20VC: GPT5: Sam Altman's Masterplan or a Gift To Anthropic | Palantir & Shopify Crush Earnings | Monday & Datadog Perform But Hit Hard by Wall St | Should Perplexity Buy Chrome for $34.5BN |

AGENDA: 00:04 – Was GPT-5 the Biggest AI Letdown Yet? 00:17 – Is OpenAI’s Real Target Anthropic’s $6B Revenue? 00:22 – Why Anthropic Might Secretly Be Worried 00:28 – The Hidden Business Strategy Behind OpenAI’s “Underwhelming” Launch 00:32 – Should Perplexity Really Try to Buy Chrome for $34.5B? 00:35 – The $3B N8N Deal: Genius Bet or Bubble FOMO? 00:38 – Why Datadog’s Best Quarter Ever Still Tanked the Stock 00:44 – Palantir’s 50% Growth at Scale – Can It Last? Is Palantir Overpriced? 00:53 – Shopify’s Ruthless Path to 91% Revenue Growth With 30% Fewer Staff 01:01 – Are Seed and Series A Valuations Now at Dangerous Highs? 01:06 – What Does The Highest Levels of Capital Concentration Mean For Early Stage Founders? 01:15 – Could Palantir Hit a $2 Trillion Market Cap by 2030?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  It's like dealing with a deranged madman trying to estimate what the street will do. I spend no time on this. You don't need half your company and Palantir and Shopify are proving it. You don't need half your company. He's ruthless, Zuck's ruthless, Carp's ruthless. And if you think you're gonna win in B2B, if you're not ruthless, you're gonna lose. Okay, let's look at Shopify for a minute. From peak employee was was 2022, 11,600 employees. Since then, revenue has grown 91%, pretty impressive for a company at 11 billion revenue. And employees have gone down from 11,600 to 8,100, gone down while revenue's up 91%.

• 0:36Harry Stebbings?

  It's time for my favorite show of the week. This is 20 VC with me, Harry Stebbings. Now today, we break down the best earnings quarters for some fricking insane companies. Datadog, Shopify, Palantir, oh my god, what a quarter Palantir had. We then discussed GPT-5, what we thought of that. We discussed perplexity, potentially buying Chrome. This was a fantastic discussion. So much fun here. I always want this to be as good as it can be for you. Let me know what you think. You can email me, [email protected] or DM me on Twitter. I love to hear your thoughts. But before we dive into the show today, let's talk about agents, specifically Piper, the AI SDR agent brought to you by Qualified.

• 1:18Harry Stebbings?

  The Agentic Marketing Era has arrived. And if you're a B2B marketing leader looking to scale a pipeline generation, Piper, the AI SDR agent, wow, it is here to help. Piper is the number one AI SDR agent on the market, according to G2. And hundreds of companies like Box, Asana and Brex have hired Piper to autonomously grow inbound pipeline. Fucking sign me up. Anyway, Qualified customers see massive business impact with Piper. 3x increase in meetings booked and 2x increase in pipeline. Wow, that is some results. Hire Piper, the number one AI SDR agent, and grow your pipeline today.

• 1:55Harry Stebbings?

  Learn more at qualified.com/20vc. That's qualified.com/20vc with the 20 VC spelt out in letters for goodness sake. And while Piper builds your pipeline, Atio gives you the CRM power to close and grow those relationships. Atio is the next generation of CRM built for the AI era. Fast, flexible and powerful. No, it's not a sports car. It's a CRM system, baby. It is Atio and it takes less than a minute. Sync your email, your calendar and you'll instantly get all your relationships enriched in real time with incredible data. No manual input needed. Atio also integrates with your existing tools and syncs with your product data to deliver

• 2:37Harry Stebbings?

  an AI native platform that's tailored to how your team actually works. You can model your CRM around your business, automate complex tasks and surface real time insights, all in a platform designed to scale with you. With Atio, AI isn't just a feature. No, no, it is the foundation. It's powerful. It's AI automations. It's research agents that transform your go to market motion. It's a data driven engine from intelligent pipeline tracking to smarter product led growth. Fast growing startups like Flat, File, Replicate and Modal are all experiencing what's next. So get ready to build without limits and start now. Atio.com/20vc and get 15% off your first year.

• 3:18Harry Stebbings?

  That's Atio, A-T-T-I-O dot com slash 20 vc. Okay, pipeline sorted. Woo hoo. Now, what about your own legal team? Enter Logora. Logora is the category defining AI platform that's fundamentally reshaping how legal work gets done about fricking time. Empowering lawyers across tier one law firms and in-house teams to achieve more with greater precision and confidence. So Logora does this by solving really concrete tasks such as document extraction, reviews against a firm playbook and suggesting well crafted markups directly in Microsoft Word based on your preferences. My word, that is a topic list of conversation that will not get a second date. But anyway, the adoption of legal AI is surging across the world and Logora is at

• 4:02Harry Stebbings?

  the forefront of this shift as the chosen partner to 250 industry leaders in law across more than 20 markets. The likes of Goodwin, Burden Bird and Deloitte are making daily use of Logora platform to review and research with precision, draft smarter and collaborate seamlessly. They recently also got an $80 million series B from iconic, they're backed by General Catalyst, Redpoint, Benchmark and Y C. Also, they operate out of New York, London, Stockholm. Yes, they're Swedes, always a wonderful race. With over a hundred employees from some of the world's leading global law firms and tech companies, the team is growing super rapidly. They're just fricking awesome. Just go use Legora, honestly. I love Max, their founder. He's just a great dude. Go find out more, legora.com.

• 4:46Harry Stebbings?

  You have now arrived at your destination. Guys, I am so excited for this. We have a amazing schedule in place today. I want to start with G P T five, adding as the top story of the week. Consensus is it's slightly underwhelming. Before I lead the witness, I'd love to hear how you responded to it. Do you agree it was underwhelming and do you see it differently?

• 5:08Speaker 00

  So my first experience was certainly underwhelming. When it said we had the greatest market crash since the tulip era. That's what I think. But when I look at folks smarter than me, if Aaron Levy is running this through box and saying red line and document comparison and term extraction is materially better, maybe that doesn't make those of us who are using it for therapy excited. But if he thinks it's materially better and more importantly, if it's materially better at coding and competes with Anthropic, you know, that's six billion of revenue that they lost. But I get it. It does feel like it's a worse therapist at the moment, doesn't it?

• 5:43Speaker 02

  My take similarly was, I think underwhelming is great. Let me tell you what I mean by that. Underwhelming kind of took a little bit of the air out of these, you know, the, the kind of techno optimist, we're underway to A G I, it's all going to revolutionize everything, all that kind of noise. You definitely felt a little deflate here, which is great because we're now at the, it's a really great piece of software for doing business. Let's make it better stage of life, right? It feels for me, I remember, you know, the first, you know, Windows ninety five, yay, it's amazing, got a big launch and then, and then there's just a steady growth, or even the iPhone, better example, the early one, you know, great launch is going to change everything. And then you settle into ten or fifteen years of incrementally making it better until you plateau, right? And from a zero to one

• 6:27Speaker 02

  perspective, that's not as interesting. But we're now in the grind it out, make it Better build a business stage of life, which I think is a more normalized world. And so there's two things in it. What implicit in that is the statement, I don't buy any of this. You know, they're going to keep on getting better, exponential takeoff, all that AGI rubbish. I've always assumed it's rubbish and maybe I'm wrong, but at least right now, the evidence shifted a little more in the favor of perhaps not nearly as quick as you think. Cause from a business perspective, there's a lot of interesting shit going on here. And Jason nailed the first big one. The product is good, though I believe not as good as the high-end Claude code, the models, but a damn sight cheaper, 10x cheaper than most expensive token load based on what is something 8x to 10x.

• 7:13Speaker 02

  On top of that, it's noticeable Cursor now is pushing a GPT-5 based product, you know, and has free demos of that, pushing that on their user base. From a business perspective, as this thing from a pie in the sky AGI stuff, this is exactly what Jason said. This is OpenAI going at a big ass pile of revenue that Anthropic has. And maybe Anthropic overplayed their hand a little bit by kind of bullying Wind Surf. And as we discussed, if I'm now Cursor, or maybe a month ago, I'm sitting there going, my gross margins are set by my worst competitor, Anthropic. And now I'm ecstatic because the big ass guy in the block is now another vendor of tokens significantly cheaper.

• 7:53Speaker 02

  I'm going to push the hell out of this. Such a really big business comment. It's not as sexy as AGI making us all unemployed. But if you're trying to build a business and you're Cursor, this is the best damn thing that ever happened. We have a competitive product at one quarter to one tenth the price and I'm happy.

• 8:08Harry Stebbings?

  If I was Anthropic, I would be in that room rejoicing. Everyone, when I speak to the Anthropic team, are bluntly laughing because, I mean, the demos were terrible. I think it was entirely underwhelming in terms of the presentation of features. Yeah, model compatibility into one and model routing and we've now taken them. That's it? Seriously? We waited GPT-5 and you gave me better model? This is, this is disappointing.

• 8:33Speaker 00

  There's a reason for it. Sam Altman, in his own way, is a marketing mastermind like Elon Musk. He knows what he's doing. Okay? We can make fun of this or that. He's everywhere. And the entire globe, he's doing Stargate, Farscape, everything. He's building everything. He is as perceptive as they get. He's dueling with Elon on who manages the X algorithm, right? The fact that this would come out with a bit of a thud was known to him and the team, right? So there's a reason they did it. Was it timing pressure? Was it to put pressure on the team? I actually don't know. I haven't seen it on the hundreds of reddits I'm on. This is like Figma, I was saying Figma was dumb. They didn't understand the IPO pop from last week. This is, that's neither is true. The idea would come out with a thud is not a shock.

• 9:17Speaker 02

  Pubby Dan is not quite buying that. You can be directionally brilliant and entrepreneurially brilliant. And it's hard not to argue some algorithms both, but it's always worth remembering the most popular product they ever shipped. They didn't know they were shipping a good product at the time. ChatGPT, which is, you know, 70, 80% of the revenue dollars. When they shipped, they didn't even think it was a major release. They were focused on GPT for the following March. It was, so I think one of the bigger holes on that, it's not where we went to go, but to go there is, you see this invention often, if you're directionally correct and you have, you know, big ass vision and drive and the ability to raise money, sometimes just that's enough and you kind of get the brakes on your side. But I don't think you have this, I don't think he or anyone has complete clarity at every step and the level, the level of what?

