AI startup

“So it does feel like there are a lot of AI startups who are going to run up against this problem of both data and distribution, but that said, there are particular niche applications where you can imagine a startup being able to compete because it's just not o…”

“And if you think about sort of the approach that most startups take to artificial intelligence today, they basically take the supervised learning approach. And step one, raise money so that you can go get a data set that's annotated, train your neural network,…”

“For example, if I look across AI startups, the ones that tend to be getting the most traction have taken AI and applied it to a vertical problem. They have access to a Priority data set, or they've done a specific sort of optimization, and now there's a vertic…”

“The second one, and it's the one that I tend to focus the most on, they actually understand what you can apply AI to. So they're like, you know, it's good for these things to solve these problems. They're taking that and they're applying it to an existing prob…”

“We've specifically seen that with founders that want to train their own models, right, which is extremely expensive, and you have to spend a large chunk of your funding just on compute capacity, right, and they often run with very small lean teams, right, that…”

“I think it's very hard to just kind of, like, think top down about where there's demand in the market. I think experimentation is really the way to go to generate ideas and to set up a, you know, a startup that's going to be able to build something really valu…”

“I think probably The companies that have gotten to profitability the fastest, maybe in the history of the firm have been AI companies or have been, you know, AI companies in the portfolio where the revenue grows so fast that it actually kind of runs out ahead …”

“I think if you were a startup, And you were like, okay, in two years I can get as good as GPT-IV. You shouldn't do that. That would be a bad mistake.”

“Right, which is like, and then once they get the chips, we're not gonna have enough power, and once we have the power, we're not gonna have enough cooling, and so, so, so, so there are many, many steps.”

“I think the vast majority of things that we're seeing right now just monetize via subscription. So it's actually very clear how they make money. And the DAU thing is actually just as useful today as it was before, but it's like the money part is almost automat…”

“I think it's actually the exact same metric. It's not like, oh, it's AI, so therefore future profits don't matter. It's like, it's the present value of future profits. And that really comes down to like, how many customers do you have? Do you retain those cust…”

“Another way to think about it is what sorts of operational work scales linearly as the company grows, meaning it's always going to be a consistent cost on the company. And, you know, as you get more customers, you have more customer support requests or As you …”

“Eventually we're turned into a product that need to be retained, that need to be used every day, but we're still in this early stage of AI where I think momentum is the moat.”

“And so fundamentally they sh they're using capital as a weapon to kill competitors. To gain market share and they'll figure it out down the line. And I think that's like, honestly, it's a pretty good bet in this moment.”

“Actually, one of the things that's really fascinating is you'll see companies that are actually, their pricing model is like a cost plus model in this moment, where basically they just fix their margin. And then they basically say, look, we just, we're going t…”

“I think that's a huge mistake that a lot of the early stage companies can make is you go out there and again, like, you know, you're like, I don't want to charge for implementation. Like these big companies, they won't like that. Like, you know, they just want…”

“Many of the politicians who are put, were pushing concepts that would have really put a stranglehold, I think, on AI startups and would have led to more monopolization of a market that already tends toward monopoly because of the high barriers to entry already…”

“Licensing, nuclear style regulation like flops, threshold based disclosures, really complicated transparency regimes, impact assessments, audits, which are a bunch of ideas that we think are not going to help protect people and are going to make it really hard…”

“We always look at the gross margins, and it's become like a badge of honor for them to actually have low gross margins, because we're like, oh my god, people are actually using your AI stuff. But if you show up, and you're like, I'm an AI company, and it's lik…”

“Momentum has the highest chance of getting you to gravitational scale where you do have a moat. And if you don't do that, by contrast, you're just gonna get eaten alive.”

“So I think that will probably play out the same way here, because you just can't have a market where you have everybody lost leading and nobody's big enough to get any kind of scale effects.”

“There is a strategy that we think is very interesting, which is instead of having a sales team, you buy one.”

“The top companies that we've seen you know, have gotten to ten million, then a hundred million, like, Four times faster or something like that.”

“I think for startups to win, I think you need all three and that's just in the head-to-head stuff.”

“This crop of companies, I would say is more impressive than prior crops of companies, partially because the demand for their products is so high.”

“There are a lot of categories where there never was an incumbent software company because the only job to be done was, like, actual human labor. And that's really exciting because now you don't have to worry about, like, oh, shoot, these guys are gonna come in…”

“And like, what's crazy is AI, A, solves the distribution problem. It just solves the demand problem. And B, these companies are able to raise so much money that they're actually on competitive footing with like the Microsofts and the medicine and the Microsoft…”