20VC: Anthropic's Superbowl Ad: Who Won - Who Lost | Harvey Raises $200M at $11BN Valuation | Sierra Hits $150M in ARR: Is Customer Support Too Crowded

AGENDA: 03:43 Anthropic Predicts $149B in ARR in 2029 09:27 Will FDEs Become More or Less Powerful 26:17 Harvey Raises $200M at an $11BN Valuation 42:45 Is Customer Support a Terrible or Terrific Investment Category 56:14 Anthropic's Superbowl Ad: Who Won and Who Lost 01:11:30 Do CEOs Have to Work Harder Today Than Ever

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

• 0:00Speaker 00

  The idea that software is a category is dead is ludicrous to me.

• 0:03Speaker 01

  It's tough out there. It's gonna be hard. Welcome to the technology industry. I just think we have to give up on TAM. I think we just have to let the revenue show us the path to TAM. I think every category that I know of outside of engineering product is at existential risk of shrinking seats.

• 0:20Speaker 02

  It's the venture capital equivalent of you can't get fired for buying IBM. You can't get fired for sticking money in with a 1X preference on the consensus winner. This is classic top of the bubble stuff.

• 0:32Harry Stebbings?

  This is 20VC with me, Harry Stebbings. Now today, we have Rory, Jason and one very special guest. We have Mike Cannon-Brooks, co-founder of Atlassian, joining us for my favorite show of the week. The show where we discuss the single biggest news items that have happened in the last seven days of tech. This was an incredible one. I want your feedback. Let me know what you think of this show. Harry at 20vc.com. But before we dive into the show today, are you a founder working non-stop to raise your next round? Are you an investor doing all you can for your portfolio companies to help them stand out? Funding and scaling a vision is challenging. Banking should not be. HSBC Innovation Banking caters to tech and healthcare founders all over the world

• 1:16Harry Stebbings?

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• 2:01Harry Stebbings?

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• 4:22Harry Stebbings?

  Rules and restrictions may apply. You have now arrived at your destination. I am so excited for this, guys. We have a very special guest joining the trio in Mike Cannon-Brooks. Mike, thank you so much for joining such a phenomenal group of intellectuals.

• 4:39Speaker 00

  Thanks for having me.

• 4:40Harry Stebbings?

  We saw Anthropic release updates which wiped billions off the stock market. I want to start with Anthropic predicts 149 billion in ARR in 2029 under the most optimistic scenario. The question that we ask ourselves is, is this just the collective budgets of enterprises all going to Anthropic? And how do we think about that?

• 5:03Speaker 02

  Let's just mention it out quickly. 150 billion for Anthropic. Let's just see if they make that number. OpenAI's estimate for the same year, I checked, is 180. So call it 350, 380 between them. You know, total worldwide software business is 700 billion. So it would be a pretty big chunk unless you expand the TAM. It's the same old discussion. If you don't believe in TAM expansion and it's a zero sum game, then if two companies are going to do 400 billion, then we can probably assume Microsoft, who's already at 200 billion, going to roll over and die. Then yeah, they're going to have to take the money away from the rest of us. But clearly the bet is TAM expansion. Otherwise it gets really hard.

• 5:39Speaker 01

  Mike, can I ask you a meta question? I'm sure you've thought about it. Does all this Anthropic revenue? At some point, companies only have so much budgets, especially CIOs and down. At some level, do you compete with that budget on product engineering? I know it's a boost for you, but on the other hand, there's only so much budget to get extra seats, to get extra licenses. Do you feel any meta-competition from that or none at all?

• 6:02Speaker 00

  Let me take that second. I think you also have to work out the revenue stack here because like we use Anthropic a lot, it's one of our biggest models. We use multiple models, which I think is what most good SaaS vendors are doing within their customers' choices, right? Like we use a lot of Gemini, a lot of Anthropic. We have a whole bunch of Llama and Mistral running and stuff internally and a bunch of OpenAI, right? And our job is to pick the best model for the best costs, the best quality outcome and the best speed. Then we have a whole gateway that's constantly balancing that. But when we spend money on Anthropic, don't forget, we pay AWS and then AWS pay Anthropic. So if someone spends a million dollars on the Elasian platform and we spend $200,000 on AI bills or something, pick a number, it's nowhere near that high proportionally, but that goes to AWS revenue.

• 6:47Speaker 00

  And then AWS spend, what, 150,000? On Anthropic revenue, don't forget like the individual revenue number is not necessarily counting the whole stack, right? And they have to buy a bunch of chips and stuff. So the revenue stacking here gets a bit complicated. Because there is a whole set of layers underneath this, right? There's no doubt that's a big number, though. Do we compete with the model providers? I think this is one of the big questions over the long term, right? I don't know, we've yet worked out for all the model providers, what they're going to do. We use a lot of Gemini, we're deeply partnered with Google. But obviously you could argue, I don't know, Google Docs and Confluence are somewhat competitive. There are two ways you can write a piece of text and collaborate on it and change it. Mega corps in tech competing on one level and partnering on other levels, that's, there's nothing new in that, I don't think. Um, I think we have to be good, right?

• 7:31Speaker 00

  The question for underneath that is can they all afford to shut down their models, right? That they get so good, they'll only use themselves. I don't, I don't believe they will, given the competition from the other three, four, before we get to China on models or anything else, right? So I'm not particularly worried about that. We have to compete with everybody that's providing our customers with the same value that we're providing them, right? In some era.

• 7:53Speaker 01

  There's a hundred and fifty billion for Anthropic, it's a lot of CIO budget. It does make you wonder, the more I read, the more I get confused where that money is really coming from.

• 8:03Speaker 00

  But I think to Rory's point, it depends on your question of whether it's zero sum, right? Like, I, I don't think any of this is going to be zero sum. Like, people say, oh, well, that's gonna swap software. And I'm like, well, is it really swapping for software? If your business is getting more productive, you're building more products and services, your, your quality is going up, your speed is going up, whatever. You're gonna spend money on different things. The technology budget of most companies over the last thirty years has gone up massively, I would argue, since thirty years ago, when they were buying keyboards and mice and stuff like that. I don't think that's gonna stop.

• 8:34Speaker 02

  I think the interesting thing about that, there are a ton in answer to unpack, but I just wanna highlight the you have to be good sentence. Cause when we're gonna talk about all the, oh, what happens to SaaS and all that, I think Mike's big picture comment, we should remember every time. It turns out if you wanna make a lot of money, you have to be good. And you have to compete with everyone else for the same dollars. And my guess is that will be a recurring theme. It's not impossible to see just quote unquote have to be good. There's such a lot of complexity here. Because you're right, you have the margin stacking. So, you know, a classic example is you look at Anthropic is doing a billion dollars in revenue. You look at Cursor, it's doing a billion dollars in revenue, but it's pretty much the same billion dollars. So you have to think about the margin stacking. Then, on the other hand, you have to say to yourself, if Anthropic hypothetically was doing a hundred billion dollars and all of it was through third-party

• 9:18Speaker 02

  ISVs that were also adding value and getting more money on that, it would point to the end market would have to expand a lot. If everyone's going to eat and grow, you're going to have to buy into big TAM expansion. And you're right, my software's grown nicely over the years. My guess is for this kind of growth, you probably need more than the trend line of the last 20 years. You probably need some acceleration on top, just because the numbers are so big. If Anthropic goes from four and a half billion to 150 bill, in a world where, you know, Microsoft does 200 billion, you're basically saying two rounding error, Anthropic is another Microsoft, OpenAI is another Microsoft, and that's two more Microsofts, which are pretty voracious mounts to feed out of the same pile of cash.

• 10:01Speaker 02

  There better be more money coming or it's going to get pretty kind of short around here. An obvious one is when you look at the IT spend, you know, you get six, 700 billion of software, but the stunning thing is you have a billion plus or minus of, sorry, trillion of consulting servicing type stuff. And if some of the software can eat that, that's a pretty big slug of extra budget that's available for a more efficient product. It's finding the extra money is the thing.

