The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:20:02 · Jason Lemkin
[00:20:02] S0: They're all gonna lose. I think it's the last stand of the unnecessary system of record. Resi is gonna lose. Amazon is the least losey in the short term because they're they're at the edge of a monopolist for what they sell as a merchant. But the agents will bypass them ultimately. You're going to have to decide. The agents have very clear positions. And you're right, Rory, this benefits Shopify. Of course Shopify leans into this, right? Of course Stripe and PayPal lean into this. It benefits them, right? There's no question. And Amazon losing ads, losing upsell, losing shopping cart sites, all a negative. But to the extent an agent can route around Amazon, to the extent you can, the agents not only will, they will gleefully do so. They will gleefully do so. What would you... Would you like me to call the restaurant directly, Jason? Oh, I found a back end API where OpenTable still works even though they're they're exclusive on Resi. Oh, I found another way to do this on DoorDash that's left open. The agents are wonderful at finding broke APIs that have other surfaces that shouldn't be exposed. This is a... It may be their only choice, but I believe all the systems of record, places of record, they're just battening down the hatches and they're fighting the agents. And net net, it's not a positive for any of them. It's not a positive for it. This is not a positive for Amazon.
00:21:17 · Rory O'Driscoll, Harry Stebbings
[00:21:17] S1: I hear you. The agent, as Jason points out, is tireless. The agent does have the ability to call to hit all 17 websites. It's only compute. They don't care. So you're right, a [00:21:27] S2: lot of [00:21:27] S1: these digital only aggregation businesses, I don't think they'll fall as brutally as you say, Jason, but there definitely will be some end run pressure to go around the kind of demand systems like a Resy or something like that. I'm not sure it's as fatal as you think. Then I...
00:21:43 · Jason Lemkin
[00:21:43] S0: It's not that I think... Well, let me be clear, because I think you'll agree with me. It's not that I think they're gonna be killed. I think they're gonna be maimed. It doesn't matter if this means that Resy's growth falls this much. If this means it impacts 10% of Amazon's advertising revenue. That's just like Meta stocks up 20 some odd percent. If this drives Amazon stock down 20% because it impacts margins, it's a big deal. I can tell you talking to our agents all day, they don't put up with this bullshit. They don't friggin' put up with it, right? Listen, I don't want to name the name or the vendor, please don't make me, but we got a raise this morning from one of our core vendors, massive price increase, massive pricing. Immediately our agent said, I want to work around it. Here are my ideas, dump them. And it actually laid out a twelve month plan to migrate off this vendor on its own. They will not tolerate this crap. Right? And there are so many products you can only buy on Amazon. There's it has so many advantages as warehouse, it has fulfillment, but some of that stuff can be bought on a Shopify store. It could just be enough. It could just be enough. This maiming is a big deal for AI. It's gonna maim the existing folks unless they embrace things they don't want to embrace.
00:22:44 · Rory O'Driscoll, Jason Lemkin
[00:22:44] S1: Two comments. One each way. One is yes, I do think Amazon's biggest defense will be its physical infrastructure and ability to deliver, but zooming. But your point is the right one. I remember someone said, like twenty years ago when the Internet... Probably twenty five years ago now, Internet first came out, that the Internet abhors inefficiency. In other words, middlemen get pounded down. Right? And if you think about things like the travel sites, Expedia, Airbnb, all of that is that, is getting demand and supply closer together. And I think what you're saying, Jason, is correct. AI is the same. It's going to pound down people who are in the middle, who just have information and are using that to make offers. If if that's all you're doing, there will be pressure at the margin. Because if you're reducing search costs, that's valuable to me as a human, but maybe the agent can just do it itself. So I'll go with the maiming comment. If it's even 5% or 10% impact, it's meaningful. [00:23:34] S0: That's the thing. It's easy to shut off perplexity for Amazon. It's just... They're just a gnat. Amazon will have interesting choices when it's everybody. Like, you shut off everybody. It is technically possible. But at some point, it's gonna be complicated. Are we sure we wanna shut off everybody? Moving swiftly on. Anything else that I haven't touched with Muse?
00:23:34 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:23:34] S0: That's the thing. It's easy to shut off perplexity for Amazon. It's just... They're just a gnat. Amazon will have interesting choices when it's everybody. Like, you shut off everybody. It is technically possible. But at some point, it's gonna be complicated. Are we sure we wanna shut off everybody? Moving swiftly on. Anything else that I haven't touched with Muse? [00:23:52] S1: No. Because it's not really the story of the week. I mean, it's the story of last week. We're gonna do the story of the week, and Jason's gonna be ready as a hands on users to tell us about Jev. Right? That's the story of the week. How do we go? [00:24:03] S0: We can talk about JEV if you want. [00:24:05] S1: It's next one up, and it's the story. [00:24:06] S2: It's the next one up, and fine is Rory's story of the week. So for those that don't know, chat GBT and banter ships JEV. It's a model that decides instead of chats, and it becomes Vercel's fastest ever launch. Jason, I'm sure you've played with it. What did you think? Jason's review. New new segment. [00:24:24] S0: Well, first of all, listen. I'm not I I maybe... I might not be smart enough to get into semantics. I don't even think it's a model. I think it's a classifier backed by an LLM. I've used it. It's awesome. But I don't know that it'll be as disruptive as everyone on x talking about it that probably never used it said it is. But it is awesome. Okay? Jason, what do you [00:24:41] S2: use it for?
00:24:41 · Harry Stebbings, Jason Lemkin
[00:24:41] S2: use it for? [00:24:42] S0: What I use it for is deciding who in the SaaS community should meet each other. It's quite good at that. Rory is the CRO at GCI. Harry is the CRO at Perplexity. Should they meet? It's actually not that simple a question. They're at pretty different stages. They live in different places. Should they meet? I spent all of Saturday nothing worked on on Jeb because I had to redo the way I did prompts. Okay, so I thought it was a failure, right? Then what I learned is you've invested the time. It can answer that question in milliseconds for a hundredth the price of anthropic or judge, actually even less. It can just answer a question and it can answer a subset of questions. But I think as we've learned from data labeling and others, there's a lot of classification that needs to be done, a lot of data labeling that needs to be done, but it doesn't output text and it can't do anything particularly complicated or with reasoning. So it's like a big deal. And for this particular use case, I'm talking about who should meet who. It is disruptive, but it's maybe like 20% of all the LLM calls associated with this application. Right? So I love it. I think everyone will do some version of this. I think, you know, maybe even XA and Parallel should do some version. Maybe OpenAnch, everyone should do a version of this, but it's not going take over 100% of your stack and it's not going to replace ChatGPT because it just doesn't do those things. But it does remind us that man, we effing waste a lot of tokens on simple stuff that Astra shouldn't be doing.