20VC: "How Being a Founder Almost Killed Me"; We Have Lied to a Generation of Founders | The Hardest Truths About Being a Founder Revealed | Why AI Co-Pilot is BS, Seat Pricing is Over & User Interfaces are Stupid with Christian Lanng

22:27But how long can you do it? And what are the consequences of doing it? Because you said about your friendships there. I think one thing I think can tend to say about is that she's children. I love children. I don't have any because you know, it's struggle to get up in the morning myself. But I would like them one day. And I worry that I won't be there for them in a way that I would like to as a father. Yeah. I hope it's okay for me to ask. We use that for your child in the way that you wanted to be and how do you feel about that? You know, time will tell. I think I always try to be honest with my son about what I do and why I do it.

22:56I always try to be honest that I work a lot, but I also try to include him in what is the work. So in a way, you have two choices if you want to do this and you have kids, right? You can try to shield them and keep them away from it. Oh, you can try to include them so they can see what it is. And again, as I said, time will tell, right? You regret missing things. Yeah, absolutely. There's lots and lots of things I regret missing. And I mean, we all have the right parent school meetings, etc. I mean, one of my friends said that being a parent is to permanently feeling guilty. Like, that's just how it is.

23:24And I mean, to your point about getting up in the morning, I mean, if you have a problem with that, just get kids because that solves the problem. Again, I mean, that's another thing. It ends up costing family time. And it ends up costing, you know, with your family. This kind of is semi, you weren't expecting the kind of mutual counseling session, but I can't see feel guilty because I constantly feel like I'm failing as a son, as a brother, as a boyfriend, as a family manager, as an entrepreneur. There's so many different fucking hats. Yeah. If I'm winning in one, I'm by nature failing in another.

23:54Yeah. I really struggle with that constant feeling of failing. Yeah. Yeah, yeah. I think it's really, really important to let her forgive yourself. It's taking me, I'm still starting with it, but taking me a very, very long time to do that. Is there anything that's helped you do that? Yeah, I did coaching for seven years and an amazing coach. In the very first session I had with her, I said, coaching is bullshit. I don't want you to take my anger away. I'm angry about all the bullshit from my childhood and it's just like, I want to build and show everyone what I can create. And she just looks at me and says, this is Christian.

24:24What makes you think that it's not a big of events to be happy and successful? And I said, like, F you. So that was the start, but I think one of the things she talked me is it's okay Like it's okay that you're failing at certain things So I think for giving yourself and taking some of the hats off honestly I also think it's about creating maybe a family life where you are aligned in what you want You can build together for instance This is what I'm doing now and in that way it's not a constant talk of force of time, right? And it's more like you're pushing in the same direction now That's very, very hard to find, of course, but that's what works for me.

24:58You just didn't truly do you say that about kind of bullshit from childhood? I'll show you. Yeah. I was like the fact that it was bullied at school. I know you wouldn't know it now looking at this Hulk of the man. But there was a lot, which is like, I derive my own value from like bluntly my status. Yeah. Not, of course, and I think I mean, I think you'll have a hard time finding a foul right that don't have something that they're motivating them, right? Because is it earlier like foul, or side extreme people? What is it for you? Is it that bullshit childhood that you're like, I mean, I've lost that and I think Over the last seven years it moved from being that to being is that unhealthy like because I don't mind No, I mean I used to also don't mind But I think I also learned that I also don't mind actually being happy You did a bit of the edge go off I think you should ask me a competitive about that that probably say no and that's the thing I think inside your head you think it's really really important and it's what strives you But what I found is that even when it goes down a little bit and you feel less of the anger, less of the motivation from that, I didn't lose my drive.

25:56So I think one thing you might be depriving yourself of off is figuring out that you have the drive because you have the drive and it's not necessarily with something external. And I mean, that's awesome. That just means you're a created driven person with a high amount of low power, right? You don't need to let somebody else who is, you know, a dick in your childhood define you, right? Like this. Yeah. Can I ask, it's also a financial decision walkie -way, and I think a lot of people don't admit the truth about finances. We all have to have these missions. It's not about the money, and I don't care about the money, I just love my mission.

26:28How do you feel about your relationship to money today and did that change? So for me, money has never been the goal. I always just been a very curious person. I always just stumbled into things that sort of peak my curiosity and then I start digging at them, more at them. And what I found is that if I follow my curiosity, it tends to follow that success and money and so on. But I think also in my later years, it's easier and you don't have any kids and it's just you, what is risk really then? All the investors, especially when they want to extract a bit better terms, bully you in the down market or whatever, they will tell you like, we hate to see you lose everything.

27:02But my everything is my mind. They can lose some money, but I cannot lose my mind. I can still tomorrow go out and think about what's next. And so I think for me, later in life now that I have a family and people, of course, it's important that you can support everyone, but it's never been the goal. It's really nice. People say, money can't buy happiness, haven't tried. You can definitely make things nicer and you can make life nicer, but it gets very hard to sustain that drive if it's the only thing. There got to be something you want to scratch at a peak at our, that particular mind, enough that you want to keep going.

27:36You said it's like an ultramar from the last 14 years, but many ultramar. My question to you is on two sides, we started about kind of investors on the negotiating and discussing terms with you. What other bullshit things that you see about VCs and investors that you think more founders should know or wish you had known earlier? I think one of the things that we were lucky earlier on is that we have a lot of investors that were actually in their way they were thinking evergreen they did not have to have necessary an accident three, four, five years. It's best because we, as some of you talked, nine years ago, massively underestimated how hard it would be, how long it would take.

