The Exchanges

Q 100%. Uh, Larry Ellison said, to enter the frontier model race, you need a hundred billion dollars. Do you agree, or do you think we're seeing the democratization of cost to enter that race?

A Yeah, I don't think we're saying democratization of cost when it comes to coming to the models. Um, generally I agree. I think you need vast, uh, quantities or vast amounts of capital to be able to properly compete in the foundation models. There is, there are kind of two, uh, competing theories though. One is that scaling laws will continue to, to show themselves, and as a result of that, you'd need more and more money to make progress. Uh, and the general models, the generic, the global models, They will, uh, they will continue to grow, and they will eat everybody's breakfast. The counter argument is that you would actually really benefit from specialized models, uh, and so if the big guns are really trying to get, like, the massive models, and they're trying to scale, and they fail, which there are all sorts of rumors around how the latest sort of GPT-V and equivalent in Gemini and Anthropic and all that are failing with some tests, but if you, if that is correct, and they spend a lot of money and time on that, then the ones that are building, you know, maybe code-specific or robotic-specific, uh, models of it They may have a shot at being able to train with relatively small amounts. Um, I still think that's a short live though. If you, if you take a five year, a 10 year time horizon, those are just like, maybe you, you get some gain for a few years, but over time, like capi…

AI assessment note: “generally I agree. I think you need vast, uh, quantities or vast amounts of capital”

Q I want to start today with a little bit of context. So how did you make your way into the world of startups? And most importantly, how did you come to FoundSneak?

A So I've, I've sort of been working in startups throughout my professional career. I was in the sort of the cyber parts of the Israeli army, uh, did that for about four and a half years, and then went into a startup in the AppSec space that got acquired by another startup that got acquired by IBM. I moved to Canada in the process, I'm Israeli, sort of moved to Canada in the process, left IBM to found a web performance startup, a company that's sort of more in the, in the DevOps space, you know, making websites faster. And, and so I, at that point, I kind of had You know, shy of a decade of sort of application security experience, trying to get people to appreciate that it matters, trying to shift left, you know, get developers to embrace it, leaving them, got my entrepreneurial of founding startups experience going with Blaze, which ran for about, you know, two and a half years, maybe, uh, in and around that, and sold that to Akamai, where I was CTO for about sort of three and a half years and moved with them to London. So that's kind of my life story in short. And, and during the sort of the blaze days, the sort of the, uh, the performance days, I was part of the first wave of DevOps and sort of the first kind of seminal presentation that velocity and such about how it sort of is different than the waterfall approach and the cultural revolution that came with that. And so Snyk …

AI assessment note: “Snyk was... a bit of the combination of those journeys.”

Q How likely is that the concentration of these platforms being the sole providers or kind of few providers To really dominate the space. Is that like a 10%, like a 50%?

A Um, I, I think there is a, a pretty high chance that we're going towards this path. Ease of use of software development is already, you know, amazing, and you're seeing platforms like, ah, Vercel, for instance, you know, make it very easy to generate applications and go end to end with them. And that's great, because again, they represent a subset of the ecosystem and a specific type of application. Uh, when you think about GitHub now, for instance, going to actually deploy Applications. They're, they're going from the ADE to the deployment, and they're also the engine that writes much of that code. I think that's a pretty high probability, and the more you lean into the agentic magical creation of it, the less control that the developer has.

AI assessment note: “I think there is a, a pretty high chance that we're going towards this path.”

Q 100%. Uh, Larry Ellison said, to enter the frontier model race, you need a hundred billion dollars. Do you agree, or do you think we're seeing the democratization of cost to enter that race?

