20VC: Why OpenAI Will Become an Infrastructure Play, Why Apple Will Win in an AI World, Why Google is the Most Vulnerable Incumbent, Will LLMs Be Commoditised, Which Startups Are Thin vs Thick Wrappers on Top of LLMs with Jeff Seibert, Founder @ Digits

23:37Or will it be one that we rely on? That is a really good question. So we built our ML team three years ago. We're training our own in -house models. You're right, like you can't hallucinate in finance. We've done a ton of work to make sure our math is always accurate. It'll be really interesting to see. Every model has different strengths. Like if you already look at Bard and versus GPT and so on and so on. My sense is there'll be a very common popular open source sort of base LLM and then tools to allow folks to fine tune it easily. What we've discovered is while it creates, it takes so much time, data, energy, money to train an LLM, fine tuning it can actually be done relatively straightforwardly, with a surprisingly small amount of data, as long as your data is very high quality and focused.

24:22And so imagine you basically have your sort of default Linux operating system, right? And then everyone customizes their flavor of it for their product market use case, whatever it might be. When you say about the data size, not being as important as the data quality, I'm always kind of interested like, how do we think about the importance of model size versus data size? Because we are trained that data size is so important. Yes. At the base LLM layer, the data size so far has been very correlated with performance. And so, right, the bigger the models, the more data, the more parameters, etc. the better they do.

24:54Now, they're starting to be this counter push of like, okay, can we compress them? Can we pull that back? Like, how do we maintain the performance improvements without the size? So I think that's a super interesting part of R &D. What I'm talking about is sort of the next tier of how do you fine tune the models? And that's where actually I think the quality of data is most important. I totally, either. I always say if you're just like, levers, which is like, you've got latency, you've got cost, and you have to have a trade off like anything on where you want to perform and where you're happy to have some form move degradation.

25:24And look at Apple Silicon, right? They've done an amazing job, like yes, they're fast, but instead of pushing the bounds on pure compute, they're pushing the bounds on energy efficiency, which for Apple's use cases critical. And so I think there will be a lot of really interesting R &D on how do you make these models, maybe smaller and perform it in certain use cases. You said about kind of individual cases where you'd find you on top of a core foundation model. A lot of investors today and they're honestly I see 90 % of companies that I see are like AI4, wealth management, AI4, podcast to album, artwork creation.

25:58I'm not this name, but like, it all, and it's like three weeks old, and I'm like, that can't have been that difficult to build. My question to you is, what's the difference between a thin layer on top of one of these models and a thick wrapper within Harron Valley? Yeah, this is the real problem you're hitting on. So startups are gonna get killed because they're very thin wrappers, And I agree with you most of what I'm seeing on the angel side right now are these very thin wrappers on top of open AI. If your primary product value is scripting GPT, that's a thin wrapper. If you've built it in two to four weeks, that's a thin wrapper.

26:33The key thing to me is like we are in a hype cycle around AI, much like potentially the hype cycle with crypto and other tech before it. All of these sort of fake use cases are going to get quickly washed out and replaced and commoditized. It's really important to me that people view this as a technology. Like your MySQL database, MySQL was very popular 20 years ago, right? Like it was super cool what it could do. It's still cool, but if you try to go raise money on you've built a form on top of MySQL, you're not going to be successful. In five years, that's what a lot of these are going to look like.

27:05You need to really focus on the market and like solving a core problem. When we think about it, like found us today building in this environment, who's vulnerable then? And what I mean by that is that is it in components like Zandesk? Is it like high -growth companies like, I didn't know your notions of the world? Or is it your startups? Or is it all of them? It's probably more startups. The one thing I would say is I view OpenAI probably evolving more into an infrastructure company like AWS. They will host these models that allow you to fine tune them, they'll give you all these base capabilities like you get with EC2 and S3 and so on and so on.

