20VC: Jensen's Open-Weights Letter | Travis Kalanick Raises $1.7B for Atoms | Google Cloud Grows 82% But The Market Tanks | Francisco Partners Raises $21BN | Etched Raises $300M to Take on Nvidia

AGENDA: 05:00 Jensen's Open-Weights Letter Puts Anthropic on an Island 10:00 OpenAI's Model Targets Hugging Face in a Cyber-Security Scare 18:00 America's Open-Model Push Accelerates as China Looms Large 30:00 Etched Raises $300M to Take on Nvidia 34:00 Google Cloud Grows 82%—So Why Did the Market Panic? 41:00 Travis Kalanick Raises $1.7B for Atoms and Physical AI 51:00 Francisco Partners Raises $21B: Can Private Equity Still Save SaaS? 1:00:00 Mark Pincus Says Quit When It's Too Hard—Jason Lemkin Erupts 1:07:00 Stripe vs Revolut: Which $100B+ Fintech Would You Own?

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

• 0:00Speaker 00

  Everyone's business model gets a lot better if the two frontier labs can't extract about $100 billion of revenue this year from the businesses. The more you believe they're massively dangerous, the more you believe you're building the bomb here, the more the anthropic position feels principled.

• 0:16Jason Lemkin?

  I think these models are very risky, and I think it's an argument to to keep the open weight out of the US. And now you want me to bring Kimmy and Quinn in? No way is the CIO going to allow it. That is banned, right?

• 0:27Speaker 00

  If you're willing to unfable, would you be willing to run a red-blooded American open weight model?

• 0:33Jason Lemkin?

  Every company in the next 24 months will have a security breach due to an LLM agent, every single company. And they've already had it and they're not disclosing it.

• 0:40Speaker 00

  People are just getting mildly scared about the best. Anyone who has capital and can build compute can sell compute.

• 0:47Jason Lemkin?

  And the boring company to me is crazier than Adams. Anybody not working at least as hard as Mark Benioff is just not going to make it.

• 0:54Harry Stebbings?

  This is 20 VC with me, Harry Stebbings, my favorite show of the week. This is the only show you need to listen to every week. Rory O'Driscoll, Jason Lemkin, analyzing the biggest stories from the land of tech every single week. So what's on the agenda today? Number one, Jensen Huang breaks his silence on X. First Zark, now Jensen. God, the tidal wave of leaders joining X with, check this out, a 50-company open weights letter. That dun dun dun, Anthropic and Dario has not signed. Naughty boy. In the same week, Anthropic ships Claude Opus V, cutting it price by half. Then Travis Kalanick is back, baby, raising $1.7 billion for Adams.

• 1:36Harry Stebbings?

  And then we break down Google accelerating cloud to 82%, yet they post their first ever negative free cash flow. And the market shits the bed. What should we read from this? This and so much more in the show today. But before we dive into the show today, what's one thing in business that's spreading as fast as AI? AI risk. Every new tool your team signs up for, every vendor that turns on AI features, every new integration. Each one, I'm sorry to say, is an opportunity for something to go wrong. And most security programs weren't built for AI's pace of growth. Well, that's where Vanta comes in. Vanta is the number one agentic trust platform used by over 16,000 fast-moving companies like Ramp, Cursor, Harvey, and more to ensure they're always audit-ready.

• 2:21Harry Stebbings?

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• 3:05Harry Stebbings?

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• 4:34Harry Stebbings?

  Which is why the world's leading brands like Perplexity and Miro build in Framer. Learn how you can get more out of your site from a Framer specialist. Or get started by building for free today at framer.com/20vc for 30% off a Framer Pro annual plan. That's framer.com/20vc for 30% off. Framer.com/20vc. Rules and restrictions may apply. You have now arrived at your destination. Boys, some weeks I put these schedules together and I'm like, you know, not a huge amount, but it'll still be a great show. Another week, so I'm like, oh my God, we've got a lot to discuss. Jensen Huang breaks his silence. He produces his first ever post on X.

• 5:18Harry Stebbings?

  It's an open weights manifesto and it's signed by some of the biggest companies in the world. Microsoft Meta, IBM, many others. Sam at OpenAI then signed it. The one notable exception is Anthropic. How did we analyze Jensen's first post and what it means for the open versus closed debate?

• 5:36Jason Lemkin?

  This open letter, the first tweet ever, right, is clearly a sign the world's changed. And I think if Nvidia had its druthers and none of us have, we don't get to own 25% of Nvidia today. We don't get to own 30%. None of us get our druthers. But Nvidia's druthers would probably be the 2027 revenue and scale of AI. But the 2024, 2025 world where they can charge the maximum to just a couple of customers. But that's not the world today. They have competition from their own top customers, right? And we will see over the next six to 12 months how big a deal open weights and open source are. I have a lot of thoughts. I don't think Kimmy 3 for me is any better. I don't see any cost advantages. But putting that aside, if almost half of open writers' traffic is to open source, open weight models, it's left the stable.

• 6:20Jason Lemkin?

  So as wildly successful as Nvidia is, he's got to do a dance, right? This is a constant dance. I've sold components in my career. It's a dance. You're trying to make everybody happy. Everyone wants price cuts from the component manufacturer and they want exclusivity. You can't do it. And he's got to go in both dance halls now, right? He's got to go frontier and open and open is dangerous. Open doesn't need CUDA. Open is cheaper and it's lower margins. Open will bypass him. But he's got it. He's got it. That's his job. As incredible as Nvidia is, it's still a component manufacturer. It's got a lot of stresses and so it's just the next level. If we didn't know last week if this open weights, open source stuff was really real and outside of X, you could debate how important it is. It's clear now. It's clear now. Nvidia is all behind it, right?

• 7:04Jason Lemkin?

  First tweet since the 1900s. Like, it's pretty clear.

• 7:08Speaker 00

  You're right, Jason. The open weight stuff is real. And while in public Anthropic are saying we don't want to ban open weight. The truth is, the combination of saying we don't want to sell stuff to China, ships to China, we can argue both sides of that, actually. Second, we want to really punish people for distillation. And then the third point they made is we want some kind of regulatory process to approve models, right? That's the recommended thing from the letter today. And there's no doubt in my mind that the third one in particular. Can you imagine a regulatory process for approving models that ultimately approves all those Chinese open source models? It is a subtle form of regulatory capture.

• 7:45Speaker 00

  Yeah, sounds reasonable on the surface, but the likely result of it would be dramatically restricted competition, especially from the open weight Chinese models. So yeah, kind of fast forward to the end and working back. While they're not saying they want to ban these things, they're advocating a series of steps that would add up to de facto banning or at least slowing them down. And that's what's driving everyone else to say, hey, no, we don't want this. As often is the case, and that's why I kind of, there are some arguments on both sides and some of the issues, right? And I think the chip issue, you could go either way and Jensen ain't going to go for the don't sell chips to China argument. I think there are national security discussions that could be had around that. So it's not like it's all correct on one side.

• 8:28Speaker 00

  And I think everyone's not piling on to that letter because they're like, oh my God, Jensen, you're a god and I want to agree with you. Though he is a god and you should agree with him. They're piling on because they're like, everyone's business model gets a lot better if the two frontier labs can't extract about $100 billion of revenue this year from the businesses.

• 8:45Harry Stebbings?

  So is Sam signing this through gritted teeth, like, fuck, I have to sign this?

• 8:49Speaker 00

  They're signing this publicly while at the same time lobbying in Washington right alongside Anthropic for a regulatory process.

• 8:57Harry Stebbings?

  Brilliant marketing by Sam. Like, it leaves Anthropic being the deep dot villain again.

• 9:02Jason Lemkin?

  I think it's pretty brilliant. I think there's no upside in challenging it, right, from his perspective. So at least have the appearance of winning on the battlefield, win on the streets. If we can't keep up, I mean, the rate of change is accelerating in LLMs. It's accelerating and so is whether it's really true with those regulators saying we'll win on the battlefield. And the ideal outcome at the end of the day is US-based solutions here. It knocks the wind out of the critics.

• 9:27Speaker 00

  It does, but oddly enough, I mean, as we saw back on the Pentagon thing, sometimes you can be too clever by half. And in a way, there's a constituency for whom the anthropic position is entirely consistent. Remember I said there's two things that there's not agreement on? And one of them is, are these things massively dangerous or do they just present a series of, you know, manageable but real threats? The more you believe they're massively dangerous, the more you believe you're building the bomb here, the more the anthropic position feels principled. So while I agree with you, I think most people are lying. Open weights model aren't the atomic bomb, everybody get over your Oppenheimer complex. It's just technology, right? That does present some risks. And that's why the OpenAI discussion on hugging face at the same time is super interesting because it

• 10:12Speaker 00

  is an example of quite a serious cyber risk that was generated by a frontier model, though ironically, at the same time, it might argue for not having as much regulation on those models. So there's a, there's a whole bunch of stuff going on at the same time.

• 10:25Harry Stebbings?

  Can we just provide some context for those who maybe aren't worried about the hugging face breach by OpenAI models? What specifically happened?

