20VC: a16z's Martin Casado on Anthropic vs OpenAI: Where Value Accrues | Cursor vs Replit vs Lovable: Who Wins and Who Loses | The One Sin in AI Investing | Why Open Source is a National Security Risk with China

24:36So I think there's even a ton of technical level to differentiate. So my sense is most of these companies that are like, let's say, break even margins, it's like a board level specific choice to prioritize distribution, not just because this is is just a systemically something they have to do. We mentioned their sovereignty. I am intrigued how you think about safety and safety around AI and models. If you've had Vinnon Costa be like, we have to lock this down. If this was not locked down, it would be like nuclear secrets being handed out. I remember then Mark came and was like, fuck that. No way.

25:10How do you feel about the future of safety within this landscape? I mean, it's crazy to have VCs talking against open source, right? I mean, founders fund, And pro -ordid vegans, sectors of the economy, academia too, have decided that open transparent innovation is somehow an antithesis of safety. And I know that's not what you asked, but I just want to make the point. We're in very bizarre land for a while. It seems like we're coming out of that now. So let me just draw a bit of a new pattern. Do you think we're coming out of that? I think we're moving more and more into that. Maternalis is going to turn long but fully closed.

25:45Great. So let's go back to that in just one second. I'm gonna answer the question that, because you actually asked like a great question on how I view this and let's go to whether we're coming out or not. So how do I think about safety? You know, I was actually very, very close to security during the rise of the internet. You know, I worked for the intelligence community. I worked for Livermore National Labs and then you know, when I did my PhD, like 50 % of my work was in security. I taught cybersecurity policy course. And the thing with the internet is you had these very specific examples of new types of attacks that impacted nation states.

26:20Critical infrastructure would go down. You'd have things like the Morris worm. I mean, you'd have these really significant examples. And that kind of kicked off this large discussion on how you handle it. And it was so significant at the time that at the nation state level, we started thinking that we have to actually change our doctrine. You know, we're kind of this cold war era, mutually short destruction. We had to change it to this notion of like, defense asymmetry, which meant the more we relied on these things, the more vulnerable we were, right, as opposed to like a country that didn't rely on them because you can be attacked.

26:54And then of course, kind of the whole terrorist information warfare stuff. And so the implications were so absolute and you had so many proofpoints and you could articulate them incredibly well. And so if you look at the AI stuff for every computer system, you have security considerations. But we've got this 30, 40 year very robust discourse around this that we can draw from and use from. And the thing that I don't understand is how all of a sudden we've decided that these are not computer systems, they don't obey the same laws, and we have to kind of throw out everything that we've learned and kind of like revisit the discourse, even though we don't even have the same proof points.

27:31I mean, like nobody can make a strong argument on asymmetry or need a shift to doctrine. And if they can, let's go ahead and have that discussion. You know, I still have yet to see the dramatic new attack. It's gonna come for sure, but we haven't seen it yet. And so I just feel like the discourse around this is not in line with the reality. It's not in line with historical precedents. And so we should absolutely take these things seriously, but we should draw on the information that we've learned from in the past and the approaches we've taken in the past. The biggest difference this time is in the past, the people created the technology were kind of protect and the people that were like selling security solutions were like the fear mongers, right?

28:11So you'd have somebody create like the internet and they're like this is safe and it's great for everybody But then you'd have somebody to create a firewall and like oh the internet's dangerous every sociopath to your next door neighbor So you had both the same voices but in two different bodies based on interests the interesting thing this time is They're in the same body so the person that's creating the thing is also like oh this thing is very dangerous I don't recall the last time we had something like that But it's created a dynamic that's just been very confusing for everyone Do you not think open source increases the opportunity set for hostile actors like China and Russia to harm us?

28:47I think it's Tata logically true like I think Tata logically you can say Do you believe Computers and the availability of computers increase their ability to harm us and I'd say absolutely Computers and availability computers do but very specifically open source over close source So I think that right now, open source is most dangerous because China is better at it than we are. And as a result of that, we're seeing a proliferation of Chinese open source models everywhere. Now, unfortunately, we don't have control over Chinese regulation. And so I would say the answer is yes because of China, not because of us.

29:29And the right way for us to respond is to fuel our open source efforts against that. Chinese open source can be a national security issue for sure. And any of the software that produced by a nation state that we view quasi adversarially, the way that we combat that is we also are incredibly open and we also do a proliferation of technology. What do you think we can learn from China regulatory wise that would enable us to have the same or better open source ecosystem slash environments? You know, the United States is a long history of being pro innovation, pro innovation for national security, pro innovation for national defense.

