Incumbents

“So I kind of think the same rules apply, you know, the battle between every startup and incumbent comes down to whether the startup gets the distribution before the incumbent gets the innovation. But with many changes, one change is the incumbent can get the i…”

“And now I actually think with the power of agents and AI broadly speaking, it's much closer to Goliath versus Goliath. Like, I think, but maybe the startup is like a mecha Goliath that is like vastly enhanced by the power of agents and AI, and you know, the la…”

“Whenever somebody says this is so scary, everybody should have to come in and get a license from the government. I'm like, well, the government does a lot of things very well, but the one thing they're not great at is like understanding the very frontier of te…”

“You can make a billion dollars a year selling to incumbents, but you're probably not going to change some huge industry if the incumbents who are your main customers don't want the industry to change.”

“If you're already the market leader and you only have share to lose if you're already the incumbent, that's a really tough place to be because there's not really share to gain, there's only share to lose, and AI is a great way to for startups to take share fro…”

“I think in general, I think investors underestimate incumbents ability to change their willingness to change the motivation to change.”

“When you have this product cycle and you have a capable incumbent, what happens is they usually make their product better for their existing categories. So Microsoft will make a better word processor than they've ever made. Google will make a better search eng…”

“Every one of these markets. It's a race between the incumbents who have distribution needing to add product and the new guys who have product need to add distribution, right?”

“And we also believe, and we'll talk about it more, that it's unique and new, and it's not well suited for incumbents.”

“The battle of every startup versus incumbent is whether the startup gets the distribution before the incumbent gets the innovation, right?”

“So now you've got to compete with incumbents, foundational models, and new entrance. So competition becomes a primary risk. All of a sudden the ability to deliver incredible value is not nearly as hard as used to be, but The counter to that is competition is m…”

“Unless a company truly hits escape velocity and build a network effect or something else that's really defensible, usually incumbents can launch two, three years later and catch up.”

“In order for them to basically build a product that handles all of the complexity and permutations, they have to rebuild their entire data model and architecture from the ground up, which is the same thing that basically most incumbents have to do today, right…”

“I think security is going to benefit the incumbents. I think we're going to be worried that our agents are depositing our data in a hundred different places”

“We will be on a 10 to 20 year decline of incumbents who are unable and unwilling to adopt new tools because of data, because of permissioning, because of internal buying processes.”

“Because I believe that distribution matters a great deal. We're all building on largely the same models. The areas where you actually can have like true network effects is access to unavailable data or consumer network effects. Both of these typically sit insi…”

“One thing which every founder should capitalize on is that anything, any company that has stayed on for a long time, their technology is old. They are an old tech stack. And, ah, they, ah, you know, all the workers, especially the newer workers who are coming …”

“Ah, it is at the same time that, that we will have a carbon footprint that at one 10th of the incumbents today.”

“You have to imagine that someone somewhere in a garage or in whatever we work or whatever it may be, is thinking about how what you do as the incumbent is not good enough, is not delivering value to the customer. It's not easy to deploy. It's not easy to use. …”

“Incumbents have the advantage of a lot of data, right? But they also have the baggage that often the data is not very clean. So as you build your models, as you build your foundation models, et cetera, are you relying on good data or not, right? Whereas a star…”

“The innovation of Turbo Puffer is that it is almost a hundred times cheaper than the incumbents at the time to store that coordinate system.”

“So if you are the incumbent, you have an advantage because people are designing their models for your hardware. It doesn't even matter if there's a better architecture out there. It's not going to run well, so it's not a better architecture.”

“And they're not going to retool their entire internal engineering workflows to move at 10 X the pace. And so a brand new startup can go and do that and then instantly get the scale of a larger company.”

“Because I think incumbents are only going to be the agent providers for their existing install base, which means that there's going to be tons of opportunity for so many more agents that those incumbents aren't already selling into.”

“If you look at around the world, from Indonesia, to Brazil, to other countries, you find, even Mexico and stuff, you find that the incumbent in general, the chance of the incumbent winning has now gone up by more than 50%.”

“Usually I think what happens is in the early stage of a startup life, you're competing with other startups. And if you're way ahead, it feels great, but eventually if they're incumbents in your market, they come in and the faster you capture the market and mov…”

“It's not going to be the startups and the up and comers that provide the more personal cases to people. It's going to be the incumbents and the incumbents with enormous business models that can afford to make this stuff really low costs for the consumer.”

“Not having it, I think the risk is that if you have 50 different sets of regulation, and it won't even just be 50 as Freebrick said, it's going to be You know, all kinds of pet organizations that pop up in all of these states. What happens? I think what it doe…”

“So I think it's transformational, but that, the fact that there's no A new distribution might give an edge to incumbents versus, versus the new folk.”

