The Ledger, every show

“We don't think about reserves. Period. Barely. We're very oriented towards our initial investment, and in that moment, you know, we are more ownership sensitive than probably most other firms. But then after we invest, we are 100% aligned with whatever objecti…”

“And this is sometimes the weaknesses that ex-operators have when they transition into investing is thinking, oh, I can do this and I'm going to dig in on, in the company and get, you know, help them with growth or help them with whatever it may be. And it ends…”

“What AI enables is actually a very different unit of work that you sell, which is doing the work. And so you're almost a software company that looks like a services business. That is able to sell like the full work product that the outcome, as opposed to selli…”

“And this is very disruptive to incumbents because incumbents are used to thinking about selling per seat and pricing per seat based on the cost of the headcount. But if instead you're selling something that doesn't require a seat, that is like a very disruptiv…”

“I focus on the application layer because I do think that's where a tremendous amount of value ends up being captured and created.”

“Each successive model is going to be more and more expensive. That suggests a world where you're going to have an oligopoly.”

“What happened with Be Real in my estimation is that they did capture that why now of the authenticity But they could never earn the right to enough minutes for a consumer because the consumer was then having, you know, the dopamine hits of, you know, the most …”

“If it's existing employees and their existing workflows that, you know, AI technology is going to be sustaining and it's going to drive tremendous market cap for the incumbents.”

“What AI enables is actually a very different unit of work that you sell, which is doing the work. And so you're almost a software company that looks like a services business that is able to sell like the full work product that the outcome, as opposed to sellin…”

“Part of the opportunity with selling work as an AI startup is that the market for that could actually be 10 or 50 X bigger than if you were selling software. Why is that? You're selling a 95% productivity improvement instead of a 10% productivity improvement. …”

“Those are going to progress, but they're not going to progress with the same level of focus and ambition as the core foundation model that OpenAI is working on. They might progress as beneficiaries of that core work, but it doesn't have the same level of focus…”

“So that something coming out, you know, an open AI, they're just not going to build that same level of workflow, the same level of integration. And so it's going to be, there's, there are, there's plenty of work to be done. That's beyond the model itself.”

“If you want a model that's on the frontier, that's going to be closed source. Now, look, every, as I mentioned, every month it feels different with what Meta's doing with Llama, that may actually fundamentally change the game. If Meta is willing to make that h…”

“In those cases, someone said this to me once, and it really hit me, is like, if you like everything but the price, you pay the price.”

“But at the end of the day, if you're not doing that action, you're not really a user to the product. And that's why it's, you know, the MAU thing doesn't really mean anything It's really looking at, I think, of users completing the core action.”

“The challenge when you have pure anonymity is that you don't have that accruing benefit or mounting loss that, that happens. I don't know if you ever played with secret, but it's similar to Tik TOK or something like that. These are the types of experiences whe…”

“GMV is really actually a vanity metric. It doesn't get at the core of whether you're building enduring value. It's like very clear. And there's plenty of examples I could give where there are companies that had incredible scale and still were disrupted by a st…”

“When you're building a marketplace, you actually, there's a healthy amount of churn that you want on the supplier side. Because there are just going to be suppliers who aren't going to create a great experience for the buyer, and you can't do anything about th…”

“The only way to build long-term enduring value with a marketplace is to corner the demand side.”

“So you don't write a memo. And it's because the memo, you know, when you're, a memo really is a vehicle to, you know, obviously give background on a company, all the work you've done, but it is also a little bit a pre-sell before the company comes in to presen…”

“And the thesis was is that sevens kill companies. And what that means is that, you know, when someone is a four, you just know they're not doing the job, they're not up for it, and let's, let's take them out of the system. But the problem with the seven Is tha…”

“That's so, so wrong, because things rarely come to a vote. It's always about what's that conversation around the table. And someone who has a seat at the table is participating in whatever strategic conversation you're having can really change the direction of…”

“At Benchmark, our model of investing is that we have decided that we're not going to scale our business. You know, we haven't grown our fund size, and it's just five general partners right now, and it's a kind of this rare structure of an equal partnership. An…”

“You know, I would say Postmates could be executing a 10 X DoorDash's execution, but because DoorDash had a strategy that let them just be, you know, so much better than any substitute because it's a lot better to be Better. It's a lot easier to be better than …”