30:07I think we should be funding this stuff like crazy. I think we should get the national labs involved, we should get academia involved. You know, we should make this a national priority just like China does and we should just, you know, a full -throwed endorsement of all of this stuff. I think we should do close stuff. I think we should do open stuff and we've done this forever. My first job out of college, this is, you know, like, $19 .99, was working at Lawrence live from our national labs and the ASCII program. And what we're doing then, we're, I mean, the broad program is simulating nuclear weapons.

30:36I mean, this is what it was. And a lot of the concerns we have today, where concerns we have then around compute, I mean, we actually stopped Saddam Hussein from importing play stations because we were worried about, you know, using them for simulation. We put export controls on the hardware. And we'd say the same things like, oh, you know, computers out there, like computers, you know, they're going to enable the enemies and all sorts of stuff. And this is like nuclear weapons. This isn't like some abstract AI thing. This is like actual, actual on the ground weapons. The posture that we took at the time, the conclusion is we're just gonna be the leaders and all of this stuff.

31:10And we funded academia, we funded the labs, and we won. And we were able to control like the technical discourse of the planet going forward. And this time, instead we wanna put our head in the sand and let somebody else do it. So like they're gonna learn from our success and somehow we're not. Do Trump's cuts to university's research labs not impact your ability to do what you just said? Do you not actively going against what you should be doing? I am very pro investing in academia and in the national labs. I think there's always a political shift in money, depending on what they view is in line with administration.

31:52and I did my PhD at Stanford, I've done a bunch of NSF grants. I don't remember ever somebody saying we like indirect costs. Every researcher, every professor, every single one was like indirect costs or terrible. Obama, Obama tried to get rid of indirect costs. He was like, you know what? Universities, they have a tax exempt status. So why don't we this have them spend 5 % of their endowments, any other tax exempt organization that will cover a lot of indirect costs, and he couldn't get it through. So this is a by kind of partisan issue that is longstanding. I would say that like a change is needed.

32:34You know, I think these things are very hard to implement, but I would say concretely, yes, we should invest in these things. Yes, we need a shift in how funding happens. I do think that like indirect costs have gotten way out of hand. And until it was like Trump doing it, everybody that I know in academia totally agreed, But yes, of course, change and shifts in funding will be disruptive. And so I think all things are true. I just don't want to do it. I don't want to do this to a simple like Trump does bad things because I don't think that is the case. And then funding science is arbitrarily good because I don't think that's the case.

33:07I mean, I definitely think we should fund as much or more. I definitely think that shift in funding and change to the system is needed. And the right path through that is complex. I don't quite know it. You very tiny said that I asked a good question on the reversion back to closed source when we mentioned Alex joining matter, what it meant for Lama. I said quite zero some wise to your point, we're clearly seeing a movement back towards closed and away from open. How do you see that? And do you disagree with my statement now on the transition? I agree on the ground 100 % that I think we're seeing a movement away from open source, but the rhetoric around open sources shifted, right?

33:46I mean, we just had the AI policy and recommendations as a full -throwed endorsement of for open source. So I think discourse wise, there's more support for open source than ever before. I think ecosystem wise, you're right. I do think it's quite likely that we're going to see less open source. Now, listen, OpenAI has said that they're going to open source. That would be wonderful. And if they do, then I think that would be very, very positive. Do you think they will? Yeah, I have no idea. I hope so. We say open source, but it's such a misnomer when it comes to, when it comes to AI. I mean, the standard model of open sourcing AI is you open source the smaller model and you keep the more capable model close source and it's a way that you get distribution and brand recognition, but you don't actually erode your business.

34:28This has been very, very successful as a business model and unlike actual software open source, just because you release your model doesn't mean somebody can replicate it. Like to replicate it, you'd have to like recreate the data pipeline and the training pipeline. And so, you know, I think that there's just like a lot of concern of investing, you know, hundreds of millions of dollars or billions of dollars to train something and then just giving all of that away. But I feel very confident that the business justification is there and behavior will always follow business. And we're going to continue to see open source be a large part of the ecosystem.

35:01And remember, historically, open source has only been about 20 % of the total market value. I would say it's much higher than that for AI. So in a way, we're doing better than software has historically. What did you believe about the AI landscape that you now no longer believe? We've touched on so many different elements. My mindsets have changed around so many. I mean, the one for me that I've just consistently got wrong is just how fast these coding models advance. And this is probably just sunk cost -fals. My entire life, I've just been this nerdy program. I've been programming since the 90s.

35:30I mean, it's like it's my happy place. And I just never thought that they would advance to the level that they have. I mean, I still develop most evenings, and it's just, you know, instead of watching a sitcom, I just goof off and mostly writing like old video games or whatever, just for fun. Like, it's silly stuff. And I'm already at the point that I just couldn't work back to working without them, and I've spent, you know, 30 years without them. And it's just their ability to offload all of the shit I didn't want to learn is remarkable. The thing that kept me away from code for a while, which is I would kind of dab with it.

