Arena Show Part I: Idea Dinner + YC Continuity

We did an Arena Show!! This evening was so big and so special, we had to split it into two episodes for the podcast feed. First up is the Idea Dinner with our best internet buddies, Packy McCormick and Mario Gabriele (and special guest judge Shu Nyatta), followed by the story of YC Continuity with managing partner Anu Hariharan. Huge, huge thank you to PitchBook for making this night possible. *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._

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

• 0:00Ben Gilbert?

  Holy crap! Wow.

• 0:07Ben Gilbert?

  Hello, Acquired listeners.

• 0:13Ben Gilbert?

  You didn't tell me you were gonna say that. That's good. I'm ad-libbing.

• 0:18Ben Gilbert?

  I got up here and I was overcome with emotion, and none of this is scripted.

• 0:24Ben Gilbert?

  Thank you so much for coming tonight.

• 0:29Ben Gilbert?

  I like prepared things, and I should read them off my iPad here. But the only thought that can occur to me right now is how different this is than what you and I normally do. David and I are very used to being on Zoom, talking to each other through the internet. There are zero people watching live, and if we say something wrong, we delete it. And that's not happening tonight.

• 0:57Ben Gilbert?

  More important than that is, you know, we get evidence that people listen in the form of analytics, or tweets, or anecdotes here and there of someone saying, "Oh, I listen to the show." But there's no human visceral way to feel that. Like, we literally just refresh an analytics dashboard and a number goes up. And this is so cool to see you. Real.

• 1:24Ben Gilbert?

  Well, as fun as it is going to be to, like, watch the show, and we've got some great stuff planned, I think it will be much cooler to meet each other. For as many, they call it parasocial relationships, where you hear us talk but we don't get to meet you. We're gonna try and meet as many of you as possible. We want a lot of you to meet as many other people as possible, because you have an easy opener, like, "What's your favorite episode?" Or, "How did you hear about Acquired?" Like, "My buddy dragged me here tonight, and I never heard of it before this." But everyone's got some answer to that question, so meet each other, take selfies, enjoy the time together. We have freaking Climate Pledge Arena, and enjoy the time in it. Thank you to PitchBook. Holy crap.

• 2:09Ben Gilbert?

  John's not kidding.

• 2:14Ben Gilbert?

  PitchBook is Seattle's monster, amazing business hiding in plain sight. And it's been really cool to get to know their team more and more and more and understand the business and just learn how, on $4 million, they've been able to build this multi-hundred-million-dollar business. And it's inspiring to us. So, thank you to John, thank you to Kai, thank you to Lauren and Val, thank you to Nas. Everyone we work with at PitchBook is just awesome. So, thank you to them. Happy Star Wars Day, Ben. Happy Star Wars Day. May the fourth be with you all.

• 3:01Ben Gilbert?

  Yes, Paul McCartney is here tonight. We have a great show for you.

• 3:06Ben Gilbert?

  That was last night? That was last night. We do have a great show, though. Tonight, we have Jim Weber, the CEO of Brooks Running, another Seattle monster business that we're very excited to talk to you about. We have Anu Hariharan tonight from Y Combinator, the infamous Packy McCormick from Not Boring, Mario Gabriele from The Generalist, two of the internet's finest publications. So, very excited to chop it up with them. We learned from arena shows past, live shows past, very small live shows past, that our normal format of telling a three-plus-hour story of a business doesn't work very well in this sort of time where you're sitting

• 3:48Ben Gilbert?

  down and you can feel the audience getting antsy in those long stories. So, we got three just like fast-paced, great stories, great segments for you tonight. Be in and out in a couple hours. We'll enjoy it along the way, but it's going to feel fast relative to your normal acquired episode. Speaking of, should we start our normal acquired episode? We've got to do it the way that, I don't know, it feels like we have a way that we start acquired episodes, so we should do that. We should do that.

• 4:49Ben Gilbert?

  Welcome to Season 10, Episode 7, The Arena Show, Presented by PitchBook of Acquired, the podcast

• 5:02Ben Gilbert?

  about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based

• 5:15Ben Gilbert?

  Pioneer Square Labs and our venture fund, PSL Ventures.

• 5:19David Rosenthal?

  And I'm David Rosenthal, and most days, I'm an angel investor based in San Francisco. But today, I'm an angel investor based in Seattle.

• 5:31Ben Gilbert?

  And we are your hosts. All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 5:52David Rosenthal?

  Yep. Your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this "shadow AI" running with no security review at all.

• 6:13Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 6:35David Rosenthal?

  In half? Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor and Snowflake all stay audit ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 6:53Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V A N T A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you. David, what do we have in Act One?

• 7:23David Rosenthal?

  Well, for Act One tonight, we start back in February 2021, when we were all bored at home, Clubhouse was a thing, GameStop was going to the moon.

• 7:40David Rosenthal?

  And we decided to call up our best internet friends, Paki McCormick and Mario Gabrielli, and pick some stocks.

• 7:51Ben Gilbert?

  Like everyone was doing.

• 7:52David Rosenthal?

  Like everyone was doing.

• 7:53Ben Gilbert?

  Real quick, this is not investment advice. Do your own research.

• 7:57David Rosenthal?

  I'm glad you remembered that.

• 8:01David Rosenthal?

  And tonight, we're going to recreate that magic live here, in person. Ladies and gentlemen, please welcome, all the way from New York, Packy McCormick and Mario Gabriele.

• 8:16Speaker 02

  Whoa. Oh my God, let's go. Look how dirty my sneakers are, too. This is perfect.

• 8:25Speaker 03

  This is a weird start. So just change shoes from the beginning, but let's do it.

• 8:30Ben Gilbert?

  Yes. So the only rule is you will lose the idea dinner unless you are wearing.

• 8:34Speaker 02

  Did you ask us for a shoe size? I didn't remember that. This is actually the second most embarrassing thing to the pick.

• 8:43David Rosenthal?

  Well, we needed to delay a little bit because we have one more thing. A little special surprise. We wanted to raise the stakes tonight, so we brought in a judge who is going to grade each of our picks, acquired style, and declare a winner and a loser at the end of the night.

• 9:03Ben Gilbert?

  And a loser. This is very harsh.

• 9:05David Rosenthal?

  Very mean. Yeah. Please welcome, from the capital of Silicon Valley, Miami, Florida, great, longtime friend of the show and former SoftBank Latin America Managing Director, Shu Nyatta.

• 9:30Ben Gilbert?

  Thanks, Al.

• 9:30David Rosenthal?

  All right, so let's dive into the idea dinner. I'm happy to report when we were deciding the order that we were going to go in. I came up with the criteria, which was whose picks historically have performed the best. That would be my.

• 9:45Ben Gilbert?

  This is so rigged. In the way that you chose to select whose picks have performed the best, yours performed the best.

• 9:51David Rosenthal?

  Yes.

• 9:53Ben Gilbert?

  Not private picks, not blended, just public picks?

• 9:56David Rosenthal?

  Yes.

• 9:57Ben Gilbert?

  Okay.

• 9:59David Rosenthal?

  So I'm going to back clean up, and Mr. Mario Gabriele is going to lead us off.

• 10:04Speaker 03

  And why is that?

• 10:05David Rosenthal?

  Yeah, well, I don't agree with the judging so far, but... Before you tell us your pick, for all two people that don't know about The Generalist, tell us about The Generalist.

• 10:17Speaker 03

  Ah, wonderful. Thank you so much. The Generalist is a publication that covers tech, crypto, and venture capital. I aspire to the level of depth of these two gentlemen and always enjoy collaborating with them.

• 10:29Ben Gilbert?

  We cannot write the way that you write, so there's no aspiration. So for people who haven't read The Generalist, it is...

• 10:38Ben Gilbert?

  Deep writing about technology companies in the most whimsical style I can possibly imagine. Like Mario is a novelist at heart who covers tech companies. It's very fun to read.

• 10:49Speaker 03

  Oh, thank you so much. I feel honored.

• 10:51Ben Gilbert?

  Now, before we grill you on your pick, a little like rules of the game here. We're all coming with our best investment idea, starting today. What is today? May 4th. So the idea is to espouse something that you think would be a profitable investment, not investment advice. Starting today, going forward on a timeframe that you choose to specify. And then Shu ultimately will be the judge because we don't have the benefit of all that time to know how it will actually play out.

• 11:23Speaker 04

  Godlike powers.

• 11:25Ben Gilbert?

  Yes. So, yes. So Mario, lead us off.

• 11:30Speaker 03

  Well, since Shu is really my audience. All right, gentlemen. My pick is Snowflake.

• 11:40Ben Gilbert?

  Ooh.

• 11:42Speaker 03

  Thank you.

• 11:43Ben Gilbert?

  Heard of it.

• 11:46Speaker 03

  So for those who perhaps are less familiar, what is Snowflake? Snowflake is a managed data warehouse. And their sort of initial genius was that they separated storage and compute. Made it super easy to take in all of this data that a company is managing and to run queries against it super fast. So you can get the insights and information from it. That initial idea was quite brilliant and has formed the company into the sophisticated, elegant product that it is today. That made it something of a pandemic, darling, if we recall. It was one of the craziest sort of IPO day pops that I think any of us have seen in a long time.