• 10:24Harry Stebbings?

  Do you not think that consulting services pie actually goes up? I think one of the most profitable categories right now is your incentives on the implementation and integration of some of these systems in the largest enterprises in the world. I tweeted this. I said, I think they will be more revenue generative than the foundation model companies in the next two to three years, as they often are in early stages of kind of cycles. But actually, I think that would grow, not shrink. No, Rory?

• 10:47Speaker 02

  That kind of stuff, maybe yes. The consulting to help you implement AI, yes. The consulting to help you morph your codebase from Fortran to blah, the market we've been looking at a lot is all the consulting spend around systems integration, you know, SAP, Oracle, NetSuite. A lot of that is pretty rote stuff. And, you know, it makes coding look hard. And there's a lot of automation that we think you'll see there. So again, it's the same thing. It's the swings and roundabouts, places where it grows and places where you're going to get scrunched.

• 11:17Speaker 01

  Listen, we all need these consultants, whether they're FDEs or Accenture, we all need them, right? We need, I think we need them more in the age of AI. The only thing that I find lost in this, in the simplistic version of the argument is they have to be smarter than they used to be. The average agency, traditionally in the more enterprise, Mike, there were a lot of partner agencies that were helping doing big deployments, right? Of Jira and Confluence. I'm sure they had to be smart, but not quite train the agent from scratch. Smart, and maybe at last seems a bad example, but I can tell you only a handful of folks that we work with are really smart. Like, this is why customer success is dead, because all these B2B companies are trying to convert their CS teams to FDEs. And I don't think even 10% of them can do it. They can't really be like product engineers. They don't need to code.

• 12:02Speaker 01

  So I wonder if we have enough consultants out there to really do this, to fully

• 12:08Speaker 00

  I like the argument that we're heading into the death of consulting because we're going to run out of consultants.

• 12:12Speaker 01

  The ones that are smart enough to do it.

• 12:14Speaker 00

  We'll have to make a new factory.

• 12:15Speaker 02

  Mike's taking no prisoners here. Okay, it's open season. But the thing that's going to stop that is, look, their economic incentive of the software provider is to make this adaptable by ordinary people. If the only people who can roll out your shit are wizards, then you're going to run out of wizards and then you're going to run out of revenue. To have mass adoption, you're going to need mass simplification.

• 12:34Speaker 00

  We will build those guardrails, right? We do. Most of our customers deploying agents, the agents that they deploy themselves when they start are relatively simplistic. They are small automations and pieces of software that make some business process go a little quicker. And you could argue, well, it's a very minor improvement. I said, no, but it's a major leap in their learning. And they're learning and they're controlling and they're letting them out slowly. And they're getting, understanding what they can and can't do as the technology improves. And as they find more business processes that they can automate with software, right? We can call it an agent, we can call it whatever we want. That's a pretty normal, I would say, corporate adoption pattern. And we're super early in that cycle, right? Like, these companies are, they'll tell you some sort of fantastic AI story, but they're not like

• 13:19Speaker 00

  having millions of agents run right over the bank account.

• 13:22Speaker 02

  How do you genuinely comment? Because that all makes sense to me, and I've said this to guys before, is I think one of my Weaknesses of VC, sometimes I can be too incrementalist. That makes sense to me is how I'd adopt it, right? How do you square that with, you know, the Wall Street's VC buzz that, you know, the entire SaaS industry was meant to implode in the last two weeks? And the, and, and new company agents are going to take over everywhere. How do you, like, I don't want to put you on the spot on Atlassian in particular, but how do you, unless you want to?

• 13:49Speaker 00

  I've been on the spot.

• 13:50Speaker 02

  Okay.

• 13:51Harry Stebbings?

  Put him on the spot, Rory, come on.

• 13:53Speaker 00

  Twenty-four years of being on the spot, it's fine.

• 13:55Speaker 02

  Okay, I just didn't want to be rude to our guest, but I'm game. Genuinely, how do you respond to the madness of the last three weeks where people were like, you know, the entire software industry is going away and being replaced by AI? Because my LPs are asking me, how do you think about SaaS today? You know, what's your, what's your thoughts on that?

• 14:11Speaker 00

  I've said it a few times, I don't think software is dead, I think software is alive and kicking. I think it's confusing to a lot of people in the software industry. And maybe that's normal, like to take the most generous view. Will every single software and SaaS company make it through the next five to 10 years? Absolutely not. Will a lot of them continue to grow and prosper through that five to 10 years? Absolutely. Is that any different to the last 10 years? No. I keep saying internally, the competitors we had in 2005, in 2010, in 2015, I went and pulled all these old documents, a whole bunch of those companies don't exist. Yep. They've been merged, acquired, gone out of business. And we have a set of competitors today that are new and upcoming and we have to compete with those. That is the history of the technology industry and that's going to keep going.

• 14:53Speaker 00

  The idea that software as a category is dead is ludicrous to me. I'm like, wait a second. It's very efficient for businesses to buy pre-canned solutions of technology. They don't write everything with assembly and they probably still won't.

• 15:06Speaker 01

  But can I throw in one, one micro thought? I view Atlassian, and I'm just a student, I, I didn't found it, as above the fold. And what I mean is, you're not seeing seat reduction. Product and engineering is a beneficiary of AI spend, right? Whether it's vibe coding or however, we, mobile, we are creating radically more software than six months ago. Like any curve, if you look at, for mo, like it's exploding, right? At least for a while, I think that benefits Atlassian. Because I need more tools, right? I need to track more issues, more tickets, more everything. I think there's plenty of other spaces that are being I mean, if your traditional support software like Zendesk, the old Zendesk is growing 0%. Like, we are cutting humans. And to go to Rory's point, I think there's some folks that are above the fold. And there's, there's a few that like Anthropic that are so far above the fold.

• 15:51Speaker 01

  We need to figure out how to scroll above the top of the monitor. But I think more are below the fold, more are seeing hits. And I actually think product and engineering is, is an island of stability today. The idea that maybe you see teams with fewer engineers, but when I walk into leaders. You know, I was at Replit the other day at 300 million in revenue, 300 people. There's like 11 people in go to market. It's probably like the old days at Lassian, right? But a lot of engineers, like they're not shrinking the size of their engineering team, but everything else looks pretty lean.

• 16:19Speaker 00

  We're product and engineering and software teams is a significant part of our business. Forty percent, it's a big part of our business. Service in general is a big part of our business. So your argument about Zendesk, service collection is a very large business. It's our largest at scale business, growing very fast, faster than the overall company. And that is IT service management, HR service management is like our fastest functional area, right? Going inside there, financial service management, just general employee service management. We just shipped a customer service offering in October. So like we're wading into those waters. This is crazy, right? This doesn't make any sense. No, the business is growing really, really well, right? We have to provide that software layer that makes that cheaper. There's no doubt about that, right? Like, that's, that's our job to do.

• 17:04Speaker 00

  I think the generalized view that customers are going away in these times. Like certainly for some businesses, yes, you can say that, like some software businesses. The industry wide phenomenon, which I think is what Rory was asking, doesn't make any logical sense to me, right? And again, we're either an example of the whole industry or we are somehow unique. And people tend to argue one or the other, depending on the point they're trying to make. So it's very difficult. The one point I would make is, again, we're accelerating our cloud revenue, which did 26% quarter growth rate at well north of five, six billion at the moment. And we grew our RPO by 44%. That's also accelerated for the third quarter in a row. Now, what is RPO?

• 17:46Speaker 00

  That is customers who are buying $3 million worth of software for three years, something like this. $2 million of that goes into our our balance of the future, right? We book a billion dollars in revenue. Ultra simplistic CFOs and accountants understand how it works, but that's a close enough proxy. Those others are customers making three year bets. So now we have people arguing, ah, but in year four, it's all going to fall apart. And I'm like, really? These customers aren't stupid.