• 10:02Speaker 02

  Forethought that you're implying, Jason, on that. But I actually don't think it can, I want to go back to what Harry said. Cause I don't know the answer. It's interesting. You made a comment. You think Anthropic are laughing. They're definitely laughing at the thud. And it's hard not to laugh at the funny stupid graph that was mathematically wrong. And oh my God, they must have burned someone after that at the stake, literally. I'm not sure I'd laugh quite as much because I do think, you know, a renewed push on code and pricing and trying to get that business. It would be better to, if you're Anthropic, to be a monopolist and the best product than to be in an oligopoly where you still have the best product. The consensus is token for token, dollar for dollar, the Anthropic products do more and are more efficient. And this gets into a very interesting discussion is if the pricing on the upfront is low and good enough

• 10:46Speaker 02

  for companies really resting with gross margin, you're going to have some kind of, use the cheap shit where you can and use the dear stuff where you have to. So I do think, no one ever said, I'm really delighted my bigger competitor entered my market or product 5X cheaper than us. I mean, so I don't buy it at that level, Harry, to be really direct.

• 11:04Harry Stebbings?

  But I think that's a very moment in time perspective, which is like, everyone is aware that if you're looking at like, cost of tokens today, we're seeing them reduce so dramatically within a 12-month period. I don't think Anthropic are looking at that thinking there's a permanent chasm in pricing and we're going to be unable to match it. I think they're looking going, fine, they might have a slight inefficiency on us today, but if our models are better, we'll win.

• 11:25Speaker 02

  Yes, you'll win, but it just won't be quite as easy is my point. I mean, that's my point. We've gone from the pie in the sky for everybody, it's going to be amazing, you know, flowers and sunshine, to the, okay, it's a slug it out war here. This is the advantage we've got, this is the advantage they got. So I say, we're dealing now just business fundamentals. Are you better off with the slightly better, Forex more expensive, that kind of discussion.

• 11:48Harry Stebbings?

  Roy, what was your second point? I interrupted you.

• 11:50Speaker 02

  No, no problem. I mean, it's two or three. You have to take seriously, they shipped the open source products earlier this week, another interesting commercial move. So again, in the last one, you were sneering at it, but yeah, moving away from all those models to the single model selector, yeah, it didn't work at opening. It's the kind of thing you do when you're done with imagining being the next Robert Oppenheimer, and now you're focused on what the product manager tells you will get 5% extra conversion among users. Someone in product marketing said, dude, we have to stop with these six different model names that make our users feel stupid and just make it simpler to use. All those things are, okay, it's time to get business savvy, not just AGIs coming savvy. So I thought, yeah, that's what grinding it out looks like. That's what

• 12:35Speaker 02

  every iPhone release after the first one or two looked like, similarly with every Microsoft Windows release after the first two or three. It's like, once you had tiling and Windows, the next 15 years were just grinding it out. Same thing with my, the iPhone. Maybe it's the same thing here. We've got the idea, it's a chatbot with AI, and now we're just going to be grinding here.

• 12:55Speaker 00

  I think GT5 didn't achieve what Sam wanted it to achieve by July 31st, and you got to manage the team, even at the highest profile company on planet Earth. And everyone that's been a founder that's shipped software, has had to make a decision. Do I give the team another month, another quarter? Anytime you do a release and it gets too complicated. Your team always wants more time. At some point as a leader, you've got to ship it. And earlier on the show, we had a call saying, when will G T B five ship, right? And it was all over the place. I think Sam said, August is time, boys. And if it's going to be underwhelming, I'm going to make the call that we're not going to wait for Nirvana. I don't have a firm date on what it was supposed to be, and I'm just going to box it up and ship it. And we're going to make some basic stuff better for Aaron Levy. We're going to cut some costs.

• 13:40Speaker 00

  And that's it. This maybe it's 4.9, right? Or 5.000, but this is just my theory. He decided there's so much attrition in this industry. There's so many resources flowing back and forth to Meta to here, the there, that I think he just decided ship it.

• 13:54Harry Stebbings?

  I also think aligning to a $500 billion fundraiser is actually better to get it out to continue to press on than to have continuous waiting.

• 14:02Speaker 00

  Yeah, it's like the Replit $3 billion round. Just get it done.

• 14:05Harry Stebbings?

  Rory, would you do OpenAI at 500 billion? And do you feel more or less confident post G P T five about OpenAI?

• 14:12Speaker 02

  I'm going to say more confident, and I'll tell you why. It goes back to what I said earlier, right? The grandiosity was totally necessary at the start because if you walked into people and said, we need to raise 30, $40 billion, and at the end of it, we're going to ship this chat app that, trust me, people will use as replacement for search. That might not work as well as we're going to change the known universe. We're going to exponentially eliminate all labor. When you had to raise 30 billion on nothing, you're selling dreams, the future of humanity. We're now at the, I got to make a business converge roughly on profit million over the next three to five years. So just go on the business. It's a combination of a just ship, run the business, make it better kind of next step. And the interesting thing is, and this is where I've evolved a little in the last few months, just thinking about it.

• 14:57Speaker 02

  Without any need for A G I or any of that rubbish, I think both of these companies can be plus or minus, you know, half a trillion to trillion dollar companies. The opportunity, it's just so obvious that everyone's going to be paying 20 bucks a month. And people are going to be paying more, and you get an interesting discussion how how big the high end will be, which matters more for Anthropic than these guys. But they have the mass market, everybody paying 20 bucks a month. That's a big ass company. From here to throw away this such that you probably can see a two, three X just on that, probably some noise along the way, you might be ahead of yourself. But they're on the destiny that's now locked in for them, which is to be the the go to place for information and it, you know, for pretty much everyone on the planet.

• 15:40Harry Stebbings?

  I always think that actually AI is a bit like crypto, which is like, hey, don't fucking worry about all the underlying assets. You'll make money if you just invest in the core, which is Bitcoin. And I'm like, the core unwavering asset here is Nvidia. Do we think OpenAI or Anthropic or Grok or you name it are going to win? I don't freaking know. With each month, the benchmarks change, the last humanities exam changes, next humanities test will come, Nvidia, they will just Elon, Nvidia.

• 16:10Speaker 02

  I mean, what you're saying is true, which is sometimes just keep the main thing, the main thing. And I often make that mistake because you, and this is going to sound really cynical, but early on, you listen to all the proselytization and all the crazy stories. And I'm very much a rationalist and I try and take them seriously and I deconstruct them. I realize all the these crazy stories are bullshit. Therefore, the thing itself is bullshit. And that's wrong. Every single thing that people said that used Bitcoin for in 2013, except maybe finding stable coin payments has been bullshit. But the thing itself totally worked because it's got this, you know, the store of value idea, the asset independent from everything else. Bitcoin worked, everything else, Ethan, to some extent, everything else, all those little weird coins didn't matter. Same thing here. The main thing is the main

• 16:55Speaker 02

  thing. You want to make the chips. You want to be the company that's, in an OpenAI's case, you want to be the company that's pretty much selling to every consumer. Looks like its market share is pretty hard to change at this stage. So you start multiplying, you know, you'll have a paid tier at 20 bucks times a lot of people, you'll at some point have an advertising tier and plus or minus your Google with a subscription business. There you are. It's one to two trillion dollars. Thanks for coming. Keep it simple. I am often guilty of overthinking to the point where I've now learned to watch myself when I overthink.

• 17:25Harry Stebbings?

  I'm very lucky. I don't have the luxury of the ability to overthink, Rory. And so I'm always a simplistic thinker, which tends to do me, which tends to do. Me quite well.

• 17:35Speaker 02

  You know those kind of internet meme graph where you have on the left total fucking idiot in the middle overthinking it and on the right not thinking at all just like the other guy and you win.

• 17:45Harry Stebbings?

  Listen, another element that's just like crazy is perplexity trying to buy Chrome for thirty four point five billion dollars. I spoke to Aravind before, he said legit, it's in their court. How on earth is this? Where's he getting the capital? Just to confirm. That was my question to you. Elon had his had his capital secured a while back, didn't he? How is this possible, guys? What did you make of this when you read it?

• 18:10Speaker 02

  One, I mean, you can get tactical and say where would the money come from, but now stepping back, why would Google sell? I'm just big picture points just to cover for people. Why would Google sell Chrome? And so they don't want in a million years, the Department of Justice says they have to, if they can appeal and at some point maybe they have to, they don't want to sell this thing. The second question that's interesting one is what's the Chrome business worked? And the totally interesting thing about that is it's so dependent on who buys it, right? Because the asset itself, it doesn't have like Mozilla has seven hundred billion dollars, I think of revenue, right? We've a market share. You don't get paid for owning a browser, to state the obvious, right?

• 18:48Speaker 02

  And but the reason the DOJ is going on this is as well as owning Chrome, which was one of Sundar's crowning achievements that got him the big job, building Chrome. Google also pays Apple for Search Place when on Safari twenty billion dollars a year. And the Department of Justice is looking at those two things together and saying, oh, paying to be in the browser is bad, owning the browser is bad. It allows you to continue your search monopoly. But the question is, so from Apple's perspective, owning Safari in the iPhone where it's kind of a pain in the ass to change is clearly worth twenty billion dollars of profit a year. How much is on Chrome worked, right? In other words, who would buy it? What would they sell through it?

• 19:27Speaker 02

  And how locked in would the service be? Ironically, the person for whom Chrome was the most valuable, if it wasn't owned by Google, would be Google. In other words, if someone else owned Chrome, the highest person to monetize Chrome is Google because they have a search business. So they would probably, and the Department of Justice won't let them do it, but they would probably. We say, Harry, if you bought Chrome, you have no revenue source, but we will happily pay you twenty billion dollars a year for all your search service. And you'll be, you know, the richest single person company ever. So it's a kind of a weird asset where intrinsically in itself, it has no value, but it's kind of a gateway to some product that does, which now gets to perplexity. The thought process there is they're already building a browser. If they had Chrome,

• 20:08Speaker 02

  they could basically be the AI backend. Instead of having to build their business browser by browser, they would basically jam perplexity into every Chrome user and every person who's using Chrome today, including me, they would have some version of perplexity as a default, you know, AI engine. Great work if you can get it. And I totally get now, is that worth thirty eight billion? Is it worth more? Is it worth less? Do they have the money? All those things, A, are unclear and B, may never ma- may not matter yet to Jason's point. Is it real? But would a AI engine competitor to ChatGPT absolutely kill to own the Chrome user base? Absolutely. So that's kind of a long-winded answer, but that's kind of how you get there. Do you think it's likely in any way, or is it a complete?