• 12:27Speaker 03

  And the stock traded as high as, I think, 403 a share. Today, it's about 183, 185. So it has taken quite a hammering.

• 12:39Ben Gilbert?

  Multiple compression, as they say.

• 12:41Speaker 03

  Indeed. Especially this first quarter, it really got like, I think, a 45% drawdown.

• 12:48Speaker 03

  But when you look under the hood at what the company has been doing, certainly some of the multiple compression is merited, but the growth on revenue, the net retention, the free cash flow, all of those things have moved in a stellar direction. So revenue is up about 105%. Net retention is 178. It was 168 the year before. Which I think is like a record for a public company, net retention. It may well be. It's pretty wild. And yeah, they're generating 80-plus million in free cash flow. And the business in Q4 of last year actually got contract value of 1.4 million coming in,

• 13:31Speaker 03

  which is all of the revenue they had the year prior. So I would submit to you that this is... You would submit to Shu. You would submit to Shu. I would submit to Shu, Judge Shu. Don't forget.

• 13:45Speaker 03

  That this is a business that has the potential to compound for many years. I think over a three-plus-year time horizon, it can do extremely well. It is a play that summarizes the growth of data in the technology industry, which feels like a safe bet. And it's run by one of the biggest ballers in the executive world, Frank Slootman, who has done this now at least two and a half times, depending on how you parse it, and who is sort of the quintessential sustainable growth CEO. He is someone who knows how to manage in difficult circumstances. He's compared himself to General Patton. And this is a time for a Patton-like figure, I would submit.

• 14:29Speaker 03

  And so my pick is Snowflake. It doesn't come without risks, but those are risks I'm willing to take. You've come a long way from... I think your first pick was a SPAC. Bridge Towns fact.

• 14:43Ben Gilbert?

  Whoa, whoa, whoa. Can we put a moratorium on bringing up people's old picks? Nobody's portfolio looks good right now.

• 14:51Speaker 03

  Yeah, except for yours. So long.

• 14:54Ben Gilbert?

  Sorry, David's less negative than everyone.

• 15:01David Rosenthal?

  Any thoughts from the peanut gallery on Snowflake?

• 15:05Ben Gilbert?

  I mean, you have every sector tailwind in the world, and the question is going to be like, so of course more companies are going to be using cloud data warehouses in ways that you want to have good UX around. And then the question is, are they going to continue to capture all the value? Like, how do they stand competitively?

• 15:23Speaker 03

  Yeah, I think the sort of net retention shows that they're very good at growing with this customer base. They're growing faster than any other cloud company, which isn't super surprising, given their relative size. But I think that's a fair question, but not one that I'm hugely worried about, given like, the overall growth of the of the sector.

• 15:44Ben Gilbert?

  Sweet. No further comments.

• 15:47Speaker 03

  Wow.

• 15:47David Rosenthal?

  Me neither.

• 15:49Ben Gilbert?

  Well done. Shoe? So wait, how are we doing this? Is shoe?

• 15:51Speaker 04

  I'm not going to do real time grading.

• 15:53David Rosenthal?

  Yeah.

• 15:54Speaker 04

  I'll be skewed by the first one, and then I'll be adjusting mid-course. I'll wait. I'm taking notes.

• 15:58Speaker 03

  That's very fair.

• 16:00David Rosenthal?

  Mr. McCormick?

• 16:01Speaker 02

  All right. So I think for all of us.

• 16:03David Rosenthal?

  You asked the internet for your pick.

• 16:05Speaker 02

  I asked the internet for, you know, their favorite favorite stock. I ended up going actually with an oldie but a goodie, but we're going to get there. So I think one of the most important things about 2020 and 2021 for a lot of people was learning about themselves. And what I learned is that I'm a terrible, terrible stock picker. So.

• 16:24Ben Gilbert?

  Wait, wait, but you're on CNBC like all the time.

• 16:27Speaker 02

  Like I said, I'm a terrible, terrible stock picker. And, you know, as we did the rankings, I gave Mario a little bit of guff, but I think we were going back and forth for last place. And so the safe move, we also decided to only do Publix because we didn't want to shill our private market portfolio companies. So Composer is one of the companies.

• 16:50Speaker 02

  In my portfolio, that makes it really easy to invest in automated trading strategies, I'm gonna go with one of the strategies that they have that's risk on, risk off. It looks at treasuries and actually NASDAQ outperforms S&P as an indicator and then puts you in a basket of like 3X, like TQQQ when things are good and it puts you in like long dollar when things are bad. So if I wanted to be super safe, that's my pick and that's actually where I'm putting my money. Not gonna do that, because we're all the way out in Seattle. Second thing you could do, but we can't invest in this, but maybe there are shares going around.

• 17:30Speaker 02

  Apparently it's possible to get into the equity tranche of Elon's Twitter Take Private. Oh.

• 17:37Ben Gilbert?

  At least like he's aggressively trying to find people to take some of the equity tranche.

• 17:43Speaker 02

  He's aggressively, so if any of you want a piece of the Twitter Take Private, 43, 44, whatever, billion dollars. Minimum check. Minimum check. I think actually they are taking relatively small checks from what I've seen. Here's the question, is Not Boring Capital... Stonk size checks? Stonk size checks, yeah, exactly. Is Not Boring Capital investing? Not Boring Capital, that is outside of Not Boring Capital's very, very broad mandate, so like maybe I'll throw a YOLO check in there, but...

• 18:10Ben Gilbert?

  Dude, you invested Not Boring Capital's money in buying the Constitution.

• 18:14Speaker 02

  The... And this is too far.

• 18:17Ben Gilbert?

  And this is outside.

• 18:19Speaker 02

  That one was a 15 billion percent IRR for a little while, time has gone on, but that was a 15 billion, not investment, it wasn't an investment, I was donating or contributing to the Constitution, but... So the Twitter thesis, and this isn't the pick, but the Twitter thesis is that everybody in this room, half of us are here because of Twitter. If you polled the audience, the average that it would take to pull people off of Twitter has to be in the hundreds, if not thousands or tens of thousands of dollars, yet they're monetizing like Android right now, right? Like Twitter needs to be the Apple of social media. It has a small but loyal and valuable user base. The board doesn't use Twitter. Jack is doing whatever Jack stuff.

• 19:04Speaker 02

  But like, somebody's gonna come in and monetize that thing. I think you charge for verification. You get rid of the bot problem. If the 80 million people who use Twitter in the US paid $3 a month, you're looking at a $3 billion recurring revenue opportunity annually for Twitter. And he's gonna fire headcount. He has to, to pay his debt service. But like, I would imagine 90% of people at Twitter, and if there's anybody in the room, I'm so sorry, but like, don't do very much.

• 19:30Speaker 02

  So there's a lot you can do on the cost side. And then I think with somebody like Elon, it's either gonna go horribly, horribly, horribly wrong, or it's gonna go really, really, really well. And I think that you can kind of build the, like, missing WhatsApp of the US, kind of on the Twitter platform, where you have all of these valuable, passionate users. So at $43 billion, do you think, like, when he takes this thing public again in three years, that he can do that at, you know, a fifth of whatever Facebook's valuation is at that time? Like, pretty safe to ask. Not the pick.

• 19:58Speaker 02

  We are- Just a straight-up filler. We can't, I mean, it's a public market pick, right?

• 20:02Ben Gilbert?

  We're not getting out of here at 8:00 PM tonight. There's not a chance. We're just admitting that now.

• 20:07Speaker 02

  The reason that I'm in last place is because of a company named Open Door. Oh, yes.

• 20:13Speaker 04

  Yes.

• 20:14Speaker 02

  Not the pick? Open Door is the pick. And here's why. Because we're in Seattle, and Open Door vanquished a Seattle company, Zillow's iBuying program, own the iBuying market themselves now, did $8 billion of revenue last year. And now, this is, I came from Breather, where we counted top-line revenue as like, anything that, you know, it's a generous top-line. I saw a bank knows about this as well, the generous kind of top-line.

• 20:43Speaker 02

  Shots fired. Just the WeWork thing, and we competed with them, and what a wonderful company. But, um, but still, $8 billion- Community-adjusted top-line. That Open Door did last year. They're currently trading at a $5.00 billion market cap.

• 20:59Speaker 02

  Housing is a multi-trillion-dollar market and everybody in the country, it seems like, this past year, learned how awful that process is. And so this is a point, and I've written about the company, but this is a point that I am taking from Twitter, which is somebody said it is the worst UI/UX customer experience in the biggest market out there, and they have the best solution with iBuying. Sometimes it doesn't have to be hard. I'm treating this more like a venture bet. Like, two months ago, $5 billion was a Series B valuation. So treating this like a venture bet, that they're the leader in this huge market that is inevitable, they're operationally super sound, they finally turned an adjusted EBITDA profit last year, so they can make money on this business, and they did thousands and

• 21:44Speaker 02

  thousands and thousands of homes, and their biggest competitor has dropped out of the market, and Zillow is no longer doing iBuying. So this market is there to lose. Eric Wu is an absolute monster, and it can't go any lower. So I am doing what you're not supposed to do, doubling down on my biggest loser. Open, ladies and gentlemen.