• 18:10Speaker 02

  Got it. Comment. One is because of the AI and OpenAI and Entropic, we now all are experts on RPO. So everyone has, everyone knows RPO now. Turns out, once someone signs 100 billion in RPO, everyone has to figure it out. But going back to your comment, the software word is overused because you're right, the people, oh, it's the death of software. But on the other hand, we're going to talk in a while. Harvey just raised a wonderful sum of money at a high price, and that's clearly software. So if software is dead, it's a stupid statement, right? And we should discard it, right? But on the other hand, your comment, yes, there's always an element of change. And you know, if you look at your competitors every five years, you know, some folks go to the wall. The argument here would be somewhere in the middle. It would say, when technology doesn't do a step function change, you probably have an organic death rate of 5%, 10% a year,

• 18:55Speaker 02

  because that's the way capitalism works. And the winners, like you guys, come to the top. But every 10 or 15 years, there's an architectural shift in software, where it just gets so new that instead of being a 5% death rate, you go through a two-year period where there's a 50% death rate. I'm just picking numbers out of my ass, right? And that at least is a credible discussion. And so to make it kind of tactical to you, do you think that the software you guys write with LLMs is quantum different than what you did before? Or do you see there's a step function change in the kind of software you make? Or just an organic progression? Does that make sense?

• 19:28Speaker 00

  It's both. It's both. So the way that we are building software, and I think the irony is often forgotten here, that apparently we're some sort of cavemen sitting around just banging on clicky clacky keyboards and writing assembly code. And we haven't figured out that LLMs are pretty good at writing code and can speed us up. We've got 10,000 people in R and D. This is amazing, right? I'm like, sweet, we can build a lot more stuff, a lot better. Do we have some pockets of the company where people just sit in Claude Code all day every day and write cool stuff? Yes, but I don't know. There are many software companies probably sitting around in their R and D department, still working the old way, right? Some won't make it fast enough. Totally agree with you. You have to build new things. Some of those will work. Some of those probably won't work. It gets very simplified in people's minds that like you're just bolting on AI features.

• 20:11Speaker 00

  I'm like, no, I'm building it. I have a very, very large team at this stage, building an entire substrate of context and search and chat, not to sell, but because I have to. And I have a very large infrastructure team at this point managing AI costs. You guys all went on about inference costs is going to crush us, et cetera. I'm like, actually, it's going the other way, right? Our inference costs are going down and we're very good at adopting new models, but we're also good at knowing the features that need the old models that get very cheap. Yep. Some of our features are a thousand times cheaper to run than when we introduced them today. And the feature still works really well as an AI feature. So guess what we're good at optimizing infrastructure, right? Our COGS has gone down, right? Our gross margin has gone up last six or seven quarters. And we've deployed a lot of AI, right?

• 20:53Harry Stebbings?

  My question is then are we just throwing the babies out with the bathwater? Because we've got your Mondays, your duos, your workdays, your hubspots. The sasak is real. I'm just trying to understand, should I just call it quits and sell my Monday and my duo and just accept defeat? Like they ain't coming back or like they coming back? Mike, we have a brilliant saying on this show. Rory always says it wonderfully. Harry says, that's great, but um, what about me? I'm like, help me out here. I'm looking at all my positions.

• 21:21Speaker 02

  We exist to help Harry manage his portfolio. It's a living.

• 21:24Speaker 00

  That's right. Apparently AI can just, AI just listen to this podcast repeatedly and it'll do the trading for you and you'll be fine. There's no doubt we have a secular rotation of software, right? Been on many, many therapy calls with many software CEOs and other things. Like it's, it's tricky to understand how that changes and re-rates and everything else. In my view, that's definitively fear driven at the moment and fear overrides it. Generally, fear comes from somewhere real as well, though, right? Like, so will every single one of those names be bigger in five years' time than today? Probably pretty hard to say. If you list at a basket of 20 companies, they will all do that. Will the overall average be higher? I would argue yes. The fear driven sort of average software price at the moment is there. But also you get all sorts of financial effects like people are buying chips.

• 22:09Speaker 00

  You know, the software versus semi charts been around a lot, right? Like it's this thing and that's where those chips are going. Well, those chips are going to data centers to make AI inference, to do all sorts of wonderful APIs. And eventually that's delivered through applications at some layer. And we're working out where the profits stack and the revenue stack at three distributors we talked about beforehand.

• 22:27Speaker 01

  Maybe I've got my Atlassian numbers wrong, forgive me. But Atlassian had a pretty good quarter. I know Mike probably doesn't want to talk about this, but somehow we got down it. But Atlassian is growing 23% and RPO is up 44%, right? That's pretty good, but more importantly, it's accelerating. Atlassian is doing better. The problem with so many peer companies, and these are the best founder led companies. Almost all the public SaaS and BDP are founder led, right? Very few are, is they're not, they're not, they're still decelerating. And how long do you get? The LLMs are open to everybody. You have a year, you know, Claude 3537 were really good. Like you've had seven months since then. Do you get 12 months? Do you get 18 months? Like, how long do we give you to recapture some growth and some revenue from the AI revolution? Because Atlassian's got this layer, but it's also got growth.

• 23:11Speaker 01

  If you, if you spent the last year with 50,000 engineers building all this, this great stuff, and now your growth is in the teens, maybe heading down to 10%. I mean, better CEOs than me, but that's the one where Rory, I think you should tell your LPs you're worried. And it's more of the public folks have seen no re-acceleration than have. More of them have seen persistent deceleration. And we're going to see more this quarter. And I wish it wasn't the case. My life would be better if it wasn't. My life would be better if SaaS was on autopilot like it was through 2022. But you've got to show me the money in 2026. At some point, all that infrastructure spend goes to inference, has to go to software. You've got to show a connection to that spend or you, you may not have a reason to exist.

• 23:51Speaker 00

  Presumably, if you look at history, some of that goes to new companies that arrive, right?

• 23:58Speaker 02

  You nailed it. The problem with looking at the overall SaaS growth rate now is we haven't had any good ones to the top of the funnel. So the survivor growth rate's going down because, you know, we looked at this once and it was thirty percent for about a decade and a half. But when you went into it, that's because anyone who goes to your, to your point, Jason, when you go below ten, you get the red card. You're sent off. You're told, you know, you go off to P E land, but they were dropping another one in at sixty percent growth on the top. So it stayed roughly thirty percent median growth rate for a decade and a half. And now there's been nothing good coming in. You know, you're just seeing the bad side.

• 24:33Speaker 00

  And in fact, you've, you've had a lot more. I would argue there's a whole series of phenomenons. Maybe it's a great post to, to break apart. Software IPOs for the last five years have not been a category of new companies introduced, right? And to be fair, if you go talk to a Figma employee, my friend Dylan's having a fun time over there. They're a good example of a company who's like, I think they're going to do great in the current environment, right? But you're probably not setting an example where a lot of other private company CEOs, you had Cliffy on a while, another good friend of mine, actually lives like two blocks down that way. He's a little bit less motivated, having seen what's gone on, right? I wouldn't be rushing today to IPO there. Well, number one factor is you don't have those sixty, seventy, eighty percent growers that take the average up, right? Because you've got, you do have this one. Number two, you've had private equity.

• 25:16Speaker 00

  And again, a totally valid part of the capital markets come in and hoover up a ton of companies over the last five years. I'll give you an example. In COVID in twenty twenty, we formed a group of SaaS CEOs. I think there were sixteen of us that got together. We'd meet on Zoom every single week, right? At one stage, ten, eleven of us were public, maybe more. We all had earnings calls. And, you know, it was a really good therapy group for a while. I think it's like me, Eric from Zoom, Aaron from Box, Toby from Shopify, that's it. There were all that's left, right? Because almost all of them have been bought by private equity or big tech. Big tech's getting a lot better at buying stuff historically, right? Like, so all of these phenomenons lead to this weird average system. And you have companies going, staying private a lot longer, right? They've got a lot more capital.