A Yeah, I don't think we're saying democratization of cost when it comes to coming to the models. Um, generally I agree. I think you need vast, uh, quantities or vast amounts of capital to be able to properly compete in the foundation models. There is, there are kind of two, uh, competing theories though. One is that scaling laws will continue to, to show themselves, and as a result of that, you'd need more and more money to make progress. Uh, and the general models, the generic, the global models, They will, uh, they will continue to grow, and they will eat everybody's breakfast. The counter argument is that you would actually really benefit from specialized models, uh, and so if the big guns are really trying to get, like, the massive models, and they're trying to scale, and they fail, which there are all sorts of rumors around how the latest sort of GPT-V and equivalent in Gemini and Anthropic and all that are failing with some tests, but if you, if that is correct, and they spend a lot of money and time on that, then the ones that are building, you know, maybe code-specific or robotic-specific, uh, models of it They may have a shot at being able to train with relatively small amounts. Um, I still think that's a short live though. If you, if you take a five year, a 10 year time horizon, those are just like, maybe you, you get some gain for a few years, but over time, like capi…

AI assessment note: “generally I agree. I think you need vast, uh, quantities or vast amounts of capital”

Q Why does everyone love cursor? Everyone loves cursor.

A Yeah. When you think about AI solutions as a whole, if I think kind of broader mental framework, the, uh, the solutions that are easiest to adopt right now are the ones that really don't require any change in how you work today, and they just provide you with some magic, and they don't really need you to trust the result. They Just need to work often enough, and so coding assistants, and Cursor specifically, are really, really nice, and Cursor has taken that further in, hey, I'm gonna make changes in various places, in the, in the code, and things like that, in multiple files, um, and they just make it very easy, very easy to eyeball, to say, this is correct, this is not correct, so you're not worried about them doing something incorrect, and it's, it's in your flow. You're just sort of coding away.

AI assessment note: “they just make it very easy, very easy to eyeball”

Q How likely is that the concentration of these platforms being the sole providers or kind of few providers To really dominate the space. Is that like a 10%, like a 50%?

A Um, I, I think there is a, a pretty high chance that we're going towards this path. Ease of use of software development is already, you know, amazing, and you're seeing platforms like, ah, Vercel, for instance, you know, make it very easy to generate applications and go end to end with them. And that's great, because again, they represent a subset of the ecosystem and a specific type of application. Uh, when you think about GitHub now, for instance, going to actually deploy Applications. They're, they're going from the ADE to the deployment, and they're also the engine that writes much of that code. I think that's a pretty high probability, and the more you lean into the agentic magical creation of it, the less control that the developer has.

AI assessment note: “I think there is a, a pretty high chance that we're going towards this path.”

Q Do you like competitive markets? I just had this debate internally with the investing team, and I was just like, I don't want to be in the 50th note-taker for wealth managers, and they're like, yeah, but that shows that it's a space worth going after.

A Yeah, I, I don't love them. I, I think it depends on the levels. I think a market of one is not good because, you know, often, oftentimes there's a reason, there isn't that, so there's nobody else in that domain, and you have to be careful. Um, I think a market of five or 10 companies is actually pretty good. That's healthy, everybody's pushing along, people are You know, raising awareness for you. I think when it's a market of 50 or a hundred, again, you could be amazing, but it's just everybody gets a few of the dollars in the market, and you have to really be, kind of, heads and shoulders above the rest to be able to break out. Um, so I, I don't love those. If you are going to invest in those, you really need to think about massive operational excellence. The equation changes, and you need to not just find the best product teams, But you need to find the best sort of company builders, maybe the best GTM builders on it. You need different perspectives.

AI assessment note: “Yeah, I, I don't love them. I, I think it depends on the levels.”

Q Why does everyone love cursor? Everyone loves cursor.

A Yeah. When you think about AI solutions as a whole, if I think kind of broader mental framework, the, uh, the solutions that are easiest to adopt right now are the ones that really don't require any change in how you work today, and they just provide you with some magic, and they don't really need you to trust the result. They Just need to work often enough, and so coding assistants, and Cursor specifically, are really, really nice, and Cursor has taken that further in, hey, I'm gonna make changes in various places, in the, in the code, and things like that, in multiple files, um, and they just make it very easy, very easy to eyeball, to say, this is correct, this is not correct, so you're not worried about them doing something incorrect, and it's, it's in your flow. You're just sort of coding away.

AI assessment note: “the solutions that are easiest to adopt right now are the ones that really don't require any change”

Q What do you think is the biggest mistake that founders make when they consider seven powers?