• 22:05David Rosenthal?

  All right, all right. Excellent. What about, Redfin is still in the market, another great Seattle company. Are you concerned about them as a competitor?

• 22:15Speaker 02

  Are they above or below a billion-dollar valuation right now? No, I think, I think, actually, the mistake I made last time was I did a basket of these real estate talks. It is a massive market that is awful to operate in right now, as a lot of people who bought a house over the past year have realized. I think that Redfin's gonna do really well. I think that Zillow, now that it's kind of back to its original focus, is gonna continue to do really well. I still love Zillow. And I think that Open Door is gonna do the best. I think they have the biggest lead in iBuying, and I think that's a huge, huge opportunity, particularly because they have the best company value in all of the world, which is bips for breakfast. Like, they pull every basis point out of operating these houses, and that is a really, really valuable thing.

• 22:57Speaker 02

  It does remind you of another Seattle company, Amazon, in that, like, that you really need to get your costs right, and they're the best by far at doing that.

• 23:05David Rosenthal?

  There it is. There it is.

• 23:10David Rosenthal?

  Ben?

• 23:11Ben Gilbert?

  Because David is theoretically winning, I will go next. So I did actually what Packy did. I made a list of things that I was contemplating and I thought I'd share some of those just because I think they're interesting things you could buy with your pick right now. Literally anything because everything's on sale.

• 23:35Ben Gilbert?

  I thought about Google again, which was, I think, the best pick any of us made, except Solana.

• 23:45Ben Gilbert?

  Still an amazing business, still cheap by valuation, you know, any way you want to slice it, price to earnings, price to sales, whatever. Not my pick. I kind of like the thesis that's going around FinTwit right now where people are saying Amazon has gone so low that they're basically valuing the retail business at zero and it's only AWS contributing to its market cap. And I think you can build some models to sort of show that. Would I take Amazon's retail business as a free option? Absolutely, I would. Again, not my pick, just like Packy. There's a Twitter one that I had too, which is buy Twitter right now because there's free $5 bills attached to every single share.

• 24:28Ben Gilbert?

  And for folks that don't get that joke, there's basically an arbitrage you can run. If you think that Elon is actually going to close this deal and pay out every single Twitter shareholder at $54.20 per share, you can go buy a Twitter share right now for like 49 bucks or 50 bucks. I don't know what market closed at today. But, I mean, that's free money if you think Elon is actually going to complete the deal. Not my pick. So what I'm going with is one that I know David and I have discussed at length. I can't remember if we've done it on air, but I looked back at our Idea Dinner picks and we haven't actually picked it on the Idea Dinner, and that's Coinbase.

• 25:14Ben Gilbert?

  This is a value investment.

• 25:17Ben Gilbert?

  And I'll explain myself, but this is a crypto value investment. So let's set the anchor point that we should all think about this business. In the last 12 months, they've done $10 billion in free cash flow.

• 25:33Ben Gilbert?

  It's astonishing. That is money that piled up in their bank account based on the profits of the business that they're operating. So they're printing money. The market cap at close today was $34 billion.

• 25:45David Rosenthal?

  Wow.

• 25:46Ben Gilbert?

  So if I was running a business that was generating $100 of cash per year, just to make the math easy, would you buy that business from me at $340? That seems like a pretty good pickup, especially one that has network effects, the leading brand in the space, growing incredibly fast, in a gigantic wave. Now people can think crypto is gonna crash, or the bubble's gonna pop. They're the most established company in the space, and it is still the first inning of all of crypto. So you have the opportunity to do, and here's where it gets kind of interesting, a Berkshire Hathaway-style investment into

• 26:31Ben Gilbert?

  a crypto company that is the leading crypto brand in the world? It seems pretty safe to me. Famous last words. But to me, you're like very cheaply valuing their unbelievable business that they have today. And sure, there's gonna be margin compression, and sure, the take rate's gonna go down over time. But like, I think you have a lot of resilience based into the price, not to mention all the free options that come stapled to that business, which are the NFT business and every other venture that they're going into. And on top of all of this, I think a great way to play crypto in Web 3 is to

• 27:12Ben Gilbert?

  look at the companies that have centralized all the activity and are able to run Web 2-style businesses or Web 2 business models, using the heat and light that's all shown on Web 3. And Coinbase is literally the best example of that, and has...

• 27:28David Rosenthal?

  Not only that, but Coinbase and FTX, they make money whether crypto goes up or down.

• 27:34Ben Gilbert?

  Right.

• 27:34David Rosenthal?

  As long as it's moving.

• 27:35Ben Gilbert?

  And if it goes up or down faster, they make more money.

• 27:37David Rosenthal?

  Right.

• 27:40Ben Gilbert?

  So my pick is Coinbase.

• 27:42Speaker 03

  I gotta say, I really like it. I think it's really good.

• 27:44Speaker 02

  Yeah. I was thinking about this one too. And I think what talked me out of it were a couple of things. One, I see a lot of pitches from senior ex Coinbase people. And so it feels like there's a post-IPO brain drain happening a little bit, which is natural and you also don't love to see. I think FTX is, I mean, like, there's a lot of comparing FTX and Coinbase because they're right around the same market cap right now. FTX has like 200 people or something crazy and it's moving really, really fast.

• 28:16Speaker 03

  And like 14 engineers.

• 28:18Speaker 02

  Yeah, yes.

• 28:19David Rosenthal?

  That was still, that was one of the most surreal, okay, this is the most surreal moment I've acquired. That might have been second, when we were interviewing Sam.

• 28:28Ben Gilbert?

  This is Sam Bankman-Fried, the CEO of FTX, who Mario wrote a three-part unbelievable series on.

• 28:35Speaker 03

  Sure.

• 28:36David Rosenthal?

  And he was just in the middle of his office and people were like trading behind him.

• 28:40Speaker 03

  100%. And almost certainly playing League of Legends over here.

• 28:47Ben Gilbert?

  Yeah, fair packy. I mean, the FTX bear case on Coinbase would be that derivatives are actually a much bigger market than trading direct equities or direct crypto. I think it's like 3X the volume in any given market is derivatives rather than the underlying asset. And FTX is better poised for the derivatives market than Coinbase is. I still think Coinbase at this market cap is an absolute steal.

• 29:15Speaker 02

  I agree. I think like FTX is, you know, scary in lots of ways and are so, so efficient as a business, but especially factoring in the NFT play, I think there's like a really nice upside here. The stuff that they've shown at least on the NFT side, I think looks pretty promising.

• 29:33David Rosenthal?

  Yeah.

• 29:34Speaker 02

  No, I love, it's a bet that crypto stays big and that decentralization is probably not as important to the next billion users as it was in the first, which is a pretty safe bet. I love the pick, actually.

• 29:45Speaker 03

  Also, would any of us have thought at Coinbase IPO time that they would be shipping enough to do like a big NFT play? Like, I had kind of in my head thought like, okay, we sort of have reached product staleness, but they've actually shown like a rejuvenation on it. Yeah.

• 30:03Ben Gilbert?

  Another way of framing this is, I liked this pick so much in January, and other people on this stage did too, that there were investments made in the company. And I'm speaking with passive voice for fun.

• 30:17Ben Gilbert?

  I like it a lot more today than I liked it then.

• 30:20David Rosenthal?

  Me too, me too. Ben, you've made me nervous. What, for two reasons?

• 30:25Ben Gilbert?

  Because I'm gonna beat you.

• 30:28David Rosenthal?

  Alright, that was one. The other is when you were doing your not picks, which I'm not gonna do, I got really scared that you were gonna take my pick. Because my pick is the company that built this arena, which is Amazon.

• 30:48Ben Gilbert?

  Or bought the naming rights. Built as an aggressive.

• 30:51David Rosenthal?

  Well, okay. They didn't actually build the arena. And so I was thinking about this. It's trading at about a 1.25 trillion dollar market cap. Most folks probably know, probably a lot of folks here work at Amazon. The stock got hammered last week after reporting earnings. But just looking at the fundamentals, Amazon did $470 billion of revenue in the last 12 months. That is the second highest amount of revenue that any company has ever done, ever. The only larger one being Walmart, which Amazon will almost assuredly pass very soon.

• 31:34David Rosenthal?

  So that means that Amazon is trading at 2.5 times revenue, times last 12 months' revenue.

• 31:41Ben Gilbert?

  What are Amazon's margins, David?

• 31:43David Rosenthal?

  Well, it's in the US.

• 31:48David Rosenthal?

  I thought about that. About 400 billion of that is retail revenue. But about 75 billion, more than 70 billion, is AWS revenue, which is very high margin revenue. So each of those retail and AWS, I think there is a bear narrative around that I just simply don't agree with right now. On AWS, I think the bear narrative on AWS is, yes, it's amazing, high margin business, hats are off to Bezos, to Andy Jassy for building it, but its days are numbered. Azure and Google Cloud are growing faster and Amazon,

• 32:29David Rosenthal?

  despite being the early leader in cloud, might actually end up losing this market. I think that's utterly ridiculous. AWS is growing at 37% annually on a $75 billion base. Google and Microsoft are growing at 45%, but their market share combined is still significantly less than Amazon. So yes, it's growing slower, but it's bigger than both of them combined. But then, just like, none of that matters. The market that we are talking about here is the internet. Like, this is the internet. This is the picks

• 33:07David Rosenthal?

  and shovels of the internet and Amazon is the clear market leader, growing 37% a year. I cannot imagine any other asset I would rather own, period, anywhere. So that's AWS. On the retail narrative, like you said, literally Goldman issued a research note last week, now it was a thought exercise, they didn't actually mean this, but valuing retail at zero. People have been doing this for 20 years.