• 20:53Speaker 02

  I assume Google litigate this to the end of human time. I mean, it's, I wish I actually gets to step back and say something else. I just got to get it off my chest. The Department of Justice gets around to killing American companies and technology just when they've become irrelevant anyway. We all had a lot, now irrelevant's the wrong word, just when they're at risk. The idea is, Google, think about it. The whole idea here is Google is so powerful and almighty that we've got to smash their search engine monopoly with legal remedies. When all of us here are talking about could Google be screwed because OpenAI and ChatGPT could be a better product? It's literally not kicking Google in the nuts when they should have, right? When they were evil bastards for the last fifteen years, grinding everyone down like Yelp.

• 21:34Speaker 02

  And then finally, when their backs are to the wall, now we're going to kick them just too late, when in fact they're now at risk. At a zoom out level, all this is fricking stupid. It's the Department of Justice, because they take so long to make decisions. It's like they only started kicking Microsoft when Google was in the infancy and Microsoft was on the defensive. It's the same thing here. Poor Google alone, they're just a simple humble trillion dollar company trying to survive. So dumb as well. Sorry.

• 22:01Speaker 00

  Maybe just two things. One, on marketing, there's a huge amount of need in AI to do constant marketing. Constant marketing and there's a huge need to be one of the top two players. And everyone's doing a lot of marketing, you know, lovable, project lovable. Like, why are you doing these hackathons? Why is Bolt doing a hackathon in every city? Why is Sam Altman everywhere? Why is Anthropic founders everywhere? I'm not even sure, even with Nvidia, Jensen's everywhere, right? And he probably doesn't need to be, but it's important for perplexity to be in that conversation. Because we can think of a lot of tools that aren't in the conversation. You know, we talked the last couple of weeks about cognition buying windsurf, right? At least it was in the conversation. I mean, two of my portfolio companies use Devon, like their AI tool,

• 22:44Speaker 00

  and they love it for niche use cases, but we never talk about it. I don't think it's cynical. I mean, it's a little bit cynical. I don't, because even if he had 38 billion, I'm guessing another suitor might come out of the woodwork. Like, I think Satya would raise his hand and say, I got 39. There'd be a few other folks to grow at the pace the AI leaders are growing, right? At this incredible pace, you do need to fuel the marketing engine. You need to fuel it aggressively and you're not going to do it on AdWords and a few sponsored blog posts and SEO.

• 23:11Harry Stebbings?

  You absolutely have to. And I actually interviewed Aravind at an event. And I said, to what extent do you feel like a politician or a state leader? Where you actually don't do anything in the machine, but you just entirely speak for the machine? And he said, that is completely my job. And that is the job of Dario, that's the job of Sam, that's the job of me. We are on the machine shouting. And then you also look at the poor performers, and I hate to name people, but this is the show that we have, like coherent Mr. Al. And you also correlate that with who does next to no marketing or speaking publicly, coherent Mr. Al. I have no idea to the extent their models are good, not good, not whatever. But they are both incredibly quiet and don't do press. And they are also the ones which people have deemed the losers.

• 23:53Speaker 00

  You do have to do it. Virality alone isn't going to do it. I guess the other captain obvious point is, you know, one of the things that's very interesting in the media is where does Google stand today, right? Search under massive existential threat. Yes, but search revenue is up, right? It's confusing, right? The captain obvious theme is that no matter what happens, Chrome ends up being this accidental gem. Chrome was built very strategically in the old days, in the desktop focused days, to counter IE, which it destroyed. And then it's open source. So Safari and Opera and everything's built on Chromium. They gave away the open source version. They destroyed everything. And then it kind of plateaued like a lot of software did, right? We had plugins, we took it for granted.

• 24:37Speaker 00

  Now it's the crown jewel in the age of AI, right? It's the crown jewel again. It's the return of the... It's not just the browser wars. It's the return of the browser being this core piece of software that we forgot about for the better part of a decade.

• 24:49Speaker 02

  Only, first of all, agreed, and I can't resist the Chrome wasn't built in a day statement. But moving right along, you're right. And it's only because for 10 years, Google won in the sense that no one else could monetize traffic, anything like the dollars they could, which is what, you know? So why bother building a... I mean, you could have these niche browsers, but you couldn't build a humongous business because the only thing you could do with that traffic was monetize it. And the only place to monetize it at scale was Google. And the interesting thing now, to your point, Jason, is you can envisage a world where someone monetizes Chrome traffic via an ad-supported product. But there's also, you know, ChatGPT is the astonishing consumer subscription product. What is it, 20 million, like 700 million free users?

• 25:32Speaker 02

  20, 30 million paying consumer subscribers, I think is the numbers. That's a very profitable business where the weight limiting constraint looks like you're willing to sign up people, which means, which is why perplexity is smart. If you could get a billion people coming through your door, and if, you know, a billion of them were free users, and you have the same conversion rate as ChatGPT does, which is a leap, obviously, I doubt you would. But any kind of conversion, what's it, 20 over 70? That's about, that's about the 2% plus a little under 2%, which is what you see with Faiman. You know, if you get 1% or 2% converting into paid users, it's a compelling business. Suddenly Chrome matters, not because it got better, not because the browser is uniquely different, but because you can plug it into a machine. Now that can collect checks.

• 26:15Harry Stebbings?

  We're not talking about AI for normies. And this sounds incredibly condescending and patronizing, but AI for normal people. And normal people is kind of the the slow laggards to adopt. And what I mean by that is.

• 26:27Speaker 02

  For the record, normal people is not patronizing, but slow laggards is. So you might want to work. Yeah, I I'm willing to be normal. I prefer not to be slow, but keep going, Harry.

• 26:36Harry Stebbings?

  I'll I'll keep going with this. A great example of that is threads, something that we all deem in our circles to be like, who the fuck uses threads? Threads is actually a massive success. And what I what the reason I'm going there is because, yes, we all think ChatGPT is great and a massive hit. And seven hundred million is amazing. And yes, it is. That's unbelievably incredible and insane. I'm not doing a prior guess and saying it's not. But Gemini is great, actually, and it's getting better and better and better. And they will plug it into the core engine and the core distribution channel. And actually, for AI for normies, there's a real chance that they don't lose any market share.

• 27:13Speaker 02

  You're right. For a good slug of the population, there are going to be kinds of AI answers meets your need on Google and you're done. Yeah, Gemini as a model is actually apparently pretty damn good, even for coding. Someone was walking me through. So. Yeah, they're going to have market share. They're not going to roll over and die and the search reviews will go up. It's simply you've gone from a situation where you're the only game in town to a situation where these other guys are taking the civic and slug. So it's always better to be a monopolist than an oligopolist, but it's still pretty okay to be in oligopoly.

• 27:41Harry Stebbings?

  I do want to move to the insanely hot deal, guys, that really in Europe, like, was a talking point for everyone. N eight N. It was done at three billion dollars. And reportedly, it was at forty million A R, ending the year at eighty. Excel led the round. Massive. It was like, I think the last round was not too long, at three hundred or so, give or take. It's not a new company. It's a twenty nineteen company. How did you think about this?

• 28:08Speaker 02

  With envy. Let's start with that because in fact, we had talked to them in about 22 or 23. And you're right, what we clearly underestimated was, you know, workflow automation. It's a category, pre-AI, it's a category. We'd looked at a lot of players. It's a noisy one. You have all the way from RPA to process mining to kind of low code, no code. And this big indigestible mass of things where, you know, every, every solution blurs into the next one. It was just hard to know what's what and hard, and therefore hard to build a big compelling business, especially with lots of competition. And clearly they did a brilliant job of co-attaching to AI. Because when you go from automating workflows, so people in a very deterministic way,

• 28:51Speaker 02

  to actually getting more of the work done using AI, the value prop of your software goes way up. Instead of saying, you know, we're going to automate a little bit of shit. Now we're going to literally do the work and you can get rid of all these people that were doing the boring work. So they did, clearly did an excellent job of that. And in the space of, yeah, six, nine months, just massively accelerated. And, you know, well done them, you know, it just shows you got to stay on top of these things. Good on the guys. Highland, I think Europe did the last round. Good on them.

• 29:17Speaker 00

  As I've gone into vibe coding, right, deep, right? I've like reused Zapier so much. I've got to hook stuff up, right, without wanting to code it. And if any, NAN is a more developer version of that. So I'm having a Zapier Renaissance. But today, man, with the explosion of applications we're building and the explosion of things we want to connect with the AI, it's like an order of magnitude bigger. Maybe Rory, when you met them, you couldn't predict, right? It was hard to predict the accelerant that would happen. And it's probably in the last seven months, right, from the revenue, right? And then boom.

• 29:47Speaker 02

  You, you, you're right. And actually, how there are companies that you've tracked for a while that you mentally might be writing off. You can either decide it's not knowable, you bet randomly. You can try and track them just based on metric. Or the most logical thing, you sit down, you say, what areas will the model significantly impact in the next six, 12, 18 months? And what are the companies that could benefit from that? And then the second criteria, you've talked about this before, Jason, is it's all very well to say that there were probably 10 related workflow automation type. Companies, which one of them will get the prize? I tell you, it always comes down to the founder who gets it the most, gets it the quickest and just puts everyone in a room and says, no one's leaving till we're shipping and they'll enable version of this.

• 30:30Speaker 02

  And we're going to get it in front of 20 customers by Friday. You know, in retrospect, that was the aha here. They clearly had those elements. And if you tracked it, you'd have made a lot of money.

• 30:39Harry Stebbings?

  The thing that's really stuck out to me is index, index and making everyone feel like shit right now, in particular in Europe, Sequoia and Excel. Excel have to win, otherwise the gap widens more and more and more. And they won lovable. And now they're winning N A N at I think any price. It's a well priced deal.

• 31:00Speaker 00

  But they did that at Facebook back in the day when they were out of the game. They bid, I think, what did they pay for Facebook? Rory, maybe 200 million or something pre? 500 million free. They were insane. People said Excel was washed up and they had to bid up this fledgling social network.

• 31:15Harry Stebbings?

  I'm actually praising them. I'm not saying it's bad.

• 31:17Speaker 02

  You're saying the same thing. And look, if you pick right, no price is wrong.

• 31:20Harry Stebbings?

  I think, I do think there is a retaliatory element from Excel of, oh shit, we have to, and this is next.

