The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:27:11 · Harry Stebbings, Rory O'Driscoll
[00:27:11] S2: The terrible thing about that parody is it's accurate as hell. [00:27:15] S1: Totally. It's not a parody at all. It makes you realize, yes, you can do this job in three minutes' handbites. [00:27:21] S2: Can you paint the upside for me on Jeff? How does this become a wildly successful, massive company? Where's the $500,000,000,000
00:27:29 · Jason Lemkin
[00:27:29] S0: I'll tell you though, just at a tactical level, at a builder level, right, which is that, you know, no no models are particularly... Going back to the evals and the meta, whatever, the Muse Turbo, none of these hit 90s or 100. All these models make many errors and many issues, okay? They're not reliable. I can tell you endless issues from this week. I, you know, JEV is a classifier, which we're now in classifier 2.0. We're like an AI and it works and it's maybe it gets 70% to 80% of carefully prompted matches right. Will the Cloudflare team keep putting as much effort in as a standalone team? Will Amazon, will OpenRooter, will all these people try as hard, or will these be niche products with not enough revenue that they don't have time to invest in, and that these guys at JEV just make classifiers do something they couldn't do before. Get incredibly high resolution rates, and then they can expand it. You know, right now you can ask relatively complicated questions, but you only get binary outputs. That's why it works so well. Right? Rory or Harry? Who's my better investor? Rory, Harry, Rory, Rory, Rory. They're going to get better and better and better. And I don't know that even if the Cloudflare Amazon teams can catch up today when it's easy, it's easy to build what OpenRouter was six months ago today, right? But are they going to maintain that investment? I think as VCs, we have to make this stressful investment that a core team that is very strong out of open eye that is doing nothing else will pull ahead from the seeming parody you can achieve today. I'm actually willing to make that bet because I'm using JEV a lot and I can already see that if it never changed maybe I would swap it out. Right? But if it gets better than the rest, there's no way I would change. Even just somewhat better on its evals, you would never use anything else. So I would still make that bet today that this team will do nothing else. And I don't think the inference costs are going to destroy them. I think this seven fifty, this, this is, this is a low inference model. I don't know the training costs. I think seven fifty gets you pretty far in this space for real. Think it gets you further than it gets you to thinking machine. So might get you two or three years of runway.
00:29:26 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
So I'm cautiously bullish that a focused team rather than four smart kids at Cloudflare can maintain its lead and get to accuracy levels to summarize that were never possible before. That's the unlock. JEV is super fast and super cheap, okay? And it is accurate enough to use for maybe 10% of your AI use cases. If they make it hyper accurate, it changes the game. [00:29:44] S1: And that's the theory on the, just to get back to the numbers, if it's 20% of your total, we decided this, I think two weeks ago, if total AI frontier inference is a $200,000,000,000 market, which it's better be in a year or two, we're all in trouble, then 20% of that is 40,000,000,000. And if the price of that goes down by, you know, 80%, you're still at $8,000,000,000 and billion dollars And if they get half of it, that's a 4,000,000,005 billion dollars revenue company, which is probably worth $50,000,000,000 That's the case. Every one of those sentences is credible. I think the biggest question is the other competition, but to Jason's point, the business is there. [00:30:18] S2: What worries me in every justification for a lot of these prices is, wow. The lake pref's only 1,000,000,001, and it's such a strategic asset with a good team that the downside protection is they'll just get bought by a great acquirer. I just hear this every single time, and maybe that's true, but not everything has a downside protection [00:30:36] S0: of being acquired, does it?
00:30:36 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:30:36] S0: of being acquired, does it? [00:30:38] S1: I mean, does until it doesn't. And that's meant to be glib, but in a world where you've got 12 companies above a trillion dollars, all of them are acquisitive, all of them are in a wild, tearing hurry to build companies where time is money. And especially if the legal window is open, then there's going to be a lot of acquisitions. And the logic is true. If the market slows down, then all this stuff will go in a bad place at the same time. So, you know, it'll be true until it's not. [00:31:03] S0: I think it's overstated. I will say today it feels like a liquidation preference in, in JEV is much more valuable than a thousand liquidation preferences than a thousand twenty twenty one unicorns. Many of those will end up being worthless. So we overstate the value of the liquidation preference, right, to get the deal through the committee, but they have real value today, right? It's just I'd rather have this lick preference than quite a few from 2021. [00:31:28] S2: Okay. You said 2021 there, Jason. 2021, there were 34 Decacorns. We now have a record 42 startups that have become Decacorns in 2026.
00:31:28 · Harry Stebbings, Rory O'Driscoll
[00:31:28] S2: Okay. You said 2021 there, Jason. 2021, there were 34 Decacorns. We now have a record 42 startups that have become Decacorns in 2026. [00:31:41] S1: As they say in the Simpsons cartoon, that's 2026 so far. Right? What a quarter to go. Yeah. There was 34 decacorns in 2021. Right? So in other words, more decacorns than the last time things went horribly wrong. That's the first obvious description. In other words, because if you look back at those decacorns, Mirror was a decacorn in 2021. Know, Airtable was a decacorn. I don't think they'll be the same, but just worth pointing out. I think the more funny statistic is this. There are in the public markets a grand total of 98 decacorns ever. And if you look at them by decade, there's a scary word. It's like... And you take the private and the public decacorns as of the start of this year, we roughly generated 20 plus or minus deck of corns per decade for the last five decades. And we generated, what did you say, 42 deck of corns in less than a full year of this decade. Now, is some obviously market caps continually go up. All those things point in your favor. But it is stunning to think of 20 to 30 decacorns per decade and then 42 decacorns in less than a year. And, you know, that does only 98 public companies. I just had to 98 above 10,000,000,000, another 30 above 100,000,000,000. So 130 companies in total worth 10,000,000,000 or more since the dawn of in tech, since the dawn of American capitalism, and a further 42 this year.
00:31:41 · Rory O'Driscoll, Harry Stebbings
[00:31:41] S1: As they say in the Simpsons cartoon, that's 2026 so far. Right? What a quarter to go. Yeah. There was 34 decacorns in 2021. Right? So in other words, more decacorns than the last time things went horribly wrong. That's the first obvious description. In other words, because if you look back at those decacorns, Mirror was a decacorn in 2021. Know, Airtable was a decacorn. I don't think they'll be the same, but just worth pointing out. I think the more funny statistic is this. There are in the public markets a grand total of 98 decacorns ever. And if you look at them by decade, there's a scary word. It's like... And you take the private and the public decacorns as of the start of this year, we roughly generated 20 plus or minus deck of corns per decade for the last five decades. And we generated, what did you say, 42 deck of corns in less than a full year of this decade. Now, is some obviously market caps continually go up. All those things point in your favor. But it is stunning to think of 20 to 30 decacorns per decade and then 42 decacorns in less than a year. And, you know, that does only 98 public companies. I just had to 98 above 10,000,000,000, another 30 above 100,000,000,000. So 130 companies in total worth 10,000,000,000 or more since the dawn of in tech, since the dawn of American capitalism, and a further 42 this year. [00:33:08] S2: Scratching the obvious itch there, you're basically saying that we're in a bubble.