• 26:00Speaker 00

  Poor Cliffy, Mel. Candy would have gone public a lot longer in an old era. They don't need to nowadays as much, right? The Stripe guys, same thing. But that means when you look at a public company, you're like, I wanna seeing this like the, the survivor bias of. Not small enough to get bought by private equity, not large enough to get bought by big tech. No new companies coming in. It's it's hard to work out what that average should be actually, right? But that's not saying that's not happening. I think this is where these are all a set of forces that are happening simultaneously. We will see how much is the case. There's one more effect that we're not talking about, which is some of those SaaS companies. And again, people have argued it's us and we're like, wait a second. That forty four percent RPO growth is not coming from people paying twenty dollars off Google Ads.

• 26:44Speaker 00

  Some of those have been affected also by the changes in like marketing channels and other things that I I've talked about that isn't. Again, I would argue for a multi decade company, you get used to this, right? You've you've moved your marketing to TikTok or some other way of the business model, right? And you get these chasms in marketing that have opened up. Some of those have also become a lot more challenged. So there's a lot of different forces happening here, right? It's often oversimplified by people. Fundamentally, though, software, customers, are they going to buy more in the future? Yes.

• 27:10Harry Stebbings?

  We mentioned that new companies bringing enterprise value and expanding budgets. Harvey, we mentioned, raised in December, raised two hundred million at an eleven billion dollar price. It must be quite nice to every month to fundraise. It's just like a nice hit of like ego, isn't it? Oh, another two hundred million dollars from venture investors.

• 27:27Speaker 01

  A nice bunch of secondary. Nothing wrong with that for employees. It drives a lot of this is secondary. It drives a lot of it.

• 27:33Harry Stebbings?

  Okay, let's talk about this. How do we think about this deal? They're going to end the year supposedly at a close to six hundred. The growth is pretty phenomenal from two hundred today. How do we think about this?

• 27:43Speaker 02

  First of all, let's just pick the obvious point. It was fun that it happened this week because if you think of what also happened this week is Claude Code produced a plugin, thirteen plugins, and one of the plugins was the legal plugin. And that's one of the things that's alleged to have caused the SaaS apocalypse. Oh, my God. The old school vendors, Thomson Reuters and some of these guys declined, right? While at the same time, a company who, if you square it one way, is just quote unquote a GPT wrapper or a Claude Code wrapper, raised two hundred million dollars at eleven billion. So literally, the the kind of whiplash in terms of the thinking here is hilarious, right? I think all software is dead, except this software, which is pretty close to the plugin from Claude, but at the same time, it's worth eleven billion. So it just so fair amount of inconsistency there in the worldview.

• 28:28Speaker 02

  That's just worth pausing on. Other than that, look, we've discussed, it's actually very similar to discuss, you had an open evidence. This is the lead company in the AI for law firm space, obviously Legora is number two. They're both killing it, you're seeing mass adoption. And the million dollar question, and you cited what you think they'll do at year end. All you know for sure is what they're doing today at 190 million a year. The question here is total TAM. In other words, if you can compound for three or more years at this kind of rate, you'll do amazing. And if you top out based on the number of, you know, Am Law lawyers in the US, which isn't as large as you'd think. You could find yourself TAM constraint and that's the bet because they're clearly going to get arbitrary number.

• 29:09Speaker 02

  60% of the market share with Legora getting 40, I don't know, 50, 50, something like that. So it's really a question of how big is the TAM and when do they hit it?

• 29:19Speaker 01

  Yeah, but Rory, do you like, if they do, if they're going from 200 to 600 in one year, so that's tripling. If they're magically able to double the next year to 1.2, we're paying 10 times to your forward revenue, right?

• 29:30Speaker 02

  Yeah.

• 29:31Speaker 01

  For an asset that unlike Atlassian, I can't go buy it. So there's scarcity on top of it, right? I just think we have to give up on TAM. I think we just have to let the revenue show us the path to TAM. But if the numbers are there, I think, I think if Harvey does 200 to 600, it showed us the money on TAM.

• 29:46Harry Stebbings?

  So why do you think we should give up on TAM? Just because it goes from 200 to 600 doesn't mean we should give up on TAM. It just means that it could have accelerated.

• 29:52Speaker 01

  It's a reason to say no. It's a reason to say no to Databricks growing 56% at 5.5 billion, right? Or 65%, 65% of 5.5 billion. Sometimes you gotta lean into it.

• 30:02Speaker 00

  I don't know, TAM is a, I've always struggled with the concept of TAM, right? Because our whole job in technology is to change TAM, actually. Like if you think about it, the TAM of technology has changed as a whole for 50 years. I think Harvey is a, is a fantastic business. But let's not forget, if anyone's been involved in legal proceedings or court cases, or even just dealt with a lot of lawyers. They're not an efficient part of an industry and they deal with a lot of text. So you'd argue that there is a ripeness to do that. And credit to this, this company, maybe Harvey is a GPT wrapper. But you know what? They're a GPT wrapper that's got a product that their customers like. They've got a go to market model that's clearly working in a market that probably doesn't have a lot of competition to start with.

• 30:45Speaker 00

  Good job building a piece of technology that customers want and it hands a valuable business, whether it's worth 11 billion or whatever. Okay, great. But like it's growing 300% a year at 198 ARR. Fantastic business.

• 30:57Speaker 02

  Totally agree. I want to come back in two things. One is because I realize as I replay it, I was using the word GPT wrapper. That's not a phrase I would use. It was a phrase that was applied to the sector and then people simultaneously were doing this. And I'm pointing out to just, you know, the divergence, you can't, it can't be bought at the same time. If you're doing a deal like this, and I think it's an amazing deal, and we have a deal in a related space, I, I don't buy the GPT wrapper appellation is my point. I don't think it's a useful phrase. My point was, it was wonderful and funny that it happened the same week Claude was deemed to be able to annex the entire legal market just by issuing a plugin. So my point is, th- those were two different contradictory ways of looking at the world.

• 31:37Speaker 00

  Oh, entirely agree. And I think what I was, sorry, I was trying to poke fun at the GPT wrapper, right? If Atlassian is just an orchestrator of humans, right? All of software is just a process wrapper. We take some business process and we deliver a better UI to do that, or a way to repeatedly do said process, and we, we make money doing that, right? Has Harvey got a sustainable competitive advantage that will just be eaten up? That is entirely, I assume, what their leadership team is sitting about thinking is like, we've got customers and distribution, and that is in itself an advantage, right? Like those customers presumably are pretty sticky right now. Do they keep adding value to their customers with more GPT wrapping? Or do they add more and more bits of the legal process into the UI, into the technology? I suspect that's exactly what they're doing, and that's what they're getting paid for, right?

• 32:20Speaker 00

  Any war firm can pick up Anthropic and go build their own Harvey. Are they? No.

• 32:24Harry Stebbings?

  But, but I think, I think the important question to ask is like, risk adjusted and opportunity cost adjusted, is this a good place to put my dollars? And when you go back to Jason's argument, I'm totally with you, and I'm not shitting on them at all, Mike. Fuck me, I've created a podcast, these guys have created 600 million dollars at the end of this year. So who the fuck am I to throw shade? But ultimately, I can put my money in Atlassian today, which respectfully is, is obviously, as you know, down to very low levels. And I can put my money there today, or I can put my money in Harvey, which needs to triple. And then double and then I pay ten X.

