00:16:05 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:16:05] S0: That has definitely been the most interesting situation in the last nine months, right? Nine months ago, it was like the frontier companies, the labs, they're coming for the application companies, right? Like Anthropic, they're going to come for all the application layer companies. They're going to do the legal use cases, the vibe coding, whatever. Now it's like, actually, these application companies are going to replace the providers of the models themselves with open source. [00:16:25] S1: Exactly. So what does it come down to then? It's about the customer relationship. It's about the trust. Actually, whoever has that engagement layer has, in a way, a leg up. As long as you have the same performance or better performance or same performance, but better trust, the the focus company that's in the application layer and the customer relationship should ultimately win. [00:16:45] S0: And is that true, do you think, for consumer facing applications as well, where there's less of a relationship but you've still got, I guess, like, brand and you've got... Relationship is a bit more ethereal than a one to one customer success relationship.
00:16:45 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:16:45] S0: And is that true, do you think, for consumer facing applications as well, where there's less of a relationship but you've still got, I guess, like, brand and you've got... Relationship is a bit more ethereal than a one to one customer success relationship. [00:16:57] S1: Yes, and that's a good point. It's trickier. For people to switch, consumers can switch a lot easier than businesses. Right? So, I think it's something to think about. But ultimately, at the consumer level too, the brand affinity and people changing people's behaviors, and when people are adapt, they adapt. But they don't like to change that much. You know, developers are different, for example. You know, they will actually be constantly testing new tools and switching. They're kind of like the worst people to sell to, actually. You know? They are constantly trying new things and they will change. [00:17:34] S0: And they want to find the next best thing. [00:17:35] S1: And you know what consumers do? Consumers will say if you're... They'll say... They'll be okay with whatever is good enough. Yeah. But they care about cost. So they will maybe switch because of cost because for them, if funding is good enough, like, it's good enough. [00:17:47] S0: Okay. I guess it goes back to your point on trust. Yeah. It's still about trust. Yeah. But I guess consumer facing applications build trust and loyalty in a different way, I guess, to the sort of [00:17:58] S1: Yes. [00:17:58] S0: Typical b to b or...
00:17:58 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:17:58] S0: Typical b to b or... [00:17:59] S1: And and also, like, if you look at the business side, the other other thing that we always talk about is, like, the data mods. Right? [00:18:04] S0: Yeah.
00:18:05 · Zeynep Yavuz-Willson
[00:18:05] S1: So, and that's another question. Is there really a data moat? I don't know if anyone can today come and say, like, I know for sure there's a data moat, but what I can tell you is that if you look at our AI services companies, whether that's a Legora or that's a Dwelly, or that's an integral in accounting, they're effectively layered where the work gets done. Legora is a platform where the law firm and the legal client is collaborating. Dwelly is a platform where the work gets done, where the tenant is having requests and the real estate agent is responding to it. Same thing with accounting. It's where the work is done on Integral, where the customer is having questions for the accountant and all of that, that is data that's being generated on the platform. So we're talking about effectively this, a reinforcement learning environment that you don't pay for because it's part of your stack. And I think a lot of the applied AI companies, if you look at it in the last two, three years, they were so focused on go to market because it was all about like, I need to build the brand. I need to be the first mover. I need to need to be the trusted brand in legal, trusted brand in real estate. I I need to build that. And now that that has kind of happened in customer support and a few other categories, the next step is, okay, now I need to go deeper in my technology stack. Because why? I have this threat that's coming from potentially the model companies. And two, I have this tailwind of resource, and three, I have all this data that's being generated on my platform. So, now that you have some of that scale and you have that data at scale, it's the right time to actually start thinking about how am I gonna feed that data into my own models and potentially even deliver a better experience for my customers than if I would... If I were to be staying on a closed horse or in a front room model.
00:19:54 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:19:54] S0: Yes. It's using the head start that you've got to capture the data, use the data that you've got to improve the models that maybe you're building on top of the frontier. Yeah. Interesting. [00:20:03] S1: On open source, you have the data, you're generating the data. I think up until now, they were just not focused on it, and I think it was a mix of, like, the frontier models obviously are the frontier models, so they are very good at what they do. But I think cost is becoming now a topic as well. And I think now that taking capabilities in these applied AI companies, they're also saying, like, I actually think I can build the right model for my customer because I know my customer best. I have the right data to fine tune. So I have to go down that route. [00:20:35] S0: I think it's really interesting the point that you made that it's the the application layer company, especially that you've invested in, where we're seeing most of the value, is one that sits between two people, right? Either people staying in properties and their property managers or lawyers and the people they're interacting with. I think there's something really interesting in that, that it serves as the layer of communication between two people, which I never really thought about, but it's interesting to think, like, what are the other... Where are the other products? Where are the other communication layers in the ecosystem where people should be building or are building that we haven't seen yet? You know, what other will it... Because it's
00:20:35 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:20:35] S0: I think it's really interesting the point that you made that it's the the application layer company, especially that you've invested in, where we're seeing most of the value, is one that sits between two people, right? Either people staying in properties and their property managers or lawyers and the people they're interacting with. I think there's something really interesting in that, that it serves as the layer of communication between two people, which I never really thought about, but it's interesting to think, like, what are the other... Where are the other products? Where are the other communication layers in the ecosystem where people should be building or are building that we haven't seen yet? You know, what other will it... Because it's [00:21:11] S1: all about the network effects, right? Yeah. This is where you end up having network effects. Like, Legora was a good example where it's the law firm and the legal customer, right? Because then... The in house effectively, let's say. Then if you are on Legora as a law firm and you say... You tell your customers, I want all of you to be communicating through Legora. Or...