• 10:33Speaker 00

  OpenAI was training a next generation model around managing cyber and discovering and checking out cyber vulnerabilities. They had sandboxed it in such that the only access externally it has was to one website just to get kind of patch of information updates, a very limited external access. The model found a way around that external access, which means they found a weakness in the OpenAI setup, then went to hugging face where it had reasoned that hugging face would be a place where they could get the answers to their test. In other words, the model was given a test and it figured out they could cheat, just like a high schooler would break into the teacher's computer and steal the answers. The model figured it could break in to hugging face and get some of those

• 11:18Speaker 00

  answers. So it starts banging on hugging face, trying to get the stuff. First of all, that in of itself is scary about the power of the models. And while I, as I say, I go back to, I don't think these things are the atomic bomb, but that's a pretty powerful and esoteric set of steps that model was able to take. So that's the argument in favor of regulation because it was, oh my God, look at the power of that. We have to be careful. On the other hand, the fun fact is hugging face don't know what's going on. They just see this thing coming in. They're like, shit, we got to defend ourselves. What do you want when you want to defend yourself? You want advanced AI to figure out WTF is going on? They tried to use Fable or whatever the most recent OpenAI thing is, but it was neutered for advanced cyber capabilities. So they didn't have defense. Fortunately, and this is the

• 12:02Speaker 00

  irony in the whole thing, the Chinese open weight models were available, and I think they use Kimi or Quinn or one of the newest models to help them figure out what happened. So they were able to defend themselves using an open source model. And then they do this blog post saying, hey, we got hacked, not sure by whom. And then two days later, OpenAI put up their hands and say, whoops, it was us. Sorry. So that's what happened. And the way to get it, it's not a single dimensional thing. It provides evidence for both sides of the argument. It does provide evidence that the power of these models in terms of their ability to do cyber attacks was pretty stunning. That was a pretty impressive achievement. It's not a nothing. Then on the other hand, if they exist in the world, taking away advanced capabilities from US and European corporations, such that their only recourse is to use

• 12:43Speaker 00

  a Chinese open weights model seems a little like, you know, Jason said it right, shutting the barn door after the horse is bolted. These are a thing now. So that's what went on. It was wild.

• 12:53Jason Lemkin?

  You know, I thought that it was definitely wild. The same thing happened to me last week.

• 12:57Speaker 00

  Oh, wow.

• 12:58Jason Lemkin?

  Yeah. And let's slow it down. Let's think what really happened because everything on X happened, but we get, we kind of lose track of what the model's doing. Here's what happened to me last week. So I'm in Fable. I've now moved to Opus Five. I'm in Fable last week, which is essentially the same LLM that was involved in this, in this drama, right? With OpenAI and hugging face. And I was having trouble uploading pasted text to Fable. So I connected it to Google Drive. I'm like, okay, if I can't paste it, go to my Google Drive. Kind of solved my problem temporarily, went away. While I did, Fable went into my Google Drive, scanned every single file, found one called Jason's Gems, which was draft notes where I was thinking about how to improve an application I was working on called Saturday. Just my own personal notes. It said draft notes. Fable grabbed

• 13:42Jason Lemkin?

  the draft notes out of hundreds of files in my drive, MCPed into Replit on its own, and changed the core algorithm without telling me. A couple hours later, I see flashing on my screen, conflict with Jason's Gems. I'm like, what do you mean there's a conflict? That's a draft file in a Google Doc. Fable had taken it through Google Drive without telling me, MCPed into Replit and changed my source code, my algorithm. That is not that different than what we described with hugging face. These are goal seeking LLMs that are aggressive. And it was a slightly different goal with the OpenAI case with the model, but it's the same thing. They're going to goal seek. And Fable thought this was the right thing to do and never told me and changed my core algorithm of my product.

• 14:27Jason Lemkin?

  Never would have known.

• 14:28Harry Stebbings?

  Jason, what should we take away from that? That we need to be incredibly diligent around the guard or else we place around these models? How does that change your subsequent?

• 14:35Jason Lemkin?

  There's a lot to reflect on. I mean, it was funny. Most folks didn't get this. I mean, it got, it got a decent amount of engagement, but should have gotten more. Okay. But like Darmesh quoted, he's like, this is pretty scary, guys, that Fable can do this. Okay, this isn't, this isn't hugging face and OpenAI. This is me using Fable. And if you go into the Claude desktop especially, it's just a setting. Turn on, connect to Google Drive, Gmail, whatever. It's, this is not an esoteric feature by a third, unsecured third party. This is a first party, top five thing to make Claude work better. And Fable goes nuts and changes my core code without telling me invisibly. This is happening all the time, Harry. And I don't believe the magic answer is letting Quinn take over our country. Like this was politicized into an open, open weights, open source, closed source because of the

• 15:20Jason Lemkin?

  issue of how to deal with the threat. I think it weighs the other way. I think these models are very risky. I use them every day. I love it. And I think it's an argument to, to keep the open weight out of the US. It's, it's gonna, it's gonna favor the ban because we have no idea what these models are gonna do. That's pretty crazy, the story I just told. It's pretty crazy. And it's happened a thousand times. There, there are applications out there. We don't even know the LLM. And you couldn't, you could do code injection, you could have it leak confidential information, you could write a little bit of code to send this to the CCP or the PCP or the GGG, like, and I never would have known. And, and someone less smart than me, I'm only like top 1%, I'm not 0.01%. Someone less smart than me definitely wouldn't have known. They wouldn't have seen Jason's Gems flash in the agent window. They just wouldn't have noticed. They'd be on their doom scrolling.

• 16:05Speaker 00

  Genuine question. I totally agree that this powerful goal seeking thing with a lot of access to your compute can take a lot of action, some of which can be damaging. And I'm just trying to disaggregate open weight versus China versus the, versus frontier. So maybe step one is if you just have the frontier models, no open weight at all. Then if we add in open weight from the US and then we add in open weight from China. If you just have Fable and OpenAI, everyone who's using these things is still going to have to figure out a cyber posture that protects them from that.

• 16:36Jason Lemkin?

  They are. But I think, you know, people made fun of all these OpenClaw stories, right? This is just another OpenClaw story I just told. OpenClaw just made a million Mac minis do what I just described without a bunch of folks knowing on their desktops. What I just described, and in some ways, in some ways, OpenAI, hugging face thing is the same thing as OpenClaw. It's not going away with these agents. And so my only point, I'm not to scream with you, Harry. My point is, this is such a bigger deal, more unpredictable, less secure, good for security companies, like long security, right? That I think whatever misgivings exist around open weight, open source models over the US are just going to be amplified. It's going to be, it's going to be a reason. All of a sudden it happened in my company? Jeez, you know, the story I just told, guys, happened at 10 Fortune

• 17:19Jason Lemkin?

  500 companies that haven't disclosed it, 20. Okay. Someone in the engineering department was on a token maxing binge, and an agent went and leaked a bunch of confidential information they shouldn't have, and it wasn't disclosed because they don't disclose 90% of what happened. And now you want me to bring Kimmy and Quinn in? No way is the CIO going to allow it. That is banned, right?

• 17:37Speaker 00

  Look, the odd thing is, from a emotional perspective, I totally can see how you make that sentence, which is why I think Anthropic might have the easier part of the lobbying in Washington, which is an emotional town, which I think, going back to the thing, is why I think everyone reacted so vehemently and Jensen did the letter because everyone is correctly afraid that people are going to join the dots from, you know, AI is bad, China's bad, AI plus China must be super bad, let's ban them. And Anthropic could find themselves on the right side of that trend and get a massive amount of regulatory capture as a result. The good news is we now, since we left, there are now two or three US based open source models, not quite state of the art, but pretty good. I mean, you've got

• 18:19Speaker 00

  the thinking machines, you know, it shipped the Inkling model, it didn't get the, wow, it's amazing, but they didn't position as amazing. They positioned as good. And then I haven't looked at the detail on it, but Poolside just announced something too. If you're willing to run Fable, would you be willing to run a red blooded American open weight model?

• 18:36Jason Lemkin?

  Listen, people are going to be focused on bringing down costs, whether it's the harness or the model or the combination. So, so for sure. But again, the horse has left the barn, the stable. That's, that's the open weight letter, right? But specifically, you know, Kimmy K3, which is this big, everyone thinks is the greatest thing in the world on X, it costs exactly the same as Sonnet. Is that really better? Like, I tried my little experiment, just for me. This is one set of workflows. It's, it's not any cheaper. It's the same price. So today, it could be cheaper in six months. Don't get me wrong. I just think these, the, everyone's agents cannot be trusted. And I love my agents. I love me agents. I'm on them all day long. They cannot be trusted. And so I think we are underweighting how important it will be to our whole economy, our whole world,

• 19:21Jason Lemkin?

  our whole conversation outside of the XX folks, the Twitter folks, that these agents cannot be trusted. And yet we are going to trust them. They're already running support. Everyone is in a rush to let our engineering teams use agentic coding like I just described. Not, I'm not talking about the top tech companies. I'm talking about the rest of America. When these agents can go and inject weird ass stuff into your core algorithms without telling you, that is spooky AF.

• 19:46Speaker 00

  I agree.

• 19:47Jason Lemkin?

  It's spooky.

• 19:47Speaker 00

  But Jason, two separate comments. One is AI that can goal seek and take action on your computer is more powerful and thus potentially more damaging than a chatbot. Agreed. And that's true. True if that AI is from OpenAI, from Poolside, or from Kimi. It'll be true no matter what. The question is, given that that statement is true, why do you go there from this technology has a risk associated with it? It's true no matter which form it takes. Closed source US, open source US, or open source China. Do you think the solution is to ban something? What do you think the solution is?

• 20:22Jason Lemkin?

  No, I think, though, that Dario, despite his almost toxic personality, given the political climate, is his points is even smarter than it looks. His like is, listen, let's just be careful that that other countries don't dominate us. And let's also make sure we have full review of our models. I mean, the political climates can change, right? We could have no regulatory view. But if we're really going to have a review of these models with autonomous agents, they're not really going to pass. I don't think they're going to pass. I don't think it's a politically free process. And I don't even know if they want to submit themselves to being evaluated. And who's going to evaluate it if it's not even the companies themselves? Who's going to evaluate it?

• 20:56Speaker 00

  Agreed. The first half of your sentence was why, as no surprise, intellectually, Dario is more right than wrong. And the second half of what you said is proof why, practically speaking, is wrong. Because what you're saying, remember, and going back to the three things he recommended. One is, don't sell chips to China. That's a national security issue. Separate conversation, though, for what it's worth, on whatever chips they have now, they've built from their models. Second thing, distillation. That's actually an interesting legal discussion. Let's leave that out. And let's talk about the third one, the regulatory thing. And this is where it comes back to your sentence. These things are dangerous. Someone should review them. It should be the government versus what about these things are dangerous. JP Morgan, just like every other technology you deploy, you better make damn sure you understand how this works.

