The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:14:36 · Harry Stebbings, Jason Lemkin, Rory O'Driscoll, Jack Altman
[00:14:36] S3: be a dick? Isn't this what OpenClaw was meant to be? And with the founder Pete Stipeet and like, no. But, like, dude, they've been watching from the sidelines for six months. [00:14:46] S2: Yeah. But OpenAI didn't give everyone an entire virtual CPU in the cloud. Right? And storage and everything. It... This is just these guys looked at... They were all inspired by OpenCloud. We all were. They just instinct did it. Jack and Nevis story. And the whole Muse team said they're inspired the next hour to build Muse. Muse was built since OpenClaw. It's just OpenClaw didn't make sense for any of us. [00:15:04] S0: But I think, to be clear, Harry, what you're saying is not OpenClaw standalone. What you're basically saying is when OpenClaw got subsumed in OpenAI, shouldn't have done this. [00:15:13] S3: Yeah. A 100%. You were best placed to do this. That was the most strategic thing with the person who did OpenCLO. [00:15:18] S1: I actually don't have the sort of full inside scoop here, but OpenAI's dev day is, you know, today. And so we'll see, you know, what, you know, their sort of reactions to all these things are. But, you know, also back to Jason's point, it's like there's generations of these things, and they keep moving, and everybody learns from each other. And it happens in, two seconds. Know, when Cursor came out, they had, like, a long window before the labs caught up. Now, you know, you look at the InstinctTeam's window. It's short. These these cycles are only getting shorter.
00:15:18 · Jack Altman, Rory O'Driscoll
[00:15:18] S1: I actually don't have the sort of full inside scoop here, but OpenAI's dev day is, you know, today. And so we'll see, you know, what, you know, their sort of reactions to all these things are. But, you know, also back to Jason's point, it's like there's generations of these things, and they keep moving, and everybody learns from each other. And it happens in, two seconds. Know, when Cursor came out, they had, like, a long window before the labs caught up. Now, you know, you look at the InstinctTeam's window. It's short. These these cycles are only getting shorter. [00:15:43] S0: First of all, I just gotta say in passing, Jack, I gotta hand it to you guys. You know, I've I've known Ben Trucks since '95 when they started. Right? And when you guys said after thirty years, you're gonna embrace growth, I thought you tiptoe in, and I gotta hand it to you. No. When we're embracing this thing, we're fucking embracing it. It's 10,000,000,000 pre pre revenue big ass check, no mincey little, little steps here. It's all in on day one. So congratulations. It's like coming off this coming off the dry and embracing the booze, you know, big party night first night. [00:16:13] S1: Yeah. And what what's funny about it? So yeah. And, you know, we we invested, you know, first at 2.5 and ten. And what's funny is, in our minds, it was actually kind of an early stage investment. And I know that sounds psychotic. It is it. Yeah, but that's kind of how we saw it.
00:16:26 · Rory O'Driscoll
[00:16:26] S0: Genuine comment here. It actually is one of the things that's been funny is in this cycle, we've had investments with early stage request risk require super late stage capital, which is just definitionally a strange time to be playing. But yes, I think you thought you were raising a growth fund. In fact, you're just expanding the early stage fund because it just takes bigger checks now. Good on you guys for doing it, because I thought your logic at the end is basically some version of, if this matters, it'll matter a lot. And if it doesn't matter, it won't matter at all. And there you go. I'm just pushing. I was I was... Yeah. I listened to the NOAA interview, and I'm gonna make the boring point, and then I'm gonna kinda kinda backtrack it from the boring... When you listen to the interview and you talk about monetization and travel and all that, and then you go away and you do the data on, you know, the number of Americans who fly more than one or two times a year, which is pretty small, the fees available from that, the number of Americans who book not just dining, but fine dining. It's, you know, it's like 10% or less of total dining experiences are fine dining. You don't need a reservation from McDonald's or Applebee's. So if you start thinking and he mentioned, if you think of it as travel monetization, you could get pretty angsty about market size here. I mean, you guys were smart enough to do OpenTable twenty years ago, twenty six years ago now. Jesus. You know, it's just it's a billion dollar business today. You will be pretty bummed if you're only doing a billion dollars in restaurant bookings on instinct. So does implicitly some level of, yeah, we'll get all this travel revenue, but there's something more here because you guys run the same numbers and you know what, right? Is there a part of the monetization that's just finger in the air and says, this matters, good shit will happen?
00:17:58 · Jack Altman, Harry Stebbings
[00:17:58] S1: So I mean, back to the point before, which is slightly tongue in cheek, but slightly totally true, which is like, do you think of is this a is this a growth investment because it was billions of dollars of valuation? Or is this an early stage investment because it's like nine days old? And both are kind of true. And if you think of it as a growth investment, you say, okay, how do I underwrite this relative to public companies that have 2,500,000,000 of ARR and they're worth 10,000,000,000. And so you kind of logic that out. If you're thinking of as an early stage investment, you say, gosh, this paradigm, we just have no idea. And so I think in our heads, it was close. Yeah. It was closer to that where you say, we are so early innings here where there was open claw. There's the like, you know, between now and Christmas, there's gonna be, like, three more evolutions of the whole thing. It's like you don't even try to guess all of that. [00:18:44] S3: How do you think about sizing it then when you're writing growth checks at early stage risk material?
00:18:44 · Harry Stebbings, Jack Altman, Rory O'Driscoll
[00:18:44] S3: How do you think about sizing it then when you're writing growth checks at early stage risk material? [00:18:50] S1: You still, to the extent that you can, I'm a believer that this is sort of like something I've kind of picked up from the crew, that you still still need enough investments no matter how, you know, accurately you think you can pick. At the early stage, let's define this, forget the price, but, you know, early on in a company's life, you just need enough shots on goal to get something that's gonna really matter. And so on some level, I would say the sizing is constrained by wanting the fund to have enough chances to get something great. And so that's the constraint. And then like the upper bound is these rounds are big. You need to matter in the context of the round. And if the valuation is already high, you got to put more dollars in to sort of get some ownership. And so those are kind of the boundaries. [00:19:30] S0: It was a very good, articulate, not quite answer, but exactly the right questions. Absolutely. No. I I think you're exactly right. It's that you do some kind of Kelly betting, and then you kinda, you know, how certain... What's upside and how certain are you it's gonna happen? Edge over odds. And then you say, do I have the stones to do full Kelly or do I back off?
00:19:30 · Rory O'Driscoll, Jack Altman
[00:19:30] S0: It was a very good, articulate, not quite answer, but exactly the right questions. Absolutely. No. I I think you're exactly right. It's that you do some kind of Kelly betting, and then you kinda, you know, how certain... What's upside and how certain are you it's gonna happen? Edge over odds. And then you say, do I have the stones to do full Kelly or do I back off? [00:19:49] S1: Yeah, and I think like sophisticated public markets, investors probably spend as much time thinking about their sizing as their actual positions. We obviously don't. But you know, that we try to at least give ourselves some boundaries, knowing that we're going to, know, size incorrectly almost every time. [00:20:02] S0: And it's probably actually the hardest one to size, because you're right, you have high upside, leans in super high variance, which leans out, but still a requirement for meaningful dollars. You're right, the sizing discussion must have been almost everything. Have you disclosed the dollars, total dollars in the deal? [00:20:19] S1: I don't think we did. I'll find out if we didn't. If we did, we can like stitch it back in here with some AI, but I don't think we did disclose it.