• 33:36Ben Gilbert?

  Wait, can I get into that for a second? How does that work? They issued a research report as a thought exercise?

• 33:40David Rosenthal?

  Well, they have a buy on the stock and I think they were saying that like, the upside is so much that even if you just valued Amazon based on AWS, you would still buy the stock. They think retail is worth something, but that was the thought exercise. So AWS has over a 33% market share of cloud, if the internet. The largest application of the internet by revenue is e-commerce. Amazon has a 56% market share of US e-commerce, a 56% market share. So there's a really cool feature. If you go to your account in

• 34:20David Rosenthal?

  Amazon, of course, this is so Amazon, you can download CSV reports of your own spending. It's scary.

• 34:29David Rosenthal?

  I did this.

• 34:29Ben Gilbert?

  Which they intentionally make it that you have to download a CSV report and you can't actually like see that in the web UI. That would be very scary.

• 34:38David Rosenthal?

  So, just me, over the last five years,

• 34:44David Rosenthal?

  I've grown my spend on Amazon by 34% a year. And in the last 12 months, I ordered 230 items on Amazon because we had a kid. But, you know.

• 34:58David Rosenthal?

  We have garage delivery set up. We have the Amazon credit card. They're launching Buy With Prime on the internet. I'm highly influenced by Amazon-sponsored listings, which is a $30 billion high-margin revenue business within retail.

• 35:11Ben Gilbert?

  Which was approximately zero five years ago.

• 35:13David Rosenthal?

  Exactly. So this is my point. The narrative that retail is worth zero completely misses the point. The reason that retail lost $1.5 billion last quarter is Amazon invests so far ahead of the curve. Like, it's unimaginable to me that I would buy things anywhere else but Amazon. And that moat is so deep that if they were to stop investing, they would become incredibly cash flow positive and they'd still have years of runway before any competitor caught up.

• 35:43Ben Gilbert?

  And to your point, I think their capex last year was something like 3 or 4X any of the other big tech companies because they're just building out these warehouses and data centers.

• 35:52David Rosenthal?

  Yep, totally. Okay, so to borrow a Bezos framework, I think you've got to think about what's not going to change in investing. And I think what's not going to change is, one, the internet is going to keep growing, so I want to own AWS. Two, I and others are going to keep buying more stuff online, so I want to own Amazon Retail. And I think that on the retail side, they'll keep adding credit cards, advertising, Buy With Prime, leveraging their infrastructure across other retailers on the internet, and all of those are high-margin products.

• 36:29David Rosenthal?

  It's my pick.

• 36:29Speaker 04

  No argument.

• 36:30Speaker 03

  I have no.

• 36:31Speaker 04

  Yeah.

• 36:32David Rosenthal?

  I gotta play to the hometown crowd.

• 36:33Speaker 02

  Yeah, yeah. I mean, what happened, though, to Apple stock after Steve Jobs, right? I mean, nowadays.

• 36:43Speaker 02

  That's a good pick.

• 36:44David Rosenthal?

  I think Andy Jassy could be the Tim Cook of Amazon.

• 36:46Speaker 04

  I love that. I love that analog. That's a good one. That's a neat little framework.

• 36:51David Rosenthal?

  All right, so Chu.

• 36:53Speaker 04

  So, I'm gonna change the rules a bit. But first, I'm gonna make some comments. Oh. Some generalist comments. Thank you so much.

• 37:02Ben Gilbert?

  Lowercase g.

• 37:03Speaker 04

  The first is, you all said we're not good public stock pickers. And I'm gonna posit that the future of investing is people who understand and create narratives. And that's what you all do. And you actually are very good stock pickers, period, because you understand the power of stories and narratives. So, this is the future of investing, in my view.

• 37:25Ben Gilbert?

  You're getting invited back to the next Serena Show.

• 37:27Speaker 04

  It's no surprise you all have or are launching funds. I love how this is starting so far. So, that's overall comment number one. Overall comment number two is you all think like venture investors. Yeah. Nobody talked about downside.

• 37:44Speaker 04

  You guys said you had investment advice, right? Like, enough time? Nobody. I was waiting for the bear case and what could go wrong, and it didn't come out. For example, Coinbase over-earns from a consumer pricing point of view compared to any other platform you look at that sells to consumers by some dramatic... It's a total outlier. And so if that collapses 80%, what happens to the stock? Maybe 120 is really expensive, etc. So, there was none of that.

• 38:12Speaker 04

  Generally, I'm not picking on that. No. And the third thing is you were all focused on companies that are cheap. There was a focus on now's a good moment because it's cheap.

• 38:24Speaker 04

  Expensive companies can be great investments, expensive so to speak. I think it's probably because we're in this part of the market cycle and so everyone's focused on everything's dirt cheap at these prices.

• 38:32Ben Gilbert?

  Who said that?

• 38:33Speaker 04

  Who said that?

• 38:36Speaker 04

  Somebody said... By the way, the consensus pick is Twitter. Between the two of you. So, I had five criteria. One was upside, the other was downside, the other was timing, why now? The other was novelty, which you all failed on, by the way. Fair. Snowflake could maybe the most novel and there's no science to novelty. I mean, an obvious stock can be a great investment. And the final one was flair. Very scientific criteria. I liked bips for breakfast and general patent, that got me going. Alright, let's go, man. And so I have my ranking, but we're gonna, we're gonna get the audience involved. Oh.

• 39:19Speaker 04

  So, I'm gonna hold, I don't know if you know this from like an old show, I'm gonna hold my hand above a head and then you clap a certain volume and I'll go one by one. And the loudest clap wins. And then I'll tell you if that was my pick or not, okay? So we start with, random order, um, open door, okay?

• 39:45Ben Gilbert?

  Let's go.

• 39:48Speaker 04

  Alright. This way nobody hates me. That's open door. Okay, I kinda got that clap, that was like a five out of 10 clap.

• 39:57Speaker 04

  Then we go with Amazon.

• 40:00Speaker 04

  The whole time, really came through there.

• 40:05Speaker 04

  That's a solid eight out of 10 clap. Yeah. We are in the Amazon arena. So I'll notch it down to a seven.

• 40:17Speaker 04

  Home crowd. Coinbase.

• 40:24Speaker 04

  Wow, that was pretty hot. That was good. That was better than the Amazon clap.

• 40:31Speaker 04

  So that's an eight. And then, Snowflake. Oh, that's surprising. Alright.

• 40:39David Rosenthal?

  Wow. Yeah, that's pretty good.

• 40:41Speaker 04

  So just like the French elections, this is gonna go to a runoff.

• 40:46Speaker 04

  Between Snowflake and Coinbase. Okay?

• 40:51David Rosenthal?

  Do we get to clap?

• 40:53Speaker 04

  Oh. No, because it'll sound louder.

• 40:57David Rosenthal?

  Can do.

• 40:58Speaker 04

  Okay, so think about it, okay? One of these two, Snowflake or Coinbase?

• 41:04Speaker 04

  Snowflake.

• 41:14Speaker 04

  Coinbase.

• 41:18Speaker 04

  And the winner is Coinbase!

• 41:23Speaker 04

  My pick was Snowflake, for the record. Only because of General Patton.

• 41:30Speaker 04

  I think I leave now, right?

• 41:32Ben Gilbert?

  As excited as I am to be victorious, and I am excited.

• 41:39Speaker 04

  How many people own crypto in this audience?

• 41:42Ben Gilbert?

  Yeah.

• 41:43Speaker 04

  That's probably why.

• 41:43Ben Gilbert?

  Yeah. Time will ultimately be the judge, and there is a tracker. There's an idea to enter tracker spreadsheet that listener James Avery, I think James started it, right?

• 41:53David Rosenthal?

  James started it.

• 41:55Ben Gilbert?

  maintains, and so we'll get to, at any given point, look back and see who actually won tonight.

• 42:02Speaker 02

  And I think Open Door reports tomorrow, so...

• 42:04Speaker 04

  We're gonna have a little fun with that one. But we're talking, what, five-year hold period?

• 42:09Speaker 02

  I think that's right.

• 42:09Speaker 04

  So we reconvene again here. Yep. In 2027.

• 42:13Ben Gilbert?

  Perfect.

• 42:13Speaker 04

  See everyone.

• 42:14Ben Gilbert?

  Perfect time capsule.

• 42:15Speaker 04

  And judge this contest. You'll need to use, you know, the rest of the arena at that point.

• 42:19Ben Gilbert?

  That's right, that's right. Well, Pakim Mario Shu, thank you so much, not only for doing this, but for like, flying five hours to do this. Let's give him a hand.

• 42:30Speaker 04

  Six and a half.

• 42:34Speaker 04

  Thanks so much.

• 42:40David Rosenthal?