A Well, most of them just don't consider seven powers, right? They, they think about things a bit more loosely. But I think, uh, people are unwilling to pick. They think this is important, and this is important, and this is important. And so they end up under-investing in the things that matter most. Uh, and so especially in the context of success, and you know, we've done this at SNCC a bunch of times as well. I'm not sort of claiming, ah, innocence here. At some point, you sort of feel like the world is your oyster. You know, you can do a lot of different things, and you, you go into them. So at the beginning, it's about, you know, Product market fit. It's not about powers. So if you actually over rotate on powers, that would be the mistake. Um, over time, you know, as you get something that is successful, I think powers are important because they help you pick the next thing to do. They help you ask, okay, if you're going to expand into X, right, add another product or expand an audience, which of your powers, like the best question to ask is, which of your powers help you in that expansion? If the answer is none, Then you really should pause and reconsider because basically you're saying, I'm going to go into those areas and I'm going to compete on operational excellence merits alone. Uh, and so if you don't even know what your powers are, pause and go off and have a conversa…

AI assessment note: “So if you actually over rotate on powers, that would be the mistake.”

Q spent time in the Israeli military, and I, I think it's AC two, 100. Yeah. Yeah. He said, and I, I used to have the same question. There is an unparalleled amount of very successful entrepreneurs who come out of this, you know, unit from the Israeli army, What do you think it is that breeds this level of success of entrepreneur within this kind of concentrated group of people?

A Yeah, I think, you know, there's probably a lot of aspects to it. I'd say at the core in Israel, thinking outside the box is the default. And so in general, in Israel, there's an element of, uh, lack of respect to the status quo and, uh, and kind of willingness to try things out. So I think that's the starting point. And I think what the army does is, uh, it's very good at filtering a select group of people, uh, that have certain aptitudes, you know, specifically maybe, you know, technical depth or sort of initiative and bring them together and put them in a high intensity. So surrounding and, And you learn that everything is possible, uh, in that surrounding because there is a task to do and you have a bunch of like high caliber individuals around you and it needs to get done. There isn't really the option of not doing it. So you bang your head against the wall and you do it enough time. You learn that sometimes you break the wall and you just sort of get a little bit in that habit. And then once that's sort of, uh, uh, kind of conditioning maybe happens, they end up acting a little bit like the Ivy leagues in sort of the U S in which, uh, someone got out of the army a couple of years before you, they go off, they reach out, you have this diploma of Uh, ability of potential, you know, from the army and some mileage, uh, and they pull you out. And so I think that creates a cert…

AI assessment note: “what the army does is, uh, it's very good at filtering a select group of people”

Q We mentioned kind of the, the initially small market that you served in the early, early days. How important is being first to market, do you think?

A I think first to market is, is poorly defined. You know, like what is first to market? You know, was sneak first to market? Sneak wasn't first to the AppSec market. You know, it was very, very, uh, uh, well established. I was part of the players, you know, in the AppSec market, you know, in, in, you know, back in the early 2000. And so I think it's not well defined. I think what does matter is being a leader in a market and having some gap. And, you know, to do that, you have to have something that is differentiated in an area that matters. If you're doing something that's a little bit more wild, a little bit more different, so if you're first to market with that approach, uh, and you successfully execute on it and, and kind of win some order, then you have differentiation. And being differentiated in a market, that matters. Uh, and so it really is just about, about leadership and about differentiation more than about time. Being first to market is just one way, sometimes, to achieve that.

AI assessment note: “it really is just about, about leadership and about differentiation more than about time.”

Q the biggest challenge I see is one of kind of horizontal product marketing or messaging, which is when you are a notion, when you are a retool, when you serve Such a breadth of use cases. How do you effectively message in product market? What would be your advice to founders who actually serve a very broad customer base from dentists to accountants to developers with a very horizontal tool?