28:10But I think, I mean, what are some of the things you see, right? Like, I think one of the biggest for me is that there is misalignments between founders and nurses. I need my cash back and I need more of it back than I gave you. And there will be times when I need it back and it doesn't suit you. Yeah, of course. But I also think we see, it gets pissed off when founders use exactly the same strategies as they do, right? And I'll I'll take an exam right in the latest financing around for for trade shift and for all the trade chips are there. Remember to remind your investors of this. I refuse to sign the papers until the employees' stock of option pool got moved from common to PREV2 because I did not want all of them pleased to be underwater in any potential trade sex in the future and that did not include final stock.

28:51This is the thing where people understand waterfalls, they understand the games, they understand the leak prefs, they understand how everything flows. probably not been the most friends in the world at that time and I did wait quite late because I knew if I was bringing it up, you know, nine months before I would be happy, but you know when the transactions about to happen. And this year you lay, maybe that's too much time. Exactly right. And then this is the other thing, like runway works both ways. Runways is an excellent tool to make sure you also, I able to have some leverage in that negotiation because the reality is if your company is doing well and if you're great then if the runway is shorter then everybody needs to come to a conclusion faster and that can work both for the final day and for the VCs.

29:28So I think there's a lot of stuff where VCs are not your friends but the best VCs can help you get them at great and much better outcome and I think one of my regrets, I mean I think earlier on we were too focused on valuation and probably made some other choices then and spent a lot of time. All we'd have done differently. Probably seeing some lower valuations and not having to fight as hard to catch up to those numbers to be honest but. Let's just dig into that and see he took higher valuations and then he felt pressured to then catch up to them. Yeah I think it's a very classic trap, right?

29:55Like, did you do things you wouldn't have done otherwise? I mean, if you think about it, right? And this is, does it 14 years ago? We raised our A around it at a hundred million dollar valuation. We did our B -round 140's, C -350, right? So these were hefty numbers 14 years ago. And we could because we had a strong vision and strong product and strong customers. But it also meant that when real seismic started emerging and the market started normalizing, and then it was really, really tough, right? Because we had to catch up to that and we had to do some creative structuring of financing into the interim because you couldn't go on race.

30:29There's a service in Margaret, or you would be forced into a down -round and so on. So I think I got like a PhD in finance as well in the last 14 years. But I actually tweeted yesterday how many very, very successful companies today raised 100x error rounds. So a million in revenue, a hundred million price. and Paul GoodConrad from Ripley. I know, and it's been a guess on the show many times, he was basically like, this is a narrative that VCs like to spin, actually having the capital allows you to do different experiments, which is good, it's unrelated to valuation. I think he's wrong. He's very good at deploying capital efficiently.

31:07But 99 % of people, if given 100 million, are not going to... No, I think you're both right. I think he's right in the sense that you do need... And in fact, our argument for racing at those valuation where nobody has done this before. Nobody has built a global network for trade just like you build a Facebook. It didn't exist. And I mean, to be honest, we know, freaking clue how to do it. We have a lot of ideas and we need to iterate. So my argument was always, if we get more capital, we have more shots and we can try more times, right? And also, I kind of always dislike the whole, you should pick us as a VC.

31:38We know it's a 40 % discount to the other guys, but we are smart. Like the smart VC method and like start, because the reality is like, If I need to give us 4 % discount because the VC is so smart that they will make a fun value like then I probably shouldn't be the founder. The VC should probably be the founder, ain't? On the flip side, I'm just playing Devils Advocate. I get you on the discount but actually there are some investors say a bill earlier, Banachmok or you know, Rodolfo Secuer, who the weight of their name, their contacts and their B2B customers actually could move them and it doesn't take away from your operator ability but their ability to accelerate you is very significant.

32:13Is it worth it then? I agree it is. You just got to be sure that when you get that name, you'll get that attention because your right, if that brand is behind you, but then also give you that attention to push, then absolutely right. You got to be a bit careful with the big names. I mean, they're really, really great. I know a lot of people there. I think they're amazing. But what you're going to ensure is you have that attention for the right people and then what you said will happen. Did you manage your investors well? No one teaches that founders like investor management, do they? It's hard when you feel like you're just running from, you know, for the first seven, eight years It's just up and hyper growth and then you are like in turbulent waters and you're just running from fire to fire to fire That's hard like sometimes I was writing an update But the time I was done writing the update everything had changed and you're like how do you keep catching up?

32:56But like for the last parts of this process we had to have a really tight coordination between the shareholders to pull it off And then we did that by having very frequent calls and trying to explain everything what's going on to everyone I think I would like to think in a future life I could do better. If you could advise founders, we have 200 ,000 founders. If you could advise founders listening on what you know now about fundraising, venture rounds, what would you say that you wish dead known, you'd known? Yeah, I think the first one is don't I will optimize on evaluation. It's current market source of pretty easy.

33:28I think the second one is fundraising is nobody will limit it's a key. don't reveal all your cards up front. Like, I used to always take out one or two slides after the deck like I'll make the perfect pitch deck and then I'll remove the team slide. Because all VCs will then ask the question, but what about team? That's the question I want them to ask instead of asking some stupid question about architecture that they don't know about anyways and they just want to sound smart because you got to remember VCs will always want to have a question that makes them sound smart. So it's much better, they ask about something you have in full control over and there's a team and then I'll show like this kickass team that done it like three times before and everybody was very senior and so on.

