What you can learn from Sam Altman's Ouster

0:00All right. This is an emergency pod. So yesterday Sam Altman, who is one of the co-founders of OpenAI, he was fired by the company at basically around 12 p.m. He was fired on Google Meets. And there are a lot of reasons as to why there's a lot of guesses. Maybe we can go into speculation a little bit. He was fired on Google Meets? Yeah, he was fired on Google Meets. Oh, yeah. I thought you meant, like, text. I was like, no, no. No. So Ilya, who's one of the – I think he's one of the employees. He's also on the board as well. He said, hey, we need to have a chat, right? And at 12 p.m., he was fired.

0:32At 12.19 p.m., the other – the guy that basically co-founded, he basically put together ChatGPT, right, the product, Greg? I think he's a president maybe or a board member as well. So he said, hey, we're going to strip you. Greg Brockman. Yep. He's like, we're going to strip your board rights, but we still love you to be a member of the OpenAI team, right? So he ends up resigning a couple hours later. And as of this morning, one of the lead researchers for ChatGPT4 has left. And then one of the lead AI safety people has left OpenAI. So there's starting to be departures. but we wanted to mainly focus on what you can learn from this ouster from a business and maybe a marketing perspective as well so you know you want to go first yeah so it's kind of crazy to think about in which sam's done so much for ai and the whole company it's startups in general yeah yeah because he was yc before it's crazy to think that someone would let go of someone like that.

1:35It's just bureaucracy. I don't know the real reasons, but it was just people probably not getting along with others. And it's a big mistake. The moment you lose a founder in a company, it just doesn't run the same. And I remember when we were at Kissmetrics, we were in a lawsuit over data rights and privacy. And we ended up winning our FTC investigation on that class action lawsuit, believe it or not, because we had insurance, it was cheaper to settle because insurance would cover the majority of the money. And I remember the board eventually put in a CEO and the company just wasn't the same. It didn't run the same, didn't perform the same.

2:16The passion just wasn't there. And I believe a lot of founders, like people like Sam Altman, who didn't have any shares in the company, at least from what I've read online, they do it for passion. And the moment you put in a hired gun or someone to replace them, in many cases, it's not the same. especially when companies are still young and growing, right? I think the culture, the passion, the founder is super important. I've invested in a lot of startups, too many to count on multiple hands. And the one thing I would say is, you know, it's not just me, but typically when founders are no longer part of the company, I'm less likely to invest, especially at the early stages.

2:58It's like, why, you know, a hired gun is not the same. Yep. So here's what I'll say. I mean, both Neil and I are multiple time founders. You can't beat the founder DNA. Neil and I have talked about this on the phone. It's just, it's the founder brings the energy. And it's once that energy goes away, it's like things slow down. And there are a lot of, to Neil's point, a lot of bureaucracy kicks in. Now, here's the main thing I think you can learn from OpenAI is Sam Altman's ouster from OpenAI. You have to have control of your board. And so in this situation over here, so he's saying, I'm looking at his Twitter right now, where he's X.

3:34He says, if I started going off the open AI board should go after me for the full value of my shares, which that part's fine. Right. But Greg Brockman said this, he said, Sam and I are shocked and saddened by what the board did today. And so some people can say, okay, this is the argument for bootstrapping. I'm just saying the, the hypothesis here is that Sam was ousted because they have achieved some form of artificial general intelligence and he wants to push, whereas the board wants him to slow down. Right. And in this case, there's, there's a disagreement here and it's like okay well sam just needs to go and i think in this situation having that board of directors where you look at some of the people on that board some one of the people they've been like um it looks like they've been an academic for the last 10 years of their life right um they haven't been really involved with company boards or anything like that so neil and i only know so much here we're we're just kind of calling from the top um do you want to say something uh if i if i had to end on one note you know it's at the end of the day, the founder DNA is super important.

4:34A company without a passionate leader at the very top isn't going to do as well. And yes, a CEO could be passionate and they can grow a business and they can do extremely well, but it takes time to find that passionate CEO who loves the business, the company, and is the right person to lead it to the next phase. Not impossible. There's a lot of CEOs who've actually grown businesses much better than the founders, but at early stages, and open AI is still really small. Yes, I know in the grand scheme of things, a lot of visitors, but if you look at how old they are, they're still young and they still have so much growth potential.

5:11You know, a CEO is great when you just need to put in an operator to help maintain and slowly grow a big moving ship. Yep. Here, let me share my screen real quick and then we can get out of here. So this would be interesting for some of you to take a look at. You can explore more to your heart's content. So the theory here from Matt Morales is AGI, ASI has been achieved internally at OpenAI. So Ilya, he's one of the people, I believe he's the one that initiated this coup. He says, look, on October 6th, he says, if you value intelligence above all human quality, you're gonna have a bad time. And then at APEC, basically Sam Altman says, four times in the history of OpenAI, the most recent time was in the last couple of weeks, I've gotten to be in the room where we pushed the veil of ignorance back on the frontier of discovery forward.

5:57getting to do that is the professional honor of a lifetime so that's what's happening here's one more thing over here so paul graham he's the he's the founder of y combinator which sam altman was the president of and they've invested in companies like dropbox stripe airbnb in the early stages they take a very small equity stake um and then it becomes really big the money becomes really big anyway so paul graham says this when i talk to more established startups one of the first things I want to know after asking about the growth rate and whether they're profitable is whether the founders still have board control.

6:29I'm more optimistic about the company when the answer is yes. And then the final thing here that to take a look at is what Sam Altman saying over here. So he says, this is, I don't know if this is conspiracy theory, but he says, I love you all. What are the letters for that, Neil? I love you all. The first letter of each one, each word.

6:51what does that spell out you're muted i l u a ilia exactly right what is the reason to say i love you all you know so anyway we're not going to speculate anymore you guys can take a look at this there's another post over here from andrew coat on the likelihood of it um this is all speculation but at the end of the day neil's saying you it's it's difficult to replace founder energy um what i'm saying is you have to be you you have to be sure that you have some type of control over your board. So that is it for today. Please don't forget to rate, view and subscribe and we'll see you tomorrow.