The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
00:16:39 · Rory O'Driscoll, Harry Stebbings
[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. [00:17:00] S2: Okay. For for those that don't know or haven't used it, a lot of people use it to buy things from different providers. Amazon has, in response, blocked it. Shopify has decided to partner with it. How do we think about those two decisions from Amazon and Shopify, and who do we ultimately think is right?
00:17:18 · Rory O'Driscoll
[00:17:18] S1: I think both could be right for them. For Amazon's perspective... Because it's what they've discovered in other kind of agentic type commas is two things happen when you use this agentic commerce. One, you don't get any revenue from your ad business, and Amazon's ad business is now larger than their e commerce profit. So in other words, it is the entirety of the profit stream for e commerce as a thing from their AWS business. And then the second thing, I didn't know is Walmart did something recently where the basket size gets reduced, because you don't get the chance to shop. You know, when you go on Amazon directly, they're like, you know, people also bought, then you have, yeah, I need to order that. Whereas if I do this, I just order the thing. So from Amazon's perspective, because they're such a big player, they're like, if I let these people do it, then I don't get my ad revenue. I get a smaller basket. And then this is the next sentence is key. And if I block them, they'll probably come to me anyway because I'm Amazon. So I have leverage, and this is kind of tech behemoths bumping into each other. Amazon is now saying, screw you, Muse, Meta. We're gonna have to talk about this before I roll over. And they... At some point, there probably will be a more aligned exchange of value. Shopify, on the other hand, represents lots of little tail merchants. They are very glad of the extra business. They probably don't see that much compression in order value because if you go directly... If if you're buying some obscure thing on a mid tier Shopify merchant, you go buy the thing directly or you buy it via Amazon. No matter what, Shopify is broadly happy. They don't have a big ad business. So from Shopify's perspective, it should be have at it. What Shopify likes is they have the common payment app, so they like to have that go through that. So in each case, yeah, capitalism works. These executives are very logical. They're like, it's great that you have this new source of demand. What matters to me? In Amazon's case, I think I have a lot of leverage. In Shopify's case, provided you let me charge for my payments rail, I'm good with this access. So it all made sense. It's the early days, there will be much negotiation. But it's interesting.
00:19:24 · Rory O'Driscoll
I mean, bigger lesson here is, you know, there was a whole bunch of Google OpenAI blathering on six months ago about various different agent payment mechanisms, right? And it was all your smart people getting in a room and thinking things through. And the truth is in tech, none of that shit ever matters. What really matters is someone aggregates consumer demand, like Instinct and Meta have done, they start pounding on the API, and then now everyone has to focus. I'm willing to bet someone at Resi, even as we speak, and OpenTable, is formulating their agent API policy. I'm willing to bet at Amazon. They're talking to Meta this week. Demand creates urgency to sort all this shit out.