27:39The big companies, the big incumbents that will be able to leverage that tech. I would doubt if OpenAI goes and builds like a notion competitor or an HR sales force competitor or so on They probably want to stay at the more generic level from the startup side a lot of startups are getting killed It's funny. I use the term Sherlock. I'm an old -school Mac programmer back in 2002 Apple killed Watson with its Sherlock tour and so the name sort of stuck There's a lot of companies getting Sherlock because they're pretty incremental and they're filling gaps in OpenAI's current product without realizing that like, yes, they're just on the road map, they haven't gotten there yet.

28:14And so if you're working on a use case that's pretty horizontal, that like, OpenAI is going to need to solve within five years in order to scale, that's not a great investment, and that's not a good use of your time as a founder. One thing that I do think about, which I don't think people talk about enough, which is like, I completely understand the criticism of Google and BOD, but Google have access to compute and the ability to control compute pricing. Whereas OpenAI are the whims of, you know, and Jensen and Nvidia to his, you know, smiling appreciation right now, that's fundamentally challenging, no?

28:47It is very challenging. I like the road ahead for opening eye is not easy. What can you just help all this and understand? Why is it important that it runs on device, you know, running with their own silicon? And so, yeah, so Apple of course is super focused on privacy. They don't want your data to leave the device. The only way to do that with AI is if you can fit a machine learning model on the device and keep all the data there I bet Apple can and will and so if you project forward five years if they get to the point where they can run a sufficiently large LLM on your iPhone then open AI is out of the picture You don't you don't even need to hit their servers.

29:24It's just on your phone. I hadn't thought about it I'm like you my bro. Can we buy some more Apple? Can we load up on this one more and might have been right about them? Some things get taken out of the show. So my favorite is sometimes I'm like, I'll fuck it just leave it in. Can I ask you, how do you think about enterprise adoption? Because I speak to some of the largest enterprise in the world. And they're like, I'm not sending my customer data, my transaction data to a model that is outside of our bounds. How do we think about enterprise control of very sensitive data in this world where they want to get the benefits, but don't want to lose control?

29:59Yeah, two different thoughts here. This is a really good question. So they had the exact same reaction to cloud. If you go back 10 years, they were like, I would never put stuff on AWS or Google Cloud or Azure or whatever. That's ridiculous. Why would I share my data with those companies? Right? Now it's just not only do they all do it, but it's actually better because those companies core competency is running data centers. Most enterprises have no idea how to operate a data center. I think this will go in the same direction. You'll have very clear guidelines around how the companies use the data from model training and its off limits and so on, and sort of that trust will be overcome.

30:33The other angle though is there's also the danger of every enterprise jumping on AI because it's hot and cool. They all jumped on blockchain for zero reason even though it did nothing. And like IBM's at fault, IBM was consulting, charging for services to consult on how to adopt blockchain into your enterprise. That's ridiculous. Again, to me, focus on your customer, your market, your product need, and view this as a tool, not a panacea and adopt it strategically unlike what makes sense and where it's going to push the product forward. You said of IBM that I think that ashy AI implementation services will be one of the biggest categories in the next few years.

31:09Do you agree with me or do you actually think that enterprises will adopt natively? It'll be fine. How do you think about that statement? I think you're probably right in that it's a large market. To me, it's not a very interesting market. Like, yes, there'll be a lot of consulting to help enterprises adopt AI and the products won't be that great and they won't really make that much of a difference. What I see when you come to platform shifts is, again, this opportunity for sort of a net new approach to really take over fast. And what gets me excited is like, let's build real workflow automation for real people in massive industries that are outdated, like, for example, accounting.

31:45Like are you going to trust into it to adopt this and totally disrupt their own product lines or do you think a new upstart is going to come in and do it better? And that's where I'm excited to see a like poor energy until. If we're totally honest, you have a couple more years in this game than me Jeff. My question to you is you've seen transitions with mobile, you mentioned before databases. I'm always worried about speed of adoption and speed of transition. I always fear that it takes a lot longer than we think. Yes. When we think about the speed of transitions, Will this be a slow transition or a false transition and we give credit to you?