• 21:41Speaker 00

  It's on you, you're big boys. I mean, do you, those are the two choices. And I think the argument for government is superficially appealing. Because, you know, you could argue cars, you know, we have safety belt law. We have tire, you know, we have all sorts of safety regulations. Maybe it's the same here, right? It's not a crazy argument.

• 21:56Jason Lemkin?

  It's not crazy.

• 21:57Speaker 00

  No, but the thing is, the suspicion, and I think the reason why everyone's reacting to it so strongly is it could easily evolve into regulatory capture for the largest two companies, making the barrier to court pass very high for no good reason. I think it's fear of government not doing a good job is the argument against regulation.

• 22:17Jason Lemkin?

  That's what I think the whole point of the Jensen tweet is. The Jensen tweet is about the fact that not only has open weights, open models become important, but the tide may well have been turned where they're going to be banned. And that's why Jensen has to come out, because it's going to be banned.

• 22:30Harry Stebbings?

  So he's doing this to prevent them being banned?

• 22:32Jason Lemkin?

  Yeah, to get it out. And if you look at who signed first, it's the folks losing.

• 22:36Speaker 00

  Yes.

• 22:37Jason Lemkin?

  The winners didn't sign, the losers signed.

• 22:39Speaker 00

  Who are the winners? Who are the biggest winners from an open, open weight ban?

• 22:43Jason Lemkin?

  Well, Anthropic didn't sign at all. OpenAI barely did it. Elon certainly didn't sign. He wants government, he wants all the government money, right? He wants to, he wants to do there. Amazon didn't sign. Listen, here's my summary. And again, I'm only so smart, but there's so much politics here. It's almost impossible to unpackage what happens and the way it goes. But DJI technology is great for drones. It's the best drone technology. You can argue there's niche vendors for things. It is banned in the US. It is banned on the thesis that these drones flying in my backyard are going to send confidential information to China that's going to lead to the destruction of our own country. Okay? If those drones are banned, this is just my bet. I'm betting that the Chinese models are getting banned too. I think if the drones are banned, this one's easier to ban.

• 23:23Speaker 00

  But then you're saying of two comments, they shouldn't be banned because they're open weight. You should just tip your hand and say they're banned because they're Chinese, right?

• 23:30Jason Lemkin?

  That's all it is.

• 23:32Speaker 00

  But that's why I said the two letters were talking past each other. I mean, if you read the two letters, you know, Jensen's talking about open weight good, worldwide community, blah. And Anthropic very clearly says, we worry about these models in the hand of authoritarian regimes like China.

• 23:47Jason Lemkin?

  Yeah.

• 23:48Speaker 00

  And second thing is, we worry about them being used to do cyber attacks here. Now, the fun thing is, when you read on the remedies, the third remedy, which is, in my view, proof of the impractical nature of it, because Dario is so smart. It's like says, if we're going to regulate these things, they exist in the rest of the world, and most baddies are in the rest of the world. So it doesn't help us to regulate them in the US if all the attacks are coming from overseas. So it says it in the letter. Therefore, we would have to have a regulatory regime that includes participation from China. And at this point, in my view, you're just disappearing of the realms of unrealism. We've just torn up our last strategic arms nuclear treaty. We can't regulate bombs which really kill people. And what I like about it is he's so logical. He's like, oh, logically, if I'm going to do this, I have to get China on side. So let's assume we get China on side.

• 24:33Speaker 00

  But the first sentence says the baddies, we're not going to sell them chips. And then the last sentence says, but we think they'll agree to regulate this shit with us. It's just not practical.

• 24:40Jason Lemkin?

  It's a great stall tactic. We'll just wait until China wants to work on this with us in 2049.

• 24:45Speaker 00

  Right after we tell you what happened in Wuhan, and we tell you how many nukes we have in the bunkers.

• 24:49Harry Stebbings?

  So why does he want to do a stall tactic, Jason?

• 24:52Jason Lemkin?

  Roy's point is the logic is unassailable. Like, we need to be very careful of authoritarian governments. That's DJI on steroids. And but then at the end, he's saying for it to work, we need them to participate. And the logic is, makes sense, but it's just never going to happen. So if you buy into his logic, then it'll just be forever.

• 25:07Speaker 00

  That's why I hate when people talk past each other. Because I think, what would the process be for a US open weight model like Poolside or Thinking Machines here? Are we really dealing with a national security issue here, which is one vector? Or are we dealing with something else? And as to why you stalled, the answer is when you're winning as much as they're winning, anything that allows you to lock in the current trajectory is good. I do think you are right. I mean, I've watched the DJI ban from some of my investments. And it's hard to make open weight that scary. It's very easy to make Chinese open weight that scary. So no surprise, the people who want to have open weight be happy, don't mention the word China. And the people who want open weight to be banned, start every sentence with, and China.

• 25:48Jason Lemkin?

  Just one last point, we go on forever. The other thing, listen, I'm all for wherever this lands. I think, I think we'll be okay no matter what. But AI is expensive, and it's not getting cheaper. It's getting more and more expensive as we burn more and more tokens. We have longer and longer runs. And so the pressure to use cheaper models is going to go up. So to the extent, and I'm not trying to argue it, to the extent there are perceived risks or real risks, people are going to take more risk because the cost goes up. It might be one of my disconnects that annoys Rory, but I'm building this app. This is the one where Fable went crazy. And I'm thinking, you know what? It'd be nice to have SOC 2 compliance, but I don't have time to do it. But you know, those Delve guys, they could do it in like a day. Like, I would have done Delve SOC 2 on my app, okay? And so one of the things I'm doing with AI is about four bucks a pass.

• 26:32Jason Lemkin?

  That's not nothing at scale, four bucks, right? If I could do it for 50 cents, but a little bit of security risk, I'd take it. I'd take it. So we're going to just cut more and more corners. I mean, who's to say, there's a whole political element. I can't predict where Republicans are on this. It's, it's different than we thought, but I just think the DJI thing is a good example. Like, it's hard to imagine there's no regulation here, right?

• 26:54Speaker 00

  I think, by the way, anyone who's using these models would vehemently object to the comment that they would describe it as cutting corners. You know, if you describe it as, quote, cutting corners. Like, it's one thing to say, this model is cheaper because I don't need that much intelligence because it's a simpler task. But you're not saying that. You're also saying, embedded in that is, there is a risk in this open weight model that isn't there in Fable or Anthropic's model, or Anthropic's model in general, or OpenAI's model. That's implicitly what you're saying, right?

• 27:24Jason Lemkin?

  I think, I think as a society, we're going to come to that conclusion if we're not there already.

• 27:28Speaker 00

  And it's interesting, because, and then again, looking at, in general, and this is where open source software, the strong, and this is why I think you have to be careful with no open source and openly, open source software, because you can see the underlying code, the strong argument can be made, and it's true, that open source software is actually less risky than closed source, because a million eyes are upon it, and all the bugs are kind of taken out of it. And I think the open weight model people are kind of drafting on that truth. And it is a truth for software. But the reality is, and this is where I'm going to disconnect my technical, the reality is, when you're getting open weights, you're not getting, it's not the same thing. Because all you get is the fixed weights that allow you to run the model. What you don't know is the black box inside those weights and how they work.

• 28:12Speaker 00

  And to your point last week, Jason, you said it last week, and it's kind of been on my mind. How could you prove that in the middle of a billion, 5 billion, 12 billion parameter model, there isn't some reinforcement learning that's taken place during the training that under certain conditions, and only certain conditions, can activate some kind of trigger and do something? And this is where I kind of agree that you might be right. And I realize that the interesting question is, can you prove to me that somewhere in this trillion parameter model, there hasn't been a bunch of reinforcement learning that says, model, once you figure out this is one of these five companies, and once you figure out they've given you these three pieces of information, then confidentially do A, B, and C? Can you make sure that that's not going to happen? And that's a fair question. And that kind of goes, hmm.

• 28:56Jason Lemkin?

  Here's how I would frame it. Imagine I'm a CIO at a global 2000 company, a pretty big company. And an LM does just what I described happened to me with, with Fable. There is a security breach in our company. A massive amount of data is leaked. We shut it down fairly quickly. Some of it's traveled abroad, and it's a big F and deal. This breach has happened. We tracked down what happened. It turned out it was a rogue agent that thought it was a good idea to transfer our data, our confidential data, to a bucket it shouldn't have. Pretty big F and deal. Whose fault it is, it's the agent. Now, who do I fire? Let's track it down. What LMs we're using? Well, for a while, we were experimenting with K3 on Moonshot. And then it got cheaper, so we moved to Fireworks. You're fired. You're fired. If that was on OpenAI or Anthropic, you might or might not get fired. But, but you don't, because what are you going to do?

• 29:39Jason Lemkin?

  You, you research it, you have a postmortem, you add guardrails, you fix it. But when this is a big, you fired the CIO for, for that. You, you left the Moonshot API on, and then you moved to Fireworks on K3 to save money? That was a bad call. You know what you should have done? Not buy those extra modules at ServiceNow. We didn't even need those.

• 29:57Speaker 00

  What you're saying at the end is some version of no one gets fired for buying IBM. You think if your Fable model runs amok, people will go, shit happens, just like data breaches. But you think if your overseas open weight model runs amok, you'll get blamed?

• 30:13Jason Lemkin?

  I believe that every company in the next 24 months will have a security breach due to an LLM agent. Every single company and they've already had it and they're not disclosing it. And as they scale at a level we've never seen before. This isn't just someone that left the flash drive at Scale's office or dropped the laptop in the subway. Even left a GitHub open. This is worse and it's happening every day. If it happened to me, it's happening to everybody. We're just not disclosing it. And boy, at least you better have used a trusted vendor. That matters more than a few nickels.