A Well, you have to choose. You can't, you can't be everything to everyone or you'll be kind of pretty crap at all of it. Your platform can have a vision, has an, have an aspiration of, you know, being everything to everyone. But it has to, it has to have a specific subset of users, a subset of the sort of the market for which you're amazing at the beginning. And, you know, there's a variety of reasons for it. On the product itself, it's because almost all of these problems are more complicated than you think they are. So as you unravel it, and as you kind of really think about the customer's entire use case, then you learn that there's a lot more that they need to build. But even beyond the product, it has a go to market element to it. You know, you want to find A group of people that talk to one another. You don't like, that's, that's the whole idea of kind of getting a certain flywheel is, you know, you get a certain momentum. So if you're only in the, you know, node.js ecosystem technologically, then, you know, that community, you know, they, they talk about you, you're at an event, you hear about it from multiple people, a person that moves from one company to another brings you along, you know, but that's also true for HR software and HR leaders talk to one another. It's true for sort of, you know, finances, it's true for all of those. And so you have to, you have to pick a…

AI assessment note: “Well, you have to choose. You can't, you can't be everything to everyone”

Q a hundred K an arrow after several million dollars burnt and several years. And honestly, as an investor, I'm going, oh God, why didn't they just give me my money back or give up or do something different? This is not fucking working. Um, what do you say to those founders who's been through it and how do they know whether to keep going or actually just, it's not why.

A Just call it a day. I think you have to, you have to have an understanding. To me, it comes back to that sort of first principles thinking. And so, you have to break it down and say, why is it not working? If, if, if the answers are only, well, if only I built this feature, if only I, like, talked to that person, then I, I think you're missing something. You know, for us, I think there was, pretty quickly, there was a deeper understanding of saying, uh, our challenge was, you know, developers like depth, and security needs breadth, and so we built this amazing product for the Node.js surrounding, and the Node.js developers wanted this, and eventually went security, but we didn't really care Uh, or we didn't give any time to security audiences and what their needs are. And once you started talking to them, you understood a few tactical things they needed, which were important and we innovated for, but also you understand that security, they can't have every director of engineering use their own sort of security tools. They need to be able to govern a security concern across. And so they need breadth. They need a certain amount of coverage. And so we were on this path of saying, okay, we need to broaden the, uh, technology stacks that we support. Uh, and so we had a certain theory for it and we were proving it out. So I think if you're just churning, uh, if you're just trying to …

AI assessment note: “You have to have a theory of change of, like, why, what is it”

Q Do you agree with we're a family, not a team, or do you think it's a team, not a family?

A I think it's a team, uh, but I think teams can get awfully intimate. You know, I think it's okay. It's a team that is on a mission and, you know, what type of team is it? Is it sort of a commander unit sort of, you know, stuck in some format? Is it sort of a set of explorers kind of going to Antarctica and doing it? It's not a team as in, you know, a group of friends who met for a basketball game kind of on the courts and kind of went back home. It's a team that is all in together. Uh, and I think that's sometimes that's a more intimate and sort of close knit group than a family. And so making moves like, you know, letting someone go or, or quitting, if you're sort of one that goes, they can be awfully emotional and awfully personal. Uh, I do think it is a team, you know, because you, you can't fire a child, you know, and you can fire an employee. You can't quit from your family. You know, I know many would want to. Uh, and so it's, I think it is a team, uh, but it doesn't make it any less intimate.

AI assessment note: “I think it's a team, uh, but I think teams can get awfully intimate.”

Q spent time in the Israeli military, and I, I think it's AC two, 100. Yeah. Yeah. He said, and I, I used to have the same question. There is an unparalleled amount of very successful entrepreneurs who come out of this, you know, unit from the Israeli army, What do you think it is that breeds this level of success of entrepreneur within this kind of concentrated group of people?

