The Exchanges

Q Does DeepSeat change how OpenAI and Anthropics should operate? I just had Jonathan from Grok on the show and he said, if I was Sam Altman, I would open source today. You will die if you don't open source.

A I don't know that DeepSeek changes that much for the way that I think about the future, strangely enough, and maybe that's an odd thing to say when everybody in the world is freaking out about DeepSeek this week. Um, I, I don't know that I ever really believed, personally, that the hundred billion dollar, or five hundred billion dollar, or one trillion dollar training was the only barrier to entry for making these models. And so, like, it was, in fact, if we had believed that only capital was going to win, Then we would not have invested in Anthropic, because you, you know, surely Sam was telling us and everybody else, like, we're going to win the capital game. The capital game is the only way to win, and so there's no reason to build a competitor. So we didn't believe that back then, or else we wouldn't have invested in Anthropic, and so it's still true today.

AI assessment note: “I don't know that DeepSeek changes that much for the way that I think”

Q And I'm too intrigued that on that vein, what do you think makes you, you said half decent, but that's very unfair. I'd say brilliant at this job. And then what makes you enjoy it? What were those two for you?

A Yeah. I mean, so first of all, you know, you just have to take some time to listen to somebody like, you know, Bijan, who is somebody who I respected, but also quite frankly had his first five years as a VC, you know, is the stuff of legend. Like he just had done incredibly, incredibly well. And so, you know, you're like, well, maybe I should take some advice from this person. And, and, and the big thing I think he touched on, which has played out very well is he basically said, look, when you look at your startups and the satisfaction you get from your startups, it's certainly to bring ideas into the world. But the thing that I feel from you is that you actually get just as much satisfaction from helping the people in your company become leaders that, you know, the director of engineering becoming a VP of engineering. Um, you seem to be very happy and not tortured if somebody, you know, gets so advanced in the, in your startup that they leave and start their own company and you want to help them there. It's like, this seems like where you're getting set your satisfaction from. And that is exactly what a really brilliant VC does. And so, Um, I don't know whether, I still don't know whether I'm any good at this or not, but I do get immense satisfaction from, uh, helping founders and CEOs bring their ideas into the world from taking them in, you know, maybe they started one compa…

AI assessment note: “I do get immense satisfaction from, uh, helping founders and CEOs bring their ideas”

Q Will you ever invest if you haven't met them in person?

A If I've never met them in person? Probably not. There's some world where You met them five years ago. You knew them quite well. You know, Chris from Granola is a prior Spark founder, and so he was one of the first people I met after I joined Spark, um, because I was supposed to go sprinkle growth fairy dust on him in New York and talk about growth marketing, growth hacking, and all the rest of those metrics things that I don't really aspire to now. Um, and, and I, I said, you know, Discord, Jason, I knew for seven years. We were founders together before, before investing in Discord, and also smartly passed I was twice on Discord before investing. So like, you know, like a lot of long-term relationships and a lot of short relationships where you passed and then spent time. Cruz, back in the day with Kyle, I passed. We did a huge deep dive on why I thought his business wasn't going to work. He disappeared for nine months and wouldn't return my emails, and then he comes back nine months later, and he's like, yeah, this is like, we've re-pivoted. We've gone from trying to put, you know, aftermarket things on top of Audis, and we're now going to build a full self-driving stack, I'm going to show you a demo. You and like five other investors a demo because I really liked our last conversation, and so you knew somebody for eight, nine months. You've thought of how they internalize inf…

AI assessment note: “If I've never met them in person? Probably not.”

Q And I'm too intrigued that on that vein, what do you think makes you, you said half decent, but that's very unfair. I'd say brilliant at this job. And then what makes you enjoy it? What were those two for you?

