00:18:17 · Elad Gil
[00:18:17] S0: So if you look at the history of technology, every time you have a new platform, it forward integrates into the most valuable application in the platform. So for example, Microsoft OS board integrated what became Word and Excel and PowerPoint and Access, and they basically killer bot companies that were doing that. And then they port integrated in the browser, and that was a famous sort of fight with Netscape and then I've used Google in the two thousands port integrated into the biggest vertical search categories. Right? They had local, and they did travel, and they did finance. And so, this always happens. And so it's not odd that the foundation model companies or labs will forward integrate into the biggest applications starting with code. Code in particular, though, also has this interesting attribute, which if if you have a very good coding model, it helps you generate the next model faster. Right? And that's because it helps you write code for it. It helps you with data labeling. It helps you with a bunch of stuff. And so, you know, one of the hypotheses in terms of how we get true lift off into a singularity is you have models, Boolean models, Boolean models, and then you just take off. Right? And so it's not a surprise that these... The labs are focused on that. It seems like the the single queerest specter of speed of change. And eventually, we have, like, evolving models and evolutionary trees, and you spawn 50 versions of the same thing, and there's some utility function abrasive against and all sorts of crazy shit that, you know, seems likely to happen at some point.
00:19:36 · Aditya Agarwal, Elad Gil
[00:19:36] S1: So what is the world? It's great. We'll be all, you know, we'll be all at [00:19:42] S0: the edge of this. I'm sorry. I got a little bit distracted. [00:19:45] S1: I was gonna be like, here is Satya. Eat it bright. Do you have me happy?
00:19:45 · Aditya Agarwal, Elad Gil
[00:19:45] S1: I was gonna be like, here is Satya. Eat it bright. Do you have me happy? [00:19:50] S0: They should not ask me questions like this. This is a loaded question. I don't know whether they're gonna afford an interview. Yeah. Exactly. So I If you look at durability, there's strategic ways that you can be durable. And by the way, if you look at... You know, the whole wrapper around a model thing, don't really buy. Because if you look at a SaaS company, is this a wrapper around a SQL database? And I'll fix it. Those things just just bite. Right? I think usually what you need is you need to build a multiproduct company. So there's three theories. One is there a system of record? You're basically where core data about a thing is stored in all its attributes. And so, you know, that's a workday for all the people working at your company or whatever. And so then you keep all the dozen applications around it, and it's very, durable. That's that's one hypothesis in terms of what creates durability. I think the single biggest thing is just, can you build a dozen different products that you're cross selling roughly to the same customer or user? They're deeply integrated, and therefore you have multiple workflows. And I think then you're very defensible. So for example, if Harvey has two dozen different workflows for different legal applications and use cases, that's defensible. If they're just, you know, let's chat with the legal document, they're not very defensible.
00:20:57 · Aditya Agarwal, Elad Gil
[00:20:57] S1: It's a good observation. I actually haven't... Maybe I've said this publicly before, but that's interesting because it's a very, know, kind of what Parker always talks about with the tech startup. [00:21:06] S0: It's Rippling. It's HubSpot. It's actually Microsoft. [00:21:10] S1: It's a lot more doable today because you can just crack that stuff out. [00:21:13] S0: Yeah. It's what's the surface area of your product, and I think it's very under discussed and is often discussed as a revenue driver, which it is. And, you know, you have different wedges in that you can cross sell against. You can cross sell to the same account. It's hugely defensible. Right? Because usually what happens is, a founder will start a company that build one product, and they'll win because a product is 10 x better, and that'll get in distribution. And then they, keep going, and they forget the fact that now that they're the incumbent and they have all these customers that can build a product that's 80% as good as the best thing and still win because they're just cross selling. They've already done the security review. They've already done the purchasing. They were... You know, they've gone to procurement. They've gone through everything legal. And so it's really easy to start cross selling, in which case it becomes very defensible. Right? It's really hard to rip out a dozen things instead of just one thing. [00:22:00] S1: I was gonna say this, why we don't really like to sub Teams. [00:22:04] S0: Teams is such an interesting example of that. Right?
00:22:04 · Elad Gil, Aditya Agarwal
[00:22:04] S0: Teams is such an interesting example of that. Right? [00:22:06] S1: Yeah. So... Yeah. But it's actually an interesting example of what you said. Yeah. [00:22:09] S0: Yeah. Teams, it's fascinating if you look at it. So the early days of a startup, the primary thing you're competing with is other startups. And then incumbents often used to have five to seven years to react, literally, because they could just cross sell to everybody. And so that's Slack and Zoom versus Teams. Right? They were both like this, and then they flattened out, and then Slack had to sell. And the reason is because Microsoft bundled it in Teams, gave it to everybody, and then cut off their growth, and they won. And so in the olden days, like last decade, you had five to seven years of fighting other startups, and then an incumbent would come in. And if you could escape that incumbent, you won. Now maybe, there's less time for the incumbent triad because you can iterate so quickly on code and the markets are open and everything else. But the incumbent can also build share way faster even if if they're getting in their own way. And so there's this interesting dynamic that that timeline should shorten on both sides. And if so, we'll see what happens there.
00:22:09 · Elad Gil, Aditya Agarwal
[00:22:09] S0: Yeah. Teams, it's fascinating if you look at it. So the early days of a startup, the primary thing you're competing with is other startups. And then incumbents often used to have five to seven years to react, literally, because they could just cross sell to everybody. And so that's Slack and Zoom versus Teams. Right? They were both like this, and then they flattened out, and then Slack had to sell. And the reason is because Microsoft bundled it in Teams, gave it to everybody, and then cut off their growth, and they won. And so in the olden days, like last decade, you had five to seven years of fighting other startups, and then an incumbent would come in. And if you could escape that incumbent, you won. Now maybe, there's less time for the incumbent triad because you can iterate so quickly on code and the markets are open and everything else. But the incumbent can also build share way faster even if if they're getting in their own way. And so there's this interesting dynamic that that timeline should shorten on both sides. And if so, we'll see what happens there. [00:23:04] S1: That's interesting. I mean, you could argue that whatever baseline speed you are starting off, a startup should be able to accelerate it at a far fast start exponent. So you should have technically an advantage in a world where you can crack out a lot of code. I I would argue it's probably still harder for Microsoft or Google to generate a bunch of... But you never know. I get it. They're fast moving. They're also a good company.