The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:33:45 · Harry Stebbings, Jason Lemkin
[00:33:45] S3: Ding. Ding. Ding. We got investment committee. Dave, welcome to the committee, by the way. We're thrilled to have you as part of the investment team. You are, as arduccio see, on the new new firm that is O'Driscoll, Lemkin, Stebbings. Jason, we have 11 labs who doubled their valuation to $22,000,000,000 Would we do 22,000,000,000? [00:34:06] S2: I think at 22,000,000,000, we should consider doing up to 10% of the fund. Time is short. We're at an eighteen month deployment cycle. One of our most esteemed partners is going back to run a public company so we're losing some of the folks on the team. The way I see it, eleven Labs has done something quite different with actually a fair amount of intense competition. Its lead keeps widening. It is one of the 10 most important underpinnings of AgenTeq applications is their voice applications, where they're going. The rate of growth and surprisingly the margins are very impressive. This is a company that by the time we close the friend and families round, which we're hoping to do at $50,000,000,000 right? This one could be approaching 1,000,000,000 in revenue. And that's the sort of growth rate that I think it's the deal we've got to do. And it's a highly differentiated. I won't say they have the highest mode out there in the world, but this is no, this isn't JEV level risk. Eleven Labs has built an incredible team. They have sub millisecond response rates for voice, which has become a key modal. And it's tough to find a better asset today. Do I wish it was at '21 or '18? For sure, but I say we go all in.
00:34:06 · Jason Lemkin, Harry Stebbings
[00:34:06] S2: I think at 22,000,000,000, we should consider doing up to 10% of the fund. Time is short. We're at an eighteen month deployment cycle. One of our most esteemed partners is going back to run a public company so we're losing some of the folks on the team. The way I see it, eleven Labs has done something quite different with actually a fair amount of intense competition. Its lead keeps widening. It is one of the 10 most important underpinnings of AgenTeq applications is their voice applications, where they're going. The rate of growth and surprisingly the margins are very impressive. This is a company that by the time we close the friend and families round, which we're hoping to do at $50,000,000,000 right? This one could be approaching 1,000,000,000 in revenue. And that's the sort of growth rate that I think it's the deal we've got to do. And it's a highly differentiated. I won't say they have the highest mode out there in the world, but this is no, this isn't JEV level risk. Eleven Labs has built an incredible team. They have sub millisecond response rates for voice, which has become a key modal. And it's tough to find a better asset today. Do I wish it was at '21 or '18? For sure, but I say we go all in. [00:35:08] S3: Can I ask you, mister Lampkin? You previously said on the show that this would be the year of substitution for voice models and that cost would drive that decision. Have you changed your mind?
00:35:08 · Harry Stebbings, Jason Lemkin
[00:35:08] S3: Can I ask you, mister Lampkin? You previously said on the show that this would be the year of substitution for voice models and that cost would drive that decision. Have you changed your mind? [00:35:18] S2: No. Because I think eleven Labs is for the most part... It's always a risk. For the most part, has multiple models that has covered the low end and the high end. And quality here is in many ways more important than it is in your classic open weights model. We can tolerate a bit of laxness in the reasoning for non critical workflows. But when that flower dealer is picking up the phone, it has to work. It has to answer that phone in seconds. And it has to be the right flowers. If it fails, if it misunderstands that if we can't populate this product isn't worth it. So there's a limit to price, but I'm shocked at the deal size of Level Labs. I'm shocked at the number of folks that are relatively modest companies paying hundreds and hundreds of thousands dollars a year happily. And our reference checks said they love it. They feel like they're getting a good deal. So I don't think all models are fungible. Despite some of the other discussions we've had at the fund, the fact that I did recommend putting maybe 500,000,000 into reflection and others, this is not a fungible use case today. Twelve months, it's hard to predict, but I'm impressed with the team and I don't think anybody's gonna catch them here today. It matters. This is where the LLM matters. [00:36:20] S3: 10% of the fund goes to 11 laps?
00:36:20 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:36:20] S3: 10% of the fund goes to 11 laps? [00:36:23] S2: Wow. I just don't wanna do it over two rounds. You know? I don't I don't need to see it at 50 or a 100. Dev knows what I mean. Okay? I don't need to see it a second time. I just wanna put all the chips in now, get the ownership I can, and move on. Right? And I've got a friend of mine that's a CRO I wanna put on as a board adviser. I think he'll he'll be able to help out and give him some insight. [00:36:41] S3: Okay. Moving from one Square company to another Square company. Sorry, Dave. We... It's not intentional. Rory once said a quote, which is like, what was the quote? Like, whatever game you're playing, just be Sequoia. Remember the one I'm [00:36:52] S0: talking about? There's so many quotes. I mean, you know, look. I've been doing this thirty years. And when I came in, Sequoia were top and give them huge credit. Thirty years later, they're still there. You know? So I... Yes. I I gave the Gary Linick a football quote, if you recollect. [00:37:06] S3: So with great surprise, Sequoia made hundreds and hundreds of million dollars with Salesforce buying Listen Labs for $2,000,000,000. Now apparently, they had offers at 1,500,000,000, a major win for Brian Schrier at Sequoia, about $850,000,000 back to investors on 96 invested. Sequoia did the best. They led the c. They led the a, making about a 25 x. Ribbit led the b, which four x in eight months. So well done, Mickey. What did we think of this, guys?
00:37:35 · Rory O'Driscoll
[00:37:35] S0: I think it was a great outcome for a very clear category in a sense of it's pretty obvious that mark... Stepping back, listen up. Market research is a very large, fragmented, almost pretechnical industry. There's a bunch of consulting type companies, and then there's three last generation companies, Qualtrics, Medallia, and what was SurveyMonkey, all that got to kind of high single digit, low double digit billions of dollars in terms of market cap outcome. So it's a really good category, is an existing category with a big ass spend, and LLMs just do it so much better because what are you doing in market research? You're kind of asking questions of people and aggregating and assimilating the answers. And the two things LLMs do well, we just talked about voice. Voice as a modality is a solved LLM problem. And then asking questions and knowing how to end, not just kind of these canned, stupid, last generation surveys, where no matter what you say, the survey just asked the next dumb question. You know, it's like, did you like your stay? No, I didn't even check-in. And then the next question is, was the bed comfy? That's the last generation. Whereas now with LLMs, can adjust the questions based on what the respondent is saying. All that means market research can be done so much better with LLMs, and I think ListenLabs was one of the early contenders that did it well and executed brilliantly and, you know, got the real revenue. Great outcome. I mean, it is kind of one of those the list of use cases for AI and LLMs at the app layer that comes out like a top five, top 10 use case, and there it is.
00:39:06 · Jason Lemkin
[00:39:06] S2: But you know what? I would love to get devs thoughts to this. I'm a pretty much a fan of a lot of Salesforce's acquisitions, and I've been champions of anyone. This one I don't really get. It's not that I think it's a bad idea, but I mean Salesforce is coming up on $60,000,000,000 their target $60,000,000,000 for, you know, they're almost at 50. I just don't, I don't know how 20,000,000 of revenue of next generation AI survey moves the needle. And I'm not saying it doesn't. I mean, Mongo scale, got to move, it either has to tuck in or move the needle, right? Maybe you think about it differently, but to move the needle, it's got to be big. Salesforce even... So this is the one where I'm... I get the theoretical appeal, but I wonder if this one will just be kind of forgotten in a couple of years.