  Even more important than flying five hours, thank you guys for being our friends. Oh, thank you, guys. This is the best. I'll take a hug.

• 42:47Ben Gilbert?

  NotBoring.co, ReadTheGeneralist.com. You should follow Shu on Twitter. The future of public investing. He's incredibly entertaining. If you like tonight, you're in for a treat on the internet. Thank you. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 43:13David Rosenthal?

  Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 43:27Ben Gilbert?

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 43:37David Rosenthal?

  Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent visible and secure in one place.

• 43:55Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise: the workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 44:11David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 44:28Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 44:37David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. All right, David, what is Act Two of our evening? All right, we're ready for Act Two. And for Act Two, we have a story that I think most of you know, but that we have not yet told on the main feed of Acquired Itself, and that is Y Combinator. Woo! Woo! Specifically, tonight, we're going to tell Part Two of the YC story. I think most people know about YC's accelerator business that produced Airbnb, Dropbox, Stripe, Brex, friends of the show Modern Treasury, Vouch, Vanta,

• 45:22David Rosenthal?

  came out of the accelerator business. But most people don't realize that that is only one half of what YC is today. They are also one of the biggest and most active late-stage growth investors in the Valley, and they have deployed literally billions of dollars into Series B, C, D rounds in startups, both YC alumni and non-YC alumni alike over the past several years. So tonight, we have Anu Hariharan, the managing partner of YC's Continuity Fund, which leads all of these late-stage investments, here to tell the story with us. Anu's had an amazing career. She went from a junior engineer at Qualcomm, great semiconductor company, Yep. to partner at Andreessen Horowitz,

• 46:07David Rosenthal?

  to now running YC Continuity, where she serves on the boards of Brex, local fan favorite Convoy, Woo! Woo! Fair, Monzo, Gusto, Revenue Cat, Rappi, and Vouch. And Vouch. Ladies and gentlemen, welcome Anu Hariharan.

• 46:31Speaker 05

  Thank you. Well, I'll give you a hug.

• 46:34David Rosenthal?

  We got you some shoes.

• 46:35Speaker 05

  Oh, great.

• 46:36David Rosenthal?

  So great to have you here.

• 46:38Speaker 05

  Thank you. Thank you for having me.

• 46:40David Rosenthal?

  I don't know if you noticed, but we picked that walkout music just for you.

• 46:43Speaker 05

  I don't know who can save San Francisco.

• 46:45David Rosenthal?

  Oh! Well, you know, so Pat Mahan, I think, the lead singer of Train, obviously a San Francisco band. I think he wrote that song because he moved up here to Seattle.

• 46:57Speaker 05

  Oh, interesting.

• 46:58Ben Gilbert?

  So Anu is foreshadowing your next.

• 47:01David Rosenthal?

  Yeah, so when YC is, you know, ready to move up to Seattle.

• 47:04Speaker 05

  I think YC will, YC right now is remote first.

• 47:08David Rosenthal?

  Ah.

• 47:09Speaker 05

  So we all live in San Francisco, but we don't have an office.

• 47:13Ben Gilbert?

  So the Mountain View facilities.

• 47:15Speaker 05

  We own the Mountain View building. We have that, but since the pandemic, all our batches have been fully remote.

• 47:22David Rosenthal?

  Wow. So there's no requirement. It used to be before the pandemic, no matter where you were in the world, you had to come to Mountain View.

• 47:28Speaker 05

  Yes, that's not been true for the last three years. And we have learned to do everything remote. We always read applications online, but we learned how to do interviews remote. That was strange for us because we believe in bringing everyone to Mountain View for the interview, and we had to learn how to test for that on Zoom. And then we also learned how to run the batch on Zoom. And we learned how to do a demo day on Zoom.

• 47:56David Rosenthal?

  Wow. And this is the new normal going forward?

• 47:59Speaker 05

  This is the new normal going forward, except there will be tweaks for the new batch. It has not yet been announced, but there will be a little bit of mix of in-person as well as, you know, largely remote. But going remote really helped us. 50% of our batches international.

• 48:17David Rosenthal?

  Wow. What, uh, what's the application deadline for the next batch?

• 48:22Speaker 05

  The deadline has passed, but we are still accepting applications. YC always accepts even late applications.

• 48:28David Rosenthal?

  YC.com/acquired. Get your late application.

• 48:32Speaker 05

  Great. All for it.

• 48:34Ben Gilbert?

  Not a real URL. All right. So wait, let me, let me kick us off here with just like a very, let's drive right in. We wanted to ask you, what is YC continuity? But in a very mechanical way, like, like literally, what is YC continuity? Is it a fund? Is it a set of funds?

• 48:57Speaker 05

  It's literally the word continuity. So the way it was formed, a lot of our founders, the alumni, came and said, "Hey, you took us through the 12-week program. This is really why we started a company. It would be so cool if VC can continue to support us in the form of investment and in the form of programs down the line, too. Why do you stop at the accelerator?" And so that's really how we came up with continuity. So it is a multi-stage fund. We pretty much do primarily the growth stage, Series B and above. We have invested in primarily VC companies, actually. We double down in VC companies. Our goal is to be partner, a lifelong partner,

• 49:42Speaker 05

  for all the enduring companies in VC to the extent possible. We also do a tremendous amount of post-batch programming. So people don't know this. If you go through VC today, you get 10 times more what you got in 2012 batch or 2014 batch. So we run three programs in continuity. We run the Series A program. We help you and teach you how to raise the Series A. So we work with you on pitch decks, how to negotiate term sheets, how to identify investors.

• 50:15David Rosenthal?

  And that happens after, well after the batch?

• 50:19Speaker 05

  Usually, the Series A, most companies raise Series A two to three years after the batch. Very few raise during the batch. So we, you know, we pretty much help them nine months, six to nine months before they raise the A. We sit down with them and say, "Are you ready to raise the Series A? Do you really have metrics that you need to see for a typical Series A investor? How to put the pitch deck together?" We run workshops for how to help you raise the Series A, how to identify all the prep work. And we have, you know, VC runs on WhatsApp. I don't know if you guys know this.

• 50:53David Rosenthal?

  Did not know that.

• 50:54Speaker 05

  We have around 4,000 companies and more than 8,500 alumni. So literally every morning, my phone is buzzing because I have so many WhatsApp groups.

• 51:06Ben Gilbert?

  So we actually can vouch for this, listeners. So you're on the board of Revenue Cat, so we're doing our diligence and we texted Jake, because Jake's another fellow Ohio State alum. He actually was at our very first acquired meetup in San Francisco. And I was like, well, tell me about some stuff with Anu. And he was talking about how you WhatsApped him. I don't know exactly how much of that I can share, but that you proactively were WhatsApping him before a round was coming together to tell him you were considering an investment.

• 51:41Speaker 05

  Yes, so we actually know our founders from day one, right? YC is one team. So even though Continuity was launched seven years ago, by the way. You know, YC itself is 17 years old. But we are one team, so we actually know the companies through the batch. So I knew Jacob in the Revenue Cat example. I think even at the time of Demo Day, when he was trying to figure out which investors to work with, he had reached out to us to say, hey, how should I think about this? Whether to raise from seed investors or CDZ. And then he went through the CDZ program. So that's how we helped him figure out which partner to go with. He decided to go with Index. Behind the scenes, we had actually helped him a ton with how to pitch, how to negotiate the term sheet and all of that.

• 52:26Speaker 05

  So by the time, I usually say by the time we are investing, I'm not waiting for the founders to come tell me I'm fundraising.

• 52:32David Rosenthal?

  Well, it's kind of like, I mean, you acquired Has Been an investor, not acquired. Y Combinator has been an investor in these companies for years at this point. Before Continuity started, was YC, were there any experiments in doing investing after the seed stage before Continuity? Or was Continuity the beginning of?

• 52:56Speaker 05

  Continuity was the beginning. Partners always invested in companies that graduated from Demo Day. So, and I'll give you an example. A lot of people may not know this, but Coinbase, which was the idea winner, did not get any money, or I think he got 20 to 30% of his ideal goal on Demo Day.

• 53:17David Rosenthal?

  That's right.

• 53:18Speaker 05

  Right? He went out and said, I want to raise 750K. Only 30% of the round got filled.

• 53:23David Rosenthal?

  Oh, my goodness.

• 53:24Ben Gilbert?

  It's crazy.

• 53:25Speaker 05

  Because no one understood Bitcoin at the time. But our early-stage partners have worked with these founders for 12 weeks.

• 53:33Speaker 05

  So they're not picking companies or they don't go by idea. They are going by who are the most earnest founders that I want to give them a shot to build. And so quite a few of the YC partners helped fill Brian's round so that he can go back to building.

• 53:51Ben Gilbert?

  Initialized being one of them, if I remember right, one thing?

• 53:54Speaker 05

  Yes, so Gary in fact was the one that accepted Brian into the badge. But that was the culture in YC before Continuity. It was more the partners helping out the founders.

• 54:04Ben Gilbert?

  Individual investors, you know, there was no YC follow-on capital.

• 54:09Speaker 05

  No, there was not.

• 54:10Ben Gilbert?

  It was individuals who built those relationships.

• 54:11Speaker 05

  Continuity was the first time there was follow-on capital.

