The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:45:05 · Harry Stebbings, Parag Agrawal
[00:45:05] S1: They're so powerful. They're so powerful. And so when something does happen [00:45:08] S0: Yeah. I actually worry about that more. I worry about us being right on AI being a really useful technology, that it being a... Despite all the risks, it being net positive in a really material way to society. And despite that, I think we won't diffuse it the right way. We won't use it the right way. We will remain too concentrated and we will make the next few years really, really rough as things change around us. What would look like? I don't know. But then I think over time, as things have changed, like, like, the world is very different now than even, like, twenty years ago. Right? But it'll be really different in ten years from now. And I don't know how fast we can adapt or change. And I think if the technology moves faster than our ability to adapt, it's going to be rough in some way. What's your spookiest prediction? Or what do you believe today will come true that people think is absolutely nuts? You know, before it was like, you'd never put your credit card online. [00:46:09] S1: Do you remember that? Nuts. Or even better, Parag, you'd never find the love of your life online. Are you stupid? Now? Both.
00:46:09 · Harry Stebbings, Parag Agrawal
[00:46:09] S1: Do you remember that? Nuts. Or even better, Parag, you'd never find the love of your life online. Are you stupid? Now? Both. [00:46:17] S0: Yeah. And I think... So I think you and I live in a bubble. Right? You're using instinct to make purchases for you all the time. And you're in the point o one percentile of humanity that is comfortable. You ask someone else like that, oh, there's this agent that looks smart. And you wanna give it like a full on ability to go spend your money. I think today, people will have the same reaction as like, oh, you don't put your credit cards online. You don't give your credit card to an agent. You don't give your logins and passwords to agents. Like, I think that's where the world is today. [00:46:48] S1: I think that's gonna change in three months, though, when MetaPay comes out and it allows Muse to have siloed accounts that you can draw from, kind of like top up accounts for kids. [00:46:57] S0: I think you're talking about the technology being there. I think it takes longer for social acceptance to be there. I think if you go to a non bubble conversation of people today, when do you get to a majority of people saying that I trust the agent enough to have it, have access to my bank accounts and spend money on my behalf, send emails on my behalf, read my emails. I think that's not happening in three months. [00:47:24] S1: You don't worry about the the wealth dispersion increasing. You're in the middle
00:47:24 · Harry Stebbings, Parag Agrawal
[00:47:24] S1: You don't worry about the the wealth dispersion increasing. You're in the middle [00:47:28] S0: of the valley. You've you've you've seen him firsthand. So I don't know. I I do think there should be some disparity in wealth, but I don't know what's too much. And my fear is we're trending towards too much. There should be disparity in wealth is my worldview. Sure. You're a capitalist. I don't know when it's too much, but I do think there are real forces that will push us to fix things. Like, I think that part will work, hopefully, without crazy things happening. [00:47:56] S1: You as we're seeing more and more of the gains seemingly be made by vertical ownership, like Meta. They have compute. They have chips. They now own the application layer. It's the world one where vertical ownership is the motherload strategy. And with the greatest of respects, OpenRouter on the routing there, you and another layer kinda either get eaten or a small providers.
00:48:19 · Parag Agrawal, Harry Stebbings
[00:48:19] S0: There's always American vertical integration. The counterforce here is things and technology are changing so fast that if someone decides that my only play is vertical integration, I don't play nice with anyone else. I think it's the same example as the Amazon example. If you get too stuck on, I will only play for vertical integration, you might box yourself out. And so the people who build the best stuff and can figure out how to sell it will have a place. And in different markets, like, example, right, like, I believe in vertical integration too because I vertically integrate everything from the call all the way to the API layer. But I have decided that to reach the widest population of agents searching the web, I stop at the API layer because going further precludes me from using my technology to be super horizontal. And so we're making a technical bet just like these models are really good across many disciplines. The same model is good for lots of different things. Search problem underneath is the same for all kinds of information signal needs. And if our bet is right, even verticalized players, they might verticalize models and they might verticalize hardware. They might use our web search. [00:49:32] S1: One of the providers that's going full stack is is Elon. I am fascinated. The world has a perception of him from social media, from everything. You've seen him behind the scenes. What did you see that the... Maybe the world doesn't know about him?
00:49:32 · Harry Stebbings, Parag Agrawal
[00:49:32] S1: One of the providers that's going full stack is is Elon. I am fascinated. The world has a perception of him from social media, from everything. You've seen him behind the scenes. What did you see that the... Maybe the world doesn't know about him? [00:49:47] S0: The thing I'll share here, which isn't all of it, I have lots of disagreements with him, but I'll share what I think is for founders here, what is I think the thing you can admire about him, the urgency and the ability to compress time. I think having unreasonable expectations of people is mostly a good thing. Most people don't understand what they're capable of and kind of implicitly sandbag themselves and implicitly set lower expectations themselves than they're capable of. So when simultaneously inspired and pushed with urgency, people can do more than they thought. And I think he can sometimes extract that from people. And when that works, it's powerful. [00:50:29] S1: What do you think of the Twitter product and direction today? [00:50:33] S0: Listen, I always liked what we call Birdwatch, which is now Community Notes rebranded. It's a good idea. I'm glad people keep... People have continued working on it, launched up. Right. [00:50:44] S1: We're gonna do a quick fire round. Okay? Let's go. Would you invest in Instinct at 10,000,000,000? [00:50:49] S0: I don't invest because my wife is a VC, and we have a compliance process that is more trouble than it's worth. [00:50:57] S1: Wow. That's costly with the greatest of respect.
00:50:57 · Harry Stebbings, Parag Agrawal
[00:50:57] S1: Wow. That's costly with the greatest of respect. [00:51:00] S0: No. It's it's a decision. Listen. Like, I... If I invested, I would invest based on meeting a founder for thirty minutes. I think we have enough exposure to the venture. I have no reason for believing I'm a better investor than... I have some perhaps network advantages, and I run into a lot of great founders all the time. Many of them are my customers. [00:51:23] S1: Vinod Khosla. [00:51:24] S0: Yeah. [00:51:24] S1: One of your first investors on your board. Biggest lesson from working with Vinod? [00:51:29] S0: Technical intuition, centering a lot of what you do towards a longer term technical aspiration. And as soon as you solve one problem, trying to place bets on the next two or three, preempting technical bets. [00:51:43] S1: What have you changed your mind on most in the last twelve months? [00:51:48] S0: I started with a very pure technical and product focus. Only thing that matters is building the best technology and the best product. Product. Nothing else matters. And now I see week on week value of having highly competent sales and being good at marketing. Yeah, I think I discounted those things. It's not that I thought they weren't valuable, but I didn't fully appreciate the the week on week visceral delta you could perceive by being good at those things. Like a naive tech person thing to say, but it's true. [00:52:21] S1: You feel that way. Perplexity or axe, sir? Which one's a bigger threat?