The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:17:38 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:17:38] S0: It's five or six. I'm not going long on... I want to hold... Want... I'm not passing core weave to my great grandchildren. I'm not putting it in their five 29s that I'm giving to to my great grandchildren. You know, there's no way. [00:17:50] S1: This is the Jason stock picking is dead. This is the public equivalent of the private comment that only the biggest companies matter. And again, the great thing about this is I I can prove you wrong more easily in the public markets because what... You know, when you go back over a year, I mean, Nvidia is up 18%, Nevis is up 50%, SOX, I mean, Micron's up 350%. I mean, the truth is you buy the second tier assets because you think they're going to pop. So, you know, I hear you, but no. [00:18:16] S0: Well, let's see if you put 20% of your personal portfolio into those, into the microns and schmicrons. There's a lot of risk there, right? [00:18:23] S1: Agreed. I wouldn't I wouldn't dare. [00:18:24] S2: So, Rory, you know, we have Jason's IC. We're going to have Rory recommends. [00:18:29] S1: No, we're not. No, we're not gonna do it. Genuinely, we're not gonna do it because I'm not gonna sit here. One other thing I've learned about doing this now is pulling stuff out of your ass because you've done a little bit of work is just not right. No, I'm it. It's not an adventure. [00:18:44] S2: That's all Yeah. General [00:18:45] S1: Yeah. So... No.
00:18:45 · Rory O'Driscoll, Harry Stebbings
[00:18:45] S1: Yeah. So... No. [00:18:47] S2: Okay. Okay. I'll I'll I'll leave it there. I'll leave it there. It's okay. And we can talk about what maybe caused a slight crack in that, which is Anthropic's numbers. Anthropic announced that they had turned profitable on an adjusted basis. Growth slows. IPO price potentially rumored to be going down from 2,000,000,000,000 to 1,500,000,000,000. Q three revenue was 16,800,000,000, up 45% on q two. 85% gross margin, which we'll talk separately about. What should we take from these numbers? [00:19:18] S1: I think that was good. I mean, I think that... Look. Again You [00:19:21] S2: should tell your voice that, Rory.
00:19:21 · Harry Stebbings, Rory O'Driscoll
[00:19:21] S2: should tell your voice that, Rory. [00:19:23] S1: Sorry. Long day. I mean, look. Growth is clearly slowing fairly quickly. But from an unsustainably high number, I mean, 10x for the last three years, it's highly unlikely to 10x, you know, what was it one way coming into the year 10,000,000,000, if it you know, if two more 10x is and why would I say 100,000,000,000, you'd be at a trillion. So growth was going to decline. This is all about how quickly is the growth going to slow, right? And honestly, I thought, I'm sure people are sitting there going, if you add linearly, if you did five in Q1, 11 in Q2, 16 in Q3, you kind of lean in and you're at 20, 21 in Q4, if you keep adding $5,000,000,000 a quarter, I'm not saying they will, but right, and you do that. So you start next year, which is, which would be when you go public the future year, if you're at a $20,000,000,000 run rate, adding five a quarter, then you do 105, 110. And now you're saying it's 12, 13 times forward revenues for the most exciting company in the world. It doesn't feel crazy. It doesn't take a lot of squinting to make that work.
00:20:23 · Jason Lemkin, Rory O'Driscoll
[00:20:23] S0: I just one thing for, for, for what it's worth just tactically. I thought, I think where you'd agree. I mean, Chamath's tweet was just raise whatever you need at 1,500,000,000,000 to move on. When the day, like, you're, if you can raise it 2,000,000,000,000, but it's going to stress your capital needs, like it's just evaluation. So in absolute terms, it's everything's great, right? This is unprecedented on all levels. Great team, great application. What I suspect will a reminder is it's going to be very choppy after the IPO because going to Deb's point when he was on the show, developers are not loyal And the amount of market share since this show started, the amount of change in Anthropic versus OpenAI versus OpenWeights versus JEV, right? Which didn't even exist, what, It wouldn't surprise me if at the end of next year, Anthropix market share is down 10% from where it is today. And it still could be great on an absolute basis, but down percent wouldn't be a shocker at all, not just in tokens, but in revenue easily could happen. Look at despite whether open airs at 70 or 50, it's a lot. [00:21:38] S1: When you say the, you mean the share is down. [00:21:40] S0: Yeah, market share could be down, right? And so when you're building your models, Not just DCF models, but your top line models, you could be materially off from your good best case. And it should be expected. It should be expected.
00:21:40 · Jason Lemkin, Rory O'Driscoll, Harry Stebbings
[00:21:40] S0: Yeah, market share could be down, right? And so when you're building your models, Not just DCF models, but your top line models, you could be materially off from your good best case. And it should be expected. It should be expected. [00:21:54] S1: To state the banal is a little scarier than the average recurring revenue business. Right? And that's what people are wrestling with. How do I think about, I mean, if you have continued market share shifts between the key players, then the next shoe to drop is typically, well, I want to keep my market share, so I'll look at price. And I think, you know, everyone's trying to work out from a game theory perspective. You know what? You're right. What does that look like as a P and L going forward? Which is why going back to the boring thing I keep saying is provided the end user demand at the top is there, can, you know, everybody can win. And we all love businesses where everybody can win, right? If that starts to slow down, and then price competition becomes not, know, literally the thing you gotta do to take it from the other guy to keep a growth rate going, then it could get pretty tougher. [00:22:36] S2: Do you think Sam was super strategic raising his supposed round at 1.4, just in terms of some form of anchoring and message to market?
00:22:36 · Harry Stebbings, Rory O'Driscoll
[00:22:36] S2: Do you think Sam was super strategic raising his supposed round at 1.4, just in terms of some form of anchoring and message to market? [00:22:45] S1: I think when you need money, you take money. And I don't know if there's a big sophisticated, oh, 1.4 is a messaging versus 1.5. I think it's as simple as, you know, we spent a lot of money in compute. We didn't get our IPO done. Been good. We spent all of Massasan's money. Better get another 40 at a price. I mean, you know, what are the constraints? It's got to be up on the last round. Otherwise, the messaging is shit, and it's got to be down below reality to leave room for the upside. You know, there's only a finite number of digits between... Well, there's infinite number of digits, but there's only a finite number of one decimal plus digits between one and two. [00:23:18] S2: There are a couple of elements beneath this story, one of which... Or beneath Anthropic is a week, was Replit made OpenAI its default. Jason, I am intrigued here. Anything from you on that, especially given your Replit power user status?