• 54:13Ben Gilbert?

  Wow.

• 54:13David Rosenthal?

  So who, how did this idea come together? I mean, it's sort of obvious now when you say all these things, but thinking back to, it was 2015?

• 54:25Speaker 05

  July 2015.

• 54:26David Rosenthal?

  July 2015 when Continuity was started. The idea of raising a fund, a growth fund, or like, most people would have thought that was crazy, right? So how did this happen?

• 54:38Ben Gilbert?

  Or people would have been skeptical and been like, then we're picking winners.

• 54:42Speaker 05

  Yes, so I think that at that time, because growth stage capital itself was frowned upon, right? Remember the narrative was you need to go public, you know, the late-stage investors are just throwing cash. There were only like, I think, less than 10 people who could write $100 million checks there. And so, but what you saw was there were less than 10 funds that could write $100 million checks. But the median time to IPO, can you guess what it was in 2015?

• 55:09David Rosenthal?

  Oh, 11 years?

• 55:10Speaker 05

  11 years. And so YC alum's came to YC partners often and said, I, you know, you train us so well at Demo Day and you teach us how to raise, and like, then we were in the woods, right? And we tell our founders, it's never going to be as easy as Demo Day.

• 55:31David Rosenthal?

  Well, it's, yeah, like, the pyramid has widened, it's still a pyramid. But I didn't thought about that, like, back then, yeah, there were, I don't know, less than number of investors you could count on two hands that were writing hundred million dollar checks. And so if you're like, I can't go public, but I need a hundred million dollars plus to finance this stage of growth in my company, you know, it's a supply-demand equation, right?

• 55:54Speaker 05

  Yeah. So it was primarily that, but I think YC's mission has always been, how do we support our founders more? And, right, YC was learning through its evolution. Remember, like, seven years ago was when Dropbox had raised a mid-stage private round. So YC itself was learning, what are its companies going through? When do they get help versus when do they not? So we saw an opportunity. We saw that these companies still need help. And they, you know, and we are in a great place, on an amazing platform, that really kudos to PG and Jessica on how they built it. YC can play a significant role. And, you know, one of the things that people don't understand, and I didn't, I was at

• 56:36Speaker 05

  Andreessen Horowitz before, right, is the YC founder never views YC as an investor.

• 56:43David Rosenthal?

  That's the secret.

• 56:44Speaker 05

  They view YC as the parent. So what does that mean? Anytime a company is going through any issue, five years after they've graduated, they will first come to their YC partner.

• 56:56David Rosenthal?

  Hmm.

• 56:57Speaker 05

  They don't have to talk every quarter, they don't have to talk every month, they may not even have talked for a year, but they would reach out to the partner and say, I need urgent, there's an urgent issue, I need you for five minutes, I need you to help sort this through.

• 57:11Ben Gilbert?

  Does continuity change that relationship, knowing that you are available capital now?

• 57:17Speaker 05

  No, I mean, we worked very hard not to change that. So it goes back to our mission. If you ask venture funds, most of their mission statements are,

• 57:29Speaker 05

  Want to own 10 to 15 or 20% of the best companies. Our mission statement deliberately doesn't have that. It is we want to help more founders start companies and more founders build enduring companies. So what that means is there are many times we may offer term sheets and they would say, out of, you know, we would not want YC this round and we would like YC in the next round because you're already in the cap table. And we will respect that.

• 57:55Speaker 06

  Yep.

• 57:56Speaker 05

  Because it's one D. We don't, we don't say, oh, you know, let's play all the tactics that we need to play in the close process. But we also know that if you've really helped them and earned the trust, we will earn the right to win.

• 58:10Speaker 06

  Yeah.

• 58:11Speaker 05

  And so we often internally have a saying that you have to earn the right to win. And as long as it's the right decision for the company, sometimes we're the right partner and sometimes we aren't. And we have to be honest about that. For us, YC companies succeeding is more important than what the returns of our funds are. But if we do write by them, we know that we can have incredible returns. History has shown that.

• 58:34Ben Gilbert?

  How do you structure the partnership? Like, is RYC partners one big pool that sort of comprise one investment committee across accepting into the accelerator, making growth investments? Or is it more like a couple people are YC continuity and then a handful of people are the accelerator partners making those admission decisions?

• 58:55Speaker 05

  Yeah, so the early stage has group partners that run the groups. And on continuity, it's Ali and I, Ali Rogani, who was the former CEO of Twitter and CFO of Pixar. So we both run the continuity fund. So on the, on the early stage, it's only one group partner needs to say yes. Then the company is accepted into the batch, so they apply. We shortlist a bunch of them and they go through the interview process. But as long as one group partner said a strong yes, I really need them in the batch, they're accepted. Now, remember, the group partner is taking them and working with them for 12 weeks.

• 59:36Speaker 05

  So if they picked, if they didn't pick the right team, the feedback loop is really fast. So they learn and they evolve for the next batch. So that's kind of why we went with the model of one yes is enough. On continuity, it's a three people investing team, investment committee. So it's just me, Ali, and one early-stage vote in case Ali and I don't agree. But it's primarily the continuity decision.

• 1:00:00Ben Gilbert?

  Fascinating. And one other question, just to help sort of frame up the continuity operations. You're not a very high-velocity investor. The continuity fund, I think, only does a handful of deals a quarter. Maybe like leads two, three investments a quarter?

• 1:00:19Speaker 05

  Yeah, so we've done 35 investments in seven years.

• 1:00:22Ben Gilbert?

  Wow. Oh, so even less than I thought.

• 1:00:23Speaker 05

  And we have 3,500 companies that have gone through YC. So we've done less than 1%. Now, it's for two reasons. We were, so we pretty much are a startup within YC. So when we first launched, we were honing our investment strategy. What's right and what makes sense for the broader YC, right? And then I would say we've always been undercapitalized relative to the success of YC companies. And we are changing that. But every time we change that, the bad size grows and they're more successful.

• 1:00:55Ben Gilbert?

  I mean, YC's just had a ridiculous track record. If you look at, I'm sure there's some vanity stat that you know off the top of your head. Is it like total combined market cap of all YC companies?

• 1:01:06David Rosenthal?

  It's on the pitchbook wall out there.

• 1:01:07Ben Gilbert?

  What is it? Actually, I don't know.

• 1:01:09Speaker 05

  It's well over 500 billion.

• 1:01:10David Rosenthal?

  The pitchbook says 600 billion.

• 1:01:12Ben Gilbert?

  600 billion dollars.

• 1:01:13Speaker 05

  Probably 600 billion.

• 1:01:14Ben Gilbert?

  Yeah. So I think no matter how much capital you raise, you're probably always going to feel like you're under.

• 1:01:21Speaker 05

  Yeah, we always feel undercapitalized. Also, we do global, right? Our entire team is sitting in San Francisco, but we have investments in India. We have three investments in India. In fact, the top three breakout companies in India in the last two years are all YC.

• 1:01:34David Rosenthal?

  Wow.

• 1:01:35Speaker 05

  We have investments in London. We have investments in LatAm. We, you know, we have investments in Middle East. So we, because for us, it's about enable entrepreneurship globally. That's the mission. And continuity needs to support that mission.

• 1:01:51David Rosenthal?

  So you said, you know, continuity is this startup within the, it's just crazy to me that YC is 17 years old. I mean, I guess that's true, but like, that makes me feel really old.

• 1:02:01Ben Gilbert?

  In my head, it's still like an innovation in the venture capital landscape.

• 1:02:05David Rosenthal?

  That probably says more about the venture capital landscape than anything else.

• 1:02:08Speaker 05

  That's why we have a new tagline, the YC mob. How many of you heard that?

• 1:02:14David Rosenthal?

  We hear noise about that.

• 1:02:16Speaker 05

  We never thought of them all, but I was like, oh, we're the YC boss.

• 1:02:20David Rosenthal?

  Well, it's like, I used to be on the other side of this because I quasi used to compete with YC in leading seed rounds. And the number of VC firms throughout the whole life of YC that talk about YC, often in negative terms, like, can you believe what they're doing? Can you believe how many companies they're taking? Can you believe they're investing now? It's just like the Andreessen story that we told. If your name is on your competitors' lips, you're winning. It doesn't matter what they say. You're winning.

• 1:02:51Speaker 05

  It is so true. I also think it's really hard to understand and appreciate an organization like YC from the outside. You really deeply understand YC in only two ways. If you're a YC founder and if you work within YC. And I mean, outside, when I was at Andreessen Horowitz, I actually did not understand the depth and the cultural nuance with which YC was built. And it's really hard to grasp that.

• 1:03:16David Rosenthal?

  Can we talk about that for a minute? So I put this in the notes. My current mental model of YC is like a university, a top, call it an Ivy League university. It's very hard to get into. You take classes every year or every six months. There's an endowment attached to it, which is continuity now.

• 1:03:40Ben Gilbert?

  And wait, wait, David, what do you mean by endowment? I want to... Are you saying that all of the proceeds from YC exits go into a big pool of capital that then funds continuity? Is that what you're suggesting by endowment?

• 1:03:56David Rosenthal?

