The Exchanges

Q processes around core strategic decisions like, you know, which architecture are we doing? Which trade-offs are we making? That seems to be like a progression towards leadership style thinking, and there are by definition only so many big decisions or leadership positions to be had. My question is, like, does everyone progress up the architect path? Because you don't want 20 devs all going, well, I've got this architectural opinion.

A Well, I think you do, because you are creating software, uh, like, substantially faster, and so you will, you will have more software For which you need to make those decisions. I, I gave you a few examples here. Many decisions are more immediate. I do think there's another progression path for developers that is more towards the product path, more understanding of user empathy, uh, uh, whatever the Henry Ford, uh, you know, don't, uh, if, if, if I did what customers told me, I'd build a, a faster horse. And so, you know, there's examples like that that are more towards the product manager. And so I think those two paths, they evolve up the kind of one of those routes. And I, I do think we will produce more software than ever. I think, uh, consider the web of whatever, like, 2000. It was all boxy and, you know, messy, and to build a very fancy website, you know, like what we consider today even a legitimate website, it would have taken a ton, a ton, a ton of work. And money. And money, and expertise, and it was very, very hard. And today, it's much, much, much easier to, uh, build software that, you know, creates a pretty website, And therefore expectations of consumers have changed, and now we expect websites to have that level of functionality, performance of websites. We used to be much more tolerant of latency. Now we don't have those. And so some of it is just the systems …

AI assessment note: “Well, I think you do, because you are creating software, uh, like, substantially faster”

Q I have to ask this. You mentioned kind of giving away money. How do you think about your relationship to money?

A I'm, I'm very uncomfortable with it. Look, I, I, I'm, you know, I like my kind of creature comforts, you know, I like my sort of larger house and, you know, Poshe vacations, and I enjoy those. I like premium, even super premium. I don't like, I, I really dislike luxury. I really dislike sort of status symbols and wearing something because it is sort of to show that you're doing it. I, those are negative value to me. Uh, and so I'm, I'm learning it. You know, I'm enjoying the ability to help family members, to help friends, and I think those are the things that give me the most pleasure. Um, and eventually it's, it's a bit of a burden, you know, and I talk about sort of giving it away. You know, I think All the money that I have at Sneak, you know, my wife and I were planning to give that away. But when you give away larger amounts of money, suddenly that becomes a burden. You know, it's sort of, it's not donating 50 bucks to sort of UNICEF. Um, and so, uh, I think, but I think, you know, it's a, it's a burden. I, I, I accept, you know, there's moments where I get annoyed with it. Uh, and I don't pretend to be sort of, you know, miserable for it. You know, it's first class problems by definition. Uh, but I, uh, but, you know, I think it's a, it's to an extent Uh, an effort, not just sort of a, a joy.

AI assessment note: “I'm very uncomfortable with it.”

Q the right post product market fit. Was there ever a time when it went flat or like, I remember when you raised that, you know, your, I think it was your A from Excel and from GV and from great people and everything just always looks up. I'm sorry. Was there ever a time when it was like a flat quarter and everyone was going, ah, what's going on here?

A So I think like, no, the, the flatness was mostly before we sort of hit the, uh, the hit the curve, you know, on it. I think since then it's been, it's been like the opposite. It's like our CFO calls it, you know, kinks in the curve of sort of, you know, going steeper and steeper. Our growth actually accelerated, um, you know, all that to say until the sort of the current market in which, you know, we like sort of others are, are definitely, you know, there's a certain amount of, uh, Of sort of slap in the face or whatever cold water bucket that you get. You know, I think we're, relatively speaking, super well positioned, lots of money in the bank, you know, the needs themselves of the market are not ones. They're definitely a, um, an aspirin and not a vitamin. They can't choose not to do them. Uh, but the numbers are different, uh, in this world.

AI assessment note: “no, the, the flatness was mostly before we sort of hit the”

Q Do you agree with that? I think of brands like Chanel, like Louis Vuitton.

