The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:57:47 · Jason Lemkin
[00:57:47] S2: You know what's tough, Tute? I know you wanna wrap it up. I just... I'm just learning. I'm I'm learning later in my investment career. You gotta be effing ruthless to do a venture backed open source company. Ruthless. You really do. Because look what Matt did. Matt did said, listen, I'm focused on the platform. This is what I'm passionate about. I'm not so into the hosting. Okay? That's a commodity business. I'm gonna let WP Engine do 500, you know, 100,000,000, 80,000,000, a 100,000,000, 300 of these other folks do and there's like I'm kind of into this e commerce thing like WooCommerce but I don't want to do what Shopify and Toby did like that's too extreme and so you end up not owning that much of the revenue in your ecosystem and I don't think he's mad about the the WooCommerce thing not being huge from revenue. Because WooCommerce actually is... Used to be massive in terms of scale versus Shopify. But I think he's looking at WP Engine, he's like, not only did these guys treat my community worse after the PE buyout, which I do think is objectively true, but I kind of want that 500,000,000 now guys I wouldn't have minded having that extra 500,000,000 for this crappy commodity hosting that I could do a better job but in fact we're on their own product it's a great product but my guess is it's doing a fraction of what it has to be mathematically right it's like I want that you know and so if you're too kind in open source, think you lose. If you're too kind, you lose. You got to be ruthless.
00:58:59 · Rory O'Driscoll, Harry Stebbings
[00:58:59] S1: If you think about a couple of different agenda items that we've talked about here, you know, on the one hand trailing edge of tech trends, you have Mirror getting bought for 2.7 times, and you have a nasty little spat over with flat to declining asset in open source land in automatic. And then on the front edge of the thing, have companies like Instinct, you know, raising literally four weeks ago at 2,500,000,000, now raising at 10. You mentioned the Jeff Dean kind of spin out raising at 10,000,000,000, now raising at 50,000,000,000. The big picture point, it really captain obvious here, but it just shows venture, so unlike PE, is not about valuation, and there's not any safe assets. It's just you're either in the head of the train, in the new, new thing, everything is possible, or you're in the tail end of the train and life is shitty. [00:59:52] S0: I was with one of the biggest CIOs the other day, and I said, you've been doing this for thirty years. Have you ever seen a time like this? I'm cognizant that I'm on the younger spectrum. I'm not that young anymore, but I haven't seen all cycles. And he said, I've never seen a time like this. This is more nuts than it's ever been. This is unprecedented.
00:59:52 · Harry Stebbings, Rory O'Driscoll
[00:59:52] S0: I was with one of the biggest CIOs the other day, and I said, you've been doing this for thirty years. Have you ever seen a time like this? I'm cognizant that I'm on the younger spectrum. I'm not that young anymore, but I haven't seen all cycles. And he said, I've never seen a time like this. This is more nuts than it's ever been. This is unprecedented. [01:00:09] S1: I think that's true. I was investing only since... I love this. Only since '93 or '94. So I did live through the .com investing thing, and it was pretty crazy because you also had the whole millennial thing about Y2K and the world was going to end just like now. We all have to have a world ending thing. And let's be honest, New Year's Eve, December 'ninety nine was a pretty wild fricking party in San Francisco. Half the people were getting toasted drunk because they were rich, and the other half of the people were staying up, making sure that the Y2K thing didn't bring down the world, which was the actual worry at the time, bizarrely enough. But it's nothing compared to this. I think the ability of AI to just excite the imagination is just way higher. And the internet was awesome, but AI, you you can start talking about the AI, the software is human, you can get carried away. And then the second thing is, you know, instead of existentially worrying about the computers won't work because of Y2K, we now get to worry about the whole world ending. It's the same thing on a way more magnified scale. And the money is 10 x bigger.
01:00:09 · Rory O'Driscoll, Harry Stebbings
[01:00:09] S1: I think that's true. I was investing only since... I love this. Only since '93 or '94. So I did live through the .com investing thing, and it was pretty crazy because you also had the whole millennial thing about Y2K and the world was going to end just like now. We all have to have a world ending thing. And let's be honest, New Year's Eve, December 'ninety nine was a pretty wild fricking party in San Francisco. Half the people were getting toasted drunk because they were rich, and the other half of the people were staying up, making sure that the Y2K thing didn't bring down the world, which was the actual worry at the time, bizarrely enough. But it's nothing compared to this. I think the ability of AI to just excite the imagination is just way higher. And the internet was awesome, but AI, you you can start talking about the AI, the software is human, you can get carried away. And then the second thing is, you know, instead of existentially worrying about the computers won't work because of Y2K, we now get to worry about the whole world ending. It's the same thing on a way more magnified scale. And the money is 10 x bigger. [01:01:06] S0: Can I ask, being the money being 10 x bigger, I sit in in Europe, as you know, Rory, and remind me frequently? [01:01:12] S1: But, actually, Howard, you don't. You actually sit in England, which deliberately chose not to be part of Europe, but I know what you mean. It's okay. Sorry. That was mean. [01:01:20] S0: Listen. You know, I wasn't pro Brexit, but I I... You're technically right. I agree. [01:01:24] S1: Yep.
01:01:24 · Rory O'Driscoll, Harry Stebbings
[01:01:24] S1: Yep. [01:01:24] S0: Very sad. Mister Al raises €3,000,000,000. It's Europe's largest ever tech round. They're gonna hit 1,000,000,000 in revenue by the end of the year. For a company that's had, I think, a lot of criticism definitely in Europe, this was a very meaningful sign of progression and hope that actually we do have a horse still, so to speak, in the race. What should we take from this round?
01:01:48 · Rory O'Driscoll
[01:01:48] S1: I think it's less about being a competitive frontier lab and more about AI sovereignty. I don't think you should take the fact you have a horse into it. If you're saying Mistral is now competing with OpenAI and Anthropic in the frontier model race, you and I know that would be bullshit. I think what you're really saying is Europe has decided, based on the antics they see from the companies at the frontier in The US, coupled with the dynamics of the political interaction between The United States Of America and Europe, that a technology as important as this has to have a sovereign European component. And even though it's obviously ludicrously inefficient from any kind of rational perspective, they've decided we just got to make this thing happen and give Mistral enough business to make sure that it's a viable European AI competitor. And it's clearly Mistral, and there's a long tradition of Europe doing. I mean, Airbus is an example of that. They said we can't just be relying on the Americans to make planes because otherwise we're a vassal state. And they said, we're going to make it happen. France and Germany are going to make planes and we're just going to do it. It took ten or fifteen years, but they built a viable competitor. It's probably the same thing here. They're simply saying we can't afford to have I mean, we've seen instances where I think recently, I'm doing it from memory here, I think the US government said to Anthropic, Thou shalt cut off all other countries from Fable. I think it was Fable or one of the most recent models. Cut them off because it's a security risk. And we didn't say cut off, you know, Russia, but leave The United Kingdom and France and Germany. We said cut off everybody. If you're in Europe, the day that happened, you said to yourself, we can't rely on these guys anymore. And the day that happened, you made Mistral a viable European competitor. Is it gonna be as big as us? No. It's not gonna... I mean, I don't think it's gonna be as... I mean, Airbus has actually overtaken Boeing. Took thirty years. Right? But in the short term, it's not gonna be any near as big a market cap as OpenAI on Tropic, but it's gonna be a winner, and it's gonna be the European winner. So thank you very much, politics. If you... If you're a if you're a Mr. Al shareholder, you should be very grateful for the current political tactics.