01:26:11 · Jordi Hays, John Coogan
[01:26:11] S0: What's the context here? [01:26:12] S1: Oh, yes. [01:26:13] S0: Avadon Yes. Rodonski says recently got asked which VC firm changed the game like Steph Curry did [01:26:19] S1: for metaphors and tech these days. You love to see it. [01:26:22] S0: It's tough when you know nothing [01:26:23] S1: about examples of VC firms that changed the game like Steph Curry did for the NBA, Andreessen Horowitz and Sutter Hill Ventures, but in completely different ways. James Lynn here says a 16 z realized that everyone was undervaluing startups and massively overbid 10 x what other people were offering. I don't know if that's actually happened that often that you go get a term sheet and interesting comes in at 10 x the price. But they've certainly been aggressive on pricing and it's worked out in many cases. Yeah. For early rounds 50% higher. But Yeah. But So it got them Twitter, Instagram, Coinbase, GitHub, Anduril, Airbnb, Slack. Round sizes went up after that. Sutter Hills saw trends in cloud computing, incubated Snowflake from idea to IPO. They made Mike Speiser, a partner, the interim CEO, hired the technical cofounders, funded the entire series a. They had 20% stake in Snowflake at IPO at a $33,000,000,000 valuation. [01:27:18] S0: Worth 12 it was a $12,000,000,000 position for So pretty much the best incubation of all time.
01:27:18 · Jordi Hays, John Coogan
[01:27:18] S0: Worth 12 it was a $12,000,000,000 position for So pretty much the best incubation of all time. [01:27:25] S1: So a 16 z finds talent and makes several outsized bets. Sutter Hill sees a trend and operationalizes one to two companies completely in house. Now larger rounds are the norm, and the venture studio model is much more common. That makes a ton of sense. We'll have to ask Vineeta about that when she joins. What else do we have here in the timeline? [01:27:46] S0: I also think you can't you you can't leave YC out of that group. Right? It's Who [01:27:50] S1: else changed the game? An [01:27:53] S0: different model but highly highly highly effective. [01:27:56] S1: Yeah. I think the initial YC, the way it changed the game was that it made it completely possible for college new grads to go and start a company without getting any experience in enterprise or in business. And so that was the initial arb. Like, Sandhill Road existed. Sequoia Capital existed, Kleiner Perkins existed. But if the Airbnb guys had gone straight to Sequoia. [01:28:23] S0: Family round to get a friends and family round done.
01:28:23 · Jordi Hays, John Coogan, Vineeta Agarwala
[01:28:23] S0: Family round to get a friends and family round done. [01:28:26] S1: Exactly. So if the Airbnb guys, I think had showed up to Kleiner Perkins or Sequoia, who actually I think wound up doing the Airbnb deal later. I think Sequoia did. Pre YC, that might have been like, this is a little weird company. This is a little bit out of our sweet spot, but then you go through YC, you get coached by Paul Graham at the time and you polish things up such that you're ready to go and ready to talk to the big firms. And Paul Graham, I think famously told the Sequoia partner like you should do the Airbnb deal even as weird as it is. Like think about you know eBay for space and it worked out. Fantastic story. [01:29:00] S0: Pretty much good. [01:29:01] S1: We have Vineeta from Andreessen Horowitz in the studio. Welcome to the stream. How are you doing? [01:29:06] S7: Hello. How are you doing? I'm your Airbnb fan. [01:29:09] S1: Yes. What yeah. What's your what what what's your take on this on this a 16 z changing the game by recognizing that everyone was undervaluing startups and massively overbidding for early rounds? What do do you think that resonates? Do you feel like Andreessen Horowitz has changed the game in venture? [01:29:25] S0: Totally unbiased. Take two coming out.
01:29:25 · Jordi Hays, Vineeta Agarwala, Casey Neistat
[01:29:25] S0: Totally unbiased. Take two coming out. [01:29:28] S7: Totally unbiased. I do believe my partners are changing the game. No. And part of what's amazing about a 16 z is our willingness to bet in every sector, every vertical, every part of the economy, really every part of the economy, you know, both locally, domestically, and globally. So my corner of the world, it's a big corner [01:29:45] S6: of the world. [01:29:45] S7: It's a $5,000,000,000,000 corner of the world is health care. Yep. And one of the things I love about our firm is that we've really established a dedicated strategy here too Yep. And hopefully changing the game here too.
01:29:45 · Vineeta Agarwala, John Coogan
[01:29:45] S7: It's a $5,000,000,000,000 corner of the world is health care. Yep. And one of the things I love about our firm is that we've really established a dedicated strategy here too Yep. And hopefully changing the game here too. [01:29:57] S1: Yeah. Has, how has bio investing, healthcare investing changed? We were talking about the Airbnb example. It feels like it's it's it's easy for a couple folks with just a hope and a dream. They don't need to do a friends and family round. They can just go to Sandhill Road. They can go to places like YC. They can go to Andreessen Horowitz directly and and raise a seed round and have enough to actually pay the bills, hire a couple people, do a couple tests, launch a consumer app, launch an enterprise app. Has there been a meaningful change in the way health care and bio companies get started? For a long time, it felt like the only way to do a company in that space was you're at MIT and you do some partnership with Flagship Pioneering and then you IPO and then you're living and dying by your FDA trials. The traditional venture path felt very just like a completely separate track, but how has it evolved from your experience?
01:30:53 · Vineeta Agarwala
[01:30:53] S7: Yeah. Great question. I mean, I think we're absolutely part of the agentic wave. I've never seen so much interest in the role of AI agents in transforming how science is done, how research discoveries are made, how drugs could be developed. The FDA launched an AI agent called ELSA, cute name, but, you know, potentially signaling, you know, a transformative role for AI even in the regulatory agency, which is kind of a mind blowing mind blowing thing to think about. Right? You would have thought that it would have been the innovators and the start ups kind of pushing AI first and then waiting for the regulator to say, yes, we believe these predictive tools are going to help us make drugs. So I think we are seeing a really different market pull than ever before. At the same time, the business models in health care, you know, are still similar, and the core products that drive value are still similar. So we're in the business of making new medicines, so are the startups that we back in large part, or making the practice of medicine way better and transforming the practice of medicine. And both have some really established business models around them. Drugs that work that have an impact on patients get paid for. They get paid for because they save the system money. Services, we pay for because people need services on time at you know, from the right specialist for the right disease. And so those are all, you know, great business models in which to in which to invest and in which startups can run. But certainly startups are now running in a much more capital efficient way and a much more AI powered way than they ever were before. We need good agents in the game Where in our space