32:20It'll be faster for a couple of reasons. So if you look back at mobile, so the iPhone came out in 2007, they opened up the App Store in 2009 by 2011 to 2012 a lot of people were using in building apps. And then enterprise adopts are even lagged from there, so call it five to seven years. With AI, there's no new hardware to buy. So you don't need this huge purchase price, right? Locking out enterprises and people all around the world. You can do this instantly benefit from it online, and there's no new UX pattern to get familiar with, right? You don't need to be used to carrying something around in your pocket, looking at a little screen, squinting or reading things.

32:56There are chatbots. It's a very fluid interface. It does things for you. That makes sense. And so I actually think the adoption curve here will be radically faster, and industries will be disrupted probably way quicker than prior tech waves, just because of the barriers or solo. You said they're about kind of the disruption inherent there. One thing that I find people kind of don't understand as well It's like everyone's like oh Google is so slow and behind. Yes, but that golden goose is such which produces some I think it's like a hundred million a day Whatever it is they're essentially having to cannibalize their cool golden goose.

33:30Yes. What would you do if you I asked as trainer This actually from intcom, but what would you do if you were CEO of Google from here? You mentioned Apple's strong stance What do you have here to go? They need to go all in on it. I don't think they have a choice. I agree with you. I think it's existential for them. Because if AI replaces search, their golden goose has been killed. It is way more effective to kill your own golden goose than let them watch someone else do it. And again, I mean, going back to Apple, it reminds me of the iPod Nano. Apple killed their most popular product, actively killed it because they knew there was better tech coming.

34:03And I think Google needs to get bold and do the same. How do we feel about the cost of compute changing over time? You know, right now it's actually, we mentioned that kind of cannibalization cost of queries is significantly higher With you know models than it is for search today How do we feel about cost of computing cost of query in the next three? Is the traditional Moore's Law is it faster is it slower? What has been interesting to see is it's very clear the top models are memory bound as well as CPU bound So you can't just make the CPUs the GPUs faster. You need to increase memory bandwidth on par with that and open AI actually shared a tech talk a few weeks ago that talks about how they were tuning their data centers like this So it's gonna be new challenges for Nvidia for ARM for these chip companies to really unpack I would bet on the pace of technology.

34:50It will get a lot faster and a lot cheaper very very fast Speaking kind of the price per query that I think pricing is this undiscovered element of this net generation Traditioning we've had per seat pricing in the world of SaaS, will we continue in a world of per seat pricing? Will it be consumption lab? Will it be project led? How do you see the future of pricing in an AI world? So this may be just me, but I very much see AI as a tool, not a product. And so it's a technology. It's like your database. It's like memcash back in the day. And so because of that, I don't think it'll change how people price in specific industries.

35:25Like if your market does Percy pricing, that'll probably stay. If your business and product does consumption pricing, that'll probably stay. And you'll have to work that into how you use the AI. I think it'll be commoditized and seen as technology within a couple years. So you mentioned that the word commoditized. I'm really interested when it comes to the data itself. So my mind just jumps around. It's Friday evening. It's dark. It does roll with me on this one, Jeff. You mentioned the challenge in terms of acquiring clean dates earlier. How challenging do we think it is for companies today to acquire high -quality clean data?

35:59Is it as proprietary defense mechanism as some suggestive is? It is extremely challenging and what's interesting is the counter -reaction because you're seeing Reddit, Twitter, etc. Suttoff APIs, put in more strict rate limits, etc. etc. And so the whole world is starting to lock down data, which was counter to the trends over the past 20 years. So when everything was being pushed more and more open and API accessible and so on. And so I think there's been a clear realization that the data is valuable. And that's one of the things like we've been really focused on at digits is we have a proprietary data set of a hundred million financial transactions.