A Yeah, I think, you know, there's probably a lot of aspects to it. I'd say at the core in Israel, thinking outside the box is the default. And so in general, in Israel, there's an element of, uh, lack of respect to the status quo and, uh, and kind of willingness to try things out. So I think that's the starting point. And I think what the army does is, uh, it's very good at filtering a select group of people, uh, that have certain aptitudes, you know, specifically maybe, you know, technical depth or sort of initiative and bring them together and put them in a high intensity. So surrounding and, And you learn that everything is possible, uh, in that surrounding because there is a task to do and you have a bunch of like high caliber individuals around you and it needs to get done. There isn't really the option of not doing it. So you bang your head against the wall and you do it enough time. You learn that sometimes you break the wall and you just sort of get a little bit in that habit. And then once that's sort of, uh, uh, kind of conditioning maybe happens, they end up acting a little bit like the Ivy leagues in sort of the U S in which, uh, someone got out of the army a couple of years before you, they go off, they reach out, you have this diploma of Uh, ability of potential, you know, from the army and some mileage, uh, and they pull you out. And so I think that creates a cert…

AI assessment note: “what the army does is, uh, it's very good at filtering a select group”

Q the biggest challenge I see is one of kind of horizontal product marketing or messaging, which is when you are a notion, when you are a retool, when you serve Such a breadth of use cases. How do you effectively message in product market? What would be your advice to founders who actually serve a very broad customer base from dentists to accountants to developers with a very horizontal tool?

A Well, you have to choose. You can't, you can't be everything to everyone or you'll be kind of pretty crap at all of it. Your platform can have a vision, has an, have an aspiration of, you know, being everything to everyone. But it has to, it has to have a specific subset of users, a subset of the sort of the market for which you're amazing at the beginning. And, you know, there's a variety of reasons for it. On the product itself, it's because almost all of these problems are more complicated than you think they are. So as you unravel it, and as you kind of really think about the customer's entire use case, then you learn that there's a lot more that they need to build. But even beyond the product, it has a go to market element to it. You know, you want to find A group of people that talk to one another. You don't like, that's, that's the whole idea of kind of getting a certain flywheel is, you know, you get a certain momentum. So if you're only in the, you know, node.js ecosystem technologically, then, you know, that community, you know, they, they talk about you, you're at an event, you hear about it from multiple people, a person that moves from one company to another brings you along, you know, but that's also true for HR software and HR leaders talk to one another. It's true for sort of, you know, finances, it's true for all of those. And so you have to, you have to pick a…

AI assessment note: “Well, you have to choose. You can't, you can't be everything to everyone”

Q kind of reversion back to a world of bundling where everything is just cheaper. You will probably give up your calendar and go back to Google Calendar if you are in a large organization, as an example. And I, Not picking on Calendly, but just an example. Um, do you agree with that reversion back to bundling? And how do you advise founders then who are in an unbundled world?

A It's always a bit of a balance, you know, between them. And so, um, best of breed products for the point activity that they provide are presumably better, their best of breed. And so they will have the individual, uh, or the specific small unit, uh, provide value while, uh, uh, Presumably the sort of the platform solutions or the broad solutions, you know, the idea is that their overall value will be better. And so even if they're sort of on, on every point case, they're only 80% as good, um, then, um, you know, they will, uh, they will eventually provide more value to the organization. So it does indeed come back to, like, who is making that decision. I think right now there is a lot of platform consolidation. You know, I will admit that Snyk is benefiting from that, you know, now that we have the breadth. But, uh, but I think a lot of it is from, Uh, just from, from cost savings perspective, you know, single vendor relationships, uh, things of that nature. But I think there are ways to build a platform that may actually makes it truly better in total if you make your products work together. Um, and so I, I think it, it really, it again comes back to that notion of how much additional value, how differentiated you are. If you're a point best of breed product that is doubly as good, you know, it's twice as good As the generic product, you probably will still succeed, like compa…

AI assessment note: “I think right now there is a lot of platform consolidation”

Q I, I totally agree. Price wise, have the best companies consistently been the highest price when you look back?