36:06I would drop it. It's, yeah, just learn all of this, like all these weird frameworks. None of the knowledge is foundational. It's just like some fucking random dev came up with some weird way to do something and you've got to kind of learn some poor design decision to do it. And none of it made any fucking sense. And it just felt like you're wasting your brain space on poor decisions made by random open source developers. And that was programming in the past. Let me just put it in context. In the late 90s, programming was you download your IDE, you sit down to your computer, you program something, it would turn into a binary, and then you'd run that binary.

36:43So you could really get a lot done just by sitting down and writing code. I would say like 2015 or so, writing with something is like you'd have to fucking download like 50 million packages and to run it, you got to run some stupid dev server and to like actually have anybody else use it, you gotta learn how to host it. And it was a bunch of libraries that were like dealing with incompatibilities for all of us as a weird fucking platform. So like 90 % of your time, and nothing to do with code. Like 90 % of your time was just dealing with all the environment platform bullshit. And so what's so nice now is you can just focus on your code.

37:17So like now I literally just, I mean, I use cursor and I just have like the AI, tell me how to host the thing and tell me what package to use and whatever. And I just strictly focus on what I want in the logic. And so it's almost like it's brought coding back. And you can see this across the industry. Like all of, I've got, I mean, I grew up in the industry. I know a bunch of very strong developers that have been developing for a very long time that have basically stopped their running companies now or whatever, and they're all back to programming at night. And I really think that you know how like there's like the adage of like, I don't know, like the old man that goes into the garage and like makes the train set for like nostalgic reasons.

37:53I think like the modern version of it is these old systems programmers like vibe coding at night just because it's become pleasant again. And so I know you ask about the thing that's kind of surprised me the most, but I really think it's such a marvel what these coding models are able to do. And they add very real value. Do you think they make 1X engineers 10X or 10X engineers 100X? 10X engineers 100X would be what I said, but I don't I don't actually think it's that I think they make 10X engineers 2X. I would say every company I work with uses cursor. And then if I actually look at, has that increased the velocity of the products coming out?

38:32I don't think that much. So what's changing then? Because that productivity is going up. So it's the quality of product going up if the product release cadence isn't. I just think the things that are hard remain really hard. So let's say I'm creating a new model, a new frontier model. And to create that new frontier model, I've got to collect data and I've got to run a pipeline and I've got to like sit with my my Jupiter notebook and I've got to like look at the lost curves, I've got to rerun it. That's just a lot of kind of experimentation. And there's no coding model that's going to do that for you.

39:02But if I wanted to run great tests or a test suite or visualization or write documentation, it's actually really good at that. And so I would say that probably in the long run, having more robust, maintainable code bases with less bugs is just as likely to be the impact as feature velocity because in startups, they get an on and on and on. This is probably different from the apps. I've always thought apps had no technology to begin with. Like every time I look at vertical SaaS, I'm like, why don't we even care about the technical team? It's fucking crud. Man, it's like crud is like create, read, update, delete.

39:39It's like they all do the same thing. They all just kind of look like a web app who cares about the technology, the technology is simple. These are all these kind of go -to -market things and whatever. However, but infrastructure is different. Infrastructure is like very real trade offs in the design space that only some of the understands computer science would know. So for infrastructure companies, I think it's quite unlikely that AI will really help speed that up because it comes down to something that the developer has to decide on, has to articulate the trade offs. But I do think it could really help with the development process so you have less bugs and things like that.

40:12And so I actually view it more as like a more robust development methodology that necessarily speeds up the core product. Given the kind of dev productivity changes that occur because of these tools, how does that impact a fancibility within companies today? If time to copy it, which is me, sure, at five, I said this on the show, he said time to copies basically been reduced to nothing. To what extent does that change the fancibility for companies? I mean, I still think we should just go back to the split between apps and infrastructure. For apps, how long does it take to copy it anyways? I mean, you know that there are entire companies that their stated purpose is just a copy.

40:48Another copy in the app space is just so easy to do. I mean, there is no core technology for random app. I mean, there's no like different technology for random app. Let's say that you're creating, I don't know, some healthcare vertical, SaaS thing. Like, you could contract and you have been forever the actual app. I mean, the business is actually the long tail of understanding that domain. So I just don't think it changes that paradigm at all. And then when it comes to core infrastructure, which is what I focus on, things like databases, foundation models, there's no way that right now models can just copy.