  No, but I'm curious if that's the case. I meant more just like, it's really weird that a large part of the private capital markets and the venture capital markets in America, those dollars come from educational institutions, mostly private educational institutions. That's just very bizarre. But anyway, that's kind of what I meant. Is that a good mental model of YC? Like, what is it like?

• 1:04:22Speaker 05

  Yes, in fact, we say that. We say YC is university for startups. So think of the accelerator as the undergraduate program and continuity is the graduate school.

• 1:04:33Speaker 05

  We are modeled after a university in the sense of we have applications. You don't need to know anyone to apply to Y C. Right. Second, we were the first to do mass production of investments in a batch of startups. No one had ever done that. Everyone usually does. I met a set of companies. We have a Monday partner meeting and you pick one or two. Right. And Y C from day one was a batch. They always received investments together. And that, I think, goes to the insight that the founders of Y C had at the time, which was entrepreneurship is lonely. Being in a group is how you motivate each other to learn from each other. And that's your peer group.

• 1:05:14Speaker 05

  And so fundamentally, it came from the approach of a university. And Connewery is graduate school. It's where, as I talked about, like C D C is just one of the programs we run. We have two others, Post A and Growth. Post A focuses on two months within you raise the C D C. There's a six week program. We rebatch you. So now you have a new set of peers. And our scale founders come teach how to form a recruiting team, how to hire engineers. Because your job changes as a C E O.

• 1:05:42David Rosenthal?

  Right.

• 1:05:42Speaker 05

  And no one is writing a book about how your job changes and how to learn. And remember, the median age of a Y C founder is 27, which means they have probably managed a sum total of three people in their life before these founders.

• 1:05:56David Rosenthal?

  They really are like undergrads.

• 1:05:58Speaker 05

  Yeah. So you cannot expect them to know. So how are you going to provide resources so that they do, they can learn from others? And they do as few mistakes as possible and as quickly as possible. Because when you're scaling, you just go on a rocket ship path. You're, the, the amount you demand out of these founders is a lot. And their ability to learn in four years is. I mean, the bar you're setting is really high.

• 1:06:25Speaker 04

  Mm hmm.

• 1:06:26Speaker 05

  And so in our community, that's why like Brian Chesky comes to speak every batch. He's the opening speaker of every batch.

• 1:06:32Speaker 04

  Wow, every batch.

• 1:06:33Speaker 05

  Every batch. And right now, for all these programs that we run, the growth program is how to scale as a CEO. That's literally the program. It's an eight week session. It talks about hiring execs, performance, management, culture, and so on. And we have scaled founders and scaled exec, like Tony Hsu comes for that. His execs, the CFO of Dorash, the head of engineering of Dorash, they come for their respective sessions. So it's really good to see the entire community working to transfer their learnings to the next batch of companies.

• 1:07:05Ben Gilbert?

  All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 1:07:18David Rosenthal?

  Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 1:07:35Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 1:07:50David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 1:08:14Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 1:08:33David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 1:09:03Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at legora.com/acquired and just tell them that Ben and David sent you. I actually want to ask on a thing that I, for some reason, asked David, even though I probably should have asked you. When a company exits or has a liquidity event such as Airbnb, what does YC do with that liquidity?

• 1:09:46Ben Gilbert?

  And is YC an LP in itself for future continuity funds?

• 1:09:52Speaker 05

  So right now, it's set up just like any other funds, right? So we have incredible LPs, primarily university endowments, because Amish is more university-oriented. So the structure is very similar to other funds. And I think that's a new change for YC since 2015, because when YC was started, this model wasn't proven. So it was actually self-funded by the founders.

• 1:10:19Ben Gilbert?

  Yeah. Okay, so self-funded by the founders. I know Sequoia was involved at one point, putting up capital, and I think that was the capital invested in two batches for, I don't know, five-ish years?

• 1:10:34Speaker 05

  Yeah, so I think the different people, there were quite a few LPs that came in on a batch basis. Remember, the first check in YC, the first batch was $20,000.

• 1:10:44David Rosenthal?

  I know, my gosh.

• 1:10:46Speaker 05

  So when you're self-funding something, that's how you start, right? And so, but then when we asked, as time progressed, and when we asked startups to come to San Francisco... You know, they needed at least 100 to 125K, given all the inflation, even if they wanted to stay in Montevideo for a period of time. So that's when we brought in, you know, LPs based on a batch. So that if they could pretty much fill the rest of the gap that YC was not able to find.

• 1:11:13Ben Gilbert?

  And so is that still how it works? Is each batch and each continuity fund has its own set of LPs that you go on an individual sort of fundraising mission for that specific vehicle?

• 1:11:24Speaker 05

  Yes, so both, we have early-stage fund as well as the late-stage funds, and we have pretty much the same set of LPs across both funds. And as we've, because our ambition is to grow the batch. And why is that? Because we, we actually, you know, we want to keep the bar high, and it's not that, and when we say the bar high, it is we want the founders to be working on the right problems, not the wrong problems. There are amazing founders, but if they're working on a problem because it's following a hype cycle and it's not a unique insight, then accepting them, we are doing a disservice to them because they've decided to stop doing whatever they're doing to work on this. But we're not like an Ivy League institution that thinks that the batch size has to be

• 1:12:08Speaker 05

  only like, you know, Princeton probably has a fixed class size that doesn't grow. We don't want to be that because we think there are incredible founders everywhere. And if we have a chance to give them that first opportunity and that really opens up doors for them, we want to be able to do that.

• 1:12:27Ben Gilbert?

  So we could see batch sizes of 1,000, 2,000 YC companies in the future?

• 1:12:31Speaker 05

  We will do, so our criteria is if there are, if our application volume keeps going up and if there are that many really good applications, we need to learn how to scale.

• 1:12:42David Rosenthal?

  Yeah. I mean, it's not, you're already approaching the scale where-

• 1:12:48Speaker 05

  We have around 400 companies per batch now.

• 1:12:50David Rosenthal?

  You're like a liberal arts college at this point, like where you're graduating that many number of companies.

• 1:12:54Speaker 05

  You know, our acceptance rate is still below 3%, but yeah. Our acceptance rate has only decreased. But I mean, I think this is why, I think it's very hard to compare YC to a venture fund. Because-

• 1:13:10Speaker 05

  If you look at the types of opportunities we have given people in different parts of the world, they would not have stood a chance anywhere else. That was true for Airbnb, that was true for Coinbase, that was true for DoorDash. One of the partners at YC kept funding DoorDash because nobody believed in the idea. It was the third food delivery startup that came out when they came.

• 1:13:34David Rosenthal?

  Rappi, same.

• 1:13:37Speaker 05

  Rappi. It was the first, I mean, it was a late application. He applied one week after the batch. And we were pretty much like, the batch started. But I think that's why it's such a powerful and mission-oriented organization. And, you know, it's very different.

• 1:13:55David Rosenthal?

  Maybe that's a good place to wrap. We talk about powers on Acquired. We can speculate a lot, and I think we probably have on the show, about YC's power at various points in time. But you're in it. What do you think YC's power is, in the Hamilton-Helmmer sense of enables YC to earn better differentiated returns versus your competitors in the venture ecosystem? Is it the traditional VC power is brand, but it feels like it's something else with YC?

• 1:14:32Speaker 05

  Yeah, I think brand also comes much later, right? Unless you can either get brand because you have a lot of things you've built before and you launched, or you just launched something and it takes, I mean, just the way you all started Acquired, it takes incredible amount of time to build brand. It's never an overnight success. At YC, I would say, if I had to pick one thing YC is really good at, across both early and continuity, is we go based on founders. And I know it sounds cliche, but I think we also have an incredible advantage in assessing what makes a founder a really good founder. And we have incredible amount of data and pattern recognition and learning that we

• 1:15:13Speaker 05

  have honed it to a point that we know to spot them. You know, you all have heard of the famous 10-minute YC interview, and everyone asked, "How do you know in 10 minutes?" The fact is, we probably know in the first two minutes.

• 1:15:25David Rosenthal?

  Yeah.

• 1:15:26Speaker 05

  So we actually don't need the full 10 minutes.

• 1:15:31Speaker 05

  But you know, sometimes one or two people will surprise us with the end of the interview. And I think the three things I can articulate what it is on the founder we look for. One is at the continuity stage, right? Often on the growth stage, people, I think, pay attention to the founder, but they don't. Like if you're at a venture fund or a growth fund, you probably hung out with the founder for a week or two weeks before the investment, some total of three hours. By the time continuity invests, I probably know them for years or months, and I've had hours of interaction.

• 1:16:02Ben Gilbert?

  So you're saying that you're paying attention more to the qualitative founder properties, even at the growth stage, than you are to their specific growth rate or, you know, what their margins look like or anything like that?

• 1:16:16Speaker 05

  Yes, but you know, if the three qualities hold, the metrics will show.

• 1:16:21Ben Gilbert?

  And what are the three qualities?

• 1:16:23Speaker 05

  I can either look at metrics, but sometimes metrics don't tell you how good the internal sausage making is.

• 1:16:28Ben Gilbert?

  Yeah.

