The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:30:29 · Rory O'Driscoll, Jason Lemkin, Harry Stebbings
[00:30:29] S1: Maybe the better way to say it is let's assume they're telling the truth. That's the objective fact about what's going on now. And the million dollar question is, do you see that behavior happen more and more? And then how does DoorDash respond to it? You know, they're all doing versions of the same thing, which... I mean, I could totally see for some of your standard food orders, just it's not that much easier for the record. I mean, telling your your agent to order your dinner, it's just as easy as to just go click on the DoorDash app. [00:30:52] S0: Well, but there's a thing. DoorDash has two competitor, big competitors. It has Uber Eats, right? And it has the restaurant. The restaurants don't want to use DoorDash or Uber. So most restaurants have self pickup. At least they have to go pick up or they can avoid most of the fees, right? Or self delivery. An agent can figure that out for you. Hey Harry, did you know that Lemkin's Curry down the street, actually it will deliver for $2 and you don't need to go through DoorDash or whatever they have in London? I did not know. Thank you, Musk. Thank you, Instacart. I'll take that. That'll save me $14 on my order. What's the pub right behind your office that I really like Harry? [00:31:24] S2: The Grazing Goat.
00:31:24 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:31:24] S2: The Grazing Goat. [00:31:25] S0: Love that place. Five out of five. Okay. Maybe they could just drop it off at the next time we do the pod for free. I don't have to pay 20% and plus tip, plus this, plus... You think I'm kidding. I think agents are an existential risk to DoorDash because their number three competitor is nobody. [00:31:40] S2: Can I put out a cultural difference between us? You guys pay $15 a burger, and it gets delivered at fifty. And there's, like, federal charge, state charge, delivery charge, service charge. It's ridiculous. In London, it's kind of, like, £15 is £15. It's fascinating to see the difference in, like, what you pay and what you get. [00:31:58] S1: Yes. And that's why these businesses are widely profitable. They figured out exactly how to extract every dollar of rent from the person who wants to sit on their couch, press a button, and get the meal an hour later. It works. [00:32:07] S0: It's been a brutal business since the old Grubhub days. It's just evolved with the internet, and agents will evolve it again. It's been brutal. It's been brutal. The idea is take as much margin out of the customers or the restaurants as humanly possible. [00:32:17] S2: I'm with Bill Ackman. I think Uber's a banger of a buy right now, though. I mean, it's so cheap. [00:32:22] S1: I broadly agree, and I haven't spent a lot of time on this, but the two worries you have are way more disruption and agentic disruption. And what you're implicitly saying is border fine.
00:32:22 · Rory O'Driscoll, Harry Stebbings
[00:32:22] S1: I broadly agree, and I haven't spent a lot of time on this, but the two worries you have are way more disruption and agentic disruption. And what you're implicitly saying is border fine. [00:32:30] S2: Yeah, agentic disruption is bizarre in taxi hailing. You're gonna go to your WhatsApp and say, I would like to get an- agree. [00:32:37] S1: I don't think [00:32:37] S2: that's It's it's it's a worse user experience. I would like to get an Uber. I am at this position on the map. Yep. [00:32:43] S1: Agreed. [00:32:44] S2: And and then the other issue is people love food. They love looking at it. They love pictures. They love scrolling. They love discovery. The only thing that makes sense for is, like, automation and scheduling. Like, every day drop it off at scale's office in San Francisco. That's it. Okay, boys. We have two big rounds in Kalshi and Cohere. Kalshi, a billion and 40,000,000,000, one of Jason's favorites. A low dilution round there with a two and a half percent dilution, but still raising a billion dollars and a 40,000,000,000 price a day after Utah charges founders of Kalshi. And then we have Cohere. I think it's the largest private raise for a Canadian company at this point with actually the Canadian government, I believe, or Canada itself investing up to 1,140,000,000. Which one's more interesting?
