The Wisdom Wall
7 quotable lessons, heuristics and mental models. Every one is playable at the moment it was said. No fortune cookies allowed.
“So like we're, we're increasingly not limited by the architecture of the technology. And now we're just limited by like, can Jensen make these things cheaper? Um, can, can the, you know, can the engineers at open AI have more efficient model algorithms?”
“if you're like one click or two clicks removed from Sandhill Road and Sandhill's equally to probably blame at certain points, you're sort of like, oh, tech enabled, everything should all get a six or 10 X revenue multiple when the underlying economics of this business, you know, could be literally a hundred X…”
“I think that was the exactly right economic decision at the time. There was sort of a market share war. Um, you were, you were acquiring customers that maybe had a, a sort of a five or 10 year You know, kind of lifetime value curve, uh, associated with them, maybe even more. Um, and so of course you want to gobble up…”
“Coding is still working better than most other use cases. And it's because you basically have a workflow where you're in a text interface that is just linear, where most of the, the sort of, um, knowledge of that, of the, of the field is all public and open source for the most part and available for training runs. And,…”
“your gross margin will ultimately determine your operating margin. Um, there's almost no way that, that you can, you can kind of make those two, um, you know, kind of get out of sync. Um, and so if you're, if you're subsidizing something or, you know, or, or in just such a commodity business and you're, you know, 40,…”
“there are some of these functions that are so high leverage that if you just nail it, um, you know, the, the deal desk legal team who's, who's negotiating the contract terms. I mean, these things are like, they literally are, are trajectory defining in your cashflow.”
“one has a 90% retention rate or something. Um, which means, which means, um, that sales and marketing is required forever to refuel the customer base because of the churn rate of that product. And, and it means you'll never actually converge on, you'll never actually converge on, on cashflow at the level of a company…”