00:15:31 · Molly O'Shea
[00:15:31] S1: Since it's not a thematic fund, but we are entering a new kind of state of the AI era where things are maturing more. Brad Gerser thinks it's, you know, he says it's the age of inference and the companies that are gonna be rewarded most now are downstream of that. You know, I mean, think about like the AI agent economy, which you know well with Gumloop, everything that's downstream of that, whether it's hyperscalers, clouds, power, all the different kinds of connectors, routers are now big, huge. People are going after those categories, so how do you think about, I guess, inference too, then maybe tie in Gumloop a bit, this whole economy that's booming because of the proliferation of agents versus chats?
00:16:23 · Ev Randle
[00:16:23] S0: Yep, 100%. I think the framework I have around inference right now, so I was working with one of our portfolio companies that has this amazing mass of developer users and an amazing product, but they just hadn't figured out their business model yet. And I sat down with them and I was working with them around how are we figuring out what the revenue model's going to be, and the thing I said is it's sort of like you're on this riverbank, and you have this bucket, and you wanna fill the bucket up because it's like the revenue bucket or whatever, but you're just sitting on the riverbank, and over there, there's a fucking waterfall, and what you should go do is instead of just sitting there on the riverbank wondering what to do, you should just go walk under the waterfall, and you don't know until you're under the waterfall whether there's holes in your bucket or how big the bucket is or anything like that, but the first thing you should do is get under the waterfall, and the waterfall's inference, and just the absolute, just unbelievable wave of revenue and demand for so many different businesses and business models that has come out of inference, I think your point cannot be ignored. If you think about, again, we're huge investors in Fireworks, but if you think about the other inference platforms like Fowl or Base10, Modal, a lot of app companies that are using a usage based model or an outcome based model, all of these are different derivations of monetizing inference. And so when you hear about all of these companies and you hear about all of these businesses that are going not one to three to nine to 20 like they used to, but are going one to 20 to 100 or one to 30 to 300, all of that can be traced back to the enablement of a business model via inference, because the business model used to be, you know, we're gonna charge some raw dollar amount times some amount of heads within your company, and now it is hey, we're going to charge some calculation of making a margin essentially on the inference that we're reselling you, and some of those business models are a little bit more thin and are just like actually just kind of like reselling inference as a broker, and some are really abstracting it away if you think about like a Sierra that is outcome based pricing for actual completed deflections of customer support queries and things like that.
00:18:47 · Ev Randle, Molly O'Shea
That's largely abstracted, but you're still monetizing this thing which is based on inference, and what that allows is it removes any sort of rate limiter that you have on your potential to grow, and it's the enabler to these unbelievable revenue growth rates that we're seeing time and time again with all these new AI companies. [00:19:07] S1: What do you think is gonna happen with the proliferation of agents? [00:19:10] S0: I think, so obviously, it's interesting because on one hand, I think that, I always cringe a little bit whenever a word or a term becomes over product marketed, so know, FDE's is certainly a version of this, I think agents is absolutely a version of this. [00:19:31] S1: What about AI?
00:19:32 · Ev Randle
[00:19:32] S0: Yeah, well I mean AI, that's at least this umbrella term, but you know, it's like when, I think when private equity firms are telling all of their portfolio companies to say that they sell agents, that's when you know it's like okay, the term is cooked. We need to move on from this term onto something new or something different. I think all of that said, it is still fundamentally the greatest both product innovation and business model innovation that I think we've seen since the start of SaaS, and since the cloud business model. And the reason for that is because it is the underpinning of how we move to this idea of selling work or actually replicating what a human being is doing when they're trying to complete a task. And on the business model side, as I mentioned, it allows a buyer of software to move their mental framing from like, oh, I buy a license to oh, I buy intelligence on tap, or like a white collar activity on tap, or some activity that created some economic output for my business on tap via an API or via software product. And so it unlocks this new price for value equation for buyers that allow them to think about software and the budget that they have for software in a whole different way. I think one of the things that we got insanely excited about when we were first tracking the rise of coding agents was when Cloud Code, even when it was still Cloud CLI but when it became Cloud Code, we were talking with developers and companies within our portfolio, and they're like yeah, we have developers that are spending $3,000 per month themselves, like each on Cloud Code. So it's like wow, okay, that's $36,000 per developer, and oftentimes in the SaaS era, if you had a $50,000 ACV, that okay, but instead of having a $50,000 overall contract value with this customer, you were now getting that per developer, and it was still growing. And so it was just this idea that like wow, this could actually become not a 200 ks line item for the average company, but a $20,000,000 line item for the average customer and average company.
00:21:47 · Molly O'Shea, Ev Randle
[00:21:47] S1: Or for some. [00:21:48] S0: Or for some 500,000,000 a month. 500,000,000 [00:21:51] S1: a month. [00:21:51] S0: A month. That's a different era of technology, and so I think even though I'm so annoyed at the whole agent thing because now it's just the only thing that you can see when you go online, and it's been marketed to death, it represents the most important both like product slash technology, and then also just like raw revenue and business model shift we've ever seen probably in maybe the history of technology, and I think that was one of the reasons, and we can go into Gumloop if that's interesting. That was one of reasons we also got really excited about Gumloop.
00:22:25 · Molly O'Shea, Molly O'Shea
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