Tech's short-term era

0:05Today on Great Chat, we take a recurring theme of this podcast head on. Is venture and tech more broadly suffering from short-termism? Venture is traditionally the most patient asset class, so this feels new. Is it a bad thing? Did we do this to ourselves? I'm Helen, and this week I'm joined by Ashley, Angela, and Mac. Great Chat is brought to you by Mercury, radically different banking loved by over 300 ,000 entrepreneurs. We use Mercury to run this podcast and love recommending it to other founders and fund managers. It's free to get started. Try it for yourself. Visit mercury.com to learn more and apply online in minutes.

1:06Francisco, but for you guys, maybe it would be like there's too much air conditioning in your cold. I have a lot of AC and it's so hot outside and it's a really jarring thing. You know, like when you're in New York in the winter and it's just like inside is burning hot and outside is freezing cold. It feels like that. Yeah. Yeah. Yeah. I mean, this is my, it's, it's hot outside here, but my, my New York city flex is that we have central air and so can be cozy when I decide I want to. Oh my God, Ashley, what's it like having it made? Oh my gosh. I mean, really, this was the, in like the three apartments I've lived in, in Brooklyn, this is like, this is the best feature that you can have in my personal experience.

1:50Okay, guys, I need to go around. If we're talking about like the in-unit or unit features wars, I feel like it's always between like air con and then like washer dryer in-house. Washer dryer, 100%. But I do think it is washer dryer. Garbage disposal. Garbage disposal. Have you ever lived in an apartment that didn't have a garbage disposal? I mean, that's disgusting. I would be really upset about that. Okay. But going back to air con units, I was in Europe for a week. My flex is I was in Spain for the Spain-France game. So that was very exciting. But apparently there's a massive heat wave that's been going through Europe.

2:25Thank you, global warming. And a shortage of air conditioning units where people are literally trying to... Oh, yes, Angela. Twitter is all over this, as you might imagine. Oh, is it? Is it? Okay. I was going to say, great chat. Enterprise's new ideas. We've just got to start shipping air con units from the US to Germany. This is like everyone's favorite US superiority argument. I'm sorry. Our best US supremacy argument is that we have air con, please no. We have so many better things. I'm sorry. We took the world out of it. It's directly tied to productivity. So it's not just the AC. I know, but I also feel like if we're talking about productivity, similar to like, if we're talking about drinking, we're, we're beat by a lot of other countries on drinking, on both productivity and drinking.

3:16Well, Ashley, I'm disappointed. I thought that my like in-person human trafficking to Europe found us a unique idea. But of course, Twitter was all over it. Angela, I love that every time you use human trafficking, there's a cohort of listeners who've never listened before and are like, what is she talking about? And then there are my dealers who are like, this is how Angela describes moving her own body across borders. It's a choice. It's a choice. Yeah. So I think I was sending you guys the like march in San Francisco, like the march for open source. And And then that like open letter has made its rounds.

3:53And I think at this point, it's been so long and it's kind of meaningless if there are like new names added to it. But when I woke this morning, I opened Twitter and saw, oh, it's more telling who isn't signing the letter. I'm like, oh, my God, these things are so stupid. I mean, I think somebody wisely pointed out that just because you are not supportive of restricting it doesn't mean that you are for it, right? Like there was some sort of like nuance here that people are sort of glazing over. Well, I also think there's an important distinction. Like it's funny, Helen, even hearing you call it like the open source letter, which was like a nice little narrative trick.

4:37because what we're talking about are open weights for models, which like have real parallels to open source. Well, do you want to give the quick backstory on like how this popped up? I think on Thursday, was it Thursday? It was whenever Jensen joined Twitter where he was like - Yeah, I was about to say like, we'll never forget the moment. Yeah, yeah. I actually haven't looked to see if that was the most quickly followed new account of all time. And maybe there's like a celebrity who outpaced him. But yeah, Jensen with the mic drop with an open letter of which obviously NVIDIA was a signatory, making the case for open weight models, like being critically important to economic prosperity and freedom versus this idea that we're just going to have a couple vertically integrated AI labs, closed models that like eat every part of the stack.