34:01But remember, it's a little bit of a game and make sure that you control the conversation a bit of where, you know, do you want to go? And then lastly, I think remember you're building relationships for five, six, seven, eight, nine, ten years. In some cases, right? And just mean max negotiating on the very first contact. If you're about to do something together, that might be very suboptimal for the whole length, right? I've opened up a little bit about my struggles before in different areas. As an investor, I would like to be able to have a relationship with you as a fact, if we were investing and working together, where you could tell me.

34:33Yeah. And I would like to be able to tell you when I'm struggling. Yeah. Is there anything that one could do, or is it just a nature of the structure? I have investors where I have this relationship with, right? I mean, a bunch of our investors also wrote me after my post. I mean, somewhere we're happy with the results of the round, we did just did somewhat unhappy, but they still wrote me. And so that meant a lot. But it is clear. I like, of course, investors are in it for the money. So some degree, most of us, I think, found us as well. But I do think it's better when there's an understanding.

35:00And I mean, there's the old saying, like, you know, if an investor is good, if they show up and shit is hot, right? Like everybody is just cheering when it's like, up, up, up, up, up, it's like, go faster. But the investors that I have a relationship with today are the investors that were there and Minstaff was really, really hot or with something blew up in a way we didn't expect or whatever. And they were still there. And I think, you know, as an investor, you probably have some control in the sense that do you show up for your founders when everybody else is about to bail in them, for instance, right?

35:24Can I be honest, I don't think they come to you and I don't think they come to you because I just don't feel they can. No, I mean, I say that. And so then I think, well, is there anything that I can do to let them know that they can? It's why, honestly, it's why do you show them more like this, where I show you that? Yeah, fuck, I've got problems. Yeah, yeah, no, I think, actually, this is part of, the used to part of the leadership principles and trade shifts, which one of the very first things I taught all our leaders is shovel ability. And the reason I say that is, in American business culture, you're just going to be perfect.

35:50Like, hey, what do you think about this? You're not an answer, right? Actually, that's why I chat to these kind of scoots, because it just want to give a perfect answer to everything and it can't say, hey, could you clarify? I don't know, whatever, but I totally know people will actually trust you more if you show vulnerability. If you say, hey, this is an area I'm bad at. I said, either this is an area good. Because that helped build a relationship with people. I think the same is true as an investor. I think it's absolutely right. I straight you to show vulnerability and say, look, I've started with these things and so on because it makes you a human.

36:16Can I be really harsh? Yeah. And transparency is the core trait. Yeah, absolutely. But you didn't share it with the team when you were struggling. No, that's bottle. Like, you know, I think I failed at the first leadership principle. I taught most of our leaders. And that's right. Maybe they got differently if I had. But I think still, like, I think to try to be real people is very, very important. And I think vulnerability is actually one of the biggest trust building things you can do. The hard part is I've also plentiful time shown vulnerability and gotten screwed over hard, right? How so? Just because because people take advantage, they see an opportunity, they see money, and then it's really hot the morning after.

36:53To wake up and say, I don't want to become a fucking sonny. I'd rather have one more time where you say, okay, I was vulnerable and I got effed, but it was more important that I don't lose to I am. Now, people are on me with my cell, yeah, that's true Christian, but you could be a bit more, you could still be a bit more skeptical and a little bit more critical of people. And yeah. When you trust is broken and someone you believe in or trust is very hard not to be jaded. It is. It is the hardest thing in the world. But if you let yourself become jaded, then you'll let those people define who you are.

37:20Look, I have people out there right now that I really like. They just want to exploit the situation that they want to hurt me. But what I want to focus on is like, I don't want to keep them in an unity. I don't want to think about. I want to think about what I'm building now. I want to think about what I'm going to future. I want to think about being happy because back to the point about having this is the best revenge in the world. So as someone said to me, revenge is someone else having run to your mind. Yeah. It is really, really effing hard. Yeah. I said there is an investor. I want to have that relationship with you where you can as a founder with employees with team members How do you think about creating especially with new companies now and just generally to stay with this workforce?

37:55Creating environments where I like hey mental health is serious and you can talk about it to us because you can if you can't Yeah, no, I think I mean talk about mental health and startups is wow That's that's a big one. It's hard right because I believe myself I have the heart you called my check it don't start back and just keep going all of those things, right? So you know when I was younger I thought like how do we deal with mental health and startup? We just make sure we hide people only like that right? Like I mean the first joke was like we don't need an eights out department because everybody here It's just like here to work and you know fucker will just go full speed But I think if I can struggle then anyone can and if I can burn out then anyone can and I think Stadels is 99 % people that is the primary asset if the wrong person goes down at the wrong time That can be a very very big destruction of value, right?

38:39So I think we got to find better ways of thinking about it. It should definitely not be that we now have to all do our journaling and a lot of other work things that I think probably just contribute more to stress than that actually helps all things. So do you find leadership harder today in this work generation? I think a lot of the things that were the sources behind Wognus probably have rounding. It's extremely hard to discuss that within some very extreme environments like startups because they are extreme machines, they are extreme environments. On the other hand, there's also been a lot of founders out there that are exploiting that and said, it is an extreme environment so I can do whatever I want.