“Like if you pick an idea that is like obvious to everyone, there's probably no alpha, right? A big company is going to go out and already beat you to the market, right? Because they have more distribution resources and capital than you.”

“If I was a number one or number two in a market and I was a startup, I'd consider merging with the other party if there were the two main startup players, because the real threat will be fighting the incumbents.”

“Like crypto is fundamentally disruptive structurally to the incumbents because it's a very hard leap for them to make.”

“You know, I'd actually argue that AI is kind of like mobile. It's not disruptive. It's great tech to be clear. It's important, but just as the internet, I would say that just as like mobile was just More internet and pervasive internet. AI is just like more te…”

“Up and coming startups that are built completely from the ground up on these kinds of technologies are going to just do stuff way faster, like much more efficiently, probably better for the end consumer as well. So any kind of incumbent has to rethink the way …”

“Incumbents, especially incumbents that no longer have their founders, incumbents are highly likely to underestimate the amount of structural change and they're going to have a hard time adapting to it.”

“The incumbents usually win. It's customer distribution.”

“This dismissive logic that if something were possible, industry giants would have already done it is the comfortable assumption incumbents have relied on throughout history, right until an outsider proves them catastrophically wrong.”

“I think what we could be getting wrong is like, maybe you kind of have to rethink the entire tool from the ground up to be AI native and maybe that matters versus like layering it into your existing product.”

“The thing I've changed my mind on is I'm less fearful that incumbents will be able to accrue most of the value. The reality is, like, it still early days in this game, and things could change, but thus far, the startups are outpacing, the focus startups are ou…”

“I think with these big technology waves, I think startups have a bit of a leg up relative to incumbents because they tend to be sort of more Self-actualize in terms of just like bringing those disciplines closer together. And in particular, I think entrepreneu…”

“In the history of technology investing that I've been involved with, if you're afraid of the incumbents, you should just punch out.”

“Many of these incumbents aren't going to evolve.”

“The problem is that every incumbent is gonna copy your product, they're gonna bundle it with their platforms, and then they're gonna kill the economics.”

“So I like, as I play both sides of this, but I, but in this particular case, I think the incumbents have a little bit more advantage than in most platform shifts.”

“For a large portion of the of the U.S. Population, it was very difficult to get a free checking account. Chime came along, enabled that to be possible, and put pressure on the incumbents.”

“Big companies are really limited in the risk, the amount of risks that they can take to like make their actual interface good for that specific thing. Cause they can't risk like pissing off their regular users. And that's a tremendous advantage for startups to…”

“I think that's going to be hard for the incumbents, and I think it's going to be a net benefit to the, you know, kind of the people that are coming in with new with new tools and new ways of doing things, and it's going to put pressure on margins which again i…”

“The incumbents were trying to say, all right, we'll give it to you for free. That's a great tactic. Big companies employ to try and kill new entrants. So if you can make sure that the first dozen customers that want to buy from the new entrants get your produc…”

“But if you see where we win most of our business, it's with the traditional businesses. So indeed, the incumbents, the banks, that's where volume comes from.”

“I mean, I obviously deeply agree with the fact that the incumbents are going to crush all of this. Right. And I think that's where all the money's going to be made.”

“I think if most of the benefit is on the cost saving side, then that's not really enough to disrupt large incumbent that has already kind of, you know, there's kind of like push their way through all the costs of gate of growing and distribution.”

“Most likely I think most apps will not have social graphs going forward and this will entrench incumbents even more.”

“If your product can be compared to the incumbents, you lose. You want to force a choice and not a comparison. You want to show up with something radically different that denies the premise of the rules. And inflections are the magical weapon that the founder h…”

“The great startups, they create movements, not so much by criticizing the incumbent, but by showing the weakness in the strength of the income. And then just saying to the customer, Hey, look, you decide.”

“All these like core workflow tools, Need to get rebuilt every five to 10 years. Why is that? Because the technology gets better, right? People all want, people always want the same thing. They want it to be beautiful. They want it to look like the tools that t…”

“The incumbents always try to make the new thing a feature.”

“I also think honestly as an incumbent you have a couple years to figure it out because you tend to have so much distribution that you can launch four years later and still You know, when, as it were”

“And in the internet wave, you could argue 80 or 90% of the value went to startups. And in mobile, it was the other way around. Almost all the value went to incumbents, and in part it was because it was an extension of access and UI.”

“Where a lot of the incumbents get stuck is they can't really cannibalize or put their existing product or platform too much at risk. And so they tack on AI features versus, like, reimagining what the experience would look like.”

“That is as much going to be an incumbent's game as a startup's game this time around.”