5:35And it was on the heels of like the Kimi model release and a lot of excitement around open source. And then maybe some growing like speculation that the government may shut some of this down, especially when it comes to Chinese open weight models. So yeah, so a bunch of, you know, heavyweights got together, published this letter. And Helen, to your point, it was really fun to see who was on it and who was not. NVIDIA was there. Microsoft was there. Meta was there. I was very proud to see Box's little logo there. I was like, oh, we're like - Oh, and they were like original. I think when the first, when the Jensen letter dropped, right?

6:12Listen, being an AI fault leader, Aaron Levy definitely has its perks. But of course, neither OpenAI and Ryan Travick were there, although Sam did later tweet his support. I don't know if OpenAI is on it yet. Y Combinator was there, A16Z was there. It was kind of a little bit of a random mashup, but overall, it just sort of took over the internet and the narrative swung from a few labs to rule them all to this is the future. Open source, open models are the future. And anyone who stands in their way is against like this broader sort of like economic prosperity for this country. So I thought it was very artfully done, if somewhat random in terms of the collection and sequencing of logos.

7:02Who is this letter for, in your opinion? Like who are they trying to reach or convince or like, what is the point of this letter? I felt like a couple of the events that happened right before the letter that we've brought up on the pod was like the Kimi release. So like, you know, just the reality of these Chinese models are very high performing, and they're much cheaper. And they're, they're making their way into a lot of companies in the US. And then the open source models are getting better. There was always this, you know, sort of like, line walking of whether meta was going to go full open source.

7:41It felt like the last big thing was like the US government made some sort of statement, right? Saying like, for the sake of national security, you know, we have to sort of like use our domestic models and solutions that are the most secure. And that to me felt like not to go so not to run, you know, 100 yards in a direction too quickly. But it's like, oh, no, is this like a too big to fail moment where like, the government knows how much we have put behind, frankly, open AI and Anthropic? How much investment? Does this fit so nicely into their anti-China narrative too, right? Like I think a lot of that was.

8:30That too. But I think the more cynical part of me and like sort of the economic effects of what happens if open AI and anthropic do not have successful outcomes or do not succeed. Like I think there will be devastating economic effects because we have. Bet the country. Kind of put all of our eggs in this basket, right? I mean, like, forget just venture as an asset class. Yes, we know it's been concentrated against those two names, but like endowments, pension funds, like we have really gone all in. And so if those bets, you know, are threatened by either something from China or open source that is just much cheaper, you know, I think that would be bad.

9:15So maybe I'm giving them too much credit. And this is really just like a, we need to dagger. But I guess it's just interesting that it was posted on Twitter. Like if the audience is the government, like it's just like, it's just interesting that the Twitter announced on Twitter too. Right. And I mean, I think that the AI conversation in real time is happening on Twitter. Angela, what it did was it like galvanized the ecosystem, right? And especially I feel like the Jensen might drop. He's such a celebrity. But I think what it did was it made it uncool to not be for open weights and a more open approach to AI and gave people this alternate narrative to open AI and anthropic are going to rule everything.

10:05and there was so much like pent up enthusiasm for an alternative that it created this like much bigger moment around it than if someone had actually just like gone to DC and testified. And maybe Helen to get back to her like conversation from a couple of weeks ago around like, all of the execs are like, even ones with crazy reputations and Laura and Aura are joining Twitter. I do think like Jensen joining Twitter specifically for that open letter was such a validation that like this is where the AI conversation happens. Like you got to give, I guess, Elon some credit for that. Like X is where X is where this is going.

10:49This is not happening on LinkedIn. It's not happening on threads. It's not happening on Blue Sky. It's certainly not happening on Instagram. And so this was like kind of where they crowdsourced enthusiasm. Yeah. And it's not happening in traditional media either. I actually don't think that traditional media can keep up with the pace of this. So they can just sort of summarize and help us like. Exactly. They can do a daily roundup or a morning newsletter. Isn't that what's so interesting? Because as someone who is not on X, other than being like sent this post, I would have totally not known. It's not in the Wall Street Journal.

11:23It's not, you know, like you can sort of go through the whole week without having known this. And so it's both interesting that this is where the discourse is taking place, but also just the bifurcation of how that knowledge gets disseminated, right? It's such a small audience that, not small, but like very targeted audience that it's speaking to versus for the government, like the broad majority of its population is probably unaware of this discourse happening. So it sets a very clear delineation between the people that matter, quote unquote, and the people that don't. Yes. I mean, I think this is why, like coming back to Dan Primack, who I think is like super online.