• 32:58Speaker 00

  I totally agree. I'm not arguing whether you should put a dollar in A or B and and there'll be mispricings up and down the stack, right? I'll give you an example from history, which I'm sure the Excel guys wouldn't mind. So when the Excel guys invested at Lastian, right? It was all secondary. They put sixty million bucks in twenty ten and they bid highest of the five VCs. Can I just say? They're also the nicest and had the one page term sheet and all sorts of other things. But when they put in that, we I know we have their model. We've known them fifteen years, which just stepped off the board in December after fifteen years of amazing service, right? Well, beyond Excel's investment and that they're legendary people as far as I'm concerned. Their expectation was that Jira would grow and Confluence collectively. I think thirty percent the year after they invested, then twenty percent, then sort of peter out at fifteen percent. So by twenty thirteen, instead, we did fifty, sixty, seventy or something. And they were like, what?

• 33:44Speaker 00

  And we are still growing Jira at faster than their three year terminal rate fifteen years later. Now, are they stupid and did they get the tam wrong? No, the business just was a lot better than than they even they understood. They were trying to get two to three times their money. They made a hundred times their money. But you're looking back at a success example, right? They they probably did a bunch of those deals that didn't work around us, right? It's very hard to predict what the management team of Harvey are going to do in building out their business over the next some years. So I assume the smart people that are putting this money in believe that management team can build a business that gets to, on current SaaS rates, eleven billion dollars, that have to be what? Four times forward revenue to four billion in revenue or something, three billion in revenue.

• 34:28Speaker 02

  I think your comment is correct as the entrepreneur, but I also think Harry's comment was correct as the investor. Because, look, when you're talking about companies that are raising at eleven billion, there's no useful sentence that says this is a bad company. They're freaking amazing companies. But as Harry points out, we're not here to say, you're amazing because you build a big company. The Harvey team are amazing because they built a big company. I didn't build a big company. I'm not amazing on that dimension. But in terms of capital allocation, you have to say to yourself, I'm compared to two scenarios. You were a profitable company, self-sticking sixty million. My guess is the revenue multiple, well, sub ten, right? Growth rate thinking back, I can tell you. But it wasn't. But we got Harvey's at 190 ARR now, 11 billion. That's 50 times. I can tell you it wasn't 50 times, Mike.

• 35:12Speaker 00

  No, no, I was gonna say it's probably 10 to 12 times forward revenue. But we're an unusual company. We're like 50 million revenue with 20 million profit or something.

• 35:20Speaker 02

  And that's a deal that outperformed on the growth rate. And as a result, as you say, a 3X became a 50 or 100X. And then when you look at another deal where you're paying, you know, you just gotta say to yourself, you're paying 50 times run rate revenues. It's growing much faster than you were growing at the time. And then how do you, to Harvey's point, how do you think about the risk return on that? And it boils down to you just have to have, you were able to beat their model by just growing at 30% instead of 20. What do you have to do to beat the model when you're paying 50 times? The answer is you have to peg that growth rate at well note of 3, 400% a year for three or four years.

• 35:57Speaker 01

  Yeah, can't argue with the math. When we started this podcast, I was actually fairly skeptical of AI replacing humans. Not because I didn't think it would happen when I started vibe coding, but because I thought too many VCs talked out of their rear. Oh, you know, we're gonna replace, AI is gonna destroy all jobs. And I thought, this is a bunch of people who haven't done any, any work. Are they just reading Twitter all day? But my mind has changed over time. And so what I mean is, when you look, it's not gonna be true in all categories. But when you say, listen, there's 200 billion a year spent in the US on non-partnered lawyers, associates and paralegals, 200 billion a year. Okay. Six months ago, you could say it'd be ridiculous to think Harvey's gonna make a dent in that. Maybe it's not ridiculous now. And so if that growth stays, if it stays, if it can literally grow at the pace it is, what you're seeing is it's happening.

• 36:40Speaker 01

  To Rory's prior points, it can't come out of the legacy software budgets. It can't come out of the old, the old TAM for Bitbucket or whatever, or legal software of the old days. And so my point is, it's not all gonna prove itself. Some of these will flame out. But that amount of growth is spectacular. And at some point, like Anthropic, you prove it. Like, the growth is so stellar. You have proven that you have captured a mass amount of TAM that was uncaptable before. And so as an investor, I would just put my money in at some point.

• 37:09Speaker 02

  I totally agree. Let me make the argument again, not because I think it's correct, but because it is the other argument. And I said that as an investor, thinking about it. If you look at, they have 200 million, 190 million in revenue, right, in ARR, 100,000 active users, that's 2K per active user. That's under what Westlaw gets from a lawyer. That's not replace the labor revenue. That's nice next generation tool revenue. And the point is, if you're only getting 2,000 tons a lawyer, there's 1.3 million lawyers in America. Some of them are in-house. Some of them do weird things like patent that can buy Harry's product. Four or 500,000 lawyers that are in, you know, Am Law, big law people who would be a buyer for this. It's a billion, billion two marketplace. If you're only getting 2 grand per head, the math won't work. Now, Mike's right.

• 37:53Speaker 02

  In the end, my point is this, and this is why I guess about Harry's thing. To make this a big ass company, you have to take that 2 grand and turn it into 5 grand and 10 grand per lawyer by eating the work. And it's doable, and Mike's right. The whole last 50 years has been, software does more, software gets more.

• 38:10Speaker 01

  I don't think it's gonna be 2 to 10. I think it's, this is what I'm already seeing. It's not that, it's 50 to 100 because you get rid of the humans. Now, listen, we're in a weird niche, but I can tell you, because I know the GTM agent category really well, I know everything. They're all 50 to 100 grand because you get rid of the people. If you compare a pipe drive or, you know, a Trello clone for CRM to the old days for $8, $12 to an agentic product that gets rid of humans, I'm not saying for sure this is what happened to Harvey, but 50 to 100 grand, if you can get rid of half of your associates or two thirds of your associates.

• 38:39Speaker 02

  Agreed, if you can.

• 38:40Speaker 01

  And you'll just pay it because they won't quit. They don't want raises, they don't complain about weekends. They don't have all the issues. Our agent closed a 100K deal the other day on a Saturday night. It doesn't complain. They want family lives, these associates in law firms? You just get rid of them.

• 38:55Speaker 02

  There's two arguments against what you're saying. One, Mike's already made. If we can make more software, we're not going to get rid of those humans and the coordination problem. We're just going to make more software, have the same number of humans and have the same coordination problem and keep buying Atlassian stuff. The same argument in law here. Maybe you just automate more, right?

• 39:11Speaker 01

  No, it's totally different. We are building more software than ever and we need the humans and no one is reducing their engineering team. No, the world is so competitive today. You can't wait every four years for a release like the old days. So that category, every other category may shrink.

• 39:26Speaker 02

  That, okay, that's, that's coherent at least. What you're saying is if you're selling to engineers, no, seriously, because we've talked enough that we know what we're gonna say. You're right. What you're saying is every engineering category in software won't be cut. We'll use the tools to just make more software. But every non-engineering area like law, like ASDRs could be automated away. So the headcount goes down there. That's what you're saying.

• 39:48Speaker 01

  I think every category that I know of outside of engineering and product is at existential risk of shrinking seats. Workday said it. Everyone else is saying it. We're seeing, I mean, Workday just founder had to go back. They said, they said even at Workday, we're seeing headwinds on seats because people just aren't hiring across the Fortune, you know, the Fortune 500 like they used to. They're seeing, but we are in a renaissance of software. We are building so much software. It is unbelievable.

• 40:14Speaker 00

  Fascinating that on this, on this podcast, the product and engineering firms are gonna win. So we're a winner. We're above the fold, which I'll add that as well. This is, that in itself is an old school term, Jason. The fold doesn't exist anymore.

• 40:24Speaker 01

  I know, but I think Zoom, I mean, HubSpot, Monday, even Zoom are below the fold.

• 40:29Speaker 00

  A few things. Firstly, your holiday party with your lack of belief in humans is gonna be amazing, right? You're sitting around drinking wine with all your agents that are closing sales.

• 40:37Speaker 01

  Come to our office, dude.

• 40:38Speaker 00

  I'm really looking forward to it.