• 31:27Speaker 02

  You know your European market better than me and maybe because they're smaller. I don't, humans are human. So that kind of, it's a bad way to try and make money. And it's hard because we're all prone to, you know, regret, formal decision of, you know, looking back at the decision. You'd like to think you just make every decision on the basis of, is it a good bet or not?

• 31:47Speaker 00

  I don't know what you think, Rory. This is what I was taught. I'm not a growth investor, right? If you're writing one of these checks, you believe it's a winner and you see a clear path to 5X. And you can deploy enough capital, you do the deal in a certain moment in time. So if they believe 5X with dilutions a lot, it's got to be worth a $20 billion company, right? Or lovable has got to be 20, they all got to be 20. But if you genuinely believe it and you overpay it and it keeps you in the game and it's for your brand, like, you know, and it's not your whole fund. It might not be worth the bet if you genuinely see a 5X. The growth run zone all have to be 10X or 500X, right?

• 32:21Speaker 02

  That is definitely true.

• 32:22Speaker 00

  It's why to overpay to get into a good deal where you're not in a space, but it's not insanity if you see your way to 5X, right? Just might not be a five X fund returner if that investment makes five X in a growth fund.

• 32:32Speaker 02

  There's actually two things to unpack there. One is the five X versus fund returner. You're exactly right. Growth investors typically, when they're looking at something, can say three to five X. And the interesting thing is that they'll say, and most of the time it's hard to go beyond that. And then by virtue of the power law, one in every ten does. It's just like, not the similar in a way. It's fractally similar to seed, but just when they're much bigger, it's harder to envisage, right? But the truth, I mean, I remember a face, a Facebook investor, an early Facebook investor said, you know, they'd bid another deal, they'd lost it. And they said they could see a three to five X from here. And obviously they made a hundred times their money. So yeah, you basically just operate on the power law and some of them turn into amazing, but you want to be able to say

• 33:13Speaker 02

  your base case is a three to five X. That's totally absolute. And that's the business they're in. Now you went from there halfway to the, halfway to the paragraph into some kind of, we should do it for brand or we need to be relevant. At that point, what you're really saying is I don't see a three to five X, but I'm just going to convince myself to do it. Cause I gotta be relevant. And the sad thing is sometimes that might be the right thing to do. When I recoil against it, perhaps wrongly, to be perfectly honest, maybe there are times when you should just do that. But it's just, it feels like, I remember when they teach you in Catholic school about sin and they'd say you start on little things and then it will just get worse and worse. It's saying, once you start doing deals not for return, does it just get worse and worse forever? So I don't love the, I won't make my return, but it's good for marketing school of investing.

• 33:58Speaker 02

  But I also recognize that sometimes you can say, ooh, I can squint and get a three X and it'll be good. And hey, sometimes you do what you do.

• 34:06Harry Stebbings?

  Do you know the funny thing is we have a like YOLO segment of our fund, which is like two million or three million, whatever. But it's basically, we have amazing access because of the shows and people will give us positions at high prices, but we get into amazing names and it's good for marketing and brand. It's seven X as a pool right now.

• 34:24Speaker 02

  No, it makes sense. It makes sense.

• 34:25Harry Stebbings?

  When we did it, we were like, this is total brand. Never.

• 34:29Speaker 00

  Yeah. But then you've been, it's great. And then, but then as you get later into the fund, you're like, well, so what?

• 34:37Speaker 00

  I got 12 X you'll make, I believe it, right? And then like, but it returns 5% of the fund is the problem, right?

• 34:43Speaker 02

  And I think that the other problem with that is the Machiavelli quote, which is, you know, I've used it before, that circumstances change and people, but people don't. And what works in one market doesn't work in another, right? That same strategy, when you look back in 21, it felt really sickly in 22, 23. It felt like, well, that wasn't the right strategy, be more careful. And then obviously, whenever you're a company of boom and you're leaning in, leaning in is the right strategy and it'll be the right strategy until pricing turns.

• 35:11Speaker 00

  This is super narrow niche. It has one small advantage, that strategy though, thinking back, because I accidentally did some of it pre-AI, right? It can get you early DPI in a fund. I accidentally did some of that. From my 2017 fund, I got about 20% of it back early from these early exits that had a nominal large value, right? And it doesn't matter at the end of the day so much, but you're going to hold some of your, your early stuff may take 15, 20, 35, 40 years to get liquid these days. So it's nice if you can get, get that early DPI, even if it doesn't matter too much in the long run.

• 35:45Harry Stebbings?

  Well, Jason, listen, you, me and you both are fortunate to have Horsey Bridge, who I think are one of the best of the best, and I love them dearly. But they've taught me really that venture is a very challenging asset class unless you take advantage of very small windows of hyper liquidity. And so where I, where I think about this is absolutely aligned to you. I'm leaning in, being very cognizant of when to lean out and being very aware that this will fall off a cliff, but I need to time it well.

• 36:11Speaker 02

  Yeah, I buy that. As I say, there's one year in seven where you make most of your money. And the one thing you don't want to find is you don't, you don't want to not have assets to sell when that year comes around.

• 36:21Speaker 00

  If you want to be a little cynical about venture, right? I do think in your earlier funds, it is like everyone on X talks about DPI, DPI. But you know, you don't want to sell your winners early. Like we, we've had that conversation too many times. And Horsey, you know, I had a conversation with Horsey. I had a winner, I had a chance to sell for Nora billion. And they're like, don't sell it, don't sell it at all. It's not enough of a return. But it is nice if you go out to raise your next fund and you've got some. Some DPI, right? So if Harry's little sliver is at 10x, and again, it's 10 or 20% of the fund, and you go out and it shows that this current fund is making progress versus all markups and no cash, it is cynical, right? Fundraising is just like founder fundraising for folks, for founders that are watching, listening. Like, you've got to put some points

• 37:06Speaker 00

  on the, it helps to put some points on the board, right? So it's not bad to have, to overturn some of your fund at a nominally very high IRR in multiple, even if the absolute number, if you squint, you're like, you know, that was only 11% of, all that together is only 11% of the fund, let alone a 1x of the fund, right? I think it helps.

• 37:25Harry Stebbings?

  It also does amazing things for relationship build with founders. When I look at a McCour, when I look at a perplexity, when I look at amazing business studies, honestly, me and Harvin chat a lot. Would we chat a lot if I hadn't have put a tiny check into the company? I don't think so, not as much. There's no tie that's enduring. And so I think it actually does outweigh, moving on, I do want, you guys are going to be exceptional on this. And it was nuts weak in terms of earnings in many respects. I want to start on Datadog. Wow. Best net new ARR quarter in company history, 260 million ARR in the quarter. Initial reaction, pretty positive. And the stock is down 10% in today and lower than before results. I

• 38:08Harry Stebbings?

  just couldn't get my head around this, guys, honestly. It seemed great and the market puked.

• 38:13Speaker 02

  One of the things that when you talk to CEOs of public companies, and you should do this thing, other than the obvious, you know, major beat, major miss, and we'll talk about one in a second, for all the middling things, if you talk to a lot of CEOs, and I remember we used to play this fun game on some of the boards where you'd know your numbers and you wouldn't know the market's reaction to those numbers, and you try and speculate. And at least half the time, you're wrong. It's actually a very fun game to pay on a public board. You have the earnings call internally, the internal thing, you look at the numbers and you say, okay, the stock's 32. When we announced these numbers, up or down and by how much? The error rate is massive. In other words, perfect information doesn't tell you.

• 38:55Speaker 02

  Shit, other than the obvious, when you miss by twenty percent or you beat by thirty, it's pretty obvious what to happen. But in the middle, it's very hit on this, which is the odd thing. I just offer that as a kind of a prelim comment. I remember watching my CEOs internalize that. So I actually, I've stopped worrying about it. Because remember, you know what you did relative to your budget. So you know how you feel as a board member or CEO of one in the company. They're comparing your numbers to two things. One, their internal estimate of what they thought you were going to do, which you have no visibility to. And then even more zanely, the Keynes quote, what they think everyone else thought you were going to do to try and figure out what happens. And if you look at Datadog, the stock went up in the aftermarket. In other words, people looked at it and said, oh shit, this is good stock up.

• 39:39Speaker 02

  Next day, it's like, oh, it's not good, go down. My big aha is it's like dealing with a deranged madman trying to estimate what the street will do. I spend no time on this. Utterly unknowable.

• 39:50Speaker 00

  So there's folks that are directly benefiting from the AI boom. They're selling AI products, N8N and others. Then there's folks that are benefiting because AI is exploding. So apparently OpenAI pays Datadog two hundred and forty million a year. So what's happening is, and I'll give you a very small example. Harry and I are both investors in a company called Revenue Cat that powers forty percent of all mobile subscriptions. Okay. And it is already, it, it, its usage has already doubled this year from when it ended last year, even though it's not an AI company. Neither of these are AI companies. But Revenue Cat's more extreme, but all the AI guys are using their products. So it's very exciting, but it also has concentration risk because there's, there's only so many of these large players, right?

• 40:33Speaker 00

  There's pricing pressure and OpenAI has already said they're going to renegotiate down the Datadog deal as they should, right? So there's folks that are exploding, not because they're AI, but because of the AI economy. But I, I'm not sure that's why the, that's why it's up, one of the reasons it's up. But there's also a fragility when you're indirectly benefiting from this. But obviously that's, you know, that's a lot of incremental revenue for Datadog. A two hundred and forty million dollar a year customers is high. But the incremental revenue and spend is from AI, right? If you want, if you're a B to B company, you gotta go get AI. AI revenue, right? Because you're not getting it from John Deere and the rest. They're spending the same.

• 41:11Speaker 02

  You in fact, probably a little. No, you're exactly right. Because that's the meta point, zooming out from this, right? Is that, I mean, you've seen the data, almost the entire GDP growth is AI capex. So if you can coattach, even if you're not AI capex, if you're not Nvidia, if you're not, if you can just coattach to the money, you're going to get a pop. Now, it may not last, but yeah, the spend is happening there. That's where all the capex is going. So it's literally, I always think of what is the bill of materials to build AI? If I wake up tomorrow morning and said, I want to be safe superintelligence, I want to build me one of those LLM models. You just make a list of the things you need. You need chips, you need a data center, you need power, you need some quotas. And then you're right, it's all the little things. I need to keep this up and running. I probably need data dog.

