The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:42:46 · Alex Mashrabov, Harry Stebbings
[00:42:46] S0: things which I believe are very important. So first, we build for long term. We have seen that direct to consumer space, like e commerce can be disrupted. Shopify is a great example, how they have become infrastructure to build direct to consumer businesses, and we become infrastructure to essentially build distribution for direct to consumer businesses. That's one aspiration. And second aspiration is obviously Applavin. The company's worth over $200,000,000,000 It's insane. So look, and as we think long term, just these multiples don't matter that much. As we know we're building long term, we're gonna be over 100,000,000,000. It's true that most of the people don't get the opportunity that we are going after the biggest industry in the world, but I wanted to drop another number. And I asked the team to double check, so it's at least four people on the team who proved... So it's not like random fact. So I asked, When we look at public companies and we exclude pharma and big tech, spend on sales and marketing is higher than spend on R and D. When it comes to sales and marketing, the goal is to deliver personalized offering which converts the best. A lot of that is human work, of course, but a lot of that is gonna be personalized videos in some shape or form. So that's why I'm saying that many people just... And that's good for us that many people don't understand the opportunity, this large market, which we go after. [00:44:09] S1: You've mentioned Asia short form dramas a lot. What percent of revenue is from Asia versus the West?
00:44:09 · Harry Stebbings, Alex Mashrabov
[00:44:09] S1: You've mentioned Asia short form dramas a lot. What percent of revenue is from Asia versus the West? [00:44:15] S0: So all the West makes well over 70% of revenue. [00:44:19] S1: Well over. [00:44:20] S0: But just important to say that we learn a lot from trends coming from Asia. Hicksville does not exist in China, for example, which is massive market for AI. The largest city by usage is Seoul in South Korea, while the largest country is obviously The United States. [00:44:36] S1: What's the biggest lesson from Asia that you've learned? [00:44:40] S0: There is so much IP, so many products coming from Asia, and they all try to figure out distribution direct to consumer. That's why they lean into the new tooling like Video AI, which actually helps to achieve that. That's just a very different mindset. They feel that they could do way better if they could establish direct relationship with customer instead of having some other layer. That's why they go so so my direct to consumer rather than using some resale platforms and so on. [00:45:09] S1: I sacrificed a lot of life for the life that I have and the career that I have, and I love it. Do you think you will one day regret spending a day with your son in three and a half months?
00:45:09 · Harry Stebbings, Alex Mashrabov
[00:45:09] S1: I sacrificed a lot of life for the life that I have and the career that I have, and I love it. Do you think you will one day regret spending a day with your son in three and a half months? [00:45:20] S0: Look. This is... Goes even beyond that because my... From the age of seven to 12, my mother had to work three jobs, so I didn't see her. My father was spending all the time with me going to all... And it was... I was basically minors, so he had to go to all these camps with me. I also played checkers. I was top three in the world, so we went... We traveled throughout the world. Then I did programming. He spent all the time with me, like really dedicated his life to me. Like, did sacrifice. And since twenty first, he has Parkinson's disease. So even, like, having some ability to capital and exits cannot fully change things, and this is something which is deeply personal, obviously. [00:46:00] S1: But you don't need to do what you're doing now, Alex. I didn't need to any more either. I still am. I still miss family birthdays. I still miss weddings. Because mine's about a deep insecurity rooted in me being a fat kid. Why are you doing it?
00:46:00 · Harry Stebbings, Alex Mashrabov
[00:46:00] S1: But you don't need to do what you're doing now, Alex. I didn't need to any more either. I still am. I still miss family birthdays. I still miss weddings. Because mine's about a deep insecurity rooted in me being a fat kid. Why are you doing it? [00:46:16] S0: So I think Mark and Jason actually described it really well, that there are five archetypes. So obviously for me, it's just huge conviction about the technology, about the markets, about the opportunity, and just huge fear of missing that. Huge fear of missing that. But remember that my parents really taught me that there is a place in the world where good technology products matter. I remember when I was six, there was this, I guess, magazine about Bill Gates building Microsoft and not being very socially accepted everywhere back then. And my mother just told me, oh, these examples basically happen in the world. I think she didn't fully understand San Francisco and Seattle are different cities, but that's still deeply rooted in me. [00:47:00] S1: Childhood shaped us a lot. What did your parents teach you? [00:47:03] S0: For them, what was important is to just be in merit based environment, sort of. And that's why getting to California felt so important. [00:47:14] S1: What's your biggest lesson on hiring, speaking of a merit based environment? We see a lot of focus on that, your cognitions of the world who hire mass Olympiads. Yeah. What's your biggest lessons on hiring effectively?
00:47:27 · Alex Mashrabov
[00:47:27] S0: I think one of the things why Europe thrives so much... Like, I know that you typically say otherwise, but let me just challenge you. Like, who are the most relevant neo clouds today? It's Endscale, Iran, and Nervous, and Crusoe. Crusoe, okay, is Silicon Valley story. I ran from Australia and scale from The UK, and Nervous is UK and Netherlands. Let's talk about the companies on application layer that matter. I know that you mentioned Merkor and you mentioned Harvey, but Ligora, eleven Labs, Lovable, they all deeply matter. So if we just go outside of the model layer, because then I don't wanna go into the Mistral topic, right? Because I think by usage, the numbers are very strong, but people for some reason don't believe in that. I don't know why, but public data shows that the usage is there. But on every other layer, Europe is extremely competitive. Without ASML, this whole thing just wouldn't happen. So I think fundamentally what matters if Europe is gonna figure out energy, but that's above my pay grade, right? So very important to say here is that now there are more opportunities to create company from different kind of cities, from different parts of the world, while before it all felt extremely centralized. And we are obviously excited about that. Another thing about hiring is that in Silicon Valley, unfortunately, what I'm seeing is that people just jump between jobs every two years. That's why I think Europe can be so competitive because the sense of loyalty matters a lot. And that goes sort of a little bit to the childhood. We just discussed that. Let's say if you're a Fulham fan, you are not gonna root for Arsenal just because they won or played in the Champions League final. But in The United States, if Lakers are on the top, people are gonna say, yeah. I'm I'm fan of Lakers because it just makes it easier
00:49:25 · Harry Stebbings, Alex Mashrabov
[00:49:25] S1: to start conversation. You know? When you think about your own CEO style, what's changed most? [00:49:31] S0: In AI, it's so important to look at actual signals and actual adoption and having access to raw information. I was obviously taught the corporate school of management in The United States. And when I look at the CEOs whom I'm learning from is obviously Jensen, Elon, and Nick. Those three, they completely abandon all the management principles. They don't necessarily are fans of one on one and soft feedback. All of them, I think, are encouraged, being down to the points, knowing the details. While it would be called in corporate America something like micromanagement. What management [00:50:11] S1: principle do you disregard that many people think is important? [00:50:16] S0: I do believe that it's as simple as hire the best people to do the best work and figure out how to retain them. Everything else is frankly secondary. And people just create so much theory around that, and then essentially, there are just so many fake rules which are disconnected from reality. It's really as simple as hire the best people, empower them to do the best work, and just figure out how to establish relationship and retain them. [00:50:40] S1: A lot of them do see dollar signs, and secondaries are a part of that. How do you think about doing annual tenders to retain people?