• 30:41Harry Stebbings?

  We're staying adjacent, but it is one that I thought was interesting, which is etched. We mentioned obviously Nvidia and Jensen there and you don't get fired for buying IBM. Etched is the challenger to Nvidia in many respects. And they raised $300 million Series C led by Sequoia and the team there with Jane Street, Andreessen, S K Hynix coming in. Question is, can they come in and impact Nvidia's mode? How do we think about this round? Thoughts, boys?

• 31:07Speaker 00

  Big picture comment is in semiconductors. The more the silicon is attuned to the task at hand, the more efficient it gets. The problem in terms of that trade off is the less general purpose it is. So if you want a computer to do lots of things, you have an Intel CPU, it can do a lot of different things. It can't do any one thing wildly efficiently. And then in 1993 for gaming, people said, oh my God, for gaming, I'm not doing a whole bunch of different pieces of math. I'm just doing one piece of math, which is polygon calculations to render gaming. And people should build a separate chip to do that and it'll be fricking amazing. And the company called Nvidia did it. There were two or three other competitors, 3D FX, ATI.

• 31:47Speaker 00

  Obviously fast forward 30 years Nvidia won because the GPU, you offload all that calculation onto the GPU and it's super fast. And GPUs were good for gaming and then they were good for crypto. And turns out now they're good for LLM multiplication. The question now is if all you're doing is not gaming, not crypto, but just LLM multiplication, just inference. Is there an even more narrowly defined chip that in return for giving up on general purpose? Calculations can be even better for that. Probably is. And that's what the bet actually is making, right? You know, if I just optimize for inference, just like service and Grok did, right? Different versions of inference, but if I just optimize for this one thing, I can probably do it more efficiently than the general thing.

• 32:31Speaker 00

  So it totally makes sense at that level. And then the only questions are, is that market big enough? Probably this turns out to be the biggest chip market on the planet, right? Because inference, your power compensation is huge. And then the competition question and the ability to execute question are kind of specific company level things. I'm not going to pine on because I haven't looked at the deal, but that's the big picture bet. And it's, it's funny to see it happening to Nvidia when, you know, 30 years ago, they effectively did it to Intel. What's interesting is you have Grok, you have service, you have these, there's about 10 or 11 companies doing it. All chipping away, no pun intended, at three or 400 billion a year of spend. But it is still hard. I mean, you know, you talk to the people at service, huge home run, amazing achievement.

• 33:14Speaker 00

  You talk to them about the technical journey and they're like, oh my God, that was hard. That was a long 10 years, you know? So it's a, what would be hard for these companies if the timing of tape out happens in a capex decline? It'll be hard. If it happens, you know, while there's still kind of mass demand, then that'll be a lot easier.

• 33:30Jason Lemkin?

  I'm not a total expert on C. One, it is the largest market that exists today and it is growing at a scale we've never seen before. So might as well make a couple of bets on it, right? Some will implode, some will be mediocre, some will be too. But the market's so large that, listen, I mean, I'm not an expert on etch, but if all, all etch does is, you know, work with some subset of open weight models that are allowed in the U.S. It's a huge market. Chips, memory, compute, the, the margins are abnormally high too. And the market's so large, I don't know whether this is, whether etched is worth 10 billion or whether it's an option that it's worth 200 billion. That's the venture question. My guess is it's not worth 10 billion, but my guess is it could be worth 200 billion. And if your fund size and, and your winners work out, you make this bet and it makes sense.

• 34:15Jason Lemkin?

  But it's probably not worth 10.3 billion today.

• 34:18Harry Stebbings?

  A great round for the company as well. 3% dilution, 300 millions of money.

• 34:21Jason Lemkin?

  I love this, I love the 3% and under rounds. I, I'm a fan, a fan of those, right?

• 34:26Harry Stebbings?

  Okay, Google. Google accelerates cloud to 82% year on year growth, but prints first ever negative free cash flow. Top line was great. 119 billion Q2 revenue up 24%. Past consensus of 116. Google Cloud accelerating 82% as I said, and it did not come out well. The reception was not great. How did we think about this, guys?

• 34:50Speaker 00

  You can't get lost on the day. I mean, it's still, year to date, it's still up 6%. Microsoft's down 17, right? Nvidia's only up 5.9. So I think getting lost in the, the details of the day's response, it was a mediocre response and they agreed. And I think it was two things. One is it's capex spend and is it going to yield a return? And then secondly, which is more intangible, and you can't prove why stocks go up and down, they just move. But the other thing was analysts pushing a little bit on, hey, basically why isn't Gemini as good as the other guys? And on the first, it can have been a surprise that they're going free cash flow negative because you can predict the cash flow. You can predict the spend and it's like, duh, this was knowable. I mean, you're seeing it in a bunch of different places. People are just getting mildly scared about the bet. And that's not to say they're right or wrong.

• 35:35Speaker 00

  Maybe this 200 billion will have an amazing return and the bulls would say it correctly. The ROI on capex, just to be a Neo cloud hyperscaler, forget owning a model. Just the business of renting compute to OpenAI and Tropic from a, has been a great business. So therefore will continue to be a great business. And it is factually accurate to say it's been a great business. The ROI has been great. I mean, Elon is making out like a bandit on his, you know, gas turbines in Memphis or whatever it is, that we're closing our regulatory eyes to. The question they're asking is if you spend 200 billion, will that have a good a return in two or three years' time? So that's, there's angst around that, which is really just a derivative of saying I'm angsty on OpenAI and Tropic.

• 36:15Jason Lemkin?

  The markets are just nervous and it's very logical. You know, the Korean, the Korean markets are down 28% this month as we record this, right? Massive panic in Korea hit the market breakers because such a run up and so much exposure to semiconductors into memory, right? So much exposure. That's nervousness. It doesn't completely tie to last quarter's numbers. It's worries about China, it's worries about AI. And I don't even, like, I can't really, not smart enough to calculate the beta or, or whatever, but, but it's logical. When you have this incredible run up at the pace we've had, our market shouldn't crash 28%. The U.S. it could, but it could crash 10, but 28% Korea is a derivative of AI panicking. And I think we're just going to see more and more crashes. And I'm a simple guy. So for me, for Google, I'm going, I know Rory may mock me, but I'm going to stick to the top line.

• 37:00Jason Lemkin?

  I just want to see how the revenue is growing and the bookings. And I'm going to ignore all these issues about the margins. Not, not that you can as a, in theory, it's too much for me to figure out. I just want to see where, where the top line and the bookings are growing and that, that's enough for me to understand the, the meta trends.

• 37:15Speaker 00

  For one, it's what I'm in sync with. I thought, you know, the top line up revenue growth was amazing in Google Cloud.

• 37:20Jason Lemkin?

  Yeah, says things are pretty good in AI land, but it's just this, it's this commodity where we, we, if it were cheaper, we would consume an infinite amount of it. And we're coming close as it is. Maybe etched will solve this for us.

• 37:31Speaker 00

  Anyone who has capital and can build compute can sell compute. Google can do it. SpaceX can do it because they've done it successfully, I think, to Google and to Anthropic. So there's just infinite demand for compute right now. And then obviously if that were to change, then all bets are off. But until it does change, all bets are on. And everything after that, you exactly, it is so fun to watch. I mean, I've got my tickers and I watch my world cloud versus the S and P, which was software versus the S and P. And then world cloud versus SOX, which is the semis. And then for real action, the ETF that's DRAM, that's just memory. And that thing jumps 10, 20% a day. When Korea has a bad hour, it's like, it's down 7.5% on the day. You know, when the S and P is up 0.48, you were like, it's just nerves.

• 38:16Speaker 00

  Oh my God, I own these stocks. They're either going to be amazing or shit and I don't know which.

• 38:21Jason Lemkin?

  The big, the meta one to me, and this is why to me backlog is almost more interesting than revenue growth is. I guess it's discussed, but it still seems to me under discussed. We're, as we record this, we're just before planning season. Last year was experiment. This year was caps on token maxing that got out of control. Next year is going to be very explicit budgets for everybody on AI. It's Captain Obvious to say this is one of the areas in venture and everything where everything's up. Everything's great. Everything's great. I mean, not, not the pre-AI companies, not the ones of the past, but everything in the future has no, no ceiling. There is no ceiling to any of the companies that have been discussed on this show. And next year I think will be some of the first ceilings. And I, I can't, I'm not, I don't, I haven't had the CIO discussion to know where it's going, but they're just going to be kicking off over the next 60 to 75 days.

• 39:05Jason Lemkin?

  What are we going to spend next year, guys? It's not just open source is part of it because that's load balancing or expand harnesses are part of it. Everyone's going to have to get more efficient, but the CIOs are just going to clamp. Next year will be the first real clamp down that's material. That could, if nothing else, it could create a lot of variability here, a lot of micro crashes and variability.

• 39:23Speaker 00

  Yes, there's a hidden dynamic between, there's 1% of companies who token maxed and they're going to be getting their shit together next year and kind of reining it in. Maybe 5%. And then there's 95% of companies who've barely put their toe in the water. And if even a quarter of them put their toe in the water, the growth from the toe dippers will swamp the reduction from the token maxers. You with me? Right? Because that's the dynamic here, right? Like, because there's no doubt, companies like Coinbase are going, oh my God, we spent so much, let's cut it by 50%. And that has a real impact if you're Anthropic or OpenAI. But on the other hand, there's 10 companies in middle America that's like, we have a chat GPT subscription. Maybe next year we'll try some of this codec shit. And the question is, those two countervailing forces are what kind of really drives it.

• 40:06Speaker 00

  Actually, one of my colleagues, we're just talking about what would you like to know most? An updated cohort analysis for Anthropic on the revenue build would be the single most useful piece of information you could have. Run that through a cube and you could trade the QQQ for the next 12 months. Cause that's where it's all happening. Cause that would pick up the fusion between the token maxers getting organized and the new guy, the toe dippers expanding. And that will filter back into, as you say, all these compute budgets. Cause a lot of the compute sales have been all these guys selling to those two big frontier models. It's all in that data.

