The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:22:35 · Rory O'Driscoll, Dev Ittycheria, Harry Stebbings
[00:22:35] S0: You ask an interesting question. Would you prefer someone to... A senior executive to leave and go to a direct competitor, but recruit no one or someone to leave and go to a totally different business, broadly in developer tools, but say, and recruit four or five of your top of his top execs? Which would you prefer to defend, the talent or the knowledge? [00:22:55] S1: It's a tough one. I think it depends on who that competitor was, and it was, like, my mortal enemy. I'd be more upset about the former. If it was another company and four or five people left, it is what it is, and, I'd move on. [00:23:08] S3: I would just love to maybe slightly move the conversation along because we mentioned the word loyalty. And, you know, when we hear the word loyalty, I just think of Vinyl Khosla, who led Factory Series C, led their most recent round, and then goes on Twitter. The wording was like struggling second tier competitor. Absolute demolition job of Mattan. I don't know what to say. Was he asleep in the partnership decision? Like, was he aware that he led the last round? I'm genuinely not saying that stupidly. I don't know if he was.
00:23:08 · Harry Stebbings, Dev Ittycheria
[00:23:08] S3: I would just love to maybe slightly move the conversation along because we mentioned the word loyalty. And, you know, when we hear the word loyalty, I just think of Vinyl Khosla, who led Factory Series C, led their most recent round, and then goes on Twitter. The wording was like struggling second tier competitor. Absolute demolition job of Mattan. I don't know what to say. Was he asleep in the partnership decision? Like, was he aware that he led the last round? I'm genuinely not saying that stupidly. I don't know if he was. [00:23:42] S1: Candidly, was shocked when I saw that. I was just totally flummoxed by the... That tweet because it basically handed a weapon to every other firm competing with Kosla Ventures, and Kosla's got a great team with Keith and a bunch of other people there, and basically handed every other firm a weapon when they're competing on deals saying, is this the partner you want when things go bad? I was just totally flummoxed on why he would do that publicly.
00:23:42 · Dev Ittycheria, Rory O'Driscoll
[00:23:42] S1: Candidly, was shocked when I saw that. I was just totally flummoxed by the... That tweet because it basically handed a weapon to every other firm competing with Kosla Ventures, and Kosla's got a great team with Keith and a bunch of other people there, and basically handed every other firm a weapon when they're competing on deals saying, is this the partner you want when things go bad? I was just totally flummoxed on why he would do that publicly. [00:24:07] S0: Yeah. Some days you just make a... It was a mistake. He will probably look back and say, gosh, I wish I hadn't done that. It's weapon in the hands of everyone who competes with them. Wish it hadn't happened. A lot of what's going on here is what are the legal obligations versus what are the implied rules? And what are the consequences of breaking the implied rules? And what are the non legal, but nonetheless implied rules is it's really hard for venture firms when they do two directly competitive deals. And the only way you get around it is you make all this argument about you love your children equally, you don't say anything in public about one about the other, and then you have something like this that crashes through every wall. And it just shows that those situations of, you know, two directly competitive investments are very fraught, especially if you're actively involved in the companies. It was very unhelpful for Kohl's, very unhelpful for both companies. It's like, it was not venture's finest hour. Let's move on. You know?
00:24:07 · Rory O'Driscoll, Jason Lemkin, Dev Ittycheria
[00:24:07] S0: Yeah. Some days you just make a... It was a mistake. He will probably look back and say, gosh, I wish I hadn't done that. It's weapon in the hands of everyone who competes with them. Wish it hadn't happened. A lot of what's going on here is what are the legal obligations versus what are the implied rules? And what are the consequences of breaking the implied rules? And what are the non legal, but nonetheless implied rules is it's really hard for venture firms when they do two directly competitive deals. And the only way you get around it is you make all this argument about you love your children equally, you don't say anything in public about one about the other, and then you have something like this that crashes through every wall. And it just shows that those situations of, you know, two directly competitive investments are very fraught, especially if you're actively involved in the companies. It was very unhelpful for Kohl's, very unhelpful for both companies. It's like, it was not venture's finest hour. Let's move on. You know? [00:24:58] S2: Maybe being the Pollyanna, he meant it positively as tough love. Struggling sec... You know, there's a theory. Like, harsh on the struggling... The most struggling founders. He thought struggling second tier competitor would be motivating. [00:25:11] S0: Yield obviously the dev and the CEO or man manager side here, but I do vaguely remember something about praise in public and chastise in [00:25:19] S2: It seems backwards, but... [00:25:21] S1: I think [00:25:21] S0: that was the mission here.
00:25:21 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:25:21] S0: that was the mission here. [00:25:22] S2: Never know. It seems baffling. [00:25:24] S3: We've been talking a lot about open models over the last few weeks. We saw Reflectionship Beam. I thought that was a really interesting story. We also discussed, Rory, one of yours before Intercom, obviously selling to Salesforce. We had Salesforce buying Listen Labs too for $2,000,000,000. Of those two, where would you rather go? [00:25:43] S0: I think both are worth some time. I mean, I'd love to hear your thoughts on deflection because look, they've been frankly talking about shipping for a long time. And from what we said earlier, it seems to me that being an open weight US sourced model is a super interesting strategic position right now. So if someone can ship something that's near near frontier quality, even if it's six, twelve months off, just from the dynamics of the market, that's a nice place. So what are you guys thoughts, David?
00:25:43 · Rory O'Driscoll, Dev Ittycheria
[00:25:43] S0: I think both are worth some time. I mean, I'd love to hear your thoughts on deflection because look, they've been frankly talking about shipping for a long time. And from what we said earlier, it seems to me that being an open weight US sourced model is a super interesting strategic position right now. So if someone can ship something that's near near frontier quality, even if it's six, twelve months off, just from the dynamics of the market, that's a nice place. So what are you guys thoughts, David? [00:26:10] S1: Yeah. I actually tweeted out this morning. I actually thought that enterprises kind of can have their cake and eat it too. One, you get a US open source model that's near frontier intelligence. That's three to four times more cost effective, I e, cheaper. And that's music to the years of any enterprise because there's obviously gonna be some hesitation by using Chinese open source models, especially if you're in a regulated industry or industry that deals a lot of sensitive information. To me, this is a... Was a very noteworthy announcement. Again, I do wanna disclose the Sequoia's investor and re... Reflection, but I think it's great for the enterprise.