• 41:53Speaker 02

  I need, you know, what all the other software tools to make it happen. And if you just coattach to that, it's showing up now, but I think is the productivity is not showing up, the revenue is not showing up at the app level, but the capex is showing up in the GDP numbers. It's so big. So you're exactly right. If you can get your piece of that, then I'd prefer to have it than not. I mean, people are saying, oh, it's a bad $120 million concentrated risk customer. It's a downside better than not having that $120 million customer.

• 42:20Harry Stebbings?

  Is this a gift or a curse? And forgive me for my naivety, but the concentrated risk of 260, yeah. And if OpenAI continues its trajectory, it'll be 520 in a year's time.

• 42:30Speaker 02

  Whatever. And yes, it's a gift. We agree. I think both of us are saying the same thing, Harry, which is the people who are worrying about, that's why you're getting into the second order derivative thing. The people trying to value the stock, they're not just saying, I mean, if you were the operator, you would be coming into your board and you're saying, we killed it this quarter. We signed a $100 million ARR deal with the most exciting company on the planet. It's fricking amazing. End of conversation. And no one is going to say, oh, I'm really worried that they might kind of reduce the price in two years. That's bad. They'd be like, dude, we're so happy. And as a board member, I would be too. You know, Wall Street, as I say, it has this different role, which is not just guessing what you are now, but guessing, you know, how you're going to be compared to what they thought you were going to be. And, you know, they're paid to second guess themselves.

• 43:14Speaker 02

  As I say, my best advice is ignore it. Maybe two years' time, you'll be dealing with a renegotiation. But as you point out, maybe you'll be dealing with the fact that OpenAI is growing so quickly that the contract has doubled and they don't have the engineers to waste. I'm kind of engineering you out and you just take the check.

• 43:29Harry Stebbings?

  Are we just seeing like big ish tech just win like just invest in big ish tech? And what I mean by that is like app loving crushed, you know, HubSpot gains Shopify are ripping. Palantir obviously ripping. These are not mag seven quite. They're great companies. They're not mag. Be long big ish tech. The whole AI wave is mega.

• 43:49Speaker 02

  That's true. I mean, I'd say I think there's maybe two things going on. One is the AI wave is mega. And I think definitely Palantir, probably Data Dog. Not so much I would argue HubSpot and Shopify benefiting from that. But then the second thing is, you know, rather than this whole, oh, my God, SaaS is dead thing. I think what you're saying is, and I think it's correct, is that these markets are big and huge. And if you're the winner and you're public and you've got scale and you execute well, add a little AI, you can defend your position, grow nicely, kick off a ton of cash. I wouldn't like to be a little startup trying to enter the HubSpot space or the Shopify space. But the death of SaaS has been overdone for the public market winners,

• 44:30Speaker 02

  which is a very different thing than saying you'd want to invest in, quote, the next Shopify at a billion in revenue. No, these guys, they have clear market leadership positions. They, on every case, have strong founder CEOs. They have profitability. And yeah, the growth re-acceleration this quarter has been pretty real across the board. As I said, I'd put HubSpot, if I was to rank them in terms of their AI, HubSpot and Shopify are in that, yeah, they're using AI, but they're not direct beneficiaries. And Data Dog in the middle because they got a big ass contract from the biggest company in AI. So they're kind of caught that. And then obviously Palantir, white hot in terms of their AI story. They have brilliantly become the way large corporate America implements AI at scale. It's a beautiful position.

• 45:13Harry Stebbings?

  Can you guys help me on Palantir? I always look at it and I go, amazing company, but oh my God, look at it. It's so overpriced. And every time I do that, I'm proved wrong and it goes again. How do you think about that? And legitimately, how would you advise me? I love these shows because I learned from you both.

• 45:31Speaker 00

  I mean, Jesus, I mean, the growth is frigging breathtaking. It goes from 12% growth at about 2 billion revenue in 2023 to almost 45% growth at 4 billion in ARR. Goodness, I mean, this has never happened. Forget about the fuel, right? The secular fuel, the contracts are getting bigger. Record number of 5 million and up contracts. The fact that they are the AI solution for both commercial and military. If you, if I didn't even know how to spell Palantir or what it did, which I think most people didn't even know until 12 months ago, what it did. When you see going from 12% growth for a public company at billions in revenue in 2023 to almost 50 today. I mean, maybe Rory can come up with an example.

• 46:13Speaker 00

  I don't think in enterprise software, we've ever seen that level of re-acceleration ever. You can either say it's going to decay like all curves do, or you can say, good God, this is my, you know, everyone in the public markets, they're 10 baggers. That's what, that's what my social media is full of. What's your 10 bagger, Rory? What's your, what's your 10 bagger? And it's this, you know, the chart keeps going. This is unprecedented in enterprise software.

• 46:33Speaker 02

  Across 20 years, about only one in three companies re-accelerates for one year. And about one in nine, one in 10, we accelerates for two years. So that's just the data.

• 46:43Speaker 00

  That's daunting.

• 46:45Speaker 02

  And these guys have re-accelerated significantly at scale for two plus years already. So I can see how you can build a model. If you go from 12 to 23 to 45, you're right. The next question is, do you fill in 55 or do you fill in decay at that point in time? And the problem is any exponential curve up can justify almost any valuation. I mean, my gut, Harry, is your instincts are right, which is it's an amazing company smack in the middle of two huge trends. We'll come back to them in a second. At the same time, 120 times revenues plus or minus is probably not sustainable. I mean, I saw the data, it looks like it was a good statistic. Someone says five years of 40% to 50% growth.

• 47:28Speaker 02

  And then they'll be valued about the same in terms of a revenue model as Google is today. And you know, you can have two responses to that fact. Says, oh, my God, five years where you got to pull it off. That's a lot. And then you gotta go, it's not crazy. I would be terrified of buying at that price. But the interesting thing about that calculation was you go, oh, yeah, it's the beauty of compounding. Five years times 1.5, you just ended up in an amazing place. Now, I haven't checked that math fully. So that's kind of, I mean, it does feel incredibly lofty at scale. I mean, there's that great Scott McNeely quote about trading at 10x revenues, where he just, you know, walks through how absurd it all is. When Sun was trading at 10x revenues in 99. And every once in a while, you should reread that quote because he was totally correct and it went in tears.

• 48:09Speaker 02

  So intuitively, 122x revenues is not a sustainable place. But, yeah, they got three huge trends on their side. They're the AI solution for large corporates. They are the AI solution for defense, which is having a boom. And they got the administration on their side.

• 48:26Speaker 00

  Just this last quarter, they closed 843 in US commercial bookings outside of, up 222%. So help me with the math, 222% at 843 million. I mean, this is, this isn't quite lovable growth, but this is pretty good.

• 48:40Speaker 02

  And this was

• 48:41Speaker 00

  222% at 843 million, their commercial division.

• 48:44Speaker 02

  And you've got to, again, step back and give credit to the founders and obviously feel and look at in 2000, I think it was 03 or 04, with a sense of mission around 9/11, built this stuff, then moved into commercial. It was a slog for a while. Some of the early commercial customers weren't wildly successful. But they've ended up now whereby, one of the things you figure out is when big companies want to do big things with a project like this, it's not the kind of thing you can give to, you know, little SaaS companies just starting out. Big companies need to spend big initiatives with big vendors. And the point is, all the other big vendors are old and stodgy like IBM and Accenture. And now you can have these dudes who've been, you know, working for the US government. They've got the whole forward deployed shtick.

• 49:26Speaker 02

  I see how it's working because corporate, I mean, I went through the last earnings and actually went through a bunch of the use cases in corporate and it's all over the place. You have supply chain planning, scheduling for an airline. It's a whole bunch of very different stuff. And a single SaaS app couldn't do that. But what they have is a platform that's been around Ten or fifteen years, they have another platform they've added around enabling L L Ms. And take that, take the four deployed engineers. You can squint and say a lot of its services, but who the hell cares? The margins are fifty percent. And the reason they can get it is they can look the C E O or the C F O of a Fortune one hundred company in the eye and say, we've done ten of these. You give us the ten million dollars, we'll get this puppy done.

• 50:10Speaker 02

  The other two competition is a little staff startup that says we have a hundred thousand dollar product that's way more efficient than Palantir. It'll work, but it'll need a lot of work. And they're like, oh, don't know about that. And the other competition is Accenture saying we're going to build it from scratch. They're just in that sweet spot of they can make the pain go. You you can get your A I initiative as the C E O of a large corporate company. You give them ten million dollars, you got your A I initiative, they'll probably get it done. It's a golden place for the next couple of years.

• 50:37Speaker 00

  You know what the other crazy thing about Palantir is? I thought this was fascinating with Alex Karp. So they're a rule of ninety four company today, right? Pretty good. So he said, I mean, he's he's on fire. Just watch his body language. He knows they're they're going to crush it, right? But he said that when they will, they will be when they're ten X bigger, so at forty billion, they'll have ten percent less employees than today. And they're already on the trend of that. And I think when we, there's a meta point, I don't, you know, maybe, maybe needs a few more, but I think this has been well thought through. And this, this is a hint of the future in Palantir, right? This efficiency level, Microsoft has already reached peak employee, right? Google's already reached peak employee, but Alex Karp going on record saying at forty billion in revenue, ten times, we will have ten percent less employees.

• 51:21Speaker 00

  I think it's the journey we're all kind of on, but he's, he's out there because he doesn't give a rat's ass what anyone thinks in his farm in Vermont in sandals crushing the numbers, right? But to me, this is the future of B two B companies just trying to get to this massive, massive scale with few humans.

• 51:37Speaker 02

  Yeah, I wouldn't pencil into my model, but it doesn't matter because as you point out, ten fifty percent operating margins today, don't bother getting more efficient just scale. So.

• 51:46Speaker 00

  He's not doing it, obviously, directly for the margins, right? But it's, it's how to structure the company. But this may be where the future is like he just, he's just so, he's so. Far ahead, he can make these visions and bets, right? And not not be hiding in 7% growth, you know, as as some others. I just thought that's the future. I think this age of these bloated companies is just insane. What you talk about Shopify. Shopify is at 1.3 million in revenue per employee now, and it's reaccelerated and it's reaccelerated. I don't think it has. We could talk about Shopify if you want, but the efficiency at Shopify is not a palantir, but it's breathtaking. The efficiency. Toby's ruthless on this and founders should be too. Founders should be ruthless on this. You don't need half your company and Palantir and Shopify

• 52:29Speaker 00

  are proving it. You don't need half your company. You literally don't need half the people working at your company. You don't need them today.