A Yeah. I mean, so first of all, you know, you just have to take some time to listen to somebody like, you know, Bijan, who is somebody who I respected, but also quite frankly had his first five years as a VC, you know, is the stuff of legend. Like he just had done incredibly, incredibly well. And so, you know, you're like, well, maybe I should take some advice from this person. And, and, and the big thing I think he touched on, which has played out very well is he basically said, look, when you look at your startups and the satisfaction you get from your startups, it's certainly to bring ideas into the world. But the thing that I feel from you is that you actually get just as much satisfaction from helping the people in your company become leaders that, you know, the director of engineering becoming a VP of engineering. Um, you seem to be very happy and not tortured if somebody, you know, gets so advanced in the, in your startup that they leave and start their own company and you want to help them there. It's like, this seems like where you're getting set your satisfaction from. And that is exactly what a really brilliant VC does. And so, Um, I don't know whether, I still don't know whether I'm any good at this or not, but I do get immense satisfaction from, uh, helping founders and CEOs bring their ideas into the world from taking them in, you know, maybe they started one compa…

AI assessment note: “I do get immense satisfaction from, uh, helping founders and CEOs bring their ideas”

Q When you reflect back on your prior portfolio in the last decade, was that a pattern matchy? Approach that was successful. Have you had to change?

A No. I also think I was really badly shaped to be an investor in twenty-twenty-one. I mean, I think we got lucky. Spark was started in the early web two point O era, like right at that age, uh, in the same cohort as USV and benchmark two point O that the beginning of the girly era and a handful of other firms that I think all treated mobile really well and did mobile really well, which felt similar. You didn't know what the metrics were supposed to be. You had, it was a wide open, crazy world. And you're like looking at Something that was maybe a fart app in the morning, and then, and then Uber in the afternoon. Like, it was an insane situation, and I think our DNA was very fixed by that. Our values were set by that navigation, and I'll be the first to say that, like, I don't know that we navigated the B to B SaaS era four years ago, this kind of industrialization. We didn't do the things that a lot of our peer firms did. Like, we had been very successful. We could have very easily raised five billion dollars. We could have very easily You know, tripled or quadrupled the size of the team. We didn't do that. We stayed seven people, six people partnership. We all write checks. We all do work with our founders. We like the service work. And so I, I would argue that made our job a lot harder four or five years ago, to be honest. And it makes it a lot easier now because we feel very …

AI assessment note: “No. I also think I was really badly shaped to be an investor”

Q And I'm really intrigued that when you look back at the start of the investing career for you, how has your investment strategy itself changed? Has it changed and how you view the world of VC itself?

A Yeah, I don't think there's any way, uh, a venture capitalist can know what they're going to invest in until, uh, You know, they meet, they meet the battlefield, right? Uh, I think if you would have looked at my recent resume and successes and, and so on, and frankly, even me, you know, you would have looked at Zynga and the, and the previous three or four years and said, well, this person knows an awful lot about consumer internet and, and how to grow things really, really fast, you know, and the mobile web. And so he'll probably, you know, be investing in, in a bunch of, in a bunch of those kinds of startups. And I, and I thought, frankly, I probably would, but But, um, it never really panned out that way, quite frankly.

AI assessment note: “he'll probably, you know, be investing in... But, um, it never really panned out”

Q What do you think the challenges that Europe faces then?

A I just don't, if I was a founder starting a company, my default state is dead. Things are really hard. It's hard to recruit. It's hard to raise money. All of it's hard. And you're pitching the worst of the world. That you're dedicating your life to this thing and you're all in, quote. And so if that's true, and you're trying to risk mitigate all the things that are going to kill you, and it's the age of AI, I don't know why you're not in San Francisco. Like, just from a raw, forget the opposite case. Can somebody succeed in London? Can somebody succeed in Berlin? Like, of course they can. But the real question is like, if, as a founder, why would you make that choice? And I, I just think you, that, so that's the problem. The problem is that more of the people who are actually all in, not just telling you they're all in, more of the people that are actually all in, who are actually trying to do everything on the planet to put themselves in the best case to win. And are willing to sacrifice for it. They're going to want to be at the dinner where they're learning about AI people. They're going to want to be able to recruit the best people. All those people are at San Francisco right now. And so why wouldn't you do it?

AI assessment note: “The problem is that more of the people who are actually all in”

Q was like, his product centricity makes him such a unique investor. And I thought it was just so interesting because product is the one transient element of investing. If you think about market people and product, it's the one thing that will really change. I mean, market can do, but Often less so people iterate around the same market. Why do you focus on the one that is so transient?