• 40:40Speaker 02

  At least nobody can get drunk and make an ass to themselves if they're all agents. At least we won't be doing that.

• 40:45Speaker 00

  Maybe there's advantages there, but there's a lot in Harvey that's fascinating. The question is two, two things. One, legal firms generally bill time. So it's hard for them to increase their profit margin by billing more and less time. So I don't know how that affects this particular industry. I'm not an expert at all on, on, on legals. But I'm just saying there's some interesting, their pricing, right? I don't know how legal services are gonna be value-based priced or something. They're literally the ultimate selling of hours, photocopying and all that sort of stuff. So we'll see how that works for the billing model and maybe Harvey helps them with that or doesn't help them with that. Secondly, I think you're, I like to think about things that are demand or supply constrained, right? It's a particular function, input or output constraint. And that makes a big difference in how I think AI will be applied to it. It's one of the interesting schemas to put to it.

• 41:29Speaker 00

  So you've talked about customer service or legal. I would argue those are input constrained domains. I have a whole lot of fantastical lawyers at Atlassian, in-house counsel, you know, a, a group. Their input constraint, if I make them more efficient, or if Harvey makes them more efficient, they can't like create more legal problems. There is a certain set of problems, just like customer service. Your customers ask a hundred questions a day. You need a certain amount of service to help them out. Well, if you have twice as many customers, you'll probably have two hundred questions a day. So it is, it's based on some other ratio. The difference with something like software or engineering is it's creation, right? It's how much can you make, right? The roadmap is never finished. You can keep creating more. So some domains in a company have like a constraint on the input is fixed and you're

• 42:14Speaker 00

  doing a certain amount. Now, sales and marketing are kind of in this middle ground, which is fascinating because ostensibly sales is sort of input constrained by a TAM, but you can build new products and new ways of going to market. So we sometimes jump across these categories and it's not super helpful because they're very different in.

• 42:31Speaker 02

  I think genuine, that's super helpful because I remember when we were looking at the systems integration automation category, one of the things that we realized, and you got to in a second, and it took us a few days, is like if we automate the process of installing SAP, installing Salesforce, installing NetSuite, it's not like the company's going to buy two helpings of NetSuite because it got cheaper. They're just going to spend less money doing it. And those are inherently less magical markets than the stuff where the intelligence allows just whole new things to come. I think that input output thing is actually a very useful way to think about where the magic upside might be.

• 43:06Speaker 01

  But AI may also let us have more inputs. For example, one of the few organizations of our size uses Agent Force, okay? But we ran an experiment. Mark said, use Agent Force to go after the leads. It's not worth anybody's time to do. And so we did that. We unleashed Agent Force on all of our leads, everyone to come to an event, to sponsor us, do anything that it wasn't worth a human's time to come back, and it worked. And that's like radically more inputs. That's like five to six times more inputs. And there's a lot of legal things that aren't worth taking to your lawyer. Like, I can't wait four days for a sales contract to be reviewed. I can't do this. And there may be Jevon's paradox or whatever in every category. Like, it may explode. And like, we've all had terrible customer support so often, but when you have a magical customer support experience with AI or human, you want more.

• 43:50Speaker 01

  Of it like you'll consume mass. If I could get help all day long with a product, I would be in that agent all day long, like helping me, helping me not just vibe code, vibe use my product. So we made Jevan every, every category.

• 44:02Harry Stebbings?

  Customer support is one I just cannot get my head around. And I know that sounds ridiculous and very basic, but when you look at the sheer number of players that have been funded to huge extremes. And we saw Sierra's 50 million plus quarter taking to over 150 million there on now. I thought of that straight away when we're thinking about net additive versus replacing things. Is this eating Zandesk's lunch? Is this adding new users that never had customer support before? Or is this taking on jobs that weren't being done before? How do we think about that?

• 44:32Speaker 02

  I'm waiting for Mike because I didn't know it, but he has a customer support product coming out.

• 44:36Speaker 00

  It's already out. It's doing very well. I can't tell you how well it's doing, but it's doing very well. Our service collection business, like our service collection business could go public by itself, right? It's a, it's a big business that's growing. I would have great numbers. Jason would be writing great posts on it.

• 44:49Harry Stebbings?

  Jason says it needs four billion to go public, Mike, just as an FYI.

• 44:53Speaker 01

  For a banger, for a banger, Harry.

• 44:55Harry Stebbings?

  For a banger.

• 44:56Speaker 01

  Banger IPO, for a banger IPO.

• 44:57Speaker 02

  Get back to the question, Mike.

• 44:59Speaker 00

  It's a textual based field in that voice and other things can, can quickly be approximated to text now with AI and vice versa. Right? So let's assume it's a, it's a conversation based area. It's probably three to seven percent of every business in the world on service and support. Your bank, your insurance company, your car company, every company has this. And then you get internal support and service, right? Most of the service collection revenue is on the internal basis, right? Twitter, X now, whatever has like 300, 400 service desks running on, on, on service collection, right? But that's not all internal service. So the idea of any team helping some other team in a business or any team helping their customers

• 45:41Speaker 00

  is ripe for making it efficient, right? All the things you talked about, Jevan's paradox is totally true, but it's also a measurable input and efficiency play. So I can say I spend X, your product can very easily make X less. Is the less that I'm, the money I'm saving more or less than I'm paying for your product, there's high ROI, it's a sellable thing. We go around the loop, right? I think it's a great category. Whether the category will grow or not is a different question. The hard part is in year two and year three, the savings are baked into the business. So you have to be delivering continual value to the company. And that's going to be really interesting when we get through this set of changes in the service market most broadly, right? You've got ServiceNow and Austin, others at the top end. You've got a lot of legacy providers out there.

• 46:26Speaker 00

  There's still tons of legacy providers of service. And then you've got lots of customer service companies. Mark has Service Cloud over there. I think some people still use that. There are a lot of tools in this space. You know, Zendesk probably went private for a reason.

• 46:39Speaker 01

  Zendesk says they have like 300 million plus of AI support revenue. It's just a legacy business. That category is tough, right? So they've got two streams going. The agentic piece is exploding. The only thing I would say, you ask why the category is exploding. I just think it's interesting. There's just two threads helping for support. Maybe not at last, but overall for so many of the players is one. I mean, if you look at is it Pave? I think that's how you pronounce it. It's an HR startup that tracks like 300,000 startups. Yeah. No category has been more decimated and hiring than support. No one's hiring, like it's radically down. So that money is going into agentic products. Okay. Traditional support. And then a great AI support tool can do radically more than a legacy tool.

• 47:23Speaker 01

  Like I think software in the AI age, and this is why I think so many SaaS leaders are struggling today, mature ones, is there's no more aha moment. There's no more moment when you walk in and yeah, maybe Sierra spent a month configuring your demo, but literally it answers questions like you've never seen answered before in your enterprise. You want to buy that product. And most SaaS products didn't change for a decade and we fell out of the aha moment. And so there's budget, there's aha moment, and there's like the most humans were cutting ever. It is a great moment. And then the final point, not to ramble, but we've talked about it before. But the super interesting thing about support is it becomes a Trojan horse to do everything else. Because when that's the main agent, if that is the main agent you're working with,

• 48:04Speaker 01

  you'll start using it for sales help or for research or for marketing or for other things. And these Become more horizontal agents. So but man, the hiring is it's over in the space.

• 48:16Speaker 02

  And bringing it back to Harry's question, Harry, I think we're all saying bluntly, you're wrong because you were doing the I don't get this market. I don't know why people have funded 10 companies. And I think what you're hearing, I think it's true, is that it's not a single market. At a high level of, you know, people help working with other people, you can say it's all the same, but internal help desk is different than external help desk. One thing we saw, we had a pre L L M A I company, that B two B external support has a different rhythm than B two C. B two C is lots and lots of small interactions. B two B, you might have a long lived interaction with multiple people internally. One of Mike's best customers has a P one bug. You don't just have one person involved, you have six or seven people involved, you're reaching across departments.

