Uncapped with Jack Altman
· Chetan Puttagunta
[00:00:00] S1: Peter and I actually met Max in this exact room together, and that was the first meeting we had. I think within fifteen to thirty minutes, we both came away with that unspoken language between us that we want to be in business with this person. Yes, it was legal tech, but there was some core purpose with him as he was expressing it and the founding story of how he picked that problem. They’re sitting in Stockholm watching Harvey. At the time of our seed round in March 2024, I think Harvey had already raised at a billion and a half dollar valuation or two billion. By the time the product had launched in October of 2024, I think their number one competitor had already raised at a three or four billion dollar valuation. But what we were backing was him and his co-founders. When we invested, it was a team of five people. They had a very core insight on how to attack the legal market and why LLMs were the perfect fit for lawyers. When he expressed it… Eric likes to say this a lot. There’s a magic when founders explain something very complex and they explain their unique insight into it, and it becomes very obvious. That’s obviously how the world should work, and with their fire and their energy, that will probably be how the world works. In Max, we saw it right away. So we needed to be in business with him. That was it. The conversation immediately went to, “Great. What are you doing the rest of the day? We just want to spend time with you because clearly you’re spectacular. Clearly there’s something here.” It’s been amazing. We didn’t see it right? The product didn’t launch until six months after our money went in. You don’t start to see the amazing stuff that a person can do for a while, but it’s amazing.
· Jack Altman, Chetan Puttagunta, Peter Fenton, Eric Vishria
[00:00:00] S0: If you look back at other great investments that you’ve had, do you think it’s always clear that the person’s unique to you? In the Legora situation, did something jump out faster? Or are there other situations where you don’t see it for a while? Do you always see it quickly? [00:00:00] S1: No, I think you see it quickly, but each person spikes differently. [00:00:00] S2: Coming back to your question of whether there’s one way to succeed as an investor: God, no. In this firm, we joke: imagine two circles, entrepreneurs that I respond to, entrepreneurs Eric responds to. There’s this tiny little gray area in between with six people in the universe. [00:00:00] S3: For two people who do a lot of software infrastructure, enterprise, or open source or whatever, for our Venn diagrams of entrepreneurs to be so separate is— [00:00:00] S0: You guys will meet a founder together and one of you will be like, “This person’s amazing,” and the other one’s like, “I don’t see it at all”? [00:00:00] S3: I don’t know about that. [00:00:00] S2: No, no… “I could never work with that person.” [00:00:00] S3: That’s a different statement than whether they’re good or not. I think we often— [00:00:00] S2: “Good for you, not for me.” [00:00:00] S3: Yes. We do have that.
· Eric Vishria, Peter Fenton
[00:00:00] S3: Yes. We do have that. [00:00:00] S2: By the way, Bill Gurley and I had that where there’s almost no intersection. This actually relates to any entrepreneur thinking about working with a venture firm. A friend of mine was raising money, a family friend so it wasn’t appropriate for Benchmark. He asked, “How do I choose?” I said, “The question I would be asking if I was an entrepreneur is: which of these esteemed venture capitalists is most personally resonant with you and committed to you?” They’re going to say they’re committed because they want to win. Codify it. Make them be explicit about the kind of commitment they’re going to make and make it uncomfortably concrete. With most of the entrepreneurs I work with, we speak every Friday. Make it real. If you don’t want to put the time in, if you don’t feel that response for you with running your fund and for us individually… I knew with Max at Legora, Chetan would be 24/7. He’d fly to Stockholm on a moment’s notice, and he has. And he is today. [00:00:00] S3: You’re going today?
· Eric Vishria, Peter Fenton, Jack Altman, Chetan Puttagunta
[00:00:00] S3: You’re going today? [00:00:00] S2: He’s going today. So there you go. As you introspect in your commitments, does it clear that threshold for you personally? Because if it doesn’t and you’re doing it because it’s a good investment, that is a reliable path to a bad investment and a bad relationship. I think you’re going to find… Chasing what is it that you see and then allowing that to get washed with experience… Sometimes you’re going to get it wrong. When you get it wrong, you learn. “Okay, don’t make that mistake again.” Because you’ve seen me make that mistake, and vice versa. [00:00:00] S0: So it’s interesting that you guys have these Venn diagrams. Let’s just say they don’t touch, to make it simple. But they’re both good. I know you both make very good investments. Is that basically because you can cultivate any set of tastes as long as it includes the good stuff? Is that basically what you shake out to? [00:00:00] S1: There is a lot of overlap on the people, though. If you look at the people in these Venn diagrams that the four of us have, there is overlap in that. [00:00:00] S3: In the qualities of the people.
· Eric Vishria, Jack Altman, Chetan Puttagunta
[00:00:00] S3: In the qualities of the people. [00:00:00] S0: Something Keith and Vinod said something interesting when I talked to them together is that they’re really different people. It’s very apparent when you talk to them. But they said one thing that they basically always agree on is: did we walk out of the meeting with a founder and was that person special or not? I thought that was interesting because I wouldn’t have expected that out of the two of them. They’re quite different, so I would’ve thought there would be very different tastes in there. That doesn’t mean they always want to make the same investment. [00:00:00] S1: It’s very rare that one of us thinks a person is special and the other person thinks absolutely not. [00:00:00] S0: Another question I always have is: with really special people, can you miss it? [00:00:00] S1: Yes definitely. [00:00:00] S0: Is it a special ability to identify special people? Let’s take Max at Legora. Let’s say you have a hundred reasonably okay VCs who’ve been doing it for a while. Do you not think most of them would’ve come out and been like, “This guy is great”? Is it unique to be able to see greatness early, or is it more about getting into the right room with Howie and Jack Dorsey at the right time?
· Jack Altman, Eric Vishria
[00:00:00] S0: Is it a special ability to identify special people? Let’s take Max at Legora. Let’s say you have a hundred reasonably okay VCs who’ve been doing it for a while. Do you not think most of them would’ve come out and been like, “This guy is great”? Is it unique to be able to see greatness early, or is it more about getting into the right room with Howie and Jack Dorsey at the right time? [00:00:00] S3: That’s a good question. I think most of the time people react similarly. People who are good at this will identify or see that specialness. We miss it, everybody misses it sometimes. But there’s a bigger thing that happens, which is that people talk themselves out of stuff for other reasons. The competitive situation. Can the outcome for what they’re working on be big enough? Those kinds of things. Take Alex at Scale. You met Alex and you were like— [00:00:00] S0: Something’s going on. [00:00:00] S3: This guy is a winner. We saw it very early. We saw it together. Those were particularly painful because we absolutely recognized that he was amazing and a super special person. We absolutely recognized that the autonomous vehicle labeling revenue was bullshit and going to go away in not that long. So the facts and the read were correct, and the conclusion was incorrect. It’s like, “goddamnit”. That’s a particularly painful one and a good lesson for me. [00:00:00] S0: But you thought he was special and you passed anyway? [00:00:00] S3: Yes.