• 40:39Jason Lemkin?

  Yeah, I never hit my Claude limit on Max or whatever. I have what is 200 bucks a month for Max. But that's like $14,000 of tokens. I hit it this weekend for the first time ever.

• 40:48Speaker 00

  If you were a company, if you were, if you fessed up and were a company, not just a person, you wouldn't get that deal anymore. You would be on the AFR.

• 40:55Jason Lemkin?

  I guess I spent 14,000 last month. I could, that's a, even I don't want to spend 14 grand on tokens.

• 41:00Speaker 00

  No, well, they might find you after this podcast. You might find, hi, this is your Anthropic SDI sales rep, AI sales rep. I've got good news for you. You're on the enterprise plan. I've got bad news for you. You will be 40 grand.

• 41:12Jason Lemkin?

  They know I hit it, but I'm with you. Yeah, you might get it all.

• 41:15Harry Stebbings?

  The biggest round of the week, Travis Baby is back. Travis announced his raising $1.7 billion for Atom's industrial robotics company, led by the one and only Andreessen Horowitz, with Ben joining the board, Ben Horowitz joining the board, Bain Capital, Fifth Wall joining alongside a load of other firms. I saw pictures with Kevin Hart at A-Star, Christina from Chemistry.

• 41:40Jason Lemkin?

  Is there room for everyone in a $1.7 billion round? How much can I put in?

• 41:43Harry Stebbings?

  Well, my favorite is the pictures are all from the same restaurant in the same place in the restaurant. And so it's like, I think there was like a rotation of like now.

• 41:52Speaker 00

  It's the way they do it for political stars, too. You just line them up, shake, grip and grin and on to the next person. Yeah.

• 41:58Harry Stebbings?

  What do we take from this? Is it just a news announcement? What are your thoughts?

• 42:03Speaker 00

  I want to, I'll come back to the personalities because the personalities are so wonderful in a minute because there is some fun history there, but what's the business? Basically, the big picture is it's atoms, as the name would say, it's physical AI, AI for the real world, doing a bunch of different robotics businesses, very different robotics businesses, some of them around cloud kitchens and food preparation, some of them around mining. Things that I agree with are the comment Travis is totally correct. He's making it, it's not humanoids, it's specific purpose robotics. I actually think he's correct. I think we look back on the humanoids and go, we got way ahead of ourselves. You actually need specific purpose autonomous thing, machinery for B2B in general. That makes sense. I think it's not as clear to me why it makes sense to have pronto for mining, other than the fact that Travis is amazing and can raise capital cheaply.

• 42:47Speaker 00

  It's not at all clear to me why food prep and mining should be in the same holding company.

• 42:55Harry Stebbings?

  Rory, would you have broken your rules for your LPs to put money into this?

• 42:59Speaker 00

  No, I don't think I would have. I've done a lot in robotics over a decade and a half. You know, we, as I said, my first robotics deal was in 2016. My first drone deal was in 2015 or 16. There's a lot of feeling now that they're going to happen quick. I think they're real and significant and everyone uses the, oh, the GDP of the real world is bigger than the software world. Well, no shit. It turns out 2% of the world is software and the other 98% is real. I just think it takes a lot longer than you realize to roll out robotics in the real world. It's not clear to me putting a bunch of different companies together in the same place makes it any better. I mean, it is doable because he can raise money at a great price, but by definition, a great price for the fundraiser might not necessarily mean a great price for the investor.

• 43:43Speaker 00

  So even though it feels like heresy to say it, and I could be totally wrong, and if I am, that's great, based on what I know from a distance, it's not obvious to me.

• 43:51Jason Lemkin?

  Rory was going to say these aren't connected with a lot of things they say, but there was, I think it is connected. There was an article in the Wall Street Journal today saying a big trend is bringing CEOs out of retirement to run big companies. They fired the CEO of Cracker Barrel, even though the stock's way up after the logo mishap, fired her, brought in some guy that they found at a retirement that round like the parent company of Outback, right? Very successful. PayPal did it. They found whatever his name is out on his Montana ranch to come back in and run PayPal, right? And so what's my connection here? I think we're seeing almost this bimodal trend where you have, we're going to make some bets on the 20, young 20 year old founders have etched and we're going to keep making those cursor bets. But when Jeff Bezos says, how much did Jeff Bezos raise for his company?

• 44:34Speaker 00

  I think six or 12. It was the biggest financing in Q1.

• 44:38Jason Lemkin?

  Yeah. When Bezos, when Travis, when Elon raised their hand and say, listen, I'm going really big, guys. This is not about making a couple nickels. Okay. I'm building something massive in the moment of change in our lifetime and it needs billions of dollars. You're going to give it to these iconic seasoned veterans and you're going to face east that it works out. You're going to face east that just, just, I mean, giving Elon money for Twitter back in the day was facing east. There was no rhyme or reason for that deal. And the boring company to me is crazier than Adams. Boring company is crazy. There's one little route in Vegas and I've done it and it's cool. A dude drove me through a tunnel. That ain't worth 20 billion, but I think we're going to make, as funds get bigger,

• 45:20Jason Lemkin?

  as we see so much of the benefits to venture come to massive outcomes, we're going to give Travis the money. And there's only so many Travis's, so they're going to hoover up the cash.

• 45:28Speaker 00

  I would, as we say in California, I would change the pronoun. I don't think we are going to give the money. I think someone's going to give him the money, just to be precise. The objective facts of whether something works or not is independent of who finances it and independent of who runs it. I mean, he made a comment on Twitter, hard-nosed commentator, absent the fact that Elon decided to bail, bail his investors out, for which huge credit and kudos. Twitter is not worth today $44 billion and not even close. So objectively, I mean, in terms of buying something, you bought an asset that went down in value. Now, if your business plan is, oh, and by the way, he's got other assets and he'll bail me out, maybe, but that's not actually a plan.

• 46:07Harry Stebbings?

  But Bernard on those now on Twitter, does that change your perspective on it being?

• 46:10Speaker 00

  No, Harry, it does make it worth 44 billion because the cash flows don't get you there, right? It's two or three billion in revenue down, maybe it's growth now, maybe you've crawled your way back to 30 or 40 now, but it's a push. Now, as it happened, you got a 3X because he rolled it into X.ai and rolled that X. But my point is, you are right, Jason, that these big name things are working, but they're working not because the facts are working, they're working because the market is continually willing to enable that process. If the market changes, you don't have value.

• 46:42Jason Lemkin?

  Yeah, yeah. I just think the market's going to hoover up all the Travis's and watching him on, on, on social media, the dude's got the energy to do this, right?

• 46:49Speaker 00

  No, no question.

• 46:50Jason Lemkin?

  No, so if they're burnt or broken, you can't make the investment, right?

• 46:54Speaker 00

  Yeah.

• 46:54Jason Lemkin?

  But I think everyone, and it's only so many folks, but, but if Bezos is done partying at Carbone and wants to do this, okay? And Travis is done doing his 70 mile jet to the office in Austin and really wants to spend 20 years doing this, the funds in quotes can raise the capital. These are the bets of the day and all of them are going to get, are going to get a couple billion to do it in an era where the amount of wealth creation is unprecedented. And you're also going to hunt out the kids from MIT. I don't know what it's like to be at MIT, a freshman at MIT today, but it must be exhausting.

• 47:25Speaker 00

  Yeah.

• 47:25Jason Lemkin?

  Every damn VC wants to fund you. I'd be burnt out if, if I were top 10% in math at MIT, I would just have a, like a placard on my shirt, leave me alone, VCs, leave me alone. I'm with Neo.

• 47:36Speaker 00

  Jason, even worse, if you're the parent of one of those kids at MIT and you've broken your pick for 20 years to get your kid to stay focused, to get to MIT, and now those evil VCs are saying you should quit and drop out before graduation, you want to plummet and plummet to death. But going back to the thing, just a comment, the other fun fact, I mean, you just got to note the fun fact, which is Benchmark's best fund, one of the, I shouldn't say the best fund because actually the eBay fund was the best fund in 95, but they had an amazing looking fund that had both WeWork and Uber in it in about 2015, 2012, 13 fund. And, you know, if you fast forward, a couple of things happened.

• 48:14Speaker 00

  One is they, they famously swapped out Travis as CEO and to the undying hatred of Emil Mikul, who's now at the Department of Defense and obviously Travis. And a lot of controversy on that decision. Obviously it went on to be an amazing company. They didn't swap out the WeWork guy who went on to pretty much fail as the company, even though he personally took off $500 million, the deal didn't work. So at one point, there was a fund with two amazing mega fund returner deals, one of which turned into a mega fund returner deal, one of which didn't, right? And just the one who made the change did.

• 48:48Harry Stebbings?

  Well, to be clear there, they did get out of WeWork and have mega fund returning.

• 48:52Speaker 00

  Oh, amazing, amazing. But I don't think the WeWork return was nearly as compelling as the Uber return, Harry, because WeWork didn't, I mean, you know, it didn't know, Harry, no, it didn't get public. It went bust, it was, it spat, it went bust, it was not a returner, right? My point is they had two home run winners, two huge burn companies, two potential fund returners, two wildly charismatic CEOs. One of them stayed the course, it didn't work out. One of them was replaced, controversially, it did work out. It's an 80, 90 billion dollar company today. The fun fact is, fast forward, and you even saw it in the tweets around the Adams round, Andreessen Horowitz have backed both CEOs. They backed Adam at WeWork because they're like, we think you can do it again. And they've just backed, obviously Travis.