• 49:00Speaker 02

  The internal workflow to manage that support is very different than thousands of people ringing about, you know, how do I change the password? Internally or externally, how do I get my ticket to the whatever concert, right? So there's differences there, there's difference in company size. So I think actually, and then there's difference in modalities because you got people who lead with chat. You got people who lead with voice and yeah, they're converging. You got people lead with video. I think that I think there's a lot of different sub markets rather than one big mega market is my gut.

• 49:28Speaker 00

  And I think it just like, just like Harvey, though, there's some interesting things that it tells us about how I I is changing the world. There's no doubt that the overall service category is probably going to have not a lot of growth in humans, let's just say, working in that field. However, it's a very short term field anyway, right? Like I know my, my sister worked in, in, in telephone banking in the mid nineties for a bank here, right? And everyone was there for a year or two, they train you, do it anymore. It was not a career job. It was, it had a high turnover already. So that's, that's different to like lawyers where they've done many, many years of training and they've got 40 years of career, you know? So it's an interesting job field. It's pretty different firstly. Secondly, one of the interesting things that we see both internally, I have a few examples of agents internally.

• 50:13Speaker 00

  But I've got a number of customers have seen the phenomenon as well as your A I and your agents that are helping people to in. The case of answering a question and service needs to be much more broadly thought about than than just customer service like I lost my wallet in the Uber kind of stuff. But the AI that's answering the question is as good as things you have written down. So some teams you see are employing agents and then writing a lot more documentation and their documentation is getting a lot more stepwise. Because it's less about the humans reading it than it's the agent that reads that doc and then answers the question. So you may end up with in some areas more writers and less people answering questions to get an overall better support response, right? We have a lot of examples of this in the service collection.

• 50:55Speaker 00

  The more knowledge you look it up to, the better answers it gives. It's sort of logical. Some businesses don't have all this knowledge documented because it was in the heads of the people who did the service. So that's one interesting effect of AI probably applies elsewhere. The last thing I will say is service question is one of the areas where most agents are deployed, right? In terms of AI agents and it's confusing in service because we talk about human agents that answer questions. And then we have AI agents that need to answer the question or help the human to answer the question faster in the complex scenarios. And B two B especially that they've already talked about. It's far higher deployed in that category agents for us of any of our collections. I think it's the highest proportional deployment. The reason is because those agents are taking actions. Service traditionally, someone's coming in to ask a question.

• 51:40Speaker 00

  If you think about HR service management, like can I take these people out for lunch when I'm in the Indian office? So I want to apply for leave, parental leave, whatever it is, right? You're asking some sort of HR based question. There is answers to the question, yes, you can. And then there is actions taken. Hey, I'm going to go and file this expense claim or I'm going to go and do that. The AI in service that's most interesting to customers often is not, we always talk about the cost saving aspect of it. It's the ability for it to actually go and do things to make my business quicker, right? If it goes and files the parental application or it resets your password, the canonical IT sort of service thing. The actions that AI can take more accurately, the automations that we used to call them now they're agentic automations and workflows. That expands massively, which means you not only get your question answered, you get your job done.

• 52:25Speaker 00

  And that business moves a little quicker to your TAM argument. What's the TAM on that? Like, it's not really a thing we had before, right? It's less about. It's better than the humans, sorry. It enables that business to be quicker.

• 52:35Speaker 01

  If that whole form gets filled out for you for parental leave and everything and I don't have to do anything and it's all automated, it's better.

• 52:41Harry Stebbings?

  Totally understand that. Rory, let me punch back at you, my friend. We, as we said, live in a resource allocation world or mindset where we have the choice to invest in categories and companies. There have been 14 companies in the last two years that have been created that have now raised over $100 million. You then have traditional players like ServiceNow, Atlassian, Salesforce, the list goes on, Zendesk, Intercom, I can go on and on and on. And then we have the new generation of very fast and public companies, à la Nirvan or à la Airwallex, who are building their own systems. And there is a generation of technology-first companies that are building their own customer support systems to deal with very intricate and complex needs. When we live in this risk-adjusted opportunity

• 53:24Harry Stebbings?

  cost world, I don't feel that is a good place to put your dollars when I'm competing against Mike, Mark, and the 14 companies in the last two years that raised over $100 million with Brett from Sierra. I don't think that's a good place to be investing.

• 53:41Speaker 02

  And I agree. I think, look, we looked at a number of companies that were behind Sierra and Decagon and came to the conclusion that a direct head-to-head against those companies when you're a smart, it's just a little bit too hard. You kind of go, there's all the airs out of the room with Sierra at the high end. I think Decagon have executed well. It's that classic, it's a big market, but you don't, you never want to find yourself third in a subsegment. You can be winning in an adjacent section and then you can get unlucky because the big dog can come in and decide to annex your adjacent section. And that's the stuff that happens. But I agree, there is going to be overfunding in all these sectors. And you know, a lot of it is we're all trying to pick our points. And if you look back in five years from now, you'll probably find that one of the biggest source of errors

• 54:24Speaker 02

  was, oh, we invested in the number one or two player in this little space here, but it turns out that this little space wasn't a thing. This big space was a thing and the adjacent competitor just says, I now bundle this in and do it as part of what I do. Suddenly, Mike decides he wants to be king of ServiceCloud and he just rolls over us because he just adds it to everyone. One of his customers. So I hear you. I think that it, by the way, probably explains, I want to go back to, it probably explains the Harvey financing. Because when you have all the dynamics that you just outlined, it's arguable, despite the TAM comment I made, that the best risk-adjusted bet, and we're seeing it happen, is screw it, I'm just going to pay the winner at any price. Because if you're in the winner, it's the venture capital equivalent of you can't get fired for buying IBM.

• 55:09Speaker 02

  You can't get fired for sticking money in with a 1X preference on the consensus winner. Which is why this market is way more consensus up and down the stack than it's ever been in terms of venture. There's not a whole ton of people trying to be contrarian out there. There's a whole bunch. The stat I tell my partners that blows me away is of the newly minted unicorns in Q1 of last year, by Q4, 40% of them already had one or more up rounds. In other words, the money is saying, once you are a winner, king make, double king make, treble king make, pile on top. It's too hard to pick the guy at 50 free that might make it, just pile into the guy who's made it, even if that 12 billion, worst case is a 1X.

• 55:49Speaker 00

  I think what you're going to be amazed by is every time we get one of these new technology disruptions, everyone gets very frothy and yells and screams a lot. It's going to change the world. It usually does. That means a lot of capital is raised and deployed, and a whole bunch of it turns out to be torched because VCs are very individual thinkers, that they pile into the two winners and then the next 10 companies and probably the next 15, and a whole bunch of those don't really work very well, and it takes five or six years for us to figure that out. Technology just changed the world. A handful of winners are made. A lot of money is lost. Net money is made more than lost in the transition to said new technology, and this has never happened before. This is a totally new phenomenon. We're in the era of AI. Everything's new and different, and they're not a herd of sheep following the potential next winner.

• 56:34Speaker 00

  And will that Harvey round pay off? To the point of Rory, one thing that they don't say is a lot of VCs want the loose side on the wall. So when you walk into the office, on the wall is a nice logo that says, oh, you invested in OpenAI, you invested in Anthropic. Well, if you put money three hundred and fifty billion, probably not doing the VC thing of getting on the four million dollar round, but you get the logo on your wall. That's important, I think, from the VC marketing point of view, isn't it?

• 56:57Harry Stebbings?

  Oh, we can put early investor on our buyers if we buy some Atlassian today, can't we?

• 57:01Speaker 00

  That's right. Yeah.

• 57:02Speaker 02

  Early in twenty twenty six.

• 57:04Harry Stebbings?