A So you used market, people, and product as your three cores. So I think if you just look at right now, market, uh, do we understand any of these markets? How fast are they all changing in the world of AI? They're all shifting like crazy, and who knows which ones are going to become commodity markets with absolutely no margin whatsoever anyway. So if it's a big market, Maybe it was a big market two years ago, and it's about to become a really small market, and the same thing in reverse. People is very interesting, and I think there are firms that do a really good job at just making people bets. I think you have an instinct about people that just, you get over the line, and you make your bet on people.

AI assessment note: “market, uh, do we understand any of these markets? How fast are they all changing”

Q What do you think the challenges that Europe faces then?

A I just don't, if I was a founder starting a company, my default state is dead. Things are really hard. It's hard to recruit. It's hard to raise money. All of it's hard. And you're pitching the worst of the world. That you're dedicating your life to this thing and you're all in, quote. And so if that's true, and you're trying to risk mitigate all the things that are going to kill you, and it's the age of AI, I don't know why you're not in San Francisco. Like, just from a raw, forget the opposite case. Can somebody succeed in London? Can somebody succeed in Berlin? Like, of course they can. But the real question is like, if, as a founder, why would you make that choice? And I, I just think you, that, so that's the problem. The problem is that more of the people who are actually all in, not just telling you they're all in, more of the people that are actually all in, who are actually trying to do everything on the planet to put themselves in the best case to win. And are willing to sacrifice for it. They're going to want to be at the dinner where they're learning about AI people. They're going to want to be able to recruit the best people. All those people are at San Francisco right now. And so why wouldn't you do it?

AI assessment note: “The problem is that more of the people who are actually all in”

Q So how do we think about revenue as a heuristic for quality?

A Can I push back a little bit on even, or step up one level from even that? I, I think Why did these simple heuristics, uh, revenue, you can pick one, you have to hit ten million, um, you can pick another set of metrics or dashboards that turn green so that you can get your partnership to agree to let you go do the thing you really want to go do. How did those things evolve? Because that's not how partnerships were 20 years ago. So why did that happen? That happened because you added people to the partnership. You have to look at the core of the org and then work downstream from that. What happens is if you take a room, which used to have seven partners, and that room becomes 25 partners, or 30 partners, or 500 partners at a certain set of firms. Like, what do you, what really happens? And I think the industry today is run basically by principals, associates, and junior GPs. And that incentive system is what we're all swimming in, which did not exist 20 years ago. And why does that matter? Because what does a principal want? Well, a principal is not actually waiting for an exit. They just want a promotion, man. Like they just want to move up the ladder.

AI assessment note: “Can I push back a little bit on even, or step up one level”

Q was like, his product centricity makes him such a unique investor. And I thought it was just so interesting because product is the one transient element of investing. If you think about market people and product, it's the one thing that will really change. I mean, market can do, but Often less so people iterate around the same market. Why do you focus on the one that is so transient?

A So you used market, people, and product as your three cores. So I think if you just look at right now, market, uh, do we understand any of these markets? How fast are they all changing in the world of AI? They're all shifting like crazy, and who knows which ones are going to become commodity markets with absolutely no margin whatsoever anyway. So if it's a big market, Maybe it was a big market two years ago, and it's about to become a really small market, and the same thing in reverse. People is very interesting, and I think there are firms that do a really good job at just making people bets. I think you have an instinct about people that just, you get over the line, and you make your bet on people.

AI assessment note: “How fast are they all changing in the world of AI?”

Q So how do we think about revenue as a heuristic for quality?

A Can I push back a little bit on even, or step up one level from even that? I, I think Why did these simple heuristics, uh, revenue, you can pick one, you have to hit ten million, um, you can pick another set of metrics or dashboards that turn green so that you can get your partnership to agree to let you go do the thing you really want to go do. How did those things evolve? Because that's not how partnerships were 20 years ago. So why did that happen? That happened because you added people to the partnership. You have to look at the core of the org and then work downstream from that. What happens is if you take a room, which used to have seven partners, and that room becomes 25 partners, or 30 partners, or 500 partners at a certain set of firms. Like, what do you, what really happens? And I think the industry today is run basically by principals, associates, and junior GPs. And that incentive system is what we're all swimming in, which did not exist 20 years ago. And why does that matter? Because what does a principal want? Well, a principal is not actually waiting for an exit. They just want a promotion, man. Like they just want to move up the ladder.