A Brand power is very powerful. It's sort of like for us, for a tech startup or for a company that is, uh, that is building out. It's just so easy to claim that you have brand. But I think the idea of brand is really to be able to sell the same product for a significantly higher price because of people sort of taking pride for it. And so like, for instance, if you think about Snyk, you know, so Snyk has a certain amount of brand power. You know, there's a certain amount of like fairy dust, sort of DevOps fairy dust that all the security companies want. You know, there's a certain amount of that, that the people believe, but it's not a sustainable sort of superior significant capability. I think that's really the sort of the risk with powers is that people try to call everything a power and, and that loses the sort of the, the whole kind of idea of defining and understanding your powers is that, you know, you know where to invest.

AI assessment note: “the idea of brand is really to be able to sell the same product”

Q You said differentiation, that messaging is a great way to differentiate the way you tell The world of your story. You said before, use messaging as a way to build the right product. What did you mean by that guy?

A So messaging really forces you to distill what you do into, into kind of customer need. Uh, and I find way too often what, what companies, what, what founders do is they either, they come from like a very narrow thing. I'll be amazing at this, you know, whatever sort of, you know, open source library that does, you know, codifies whatever access code, you know, and something, and it'll be superb. Um, but they don't, they, they love the technology or AI or crypto or whatever, and they don't sort of translate that into sort of a customer need. And on the flip side, you see people saying, I'll be a platform. I just had a conversation with, uh, with actually an investment of mine that started by saying, you know, we are the most flexible platform for, you know, this and this and finance. We're in beta as well. Like that just does not work, you know? And so I think what messaging does is it helps you.

AI assessment note: “messaging really forces you to distill what you do into, into kind of customer need.”

Q When I look at Magic, I look at Cognition, Honestly, even look at Tassel. Um, you guys have raised so much money so early. Do you need to, or is this not just peak enthusiasm from a venture crowd that has too much money?

A Well, I, I think it's, it's twofold. You know, one part of it, and I think that's true for Magic for sure, and I think that's true for Cognition, is that they use a big chunk of that cash for GPUs and sort of, you know, training models on it. I can tell you that at Tesla, that's not our path. We talked about not wanting to train a foundation model. AI is still costly, you know, just before coming here, the team has run a quick evaluation, cost them a thousand bucks, you know, they, they, because you need to run statistical evaluations, and it just, it does take more money. Um, that said, you know, I think a lot of these are go big or go home type propositions, so when you're trying to say, hey, this will either flop or it would change the world, then You, you want to have good reserves, so you'd be able to, to run the distance, uh, but also, you know, you're, you're trying to be ahead, and right now, these systems require a lot of iterations to, to get it right. So, I think there's no single right or wrong. It definitely reduces optionality when you raise a lot. For me, that wasn't an issue, and I am very much sort of not looking to, you know, make some sort of quick one, two billion dollar exit.

AI assessment note: “You, you want to have good reserves, so you'd be able to, to run the distance”

Q Gotcha. Fucking boom. Um, what were the acquisition offers for Sneak, and how much were they for?

A Um, I don't know if I can disclose all the numbers, but we had more acquisition offers early in the sort of, when we were still sub one billion, uh, where people thought they can get us cheap and I wasn't interested in selling. Um, and I think after that there was a lot of dancing, but generally the investors were a lot more bullish than the acquirers. You know, a little bit of sort of the, ah, you know, the hype of it. Uh, and so I think investors were always ahead of the numbers. I think The last acquisition that really I sort of felt like we were talking in, in concrete numbers was, was early in the journey. It was in sort of two hundred million range, and I think later on we talked about multiple billions, but we would, they didn't get to, like, concrete these are the numbers because we were always well ahead of them.

AI assessment note: “It was in sort of two hundred million range, and I think later on we”

Q processes around core strategic decisions like, you know, which architecture are we doing? Which trade-offs are we making? That seems to be like a progression towards leadership style thinking, and there are by definition only so many big decisions or leadership positions to be had. My question is, like, does everyone progress up the architect path? Because you don't want 20 devs all going, well, I've got this architectural opinion.