41:22And the reason there's no way is it is not that the models aren't capable of doing the technology. It's just that there is a long tail of understanding of the trade -offs for the particular use case in domain. And because it's a new market often, then you understand that through market exploration. And so I think these models really help with the software development process for non deeply technical areas like apps, sure they can help speed it up. But over time, all of these reduced to a long tail understanding of the market. Aaron Levy said it's so beautiful. What do you think the average PR is pull request is for a production code base?

41:56Like how How many lines of code is the average change that gets accepted? Would you guess for like some production enterprise app? 12. It's actually two, but let's say it's 12, right? And what is that two or 12 line signify? That two or 12 line signify probably some learning in the field or some understanding of what is needed. And so the long tail, the thing that's the hard thing is to understand the specific deployment environment in market you went to, that's the hard thing. The hard thing isn't the two lines of code. That's actually quite easy. And so in many ways, I would say the AI is getting rid of the middle, right?

42:32Like very new computer science like models, they don't know how to do just because nobody's done it before and that's kind of pushing the state of the art. And then in the app space, all of the hard stuff is the business anyways. And this is why the changes are very small and you learn everything through GoToMarket, which the models don't know just because you're exploring a new market. And it's all the bullshit in the middle that they're helping us with. And so, you know, for me, it's just kind of netacreative. Do you think that CS holds the same weight as a study and education discipline that it always did and you would always recommend it?

43:04Or does that change in a world that's more democratized in terms of creation like we discussed? I mean, I feel very strongly that like, it's very hard to work with computer systems and be effective if you don't understand how the computers, how they work. What do you think we do today, Martin, that we will look back on in five or ten years time? And you know, I can't believe we did that. It could be prompting. It could be choose the model that we're working on. I find it ridiculous that we are supposed to choose which model. Like, GROCK 3, GROCK 4, GROCK 5, GROCK Shopping, GROCK weather. What the fuck?

43:38Just figure it out. Well, I'm just taking it from a programmer's view. I mean, I just think hopefully we'll just stop worrying about frameworks altogether. And maybe even languages, maybe even a proto -language evolves, and we can just focus on logic and fundamental trade -offs. I mean, we've gotten this very backwards world where these days programmers think about all the non -fundamental stuff, and they don't think about the fundamental stuff. Let me give you an example. So I always worry, this is going to be this weird philosophical rant, but I always worried, you know, while I was doing grad school, and when I was doing research that we kind of entered a space where there's so much research that's been done over the years, that you never know if you're doing something new.

44:17Like, you just couldn't do the literature search. There's so much. And so, like, the entire industry just spent all of its time redoing research. It's like you're cleaning a room and you're trying to like sweep out the dust, but rather than sweep it out the door, you're just kind of moving it. Like, you'd move it to the bed or you'd move it to the wall. And then, like, that's all you do. You just kind of sweep the dust around, but you never actually get it out of the house. That's what research felt to me. It was like, we're in this mad delusion. And on top of that, it also felt like many of the most important problems were kind of between disciplines.

44:46And so like in order to even solve them, you just have to know too many things and we couldn't do that. And so I just felt like there's all like the entire scientific and industrial establishment, which is kind of redoing the same stuff. And so in a way, I think AI has the ability to pull out of this mass craziness, this mass ineffectiveness, which A, it's very good at telling you if you've done it before. You know, it's very good at that. It actually knows all the literature, knows all the history. And it's also very good at tying different disciplines, right? It is an expert in all of these things.

45:14And so I think we've been stuck in this morass and it's a bit of a liberator so we can actually focus on the new problems and overdoing new things. And so I've got this very optimistic view of where it's pulling us. And so I know it's more of a philosophical answer to the question that you asked, but in a way, I think it needed to happen to get to the next level of problems that we need to solve. The worst question ever is I own the job displacement question, but I am intrigued because like in In the one hand, I see intense job displacement happening fast than ever. And then I'm also very aware of Brad Feldrode, brilliant post where he basically said, every single cycle, every time we've always said, oh, what are we gonna do?

45:52Calculators, what are we gonna do? Computers, what are we gonna do? AI, now what are we gonna do? To what extent does this actually require that what are we gonna do versus another for fuck's sake? Don't we see the pack? Yeah, yeah. So I'm very sympathetic to concerns around job displacement. And I think we should take them very seriously as a society. I'm in no way libertarian. I think that this is kind of where governments do step in and we do help out. But first we have to understand, and it's actually very unclear. Let me tell you just a quick anecdote. You know, my cousins are all pretty high -ends, the wrong term, but they're pretty established translators.