• 52:34Harry Stebbings?

  I'm glad that half isn't listening to this show.

• 52:37Speaker 00

  Work hard, work harder, learn your product. Ask yourself, are you actually valuable to your company? Be honest. Not just are you a people person? What what are you doing at your company where you're irreplaceable? It's not that you're going to get fired or anything. You did. I mean, maybe moved out. It's just your future is uncertain if you're not irreplaceable. It's just uncertain. You're not getting fired. How are you just getting moved out?

• 52:57Harry Stebbings?

  Oh, there we go. I it might be slightly hard to move me out, Rory. I feel slight protective layer around me, but there's.

• 53:04Speaker 00

  Yeah, but your team should be uncertain. You may not need them for investing or content production in two years. You may not need anyone else helping you to invest. I was more giving Jason a hard time.

• 53:12Harry Stebbings?

  This is an interesting question. Do you want your team to feel uncertain? Do I want my team to be scared that they might lose their job? Now, in one hand, forces them to find the irreplaceability of their roles, and it also can make some people uncomfortable, horribly uncomfortable, scared. It's not a nice thing.

• 53:30Speaker 00

  Yep. My learning is it doesn't matter anymore. There's so much uncertainty out like we coddled people for since 2020, like since since the middle of 2020, and then we coddled them like there was no tomorrow until early 2022. Take three jobs, work two days from home. Life is easy. Like, take care of yourself. And if you can come to work, but take care of yourself, everybody. Shopify had twice as many employees at the peak as it has today. Shopify, forget about them, twice as many. And Toby was was telling everybody to to relax, guys, in in late 2020. Take it easy, guys. The commerce will come. Now he's friggin ruthless. Isn't he? He's ruthless, Zuck's ruthless, Carp's ruthless. And if you think you're gonna win in B2B,

• 54:11Speaker 00

  if you're not ruthless, you're gonna lose. So I don't think you should scare people. I don't think you should tell people, hey, if you don't step up, your job's over. I actually think that's a dated approach. Just step up and they'll quit. I'll give you a small example if you want this interesting. They'll just quit. There's a tool, for example, that we use. We use 10 AIs now at Saster, up from zero at the start of the year. Okay. But one is a niche tool called momentum.io. Okay? It's a cool startup where you should do the next round if you can, maybe. And it basically mashes up everything, Gong, Granola, everything, so that you have real time insights to everything your sales team's doing. Okay? Oh, I turned down that pre-seed. Is it good? It's a good product. It's a good product. It's not perfect, but um, here's my point. Here's what's interesting.

• 54:53Speaker 00

  It's not that any, it's like a lot of AI products. It's not that any individual component's all that interesting. It's how it synthesizes it elegant through AI. But I'll tell you, every company, and I got turned on to it then through Kyle Norton at Owner, and I've brought it into other companies. Every single time it's been brought in, someone on the sales team has quit the first day. Quit every single time they quit the first day, including on our little Saster team, someone quit in the day we brought it in. He quit that afternoon because the gig was up. The gig was up. And so that's why, Harry, I don't know if it matters whether you prepare the team, because there's gonna be so much AI around us, the gig's gonna be up one way or another. If you're not productive, if you were too busy to get the podcast out this week, if Harry had to do it himself, if you forgot to do the TikToks,

• 55:37Speaker 00

  the gig's gonna be up across tech. So you don't have to coddle people or scare them, I think. They're just gonna get a report every day that, you know, you didn't push out enough code at Shopify, you're gonna get pushed out.

• 55:48Speaker 02

  I'm gonna go back to the scared thing. And I've been thinking about it a lot, right? As you've mentioned that. Because it's always funny, Harry, we start off with a prepared script, and then you just take a so off script, buddy. And I haven't spent any time thinking about this until you asked about it. And there's a couple of different categories. I don't think it's great for society if everybody's scared all the time. At the kind of level of, there are jobs where, once upon a time, I went to manufacturing company, right? And, you know, at that level, the blue collar jobs are pretty interchangeable. If it doesn't work out in employer A, you can go down the street to employer B. I think it's good that the mass of people don't live in terror of, you know, not being able to put food on the table. There's a whole bunch of jobs where it might work out with this employer, but I can get roughly the same wage from another employer.

• 56:32Speaker 02

  So I gotta follow the rules and work hard, but I'm not sitting there every day terrified. But what you're talking about, so that's one category. And frankly, most of the people have those kind of jobs. I mean, I don't want my teacher to teach my kids in Nashville to be terrified. They should know that if it doesn't work out in this school, they can go somewhere else. That's most jobs, but there's two categories, maybe it's only one here is if you're holding down a well-paid to extraordinarily well-paid job and in an entrepreneurial, in an entrepreneurial company. And let's be frank, anyone getting paid a hundred million over four years at Meta is extraordinarily well-paid. If you're pulling down those kinds of salaries, if you're an entrepreneurial company, you should be afraid.

• 57:11Harry Stebbings?

  But ironically, this doesn't affect any of those. This affects the hundred grand a year marketer. This affects the hundred grand a year SDR, which is, I'm not saying a hundred grand.

• 57:20Speaker 00

  Yeah, they're gonna be out of jobs, man.

• 57:21Harry Stebbings?

  But it's them that it affects, not the hundred million.

• 57:24Speaker 02

  Yeah, and the point, the good thing about the hundred grand a year person is there are other white collar jobs at a hundred grand. I'm gonna say this, I think I'm a compassionate person. If I thought that hundred grand person, their next best option was twenty grand, I'd feel real empathy for them. But if you know, if you got a hundred grand a year job that's gonna be automated and your next best job is ninety five K doing something else. That's life. That's American capitalism. Get over it. I mean, you should feel the need to hustle there. I don't think that's called fear. You understand me? You're putting on a weird face like as if you disagree. You think that.

• 57:55Harry Stebbings?

  Well, no, I just think there's like a generation of twenty three to thirty year olds who aren't really masters of the craft in any way. Don't really know what they want to do. And so they're doing SDRs or marketing and they're about to get a train hit them in the face. And they're gonna go, oh shit.

• 58:11Speaker 00

  Well, let me give you, let me just give you a quantitative version of it.

• 58:14Speaker 02

  But they'll pick themselves up and keep going because you're young, you've got a good education, you know, yeah, it'll be a little bit hard.

• 58:20Speaker 00

  Now they're checking out. Um, just to pull the numbers, because Toby, Toby did do the night, the, the black and white at Shopify. Okay, let's look at Shopify for a minute. From peak employee was in, was 2022, 11,600 employees at Shopify. Since then, revenue has grown 91%, pretty impressive for a company at 11 billion revenue, and employees have gone down from 11,600 to 8100, gone down while revenue is up 91%. So I'm sorry if like Toby in that was early on this, he went not, he went into beast mode. Okay. And he destroyed the competition. Big commerce doesn't exist. WooCommerce doesn't exist anymore. Um, Amazon was never a threat, even though it wasn't direct competitor. He went into beast mode and he just got there

• 59:04Speaker 00

  earlier than the, the cracked kids in San Francisco. He just got there earlier and Shopify is doing 91% more revenue with 30% fewer employees. And if you want to fight that, like people would say I was toxic or it was hurting their feelings a couple of months ago on LinkedIn. I'm like, I'm trying to help you. You want to be one of the 8100 at Shopify or not? You got to decide because you can't leave work at three o'clock to get your salad and go and go work out. It's just not going to work. You're never going to learn the product. And even worse, you're never going to beat the AI that knows your product cold. This is the common reckoning for these people is that the AI knows this, every Shopify feature and every Shopify, every AI, the Shopify merchant knows the products better than the humans.

• 59:47Speaker 00

  AI is smarter than most humans. Pre AGI, it is smarter. Have you ever talked to an SDR that even understands the product they sell? Any 22 year old? Like once in my career, if I talk to a 22 year old SDR that knows the product better than me, it's worse with AI. These people are gone. Shopify is going to be at 7,000 to 200% bigger. You got to adjust. The Shopify numbers are stunning. If you think about it, isn't it 30% employer reduction, 91% revenue growth, and it's just starting. It's just starting. And that is before all the AI mandates went out, right? It's concurrent, but it started before everyone, everyone in tech is now, before you replace someone, find an AI first, aren't they? It's become the mantra. So it's going to accelerate.

• 1:00:26Speaker 02

  And I think that we, but I'm going back to the scared comment, because it's funny, I sound like I'm arguing, but I'm I'm actually great. I think my guess is that person's paying a hundred grand, maybe they only get eighty, but whatever. I I love this sponsor. The thing you should be scared about is you are, and you should be scared is if you're on board something like Shopify, what you've really lost there is the opportunity to participate in four years of equity that could have made you four million bucks, right? That's where fear, anyone who's in the kind of, I'm scared every day because you should never take your job for granted, especially if you're in the kind of job you can make millions of dollars if you do it well. And I think that's the level at which you can be scared. And those folks, they should have been scared, I think, not because they went for the hundred grand a year job. I'm just trying to think of the equity that they are.

• 1:01:07Harry Stebbings?

  I get you, Roy, that the opportunity cost on the upside of the equity is insanely real. But having come from some, a family that's lost everything, I worry about downside. Quite frankly, I don't think there's a ton of employers that are queuing up for a twenty-three to thirty-year-old grad from a mid-university that's not a specialist in anything in a world of AI cost-cutting and economic questionability.

• 1:01:30Speaker 00

  No, no one wants to hire them. No one wants to hire them.

• 1:01:33Speaker 02

  They'll have to suck it up and learn to do different things, but to a rounding hour, they'll be fine. I mean, if you look at the graduate, the anecdotes are there, but, and it is higher than it's been, but I'm not going to cry for someone in their twenties who has to adopt. It's a very different feeling. The kind of fear someone feels at fifty-five, when their job as a fill-in-the-blank could go and they've got nothing ahead of them for ten years, that's fear. Right? And I've seen that kind of fear too, right?

• 1:01:59Speaker 00

  It's gonna grow.

• 1:02:00Speaker 02

  With all due respect, you're right. I think we're actually hitting the end, saying the same thing. You're probably overpaid. You could probably get another job. It won't be as good. It won't have the equity upside.

• 1:02:09Speaker 00

  You're not even gonna get another job.

• 1:02:10Speaker 02

  They they will. They'll be fine.