39:15I can be, you know, a psychological terror or whatever, right? So you got to create an inclusive environment without going aboard and then you're just going to focus everyone on one thing and one thing only and that's building. I like what David Hymac says, like, he banned politics in the signals and I think that's absolutely right. We shouldn't sit around the table discussing all this stuff. We should just build something and make it work and if we're allowing everyone to be the best at building then we're doing it right. Should you be friends with your team? One of the things we put into what we're building right now is that we are a team not a family because let's be real like some of the hardest things I've had to do I fired a person that I know since high school.

39:50I've worked with for 10 years who moved to California as part of the journey. At that moment you really do not want to be friends with the person the people you work with another hand. And I think it's very, very hard to do something as intense and wild and crazy as a startup but I'll be coming from it to people because you have all these war stories, you have everything you do together. So one of my good friends and early advices, he always said, look, absolutely go work with your friends or become friends with who you work with. Just know you might have nine really good years and then the break up is probably horrible.

40:20But why not have five really intense good years with someone when most friendships to be honest is we meet in the pop and we talk bullshit about the game. It's a trade off. And I don't have the answer. 14 years, we mentioned that kind of lessons from investors and board when it comes to like operational lessons. What are the biggest operational lessons that stand out to you from the 14 years that you advise founders now having seen what you've seen? First off, never ever compromise on quality when you hire. You will be so tempted when you're in the hypergirl stage, everybody will be screaming at you that they need people on this function or this function or this function and I think...

40:52Do you think you can have like A plus players there in every year old? Essentially, it's just a question of pain. How much pain are you willing to endure to get the right people on the team? Because when everything is scaling like crazy, if you don't fill that role, it means everybody else doesn't want pain. But on the other hand, if you start feeling those roles with people who are not the same level of quality, then you have a challenge, right? Or things just don't get done. More pain than I can take. Yeah, but I'll give you an example. I have a very real example. It's like at one point, we fired 50 % of the VPs in Trashift.

41:19And there was no drop of productivity. And I really thought, What the fuck have you been doing? With the fuck out all these people, right? And I mean, that's the real, like, so operational lessons is that I think the other one is just, I mean, this has set so many times, whatever you charge, double your price. We found out in Tracee very early on that there was an inverse relationship between price and speed of sales cycle, the more we charge, the faster we closed. People are afraid of that. People are afraid of saying really large numbers, especially if you come from outside this world. I think another operational lesson that is really, really important is just, You just got to iterate faster and you got to kill stuff faster.

41:53You're going to kill everybody thinks that it can kill stuff fast, but it's not fast enough. The very best operators, like you mentioned, parker Conrad and people like that, they are so insane at the iteration speed and that's why they win. And I think there's an ability to understand and I think in Europe we don't really still understand how it's 10 years since Silicon Valley. I don't think we still understand how much better that most really good San Francisco startups or Silicon Valley startups are compare it to the Europeans. Why is that? We just honestly like vacation a little bit too much.

42:21We like coming home with five with the kids. Like we started to have other things that are other benefits, right? Because the very best people in the world in say AI or engineering or whatever, they want life policy, right? So Europe can offer a lot on that. But the extremity of execution is something I only ever seen in Silicon Valley. Actually, one of the places is China. What is some examples of the extremity of execution that impressed you or think we could learn from? I remember when I first came to Silicon Valley, this would read Huffman who actually told me, said like within two square miles of where you're staying there, five thousand startups, within three months, 95 % of them are gonna be dead.

42:55And everybody there are gonna be into new startups recycling, all the knowledge, et cetera, right? So you have just to start with, the whole machine recycles knowledge much faster. But the second thing I think within those startups is that shit just get done. Nobody stops until they're like, I mean, the idea that you work or don't work on weekends, it's just not a thing. And you know, if you're doing a startup and it's early states, you just work. You just build, you just do. And I mean, I know it's ironic to just embrace that right here as we started the conversation on burner. That's probably the paradox.

43:23There is no good ways to combine all of these things. I do believe if you have to create something, if you want to create something truly that category you're defining, you do have to give up a huge amount and that no one else is willing to give up or very few people willing to give up. Absolutely right. And it's like you don't build greatness on 9 to 5. Yeah, yeah, yeah. But I also think just look broader right most modern work sucks right why do people go to startups because it's exciting because it's great Because it's fun because you're doing something with your mind if you go to most Horrible work 90 % of it is like cover something from this pace of dispressing it into this field type this form click this button You have no idea what does then update this and then keep going.

43:59It's so far removed from who we are as humans I mean we are animals we get a kick out of the fending the village, you know hunting for stuff, racing children. So it's very hard to get excited about clicking update lead source 4. Catch per CD4. Exactly right. And I think so with this new thing, with beyond work, one of the things that I've really been thinking hard about is, can we try to redefine the modern work experience, can we make it so it's not the applications that define how you work? Why should it be sales force or workday or SAP all these systems that make you into a robot. Why shouldn't it be you who can just work the way that your brain works and all these systems should be in the background?

44:38So what is beyond work? Yeah, so beyond work is, that sounds great. Beyond work is essentially the idea that we should be able to automate any work we want as regular people. And we should be able to take any task and combine it and collaborate with other people around it without having to log into applications. Imagine you have a problem and say, hey, I want to create a vendor database based off all these invoices. The user interface just appears and show you that and it goes away. So it's like a matallel that sits on top of all your existing apps. Plug them into a database. Exactly right, but it's centered on humans in the center.