46:28And they have been for a long time, multiple languages, and they visited recently. This is a husband and wife pair, and they're like, listen, we have to change jobs because translation is all going to AI. And I asked, I said, no, they're shifting. And now instead we've got to like spot check these AI's and the only way we can hold it up to our standards if we rewrite the entire thing, but they won't pay for that. By the way, these are Italian, so they speak this way, but they're like, I can't work on something without a soul. And I think that their dilemma is a good microcosm for the broader dilemma, which is, one thing that's very unique about AI is that it actually requires today a human handler.

47:05I mean, they're just so unpredictable. Most of the use cases that we know, all the monetized use cases have a human on the other side of it. Coding, you've got a professional coder, all the creative stuff, you've got somebody like doing all of the creation. I mean, these are, it's kind of an enabler and it's a tool, but the nature of what you do does shift. And that's very different than, for example, electricity where it doesn't require a human. Either you light the fire or there's no fire to light. And so I think we as a society need to understand the level of displacement. We have to understand that.

47:38I think it's very important that we do. I think these are things that government should get involved in. Do you just have to turn to your venture investing just before we do a quick fire? Do you enjoy it as much as you did before? It is a much faster landscape. The money is much bigger. Do you enjoy it as much as you did before? I spoke to my name of your founders and they said they said that they didn't think you enjoyed the administrative work that you now have to do with the size and scale of Andreessen. Oh, well, those are two different questions. I love the investment. I mean, investing is great.

48:08It's just the most exciting time in the industry since the late 90s. It's great to be part of a super circle. I love it. I'm a venture investor too. I'm with you and I say the same to our LPs. Is your price elasticity more on deals because of the super cycle entry point that we're in or less because of the risk or uncertainty level that we're in? Fill this out ,ically. I just think the market sets the price. I just don't have the hubris to think I can somehow outsmart the market or like a single deal is going to like bend to my will. Do you walk away because of price often? Price no, ownership yes.

48:43What is the ownership you need? It all depends on the fund, the market, the size of the market, the understanding of risk. Everything comes out of ownership for us, not price. I mean, you just can't make the fund mechanics work. You know, if you don't get the ownership. Now, for very, very, very, very, very large markets that are obviously very large for very large checks, then we don't care as much. But that tends to be growth territory anyways. For early stage investments, you kind of need to understand what the median outcome is and you have to be able to size the median outcome in a way that at least returns a fifth of the fund or half of the fund.

49:15Is that not the joy of being at Andreessen? You can take a 5 % ownership on first -shet because you can size up into the next and size up into the next. is it not my challenge that I have to get as much as possible in the seed or the A. So the way that I viewed as a bit different, which is I think there's two legit ways of investing now that I've emerged. One of them is you're very much a specialist and you've got a special network, special value. You understand the special size of the market. Like you're very, very much a specialist and that is kind of how you win deals, get the ownership, keep the ownership, and then make your company successful.

49:49The other one is, and I wouldn't say it's like an AOM thing, but it's like you have all of the products so that you can be adaptive in the market. Because you know, I've been doing this for 10 years. The strategy that works has shifted this entire time. Sometimes it's early, sometimes it's mid stage, sometimes it's collaborating with growth, honestly, sometimes it's credit, which we don't have a credit fund. I can understand why people do it. The market is competitive and everybody's scrambling for deals. And if you don't have the different funds or products to offer, then often that's kind of where people are going to, you know, try and squeeze you out or get alpha, et cetera.

50:28And so I think that for the game that we play, it's very, very important that you have all of these funds and the ability to enter it all stages for exactly that reason. And so again, I don't think it's a you, me thing. I think you play a very different game than we do because I do think that on one side, like you have to go very specialized, very focused, very early, where for us, we're trying to find out what is the right time to enter to get the ownership that we need? What's the size of fun that you primarily invest out of day to day? I know you have one point two billion. So I run the infrastructure fund, which is $1 .2 billion fund.

51:01So my challenge here is your cost of capital is just so much less than mine. Your ability to put a larger check in bluntly with much more confidence is that because I'm investing out of a $275 million series A fund, and a $125 million C fund. It's just like much more meaningful dollars for me than it is for you, which will affect my willingness. My challenge is like, we have to live with these investments forever and conflicts are very, very difficult for us to do. And so we don't enter very often at the stage that you do for this reason. I mean this respectfully, everyone chastises Andrew some full -like conflicts and for investing in many conflicting companies.

51:37Do you think that's unfair? It's so hard to keep your nose clean on this one because especially with a shift towards AI, companies pivot all the time after you invest. Like, one of the top reasons we don't invest in companies is because of conflicts. And we do it, I mean, I just did it. I mean, just, I can't say the name of the company. We didn't invest because it was a hard conflict. And even though, by the way, the company, the portfolio company was not doing the thing but it was on the roadmap, and the founder called me, he's like, Martin, you just can't invest this company. I said, okay. If it's not on the roadmap, I'm really sorry, founder.