36:36And that's what we can train on and make sure a finance and bookkeeping eyes know what they're doing. So I do think the data is really, really important. In terms of permissioning around training for, you know, healthcare companies that, you know, have patient records for you, which has obviously financial records. Do you need permissioning on an end client basis to be able to use that data for training? You do. And this is usually sort of broadly captured in the terms of service, having access to your data to improve the product. And so we do not share any of that data externally. We train our own models internally on the data.

37:08But that does allow us to improve the product for you and make your accounting better. I'm pretty sure that one day Tim cooks, just going to come and take one of my children and say, actually, I take the degree in, you know, 2004 and now I've lost my kids. Let's step back for a moment because it's not entirely a joke. So Google Photos, potentially one of the most strategic products ever launched, because it allowed Google to collect the world's largest library of photos ever assembled. And that's how they were able to train their early vision models and so on. I wasn't aware of this. They're able to use the photos that you collect in Google Photos for their training models.

37:43Yeah, presumably. That's impressive. Why doesn't Amazon just buy on Thropic? I look at Amazon's play here and I'm It'd be quite an easy buy, and respectfully at 4 billion, whatever it is, it's a minimal amount of market cap for them. Yeah, that seems like a wise acquisition now. What would you do if you're an Amazon's place? That is super interesting. I would be very nervous about the OpenAI Azure partnership, and of course Meta just made a big deal about partnering with Microsoft as well, so I think you're right. I would look to aggressively move into the space and apply or something to bolster AWS.

38:12Which incumbent do you think is vulnerable from the top incumbents in terms of like, you know, your Apple, Amazon, Facebook, Google? because we've just said Apple actually have a huge opportunity. They're behind the huge opportunity. Yep. Who is vulnerable? I think Google's by far the most vulnerable. Because again, their business model is pretty binary, right? Search is all their revenue, and so if that gets damaged, they're in a huge problem. And they've been slow to react. They've combined two different MLAI teams. They've just punted Gemini into Q1, which tells me it's not doing very well.

38:41So I would be nervous. Final one, and then I will move on from... I'm loving this. but like every scale up is introducing an AI product. And they were just kind of like jumping on the topic de jour. They really are. And one of the funnier ones to me is Dropbox. Dropbox has a built in AI, and I don't know. I mean, I'm sorry Drew, but I just want Dropbox to store the files. So I think there is a bit of a sort of bandwagon ride the hype wave aspect. Oh, gosh. Daesh. What is fun though is obviously it's a lot of experimentation. So all these companies are trying things out and seeing what works and what sticks.

39:17And so the industry's gonna learn a ton over the next 12, 18 months, unlike where it's appropriate to use AI and where it's sort of just a useless out on. On the start -up side, do you think 90 % of investor dollars going to early stage companies today will go to zero? Oh yes, likely. Isn't that always the case though, has there been a period where there's not been the case? Yeah, I think so actually. I think this is a gross over exaggeration on the mortality rate of startups, which is like going to zero is actually rarer than people give credit for site. It could be half your money back. It could be a 1x whatever it is But it is actually rather than zero and the company's killed overnight So I actually have some data for you.

39:53I'm more than happy to share this publicly So since 2014 I have angel invested in 97 startups and I just did the count So far 30 have failed outright about a third another 19 are still at 1x So basically haven't gone anywhere and if you look at the overall portfolio really it's like 10 of them matter But what's crazy to me is, again, 2014, nine years of data, still the vast majority of the gains are on paper and it depends how these tend to, on how successful the portfolio is. You have just opened up treasure trove of questions to me, hey, do you have cash back on many of them? No, very few have returned.

40:31A handful gave cash back, but, or are you talking about on paper? I know I'm saying my actual cash back, like DPI. Oh, very, very few. Yeah, the time range on seed investing on the angel side is just like a decade plus. Okay, so we have that. In terms of the top 10, do you trust the book values? I do not know. And I think a lot of them are basically holding at their 2021 valuation whenever the last round they raised was, and it's nowhere close to the reality. I do get data from the secondary markets, and so I can see with some of them like where they're trading versus where their last preferred round was, it's a bloodbath.