• 1:16:29Speaker 05

  And many people can package the metrics in a fundraiser stack. It's very well done. I mean, we teach you to do it on Demo Day. So we're the experts at it. So therefore, we know it's gonna look great, right? So we also teach them how, what points to emphasize on. We actually do practice runs. We write, in Demo Day, we actually even write the script sometimes if they don't understand what it is. So we know how that's done.

• 1:16:54Ben Gilbert?

  That's a how could I help moment.

• 1:16:56Speaker 05

  Yeah. And so what we look for is how fast does the founder move? What does how fast do they move mean? How fast do they ship? How fast do they iterate? Is the single biggest indicator in correlation to how successful they're gonna be how soon? Because you won't be right about my most many decisions early on, but at least are you learning from them fast and are you making changes? So that's one we measure. Second at the growth stage is how well are you hiring?

• 1:17:30Speaker 05

  And if you're sloppy in hiring, it always hits a wall. So one of the things we look for is how well are they hiring engineers? How good are they hiring execs? Will they be able to convince an incredible exec to come join them? Right? That's second. And third is clarity of thought. Clarity of thought in the growth stage for us is are they, can they write out two pages? What makes this a $5 billion or a $10 billion company really well? And if you're doing those three things, you're going to be on top of your metrics, your product market fit, your retention. Now, there'll be rough edges. But I think because at YSE, we've had the benefit of watching everyone from day one. We know how Tony scaled.

• 1:18:12Speaker 05

  We know deeply well how Josh and Gustav scaled. So we know a lot of those founders. So we then know, okay, these were rough edges. These are okay. You know, these other founders had, and this is how you iron out.

• 1:18:23David Rosenthal?

  We also had the benefit. I mean, we've told a lot of these stories on Acquired. If you're a growth investor looking at these companies new, you're like, oh, I need, I know that this is all going great. But you know, those companies don't always all go great. Like, Tony had some serious near-death moments. You know, Airbnb was not up into the right journey the whole time.

• 1:18:41Ben Gilbert?

  If I had to summarize, I know this is, we're interviewing you, not me here, but it seems like you invest based on the inputs rather than the outputs, or maybe the leading indicators rather than the trailing indicators, where if somebody's operating with those three principles, the business probably won't consistently produce the results that someone would like to look for in a growth-stage investment. But they have a much higher probability at any given time of producing high-quality results because those are the inputs that matter.

• 1:19:16Speaker 05

  Yes, absolutely. And that's kind of why we feel strongly that inputs can be influenced, right? If you're learning best practices and those are your inputs,

• 1:19:29Ben Gilbert?

  Yep.

• 1:19:29Speaker 05

  then you can actually influence company building. So when Tony comes and teaches our growth program and says, "These were my darkest moments. These are my mistakes I made, and I sure hope you don't make these three mistakes. But these are two things I did really well." That's incredibly valuable.

• 1:19:45Ben Gilbert?

  Yeah.

• 1:19:47Speaker 05

  And so that color is very hard to get outside of YSE.

• 1:19:53Ben Gilbert?

  Yeah. All right, as we wind to a close, longtime listeners know there's a way that we need to close this, and that's grading. And with these episodes where we're covering a company in flight, the only real way to grade it is to try and forecast future paths that could happen. So Anu, I'm curious in your mind, paint us the A+, the C, and the F for YC a decade from now. And let's start with the F, because I think it's interesting. Like, YC is so dominant. How could the whole thing go up in flames at this point?

• 1:20:27Speaker 05

  Well, I think YC is the only platform that has strong network effects. And as all network effects have shown, if we mess up the YC community, that is the... Because we have this platform only because of the YC founders. And there are community values. I mean, we have written down community values. We have an internal book face. We have an ethics code. I mean, name one VC fund that has all that.

• 1:20:54Ben Gilbert?

  Right.

• 1:20:55Speaker 05

  Right? So that's why we don't look like a venture fund. So for us, as long as we do right by the community, we'll be good. But if you... You know, network effects are very powerful, but they also decelerate very fast. Right? If we do any mistake with the community, then that would be the F.

• 1:21:13Ben Gilbert?

  It's almost like operating leverage. Like, a heavily community-dependent business is just heavily levered.

• 1:21:20David Rosenthal?

  It reminds me of Acquired.

• 1:21:23Speaker 05

  Yeah?

• 1:21:24David Rosenthal?

  Like, our community.

• 1:21:25Speaker 05

  That's right. Exactly.

• 1:21:27David Rosenthal?

  Yeah, absolutely.

• 1:21:28Speaker 05

  This is an amazing group that you have. And like, congratulations from how far you've come.

• 1:21:33David Rosenthal?

  But we feel the same way. It's like, it's so amazing, but that is our fear. Like, nurturing the community and keeping it the amazing thing that it is, is the number one thing that we do.

• 1:21:46Ben Gilbert?

  Yeah. Okay, but the C is boring, so we won't cover it. But I want the A+. Like, give me the B-hag for YC from here. Like, how do you change multiple orders of magnitude from where you are? Or do you want to?

• 1:22:00Speaker 05

  B or the A?

• 1:22:01David Rosenthal?

  The A. What's the...

• 1:22:03Speaker 05

  Oh, the A.

• 1:22:04Ben Gilbert?

  Yeah, A+.

• 1:22:05Speaker 05

  We definitely want to. We want to be... Our mission is to be the partner of the companies for the life of the companies. And continuity, I would say... Has only strengthened the YC community. Because before, they would reach out whenever they wanted help, or once in a while. But now, we have a full machine, all the way to IPO. And we have programming, as I talked about. And it's really gotten the community super close. And so, I mean, as I said, we are highly undercapitalized for the success of YC companies.

• 1:22:38Ben Gilbert?

  Wait, wait. When you say "all the way to IPO," so is IPO the end? 10 years from now, is there a YC post-IPO component?

• 1:22:45Speaker 05

  Maybe, right? We already have post-IPO. We already have. So, it's so funny. So, we had the, you know, we had, we started with the growth program, which was just this CEO scaling program. And the post-A companies were like, "Well, we need a program." And so, we said, "Okay." We did the post-A program. Now, our companies have come and said, "We need a pre-IPO program."

• 1:23:04Ben Gilbert?

  Yeah.

• 1:23:04Speaker 05

  "We gotta get Airbnb and Coinbase to come teach us this pre-IPO." And I'm sure soon, they'll be like, "We need a pre-IPO."

• 1:23:10David Rosenthal?

  It's not like there's some magic moment, and Brian Chesky, and Brian Armstrong, and Tony don't have problems anymore.

• 1:23:16Speaker 05

  Yeah. They all have problems. It's company building. It's as hard as it gets. It never gets easier. I mean, you do it so many times, that you get better and better at the job, but you have other questions to ask, and you need a peer group for it.

• 1:23:28Ben Gilbert?

  Yeah.

• 1:23:29Speaker 05

  Right? So, I think our ambition is, how do we scale YC to support more amazing companies, and to especially also do it globally?

• 1:23:38Ben Gilbert?

  Yeah.

• 1:23:39Speaker 05

  Because we're, I think the remote world will show us that companies can come from anywhere. We already see that. A lot of B2B startups are based outside the US, but they serve as US customers. I mean, I'm sure you all have heard of Deal. And Alex lives in Israel.

• 1:23:55Ben Gilbert?

  Yeah.

• 1:23:56Speaker 05

  Right? So, YC has to learn to scale globally, because talent is everywhere.

• 1:24:01Ben Gilbert?

  That it is. Anu, thank you so much.

• 1:24:04Speaker 05

  Thank you for having me.

• 1:24:09Ben Gilbert?

  Thank you.

• 1:24:12Ben Gilbert?

  We have to hug. Yeah.

• 1:24:16David Rosenthal?

  All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 1:24:22Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale.

• 1:24:33David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 1:24:53Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

• 1:25:06David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 1:25:17Ben Gilbert?

  Our next episode will be the part two of the Arena Show with Jim Weber, the CEO of Brooks. I mean, I was just listening back to the segment this morning, and truly an unbelievable business, growing from like 20 to 30 million in revenue two decades ago to clearing over a billion dollars in revenue last year. Part of Berkshire Hathaway, deep personal relationship with Warren Buffett, purpose-driven brand. There's just so many great things about that story.

• 1:25:44David Rosenthal?

  Ah, Jim is so wonderful. We realized we had to make it its own episode.

• 1:25:48Ben Gilbert?

  Yes. So we will be launching that in a couple days, and we really wanted to give it the space that it deserves. So if you aren't in the Acquired Slack, you should come join the 11,000 other smart, creative members of the Acquired community there. Our thanks also to PitchBook, their whole team.

• 1:26:07David Rosenthal?

  Oh, my gosh. This was such a life experience. Whoever would have thought seven years ago that Acquired would be doing this?

• 1:26:16Ben Gilbert?

  There were 44 people on and off the stage involved in the production of that event. So too many to thank, but definitely the PitchBook team came out in full force to put it on. We're super excited to share the Jim story with you and the story of Brooks, and we'll be doing that in a few days here. And listeners, we'll see you next time.

• 1:26:35David Rosenthal?

  We'll see you for the Reno Show Part Two.

• 1:26:38Speaker 06

  Who got the truth?

• 1:26:41Speaker 06

  Is it you? Is it you? Is it you? Who got the truth now? Huh?