This Week in Startups
00:33:04 · Lon Harris, S0, D.A. Wallach, Dave McClure
[00:33:04] S1: No, for that amazing chart that you showed, we're comparing all the subscription services, pulled that directly from our friends at harmonic.ai. Thanks to them. [00:33:11] S0: Okay. And everybody go get harmonic.ai, especially if you're in the VC business. Basically imagine you had a database of every possible deal and a custom made LLM put together with it. Incredible for research. [00:33:23] S2: If I'm handing the keys over, I would much rather that that AI be predominantly local. [00:33:29] S0: Yes, me too. [00:33:30] S2: Know, this this edge stuff, I mean, know, again, for the top enterprises doing really complicated workflows and multi agents, all that's probably all gonna be cloud. I get that. But like, I still find the argument persuasive that for the average consumer, 99% of what they're gonna wanna use AI to do will be doable on the edge, on their iPhone, within a few years. So why wouldn't that be where we ultimately go? [00:33:55] S3: I think you were bringing up an interesting point about the consumer subscription. I think you were looking at customers, not necessarily users. I was doing a little research in the background here. Sorry, I didn't follow your rules. Top three consumer AI platforms, who do you think is one, two, three? [00:34:13] S0: It's got to be OpenAI and Google are pretty similar. I'm going to say Google on top, OpenAI, and then ChatGPT. [00:34:18] S3: Close. OpenAI is number one. Google Gemini is number two. Guess who's number three? You were not correct.
00:34:18 · Dave McClure, S0, Ben Black
[00:34:18] S3: Close. OpenAI is number one. Google Gemini is number two. Guess who's number three? You were not correct. [00:34:27] S0: Wait. Hold on. It's it's Microsoft? Not... And so is it... Yes. Is is it Google? [00:34:32] S3: So Canva. Canva is number three consumer AI usage platform right now. [00:34:39] S0: Consumer AI u... Wait. Wait. Usage or subscribers? Okay. That's a little bit. [00:34:44] S3: Usage. That's why I was point... I was saying Right. [00:34:46] S0: Say That's an interesting interpretation of Canva as an AI product. Because Canva obviously is a design product with AI features. I wouldn't say it's an AI first product. Yeah. Maybe I'm wrong. [00:34:57] S3: They're they're trying. They're trying. I mean, I think a lot of people were suggesting that Canva's, you know, business is getting eating... Eaten up by clawed design. You know, Figma certainly suffered from that perception in the market as well. And and, you know, Canva's growth on a revenue basis has slowed down a little bit, but there's still a pretty big platform for [00:35:16] S0: So wait. Wait. Ben, would you... If I told you, like, hey. You you you you you gotta put your money, your kid's college education, whatever, your retirement, and you had four choices there. You got the Figma and the Canva, and then you got the OpenAI and you got the Anthropic. Go ahead and tell us what percentage you put into each. [00:35:41] S4: Oh, man. I would definitely be all into OpenAI and Anthropic. [00:35:44] S0: Anything anything in Figma, anything in Canva, and why?
00:35:44 · S0, Ben Black, Dave McClure
[00:35:44] S0: Anything anything in Figma, anything in Canva, and why? [00:35:48] S4: I think Dave shows it really well. The the minute in this world perception of loss of momentum is everything. Yeah. And and, like, perception... Like, I I... I'm a secondary guy. Right? We watched Canva. The second that article came out, it said their growth went from 35% to 20, and the price dropped 25% in the secondary market. [00:36:11] S3: Only 25%? Dude, I 25%. I would say more like, you know, 30, 40. [00:36:15] S0: That's fascinating. Well, then there's a clearing price. [00:36:19] S4: Speaking as a canva holder. Say that. [00:36:21] S3: As a canva holder. [00:36:22] S4: But, like, just think about the impact that momentum has on how well you attract, you know, people to hire. You know, just think about, you know, partnerships. Like, it's... Right now, those companies have no momentum. None. They're just in a really hard spot. [00:36:39] S3: It's a tough story. [00:36:40] S4: They're gonna be nice businesses, but they're not gonna change the [00:36:43] S0: world anymore. Well, they get re underwritten D. A. And they put them at a different multiple on sales, different multiple on price earnings. It's just kind of like Buffett says, these things are voting mechanisms and then it becomes scale, right? Ultimately the market, it's not a public company. So it's part of voting and not scaling.