41:06It's like down 80 % for many of them. So I think it'll be really interesting. What do you do if you're a founder who's sitting on a price that's just untenable? That is a really tough position to be in. And I think you don't want to get there. Like my advice has always been be really disciplined about each round and what you give away and terms and so on. If you're in one of these boats, I would look to like recap if you can really focus on growth, trim expenses, length and runway. It's going to be big shoes to build into. So, over there is 10. Would you do secondaries in any of them? How do you think about liquidity planning?

41:41I have actually. So, I've done secondaries over the time. And that's actually been my most successful outcome so far. It was via secondary. It's like waiting for them to sell. I've unfortunately had the opposite happen where a couple of my early investments went on to IPO. And so, we're extremely successful. But then during the six month lockup window went almost to zero. And I couldn't exit almost anything. I've actually had more success selling on the secondary market pre -IPO than I have had actually waiting the whole time. I mean, that is just the ultimate pain, isn't it? When you wait 10 years, it IPOs, and then you can't do shit, and then it goes to zero.

42:17You're like, ah, ah, it is crazy. I mean, I understand why, but I don't understand why small -time angel investors will be locked up for six months. And my question to you is when you look at the cohort, 97 companies at nine years, what do you know now on Angel of the Massing that you wish you'd known when you started? Yeah, big lesson learned is no matter how great you think the company is, how great you think the market is, how great you think the founder is, it is still damn hard. The odds of his success are very low and you can't get too cocky. So on two of them, actually two of my biggest failures, I was so convinced.

42:53I was like, this is a no brain or this is gonna be huge home run, I'm going to put in way more than I usually do. Usually I try to stay pretty disciplined on check size. Both of them went to zero. What can you do about it? Okay, so what gave you the confidence in those companies? It was seem to be a very impressive founder. To me, a very obvious market. I won't name their names, but I was like, hey, just like solid execution here should be a clear good outcome. And there's just too many variables to play over the course of the startup journey. And you don't know everything. Like, as an angel, or you don't do that much due diligence, so it's hard to fully understand.

43:26And so my advice would be just be very disciplined. It's like do a bunch of deals because you need a portfolio and put the same amount in every time and average it out. I'm so with you, the idea that you have more conviction in one versus another at an early stage, in particular, totally wrong. You also get known for writing a certain check, I find, oh, Jeff's a 50K, right? I don't know if you do 500 and then 50 or whatever it is, it's like, whoa, also don't buy trash. And what I mean by that is, like, dude, I was in clubhouse, I was in hoppin. I've been in some of the massive spikes. Traction doesn't mean sustainable.

43:58That is very key advice. Yes, totally agree. Yeah. On the consumer side, I'd say real traction on enterprise software. Okay, potentially more sustainable. Totally. But it's generally less that. Yes. You might get to 10 million aero in 18 months, which is amazing, but it won't be like, you know, 100 million a week. Yeah. Yeah. It was been the biggest hit for you. And what was Spinner lesson from last. Oh man, it's okay, so this is all true. This was 10 years ago, a college friend of mine was prototyping what was gonna be a new teenage social network. And I invested 10K, I was like the guy smart, let's see what happens.

44:32He eventually pivoted that into down to lunch, which did well for a bit and then failed unfortunately. Then he pivoted that into crypto, but not the coins, he started and launched Alchemy, which was like an Ethereum dev platform dev tool thing. And at the height of the Bitcoin boom, I exited on the secondary market for 200x. Holy shit! Lesson learned there? Nothing. It's all about a founder's grit and mentality, and you can't back the early idea and think that that's gonna be it. Did that pay for all the other angel investments? Yes, so that is why on paper, and in terms of cash returned, I'm actually in pretty good shape.