52:06I have as much faith in conviction as you as possible. But if it's not on the robot, I'm not having you tell me how to do my job. So here's my talk track and it's evolved over the years and I stole this from Kristixen, which is I say, listen, you have one mortal enemy. You choose whoever that mortal enemy is and whoever it is, I'm with you. We're going to go kill that mortal enemy together, but you get one. You don't get an arbitrary number of mortal enemies. And so in this case, I'm like, listen, is this it? Is this your one mortal enemy? And if I had her say, yes, this is the one mortal enemy.

52:32I'm like, all right, fuck down. Let's go kill them. Listen, we have a number of companies where they pivot midstream and they start competing after we've invested. It happens all the time. And we also do have the venture and the growth fund and we try to minimize conflicts there, but sometimes they happen, you know, just very different stage companies, very different teams working on it. But I would say that we try very, very hard to steer away from conflicts. Given the nature of, as you said that, the volume of pivots that occur today, given your entry point, I always advocate wholeheartedly for being 98 % founder and then you have wonderfully smart people like E -Land Gill wholeheartedly advocate for being market first.

53:13How does the pivot Frequency and experiences you've had impact your prioritization mechanism around where you spend time? So I don't want to speak for a lot, but that's not my experience working with a lot And I've done many deals with him a lot. It is very very focused on the founder I think the one thing I would say is he's very good with founder market fit. Maybe the best in the industry. I have a huge respect for how a lot invests. I'm not that way. How does he do found a market fit that's the best? He will find a market that he really likes and sometimes it's like even a fast -follow market.

53:50And then he will find who he thinks is a great founder for that market. And so he's very good at like this kind of boy band construction based on the market. The primary point I want to make is very much in his investment cycle. The founders have always mattered to any of this. He's followed on deals. I've done a follow -on deals. He's done. We've done a bunch of deals together. I've never gotten the impression. I mean, I've actually always got the impression that they actually, the founders, the primary decision once he's chosen the market. So I would say it's a primary concern for him. When you have misjudged a founder, what did you not see that you should have seen?

54:25the only sin in investing, and I've sinned so much. The only sin investing is missing the winner. It's fine to invest in a category that doesn't work, it's fine to lose money. But if you choose the wrong company, like that's not okay. And listen, it's just so hard to get it right all of the time. And so the way that we view it is, we just look for viable, what are viable spaces? And it's determined viable because... Someone said to me the other, I'm so sorry to interrupt you, that at an Andrieson you get killed for choosing the wrong company but being right about the space, you won't get killed if you were just wrong about a space.

55:02Correct. That's exactly right. There's basically no amount of work you can do to determine if a space is going to work or not. I mean, that's just, you know, it's like weather prediction, but given a set of companies, you can actually do the work to understand which one of those are the best. The question is, can you beat the market with that strategy? Yes. I think you can beat the market. No, I do not think that you can equivitly tell the best. Can you beat the expectation of the market by running this strategy? I would say, yes. Can you specifically pick the winner every time? Absolutely not.

55:32You mentioned SIN's that. What was a big SIN that comes to your mind? I mean, I can answer the opposite. There's a bunch of markets that just haven't really worked. You know, the entire streaming market has been very, very tough. It's just turned out to be a subset of the analytics batch market. And so click houses Aaron Katsoting phenomenal with and I'm not an investor but he's doing phenomenal but that may be the one breakout since Confluent but like that's just been a very, very tough space historically. Whether you're at the dashboard layer, you have the transformation layer, you have the feature store layer.

56:02It's like there's been entire spaces where we played multiple vets where like it just didn't work out. And so many, many, many times we'll invest the space where just none of them work. You know, I will tell you there's definitely been companies invested when at the time the company was the very, very clear leader and then something happens, some macroshift, something else happened. I think that's just how the game goes. I just find it hard that if you pick the right market and the wrong horse, bad -eat Martin, but if you don't pick the right market, fine. To me, some points need to be given for the incitfulness to pick the right market and some forgiveness to be seen for that it's fucking hard to pick the horse.

56:42Almost done by the one who picked the wrong market entirely. Where was your insight at least? Yeah, and this is why you run your own venture for men you can have whatever strategy you want. Is that more on the human? No, I learned from you. No, no, no, no, no, no, I just think it's philosophically different on the approach. And so I actually don't believe you can predict the future of technology adoption. It's a very tough thing, right? I mean, you don't know what a big company is going to do. Can wipe out an entire market. You don't know what an innovation will wipe out entire markets. This happens all the time.