00:33:28 · Rory O'Driscoll
[00:33:28] S1: Kalshi is a money deal. Let's be really clear here. The thing is working. It's growing like a weed. Deep in their heart, everyone knows that we started off thinking we were doing prediction markets, which had some social utility, and we've long since converted into sports gambling markets to feed people's addiction for gambling. Right? So we're all over the doing good. We're all over the higher purpose. You know, we're pushing through a whole bunch of local regulation, which is why Utah is suing them because sports betting is regulated on a state by state basis, And these guys are plowing through on a national basis. So there's nothing to see in this other than VCs will put a lot of money into shit that's working. That's the takeaway, right? And if it's at 40,000,000,000, it's had momentum, it raised like three or four months ago at 22,000,000,000. So this is one of those classic momentum plays, right? I mean, that, clearly it's very different. I mean, it's almost not a momentum play. It's a, we need our sovereign AI play in Canada because you are nasty people and you've threatened to invade us multiple times. And we've got this product and it's one of the original four or five LLMs to be fair. Mean, back in 2023, you had Cohere, obviously OpenAI and Anthropic, and then all the other ones like the one that Microsoft bought, Adept and Amazon bought, all the others folded. So give Cohere a huge credit. They are one of the survivors of that first group of LLMs before NeoLabs was even a thing. And now they didn't release revenue numbers, but you can see how you can make a sovereign AI story. It's almost the exact opposite. In the case of Kalshi, the government is saying, I want to stop you now and put you in prison. In the case of cohere, the government's saying, I'm going to make this work no matter what, even if the economics don't work. So they're almost like the yin and yang of investments in terms of their relationship with the government.
00:35:02 · Harry Stebbings, Jason Lemkin
[00:35:02] S2: Does that work? Can the government just do that? Do what? Well, hey. We we wanna make you work, and so we're gonna inject you with 1,164,000,000. Isn't that [00:35:12] S0: what our governments do all the time? They subsidize everything. [00:35:15] S2: Yeah. You can do it once. You can do it twice. But, ultimately, if enterprise adoption isn't there, doesn't work. [00:35:20] S0: Sometimes it's worth just being in the game. It's like putting a few chips into Anthropic in the d round. Sometimes it's worth just being in the game. And sometimes it bounces your way, and you've always got the lick prep. [00:35:30] S2: Jason, the d round was 16,000,000,000, so I'd take the d round. [00:35:34] S0: Yeah. In all seriousness, I don't know how like Canadian got... Like national governments work. When you talk to folks that run at the top companies with large corp dev portfolios, public companies, really they just want it not to go down in the aggregate. They'd love the gains. Right? But you only get so many credits as a public company for gains from your portfolio. And the losses really suck, right? Because they swing your EPS in really weird ways and you have to put asterisks and daggers next to it. So as long as they don't lose too much money on the investment, I don't know they care.
00:35:34 · Jason Lemkin, Rory O'Driscoll
[00:35:34] S0: Yeah. In all seriousness, I don't know how like Canadian got... Like national governments work. When you talk to folks that run at the top companies with large corp dev portfolios, public companies, really they just want it not to go down in the aggregate. They'd love the gains. Right? But you only get so many credits as a public company for gains from your portfolio. And the losses really suck, right? Because they swing your EPS in really weird ways and you have to put asterisks and daggers next to it. So as long as they don't lose too much money on the investment, I don't know they care. [00:36:02] S1: I mean, but I think there's two separate things. You're right. The motivation for anyone doing this isn't purely financial gain if you're the government. Right? Agreed. But Harry asked a separate question is, can it work? And I think the answer there is, yeah, you can keep it... Yeah. Governments can make things happen for a fair while, but what they can't do is make the private sector use the product. So you see it with Mistral too. To the extent that there's a willingness to spend Canadian government tax dollars on a Canadian government AI solution, or maybe if Canada goes on with its kind of affiliating with the EU, these guys in this trial may be the You're Not America LLM options. And there probably is some spend to that. But do you think it'll be a compelling business that will go public at 3x this round? Not as obvious to me at all.