45:11But yeah, it's remarkable how the outliers outclass the rest. But doesn't that also tell you one other takeaway, which is market timing? Yes. And getting in very early at a very low valuation. That's another great lesson learned for folks actually. So I had the opportunity to take some money off the table in a deal. So I got a 3x return, right? Return cash in the bank, 3x return. On paper, it's gone on to do another 10 to 15x. But I'm worried that valuations fake. I don't think it'll ever return the remainder. So I only sold some of my shares, but that might be the only cash I get out of the deal.

45:44How do you feel about investors asking for cash back? Some people like you can never do that. You believe in the founder when you invest and others are like, it's a ton of your reasons we'll say, hey, Jeff, we both know this isn't working. How do you feel about it? Great question. I am biased, obviously, by the founder side, but I think it's very scenario dependent. So if the founder is still excited, the team is there, they have grit. I don't think you can ask for cash back. I think like you want to bet on the founder like let's see where it goes if the founders clearly wavering if there's performance concerns if there's been a pattern of bad decisions Then maybe there's a clear scenario in case for it But in general I would bias towards supporting the founder sometimes found is that she feel like they just have to keep going One thing I have to ask about as well.

46:30Everyone has actually I'm sure had fooled in their portfolio in somewhere or another I don't think we've seen the tip of the iceberg of it coming out. Do you agree or do you think I'm over exaggerating? No, I think a lot of valuations will still crash from here dramatically. And there's probably going to be huge layoffs going into Q1, Q2 as well. What will be really interesting is the number of companies that raised and have sort of struggled through 2023, but now are down to six months or so of cash. I think next year could be very tough because they're not all going to be able to raise follow -on rounds.

47:02What happens to talent migration? And what I mean by that is, you have some amazing talent within large companies and high growth but highly valued companies. Yeah. Do they optimize for safety and stay in the well -paid job? Or do they go and make a company that's way overvalued? I should leave and do something. Which side do you err on? Yeah, this is a great question, because a lot of folks you're right are trapped in companies with high valuations where their options are likely under water. Yeah. But it's safer than just starting something new. Right. And so it probably is safer than starting something new, but it's not safer than switching to a earlier stage sort of growing company where you're going to have real options and a real impact.

47:43I actually love sort of down markets because I think in the very hot markets, it's too easy to raise capital and you peel off all the sort of like fantastic second engineers or product managers or designers or whatever they might be and they go get funding and start something, and that actually blurs, it stretches the talent density across the entire ecosystem. Versus in down markets, you can build higher talent density because it's harder to raise your own money. So you think we'll see a migration from later stage to earlier stage? Yeah, we'll come be aligned though, because that's the big problem they just pay well.

48:15This is the problem, you're right. And that's probably the counter force is all of these big companies who raised huge rounds in 2021 have high salaries. If you switch, you'll get more equity but way less cash. And so that's probably keeping folks where they are. And so will they stay? People like cash. People are trained that cash is now king, right? You know, Ray Gatley is going, uh, cash ain't trash no more. It's very true. It's very true. The final one, but like, and it's a shit question, I can't believe I'm asking it. But like, you know, from the 97 -Langela investments, is there anything non -obvious that you see in terms of patterns from the most successful founders?

48:48I know it sounds strange, but one that I see is often the most successful founders moved a lot in early childhood. Oh, fascinating. And why does, why, if you theorize around that, the theory is that actually you essentially have to constantly reinvent yourself. Right. You align to culture, society's friendship groups. And you understand nuances, intricacies, the idea. But that's one that I found. Oh man, no, I don't have a good of an insight as you. I'd say looking at my portfolio, It's not even necessarily the most techy founders that are successful But the most sort of customer obsessed and just like really deeply personally understand the market and really want to solve it And usually have some pattern in their background like their parents were in a sort of adjacent space or something Where they've just felt this like personal identity come to bear on what they're doing and I think that gives you like an extra Push an extra drive and extra grit to make it successful.

