AI Native Companies

“I think the thought of SaaS demise is sort of overblown in my opinion, because for an enterprise you know, even though there are many, many tools around. They need regular cadence of update. They need regular cadence of services, which this AI native companies…”

“So that hasn't changed, but what has changed is I think we are going through a shift where there will be haves and have nots on the transition into being AI native. There will be companies that were originally, you know, a typical SaaS platform and do a great …”

“Because I believe that those who are AI native are going to zoom past most of you know, companies in the market, and I really think startups are in for a rude awakening, because I actually think that startups are going to have a very, very hard life ahead in t…”

“So I do think that the blended margin story for AI native companies tends to be worse. But if you look at the overall sort of form of distortion that's happening, it's a much better one than we had five years ago.”

“It's a disruptive moment in technology because the incumbent software players, their advantages all of a sudden start to look a little bit like disadvantages, and it doesn't mean they won't all pivot, by the way, but it opens the door for, I'll say, AI native …”

“Like if you think about however you define success for AI native companies, whether it's a hundred million ARR, billion ARR, pick one. There are like 10 companies like that today, today.”

“The AI native or AI forward companies are the least AI forward when it comes to interviewing at high end process.”

“There's some interesting Carta data around this cycle in AI, and there is a premium that AI native companies are getting, and it's more dramatic in the Series A and Series B.”

“At a hundred million ARR, the burn multiple falls to 0.4 X for AI native companies versus 1.6 for classic SAS companies. They're four times more efficient in adding ARR.”

“Host sales is 31% of AI native companies versus as low as 22% in traditional SAS.”

“Now we are moving into an era of consumption based pricing or outcome based pricing. I don't pay you per month. I pay you for what I use. And that's where this era is going, where I don't charge per user per month. I charge for the activity I do for you. I cha…”

“AI native companies, the ones we're all so excited about growing so quickly under a hundred million ARR. Have terrible free cash flow margins -126%. It's much worse. Non-AI companies are -56%.”

“One really interesting thing that's happening is lots of more AI native companies and newer companies are actually spending more than like bigger enterprises who are maybe not super sure about putting things into production, but we want more of them.”

“A lot of the challenge for many of the AI native companies I've seen Is that they could have, like, a very wide top of funnel, like, get all of this AI tourist traffic, you know, a lot of interest, a lot of, like, kind of, like, you know, early usage, but then…”

“AI native companies are going to be worth more than any SAS company ever has been.”

“The first thing I'd call out that seems, that sort of just jumps off the page is that the AI native companies are far outpacing their SaaS counterparts and you can see it in terms of new companies blowing past this golden metric of time to a hundred million of…”

“A lot of the biggest successes so far with AI native companies function in B to B spaces, but sell as though they're B to C companies like cursor can be bought by any dev.”

“The same thing is happening in AI. If you have heard about this term about the bolt-on AI versus built-in AI, cloud companies, established cloud companies are trying to build AI due to their architecture and complexities. And if they have to produce some AI pr…”

“The next generation of companies are AI native companies. They won't look like SaaS companies, so they will need a slightly different mindset.”

“We will look back and laugh at some of the excess, but I'm confident we will have, you know, a brand defining and likely trillion dollar consumer company come out of this. 10 plus enterprise software companies that are enduring, you know, public companies comi…”

“In fact, we tell our AI native companies not to lead with AI when they're speaking to prospective customers, because it's such a top of mind topic that it's a superficial indication of interest.”

“My new insight is there's going to be a lot of great AI native companies that are built on top of this new infrastructure. Let's call it like cloud two point O, which is this foundation models. These are the new backends that are going to power the most exciti…”