A No, I mean, I think there is a correlation. So I think, I think it comes back a little bit to the sort of the founder's ability to sell versus their ability to raise money, right? If you can articulate the opportunity very well, uh, then oftentimes that translates both to your ability to sell it to investors and the ability to sell to customers. Um, but no, I, I don't, I don't think it correlates heavily. I think it's like slightly. Um, and I do think also companies can get themselves in trouble, uh, by raising too much money too early, uh, mostly because they end up sort of Pouring fuel on, uh, on areas that, you know, don't actually need to be accelerated because you don't actually know what you're doing. And so I, I think it's, I think it's dangerous. Now we're in a slightly different reality in which some companies that have raised at a higher valuation, they need to sort of mentally prepare that they're going to work their ass off for another sort of two years now, uh, to basically get a flat round, you know, because they got such a kind of overvalued Round. So if you're early, and you're pre-revenue, and you got a hundred million dollar pre-money valuation in the previous round, you now need to get some revenue, and you need to work on it, and hopefully in the next round you've earned that sort of a hundred million dollar valuation.

AI assessment note: “No, I mean, I think there is a correlation... but no, I don't think it correlates heavily”

Q How has being a father changed the way you operate and lead?

A I find that the analogy of the company is your baby, you know, your startup is your baby, very apt. And I think one of the things you learn, I have two kids, is, you know, when you have one child, and you want to accommodate their needs, uh, then it's really about Like, you know, they want whatever, and, and you need to either, like, absorb it and give them or not. When you have two children, you realize you're in a position which you have to, you know, one child's desires might come at the expense of the other, and you have to actually teach them to, you know, do the balance and do what you think is communally best. And I think it's the same kind of in the company, you know, clearly it's adults and not kids, but you kind of learn over time that you can't please everyone, and I want everybody to love me, and I think many people do, but, um, you know, at, at some point when you have enough people, You're not gonna, like, there's gonna be some people that are unpleased, and you, you need to do the things that is in the, in the kind of the greater good, in the good of the sort of the, the broader family, even when you still think about it as a family, and even when those are hard moves to make.

AI assessment note: “you kind of learn over time that you can't please everyone”

Q What's the most contrarian or unorthodox advice for founders listening?

A I think founders should look for ideas that they need to work to convince people, ah, are useful. Like, you need to find something that people don't immediately believe. Because when you, when you pitch them things and everybody's like, oh yeah, that would be awesome, there are basically a thousand other companies figuring out the same thing. And you have to have something that's a little bit harder to understand that really requires some depth of thinking or a different angle. And that is very valuable if you're successful, if you're, if you're right about it. Otherwise, you're just going to get lost. It doesn't matter how good you are. If there's a thousand other companies doing the same thing you are doing, it's going to be very, very hard for you to succeed.

AI assessment note: “founders should look for ideas that they need to work to convince people”

Q Dude, I, I always learn from ours. Now, I've got a little bit spicy, and I want to start with, like, a quick fire on what people have said and how we think about it. Now, Masa Sun said, NVIDIA is undervalued today. Agree or disagree, and why?

A I think there are Really three questions in one, in that one. Uh, the first one is, is the market NVIDIA is in, you know, going to continue to grow, and I think that is absolute yes. You know, the, uh, semiconductors for AI, no doubt, it's gonna grow. I think there's gonna be a lot more, there are gonna be a lot more players in that space, but, uh, I think the second question is, how much would NVIDIA capture of that market? I think they are going to continue to dominate. I, I don't know percentage-wise, but I think they're doing some brilliant things like, Taking advantage of their momentary, uh, lead, right? Not that momentary. They have, you know, quite a substantial, uh, hard-to-capture lead, but they know that the clouds, for instance, have distribution advantages, and so they're building a cloud. They're using their semiconductor advantage. So I think they will continue to be, like, the market leader by a margin for a long time. I think the third question is, what do you think about, what is it now, a 35 X multiple on these revenues? Uh, that one's a bit trickier, because it, it really isn't a question of would they grow. The question is, uh, should you put that money into other stock, and would they grow faster? That one's a bit harder for me to answer.

AI assessment note: “I think there are Really three questions in one, in that one.”

Q Do you think they have the muscle to compete there now? They don't have the product shop. I don't think they're going to do it.