49:43I listen, dude I want to move into a quick fire. I've so enjoyed this. I say a short statement. You give me your immediate thoughts, aren't it, okay? All right, let's do this. So what do others not know that you know to be true? Run away climate change is less than 10 years out. What do you mean run away climate change? Like just a self -building cycle of higher temperatures and catastrophic storms and droughts and everything. And so we just accept this new reality? No, I think we're too late and like I funded climate change films 15 years ago. It's still shocking to me that this is not like the singular top priority in any political campaign in the entire world.

50:18But then do we just accept this new reality of storms and unpredictable weather patterns? Yeah, I don't think you can't accept it. It's going to happen. And so the real question is, what are we doing about it? And which countries is it gonna completely impact way more than others? So it'll be really challenging. Being a realist, I think it's something like, if China hit its emissions goals for a year, it would be the same as Canada hitting them for 26. As much as we would like to, does it even matter if you don't get China on board? Yes, the impact is unfairly distributed and the cause is unfairly distributed.

50:54That's why it's basically a strategy of the comments, and so economically it's like how do you motivate that on a global scale? Do you not also feel slightly for emerging economies in terms of like, you know, for years you've downtroddened some beatiness to a terrible way of living? And finally we're increasing our, you know, standard of living. And now you want to focus on other priorities, increase tariffs. We're still scaling the pole of starvation. Right, exactly. And they haven't had the time to catch up and drive efficiency and technology and so on. The whole thing is unfair, yes. I'm asking the tough questions.

51:27I was putting another quick fire around. Yeah, you know, I was fathering about, dude, you gave me such a good one. And most people give me shit on that question. I'm like, oh, this is good. Tell me, you can be CEO of any other company for a day, which company do you be CEO of them? Why? All right, well, this is for one day. So I would go be CEO of OpenAI just so I can see the roadmap and then I'll know what to do from there. Next one, most controversial view that you have today. Ah, so I would say actually, AI won't replace many jobs, I think, actually. It'll drive productivity, not replacement, and it'll be like other technologies that have come out.

52:02Like phones didn't replace people. Now you just use them and you can do business from wherever. I think AI will let you get a lot more done in a lot less time. Why do you think the popular narrative is that it will? Is it because we like to be scared? Yeah, we like to be scared. We like to be terrified. So there's this concept in economics called the lump of labor fallacy It was literally from the late 1800s and you can look back. There's newspaper articles in the New York Times from the 30s Being like we are gonna be replaced by robots It within the next decade and it's like nope that didn't happen and it just marches forward every decade there's a fear of the new technology coming in.

52:36People hated personal computers in the 70s, because they thought it was going to take over and replace them. And so it's just it's this fallacy. Can you imagine being a math teacher back in the day with the advent of calculators? You would think your entire job is useless. But was the right way to view competition, Jeff? Ignore them completely. Focus on the customer. Really? I'm always like, it's helpful just to be aware of the other boat. I don't think so. It's like be really aware of the customer pulling you and like make sure you're going in their direction as fast as possible And as a startup maybe if you're a giant gala if you should start paying attention to some competitors But as a startup the market is way larger than you could possibly capture this year So like focus on your customers I think a lot of product managers get too distracted watching the competition and they don't have a vision for their own product What's the best piece for advice you've been given?

53:28Oh man 24 -hour hypothesis. When your team comes to you with a question, you need a decisive answer within 24 hours. If you're slower than that, you're not moving fast enough. What if he truly needs to be incredibly thoughtful, like the Mr. T. Irishman company, or really like old structure, redesign? Yeah, so this is where I go back to one of Bezos's letters, Type 1 versus Type 2 decisions. The vast majority are Type 2 decisions, they're reversible. You can undo them. What I would say is one net, it is way better for a startup to be moving in a direction than the absolutely perfect direction. Because you can keep refining that going forward, but if you pause on a decision and you're like, give me a week, what do you want the team to do?

