The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:55:10 · Rory O'Driscoll, Jason Lemkin
[00:55:10] S1: No. The the mission is clear. [00:55:11] S0: You don't know what Vista's gonna do. You don't know what Tomo Bravo's gonna do. You don't know what Francisco partner, but you know what the bending guys are gonna do. They're gonna just axe almost your entire team, right? To a next level I've never seen before. Right? Maybe Constellation does this. I don't know, but I've I've never seen it before. [00:55:25] S1: For what it's worth, I think bending spoons has an... I mean, they all are very efficient, Bending Spoons has a central, a bigger centralized component. I think Constellation's argument is everybody runs on their own, but we don't spend a ton of money in sales and marketing, and you got to have 40% EBITDA, I don't care how you do it. I think bending spoons argument is all of the above, plus all your G and A is centralized, all your people are centralized, so you just need even less. So it's variations on a theme of lean and mean, and even leaner and even meaner.
00:55:54 · Jason Lemkin, Harry Stebbings
[00:55:54] S0: I'll tell you the other one just on the theme. And Harry, you can cut me off if you want, but I was thinking about this and I put this, I'm very sensitive to this. As we had on the dev podcast, I'm confused what loyalty means in the AI age, right? I've got many flaws. Loyalty isn't one of them. But, you know, Cloudflare Matthew just came in and said, I'm laying off 20% of the team, just doing it. He did it in one day and they beat the quarter. They've accelerated growth even more. The stock price is up like 80% this year. And it's not bending spoons. He didn't decide to gut Cloudflare, but he made the right call. He's like, we're not failing. We're an AI beneficiary, but we are too slow. We're wasting too many times, too much effort on folks that aren't going to get us there. I'm going to do 120% cut, not because we're struggling, but because we're to grow even faster and they've reaccelerated. You know? I think bending spoons, it it will... I don't know. But some of these are just too small. This one, I see these layoffs. I always think on... As as much as I care, I'm like, they're too small. Cloudflare did 20, and it worked. [00:56:58] S2: The hard thing for bending spoons now is it actually has to find large enough companies that it can buy. There's lots of smaller companies, but it needs to find large enough revenue based companies that it can actually buy. That was what was really interesting when I spoke to them. [00:57:10] S0: Yeah. It's 3% organic growth. So if you wanna grow 80% like they are, you gotta buy big stuff. Right?
00:57:10 · Jason Lemkin, Harry Stebbings
[00:57:10] S0: Yeah. It's 3% organic growth. So if you wanna grow 80% like they are, you gotta buy big stuff. Right? [00:57:16] S2: Honestly, Jason, the churn on these companies when they buy them, though, I mean, the numbers are just... You have to price increase to the max just to keep these these businesses going. While we were talking, it may be uninteresting to you. I might have been a user of this company in the past. Bumble has announced that it will be taken... Rory, Bumble, if you don't know, you probably don't, being a happily married man for so many years, but it's a dating app where young men can find young women. And I think there's a professional network as well where you obviously have a dating app, and they are being taken private by mister Ravi Gupta in his new firm, Ithaca Holdings, for $1,300,000,000, I believe it is. It's a pretty cool bit of news, a holding company taking Bumble private. [00:58:02] S0: Yeah. Was... Market cap was, 500,000,000 before the deal. Right? Yeah. Yeah. Good premium, man. VCs have always hated it, right? The churn, the problems with the customer lifetime value, they've always hated it, right?
00:58:02 · Jason Lemkin, Rory O'Driscoll
[00:58:02] S0: Yeah. Was... Market cap was, 500,000,000 before the deal. Right? Yeah. Yeah. Good premium, man. VCs have always hated it, right? The churn, the problems with the customer lifetime value, they've always hated it, right? [00:58:13] S1: It's funny because given the percentage of people who meet on the apps now is 50, 60%. But if you think about it, there's a business that provides the most basic human need, which is marriage, etcetera, dating marriage. Like, literally the thing that people care about the most, just look at the number of pop songs about it versus everything else. And all you get is a few lousy billion bucks. I mean, you're solving the needs of half the Western world and all you get is a couple million bucks. It's a funny world. Billion bucks.
00:58:38 · Jason Lemkin
[00:58:38] S0: Listen, I could be wrong. I'll give you the bull case on Bumble, right? Just as a builder, right? And this may be wrong. Having built a matchmaking app for our SaaStr community, having thought through this in AI, you can do so much more with AI than you could do before, right? I haven't used Bumble, no criticism, right? But I can only assume the matches are at best mediocre, right? They're visual and you have a fairly small amount of data to grab from, right? If Bumble has massive historic data, if you can get other data and you can use AI to make dating better, and if you have a data science team that can do this better than others, everything's competitive. But I could imagine it being the outcomes being much better with AI, right? Much better with deep analytics across lots of data. Mean, this isn't is Captain Ives, obviously not new to the team, but I would imagine there's a bull case where someone could actually make much better matches. Charge more for it, raise prices, because it's much better. Instead of going on 20 horrible dates or getting a bunch of creeps, you have five great ones, right? You know, the old, old eHarmony idea, but it actually works. Anchor high and quintuple or 10x the value of this business. That would be the bull case to me. But they're not the only guys probably thinking about it in the space, right? How to use more data and AI to make better matches.
00:59:51 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll
[00:59:51] S2: And also actually how to use synthetic versions of yourself, AI avatars that represent you, and then you can go out and meet a 100 different people without actually spending any time meeting anyone. What a wonderfully antisocial way to date. [01:00:03] S0: Yeah. But it might work. But it might work. [01:00:06] S1: In the end, I do believe the object of dating is at some point to make contact in the physical world, as I understand the mission. So Oh, boy. For a while, but at some point [01:00:16] S2: That sounds terrifying. No. We sit scrolling, which is why we have such a good business.