11:58Like he's very much, he very much lives on X. So when I get Axios updates or like, you know, see something from him kind of like, okay, I do feel like he is in many ways bridging a couple of worlds where he is part of this, like very active, fast moving conversation. It's, you know, he's running a newsroom. And so there are like all of those checks and balances as well. And so it's almost like I have like a new value placed upon. I think folks like him that, that can kind of like go between these two worlds. I'm definitely like X-brained. And then I feel like traditional media is just a little slower to catch on.

12:33So, you know, if you're only reading that, I don't think that they're not informed takes or not well researched. It's just like a couple of days later because they need to go through the proper process of like vetting. Talking to people. Yeah. You know, their sources. It's interesting to think about because like, of course, in the past, things would happen really quickly and it would take some time to be covered. But there was like catch-up time after big moments. And now it feels like there's no catch-up time. Like by the time you publish your story three days later about the open letter and like how we should all be thinking about it, something else has happened in AI.

13:15And so I really do. Maybe it's okay. Maybe it's okay if your audience doesn't need to be like super current. But in terms of like, you know, people who are insiders and want to stay on top of this, it makes it very challenging to like serve that audience both like with depth, but then also, you know, with speed. I like, yeah, like Axios is a great example because they do this sort of like roundup bullet point version, but longer form pieces. That's tricky. It's interesting because this is like old news, but I saw some legislation being passed in New York that, you know, banning data center developments.

13:54And it feels like you talked about this on the pod, like overall, sort of for lack of better term, like gen pop sentiment towards AI is very negative. But at the same time, it seems like we're going more and more insular into speaking to a smaller and smaller group of people than trying to bring people along. And then people get surprised, like, hey, I have to build a data center. It's so hard to convince people, but there's no effort in the interim. So it's just interesting to see. Angela, it was also interesting because I actually thought the messaging was pretty good. It was actually a message around broader economic prosperity, which is not a message, I think, that has made it to mainstream audiences.

14:35But it wasn't for a mainstream audience. But maybe these are the training wheels that all of these AI stakeholders need to learn how to come together and tell a more positive sum story around AI. So maybe the next moment won't just be like an open letter on Twitter and we can have a broader narrative for a broader set of people. By the way, since I wasn't on the pod to defend my terrible taste in advertisements, I just want to say that I can't believe I was slandered for 10 minutes for showing my support for the anthropic ad. And maybe this will be the precursor to better ads for the Super Bowl or some other large sporting event.

15:18Well, I definitely had that thought that I feel like we are in this territory of like these open letters. Like I think the groupings of the labs at this point, like the labs versus open source or Chinese models. It's like, can we admit that we're moving towards commoditization? And if we are, then what comes next? Differentiation and storytelling and branding. And so I'm still waiting and holding on to my hope for like the golden age of technology marketing. Maybe I'll be waiting for a long time.

15:52I feel like Kalshi had kind of a rough week. I feel like just in the week there was the CFO resigning. I saw some letter that circulated. They like threatened Netflix with a defamation suit. I guess Netflix is doing some sort of documentary on prediction markets. I will watch that. Thank you, Kalshi, for bringing that to my attention. Yeah, it was right. I sent it back there. But then at the same time, you know, I feel like there's, I'm seeing a lot more like new prediction markets or platforms getting into the prediction market game. Like I think Robinhood is working on something. There's more niche like sports betting ones that are coming to market.

16:32And there's always like the detractors that sort of like shake their moral finger at the sort of, you know, gambling advices aspect of this that is in the background. but that was hard and you know i thought of you ashley i was like well they can get out of it very quickly by just announcing a blockbuster round or some dropping some incredible revenue number so maybe we'll see that this week as a response and honestly if you don't have that just stay silent for two days and the world will have moved on they'll moved on yeah they will have moved on it's interesting there's been a lot of like it feels like a lot of um punches around like they become call sheet and polymarket too which is interesting like it's got sort of like rolling in the mud a little bit.

