The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
01:00:29 · Alex Mashrabov, Harry Stebbings
[01:00:29] S0: Maybe out of more professional CEOs, CEOs, I'm definitely Frank Slootman. Because going back to the point, I was just curious all the time. Does no bullshit culture exist in California or not? Can it allow to scale companies so quickly? Is it possible to build successful enterprise go to market motion with no bullshit culture? And when I read his Empty Up book, like book called Empty Up, I realized it's possible. So, like, I'm a huge fan. I watched all his interviews. [01:00:57] S1: The challenge with him... He's amazing. He's the best leader by far. But the challenge is you can sometimes do it at the sacrifice of product advancement. And so he built a GTM machine at Snowflake, but Databricks wiped the floor because they moved product as the priority, not GTM. And that was dangerous. I preferred Chad Peetz. [01:01:19] S0: Do you know Chad Peetz? Nah. [01:01:21] S1: Oh, dude. This guy is no bullshit. I'll introduce you afterwards. He's the best sales leader in the world, and he is no fucking bullshit. Unbelievable. [01:01:29] S0: And we probably should have him on board. Oh my god. [01:01:31] S1: I can find any way to [01:01:32] S0: have him on board. [01:01:33] S1: He is terrifyingly good. So what's the biggest lesson from Snap? [01:01:38] S0: The momentum doesn't last forever. Like, today, Snap market cap is below 15,000,000,000. There are a lot of memes on the Internet, but this is a great company. Cares so much about trust and safety and experience, and it puts it first.
01:01:38 · Alex Mashrabov, Harry Stebbings
[01:01:38] S0: The momentum doesn't last forever. Like, today, Snap market cap is below 15,000,000,000. There are a lot of memes on the Internet, but this is a great company. Cares so much about trust and safety and experience, and it puts it first. [01:01:50] S1: Do you think it is a great company? No offense. It's been mismanaged shit. It's SBC, it's through the roof. It's tough to say it's a good company. That's why [01:02:00] S0: I say that momentum doesn't last forever. When Snapchat was worth $80,000,000,000 and the gap with Meta was less than 10x, then it felt, oh, we just go explore. We we just really must lean in, but momentum doesn't last forever. And that's my core learning. So that's why... Like, while we do have the positive momentum, we don't... We do not take this for granted. Clearly, the nature of capitalism is there are ups and downs. And since we're building long term, we just should capitalize on the opportunity, like with the fundraising, and just keep pushing progress every day. [01:02:32] S1: What is reason why the divergence between Meta's market cap and Snap's market cap has increased so significantly, if there was one reason? [01:02:41] S0: Just maybe saying these straight, a lot of public companies did not figure out their AI story. Snap, unfortunately, is part of that. We have seen other great companies like Figma trying to tell their story. You mentioned Canva. It's not necessarily easy to be successful in private markets and public markets. And Zach is one of the best CEOs of all time because he managed that.
01:02:41 · Alex Mashrabov, Harry Stebbings
[01:02:41] S0: Just maybe saying these straight, a lot of public companies did not figure out their AI story. Snap, unfortunately, is part of that. We have seen other great companies like Figma trying to tell their story. You mentioned Canva. It's not necessarily easy to be successful in private markets and public markets. And Zach is one of the best CEOs of all time because he managed that. [01:03:06] S1: He's such a fucking beast. He's such a beast. You watched him last night with the event, and you're just like, now I get it. Like, that totally makes sense. And you know what? Scale with Alex Wang, I was one who was like, really? Like, what's gonna... He he basically acquired a second CEO. You know, Alex is now the CEO of Muse, and he's crushed it. Crushed it. What an effective buy for naught point 5% of your market cap. Do you know what I mean? [01:03:37] S0: Yeah. Look. But this happens with Instagram, with WhatsApp. That's why I'm saying that we just maybe should put Meta a little bit [01:03:44] S1: in Yeah, its own he got rid of Systrom and Krieger. Here, he's been like, No, no, no. You, Alex Wine, are my guy. [01:03:53] S0: Do you see what I mean? Yeah. Look, I do believe that it's a little bit early to look at whole meta AI initiatives. We probably need to see like year of successful launches and so on. And then we can look back and see what was good, what was not good. But at least the consistency of storytelling and explaining what he is doing to public investors. Being able to articulate why Muse is so different is phenomenal.
01:03:53 · Alex Mashrabov, Harry Stebbings
[01:03:53] S0: Do you see what I mean? Yeah. Look, I do believe that it's a little bit early to look at whole meta AI initiatives. We probably need to see like year of successful launches and so on. And then we can look back and see what was good, what was not good. But at least the consistency of storytelling and explaining what he is doing to public investors. Being able to articulate why Muse is so different is phenomenal. [01:04:18] S1: Okay. Revenues, say, are 1,000,000,000. What are the revenues in twelve months' time?
01:04:18 · Harry Stebbings, Alex Mashrabov
[01:04:18] S1: Okay. Revenues, say, are 1,000,000,000. What are the revenues in twelve months' time? [01:04:24] S0: Our current business model projects 4.5. It says by the end of the next year, but these basically involve substantial deceleration. And that's what just my finance team, there are a couple strong quant people. They told me that's just how the business works. But look, we are still pushing to grow at least 30% month over month. What do you think it is? They said 4.5. What what do you think it is? This is me to you, not me to your finance team. Over 10. Over 10? Let me tell you why. In a lot of adoption and creative AI space is driven by monetization, like all this direct to consumer brands making more ads, and also having like the aspirational cinematic AI content as this inspires creatives to explore the tooling. It feels to me that Hollywood starts to embrace AI mostly today as a tool for hybrid production, as a just new form of CGI. But the sentiments really shifted from strictly negative to neutral to slightly negative. And in private conversations, yes, there are maybe more than half of SDR talents who is gonna say we're anti AI forever. But increasingly, there are more and more people who are actually asking a question, can we tell more stories with AI? Can we overcome certain budget limitations which existed before, and maybe AI can help to tell new stories which we couldn't tell before? And I do believe this just change in perception that's at least comes from my conversations is extremely positive.
01:06:04 · Harry Stebbings, Alex Mashrabov
[01:06:04] S1: If you are in a billion today, 10,000,000,000 in twelve months, why do you peg the next fundraise? If you're in a billion, say, conservative multiple, you'd be like 15. But if you're hitting 10 next year, you're like paying end of year 80. [01:06:21] S0: Look, we are not chasing just the valuation because, again, the goal is just to make sure that the company can be sustainable over the time in public markets. So there is a lot of company building to be done beyond just chasing the revenue. But I just do believe- [01:06:34] S1: But you want to be public at some point? [01:06:36] S0: Yeah, do believe that Hexcel has great potential to be bigger than Applebee and Shopify. Fundamentally, building is one part of that. Shopify, one layer of infrastructure. Then for coding, there is obviously a cloud, there is codex. But what matters is distribution over the time. Distribution matters. You know that this better than any other [01:06:55] S1: It is my business. That's why we do what we do. Exactly. Dude, I cannot thank you enough for being so amazing on the show. You've been fantastic. I've loved doing it, you can tell. And you've been an amazing guest, so I really appreciate you joining me today. [01:07:07] S0: Thank you so much. It's a pleasure.