00:36:43 · S0, D.A. Wallach
[00:36:43] S0: world anymore. Well, they get re underwritten D. A. And they put them at a different multiple on sales, different multiple on price earnings. It's just kind of like Buffett says, these things are voting mechanisms and then it becomes scale, right? Ultimately the market, it's not a public company. So it's part of voting and not scaling. [00:37:03] S2: I agree, Jason. And I think, look, I'm not trying to be some so called bubble boy AI hater here. But to me, venture capital, what made venture capital fun when I got into it, when you guys got into it, was we're supposed to be the guys who imagine what the world looks like in ten years or twenty years. Okay? And and the guys on Wall Street are supposed to be the ones thinking about what's hot right now and where's the money gonna go next month. So, like, you know, short term, sure. Like, what are you gonna do? Be the guy who bets against Anthropic's IPO? [00:37:37] S0: Like, you're gonna
00:37:37 · D.A. Wallach
[00:37:37] S2: look like an idiot. So I'm sure Jim Chanos or whoever else will be shorting all this stuff, but, like, they're probably gonna have a lot of egg on their face. I think where it gets interesting is when you start asking these questions about long term defensibility, about long term profitability. And I look at something like Figma and I go, okay, everyone thought they were gonna have their lunch eaten by Claude Design six months ago. Well, it turns out they have network effects. Turns out graphic designers still do better graphics work for real companies than OpenAI or Gemini does. Now they're amazing tools. They're gonna progressively eat more and more of that workflow. But like, you know, 10 designers at a company are all used to using Figma to collaborate with each other. It's what they've trained themselves up on over the last decade and they love it. That's a product people love. So, you know, I I... I'm not counting anyone out yet. And I think the questions we were getting at earlier around the defensibility of of Anthropic and the others, those are fascinating business questions, but they're gonna play out over a longer horizon. You know? I mean, the thing I don't like about being Anthropic right now is every person in the world has a huge financial incentive to figure out how to compete with your product cheaper. Okay? Everybody... Like, it's the biggest pot of gold in human history is to figure out how to offer intelligence for free right now. So, you know, I don't like the idea of having that target on my back. Now, would I trade places? Sure. Because they're on top of the world right now. But it's not gonna be easy. And I think for those guys, one of the other interesting challenges is and this is a credit to them, they're not commercial. You know? Like like Dario and the Anthropic cofounders in
00:39:19 · Dave McClure, D.A. Wallach, S0
[00:39:19] S3: Wait. Particular They're not commercial. [00:39:21] S2: They're in this for the money. Like, I I really believe that. They they are they are full rule... Everyone around... Okay. [00:39:28] S0: Hold on. This is good. D. A. Finish. Hold on. D. A. Finish and then Dave. So finish your finish your thought of why they're not commercial, then Dave, you get to counter. Go. [00:39:37] S2: For for all of us craven capital capitalists, it is it is it is it's a it's a it is a reflection of our psychology that we cannot imagine that Dario is being genuine. Okay? It's it's impossible for Chamath to listen to Dario and not see regulatory capture, venality, scam artistry. Okay? But Chamath and Don could [00:40:01] S3: be further opposed on the spectrum. [00:40:03] S2: Read. The opposite. [00:40:04] S0: Hold on, Dave. Let him finish, then you get your My, please. [00:40:07] S2: These guys, as they are chain smoking their cigarettes, are are are showing you that they are religious extremists. Okay? These are dyed in the wool legitimate religious extremists, and they might be right. And if they're right, we should we should thank them because they're saving civilization. But if they're wrong, they're just religious extremists who happen to be engaged in the greatest business of this moment, but they will ultimately be beaten by people who are really good at business,