Uncapped with Jack Altman
00:16:09 · Jack Altman, Ev Randle
[00:16:09] S0: CodeReview I'm glad you're getting all the plugs in as we go. [00:16:12] S1: I know. I'm listening. But it's crazy. It's like, if you have 10,000 x more code in the world, all of a sudden, all of these derivatives of cogeneration also need to grow that much. And then obviously, have a very excite... I know it's not public yet, but you have a very exciting investment in the CICD GitHub Action space, because, again, durable execution with temporal, browser use APIs, and now supply chain security with folks like ChainGuard and Socket. All of these categories, every single one I just mentioned, have companies in them that are doing the 10 to 100 to 300. You start one year at 10, you go to 100, and then you go to 300 or more. Which never used to happen. Never used to happen. [00:16:54] S0: And multiple are doing it in the same category at the same time. Yes. This is what was wild. I mean, know, it's like Lovable and Replit, for example, which I've obviously done great. But it's like everyone's like, isn't this, you know, isn't this club code? Isn't this codex? Mhmm. Yeah. It is. And they're going to do a version of it that is form fitted for a different purpose. And the whole thing is so big that it's just all going to work. That's right. Which kind of goes to the Eric point of it's all And going to I think probably the modification on that is in some of these categories where technology hits that hard, it's just so easy to underestimate it.
00:16:54 · Jack Altman, Ev Randle
[00:16:54] S0: And multiple are doing it in the same category at the same time. Yes. This is what was wild. I mean, know, it's like Lovable and Replit, for example, which I've obviously done great. But it's like everyone's like, isn't this, you know, isn't this club code? Isn't this codex? Mhmm. Yeah. It is. And they're going to do a version of it that is form fitted for a different purpose. And the whole thing is so big that it's just all going to work. That's right. Which kind of goes to the Eric point of it's all And going to I think probably the modification on that is in some of these categories where technology hits that hard, it's just so easy to underestimate it. [00:17:32] S1: Yeah, it really is. I think AI code generation, you can sort of abstract most of the value generation in AI today to cogen. It's probably the most impactful product market fit moment in the history of technology. [00:17:49] S0: Probably right. Yeah, I'm trying to think what else would even I mean, it's in... It's on it's on the order of iPhone moment or something like that. That's right. [00:17:55] S1: Yeah. Except for, you know, because so much of it is in the digital... Like, because the infrastructure was already there [00:17:59] S0: Yeah. It can just go so much wider, so much faster. [00:18:01] S1: It can go so much faster. Yes. Whereas, like, Uber and DoorDash and, you know, these companies that were built on the mobile internet that were in iPhones Yes. [00:18:09] S0: They were limited by the growth because they both in mobile
00:18:09 · Jack Altman, Ev Randle
[00:18:09] S0: They were limited by the growth because they both in mobile [00:18:11] S1: phones ahead of internet. Yeah. It's fascinating. [00:18:15] S0: Yeah. And it's funny, for knock on effects of this, I think part of what's weird for founders and VCs is when you've got a thread like this that's pulling so hard, not just on code itself, but like you're saying, all of the accoutrements around it that support it and come before it and come after it and are just kind of all getting sort of yanked upwards. It's like other categories that are very good. It's like when the opportunity cost is people are like, well, I can get this ridiculous ride over here. Right. That has a big effect. Huge impact. And it's weird because at once it's making it so that venture demand in these spaces is so obscene. And then LPs are obviously doing great and they're funding it. And it's all part of like one rational circus. But then you have these other categories, and the founder's like, well, what the hell? I have a good business, and it's hard to raise and all that thing. So it creates a weirdness. [00:19:16] S1: Historically, I've spent a fair amount of time in growth investing. And as a growth investor, you keep all these historical precedents of the growth trajectories of all these amazing previous companies. And I'll go back and look, and I think data I mean, might be wrong, but I'm pretty sure Datadog went like five to 18. [00:19:33] S0: Yeah. Five to 18. [00:19:35] S1: And five to 18 to maybe 40 to 50 or something.
00:19:35 · Ev Randle, Jack Altman
[00:19:35] S1: And five to 18 to maybe 40 to 50 or something. [00:19:37] S0: It's like now, five to 18, it's like, I don't know if you can raise. I don't know if there's capital. [00:19:40] S1: Would you I don't know. Like, would you look at a five to 18 or what would it take for you [00:19:43] S0: to look at? Need in this in this environment, you would need to believe an 18 to 100 story for the next year, or you would just need to think that they were doing something that was so difficult and unique that it just had insane growth durability forever after that. But on the surface, that used to be enough where everybody would be super interested if all you heard was it's a software company going five to 18. Yep. Whereas now, if that's all you heard, you'd be like, well, why wasn't it five to 40? [00:20:10] S1: That's right. [00:20:10] S0: Which is insane. It's so insane. But it's all because of [00:20:13] S1: this code pull. That's right, 100%. A related topic that we've been talking about is that there are two archetypes, or there's almost like a continuum of how levered you are to the trend. And then do you have the old hallmarks of durability, enterprise stickiness? Some [00:20:37] S0: of
00:20:37 · Jack Altman, Ev Randle
[00:20:37] S0: of [00:20:37] S1: the things that we loved about the scions of the last era, like Datadog and CrowdStrike and even Databricks, even though they're not public. There seems to be some form of trade off between how levered you are to the AI, basically the cogen pull or just the AI trade in general, and some of the more traditional signs of durability and defensibility from an enterprise context, where it's like, oh, this is like three year long term contracts and all these things. What do you think about that trade off and if you're attracted to one or the other or anything that
00:21:19 · Jack Altman
[00:21:19] S0: you think about that? Well, might be wrong. But for me, I'm in a mindset right now where durability is really hard to call. Like, think in the last era, by, let's say, the late twenty teens, I think you had a good enough feel for cloud and enterprise at that point that you could not perfectly, but you could name it when you're like, that's durable or that's going to get competed. That's sticky. That's got a high switching cost. We got to a place where I think you could make those calls somewhat correctly because you had too many examples that looked like it, and you just knew how software worked. You also had situations where enterprises would look at software for years before they were buying and like, I know I'm going to buy Workday, but I'm not going to buy it yet. But when I do, I'm going to use it forever. You just had dynamics like that where right now, I don't know that durability is nearly as easy to identify. It's like even take like take application software. I don't know, six months ago, everybody was kind of like, it's dead. Yeah. At the moment, I think people are like, it's alive and it's good. And why should the labs do it? And there's all these edge cases to do, and they can actually be value add to the intelligence tokens. And there's all these reasons to put your data in there and blah, blah, blah. And you need a UI. And that's great. And six months from now, people might flip again and be like, never mind. Code got so good that that's all not true anymore and all these things. So calling the durability seems difficult to me. Yeah, I think. You know, I was thinking about like, what is it about the five to 18? I think if you are if you are trying to identify the next code, the next thing that's going to pull like crazy, I think that's probably the reason that people get really attracted. You know, like as an example, I think we all believe robotics will work. Yeah. We would all probably say it's not exactly working yet. We can't have a robot in here doing a bunch of things that a human could do. You can't really have one at home just yet. But I think we all believe we'll have one. You and I both love our Teslas. You, like, see the beginnings of it. And, you know, you go to these... You go to cool companies, like, if you visit, like, Pi or something like that, you're like, this... You know? You can see the future. Yeah.