The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:20:15 · Matteo Franceschetti, Harry Stebbings
[00:20:15] S0: No, it's lower than that, but it's still in the millions. [00:20:19] S1: And the thing I'm trying to understand is Mark Benioff said that they spend 300,000,000 a year on Claude, and they have a 6,000,000,000 budget for engineering. 5% of engineering salary is being spent on Claude in particular. Yep. And my question as an investor is will it stay at 5%? In which case, we can justify the $2,000,000,000,000 IPO, but it doesn't have massive expansion from there. Is it a case of the 5% is just the start, baby? We're gonna go to 25%, in which case, material has load up on Anthropix IPO. Or is it the case that actually we're going see the commoditization by open models, most of workflows are going to get taken by them, and that 5% could get down to 1% as we see efficiency? [00:20:57] S0: Yeah. I think there will be two vectors in the opposite direction. The usage will increase, and so the 5% will become 50%, but the cost will go down. And so net net, I think it will go down. I was listening to an interview to Sam Alman recently, and he was saying that in the early days, to pay for one hour of electricity at night, you had to work five hours, just to give you a sense of how expensive electricity was in the early days. And now nobody cares about, I don't even know what's the cost of electricity at night in Miami where I live. And so I think the same thing will happen. [00:21:30] S1: Do you find it a bit scary that intelligence is now free and entirely distributed? [00:21:34] S0: Yeah. It's something I [00:21:36] S1: A choice aside, like.
00:21:36 · Harry Stebbings, Matteo Franceschetti
[00:21:36] S1: A choice aside, like. [00:21:37] S0: Think about all that, right, and how businesses will change, how our business will change once that intelligence is semi unlimited. [00:21:45] S1: I asked the instinct this morning to do an in-depth analysis of three of our biggest competitors' Instagram channels because I want Instagram to be a real driver for us moving forwards. What works? What doesn't? What themes work? What hooks work? What layouts work? What doesn't? What captions work? It was incredible. And I said, can you suggest three stories every single day for me at 8AM to do? First one starts tomorrow. [00:22:05] S0: Yeah. The amount of productivity will explode. It's probably like when we went from no computers to computers or probably even bigger industrial revolution or agricultural revolution. We are facing one of those moments. [00:22:17] S1: Knowing what you know now as a consumer and customer of Claude, would you buy Anthropic at the IPO?
00:22:17 · Harry Stebbings, Matteo Franceschetti
[00:22:17] S1: Knowing what you know now as a consumer and customer of Claude, would you buy Anthropic at the IPO? [00:22:22] S0: I would probably buy. I still think there is so much upside in all these companies. I'm really bullish on SpaceX, personally. Why? What drives that? So, here is another theory that I have, and this is just my opinion, but I think with AI, the right companies will transform themselves in holdings. And so what it means is that whatever is doing today will be one of the businesses that we do. But with AI, as we build tools for ourselves, we'll discover other opportunities, business opportunities. And so the Eight Eight Sleep Inc. Will probably own three, four, five, 10 different businesses, which if you think, and if you look at Chinese companies, it's something they have been doing forever. If you look at Xiaomi, Xiaomi does 15 different things. I just watched their latest presentation from their CMO. I look at a lot of Chinese companies because they are geniuses, right? They never stop themselves. Xiaomi, instead of being just like Apple, they also do cars, for example. They do so many other things. [00:23:21] S1: And fridges, and
00:23:21 · Harry Stebbings, Matteo Franceschetti
[00:23:21] S1: And fridges, and [00:23:22] S0: ovens, anyway. Literally, Anything hardware related, anything that is a smart home, but then they also get into components, like some of the components, like BYD develops certain components well outside the car and automotive. So these companies have already proven that the concept of focus is not, oh, you keep doing the same thing forever. It's just, I have certain capabilities, then how can I use this knowledge and capabilities in any form? And with AI, we will all do that. [00:23:51] S1: I'm loving this conversation. And the joys of, like, doing second shows is, like, they're much more casual, which is much better to listen to and also much more fun to do. Do you worry when you see the excellence of these Chinese manufacturers in specifically the kind of automotive industry that it's just gonna hollow out the European car market?
00:23:51 · Harry Stebbings, Matteo Franceschetti
[00:23:51] S1: I'm loving this conversation. And the joys of, like, doing second shows is, like, they're much more casual, which is much better to listen to and also much more fun to do. Do you worry when you see the excellence of these Chinese manufacturers in specifically the kind of automotive industry that it's just gonna hollow out the European car market? [00:24:09] S0: Yeah. I think Chinese, they really nailed particularly automotive. And based on my understanding, what happened is around 10 ago, they understood that they didn't want to compete with European manufacturers on standard engines. That is when they decided to double down on electrical technology. And since then, they started developing their cars. But I go to China often for work. Now we sell in China, but we also manufacture in China. When you see the quality of their cars, because in the past we used to think that some of these products were just cheap and ugly. Well, instead, now they design cars, say, Oh, me, if you go to their stores, it looks like an Apple store, but there are cars, there are no other devices for the home. These cars, they literally look like a Ferrari aesthetics, or they have these seats that turn, so you can just sit and then Dude, I've the TikToks. They look so cool. [00:25:03] S1: Yeah, it's incredible. Screens come down.
00:25:03 · Harry Stebbings, Matteo Franceschetti
[00:25:03] S1: Yeah, it's incredible. Screens come down. [00:25:05] S0: Screens come down. Ceiling. Massage, everything is voice control. So they're really focused on the customer experience, and it's incredible. And I think a lot of other manufacturers around the world, they don't focus enough on the user experience. [00:25:19] S1: Completely get you and agree with that. But as your wonderful accent denotes, you are Italian. Yeah. And a huge amount of the European industrial economy is rotating, centered around cars. Yeah. Do you worry about that? [00:25:33] S0: Well, I worry even more about another factor. I think all the Chinese manufacturers, they will become robotic companies. I think all these automakers should transform themselves and start building humanoids because the humanoid will be what cars were in the 60s. If they don't do that, they will not lose only cars. They will lose also the humanoid market, which is trillions of dollars. [00:25:56] S1: Are you seeing the advancement with humanoids in China in a way that you really didn't expect? [00:26:00] S0: Yes. I don't know if you saw the I don't know what was the formal name, the Olympics of Raids? [00:26:06] S1: The Humanoid Games, I think.