• 1:02:11Speaker 00

  Until maybe eighteen months ago, if any seasoned B two B executive that I knew needed a job, okay, that I knew reasonably well, I'd get him a job by an email. I could reach out to someone, not even to my portfolio, extended network, founders I met that I knew, met on Twenty VC, I could get them the job. Today, odds like are ten percent I can get them a job. One, the fire's not there. Two, they're not willing to be cracked. Three, they're not willing to come to the office. Four, they don't know the AI tools. I can't get them a job anymore.

• 1:02:38Speaker 02

  You're interesting, but you're jumping. Are you talking about the fifth? 50 year old guy or the 20

• 1:02:41Speaker 00

  Yeah, now I'm talking about 38, 35 to 55 to 95.

• 1:02:45Speaker 02

  No, those folks.

• 1:02:46Speaker 00

  I can't find them any jobs, the veterans.

• 1:02:48Speaker 02

  And I totally

• 1:02:50Speaker 00

  Not a single job. I say go to Cisco before Cisco realizes they don't need you.

• 1:02:54Harry Stebbings?

  The thing I love about these shows is learning from you. I learn from you on Palantir. I don't fricking get monday.com has a good quarter. It's down 30%. What?

• 1:03:04Speaker 00

  Well, Rory may have a more nuanced view on this one. I mean, I know the Shopify data and Palantir. I think Monday is actually the one that should worry us more as investors, right? Which is that Monday was priced to perfection, but growing to perfection. I don't think it's this quarter. It's that they're, it came, came up a little soft and where they thought the growth would be, but it's still elite. The bar, this 50% at 500 million AR and never missing a quarter and keeping it going. We throw around all these numbers that schmovable and lovable and N A N, but man, the bar's high. That's the only reminder to me is like, you know, just the expectations are so high today for the top performers. That the ones that have those outline revenue multiples, it's just so high.

• 1:03:46Harry Stebbings?

  Rory, I'll give you an unfair question because you love unfair questions. Data, dog, HubSpot, Palantir and Shopify rank one through four on what you'd buy.

• 1:03:56Speaker 02

  I hate giving advice where I don't feel informed.

• 1:03:59Speaker 00

  I can give you a guess if you want, while Rory thinks about it.

• 1:04:03Harry Stebbings?

  That's what I love, Jase.

• 1:04:05Speaker 00

  I'm gonna, I'm gonna take Shopify. It is gaining market share at scale. Palantir is growing at scale and maybe it's gaining, you know, it is gaining a certain type of market. It's dominating government contracts. Don't get me wrong. So some people could criticize me for being simplistic, but e-commerce, commerce is the biggest part of our economy, right? Even bigger than, than, than the enterprise. Rory's got the numbers and the fact that they continue to gain share is breathtaking. What if Shopify has 80% market share and the economy is 80% e-commerce? Like, help me do the math, right? Versus 13% of all commerce already goes through Shopify, right? And it has essentially 90% of the platform market share. So platform lock-in, even in today's AI world is kind of exciting, isn't it?

• 1:04:50Speaker 00

  It's kind of exciting to have lock in.

• 1:04:53Speaker 02

  I buy your decision. I don't buy your logic. And let me tell you what I mean by that. You know, if they're all being bought in the same revenue multiple, I think the Palantir opportunity in terms of gross margin dollars is way bigger.

• 1:05:04Speaker 00

  I was comparing 108x ARR to 17.9.

• 1:05:08Speaker 02

  Exactly right. That's what I was going to say.

• 1:05:11Speaker 00

  That wasn't, that was implicit in my analysis.

• 1:05:13Speaker 02

  No, that's, and that's where it gets, that's exactly right. Cause you have to say to yourself, and that's why I apologize, because you got to say to yourself, a VC would say, and this is perhaps the difference between the question of these, if you were to rank the size of the opportunity from here. I, I think it would probably would be Palantir, Shopify, and then the other two is really top of the tier SaaS companies. And that's pretty obvious and straightforward.

• 1:05:34Harry Stebbings?

  You'd have Palantir one, even with the enterprise.

• 1:05:37Speaker 02

  And that's a size of the opportunity, not valuation. And please don't miss coffee. But yes, because yes, shop commerce is huge, but gross margin dollars, the ability to sell five million dollar projects to enterprise to, quote unquote, implement AI just strikes me as a wonderful place to be for the next five or 10 years. In a way that while Shopify is huge, you know, you do have, it's a more mature market. Palantir are on the white heat of this is new, this is exciting and we have it, no one else does. Which is where, you know, Shopify, Datadog and HubSpot were five, 10 years ago. But what I can't do in my head and I'm not going to do, because I'm not, is as Jason says, how do you adjust that for the fact that the market is well aware of this issue when it's trading in 120 versus 18?

• 1:06:21Speaker 02

  What's, what are the other two trading at? I know Data Dog is 15x revenue and then I haven't checked out for a while.

• 1:06:27Speaker 00

  Here's the brutal one, Monday, which we talked about, off the charts, good, right? After the correction, 8.4x ARR.

• 1:06:33Harry Stebbings?

  Dude, I bought the shit out of it. I'm going to be honest.

• 1:06:36Speaker 00

  I know, but, but, but think about how many companies do we have in our portfolios that are not as good as Monday? That may be priced around higher than 8.4x ARR. It just Monday is the one it's kind of soul crushing. It's like, you sure your portfolio is so good if it's trading at 8.4x, right? It's a that's a tough compression to go down there, isn't it?

• 1:06:56Speaker 02

  When the growth dies, all these businesses become very uncompelling. Yeah, in terms of valuation, you're exactly right, Jason. And that's why you have to be just growth bigots all the way on these deals because yeah, once they flatten out, it's four to five times, if you're lucky.

• 1:07:13Speaker 00

  Yeah, but even they're still at almost 30% growth. It's just we're too optimistic about our portfolio companies compared to Monday.

• 1:07:20Speaker 02

  For 20 years, up until 20 probably 2019, the median SaaS multiple was 6.3 ish and the median growth rate was almost 30%. And now the median multiple is closer to six again. The growth rate's 20, but the profitability is more. But yeah, I mean, for the longest time, it was you only got six X for 30%.

• 1:07:39Harry Stebbings?

  Well done, Rory. I think you did an amazing job there articulating the four. You have Palantir one, Shopify two, Datadog three, and HubSpot four.

• 1:07:45Speaker 02

  That's not what I did.

• 1:07:46Harry Stebbings?

  I think it is.

• 1:07:48Speaker 02

  I said in terms of opportunity, you're such a uncredible jerk.

• 1:07:51Harry Stebbings?

  I think it is.

• 1:07:52Speaker 02

  I did not say that. And if you say that, I did not say that. I said in terms of unpenetrable.

• 1:07:58Harry Stebbings?

  We're going to title this Rory's Public Leaderboard with your face.

• 1:08:02Speaker 02

  I look forward to seeing the new guest on your next show, Harry.

• 1:08:06Harry Stebbings?

  Mark Benioff is coming. He's and he wants to hang out with you, Rory.

• 1:08:11Speaker 02

  Well, then you have to be nicer to me.

• 1:08:13Harry Stebbings?

  Oh, I'm gonna be nice to you. Do you know what's amazing? After last show, Cliff from Canva, done. What do you call them? Arvin from Perplexity, done. Jeff from Twilio, done. Mark Benioff, done. All wanting to come on the show. All fans.

• 1:08:28Speaker 02

  Little do they know that when you come on, you just get asked stinker questions where you have one of your most successful CEOs in the mix and you're just a jerk, Harry.

• 1:08:38Harry Stebbings?

  Guys, we mentioned that, like, actually, where is the upside and where's the opportunity? Carter's state of VC Q2 2025 came out. Couple of things I want to dig in on and then we'll wrap, but highest valuations ever for CNA. And it goes back to what we said there about actually comparing to Monday. How do we feel about risk adjusted where dollars are best? And how do you feel when you see highest valuations ever for seed and A? Do you see that reflected in your daily work?

• 1:09:06Speaker 00

  But the card of data and everyone else's data also says there's fewer seed rounds been done than 12 months ago and 24 months ago. Everyone that doesn't read the stuff, founders, especially Bitcoin, there's fewer deals being done. And it's worse than that because the deals are very specific. Forget about the breathtaking growth of AI native leaders. It makes sense if you're concentrating into winners, this would happen. We're also just concentrating into winners across the board. It's not just 10 deals for 40% of dollars. It's everywhere we're seeing concentration.

• 1:09:34Speaker 02

  Agree, and that to me was the much more interesting point, the concentration in late stage rounds. It's called a vanguard, don't worry, it's fine. The leader will comment. The concentration in late stage rounds is just amazing. We run an internal process. We look at every deal done, we look at the total dollars we do every quarter. For the last couple of quarters, we've literally had to back out one or two deals because they just make the statistics so weird. Like in Q1, the deals we forecast in total, you know, deals in our sweet spot, enterprise B2B, telephone, total, I think $12 billion in total dollars raised. OpenAI raised 40 in the same period. It's just like twice our entire addressable market for us and 100 other A and B firms was done in one deal. That's a huge level of concentration.

• 1:10:19Speaker 02

  Same thing in, you know, Q2, I mean, you have, interestingly enough, in some deals, Meta gets reported as an investment in scale AI because they quote, put the money in, you know? So in theory, it's a venture vest, which is absurd, but you have big rounds for Entropic, X dot AI, where literally, yeah, your entire sector is smaller than one round at the super late stage. You know, I've seen concentration, but never to that extent. It's.

• 1:10:42Speaker 00

  Concentration is unprecedented, right? It just is what it is.

• 1:10:45Harry Stebbings?

  Is that a momentary element of time where we are in the cycle? Or is that going to be a continuing feature of a new age of venture and technology?

• 1:10:54Speaker 02

  It's probably not going to complete, look, it's not going to go back completely to where it was. Do I think there's going to be a $40 billion round every second Monday? No, but there's no doubt, I mean, there's a couple of industries now that are now appear to be venture. Accessible that are fairly capital intensive, obviously L L M model creation, obviously a lot of defense. So there does appear to be a higher propensity to do more capital intensive industries. That's one thing. And then the second thing is the more you stay private for longer, the more this becomes a phenomenon. It's the effect of holding them longer means they become bigger companies, bigger companies just to run their balance sheet. You know, you can, if you're running a hundred million dollar revenue company, you can have twenty million bucks on your balance sheet, cash for positive your fine.