17:14And I think Kalshi has the position of strength, especially in the US. So this past week was a little bit of a knock for them. But the thing is, I don't think Kalshi's users care at all or even like they're thinking about their executive team. So if this category has tailwinds, as long as they can keep the business on track, it's not good to lose a CFO. So hopefully that's not like a harboring way of more bad news to come. Yeah, that's typically, in my experience, the hardest executive departure to sort of like smooth the messaging around, which is why CFO departures are usually like quiet and sort of fading into the background.

17:56So I guess even this one, the CFO actually departed several months ago, but only now is being reported. And so I'm sure they're bummed about that. Did you guys watch any of the incredible footage from Chase Center and YC Startup School? Angela's eyes lit up in a way where she was like, who performed? And then you said YC Startup School and she looked kind of sad. I'm not on X. Of course, I've seen none of this other than in our group chat. I know I was going to say Olivia Dean's concert. Like, what are we talking about? World Cup watch parties. No, it was Sam Altman. Come on, Angela. They have a startup school annually.

18:35They've had startup school virtually. They have modules available online. I don't think they've ever done anything quite at this scale before, but they basically filled Chase Center and made like a very open invitation to anybody who is thinking about starting a company in the future. So it was like you had high school kids. You had operators that are currently at many companies in the Bay Area, people who traveled in for it. But it was basically like, you know, startup school. Like how do you lead to the pitfalls to avoid here? Here are the ways that successful founders have navigated these journeys.

19:07So I think a lot of the discourse has been, you know, anywhere from Sam Altman being like the way to close it out and it being like this, you know, sort of exciting thing. Sam Altman was the previous president of YC before Gary Tan and to, you know, sort of like commenting on the spectacle that that sort of YC has become and sort of how mainstream dream like starting a startup is and so the the sort of like you know boomer question i had in my mind was like would zuck or drew houston or even brian chesky who's a yc founder right um and so it was drew but like would they have like attended one of these events and been like hell yeah i'm so fired up to go start a company now or are they from a previous era where founders were a little more off the beaten path and like not you know filling arenas i mean i do think all three of those guys have always wanted to be cool so i would say they might wanna they might swing by i mean my mac looked shocked when i said that out loud but like you know zuck's rocking his gold chain i don't know that era of zuck was my favorite too though i remember when we all saw the photo we were like is this ai i loved it it was hilarious it was great no i mean my expression My expression is more, I am like surprised that you said that out loud, but we love to see it.

20:30I wonder if it's less about like for me when I see the YC startup school event, first of all, I think like an incredibly executed event, perfect timing, great setup, like for all of the, what did somebody say? It was the mega church-ification of YC. I think that's hilarious, but I also think like one thing that mega churches are really good is driving up hype amongst like populations that really believe in something and i think like this is an example of like a moment where yc is like trying to figure out it seems from the outside like yc is trying to figure out what their next phase is and how to continue to be the leader in like drawing the most talented and interesting young people into like their orbit and creating a uh creating a space that is actively helpful in creating like generational companies and i think they've tried out a bunch of different flavors of this.

21:25And this seems like as good of a path to try as any because it certainly has all of us talking about it. And it is definitely drawing a bunch of attention. Look at the weight that we hold, that we still to this day hold in Silicon Valley, all of you haters who say that we're over. We can get the most interesting people in the Valley to come talk at a crazy never been done before event. And I think that that is still a demonstration. I think what that was, was a demonstration of lasting and continuing power. To your point, does that translate into like financial returns? Does that translate into continuing to be the hub for the next generational companies?

21:58Like unclear. That's a good preview to what we're going to talk about today. But yes, does it even matter? I don't know if we need to be rooting for YC specifically, but I think we should be rooting for something that is more easy access in the valley. Like it's easy to hate on YC because they're like a little overdone and they've been like the center of the discourse for so many years. However, I talk to people who are outside this ecosystem a lot. And it is very intimidating if you don't live in San Francisco, if you're not tied up in like one of the like secondary cities, venture ecosystems and like deep at the center of it to really understand like who is venture for, who can start a startup really, what does it actually take to make it succeed?

