The Distribution by Juniper Square
00:32:31 · Nick Shalek
[00:32:31] S0: I mean, there's so there's so much to say, and I would start with I don't know. Because, you know, anybody who who pretends to be certain right now, you know, is is probably missing on the point. The world's just evolving really rapidly. I mean, we... There's clearly an unfathomably large opportunity in AI. And I think it... The first thing we should say is it'll probably accelerate what's been happening in the past twenty years and just add fuel to the fire. So you'll see a continuation of multiple, you know, multiple trends. You know, the... You know, for example, like, the usage and absorption of as much compute as the world can figure out how to build. You know, I think a a useful mental model for data centers is they're just we made chips smaller and smaller and smaller. We, you know, we followed Moore's Law and added transist... You know, transistors at an accelerating rate to to semiconductors. And we kinda got down to dimensions where you can't really get smaller until you, know, you build quantum computers or you change the paradigm. And so now we're just scaling up the the number of of chips that we can deploy in coherent clusters, and we're turning... Your data centers are kinda like the next version of the chip. And so you just... You can see AI as something new. You can see, you know, what we're doing with GPUs and matrix multiplication as something new. But you can also just see it as the same thing that's been going on for a long time at an accelerating pace. And now we're just... You know, it's it's like we're in the steepest... Steeper part of an exponential curve. So now you can really witness it with your own eyes. You can see these enormous data centers that are are going up. The second thing would be, like, the growing power of small teams and technically sophisticated, motivated, creative people. You know, the the the ability, you know, the ability to to start a company. When we started when we started Ribbit, it was like it had gone from... You know, you had to raise tens of millions of dollars and hire very specialized people, and it took a long time to build software, and then you didn't have a way to ship it. We were starting at a time when distribution channels were open. And now for relatively small amount of money, you could build a prototype.
00:34:38 · Nick Shalek
Today, you can be one person, and you can build something in an hour or two. You can build something sophisticated over a couple weeks. You can ship it. You know, people people like to talk about the potential. You know, when's the first billion dollar company run by one person? I don't think it's very far off. So that that trend's just gonna kinda continue, and the value of agency will keep going up in the world. I mean, agent... You know, not agency, like, from a technology standpoint, but individuals with with the gusto to just get started and and go for something. Know, the next one I would say is, like, the importance of data as an asset. Again, a thing, I think data is the new oil. That phrase comes from, like, 2004 or maybe even earlier, 2005. But it's it's it's more true today than it ever has been. And people who have proprietary data or figure out how to create proprietary data through interactions with users are going to be the companies that become the biggest companies in the world and, you know, will continue to lead to this trend of, you know, increasingly large winners in in the tech space. And then maybe a last one I'd say is, like, software being the interface. So at this... I told you at the start of Ribbit, you know, one way of describing the opportunity would be to say, hey. People used to go into branches, but now the point of sale on financial services isn't gonna move. It's gonna move to mobile for consumers. It might move to your your payroll platform or your ERP or your cloud accounting platform if you're a small business, or it might be your fund admin. You know, why why why is fund administration and fund banking, why have those historically been different functions? It's really, you know, all software, all financial services are ones and zeros. It was really, you know, part of this broader trend, I think, where just like software or what with AI we're now calling intelligence was gonna be fused with everything, every part of the economy. And so I think the next ten, twenty years, what's happening with AI is just more of that. You know, as the cost of software or building software goes to zero, you know, you... I think it's worth asking the question, you know, what's the... What is software a complement to? And I think in every part of the economy, you can say, hey.
00:36:45 · Nick Shalek, Brandon Sedloff
More software makes this business better in this way, so let's invest in that business. That's what we're trying to do now. [00:36:53] S1: Help me help me understand that last point. And maybe against the framework of, you know, we're recording this in in March 2026. The the public markets, have been have been a little bit unstable as it relates to the the SaaS SaaS pocalypse and some of the disruption that we're seeing by some of the new models that are coming out. So this idea of investing in software because the complement to software is more software. How do how do you think about that that flywheel? Or may... Maybe I didn't fully understand the thesis.
00:37:21 · Nick Shalek
[00:37:21] S0: Yeah. Yeah. I'll I'll I'll give an example to try to make it tangible rather than just, you know, buzzwording. We made an investment over the past couple of years in a company called Base Power. For people who who haven't heard of the company, the founder, Zach Dell, and his team, they're building a a retail energy network by deploying residential batteries in... First, in in Texas, which is a a deregulated energy market. So, you know, you can go and and sell to the consumer directly and and have the the direct relationship with them as their utility. So you you could think of them as offering a much more affordable, accessible version of, like, a Tesla Powerwall, going to retail customers and offering a battery at a a very low cost so that people have backup, you know, power in their home, and then actually lowering their utility bills. How they do that, They do that because they're really building a virtual power plant or a distributed energy grid where they have batteries in a lot of different places. They build not only the hardware so that they can offer, you know, a really high quality product at a at a low price, but also they build the integrated software system so they can build the intelligence around how to charge and discharge a bunch of different batteries based on what's happening on the grid more broadly. So it's it's a company that gets better because, you know, because the the rate of software development and the cost of software development is is going down. And the asset that they have is a data asset that is hard for other people to get. Now this isn't a new insight. This was like Steve Jobs' insight or Bill Gates or others. You know, if you you control a hardware ecosystem or a software ecosystem and you encourage people to build software, you know, these compute... Computers, you know, Macs, and and iPhones become more valuable the more software gets built. Think I there's an opportunity to do that for many companies in a more integrated way. So that's an example, Brandon. The the more, you know, one layer up abstraction of that is people who... You know, it may not be enough right now just to build software, and that's what the market is responding to.
00:39:23 · Nick Shalek
You know, if you've built a horizontal SaaS app, you know, that's a productivity app, that's a thing that you can replicate or get pretty damn close to replicating now using Claude Code. And and I'm sure you've done it. You've done this inside Juniper for your own use cases. We've been doing it at Ribbit. It's actually really just amazing what, you know, what what you can do. And there's a reason why Anthropic is, you know, growing, revenue by, like, billions of dollars a month. So, you know, you have to look one one click deeper to who's got some other moat outside of software, but, again, where software kind of accelerates the the value of that moat. And physical world companies in in energy or defense or quantum or or robotics are are really, you know, logical place where that's gonna happen. So a lot of us and and a bunch of other, you know, venture firms are are spending time there.
00:40:13 · Brandon Sedloff
[00:40:13] S1: I'm curious. You know, there... There's, you know, two types of companies. There's companies that started kinda pre current AI revolution, and then there's the the AI natives. As you look at the founders of those companies, whether they're in your portfolio or just that you're familiar with in the ecosystem, are there kind of different characteristics in terms of how leaders of these organizations think about, you know, either evolving a non AI native company to to lean into to this kind of AI revolution, if you want. I'm not sure that that's the right term, so you can you can edit it and call it whatever you want versus those who are starting companies today, you know, as as AI native. I I just... From a, like, a DNA perspective, is it is it a same... You know, a similar version of the same person, or are they radically different kind of people and ways of thinking and and thinking about the future of their businesses?