AI assessment note: “Can I push back a little bit on even, or step up one level”

Q I'm seeing more and more founders want no pref shares, like all common shares. How do you feel about that?

A I'll answer, not to dodge the question, but I'll answer more broadly, which is that venture as an industry was in, was a very weird thing when it was invented, right? This idea that you wouldn't take majority share in a business. And you'll be a passive investor with just a board seat, a small voice instead of a loud voice. That was a unique thing when it happened. And so we've always been a world where we were in the lean back instead of lean forward control PE mechanism of, of it. Whether that means we're preferred or common or the term sheet changes and our lick preps are different and all of these, these things have like altered over time, I go open to it. Like I just want to make sure founders can build good companies and that They treat the people that they're bringing into their orbit as people who should be committed to the same cause, and I think treating everything transactionally is kind of like the enemy of what I'm trying to work on. It's like, that's, that's, it's probably as simple as that.

AI assessment note: “Whether that means we're preferred or common... I go open to it.”

Q What did you turn down because of price that you most regret?

A Because we run a fund the way that we run, a small number of investors, you know, six investors, With a seven hundred million dollar fund is kind of broken in venture capital. And, and so what it means is usually it's not about valuation, usually it's about check size. So in our model, if you really believe in the company, and you want to have the ownership that you have, and you believe that they're at the right stage, then it's about whether you're going to write a five million dollar check, a ten million dollar check, a fifteen million dollar check, a twenty million dollar check. And so sometimes you, you say valuation, but I root back to maybe that founder is raising around, and you don't think they're going to spend twenty million dollars very well, and it will mess up the company. There is absolutely a belief, for me at least, that too much capital can mess up a company. And so sometimes it's not about valuation, although obviously it's algebra, these things are all related. It's about, ah, you know, a twenty-five million dollar round here is probably gonna kill this company. And so if it was a ten million dollar round I'd be in, and also we'd have the ownership properly, and it'd be a good partnership. But I just, I think this company will be different with this amount of capital into it. And so the company changes.

AI assessment note: “usually it's not about valuation, usually it's about check size.”

Q What did you turn down because of price that you most regret?

A Because we run a fund the way that we run, a small number of investors, you know, six investors, With a seven hundred million dollar fund is kind of broken in venture capital. And, and so what it means is usually it's not about valuation, usually it's about check size. So in our model, if you really believe in the company, and you want to have the ownership that you have, and you believe that they're at the right stage, then it's about whether you're going to write a five million dollar check, a ten million dollar check, a fifteen million dollar check, a twenty million dollar check. And so sometimes you, you say valuation, but I root back to maybe that founder is raising around, and you don't think they're going to spend twenty million dollars very well, and it will mess up the company. There is absolutely a belief, for me at least, that too much capital can mess up a company. And so sometimes it's not about valuation, although obviously it's algebra, these things are all related. It's about, ah, you know, a twenty-five million dollar round here is probably gonna kill this company. And so if it was a ten million dollar round I'd be in, and also we'd have the ownership properly, and it'd be a good partnership. But I just, I think this company will be different with this amount of capital into it. And so the company changes.

AI assessment note: “usually it's not about valuation, usually it's about check size”

Q Which company in the last 24 months did you not do that you reflect on most?

A I think many of the decisions that are made wrong in how people build venture firms, and how people hire people, and how people invest, is about not being fundamentally attuned to that fact, and because it's so unnatural for humans to work in a kind of incredibly intrinsic way. Do you feel like you did a good job today? I just, I came in six months after this job, and I'm like, and I, look, I was, I sold a company to Zynga beforehand. I was in this early, like, You know, AI hacker, I'm sorry, uh, the, like, growth hackers of Silicon Valley kind of groups. I was A-B testing everything. We were some of the very first people who were helping Mixpanel and Amplitude build out their data dashboards. I was an all-in data guy. And so you can imagine, I'm three, six months in, and I'm like, am I doing a good job? And like, I'm trying to measure literally everything to figure out whether I'm doing a good job. And I give so much credit to Bijan, uh, who was the person who really recruited me into Spark, who just kind of would always reflect back to me. He was just like, did you enjoy the work you did today? Do you think you put all in? Do you think you want to come back and do it tomorrow? That's it, man. Like, just do it well.

AI assessment note: “I think many of the decisions that are made wrong in how people build”