A Well, I think you do, because you are creating software, uh, like, substantially faster, and so you will, you will have more software For which you need to make those decisions. I, I gave you a few examples here. Many decisions are more immediate. I do think there's another progression path for developers that is more towards the product path, more understanding of user empathy, uh, uh, whatever the Henry Ford, uh, you know, don't, uh, if, if, if I did what customers told me, I'd build a, a faster horse. And so, you know, there's examples like that that are more towards the product manager. And so I think those two paths, they evolve up the kind of one of those routes. And I, I do think we will produce more software than ever. I think, uh, consider the web of whatever, like, 2000. It was all boxy and, you know, messy, and to build a very fancy website, you know, like what we consider today even a legitimate website, it would have taken a ton, a ton, a ton of work. And money. And money, and expertise, and it was very, very hard. And today, it's much, much, much easier to, uh, build software that, you know, creates a pretty website, And therefore expectations of consumers have changed, and now we expect websites to have that level of functionality, performance of websites. We used to be much more tolerant of latency. Now we don't have those. And so some of it is just the systems …

AI assessment note: “I do think there's another progression path for developers that is more towards the product path”

Q Why does that not work for people who don't understand?

A Well, it's because it's, you basically underappreciate on one hand, you know, if you're sort of too narrow, that you have to expand it to the use case, to the need of the customer, and, and, and understand their experience end to end. And sometimes, even if, if you only provide a portion of it, they don't have a solution for all the rest of it, and you're not going to succeed. So you have to think about their entire use case. What is the value proposition that you want to offer them? What is the problem that you want to solve? And similarly, from the platform perspective, people underappreciate the complexity But once again, you know, they, they, they think that they, they care about their tech. They care about how we'll build that. And my favorite sort of statement to tell founders is nobody cares about your product. They care about the problem that you're solving for them. And so why are you talking about your product all the time? Like you should really lead with what is, what is the pain? What is the problem that you're approaching? And so messaging is a forcing function To, first of all, understand what is the value proposition that you have. You know, what is it that you are doing for a customer? It has natural brevity constraints, like it has to be short. Uh, and so, so you have to distill it. You can say, I do this and this and this and this and this. You don't need to …

AI assessment note: “nobody cares about your product. They care about the problem that you're solving”

Q do you think you can actually say, and I know that sounds strange, but bluntly the hardest thing I think about investing in AI today is the speed of evolution. You know, I'm, I'm kind of bluntly betting on great people who are directionally right because it's moving so fast. To the extent that you can say five years time would be more or less necessary. I mean, who knows?

A Yeah, I think it's very hard. You know, I, you know, AI is especially kind of disruptive at the moment, and I do think that there is, you know, AI as a whole will totally dominate the world. Specifically, there's a certain kind of a honeymoon period happening with GPT and LLMs, which I think, I think will find the right limits to it. I don't really know them. I think typically if you're immersed in a space, if you come from a space and if you sort of, you know, have sufficient sort of ability in it, you can, you can kind of roughly get market timing within a plus minus two years. Uh, time horizon. That's kind of my mental model. Now, plus minus two years is like life and death for a, for a, for a startup. And so you do have to, you have to navigate the journey. And I guess, again, kind of my, my system over here is not so much to sort of perfectly align it. I mean, there is a certain, like you're making a bet. You're sort of saying, I think this is necessary. You've asked the question about whether it'll be more necessary moving forward. You know, you have a thesis about your sort of theory of change and, and how you would do it. And then you, um, you know, I try to, to apply this sort of big vision, small steps type lenses. And so big vision, and you have to be working towards something that matters at the destination, but it has to be sort of a sequence of steps towards it. A…

AI assessment note: “you can kind of roughly get market timing within a plus minus two years”

Q Will you be able to retain your talent? As, as team members, you're going, wait a minute, I'm going to bust my ass off for two years, and I'm going to have flat stock options when I could just Go to an AI company and get boosted stock options?

A Yeah, I mean, I, I think it always is a conversation, hopefully, especially early, you have people that are sort of fairly excited about the role that they play in the growth. I also feel like people should get sort of top ups in, uh, in, uh, in equity, and I think investors should be ready to do that. I mean, you got the higher valuation, and so you raised more money at a lower price. It's a little bit easier for the valuation, for the sort of the investor that actually has paid that amount, but it's a little bit harder for them to accept it. But I think generally speaking, you know, people should be financially incentivized in a competitive manner around that growth, and they should be believers in the mission, especially early.