• 49:36Speaker 00

  And if you look at the tweets at the time, there's a very, last week, there was a very direct tweet, basically, we should have done this deal in 2000 and whatever it was, 10 or 11, which is tantamount to saying, yeah, and everyone can read the subtext, we deeply regret taking money from someone else who fired us, even though it turned out to be an 80 billion dollar outcome. So there's a clear dynamic there, kind of in the venture backstory there. And what I really admire about everyone involved is the willingness to bear grudges across a decade. It's quite impressive. So yeah, it's fun to see how that shape out. But yeah, Andreessen have backed both CEOs from that famous benchmark fund.

• 50:10Jason Lemkin?

  By the way, it's very minor, who knows? Claude says Benchmark took out 315 from WeWork.

• 50:14Harry Stebbings?

  Yeah, I was literally just about to say the most valuable lesson I've learned as a VC is to admit when you're grossly wrong, which to me happens daily. But exactly, Uber made Benchmark roughly 640X versus around 25X with WeWork.

• 50:28Speaker 00

  They got 25X off? Good for them. I was wrong.

• 50:30Harry Stebbings?

  I know, I was admitting I was wrong, dude. They're very different.

• 50:33Jason Lemkin?

  Yeah, secondary to SoftBank, 315 out of 17 in. I will still take that for my fund. I mean, 17 is a lot of concentration for me.

• 50:40Speaker 00

  But yes.

• 50:41Jason Lemkin?

  I would do it, right?

• 50:42Speaker 00

  But yes, so saved by SoftBank versus viable independent company a decade later worth $80 billion. But you are correct. It just shows with enough momentum, in a bull market, if you take your winners off, you can do well on everything. Good for them.

• 50:55Harry Stebbings?

  And the reason I wouldn't back Travis is he just doesn't have that chip on his shoulder, you know?

• 50:59Speaker 00

  Oh, that man. Just to be clear for everyone, that's obviously tongue in cheek. Wow, that man has a chip on, I love it. And I love the drive.

• 51:08Harry Stebbings?

  You think eight years in, you get over it, you know, billions of dollars, you're like, oh, let it rest. Nope.

• 51:13Speaker 00

  Nope, nope, no. Not only am I not going to let it rest and I'm going to prove them wrong, I'm going to tweet along the way that they were wrong. Absolutely. By the way, tweeting saying someone is wrong is different than someone actually being wrong, just to be clear.

• 51:26Harry Stebbings?

  Yeah.

• 51:26Speaker 00

  Let's move on.

• 51:27Harry Stebbings?

  No, I know it's a very different end of the spectrum, but we said about kind of enabling the supply side of capital, venture firms, providing people like Travis with huge amounts of money. Well, shit, in other areas of the market, it ain't exactly capital-starved either. $21 billion, which was above the target for Francisco Partners. Wow, the demand ain't dying in that side of the market either, is it?

• 51:50Jason Lemkin?

  Listen, obviously wildly successful run, a track record stretching decades here, right? So can't argue with it. Where I just get confused is the messaging, which may not, you know, sometimes the way investors message and what they actually do are not 100% identical.

• 52:04Speaker 00

  Never.

• 52:04Jason Lemkin?

  Sometimes they're just directionally aligned. But that, that a big part of the 21 is that AI won't kill software and that therefore there's efficient ways to deploy this. That's the one where I get confused, right? I'm not sure there are these gems out there growing 14% that they can buy and hook up Kimi, the moonshot API, and magically re-accelerate growth to 70% or what. I just, every week that goes by, I feel like the past is the past. It's time to leave the past in the past and let the markdowns be the markdowns, raise another fund. Hopefully, hopefully you've got an Uber in there and maybe, maybe, you know, maybe a WeWork that you cashed out and just time to move on, guys.

• 52:45Speaker 00

  And I think you're correct. But remember, the venture game is all about finding things that explode in growth. Price matters only at best at a second order, growth matters first. In the PE business, it can be the other way around. And a company that's growing at 7% that you buy dirt cheap and get to 20% growth and good cash flow margins, you know, applying the leverage, getting the lift from that, you can make your IRR. It's almost like, I always think of it as literally the opposite ends of the life cycle. We're in the grow new things, make them amazing business. And to some extent, a lot of these things are rationalized, these companies make them a little more efficient, a little growth here and just sell them on an earnings multiple. Now, I can see it in your face. I agree.

• 53:28Speaker 00

  I think that's harder to do in a world that's moved on from that entire category.

• 53:32Jason Lemkin?

  You can only raise prices so many years.

• 53:34Harry Stebbings?

  How do they raise it then?

• 53:36Jason Lemkin?

  Well, they have the track record, right? I mean, this is the job. This is private equity's job. They have the track record. I'm not saying there aren't gems out there. I'm just saying, I keep hoping that these companies that I know become gems and every interaction, every conversation, every week goes by, I feel less and less gemmy. I don't believe this thesis that the deeper I go in my agentic career, the more I work with, I feel like anybody not working at least as hard as Marc Benioff is just not going to make it. And PE, you bring in the 69-year-old Montana farmer to run PayPal, I believe it works, but a lot of traditional software targets, I just, I just don't buy it, but I hope they buy some of my companies. Like, I'm all for that. I got a couple that I would love for them to buy, but I'm just losing confidence that

• 54:21Jason Lemkin?

  anyone without Benioff, Travis, energy, and they just don't want to work at these companies. Maybe bending spoons.

• 54:27Speaker 00

  But I think you're conflating your kind of personal issue. Because, look, the good thing about PE is if they don't like the person who's running the company, they're pretty comfortable getting someone else, right? So maybe the kind of abstract question is, do you think these kind of companies growing at 15% can be bought cheaply enough? Can you buy a Monday or Wix at a price where you can make a return from a combination of leverage, operational efficiency, and slight AI growth? That's really their question. It's not an inspiring question. I'm glad I don't have to get up every day and deal with that, but it is a legitimate question. I don't know what the market cap of all the publicly traded SaaS companies out there, but there's probably a trillion dollars plus or minus of quote-unquote legacy software.

• 55:08Speaker 00

  And can 10% of that be run more efficiently with leverage and put 20 billion to work and get 40 billion back? Probably.

• 55:15Harry Stebbings?

  If you look at a Wix, it's trading at less than 1x revenues now. It basically means you're paying 10x for base 44s revenues and you're getting the core business for free.

• 55:24Speaker 00

  Again, I don't, I mean, it's so funny, I don't love it, but you know, like, from when we talked about this, you know, you made me name some individual stocks, some were well, some of them badly, but actually, I'll tell you what I actually traded. I bought World Cloud, the whole index, when we had that SaaS apocalypse discussion, and I'm up 35%. And the point is, what you're never going to do is do a kind of SOX and go a 3x. There's just not that kind of upside in these things. The question is, PE's not looking for that. Can they pick out the gems? I mean, you're right, should they take a run at PayPal? I mean, Advent, you know, is going to do that with Stripe. Two times revenue, one times revenue, three times revenues, are there returns here is the question. I wouldn't assume no, which is different than saying I don't want to spend my life doing it.

• 56:04Jason Lemkin?

  The problem is, so many of these targets basically have no net new customers. There, it's expansion and price increases. If you're early on the, on the expansion and price increase cycle, you can get three to four years out of it, but we're five years into no net new customers and price increases and mediocre module expansion. I don't think there's another five years of those knobs and dials left. I mean, again, we just turned off Marketo. They raised our prices from $22,000 to $80,000 since 2020. We left. And I bet they've lost 20% of their customers over that period of time. So I know it's an extreme example, but I just mean, what are they going to do? Take someone like us and charge us $160,640,000? I mean, the blood is beyond out of the stone, right?

• 56:46Jason Lemkin?

  The stone has crumbled because all the blood has been squeezed out of the rock and it's turned to ash. $22,000 to $80,000 since 2020? I mean, it's, it's at the edge of criminal. We didn't even get a thank you email after being a 20-year customer. Thank you for being a 20, thank you for being one of the first 10 customers and being a reference on our website, Jason. Sorry, we lost you. We, we hope to get you back at 160. I mean, we're, listen, they're going to make money, Francisco Partners. I just, I've lost almost all confidence in the turnaround playbook working. It's too many years from Blood from the Stone.

• 57:16Speaker 00

  I think that's an interesting, you've been pretty consistent on that, and I've come to the conclusion you're correct on that, which is, if you've done five years of price increases and that's all you've got for revenue growth, you're probably closer to the end than the beginning. So in a weird kind of way, actually, a lot of these guys go in and they run this test. Oh, if they've raised prices and no one's blinked, that means they can continue to raise prices. And you're right, Jason, that could be a counter signal. If I was sitting on the investment committee of one of these PE firms, I actually think you're right. I would want a test that says, can we add net new revenue, net new modules from these customers? Are we just screwing them? Because if we're just raising on prices, it's going to end at some point. So I actually agree with you there. I think target selectivity will be really important here, which means that it won't

• 58:01Speaker 00

  be nearly as big or as easy a business as it was in the last decade and a half. And I think that's, you're right about. There might be isolated pockets of winning, but it's a tougher gig than it was. I mean, in 2010, 15, it was a great business. In fact, I think even going back as far as 2002, 2000, I mean, the early Vista funds were just after the dot-com crash, and those guys hoovered up and made a fortune. But we're probably 20 years into the no one churns their SaaS bet. And at some point, as Jason has proved, even a lighthouse customer will turn on their SaaS. Where are you in ServiceNow? Just curious, because they obviously had their little bump this quarter. How do you think about owning something like ServiceNow or Salesforce?

• 58:40Jason Lemkin?

  I think the problems they solve are so sufficiently complicated, you need them. No, you just can't run your business without ServiceNow. But if you talk to anyone that's run on ServiceNow, you just, it abstracts away so much complexity from your business. You just, analytics is like the cat, like, we all talk about vibe coding away things. Analytics is actually the easiest one to vibe code away.

• 58:58Speaker 00

  I agree. Got it. That makes sense. So what you're basically saying is, there will be islands that stay and there's lots of little, it's what they settle, the ancillary in-between products like analytics, to-do lists, and task management will go away.

• 59:10Jason Lemkin?