“I remember early on at Pinterest, there was a time when Facebook acquired Instagram. We were both growing exponentially. Pinterest and Instagram were growing exponentially at the time. They acquired Instagram, and then they shut Pinterest off the newsfeed. So …”

“The challenge with chasing GMV is that it actually points you away from that place of dominance. Like it points you in the wrong direction because oftentimes, or actually not even oftentimes, almost always, the fastest short-term path to maximizing GMV is to g…”

“DoorDash in particular that was able to raise an incredible amount of capital, and they were competing against Grubhub and Uber Eats, both of whom were at that point public companies, and then were being evaluated by a completely different rule book in a way. …”

“This is one of the reasons why I think it's actually a competitive weapon for a startup right now to be underestimated from the outside, because the second that there are multiple competitors going after your opportunity, the unit economics just degrade becaus…”

“At Benchmark, our model is that we don't delegate any part of our job. We've tried not to scale our business and just be focused on scaling the founders with whom we work. And so that means that there isn't a talent partner that is doing recruiting calls for m…”

“Rounds are just happening so quickly right now, and to use the analogy I used before of speed dating, it just feels like It used to be that a round would happen over the course of a couple weeks, but now I just see things happening in a few days, and it is the…”

“When companies are able to raise a lot of capital easily, they naturally take on more of a growth orientation. Yeah, I kind of think of it as you can turn the wheel towards growth, and you, or you can turn the wheel towards profitability, and all these compani…”

“I would say the same feedback that your seed investors gave you on the step up from the C to the A, we're seeing the A to the B. And I've got to imagine it's the same for every subsequent round. It's just, if you have something that's working, I just continue …”

“Kind of the way I think about it is that when there is a company that has the potential for a clear network effect and something's really working so much so that you feel like that company can really get away from you in terms of growth, then paying what does …”

“And then what's different though, from ad tech is that, and it makes it even harder is that you're often investing in a white paper or a deck. There's no code or traction that you get to invest behind. The company often has, you know, over a hundred million do…”

“The trajectory right now is that increasingly investing in crypto is looking more and more like technology investing that we've always had. It reminds me very much of kind of the open source one point O era. And I just think this is going to look a lot more li…”

“If you want to build a truly mid-market, kind of, you know, I'm focused on businesses that will become large, enduring, multi-billion dollar businesses, and I think in order to build one of those, You either have to figure out how to give something away for fr…”

“Right now it feels like if you need a model that's on the frontier, you're going to be closed source.”

“New technologies, more often than not, are best served for the group of hungry up-and-comers that want to become the new incumbents. And so, you're going to see a class of companies that realize that if they're early adopters of this technology, they're able t…”

“B to B software has very rarely had network effects, right? What it has had instead is more economies of scale.”

“Without question, Ethereum. I, you weren't expecting that. I can see, you know, what, well, Ethereum, I mean, I remember I was at Greylock. And the ICO had just happened, I believe, or just closed. And I was reading more about what's possible with smart contra…”

“What I, what you realize when you look at social products is that there are almost always is this action, which I call the core action. Of that product that forms the foundation of the product. When a user completes this action, it's clear that they both under…”

“The test for me of whether you're building a product that has the ingredients to create a retentive product on a micro level, just at the user level, is that the product should get better the more you use it, and you'll have more to lose by leading it.”

“It was actually, it may have been the first algorithmic feed that was in a social product because suddenly your home feed wasn't just things, people that you followed.”

“Shashir Meta, who is the kind of CPO of YouTube, he reached out to me and he said, you know, that's what it was in the early days. But we started to realize that it wasn't actually our core action. And we did a lot of analysis On YouTube. And what we realized …”

“The more dominant a marketplace is relative to the number two in its space, the more profitable that business is.”

“I don't like NPS for this. And I have a whole blog post on this. I like Sean Ellis's question of like, how disappointed would you be if this product disappeared? And I think it's, if you have at least 40% of people Respond that they'd be like very disappointed…”

“If you have a million dollars and you spread that million dollars of go to market costs across 10 cities spreading yourself really thin. You have a competitor come in and guess what? They put a million dollars into one city. They're going to win that city.”

“Again and again, what you see, and I think a lot of this for new companies kind of leveraging large language models to build products is that focus on a constrained market to start is the way to win.”