AI assessment note: “people should get sort of top ups in, uh, in, uh, in equity”

Q ask because it's just such a broad and shit question, but I do want to ask it anyway. You've raised multiple rounds of funding from some of the best in the business. What do you think are the most common mistakes you see your angel investments make when fundraising with venture investors? And what are some of your biggest lessons from raising from some of the best in the business?

A Well, I learned a ton from, uh, from, uh, from investing with, with various people, whether it's like with angels or with, with VCs. Um, I think the biggest mistake angels make investing with VCs is, um, uh, kind of underappreciating the different, uh, contexts, especially if you're sort of co-investing with, you know, a, a, a VC that is primarily an A or a B VC, and they're signing a seed check, you know, for them, it's a very small bet. It's the opportunity to go ahead Well, for you, it might actually be, as an angel, that might be your sort of primary check. And so you just need to, like, I think I put a lot of weight into the, uh, diligence and sort of the vetting that, you know, some of the sort of the venture, uh, firms that I co-invest with, uh, do. And so I do value that a lot, but I also want to contextualize it for me and to say whether that's important. And for me personally, I guess what I've, I don't know if it's like a learning for me or from others is, uh, I, I invest, while I expect a financial return, I invest largely for the learning, for the journey. I feel it helps me. First of all, it's fun. Second is, you know, it helps me actually in sneak, you know, it helps me sort of understand. I think it helps me be a better craftsman. And so I have all sorts of filters that the sort of the VCs don't necessarily have, like, you know, I don't know, I guess maybe some …

AI assessment note: “the biggest mistake angels make investing with VCs is, um, uh, kind of underappreciating the different”

Q do you think you can actually say, and I know that sounds strange, but bluntly the hardest thing I think about investing in AI today is the speed of evolution. You know, I'm, I'm kind of bluntly betting on great people who are directionally right because it's moving so fast. To the extent that you can say five years time would be more or less necessary. I mean, who knows?

A Yeah, I think it's very hard. You know, I, you know, AI is especially kind of disruptive at the moment, and I do think that there is, you know, AI as a whole will totally dominate the world. Specifically, there's a certain kind of a honeymoon period happening with GPT and LLMs, which I think, I think will find the right limits to it. I don't really know them. I think typically if you're immersed in a space, if you come from a space and if you sort of, you know, have sufficient sort of ability in it, you can, you can kind of roughly get market timing within a plus minus two years. Uh, time horizon. That's kind of my mental model. Now, plus minus two years is like life and death for a, for a, for a startup. And so you do have to, you have to navigate the journey. And I guess, again, kind of my, my system over here is not so much to sort of perfectly align it. I mean, there is a certain, like you're making a bet. You're sort of saying, I think this is necessary. You've asked the question about whether it'll be more necessary moving forward. You know, you have a thesis about your sort of theory of change and, and how you would do it. And then you, um, you know, I try to, to apply this sort of big vision, small steps type lenses. And so big vision, and you have to be working towards something that matters at the destination, but it has to be sort of a sequence of steps towards it. A…

AI assessment note: “Yeah, I think it's very hard... roughly get market timing within a plus minus two years”

Q How does your understanding, if you isolate those now and you sit in the room with your team, you're like, great, we know those two powers are really well. How does that change how you operate and lead? Does it change how you operate and lead?

A Firstly, it might be interesting to sort of think a little bit about the exercise that we've done. So what we've done was, you know, we, we took, we took four primary competitor categories, and for each of those, we try to write down the primary capabilities that we differentiate on in those areas. Uh, and then we thought about the capabilities we could build You know, that we think that are sort of interesting to us. And then we, for each one of those, we sort of assessed, like, are they, uh, truly superior, significant, sustainable? And that was a good exercise, even if we've done nothing else. And sometimes actually we've done this a few times. Sometimes we've done nothing but the conversation, but it still distills your understanding of it. And I think that's very important. It helps. It's a, it's a mechanism. This and questions like, you know, would this be more important in five years or not are, are things that I do with the product organizations and definitely with the labs organizations, with, Which is very kind of skilled in this now, uh, to, to help us anchor in the future, to help us think about where it is going and where it is headed. And so that is, that is very valuable. By the way, the hardest part is then distilling that into the top items. You know, what is the one or the two items that you would pick for every sort of a box?

AI assessment note: “it might be interesting to sort of think a little bit about the exercise”