The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
01:00:22 · Jason Lemkin
[01:00:22] S0: Yeah. But AI should get to know you. If AI can reduce the friction... The the the wasted time on dating, the wasted time and money, the ROI is really high. Right? I totally agree. What's a date cost? $200? A good date? You know, I put that... I put a 150 on Bumble AI. I'm already $50 ahead. Jason, any final ones? Because Rory's not gonna give me a suggestion. This one is barely worth talking about, but... Because you had it on the list. It's just worth reflecting on as we were in Q4 of the year. Do I have this right? Yeah, we're in Q4, right? Reflecting on the SaaSpocalypse for a moment, right? And I really don't even want to talk about it in 2027 because 2021 is so far behind us. But I think the SaaSpocalypse is still here. And I think about this a lot. What I mean is the SaaSpocalypse of when we're, you know, earlier this year was in part a short driven thesis that we would vibe code our way out of all these applications, right? The market feared that growth for many leaders slowed at the same time, which seemed to self reinforce the fact that we'd vibe code the old app. We reached all time lows in like March or April, something like that, right? And the markets roared back, right? NASDAQ's up 22 this year. I have a Saster .ai index. You can see a Saster of those. I think it's up 28% or the World Cloud's up 25%, right? So nominally the SaaS pocalypse was a joke and Marc Benioff made this point at the low that this too will pass. And nominally it did, like that fear passed. But I just say two things. Here's what I think about this. One, it passed for those well above 1,000,000,000 in revenue. Agreed. I think it only passed for those with massive scale. And I think everyone without massive scale is living a worse saspocalypse than in March or April because no one wants to buy software. I think we need a new term, but everyone's breathing a sigh of relief. I don't think we should be breathing any sighs of relief.
01:02:05 · Rory O'Driscoll, Jason Lemkin
[01:02:05] S1: Agreed. Because if you think about all that happened is it's a mature consolidating industry now. And what happens in mature consolidating industries is that the market leaders have scale, they have market cap, and they have a leverage, and they're just going to start, you know, you're seeing many off doing it, you're to see acquiring companies, and then the ones that don't acquire, you can grind out. Cause you might do this. If you're already at 40,000,000,000, your money good. You've got cash flow, you're good. Right? If you're at a 100,000,000, you're trying to get to 300,000,000 in a SaaS product, it's really hard today. [01:02:33] S0: Yeah. I wonder if we, if we even, when we started the show, it seemed like 500, you could IPO at 500,000,000. I'm not sure after Orin Friends, that's even true today in this asspocalypse. I don't know that 500 is durable or safe any longer, right? You might need a billion and 0.5 or 2,000,000,000 of ARR as a software company to have a safe IPO. And that outside of Jev and friends, that has a lot of implications that this sespocalypse is worse than we thought. 500,000,000 isn't good enough anymore. Now it's gotta be 1 to 2,000,000,000 in ARR for these companies to go public and the math gets harder and harder. So I don't wanna talk about it forever because it's a new world, but, you know, the only thing that is safe is scale.
01:02:33 · Jason Lemkin, Harry Stebbings
[01:02:33] S0: Yeah. I wonder if we, if we even, when we started the show, it seemed like 500, you could IPO at 500,000,000. I'm not sure after Orin Friends, that's even true today in this asspocalypse. I don't know that 500 is durable or safe any longer, right? You might need a billion and 0.5 or 2,000,000,000 of ARR as a software company to have a safe IPO. And that outside of Jev and friends, that has a lot of implications that this sespocalypse is worse than we thought. 500,000,000 isn't good enough anymore. Now it's gotta be 1 to 2,000,000,000 in ARR for these companies to go public and the math gets harder and harder. So I don't wanna talk about it forever because it's a new world, but, you know, the only thing that is safe is scale. [01:03:11] S2: And credit to the few who are able to transition preplays into postplays of the pre AI play to the post AI play like an intercom did. One of our businesses last week, I'm not allowed to say how much it sold for, but it sold for a very large amount of money, not billions, but hundreds and hundreds of millions, Tack Wolf to SAP. And it was it was a pre AI enterprise software company in the HR space of all spaces, and it was able to transition into an AI first company and sold to SAP for a big amount of money, the biggest ever for Belgium, which isn't particularly saying much, but still big. And so I think there is still room.