The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:32:20 · Daniel Dines, Harry Stebbings
[00:32:20] S0: I personally don't care about it. Let me let me tell you something. It's a it's a simple hypothesis. If the work, the quality were better of a human can be done by a machine, I will hire today a machine even if it's more expensive man than a human. Because human cost will only increase, and they bring errors into the pictures while the cost of machine will increase. So I will have a competitive advantage compared to people that will stick to humans. I think everyone will do this. So I don't think the cost of tokens, it will be the real question if you replace a person with AI. But the real problem today is that AI cannot replace a person. Because if, again, if bring me an Einstein that replace me, and I will happily go in any vacation in the world. But this Einstein doesn't yet exist. I would like to be interviewed and have this podcast with another Einstein. Man, this thing doesn't exist today. That's the reality. So let's call it a reality. Let's call a spade a spade. Maybe this technology will emerge and somehow Einstein's that embody like a person, that have will, that gets transformed on the job, learn on the job, have the capability of reasoning, imagination of Einstein's exist, of course, all the jobs will go extinct. [00:33:37] S1: I have a show with Jason Lampkin from Saster. He's cut his team from 25 to two. If he were in my seat now, he would say, no, no, no. It does. I replaced my VP finance. I replaced my VP marketing, and actually, the AI is better.
00:33:37 · Harry Stebbings, Daniel Dines
[00:33:37] S1: I have a show with Jason Lampkin from Saster. He's cut his team from 25 to two. If he were in my seat now, he would say, no, no, no. It does. I replaced my VP finance. I replaced my VP marketing, and actually, the AI is better. [00:33:53] S0: I wanna see this. I heard companies that replaced hundreds of support people in the past, and now they are rehiring these people. I think until this model is proven and is proven at scale, not in a particular industry for a particular guy, I don't think we can we can extrapolate we extrapolate for one data point that is gonna go across industry. [00:34:15] S1: You said about extrapolation and overexaggeration. The SaaSpocalypse was very real. Yeah. We're gonna vibe code everything. Did you vibe code tools out?
00:34:24 · Daniel Dines
[00:34:24] S0: Look, it was amazing. Yes, we did. But not too an extraordinary success. Initially, it seemed extraordinary. But when we tried to put it in production, we started to see, you know, some kind of real bottlenecks with these tools. And you need to have a lot of things that you have to maintain, connectors, permissions, audit, security. And always taking a software from a prototype to production, it's actually where the work is. It's not necessarily the writing code. Writing code is fun, but it's not there where you can really makes the difference. I think it's much easier today to make a prototype. Prototype is so easy, but then you have to iterate to make the prototype in production. And this is the testing and everything else. We were trying to replace, like, a procurement tool right in our system. I think we have a lot of success. It was initially... It was written only by AI. But then it comes to, you know, speaking to this self improvement loops. Kind of don't trust we don't have enough test. We don't have enough trust to put this tool in production 100%. And humans, in our experience, humans have to intervene a lot into how this Vibe coded tool. For instance, the database schema that Vibe coded tool created was completely bogus. A human has to come and, you know, create the structure. So right now, you are not at the point where, you know, you will have, like, a business user that understands a problem, and they will vibe code a tool. So you you will still need to put engineers and people. You need to maintain it. So it's a long process. So eventually, you will end up paying probably as much, if not more, as the tool you replace while you keep some of your good and best people bandwidth occupied.
00:36:23 · Harry Stebbings, Daniel Dines
[00:36:23] S1: Would you buy Salesforce today? [00:36:24] S0: I would buy Salesforce as a system of record. [00:36:28] S1: As a stock? [00:36:29] S0: As a stock. Look. I invest in software as a category, and I think I made a good investment in, you know, few months ago because I I bought in the bottom of Saspocalypse. Even our own stock, you know, has been doing better. But the markets the markets today are driven so much about sentiment and not the value. So it's kind of hard for me to make a judgment of an individual company. But I don't think Salesforce can be replaced by wife coding, if this is the question. [00:37:00] S1: I don't understand why a company would go public today. If you think about the two drivers of being public, number one is liquidity for shareholders, employees and shareholders. Well, Stripe and many companies are able to have liquid stock in private markets. And two is the ability to have M and A, a tradable asset that you can buy with. I mean, many, many private companies are able to buy with private stock. With Stripe, we're gonna do PayPal with private stock for 60,000,000,000. So that's not a barrier. And the casinoization of public markets, as you said, with current stock markets being sentiment driven, I don't understand why one would.
00:37:00 · Harry Stebbings, Daniel Dines
[00:37:00] S1: I don't understand why a company would go public today. If you think about the two drivers of being public, number one is liquidity for shareholders, employees and shareholders. Well, Stripe and many companies are able to have liquid stock in private markets. And two is the ability to have M and A, a tradable asset that you can buy with. I mean, many, many private companies are able to buy with private stock. With Stripe, we're gonna do PayPal with private stock for 60,000,000,000. So that's not a barrier. And the casinoization of public markets, as you said, with current stock markets being sentiment driven, I don't understand why one would. [00:37:35] S0: But Harry, let's don't make a confusion between, you know, some very exceptional companies and the most companies that are out there. Are so many companies that are kind of zombies right now. These 2021 zombies, they would fare better in the public market right now. At least their investors will have a way for exiting their... Employees will have a way to make some money. Nowadays, all of them are sitting on paper money. Okay? But public markets will face them with the reality of what's their real valuation. I will not say there is no value in the... Why why the Anthropic is trying to do IPO in the end. [00:38:16] S1: Well well... But they're a unique company alongside OpenAir, which just has to because they have exhausted all private funding that exists. They are literally hitting the tap out button on the supply of private capital. They're extraordinary companies because they just need too much money.
00:38:16 · Harry Stebbings, Daniel Dines
[00:38:16] S1: Well well... But they're a unique company alongside OpenAir, which just has to because they have exhausted all private funding that exists. They are literally hitting the tap out button on the supply of private capital. They're extraordinary companies because they just need too much money. [00:38:33] S0: Do you believe all the investors in OpenAI and Anthropic will stay in the companies for years to come? [00:38:38] S1: No. I think some will do, [00:38:40] S0: but some Some will do, of course, but I think we will see an Exodus. Honestly, I don't believe that 2,000,000,000,000 or whatever, maybe they will reach 5,000,000,000,000 more, because if I buy a 2,000,000,000,000, I I need to have a path to 5. [00:38:51] S1: But if they went public at 2,000,000,000,000, would you sell? [00:38:54] S0: Anthropic in particular, I wouldn't. Because do you remember on our last podcast, I think you asked me what's the company that I bet on, and I said Anthropic. And Anthropic was worth 60,000,000,000 market cap. Maybe I was stupid I didn't invest. You would have made more money on [00:39:10] S1: that than [00:39:11] S0: the Salesforce or ServiceNow or whatever. Yeah. Yeah. 100%. So I would not sell... And I think it's same with OpenAI, man. I don't have I think OpenAI has catch up quite nicely, and I use interchangeably right now. I just [00:39:25] S1: think we're in a market where the big get bigger and value concentrates more than ever.