45:09Salesforce don't have a human in the center. Salesforce makes you into a robot that has to click buttons in a certain order. And why on earth should you learn that? Why should you spend 10 % of your brain storing information that's completely useless for anything you do? What you really want to be doing is to look at their data and pull out conclusions or figure out who's about top 10 % salespilen. We have some amazing powerful tools right now, like of course the new last language models But they don't really solve the problem with work. They just give us some power They give us some stuff we can do in an engine But what I've really been thinking about is how can we put all of this together in a new way?

45:40How can we generate a complete new work experience and the funny thing is Took it out to to a few my friends who are like the sea level executives and some of the largest companies in the world And they were almost like holy shit. How fast can we get this? I think we've forgotten just some simple numbers, right? IT corporate budgets, they went from 300 billion to 780 billion dollars on enterprise software over the last 10 years. At the same time, we doubled the amount of people in shared services, 8 to 16 million, and we doubled the amount of people in corporate IT, 4 to 8 million. Why? We buying all of this amazing software that should make everything better and more efficient and more productive, but instead we just become less efficient and we hate our life more.

46:16Do you not find this, I find this was like company fundraisings, which is like how on them in a world of open source insane tooling, product like gross cheap tooling, we need more money to build startups that are often quite lightweight and sass tools that we should need less than that. Absolutely, right? And I think that's actually where, I mean, to me, building a startup today that is AI first is as pivotal of revolutionary as it were 14 years ago to build the first cloud companies. And I'm not talking about chatty -pity here and all of them. That's amazing and they're probably going to invent either superhuman intelligence and going to die according to Elon Musk, it's going to be totally fine and they're going to be almost as good as self -driving cars, but they're going to fail some of the time, right?

46:52But what I'm talking about is one of the companies building this architecture going to look like, and 14 years ago, there came something completely new, cloud computing, and suddenly we could make software in a whole different way from on -prem and change the world, change the enterprise world, and I think today there's a new generation of startups that's going to come over the next 5 -10 years, and they're going to be building an AI first architecture. And what I personally find exciting is nobody What do you have an idea what it looked like yet? I think there's a big difference there. And the big difference is who are the winners in cloud?

47:18Winners in cloud are Google. Who is in cloud at Amazon? Winners in cloud of Microsoft. Who are the winners before Google, Amazon, Microsoft? Here, we have such a strong incumbent set that we have never had before everyone's like, oh, compared to mobile, what? Motorola? They're not here. This is a fundamentally different world. Well, I think you're right when you talk about consumer. And I think by the way, everybody will be big. make a big mistake if they count the Apple out of the AI race. They're gonna come with 100 miles an hour, and when they come in, it would be really, really good. But if you think about those winners, what they really provided was platforms, we went from having a thousand to 35 ,000 SaaS companies in 10 years.

47:56And if you look at the explosion of unicorns, for instance, a very good chunk of the SaaS companies, right? Because enterprise is a multi -polar world. It's not when it takes all, I mean, Peter Till's power laws works really well in consumer, but in enterprise, there's so many modes, I mean, that'd be really, really, compliance, regulatory, incompetence. There's just layers of layers of layers of stuff that makes decisions happen differently. And I think the other thing is, if you look at the next generation of stuff about these modes, if you asked me last year, I say somebody like open their eyes going to be like the AWS of AI, but nine months later, I was running on my laptop, a model that was as powerful as chatty between a half that was released as open source by Facebook.

48:32So I never in my life in computing seen something that moves this fast. And you know what's really, really exciting? I have no clue how this is going to turn out. I don't know if the comments are going to win or somebody's, I don't care. I just want to build something that's valuable for people, but I think it's really exciting that we don't yet know how it's going to play out. Do you think I've only been thinking a little about that? She is like, does it actually remove the importance of user interfaces? Completely. User interfaces are stupid. It's only because we only have that method for, right?

48:59We create screens with buttons every year, every enterprise vendor has forced to come up with more screens with more buttons. Why? They sell use of licenses by the seat. Guess what? Is there incentive to make the application more complex or less less complex? Right? They only go one way. Why would you need that if you can just say, hey, I'm going to take two weeks of vacation. Could you please update the company record or if you could say, I would like to generate a vendor database based on this folder, Google Drive folder, I was just sure I'd do with the invoices. So natural language of course is far more efficient, but we can't just do prompt.

49:30We can't just like, I mean, everybody's like, well, you can do anything you want for chativity. Well, I mean 99 % of people use it as Wikipedia and that's it. So we need more, we need the ability to be able to push buttons, we need, but we need to have a completely different experience. When mobile came, it took five years before we really started having the concepts of responsive mobile web, the Sire and user interfaces emerge. And I think we're seeing the same right now that would be a new generation of user interfaces that haven't fully been invented yet. But we will look at all of the screens of the applications we use every day as dinosaurs in less than three years.

50:00We're like, holy shit. Why are we sitting with thousands of buttons and thousands of screens. It's very, I have Miles Grimchur on from Benchmark. As he came out to stay and he said, you know, the future of AI is essentially selling the work and not the software. Completely. The point is, think about like, you're a tower system. That's the head of a tower that buys that. It's not you. As a worker who sits there with you, it's same for your peace system, same for any system. Whoever made a set of tools platform for you as a worker, it's like, I mean, if you were, you know, a forefdering, you're cutting down trees, you would have a chain saw as your daily tool, right?

