are going to continue. How we harness that, how it, um, instantiates itself will be, you know, the, the opportunity for us all to figure out and monetize, but, um, I, I don't think it's slowing down. Uh, I do think that we're also getting many more hardware approaches and solutions out there. So that it's not as wonderful as NVIDIA is. It's not just an NVIDIA world anymore. Um, and the chip sets from Amazon and Google and AMD and others are becoming quite capable. And so you're also going to see, um, you know, different approaches, different optimization paths, you know, innovations in technology that, that unlock, uh, leap aheads in terms of, uh, training capabilities and, and cost to deliver inference. Uh, and so I do think t…

AI assessment note: “It does, and there have been, there have been some hard miles here.”

Q private markets. Um, in a way that we've never seen before. You know, Horsey Bridge taught me that, you know, fundamentally venture is a very challenging category or asset class, unless you know the small windows of hyper liquidity and can recognize and act on them. Do you think we are in one of those small windows of hyper liquidity in these assets today? And do you act on them?

A I love that question. And I hope you continue to ask that question to, um, to LPs and later stage investors as well, because It's looked down upon right now. Um, you know, it's sort of a dirty word. If, if we went and sold, um, you know, a part of our position in some of these companies, people might think there's signal risk there. There's issues. Um, and to be fair, Bessemer has, you know, this awesome, um, history and we've generated billions for our LPs. And so we don't have DPI pressure that some emerging funds might or whatever, but, um, I think that stigma is wrong. And if, if these businesses went public, um, As they used to. I mean, my very first IPO, Cornerstone On Demand, you know, went public with fifty million of ARR, and I think with seven hundred million market cap, and they traded up to billions over time. But, you know, that used to be a really successful IPO back many years ago. Um, and now you look at, you know, Canva, you know, forty billion plus, and Anthropica with seventy billion plus, and perplexity, you know, uh, deep into DekuKorn status, and like, these businesses, you know, aren't going public anytime soon. And yet, From an investor standpoint, there's a, there's an argument that they should be handed off to later stage investors and hedge funds and things. Um, and so I do hope and believe for the industry that liquidity in the secondary markets is, …

AI assessment note: “It's looked down upon right now. Um, you know, it's sort of a dirty word.”

Q Okay, that's a really interesting topic, because what struck me there was Epic coming out and saying, hey, we're going to offer transcription. And I think you're seeing this more and more where the incumbent is fighting back. How do you think about that fight back from the thirty-year-old incumbent?

A The game is on. And I think that, you know, Epic has had this, this wonderful state-endorsed monopoly for a long time. I hope that they're going to continue to be forced to be open as a system, and I think you're going to see a thousand flowers bloom in the medical ecosystem, because that is one of the most important areas for AI to address. If you read Dario's essay from Anthropic, Machines of Loving Grace, I highly recommend everyone reads it, but it's a, it's a tech-optimistic outlook of what AI can do, and one of the great statements he has is that a hundred years of medical research is about to be pulled forward in the next decade, and so This certainly goes into diagnostics and treatments, but it also goes into patient care interactions. AI can be so damn powerful when you use it to help patients in at the point of treatment, at the point of care, for follow-ups, for preventative medicine, those sorts of things. And Epic holds the key in terms of patient data that we need unlocked. And, um, and we need that treasure trove to be accessible for these apps. For innovation to happen, And I think it's going to happen, and I'm, I'm very bullish, uh, on the potential for AI in medical use cases and healthcare more broadly to be utterly transformative into quality of life, um, and, uh, the, the treatment processes for patients.

AI assessment note: “If you read Dario's essay from Anthropic, Machines of Loving Grace”

Q Does it remind you of other cycles? The thing I love about you is your wisdom, honestly. You've seen so much. Does it remind you of other cycles?

A It does, and there have been, there have been some hard miles here. We've been through a lot, Harry, um, but the, the curve is still up into the right, without a doubt, and I do believe that we will cross over this term. You know, people use, um, you know, uh, various different terms about, uh, you know, levels of reasoning and awareness and, um, and AGI and the like. Um, I have no doubt we're, if we're not there, we're gonna blow past it very soon, and that we will get to this notion Of, you know, higher level reasoning that does mirror, you know, the world's smartest scientists, and I think that's coming in the next 18 months, um, and that these curves are going to continue. How we harness that, how it, um, instantiates itself will be, you know, the, the opportunity for us all to figure out and monetize, but, um, I, I don't think it's slowing down. Uh, I do think that we're also getting many more hardware approaches and solutions out there. So that it's not as wonderful as NVIDIA is. It's not just an NVIDIA world anymore. Um, and the chip sets from Amazon and Google and AMD and others are becoming quite capable. And so you're also going to see, um, you know, different approaches, different optimization paths, you know, innovations in technology that, that unlock, uh, leap aheads in terms of, uh, training capabilities and, and cost to deliver inference. Uh, and so I do think t…

AI assessment note: “It does, and there have been, there have been some hard miles here.”