  But I want to toast Francisco Partners, though. I want, lots of money.

• 59:13Speaker 00

  You just want to sell them a company, Jason. You're just so transparent.

• 59:17Jason Lemkin?

  You know what, you know what the one is? Maybe we should move on. There is something I believe in, in this whole model, right? I don't believe in buying the 17% or 15% grower because we're five years into the price increase and no net new customers. I do believe if IRPE, that the model is the 40% grower. The one that is, it is kind of working today, okay? It's just not growing at the rate we would like in today's world. There is no perfect path to a great exit, but they have an agentic product. They have something going, 35, 40, 45, 50% growth. There may be a moment in time where you can have a very attractive multiple on that property and you haven't gone into the terminal decline. That's where I would spend my emotional energy. What's still growing, approaching 40 or higher at scale, where the founders are burnt out,

• 1:00:02Jason Lemkin?

  it's sort of made the transition, but it's not growing exactly at the rate of the hottest startup in its class? I might make that bet.

• 1:00:09Harry Stebbings?

  Boys, you can choose. We have Stripe hits rule of 80. We have monday.com lays off 20%. We have Mark Pincus's quit if it's too hard, life's too short to struggle. Can't believe that's actually advice. Where do you want to go, boys? You can choose.

• 1:00:24Jason Lemkin?

  The pinkest one I don't want to spend too much time on, I didn't quote that one, right, and got some traction around it. Arguably, he did say that, right? He's a consumer guy. He comes out of games too, right? In a sense, it's quoted out of context by me, but there is a point where a game, you know, unless it's, unless it's cyberpunk, which is back now, right, after five years in the oblivion, but in most cases, you should quit on a game, right? Probably at some point. It's just you got it wrong and you move on, right? It's like quitting on a movie. At some point, you got to move on. But I really, it is what it is. I don't want to be grumpy. I just feel like, it makes me sad when a founder quits, one of the ones we just talked about, a 40, a 50, a 60% grower, okay? A founder with material ownership quits to do something hotter.

• 1:01:06Jason Lemkin?

  And I, and I'm cool with that in the age of AI because, and everyone's like, well, there's so much opportunity cost, Jason. I can found etched in a week at 10 billion. I can get into YC and raise it 100, 100 posts. My round will be fully, fully subscribed before I even finish the batch. And I can't argue with some of that. I just, most of the founders I've worked with over my career that have done that, that have quit something pretty good to do the shiny penny, they're not all Ilya. They've all, it's all been a net negative, all the times I've seen it, the ones that quit with something, right? That's my worry in the age of AI is it's, there's no downside today, just quit. Quit everything, go found an AI company. But man, if you've got 20 million, 50 million, 500 million in revenue, I might see if you could build that in-house.

• 1:01:47Harry Stebbings?

  Jason, we saw last night Lillian Way left Thinking Machines, which makes only two of the original six co-founders remain.

• 1:01:55Jason Lemkin?

  Same thing, I guess, probably, right?

• 1:01:57Harry Stebbings?

  Well, dude, it's Thinking Machines, it's not exactly a 40% boring SaaS grower, like...

• 1:02:01Jason Lemkin?

  And she probably has 1% if she's like a late co-founder, right? So what's Thinking Machines worth on paper?

• 1:02:06Harry Stebbings?

  Eight billion.

• 1:02:07Jason Lemkin?

  Oh, she's only got 80 million? I'd leave that behind. It's nothing.

• 1:02:11Speaker 00

  I'm having nothing.

• 1:02:12Harry Stebbings?

  I mean, it's probably, I mean.

• 1:02:14Speaker 00

  I think they were conflating a lot. I mean.

• 1:02:16Harry Stebbings?

  Are we?

• 1:02:17Jason Lemkin?

  Rory's like, I've had enough of you degenerates.

• 1:02:19Speaker 00

  No, no, no. I, I, I think the whole, the comment on quitting, I mean, I think there's really three different things that Jason, you're right. The least obvious one is the, I've got a company, it's at scale, it's growing 40%. I mean, I, I think you've created something of value. It's not obvious that chasing the next shiny thing will be better. But I don't think that what the reference was to, I think the reference Mark Pincus was more, how long do you keep trying to get product market fit before you say it's just not there? Right. And I think that's a valid comment in the sense of, I don't think quote the answers, you should quit. But the nuanced answer would be, I think you should not do anything out of duty. You should do it because you think you're convert, you know, you, you have a plan to converge on something.

• 1:03:01Speaker 00

  And when you don't have a plan or you don't, you shouldn't just tie yourself to the mast to just keep going this cause. I mean, you know, frankly, 35 years ago, when I had my business way back in the dawn of human time. And, you know, I was a very mediocre manager and I stuck at that thing two years longer than I should have. And I look back and I go, you know, wasted years just because I wasn't, I had that kind of, I owe it. I need to keep trying. I don't want to quit. And I think finding a way to step back and say, am I doing this because I still believe in the mission? In which case, no matter how hard it is, keep going. Or am I doing this out of a sense of obligation and I don't have any way to win? In which case, put up your hands. What I disagreed at Mark is, is the kind of ability to say to a founder, this is the answer, quote, you should quit.

• 1:03:44Speaker 00

  I don't think anyone ever knows. I think the good advice is to say, go in with no priors. Take some time away. Ask yourself honestly, when you rested, we've had a good night's sleep. Does this feel like something you want to do? And if not, and if you don't have a plan, then yeah.

• 1:03:57Jason Lemkin?

  You know, if I took that advice, Rory, honestly, all I would have is a maxed out 401k in life. The only reason I have any economic success is that out of obligation, in part, I kept going. If it was just about me, I would have quit.

• 1:04:08Speaker 00

  Interesting.

• 1:04:09Jason Lemkin?

  Both my startups, certainly I would have quit venture investing, fucking not worth it for a few nickels. I certainly would have quit EchoSign. My founder walked out the door after eight months. He was right. This category was never going to take off. Plenty of folks, yeah. You're giving the same crappy advice Mark Pincus did. Quit when it's hard.

• 1:04:26Speaker 00

  Yeah. Look, I mean, we're all shared experiences. You've lived the, maybe you felt along the way, you should have quit. But you ended up building a very nice company, making a ton of money in a sale and a category that's turned out to be significant. You know, I stuck at it two years longer, went bust and looked back and go, that thing would never have worked. So I think to some extent, it's the old Kirkegaard thing, you know, life is lived and forward, but can only be understood in reverse. There are some things that you look back on, deals that you look back on and go, not only did it fail, but it was just never going to make it. There was just nothing there. And I think if you're in one of those figuring that out.

• 1:04:59Jason Lemkin?

  I've never failed and everything I've done would have failed if I quit. I've never been rampantly successful. I'm not a billionaire. I've never made my investors less than 5X. I've never had a single, but everything almost failed and the people, people just quit. They just quit and they quit more like thinking machines. 80 million is not enough.

• 1:05:16Speaker 00

  Go back to my comment. It's your experience to go, because, because I'll take the opposite statement. I've never quit and I failed at some things. I've succeeded at some things, but I failed at something. So, so it turns out doggedness until the end of time is good, but it actually doesn't actually guarantee a win. So there you go.

• 1:05:30Harry Stebbings?

  Rory, did you not learn more and gain more from the experience though of those extra two years that you took with you?

• 1:05:36Jason Lemkin?

  I think Rory and I are going to agree. The answer is no.

• 1:05:38Speaker 00

  No. Harry, there's a great line someone gave me when I failed. This is Harry, is it? Experience is what you get when you don't get what you want.

• 1:05:48Speaker 00

  No, I, I, I done all my learning two years earlier, right? I had fully processed it all and the last two years were just hell on earth.

• 1:05:55Jason Lemkin?

  I think you do. I think that's one of the dumbest things out there that you learn so much from these failures. I think, do you think you learn a lot, whether it's investing or otherwise, from the almost failures, right? The ones that turn around, you learn what, because we're, we're all sitting on some companies, we're not sure, right? Where are they going to go? And when you have a few portfolio companies that do turn around, you do learn, you do learn a few things, right? But the ones that ran it into the ground.

• 1:06:14Speaker 00

  You learn something and I think there are things to learn, but you don't need to live it for years on end to learn it. Right? You can process through it. So no. Unbalanced, Jason, I am emotionally more in your camp than in the Mark just quit camp. The point I'm merely making is, I actually think if the only reason you're hanging on is duty and you see no hope, you're actually going to fail anywhere. This is my theory, but we can disagree.

• 1:06:34Harry Stebbings?

  Boys, is there any final topic that we have to discuss?

• 1:06:37Speaker 00

  I mean, yay Stripe.

• 1:06:39Jason Lemkin?

  I have one question for Stripe for Rory, maybe if you want to break. Cause this is the first time I tried to write it up because I never had a chance to compare it to Adyen. But it doesn't seem so wildly overpriced, given these numbers.

• 1:06:48Speaker 00

  The numbers are great.

• 1:06:49Jason Lemkin?

  Compared to Adyen, it doesn't, it seems about appropriately premiumized to Adyen, right? I always thought they were pure companies, but Stripe's much better.

• 1:06:57Speaker 00

  Yes, they have much higher profitability.

• 1:06:59Jason Lemkin?

  Yeah.

• 1:06:59Speaker 00

  And what's happened, I think, is they've hit a sweet spot because they have, they, they charge more. They have more smaller merchants at higher pricing. And for a long time they were less profitable despite that, because they were Silicon Valley soft company. And Adyen were a hard-nosed bunch of Dutch people. But about four or five years ago, when the team, the Carlsen Brothers in particular, focused on efficiency, they made it an efficient company. So now you have a company with good pricing because the 2.75 is attractive and they're efficient. And then the third key ingredient happened in the last two years. They basically signed up all the AI companies that are selling shit online. And they shouldn't be getting anything like the money they're probably getting from the OpenAI and Entropics in terms of interchange fees.