57:11I mean, you can argue that AI is really invalidating tons of markets. And I don't think anybody could have seen that happen. But if you have, say, 10 companies that have some traction and you can talk to the founders and you can diligence the teams, you can diligence the market, diligence the project, diligence the technical approach, I think you could just say something a lot more concrete than, you know, is some future innovation going to wipe out this entire market. Do you think is power doxical or opposing to believe that both AGI will be dominant and present in a set time period and at the same time be investing in enterprise SaaS.

57:44I don't know, I mean, I would say humans are AGI and we still invest in a process. This is the problem is everybody somehow, they somehow think that AGI just means like unlimited, powerful and anything I want to disappear in the future disappears, like come on, you're AGI. I think to be on a Sam Altman, that's the definition of what AGI is. So whatever him and Microsoft decide as AGI will be AGI. Dude, I want to do a quick fire round. So I say short statement, you give me your immediate thoughts. Yeah. Yeah. What's one of the most over hyped AI categories today? ASI. What's one of the worst VC takes on AI you've heard recently?

58:22Open source is bad for national security. What one founder would you back in any category? Whatever they did, I just want to widen the money. Michael Trull. Why? I was ever worked for them for a year. He's just remarkable. What makes him remarkable? He has three things. He knows what he wants. He's got an intuition that's impeccable and he listens incredibly well and gathers information and that's a very, very potent combination. And then of course he's incredibly smart and he's got great product taste. What was your favorite trait in yourself that has been most impactful to your own success? Deep seated anxiety from being poor.

58:59I mean, listen, I grew up like you name it. Food stamps dirt road. I mean, I come from Montana. So funny people hear the name Martin and they're like, oh, he must be so. And then, you know, I was actually born in Spain, so I'm a Spanish citizen. So they're like, you know, he must be some like sophisticated European, I'm like, motherfucker, did I group on a dirt road in Montana? Like, when there was hunting season, my school shut down, like I'm like a Western country boy. And so like, you know, we kind of muddled our way through, but you go through that and you see how hard your parents work and you just don't take anything for granted.

59:30and you know, listen, I sold a very successful outcome for a company and I could retire it on that day. And I still have not taken a day off or I haven't worked since basically forever. Now, listen, I'll take like a week off while I have a job but I've never not had a job in 20 years. It's just... Did that day feel fucking awesome? Coming from a dirt track and food stamps, as you said, you can retire today, I know you didn't, but did it feel as good as you thought it would? You know, it's kind of an interesting thing. No, I mean, it was very bittersweet. I think you actually sell in companies.

1:00:05It's very bittersweet for any founder, right? It's like, you know, it's a death in a way. I mean, you spend so much time with something and then it shifts. But here's the interesting thing. And maybe this is kind of advice to other founders, which is, you always think about that thing you'll do when you make the $100 million or whatever. You're like, I'm gonna go do that thing, but you only think about that thing in the most stressful times. So my thing was so my my cousins and movie director his name is Vincenzo Natali pretty legit guy And I was like you know what I'm gonna do as soon as like I you know the money hits the bank I'm gonna drive down to Hollywood and I'm gonna help them make movies and be an actor and just kind of be one of those people It happened the wire hit and I was driving down the five and I'm like what the fuck am I doing?

1:00:48I love technology. I love my job. I hate Hollywood I have nothing in common with these people. I probably got two hours out of town, and I just turned my car around and came right on back because I was like, you know, you only have those visions at the most stressful time, and when you're not stressed, you realize that there's something that brought you to this place, and it's genuine interest and genuine love of it. And so my only advice to other people going through this is just don't use those dreams that you concocted when you were like really in the pressure cooker, like not sleeping, your relationships are falling apart.

1:01:23That whole thing, like that's not the thing that steady state you're gonna wanna do. You're probably where you are because of for the love of and letting that go tends to be pretty disastrous to some people. Was making money or having money what you thought it would be? You know, I had to play all of these tricks. I actually borrowed one, which is very helpful. So I just have had a hard time spending money just because like, I mean, for me, like, you know, when I got into like the Stanford PhD program, this is so embarrassing. But we always thought like $20 was a lot of money growing up. And we'd call it the Yepy Food Stamp because it was like $20.

1:01:56And I remember I was like, I was going to go to Bites Cafe and I was going to pay with $20. Like a $20 bill because that's some stamp of having money. So I was just so naive to all of these things. And so it was just very hard for me to once I made enough generational wealth to do it. And so I talked to a friend of mine who I went for a similar thing. He's like, you know, I did. He said, I came up with, let's, you know, let's call him Brad. I came up with a Brad coin. And the Brad coin, let's say I'm worth, you know, 10 times more than like an average rich person. So my, the Brad coin is worth 10 times more.

