The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:11:02 · Rory O'Driscoll
[00:11:02] S1: Jason is broadly right. Mean, big picture on the forecast. There's actually three numbers that matter not to. They're forecasting growing from 35 in ARR end of this year to three fifty, I think, in three or four years. So 10x growth, worth pointing out, by the way, that last year, Anthropic grew 10x in one year. This is a 10x forecast over three or four years. So almost modest. Second thing is the burn. You're they're forecasting a burn, growth, a net burn of $278,000,000,000. And that's like money out their door. They have a 122,000,000,000 of cash on hand, so they got time to raise the extra capital. The amazing number is the other one, which is the CapEx required to do all this, not all of which is on their balance sheet, a lot of it's on other people's balance sheet, is around 700,000,000,000. So it's just a reminder that this is, unlike software, this is an extraordinary capital intensive business. And to kind of bring it back to what you said, Harry, if all that burn, all 700,000,000,000 of it had to appear on the balance sheet, it would be even worse than that. And the only reason they're able to do it only burning $278,000,000,000 is because other companies like Oracle and like Nvidia, of Rev Support and Backstop Insurance, are able to say, we'll do the CapEx and lease it to you. So this is an extraordinarily capital intensive company. It is going to consume, directly or indirectly, 700,000,000,000 worth of CapEx to get there, to get to $350,000,000,000 in revenue. Intelligence is not cheap.
00:12:33 · Harry Stebbings, Rory O'Driscoll
[00:12:33] S2: I think that was the most efficient covering we've done of OpenAI and Anthropologie. [00:12:36] S1: Yeah. We can move on. [00:12:37] S2: So we're gonna move to a story of the week, [00:12:40] S1: which is gonna be a new feature of [00:12:41] S2: the show. Jason's IC has been a massive popular segment, and we're gonna add a story of the week, which for me is Meta's muse taking number one spot for days, stock ripping. Alex, Wai, and team absolutely crushing with this launch. Thoughts? Bad for OpenAI. [00:12:59] S1: That's a good point.
00:12:59 · Rory O'Driscoll, Jason Lemkin
[00:12:59] S1: That's a good point. [00:13:00] S0: The... It's the first real chat GPT competitor. Anthropic never really cared about Claude until recently. Amuse is many things. It's one of the best pieces of software I've I've ever I've used ever, but it's also a Trojan horse to fight Chet GPT because the LM's pretty good. Every time you're doing an agent, you're also asking questions. You're not just telling it to get your movies. You're saying, Hey, what is Plane? How is that latest superhero movie? How was the latest 20 VC? It has opinions. It's a darn good, normal consumer grade LLM, right? I don't think anyone's writing a wet lab biotech software on Muse, but at a lay level, if it's free, it has agents that are truly autonomous, which ChatGPT doesn't, and it can do all the other questions you have. And it writes you cute letters when it makes mistakes. If it's free, why would an ordinary person pay? And the tokens are vastly more than you get from ChatGPT. I I just think in addition to everything else, it's a ChatGPT Trojan horse because it it does everything it can do, and it has autonomous agents. It doesn't have to just be agents. It's doing all of it. So it's it's pretty cool.
00:14:01 · Rory O'Driscoll
[00:14:01] S1: Could not agree more. I think it's excellent. It's funny, I think, as I said two weeks ago, we were saying they got to ship this. Literally between talk, our conversation and release, they shipped it. You know, we've been skeptical and a little harsh about some of the, you know, MetaFacebook investments in AI with... And it'll determine enterprise model. This is the exact opposite. This is spot on, plays into their distribution leverage. It's intuitively kind of something that you would take. I mean, to the extent that you do trust Facebook with everything else already, longer discussion. At this point, if you're if you're deep in Insta or Facebook, you're in already. You don't care. And it's a good product. Jason, you're exactly right. It's a good UI. It works. It gives me recommendations, and they just have the distribution. So I I agree. I thought it was a wow moment. I thought it was a real win. You know, I'm not sure about the economics and if it's worth a 100... But it's worth pointing... This is... It's worth pointing out what it meant for Meta. They're up seven or 8%. They've made a $100,000,000,000 in market cap this week because of that product. Right? And that just shows when you... I mean, it's something I have to remind myself. Yeah. The art... The... What's possible when you're dealing with these huge end markets. Right? You can see the the value of a play in that space. It's like... And that's the argument why OpenAI might look at that and bring it back to venture. They made a 100,000,000,000. We buy Instinct? Do we have to do something in this space like now?
00:15:22 · Jason Lemkin, Rory O'Driscoll
[00:15:22] S0: And it's up 34% this month. Some people say it's up more because people in the beta test were buying. [00:15:28] S1: That's interesting. I saw that. Yes, that the beta testers will buy, which I just love. Because yeah, for the longest time I was like, it's a great business that's spending a lot of money in a bottomless pit of enterprise AI. Now it's a great business that could have an X act in AI. That's a big change. No, that's worth the rerating and give them huge credit. So I think was a big week for Meta to state the obvious. [00:15:48] S0: The thing is, the reason I say it's for Rich Norris, it built me an entire CRM. This isn't just reservations. And it's very good. Now it's very limited two weeks in. It does everything. It built me an entire CRM for every SaaS response. It tracks every email about them, every item in real time, it updates it. And so it is sort of a CRM of one. Now it's limited because it can't really collaborate. You couldn't use it for a Salesforce, but it's imagine yourself. It is some of the first compostable software that I've ever compostable that I've ever actually seen work. This has been a myth for the since the show started, right? Now I really said I need a CRM for myself. I need you to track 150 sponsors daily in real time using AI. And it just built it for what it is. It's very good. And it costs zero. You need all the pieces. You need database. You need ALM. You need intelligence. You need access to email. You need all of this for that to work.
00:15:48 · Jason Lemkin, Rory O'Driscoll
[00:15:48] S0: The thing is, the reason I say it's for Rich Norris, it built me an entire CRM. This isn't just reservations. And it's very good. Now it's very limited two weeks in. It does everything. It built me an entire CRM for every SaaS response. It tracks every email about them, every item in real time, it updates it. And so it is sort of a CRM of one. Now it's limited because it can't really collaborate. You couldn't use it for a Salesforce, but it's imagine yourself. It is some of the first compostable software that I've ever compostable that I've ever actually seen work. This has been a myth for the since the show started, right? Now I really said I need a CRM for myself. I need you to track 150 sponsors daily in real time using AI. And it just built it for what it is. It's very good. And it costs zero. You need all the pieces. You need database. You need ALM. You need intelligence. You need access to email. You need all of this for that to work. [00:16:39] S1: You're obviously not the typical user, and I don't think their economics are structured on everyone building their own CRM, or it's going to eat compute. But yes, can... Through that interface, you a sophisticated LLM at the back end, you have your own little sandbox. They have a lot more standalone compute and sandbox for you than I think Instinct does. So, yeah, that makes sense.