54:11And this was one of the biggest challenges Twitter faced internally back in the day was just complete in decision from leadership. I think we constantly underestimate the value of just activity. I look back, but like the early days of doing these shows, I wasn't so good, the topics weren't so great, the questions weren't so great, but I learned and I iterated the shows, the value of evolved, guests got better, worse, what it - But like activity drives progress. 100 % And learning, if you're not moving, you're not learning, so what are you gonna do differently? So if you're not moving, you're not learning, what did you believe 12 months ago that you no longer believe?

54:4412 months ago, I thought useful AI would be years away. No longer think that. It is amazing to think of the speed. It's not even been like a year since the evolution of the net share. Jeff, 10 years. I mean, we met eight years ago. I think it was. Yes. So if we take the amount to years in 2033, where are you then? So keep in mind, there's going to be some runaway climate change. I'm going to be off growing obscure wine grape varietals in a cold climate. Where will digits be? Digits will be the new de facto accounting platform. We're really, really excited. We've built basically a completely object -oriented real -time AI -driven approach to finance to make it really intuitive for Startup founders to understand their finances as the business happens not three weeks late on a black and white PDF.

55:31Jeff, I've absolutely loved this. This has gone in so many great directions. Thank you so much for being so brilliant and it's been a highlight of my week. I love it, Harry. This was super fun. Thanks so much for having me on. I think what I love so much about that show was just the natural rapport and conversation there. I think you could tell that it was very much unscripted. It was such a joy to do that with Jeff. I want to say huge science to him for the friendship over the many years and the partnership now with digits. I really do so appreciate it. If you'd like to see the video of this episode, then you can check it out on YouTube by searching for 2 -0 V .C.

56:03That's 20 V .C. on YouTube. But before we leave you today, there is no shortage of helpful AI tools out there, but using the mean switching back and forth between yet another digital tool, what was supposed to simplify your workflow just made it way more complicated and less of course you're in notion. Notion combines your notes, docs and projects into one space that's simple and beautifully designed and you can leverage the power of AI right inside notion across all your notes and docs without jumping between your work and with a separate AI powered tool, automate the tedious task like summarizing meeting notes or finding next steps, freeing you up to do the deep work.

56:42It allows you to save time and right faster by letting Notion AI handle the first draft, jumpstart a brainstorm, or turn your messy notes into something polished. And you can try Notion for free when you go to Notion .com slash 20VC, that's all lowercase Notion .com slash 20VC to try the powerful easy to use Notion AI to stay. And when you use our link, you're supporting our show. and speak of game -changing products like Notion there. Listen to this. Mercury has been a breath of fresh air. Getting started was maybe one of the most delightful onboarding experiences I've had. Mercury is just so easy to use.

57:18The aesthetic of it is actually quite relaxing. For me, it was less a choice and more finding a kindred spirit. Imagine feeling this way about business banking. You could, if you join more than 100 ,000 startups on Mercury, The powerful and intuitive way for ambitious companies to bank, start building momentum and leave the friction behind by visiting mercury .com forward slash 20VC. Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolved Bank and Trust, members of the FDIC. I'm finally traveling in the expense and never associated with cost savings, but now you can reduce costs up to 30 % and actually reward your employees.

58:02How? Well, the van rewards your employees with personal travel credit every time they save their company money when booking business travel under company policy. Does that sound too good to be true? Well, the van is so confident you'll move to their game changing all in one travel corporate card and it spends super app that they'll give you $250 in personal travel credit just for taking a quick demo, check them out now at navan .com forward slash 20VC. As always I so appreciate all your sporting stage tune for an incredible episode on Friday where we're going to be bringing together a couple of different episodes.

58:36Combining thoughts on will LLMs be commoditized? What will the pricing model for AIB in the future? And which incumbents will be the winners and which will be the losers? That will be such a cool episode to do.