50:30but all these systems have been made by somebody else who is judging by the license by the user, bought by people who don't use it, and then we wonder why the people are sitting in the middle they are miserable, and I think by the way like, demographics... Is that an otherwise a prolette that I'd grossed there? This is a phenomenon that we've seen over the last five to 10 years, where you get a user get a credit card out, they sit in a trade shift and they can buy a single license and go. I mean, probably growth is definitely one way, and I think that's much healthier, then there's sort of SaaS revenues of CAST again to price content to suffer.

50:56Sorry, two of the people I saw for the last 14 years, But I do think the world is changing. I think we kind of absolutely move to consumption based pricing It's the only way I think it's going to be very hard to hold the mode on on recurring revenue as it is today Because customers will want to see more value and they'll want to see a more soft ramp up to that value But I also think on the work piece look at them graphic problem like most of the people I talk to even if they want to replace The workers that haven't that shit service and us today one to one they can't because that generation of young people They don't want to go in and sit in front of a computer and type formulas into work day every day So we've got to completely change the word experience in next five to ten years So we're gonna run out of people to do it the word.

51:32I guess my question is you know We're seeing more capital russians than ever before I honestly write now I think 95 % of all new companies we see are AI related companies is 99 % Adventure dollars going in today going to be lit on fire most likely two things I think we are right now both 90 % of the money going in is gonna be lit on fire and two We are on by estimating the impact of AI and I think both are true at the same time But I think we got to get at least one or two cycles in to start really seeing what's happening. Okay, number one, do we need to burn the money on AI to see the development to see?

52:04Most likely. We need to do the experiments, but I think the other thing is like in beyond work we banned talking or using AI as something we talk about. AI is essentially as interesting as saying database or we have an HTML rendering layer, whatever. It's a set of technologies and I think, but it's really really important. and I think most people right now that are rushing into as you said AI is missing is I think it's about the use experience. I think it's about trust and trust by the way is a use experience. It's a design exercise. You know everybody's like we got a heavy I stop hallucinating.

52:34Well, hallucinations are more powerful than model, the more powerful it has racist. Maybe it's more about showing why and it went. So I'm just intrigued. You said that trust is a design experience. What did you mean by that? For us to really truly trust AI in the work environment, We need to have cues and we need to feel we can trust them as co -orders and That is absolutely a user experience that needs to be designed like if you drive a Tesla that's self -driving It renders everything that's on the road, right? You don't have to I mean it's driving. It don't need to show you. So why is it showing you trust?

53:04What would it mean right now if you ask Chatsy to question say hey, you know who won second world one is a Give you a problem But what if it said could you please clarify? Do you mean in this context or from literature or whatever right and fact some of the things we've been playing around with this We call it if in doubt ask you sometimes ask them you already know the answer apply that to marriage W apply that's a merit not totally get you that my question to you is that you said they're about changing the worker experience Do you write me? I'm in B .I. Series B series C companies are flying to great fantastic But they're looking at replacing people with AI tools whether it's in graphics design and the team know that they're looking at being replaced and they're pushing against it.

53:44You're getting this internal resistance from employees knowing that this is coming. I think humans are incredibly important in the AI loop. Everybody who's pushing for ATI level AI right now, they're going to be sorely disappointed. I think it's an estimate curve and I think we're going to end up with very most eye -cars, meaning you almost have a lawyer, but not quite. And the 5 % you don't quite have, it's going to be really, really bad. So I'm not sure there's a big market for almost lawyers, are almost designers, almost whatever. I think what's very interesting is all the trivial stuff we do everyday.

54:14All the trivial stuff, like, as you said, even in VC, right, you have to, you know, get these documents over here and then you have to correlate and you want to run an IR, if we can automate all the trivial stuff that still requires knowledge. That's actually where the sweet spot of cavities and models are and we don't need AGI to get there and then the second piece back to the human piece which is, I think people are ignoring the obvious. Just have humans in the loop to validate it. Just have humans in the loop to look at. You know, you don't have to go and find all the information you don't have to go certain and obscuring, click on the really bad buttons and something UI you didn't even understand to get your job done.

54:43The AI can do all of that for you, pull all the information correlated, and then you can validate. You can use your brain for what you're good at. So I think it's more about when I say change in the work experiences of X about putting the human brain in the place in the lucrative, the very best and stop trying to make humans into robots. You said about kind of underestimating the impact of the Azal society. I think we're over -estimating the time that it will take to permeate into society. Do we both in Europe and London? Most corporates in London and Europe don't really know what slack is. Like they are so far behind, I think we are over -astimating the speed of adoption with which we think large corporates will adopt AI.

55:18I think that's again about back to the trust question. I saw a pilot recently where we went from in 60 days, trialing to the enterprise going, we wanted to deploy to 3000 people. And it's because the guardways around the trust site and the human validation groups are so strong, they essentially say there's no downside because we have humans validating it everything back to the impact on society and the timeline to it. I think as I said I think it's almost like we always you know underestimate the future in the long run and always I mean in short run. Like if I see another agent demo on Twitter I'm just going to like I mean I cannot see any more of the hype demos of AI and in one of building real stuff have to do enterprise grade stuff etc like we know how many problems that are that needs to be solved but I think still when I'm seeing stuff like I made a game with my son in a weekend in a programming language I never programmed it.