22:38And I think that one thing that YC has been incredible at both for Silicon Valley and outside of it is really democratizing that. And that's a beautiful thing. That is like what we aspire to. Like, that's what we say, like, we're supposed to get via this system is like anyone with a dream can go and make a company that matters. And so I think like, I don't know if renting out Chase Center is it. It was a very fun event. And I hope but I hope that they or someone like them wins because I think that like, we need to like, I love what it means to continue to give young people more insight, more access to like, the insane amounts of capital and power that have developed in Silicon Valley.

23:15Mac, it's so fascinating that that's your take because I think like for so long YC's brand was about exclusivity, right? Like we only take X percent of total applicants and it's like, true, but anyone could apply. Yeah, yeah, yeah. No, totally. And also brand and content and like vibes are much more accessible today. And I think this is also just a continuation of the barbelling we're seeing across everything where either you are craft or you are a massive platform, right? Whether you're an incubator, whether you're a venture firm, whatever. And there isn't like that middle ground anymore. And like YC probably wasn't going to become – it's interesting because remember they did just a couple of years ago.

24:02They killed off their growth fund. I think they made their class sizes smaller. Like everyone's trying to figure out like what is the right way to show up when things are changing so quickly. And I think experimentation is good. And I do think like the accessibility of the YC brand and like startup lore and startup culture could be a really good thing for people who are not already in these, you know, very specific networks and have that access. But yeah, it's just so funny to think about YC and then accessibility, but also being the filter for the very best found. It's an interesting line to walk.

24:40For sure. I think the most impressive thing about YC is that it is still around and still the best. It has the number one brand of accelerators. That is beyond impressive. You really cannot think of what would be the number two or number three. And even in San Francisco, in New York too, we joke all the time. there's a new accelerator that launches on a weekly basis. It did seem like that for a while, right? There's like a new AI one. Or like a full-on venture studio. Do you remember that era? That was like a year ago. Everyone was doing a venture studio. Was it a year ago? God, okay. Maybe that's been in and out of a trend.

25:15For what it's worth, I'm rooting for YC and I really want them to win. And I think Gary is incredibly strong. And if anyone can pull it off, like I do think that he is a really, he has as good a shot as any. I don't think that the next YC ends up, like the next the next player to take up the space that YC had I wonder if it even is this model at all like if it is if accelerators continue to be the thing especially as like AI does end up democratizing a good amount of both like we have now what like a decade and a half of like really mainstreamifying like all of the conversations around company formation especially in like startup startup company formation that's right they're not teaching you something that you can't find on the internet.

25:58So like now, now the question is like, what are the viable businesses, which is why like we then went into this like venture, venture studio model. But it turns out that just knowing a viable business also isn't enough to like create investor returns. It also comes down to execution and the right team and the right like continuing motivation. Like everybody wants to be a founder until they realize that being a founder just means that you're like lonely all the time, constantly, constantly overworked. You like don't hang out with your family or friends until you're like insanely successful. And even then you mostly don't.

26:31So I don't know. I think it'll be really interesting to figure out what fills that space. But I hope something does because I think like for its many ills, I think it's the coolest thing about Silicon Valley is it's the like supposed transparency and inclusivity. When you think about YC, like the brand is powerful, but I actually think that the network is so much more and the network actually incentivizes them to scale. Because like I know so many founders who are even like repeat founders, and they've done YC again, because if you sell software to other startups, there's your initial customer base, right?

27:05And now they have as like tech expands beyond like a classic categories into like deep tech categories. And like, they're building all of these like super high value networks within all these different sectors. And, and it's an unfair advantage, right? Getting started and knowing who your first 10 customers are going to be, 20 customers, 100 customers. Yeah. I mean, I'll take like a little bit more of a dig here. I think that the criticism that I think is fair of what people are saying about YC's new version of this very scaled, accessible sort of brand and content is that it becomes so mainstream that you have people almost aspire to it as like a credential to be gained.

27:49Whereas I think there are still extraordinary founders who don't need YC for anything, except they value being on book face, having a distribution network of other YC founders, you know, that are, you know, at later stage, later company building stages than them to like sell their products to like, so I think pragmatically, yeah, those things are so valuable regardless of who you are. But then on the other end of that, it is starting to be more like an identity. How many cold emails do you get where it's like people have their name and then they have their YC class in parentheses, right? It's like the same way that it's like your name and MBA, right?