1:02:33So I buy thing in Brad coins. Let's say it's a business class flight. I mean, that's $10 ,000, but in Brad coins, it's only $1 ,000. And $1 ,000 sounds a lot better in 10 ,000. So I feel good. So I actually had to adopt a lot of these mechanisms where like I'll make a martine coin and it's worth this much money What got worse with money? Man, I mean it was I This is something I I have to deal with all the time but like Name my wife forces me to keep it real and she just won't abide by any of the shit So man, I got three fucking dogs that are crazy like she doesn't like helping the house like I drive a fucking Volkswagen again, we have three chickens in the back, you know, I'm like fucking schlepping the kid all the time.

1:03:14I mean, like, listen, man, if it were me, I would be living your life, man, I'll be like 100%. You are in the penthouse with the private jet. And instead I'm going to fucking Volkswagen with three dogs in a messy house and no hell. So I just like, I like, uh, did you so whipped? You know, it's not it's not even that, right? It's like, you know, like, I mean, this is what marriage is, man. Like, you know, you know, she's your biggest lessons on marriage. For me, I'm 29. I got a great relationship, but not quite that yet. What would you tell me about greatness in marriage? Did I should know? Well, listen, I got it wrong once.

1:03:51I'm not sure I can, uh, I'm the right guy to ask here. Like my, my start, my start up was really tough. But I think that burns through my first marriage and she's, if she's great. Yeah, fuck, dude, I'm the wrong guy to ask. I'm really the wrong guy to ask. I mean, I will say something, which is a different question than he asked, but I think it's important, which is I have found that men in particular that have stable relationships just do a much better job in work. They're just much more stable. I think the best founders I have tend to be, like have families and et cetera. You know, I don't want to make it a gender thing.

1:04:25Maybe it's not. It's maybe just my observation that works with a lot of men and that families are really, really, really good for men, even though they can be a pain in the ass. And so I just think the only high level view is, it's just these things are super important. And so whoever you have and you're working with it, it's an important thing that it really is keeping you grounded. I mean, in my case, listen, like, I mean. You got chickens, baby. I mean, it's like what is Zorba the Greek say? It's the full catastrophe, but I know it's the only way I can do what I do. There's no other way, right?

1:05:01I mean, like the level of pressure is the amount of work that I do I mean, it probably work all in 80 to 100 hours a week. I've been doing it for 10 years I mean the amount of demands I just it's very very hard to do without like Support and grounding in a way again like I'm not the right person to ask like how do you treat you? Well, like I just whatever like I'm a fucking autistic nerd like I have no idea But I do know that these things are incredibly important for us and and you should value them and treat them as such. You can change one thing about the way Andrew some works and operates. What would you change?

1:05:33This is a very dangerous question, Harry. I'm a very good interviewer. You're exceptional. You're an exceptional interviewer. There's a lot of small things I'd change. I don't have an obvious one big thing. If you think about Andrews in 10 years' time, where do you think Andrews in will be then? The 10 years ago, when you remember it, it was a fucking different farm. Amazing and innovative in its own time, but it was from where it was now, night and day. Yeah. Where is the 10 year -end recent in 2035? The most remarkable thing about the firm in my opinion is that it's able to evolve and adapt very aggressively because the way it's structured.

1:06:07I mean, Mark and Ben really are the top of the firm. They really are. And I think it's a feature, not a bug. And I think it's very, I mean, it's kind of a historical quirk that VC was created around a partnership model. Like, that's the same thing you'd use for a dentist office or a law firm. There's positives in that there's a bunch of different agendas that kind of kind of sit at the same level But for like decision velocity and disruptive change it's death and so I think that that's a massive benefit to the firm I'm just delighted that this is the way it is because they can make these big aggressive So I don't know what it's gonna look like in 10 years.

1:06:42I guarantee it's gonna look different as it evolves with with the landscape Martin, I so appreciate you, dude. You are fantastic. You're open. You're honest I love the last 15 minutes there, but I really appreciate you man. Yeah, likewise. Harry, I was a pleasure. You're the best seriously. I just love that man. I'm just a frickin' autistic nerd. I'm always schlepping the kid around. I have three chickens. What a fantastic dude, Martin. What a special show that was. If you want to watch the episode you can find it on YouTube by searching for 20VC That's 20 VC on YouTube. But before we leave you today, I love seeing the team come together to make this show happen.

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1:10:09Go to www .get .tech. Fordslash20VC. That's 20 spelled out. Or your favorite registrar like Godaddy or Namecheap and grab your .tech domain today. That's get .tech slash20VC. As always, I so appreciate all your support and stay tuned for an incredible episode coming on Thursday with Jason Lampkin, Rory O 'Dresskel and me shooting the shit on the biggest and best tech news.