A I think they have the tech jobs. Uh, I don't think they have the product jobs, but I think they have the advantage of such, like, incredible distribution and access to the users that they don't actually need to invent what perplexity is doing. Uh, they can copy it. Now, at the moment, I don't think they're executing super well. I do think that on the Why didn't they just buy it? Search side, they're actually like doing better than they are on sort of the Gemini and many of the others, but their core technology is still pretty good. And I think buying it is, and I guess we'll sort of see the Trump administration, but I think it's still going to be pretty hard, uh, from a, from an antitrust perspective.

AI assessment note: “I don't think they have the product jobs, but I think they have the advantage”

Q The numbers are bonkers, or the timing with which the value should be created is bonkers?

A Well, I think a lot of AI budgets at the moment are, are very, um, uh, kind of non-resilient, right? They're, they're coming in, people are spending money, they're trying things out, and they expect a lot from them, and I think in the long run that would be correct. But it's hard to think that people will adapt, that processes, that companies, that, you know, the way that would work will adapt quickly enough to really return something in, in the periods of time. And so there will be some amazing winners, but yeah, I think a lot will, will go sideways. I think the biggest one also is all of these tiny startups where there's like a thousand, I think in some cases there might be even 10,000 companies doing the exact same thing. So it almost doesn't matter how good they are and how good the use case is. A lot of that money is just that redundant. You know, a lot of these Companies are building the same thing, and so that would surely, you know, a lot of that is waste.

AI assessment note: “hard to think that people will adapt... quickly enough to really return something”

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 want to have good reserves, so you'd be able to, to run the distance”

Q Do you think they have the muscle to compete there now? They don't have the product shop. I don't think they're going to do it.

A I think they have the tech jobs. Uh, I don't think they have the product jobs, but I think they have the advantage of such, like, incredible distribution and access to the users that they don't actually need to invent what perplexity is doing. Uh, they can copy it. Now, at the moment, I don't think they're executing super well. I do think that on the Why didn't they just buy it? Search side, they're actually like doing better than they are on sort of the Gemini and many of the others, but their core technology is still pretty good. And I think buying it is, and I guess we'll sort of see the Trump administration, but I think it's still going to be pretty hard, uh, from a, from an antitrust perspective.

AI assessment note: “I don't think they have the product jobs, but I think they have the advantage”

Q get you. You mentioned that kind of, you have to get good at fundraising. Do you believe that the founder has to fundamentally embrace and be brilliant at fundraising as founder and CEO? I was on a panel the other day, and they were like, no, you don't. That's not a core job. It's about building the business. And I said, that's bullshit. Fundraising is part of building the business.

A Well, only if you want money. I think it's a, I mean, it's hard to sort of think about how it's not a competency. It shouldn't, I mean, if you're an investor and you primarily invest in people who are good at fundraising, that's going to be a fairly short-lived strategy. You know, you want to, uh, prioritize company building, product building, business building abilities, but if you cannot raise money, then the company cannot survive. You know, the whole idea of the growth industry is you raise money and, but also like raising money, you know, I, I, I like selling and I don't like deal making, you know, like I, I love getting people to fall in love with an idea that I have, with a concept, with something I'm building, you know, with a perspective I have. Uh, and so like that's selling, that's really getting someone to sort of believe the promise, believe the potential, believe in you. And I think that's very exciting. I separate that from the sort of the deal making, you know, the sort of, okay, and how much are you going to pay for this? You know, what is the, uh, and I think that aspect, you know, maybe, maybe Uh, you can, you can actually be a very successful founder and not be very good at it. You might be leaving some percentages on the table. But I think if you're not good at selling, if you can't, like, get your idea through, if you can't, you know, empathize enough with…

AI assessment note: “if you cannot raise money, then the company cannot survive.”

Q Penultimate one, what would you like to change about the world of venture?

A Venture companies would never invest in venture companies. There's nothing scalable, there's no tech, there's no, uh, there's no real kind of, uh, you know, scalable assets in venture today. I think it's like a lot of, uh, most of it is Is like law firm style, you know, uh, you know, a bunch of smart people that are relying on hiring additional smart people. And the little tech that is good, does get built is all about deal flow. It's all about sort of finding investment companies. And I would love to see venture investing in tech that makes their companies more successful, that makes them more scalable, but in general, kind of make it a bit more sort of systematic. And I, I, I believe, I don't know sort of for sure that there are sort of Inklings of this that are happening, but I think that can be a disruptive force in the, uh, in the world of venture.