56:08That's real. Like that's real world stuff that is not always the meaning anything in the future that happened. I would not have been able to do that last year's end time. So less than two or four months. And so I think what we also see is the cost of innovation will drop rapidly. Will it go to syrup properly not? But it would be much more about execution and ideas and necessarily having the best coders. And I mean a good friend who is a programming is whole life. He said to me, look, there's got to be a whole different generation of coders. I'm a very shitty programmer because I don't have patience.

56:35Right? So I thought what I learned program is like, this is going to be fun. I'm just going to create things with my mind and whatever. And then you learn program is 90 % debarking and I hate debarking with such a passion. But now I just throw my code at jetty. It's like, hey, where's the problem? Right? So I do think it will impact society massively, but in ways we can't really predict it, even in the short term. The Mars Grimsh was said about kind of the generation of AI first engineers. Yeah. And that very much been in front of insanity. And it shows on the co -pilot, I'm seeing co -pilot with everything.

57:00for your medical assistant, for your lawyer, for your insurance, for your care. And it's in the corpallis of the last breath from the existing enterprise that we've experienced to remain relevant. But their startups. That's even worse. Like, I mean, who wants a copilot? I want to be a pilot. I don't want to have a copilot. I don't want to be inside an application. I don't care how many copilates you have. The problem is not to have an AI help you navigate a location that's shit. The better solution is to remove that location that's shit and just talk straight with the AI, the co -pilot method for, right?

57:32I mean, what happens when we have 10 ,000 clippies all just talking to each other? And for you to work, you have to go and work in, all of these clippies, and you're gonna have to tell clibi -a to go talk to clibi -b about that thing you have on when clibi -c. I mean, it's gonna be worse than it is now. Everyone I was for, kind of school, it had issues, so exciting at the time, the paper clippings, like, can I help you? Yeah, but it's kind of like that. I mean, just imagine a thousand of them, and none of them kind of completely understand each other. And you know, so I don't think that's the model for the future.

58:01I think it's one of those weird things that happens when we transition from one paradigm to the next one. Is co -pilot a necessary inter -grateries intersection to do data acquisition well to allow to be pilot? I think it is a necessary step finding one who tries to still make enterprise applications to remain relevant. Even the idea of an application is going to be challenged quite hard, right? If you can just tell your phone that you want to buy two tickets to go to Barcelona and by the way book this hotel and By the way, can you play this music? Why did you need to know about Spotify, booking .com, all of this?

58:30Why do you need to know about any of this? Can we see the removal of brand? This is very, very into like, I think actually that one of the biggest impacts of AI and the lenses that most application -based brands are going to be really struggling because the brand is the UX. If you're not touching the buttons, so why are they making co -piles? They're making co -piles because they need you into, is it? In fact, everybody's talking about the big problem Google haven't searched where they are and their revenue stream. Nobody's talking about what it means for enterprise, I'm so sorry, but Salesforce is just a database.

58:56And LLM's are really good at talking with databases and querying data. You don't need 15 layers between you and that database to do it. That's where the real challenge is going to come and they're going to be, I mean, it's going to be fun to watch. Because I mean, new distribution channels. I think about this a lot, which is like, if we remove ourselves from the UI, no longer is the newsfeed a worthwhile or a valuable place to be as a brand. Does this enable new distribution channels entirely? I mean, we were talking about it the other day, I think it's almost like the idea of an app almost become like TikTok.

59:24It's like here's the flavor of the second, you know, have you tried this thing? Somebody made this really good prompt to generate this fun thing or whatever. So I think in consumer it is going to be absolutely pandemonium and to try to build a consumer tech brand and hold on to any population of users is going to be very, very, very hard in a world where innovation is almost free and alums can make anything. In Enterprise again, is going to be different because there's so many modes, there's so many layers of complexity, regulation, etc. that there's still a lot of space and then the last bit is the biggest differentiator in the world to come is going to be proprietary data.

59:58I'm sorry but like with a few exceptions right, OMII, BARD, all of these are trained on the same data set, it's the public data okay, Google have a bit more proprietary data on where you are and you're traveling the email, meta has some other stuff and so on but it's all the same consumer world. Are they actually joined on the same data? When you actually speak to those engineers, it's super happy to tell you about their models, superavailable and what was the minute you go to like underlying data. Sorry, I had to start something we discussed. Yeah, no. And I think obviously because people are afraid of the copyright issues, I think the copyright issues are trending in a direction that I don't think it's going to be a major problem.

1:00:28I mean, fair use, I think is covering this fairly well. But I do think it doesn't matter if you have 10 % different data if you train on one trillion parameters. It doesn't matter because it's such a big data set that actually is such a small rounding error in what you get out on the other side. But what matters is if you have 15 years of proprietary data on how to manufacture some enzymes or biology, you know, because that's the stuff. But as you think, I always say, no man's land is always the place where you don't want to be. I think now no man's land on data ownership is the place where you do want to be.

1:00:59Because if you start up, you have no data. I'd say you're kind of f**king that way. But if you're in income and you have loads of data, but you also have huge amounts of compliance and development slowness. Yeah, trade shift of the world, private company 15 years of data, you name many of your companies in that. Yeah, you're perfectly intersected, but you have huge amounts of data, but without the slowness of being public or Behemoths. No, and I think look, it's also the same but I mean, trade shift absolutely, but also with beyond work, which is we know how to build enterprise grade Data isolation, security, how to load in these models.