• 1:11:36Speaker 02

  If you're running a ten billion dollar company, even if you're profitable, you probably need a couple billion bucks on the balance sheet just to manage fluctuations. So as these companies stay private for longer, there's going to continue to be this steady stream of fairly humongous later stage financings. You know, and as I say, and then add to that the nature of the businesses, the, the model companies, the defense companies are, you know, capital hounds in a way that SaaS or consumer internet even wasn't. So yeah, I think it's maybe not as pronounced as now, but it ain't going back to everything with A's, B's and C's and nothing be more than a hundred million dollar raise.

• 1:12:09Speaker 00

  It ain't going back and everyone that wants to go back or give that dated advice. We had Brian, Brian Halligan was so good right before. If, if folks that got this far and haven't watched him, that was S tier. Go watch that one. And his point was when he's talking with Squay, he's like, at best, half of what I learned at HubSpot matters today. It's true in venture, right? We're not going back. The A I is so much bigger than cloud and so different. And unless the LPs cut off the, uh, the valve, we're not going back to the old venture.

• 1:12:35Speaker 02

  You know, has been a good fact for the large firms. The synchronicity of people having a lot of money, putting it out in lots of deals in twenty twenty one, that not working. I might even have guessed that the next stage of the movie was kind of real retrenchment on those firms. You know, you'd seen that doing a hundred deals at ten billion per didn't work and maybe you can't deploy that much capital. But along come this crop of extraordinarily good companies like, you know, but I like in Tropic, where you can deploy large amounts of capital. I, I think it really has provided justification for the opportunity for those larger funds to say, hey, look, you can put a billion dollars to work in two or three model companies and All will have thought and ventures, oh my God, there's no diversification. That's terrifying.

• 1:13:20Speaker 02

  And it's not our business, but I can totally see talking to an LP and saying this is the only way to access that risk. If you want to access that risk, you need this vehicle and that's why they exist. It's been marvelous for them.

• 1:13:32Harry Stebbings?

  We're going to do a Kaochi quick fire. Kaochi is obviously this prediction marketplace bets on cool, real life things. Uh, I'm going to create my own first one and following our conversation because I really want to. Palantir over or under five year market cap, two trillion. Its current market cap is circa four fifty, five years from today. So that would be in twenty thirty.

• 1:13:54Speaker 02

  I love the company and I they've exceeded all expectations. I just think compounding to two trillion from here is pretty damn hard. So I'm a no.

• 1:14:03Harry Stebbings?

  Jason.

• 1:14:04Speaker 00

  I'm pretty decisive. I'm just comparing that to Salesforce. Salesforce had forty billion worth two hundred and twenty two billion. And now I'm feeling gravity when I'm looking, literally, I'm looking at the number one and number two by market cap. It's, you know, Palantir is worth almost twice as much as Salesforce as we write this and Salesforce is number two, right at forty billion. So the AI is bigger than cloud. So that's the reason it's going to happen. But I'm worried about a gravity when Salesforce is only worth two hundred and twenty two billion as we record this. So I want to take this bet, but I'm going to go the, I'm going to go the under.

• 1:14:35Harry Stebbings?

  Okay, we've got when will Stripe officially announce an IPO before June first twenty seven or after?

• 1:14:43Speaker 02

  The correct response is doesn't matter anymore. I mean, they're so post-public, I don't know. It trades all the time. I mean, yeah, I'm sorry. I mean, the cash flow positive, widely so, they're just doing their thing.

• 1:14:56Harry Stebbings?

  But do you think they will go public in the next two years?

• 1:14:58Speaker 02

  If the cost of capital gets markedly cheaper in the public markets, then maybe. But they seem to be more resistant than most and there's nothing going to make them do it because they're they're strongly cash flow positive at huge scale and there's liquidity. So the truth is it's an idiosyncratic bet and the colleagues haven't shared their opinion with me. So hell, I don't know.

• 1:15:18Harry Stebbings?

  Very honest. Thank you, Roy. You're not, you're not chatting to them in an Irish WhatsApp group.

• 1:15:23Speaker 00

  Over, over a beer in the studio.

• 1:15:25Harry Stebbings?

  Over a cheeky pint with Dario. That was a very, very important sign, I thought. One of the best fintech founders in the world is a moderator to Dario. I just thought it was ironic. Ten years ago, people were like, Harry, media will never work for you, dude. Just to let you know, it's not a thing.

• 1:15:42Speaker 02

  True. I think days for a while, I think Stripe do a super interesting job in media with the publishing and all that. They're just more than most companies. There's an intellectual curiosity there, which I find the most attractive thing about that company.

• 1:15:54Harry Stebbings?

  I totally agree. No, I meant it as a compliment. I didn't mean it badly.

• 1:15:58Speaker 02

  I know, I just wanted to pile on. Yeah, it's two smart people talking to each other.

• 1:16:02Harry Stebbings?

  Final one. Will XAI sue Apple? There's odds for this one, and I know you like your odds, Rory. So yes, a hundred dollars gets you two hundred and nine dollars. No, a hundred dollars gets you a hundred and fifty one dollars. Elon has made it pretty clear he's very unhappy with Apple.

• 1:16:20Speaker 00

  And he's already sued OpenAI. There's a precedent there, right?

• 1:16:23Speaker 02

  Yes, not A, because he appears to have a propensity to pick fights with everyone, which is fun to watch. B, because it's all about the dispute with ChatGPT. And to some extent, you could, I saw a good tweet that basically said Elon's wrong because the whole idea that Apple's going to favor anyone. They don't need ChatGPT to be wildly successful. They need to figure out their, so it's a marriage of convenience. Maybe the best answer is this. If Apple continued to be, quote, aligned with ChatGPT, then probably they get drawn into it. Because the ChatGPT versus X dot AI fight is going to be existential for a long time. Because that's bought, it seems to be bought personal and business because you have the old X dot AI business.

• 1:17:04Speaker 02

  That fight ain't going away. So anyone getting sucked into that could get pulled into the mess. So to the extent they are, then yeah, so probably not a bad bet. It's kind of like getting named in the lawsuit, you know, I didn't, you didn't do anything wrong, but you're dealing with someone that did something wrong to me. So I'm just going to pull you into this mess and depot all your executives anyway.

• 1:17:22Harry Stebbings?

  Jason?

• 1:17:22Speaker 00

  I think it makes sense. I mean, Epic suing them was sort of worth it, right? At the margin, he's incensed and he's got a lot of money in XAI. I mean, he has, he's the richest man in the world, but he doesn't have unlimited capital. I think it happens.

• 1:17:34Harry Stebbings?

  Guys, as always, I so appreciate this. I want one final question from you. You gave me a target of like someone to get for the show. I think I delivered with the people that I've lined up. If you would add one more name, who would you say it is?

• 1:17:48Speaker 00

  Well, look, for what it's worth, Alex Karp's always been my dream since the beginning of Saster, asked every single year since like 2015. So personally, if he has the energy to do it from his farm, that would be my, that would be my dream. I love that. I agree. Alex would be amazing.

• 1:18:04Harry Stebbings?

  Now, I want to make those shows the best shows they can be. So please let me know what we can do to make them better, improve them. If you want us to have a guest on the show, I'd love to hear your thoughts. Email me [email protected] and you can find the show on YouTube by searching for 20 VC. But before we leave you today, let's talk about agents, specifically Piper, the AI SDR agent brought to you by Qualified. The agentic marketing era has arrived. And if you're a B2B marketing leader looking to scale a pipeline generation, Piper, the AI SDR agent, wow, it is here to help. Piper is the number one AI SDR agent on the market, according to G2, and hundreds of companies like Box, Asana and Brex have

• 1:18:47Harry Stebbings?

  hired Piper to autonomously grow inbound pipeline. Fucking sign me up. Anyway, Qualified customers see massive business impact with Piper. 3x increase in meetings booked and 2x increase in pipeline. Wow, that is some results. Hire Piper, the number one AI SDR agent and grow your pipeline today. Learn more at qualified.com/20vc. That's qualified.com/20vc with the 20 VC spelt out in letters for goodness sake. And while Piper builds your pipeline, Atio gives you the CRM power to close and grow those relationships. Atio is the next generation of CRM built for the AI era. Fast, flexible and powerful. No, it's not a sports

• 1:19:29Harry Stebbings?

  car. It's a CRM system, baby. It is Atio and it takes less than a minute. Sync your email, your calendar, and you'll instantly get all your relationships enriched in real time with incredible data, no manual input needed. Atio also integrates with your existing tools and syncs with your product data to deliver an AI native platform that's tailored to how your team actually works. You can model your CRM around your business, automate complex tasks and surface real time insights. A platform designed to scale with you. With Atio, AI isn't just a feature. No, no, it is the foundation. It's powerful, it's AI automations, it's research agents that transform your go-to-market motion. It's a data-driven engine from intelligent pipeline tracking to smarter product-led growth.

• 1:20:14Harry Stebbings?

  Fast-growing startups like Flat, File, Replicate and Modal are all experiencing what's next. So get ready to build without limits and start now. Atio.com/20vc and get 15% off your first year. That's Atio, A-T-T-I-O dot com slash 20vc. Okay, pipeline sorted, woo-hoo. Now, what about your own legal team? Enter Logora. Logora is the category-defining AI platform that's fundamentally reshaping how legal work gets done about frickin' time. Empowering lawyers across tier-one law firms and in-house teams to achieve more with greater precision and confidence. So Logora does this by solving really concrete tasks such as document extraction, reviews against a firm playbook,

• 1:20:58Harry Stebbings?

  and suggesting well-crafted markups directly in Microsoft Word based on your preferences. My word, that is a topic list of conversation that will not get a second date. But anyway, the adoption of legal AI is surging across the world, and Logora is at the forefront of this shift as the chosen partner to 250 industry leaders in law across more than 20 markets. The likes of Goodwin, Bird and Deloitte are making daily use of Logora platform to review and research with precision, draft smarter and collaborate seamlessly. They recently also got an $80 million Series B from Iconic. They're backed by General Catalyst, Redpoint, Benchmark and YC. Also, they operate out of New York, London, Stockholm. Yes, they're Swedes, always a wonderful race.

• 1:21:40Harry Stebbings?

  With over 100 employees from some of the world's leading global law firms and tech companies, the team is growing super rapidly. They're just frickin' awesome. Just go use Logora, honestly. I love Max, their founder. He's just a great dude. Go find out more, logora.com. As always, I so appreciate all your support and stay tuned for an incredible episode with Max at Logora tomorrow.