The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:15:29 · Rory O'Driscoll, Harry Stebbings
[00:15:29] S1: I mean, probably true. Right. I mean, it's gotta be something like that, Jason. I mean, is just worth stepping back and reminding ourselves again on a GAAP basis, 4,500,000,000 in GAAP revenue last year, full year, exiting a run rate of 9,000,000,000, and they're probably going to do 56,000,000,000 in GAAP revenue this year. So year on year, their growth rate is 12x, right? That's just an objective fact at this point. But then the interesting thing to your point is, you look at the same kind of growth rates and you come up with roughly $120,000,000,000 of GAAP revenue next year. So they're probably going to go from 12x growth rate to 2x growth rate in a year, right? So to your point, pretty sustained slowdown to still magnificent numbers. It really is glass half full, glass half empty. You squint one way and you say, my god, this is a company doing 56,000,000,000 in revenues that can still roughly double next year. That's freaking amazing. And you going the other way and you go, oh my god. It went from 12 x growth to two x growth. Is it gonna go to a 50% growth or five... 10% growth in, you know, the following year? [00:16:23] S2: Do you remember when we had Stewart Butterfield and Slack in zero to 10 in eighteen months was, the gold standard, like, the gold standard.
00:16:23 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:16:23] S2: Do you remember when we had Stewart Butterfield and Slack in zero to 10 in eighteen months was, the gold standard, like, the gold standard. [00:16:30] S0: You know what's just a little bit interesting? I know it's just an anecdote and people will make fun of me, but I'm trying to launch this app Saster Connect. Hopefully it goes out in the last next couple of weeks, but I've worked on it for a while, this AI matching recruiting app. And when I switched it myself to HYCU55 and JEV, total costs went down about 70%, 72. Now there's some costs that are going to keep going up. We're all going run five agents a day, 10 agents a day. We're going to run them on multiple platforms. I just upgraded to Muse Paid yesterday, right? So there trends going the other way, right? As we see in the Anthropic Quarter. But again, percent for if a lot of mature applications can see that kind of deflation from improved quality of tokens and pricing pressure, that's a lot. Even though everyone's going to be coding at seventy two hours a day with 20 agents, a 72 decrease in effective price is material. And it's faster. It's faster and 72% cheaper and better. So that hadn't happened yet, at least in my personal agentic experience since the beginning of twenty fifteen. On an as used basis, nothing got cheaper. No matter what anybody said on evals and token price, nothing got cheaper until HYCU55 plus Jebb. Then I saw 72% decline for B2B workflow running constantly. [00:17:42] S1: For same task?
00:17:42 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:17:42] S1: For same task? [00:17:43] S0: Yeah, for the same task and higher quality. So like, it's just one and people can make fun of me, but it is interesting. For me, it is interesting for that actually to happen in the real world for the first time. [00:17:53] S1: Agreed. [00:17:53] S0: It just makes us hard to predict for me. It just makes it hard to predict how it's all gonna, mean, twelve months ago, none of these models barely worked. Today they're epic. In Black October, they've become weapons to destroy Binance and everybody else. It's hard to know in twelve months how these sub metrics are gonna play out. Think it's almost unpredictable. [00:18:11] S2: But I think that exact statement, Jason, is why we have the unpredictability or the binary nature in venture markets. It's why we have the volatility in public markets, which I think is just like a lack of certainty around what the five year looks like. I think the whole world does not know what five years out looks like in a way that we generally have done for the last thirty, forty years.
00:18:11 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:18:11] S2: But I think that exact statement, Jason, is why we have the unpredictability or the binary nature in venture markets. It's why we have the volatility in public markets, which I think is just like a lack of certainty around what the five year looks like. I think the whole world does not know what five years out looks like in a way that we generally have done for the last thirty, forty years. [00:18:31] S0: I'll tell you not to share too many other personal stories, just comparing the show. This morning, I finally turned off Canva after twelve years. Took twelve years. Don't eat it. And I just think at the start of this year, Canva was still accelerating. Some rough reports this week about its current growth, right? They kind of varied. I don't know what's true. One of them said growth was zero. Others said they were preparing layoffs. Who knows what it was? It at least seems to have decelerated 20%. It's just that predictability, right? Just don't need it. The agents don't need it. So it's hard to predict one year out, let alone five. [00:19:02] S2: Jason, what happens to Canva? Does it go out? [00:19:05] S0: I don't wanna be a Debbie Downer. Right? The Debbie Downer case is obvious they miss their window. [00:19:09] S2: And then... But then but then what? They miss their window and they're just like a private company that grows slower, is it? [00:19:14] S0: I don't know. I mean, it seems to be working for Automattic outside of a few CEO turnovers and and temper tantrums. [00:19:20] S1: I want to be clear, was that humor?
00:19:20 · Rory O'Driscoll, Jason Lemkin
[00:19:20] S1: I want to be clear, was that humor? [00:19:22] S0: I don't think it's humor. What I mean is I think Automattic will stay private forever. I don't think it will, it has raised its billion, as 40% of the web. I don't think Automattic will become an agentic company and I think Matt is fine with it. And I think it will stay private. I genuinely think it'll stay private forever. I don't know what the the VCs do with it. Right? But I don't think it'll ever go public. And I don't think it'll ever get acquired, Automattic.
00:19:42 · Rory O'Driscoll, Harry Stebbings
[00:19:42] S1: The only comment I'll make is software companies in particular. They're not moving forward. You know, it's like the shark. You're moving... You know, you're you're going down. Right? And over an extent... I mean, it might take an extended period of time, but, you know, you're you're... And I remember I remember these three mainframe companies in the nineties and early two thousands that were still, you know, living off their twenty year old contracts, but the asset just becomes very terminal valued. So yes, you can stay private and continually cut costs and live off your installed base or do your own little bending spoons on your own. But it's a tough place to be, and it's hard to get value from it as an investor. It will be interesting to see what many of these companies decide to do. You know, can you clamber aboard, even if it's a little late, the AI train and get enough traction to maybe not be the winner, grow 5%, 10%, 20%? I don't know. But I think if you don't do that, if you decide to just not play that game, I think over the medium term, you're just heading to quiet obsolescence. [00:20:35] S2: I'm so picking a fight here because Cliff Cliff always matches me. I mean, Cliff loves the show, and he always matches me like, you guy... You guys are harsh on me, and I'm like, you know, Rory and Jason. I never say I'm a thing.