1:01:31I mean, look, I've spent four years convincing the largest companies in the world to give me the a supply chain data, put it in the cloud. The first time I did that, people are like, you ain't seen, that is never gonna happen. Do you think that some of the largest full manufacturers in the world are gonna give you all the supply data? That's the tax. You've got to pay to get to those proprietary data and to pay that tax, you've got to have a full and steady of compliance, regulatory, all of these things, but you can't be Google at whatever, because then you just have too many lawyers that it's gonna say no.

1:01:54Are you excited or are you scared? On nervous. All of the above, I think, like, because I can't predict my job in two years, which is very strange for a venture investor to say. Yeah, yeah, yeah, yeah. I mean, you can at least have anything else you can probably license your IP to have somebody I keep doing the podcast. Oh, the media company's fire. But when they're gonna remove it, I know. But that world is gonna be blown up completely. And you ask me, am I scared? I'm a bit nervous about what's gonna happen, but I'm mostly excited. I think it's fun when things are up in there and we don't know.

1:02:23Right, I'm scanning the media, and I want to finish on a quick fire round. So I say a short statement, you give me your immediate thoughts. Sure. Okay, you can have dinner with anyone in the world that are alive. Who would you have dinner with, am I? That's a really good question. I would love to talk to Steve Jobs still. I think he would be one of the most brilliant people to have a discussion But will more dollars be deployed in AI next year or this year next year? Is that in companies or like dollars? Do you think both do you think so? Yeah, I think it's gonna be a massive concentration in dollars But fewer companies any explosion of excitement man that everyone and their dog gets a dog of dollars Yeah, I mean, I think there will still be a lot of money going into the long tail But you're right that the concentration will have been the top but I think ultimately there will still be more companies getting funded just because some of the smartest people I know I just started to boot up on it now They spend a year to thinking looking a little bit at the hype and now they're really getting into it And I think those startups are gonna really crush it and avoid a lot of the early generation mistakes What do you think happens to finance in market?

1:03:18So let's be honest. They were ready to be on their knees Yeah, ready to own their knees and then this is the crack cocaine that venture needed Yeah, I mean look I think it's interesting right because I mean you're seeing even very big names and scrambling to get access to Dealflow at $4 billion prices. Yeah. And so I think that's going to be really, really hard. I think for the market, what's going to happen? I mean, look, if you were there when the world switched from one firm to cloud, and you could have written the checks, there was a few people who did. Right? Like, Red Hubman, he just walked around and said, Francisco, and Luke Fanny's startup that has survived 2008 and just gave the money.

1:03:50There's going to be something similar. And probably we need a good calling first. But I do think there's going to be something similar happening in this paradigm shift here. What would you say is change about the world of AI? I mean, actually not a whole lot. Like, I mean, one of the things I was talking to Steve Crasen who was crossing his former head of product at DeepMind, and we were both talking about the same thing, which was he's like, if you go back five, six years, it was like AI was made by these, the cathedrals, like Google, and it was like really serious scientists doing really serious stuff.

1:04:15And now people are hacking in the limb models on Discord. So we have this underground that's now just hacking and building everywhere. And I think that currency is really, really fun. We are part of a number of like, all the startups and real illness in Discord, by the way, now. I mean, it's so crazy. Like nobody is on slack that I know in this environment. And it feels very, very different from anything I have been part of. So I wouldn't change a whole lot. I think maybe still down the papers a little bit so we can have time to read them because it's like a hot on new papers every day. And yeah, if you can invest in one seed fund or a seed fund would you invest in?

1:04:45That's a good question. I mean, apart from, of course, 20 we see it like that. I think I'll probably pick somebody like Munfai and it has a lot to do with the philosophy and how they're optimizing. Again, I have very mixed recorders so that you invest on myself, but yeah, I haven't picked one yet. That suggests not always successful. What did you learn from not the success of the scene investing? It's a classic thing, like just because you have a great product and a great business model, I mean, if the market is wrong, the market is wrong. And it doesn't matter how much you pound, like a fight or whatever.

1:05:13Market traction founder. Yeah. How do you weight them one to three? One, because that is sort of my primary. I mean, you know, if I have a hit net, I know, and I, to be the head investor, and start up coming out of Denmark, because there's a small network and a lot of them go to San Francisco. So as a founder, it's first because if I know who they are, I don't know what they're done, and I invested quite a bit of the trace of the alumni, right? So I know those guys, that's the first. But then today, I would say, I would say market, and I'll probably flip that before and subtract some in market.

1:05:40Okay. Next 10 years fee, when we have this conversation, 10 years, I hate we don't much, you know, I've missed you. 10 years time. Where is Christian then? I'm hopefully doing something I'm really enjoying doing and having fun and I'm not thinking about why I hate my work Or why I need to just take a break. Yeah, I don't know what that is and actually that is exciting completely open to But that could be I think this has been one of the best shows I've done in a long long time Which I also find heavily ironic because as you'll see there was no schedule for Litchy was like all right again. Let's have a good chat But thank you so much for joining me and I've loved this.

1:06:15Thank you so much Harry. I'm really enjoying it As I said at the beginning, I think it's one of the best shows that we've ever done. If you want to see the full video, you can check it out on YouTube by searching for 20VC, but before we leave each day, you know all those mind -numbing tedious tasks that seemingly take up half your day. Well, Coda is here with their new AI -powered work assistant that helps you and your team not just finish tasks, but make progress. So your product team can bring a feature to market faster by using Coda AI to tag customer feedback, draft PRDs, suggest target audiences, summarising product discussions and more.

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