AI assessment note: “I would love to see venture investing in tech that makes their companies more successful”

Q get you. You mentioned that kind of, you have to get good at fundraising. Do you believe that the founder has to fundamentally embrace and be brilliant at fundraising as founder and CEO? I was on a panel the other day, and they were like, no, you don't. That's not a core job. It's about building the business. And I said, that's bullshit. Fundraising is part of building the business.

A Well, only if you want money. I think it's a, I mean, it's hard to sort of think about how it's not a competency. It shouldn't, I mean, if you're an investor and you primarily invest in people who are good at fundraising, that's going to be a fairly short-lived strategy. You know, you want to, uh, prioritize company building, product building, business building abilities, but if you cannot raise money, then the company cannot survive. You know, the whole idea of the growth industry is you raise money and, but also like raising money, you know, I, I, I like selling and I don't like deal making, you know, like I, I love getting people to fall in love with an idea that I have, with a concept, with something I'm building, you know, with a perspective I have. Uh, and so like that's selling, that's really getting someone to sort of believe the promise, believe the potential, believe in you. And I think that's very exciting. I separate that from the sort of the deal making, you know, the sort of, okay, and how much are you going to pay for this? You know, what is the, uh, and I think that aspect, you know, maybe, maybe Uh, you can, you can actually be a very successful founder and not be very good at it. You might be leaving some percentages on the table. But I think if you're not good at selling, if you can't, like, get your idea through, if you can't, you know, empathize enough with…

AI assessment note: “if you cannot raise money, then the company cannot survive.”

Q We mentioned kind of the, the initially small market that you served in the early, early days. How important is being first to market, do you think?

A I think first to market is, is poorly defined. You know, like what is first to market? You know, was sneak first to market? Sneak wasn't first to the AppSec market. You know, it was very, very, uh, uh, well established. I was part of the players, you know, in the AppSec market, you know, in, in, you know, back in the early 2000. And so I think it's not well defined. I think what does matter is being a leader in a market and having some gap. And, you know, to do that, you have to have something that is differentiated in an area that matters. If you're doing something that's a little bit more wild, a little bit more different, so if you're first to market with that approach, uh, and you successfully execute on it and, and kind of win some order, then you have differentiation. And being differentiated in a market, that matters. Uh, and so it really is just about, about leadership and about differentiation more than about time. Being first to market is just one way, sometimes, to achieve that.

AI assessment note: “Being first to market is just one way, sometimes, to achieve that.”

Q Do you have any advice for founders having been through that then?

A I think you have to be careful around how quickly you lean into a preemptive notion. Preemptive and the idea of sort of VCs coming along and sort of saying, hey, Maybe I want to, I want it so bad I will pay up ahead of time. It's very, uh, ego boosting, you know, and it feels very good. Uh, and, and then you also know that you don't want just one horse, you know, like you don't want just sort of, you know, one bidder. And so it's very easy to say, why don't I talk to everybody now? And when you do that, you're sort of going a bit all in, and, and you, I think you can really burn, kind of, you leave some scorched earth. I think for us, if it wasn't for Ed Sim and Bold Start and, you know, sort of like him and Elliot being believers, And they basically topped us up. They took, we did get some offers. We just didn't get like the right offer from the right investor. Um, and, uh, and I had a whole personal thing. My father-in-law passed away literally kind of during the same sort of week on it. And I was sort of, you know, thinking of whether I take VC calls from the shiva from the sort of the, uh, it was, it was an intense period. Uh, and they stepped up and says like, look, we see it. We believe it. We think you're sort of on the right path. Why don't you take this sort of smaller, this bridge check, uh, on the best valuation that you've received in this sort of term sheet, but a …

AI assessment note: “I think you have to be careful around how quickly you lean into a preemptive notion.”