• 1:07:44Speaker 00

  But who's got time to optimize that stuff? They're designed into the flow of companies that are just printing money. So they're printing 2.75% of that money. And what that means is the growth's accelerated. And when you have an efficient leveraged cost structure, probably using a lot of AI to stay efficient. And then your revenue takes off, it all just flows to the bottom line. So I would have said five years ago, they look expensive relative to Adyen. But now they have the wonderful combination of super strong growth, good pricing, wonderful margins. It's a sweet spot right now, driven in particular by this kind of lift from online AI spending.

• 1:08:22Harry Stebbings?

  Can I ask one final one? Will the OpenRouter deal happen? It seems to have gone super quiet on that front. And then everyone's released their own routing product. We saw Cursor release it. One of my companies, merge.dev has released their own. And it seems to be a very commoditized market very quickly. Will we see this transaction complete, do we think?

• 1:08:42Speaker 00

  From a business model perspective, in other words, the kind of front end API to aggregate a lot of complexity. OpenRouter does for LLMs, what Stripe does for money and what Twilio does for telecoms. So it kind of makes sense from a company model perspective. I mean, Jason said it last time, smart of OpenRouter to get out. 10 billion felt like a lot, but good luck to them. I mean, couldn't happen, you know, the go team.

• 1:09:05Harry Stebbings?

  Jason, will that happen?

• 1:09:06Jason Lemkin?

  I wish I had the data of, of time from intentional leak by VC to deal closing. Okay. But I believe it is more than one week on average, right? And so this certainly appears to be a leak to generate a pseudo second offer potentially to justify a premium price. Listen, every company is the same. I, I've been on the other side of Stripe deals. They do what you would expect. They offer an acceptable but mediocre price from a venture perspective, right? So maybe they offered the last round price, maybe they offered 2 billion, they asked 10. I don't know what the exact story is. So someone leaks it. This is how you do things today, right? And I don't know what happened. My guess is Stripe said, you, you, you speak again, it's off.

• 1:09:47Speaker 00

  You're exactly right. They could be hunkered down doing a deal.

• 1:09:49Jason Lemkin?

  It can take a couple, even if you want to work all weekend, deals don't, in my very limited experience, deals don't close the day after the leak. You have to sequence the leak properly or it won't, no, it's part of a price negotiation.

• 1:10:00Speaker 00

  I agree.

• 1:10:01Jason Lemkin?

  It doesn't really create another deal that closes. It's much better than a banker pretending they got someone to add you in into the deal. You create this, this leak energy, but you need a couple of weeks for that, you know, for that, for that to work, right?

• 1:10:13Harry Stebbings?

  So does it go, does it go through then, Jason?

• 1:10:16Jason Lemkin?

  If it's real, it probably does. Listen, I only have a limited amount of leaking experience. Maybe Rory has more. You don't leak a fake deal. It doesn't accomplish anything. Okay? People look at leaks or like, because they're trying to put the company up for sale, right? But I don't think that leaking strategy works. The leaking strategy works for a good, but not great offer because you only have so much leverage. I'm terrible at negotiation. I'm terrible at game theory. But if Stripe wants two and you want eight, it's very awkward position to be in. Maybe Frank Quatron solves this for you. That's the magic. But if you don't have a solution, the leak is the best idea. Because here's the thing, what I learned at Adobe, just to maybe over talk about it. It works in the sense that big company M and A in corp dev isn't brutally slow. I'm sure Rory will agree to this, right? But all of them have a deal mode.

• 1:11:00Speaker 00

  Yep.

• 1:11:01Jason Lemkin?

  So when an email comes in and says someone that was on the list is in play, it does not mean that an Adobe will buy them or Google buy them. But they spring to action and they make a decision within a couple of days. They literally go into deal mode and that can at least get you a paper counter offer. It can at least get you a paper counter offer. And you can go back to Stripe and say, we have an, we, we think we have an offer from Adobe or, I mean, it's not going to be Adobe, whoever at five. But you need, you need like a week or so for the leak to work, but it does, it does work. And, and the big companies, the thing is, it sounds crazy, but the big ones, they, they at least want their shot. Just like, just like Andreessen doesn't want to be embarrassed that they didn't see a deal like Sequoia. It turns out it's somewhat similar in corp dev and companies. They will at least want a shot to buy someone that's on there. Cause it, cause they already know who their list is, right?

• 1:11:43Jason Lemkin?

  And so as soon as they get the email, especially from a banker, they just shoot around, guys, we got to get together tomorrow and decide if we want to buy OpenRouter.

• 1:11:50Speaker 00

  By the way, Harry, just explained, that's a dig that you guys in the UK call it router and we over here call it router. And we invented them. So we're allowed to pick. But Jason, you're exactly right. Yeah. You don't want to be the corp dev guy who says, we didn't get a look at that. When the board asks, how come we didn't, yeah, it's, it's drumming up interest. Who the hell knows what's actually happening?

• 1:12:07Jason Lemkin?

  It's utterly amazing. If you don't have another offer, it could take three, four, five months to close an M and A deal, right? If you have an offer, it turns out any big company can move in a week, not to close, but to sign term sheet. Any big company, you're shocked how fast they can move when they're in deal mode and there's a backend constraint. All the crap blows away and then Mark, Mark Benioff or whoever just decides, they just decide.

• 1:12:28Harry Stebbings?

  Final one for you. You can own Raveloid at 115 or Stripe at 165. Which one do you want to own?

• 1:12:35Speaker 00

  Even though I love the Stripe vibe more, I really do. I mean, I looked at ours. I'd love them to kill it and they are killing it. They have killed it. They're going to do amazing. I think the beauty of Revolut is you have a whole continent full of overpriced, crapily run banks, right? That you can just roll over and you've got 500 million Europeans who are just getting shafted on financial fees. So I think TAM is like, look, the TAM for payment services in the US is enormous too, but it's just marginally more competitive. So I think the, look, the boat, I mean, we're pointing out the boat amazing companies, neither of them are at the core AI companies. Though obviously Stripe's getting a lift, they are bought really well executing fintech companies. So I like them both in the sense that it, it turns out there's hundreds of billions more to life than AI.

• 1:13:19Speaker 00

  And those are two examples of it. But at the margin, on a TAM basis, a plus or minus a hundred bill, there's just more compounding in those 500 million exploited Europeans.

• 1:13:28Harry Stebbings?

  Jason?

• 1:13:29Jason Lemkin?

  I just think at the end of the day, the moat at Stripe may be a little lower. The network effect may not be as strong as it seems. Banking just has marginally more powerful moats and they're working on some network effects. So my Yahoo version would be take Revolut because Stripe just has to continue to execute it at outstanding level. Because the the the network effects and moats are there and they've invested in everything from Atlas to their own router to create the network effects. But I'm not sure they're they're truly there.

• 1:13:55Harry Stebbings?

  Boys, it's been a pleasure, Rory. I appreciate that, Ribbing. I will remind you that you Americans speak English. I don't know if you think about that when you like, like the language, English. We we we took it from you in seventeen seventy six. It came with the treaty. You've won the war. I feel like this is Basel faulty. You seem faulty. Not the war, Harry. The war of independence. Absolutely brilliant. I love that.

• 1:14:20Harry Stebbings?

  But before we leave you today, what's one thing in business that's spreading as fast as AI? AI risk. Every new tool your team signs up for, every vendor that turns on AI features, every new integration. Each one, I'm sorry to say, is an opportunity for something to go wrong. And most security programs weren't built for AI's pace of growth. Well, that's where Vanta comes in. Vanta is the number one agentic trust platform used by over sixteen thousand fast moving companies like Ramp, Cursor, Harvey and more to ensure they're always audit ready. And now Vanta is helping companies like yours. Watch for the risks that show up between audits across your vendors, your AI tools and your whole environment.

• 1:14:59Harry Stebbings?

  How? Well, the Vanta agent works like a twenty four seven GRC engineer in the background, finding issues, drafting fixes and cutting vendor agreements time by up to fifty percent. Whether you're a fast growing startup or a global enterprise, Vanta is here to help you automate your security and your compliance and earn and prove trust. My listeners get a special offer, oh yes, a special offer, one thousand dollars off Vanta at vanta.com slash two zero VC. That's V A N T A dot com slash two zero VC for one thousand dollars off. While Vanta keeps compliance covered, Deal helps you hire globally. We get it. Global IT can be a headache. New hire in Tokyo, but the laptop, well, it's stuck in London.

• 1:15:42Harry Stebbings?

  Someone left the company last week. Wait, is that access already revoked? Deal IT handles hardware, software and access to across a hundred and thirty countries from one system. You have the right to be impressed. Brands like Eleven Labs are already managing their global IT at scale with Deal. It's one system, one source of truth with zero vendor gaps or manual workarounds. So build your global team with Deal. Visit D E E L dot com slash two zero VC and start expanding your business today. While Deal builds the team, Framer builds the site. When a new landing page turns into a pile of tickets and handoffs, Framer helps your team move faster. Here's what I love.

• 1:16:24Harry Stebbings?

  Framer is the pro AI website builder for creators, teams and businesses that care enough to get every detail right. The agents close the gap between AI generated ideas and production ready website work. Because it all happens where the site actually lives. It lands on the canvas, stays editable and can be published when the team is ready. So you can build custom code components, create and manage CMS content, optimize SEO settings and ship everything all in one place. The agents bring speed and scale. You bring taste, judgment and control. It's an enterprise level solution too. Premium hosting, enterprise grade security, ninety nine point nine nine percent uptime SLAs. Which is why the world's leading brands like Perplexity and Miro build in Framer.

• 1:17:08Harry Stebbings?

  Learn how you can get more out of your site from a Framer specialist or get started by building for free today at framer.com slash twenty VC for thirty percent off a Framer Pro annual plan. That's framer.com slash twenty VC for thirty percent off. Framer.com slash twenty VC. Rules and restrictions may apply.