  I feel vindicated, by the way. Thank you for that, Mike and Rory. I appreciate that you conceded that I was right on the customer support argument. It's awesome. I would love to finish on one thing, which is the Super Bowl ad. We've got to finish on this, which got the essay back from Sam and then the CMO of OpenAI being like betrayal, treacherous, epic disaster, whatever the kind of words were. How did we think about this in the response?

• 57:29Speaker 02

  That confirmed the facts. OpenAI was going to do one ad. I'm not quite sure what that was again. Remind me, please. Then Anthropic ran an ad trail that they were going to run an ad that basically said, you know, we don't have ads in our AI. We're good, you're bad. And they ran that ad, versions of that ad. And then OpenAI kind of pivoted and ran a very, you know, you can just build things, rah rah ad in the actual Super Bowl. Is that the kind of chain of events here, Harry?

• 57:54Harry Stebbings?

  The chain of events really is Anthropic ran a series of ads laughing at OpenAI for having ads, slightly ironic in that way. And then Sam and their CMO basically came back with these like epic.

• 58:06Speaker 02

  Right, the tweet, the tweet. I think everyone getting angry is a sure, a sure sign. That's hard to say. A sure sign of tension. Yes. But actually, Brian Kim from Anthropic just did a really good piece, but basically said, of course, they're going to run ads. It's a consumer product and less than five percent of consumers ever pony up for kind of subscription products. So if you're going to be the consumer product, they're going to run ads and that's ChatGPT. And if you're going to be the enterprise product, you're not going to run ads and that's Claude. Ninety-five percent of people watching that game must have gone, what are these people talking about? And why is this? Why are we taking away from Bad Bunny for these morons to talk about something? I don't even know what's going on, Matt.

• 58:45Speaker 00

  Back to the prior discussion, you know, when these technology revolutions happen and everyone pours in the capital and torches a whole bunch of it. One thing that is again unique about this era is the purchasing of Super Bowl ads to try to, I guess, justify ego. I think is largely what's going on here. Let's face it, it's human beings. They've got a lot of capital, so they make Super Bowl ads. Again, never happened in the history of technology before, except pets.com. I thought you were talking about the AI.com, the guy that bought the domain for seventy million bucks, spent eighty million dollars on an ad. And then is selling open claw. And I'm like, that is also a weird business, but like, maybe. Rory's comment that the, what do they call them online nowadays? The normies, the regular people who just wanted to watch the Super Bowl. Are like, what the hell is this about next? Give me the Doritos commercial.

• 59:28Speaker 02

  Getting to know you, Mike. It's the way your tone doesn't change when you move from fact-based comments to acute sarcasm. With literally no variation in tone. Takes a while to adjust to, but you're so right, man. When you said, it's never happened again. We all flash back to ninety nine, we flash back to crypto. This is, you are, this is classic top of the bubble stuff. You have two hundred million bucks burning a hole in your pocket and you're like, I can, I can put, spend five million and be in the national agenda. I'm in the Super Bowl.

• 59:56Speaker 01

  You know why this ad was weird, though? I'll tell you what was weird about it, for what it's worth, is, um, look, Anthropic is, I mean, it's, I mean, it's a generational, generational company. It changed coding, it changed everything, but the only place Anthropic is weak is consumer. I mean, I'm one of the seven people that uses Claude instead of ChatGPT as a consumer app, okay? So of all the things they could have done in the Super Bowl, say, the engineer's pal, the product guy's buddy, all the things they could say, how we revolutionized product creation. They talk about the one area they fail, which is say, we won't put ads in an app nobody uses for this use case. It was some sort of meta dig because it's, it's, it's advertising for its worst product. It's nothing but a dig. It makes no sense.

• 1:00:36Speaker 02

  I saw a smart tweet that made the point. The redeeming argument on this is, we're actually not talking to the ninety five percent. It was two people exchanging signals to each other and each other's employees in the valley, using five million dollars of money to send a signal. This is Anthropic reinforcing their, we're the, you know, we are. The enterprise good guys here and they're really messaging to maybe 10,000 engineers they might want to hire. And literally the other 325 million people involved are just, we're just talking.

• 1:01:05Speaker 01

  It could just be recruiting and plus our head of safety quit this week. So let's mask that over with the.

• 1:01:10Speaker 02

  It's all just positioning. It would be so much cheaper to buy a billboard on the one on one.

• 1:01:15Speaker 00

  But it does back to the original discussion, Harry. I think what's what's interesting there is it's a sign of the times. I'm not sure we can call it a sign of the top. I don't think that's probably true at all. It's a sign of the times. Look deeper at it, right? If you're burning a billion dollars a week and people are going to keep funding you, the ads are cheap. They don't make any difference, right? Your CMO doesn't have a constrained capital efficient like profit EPS calculation right now. One day they will. Right now they do not. So right now everyone is maximalist. They're trying to be in every single category all the time. What's fascinating is you go to the SaaS and software world, you have financializing going on a lot.

• 1:01:54Speaker 00

  Because they can't afford to be maximalist because those, you know, those pesky public market investors are making valid questions around. Hey, profitability and growth and all these things. And you have a lot of categories. That are raising tons of money and don't have that problem. Hence you get these ads as one example of that. That will normalize. It does every time.

• 1:02:13Harry Stebbings?

  I think we're automatically assuming that Super Bowl ads are, I'll say frivolous, sign of the top, not actually effective. Like Wix, for example, which is obviously incredibly hit in the public markets. I spent an hour and a half with their CMO the other day who's bought six different Super Bowl adverts over the years. This year he bought two, one for base 44 and one for Wix. And he's like, the impressions that you get from Super Bowl, the effectiveness of this advertising channel is immense. I I back entirely. I don't think either of them were like top of market. We've got a billion dollars. I knew brilliant uses of capital.

• 1:02:45Speaker 02

  Okay, I'll answer that. And then I want to come back to Mike's point because I think there's something more important in that point. But on your point, if it was a brilliant use of capital, you'd see it happen consistently across the cycle. But in fact, you want to see tech startups doing it when they have money to burn.

• 1:02:58Speaker 01

  But that's true of all marketing, Rory, I can tell you. It's true of all marketing. When they don't have capital burn, marketing is the first thing that gets cut.

• 1:03:04Speaker 02

  Capital in general, therefore what it is, is a good way to spend the marginal dollar when you've already spent it on everything else. But I want to come back on Mike's point because I actually think there's a more serious point in there. You made a comment on these guys are not financialized. And the public SaaS companies are financialized. And I think there's a bigger comment in that. Maybe when I was thinking about these fights between public company and incumbent and private company, next generation player. I think one of the biggest things is the public companies have this constraint, you know, having to make EPS, having to grow. Whereas the private companies are in, you know, as you say, no marginal costing is taking place. And do you think that impacts public companies in general ability to compete? Or do you think it makes them more friggin?

• 1:03:45Speaker 00

  Man, so many great topics. Firstly, I think Super Bowl ads, just very quickly, Super Bowl ads are priced that way because that's what people will pay. Efficient market in Super Bowl ads, surely. Doritos pay eight million bucks because it sells a bunch of Doritos. It's a good investment. Is it like the best use of capital? Probably. Why do Doritos and beer companies advertise all the time? So for some businesses, like Wix, I would argue, it's a totally sensible investment. For others, it's completely ego. The CEO wants a Super Bowl ad, so they go back one. Ego stuff happens when capital is not being efficiently spent in a business, right? And both of these two things happen in every Super Bowl, probably in some way. I think there is an interesting argument of public companies and maybe why, I mean, I know things I shouldn't know, I guess, but good public company CEOs are often founders, as you pointed out a few times,

• 1:04:29Speaker 00

  because you're trying to take a long-term view and manage the short term. You are trying to do both. We have massive investments in AI. We have to deliver public company results and that's the job is to do both. If we just focus on the public company results part in the very short term, we will not have a good business in five years' time from now because we won't be investing in building AI. But that takes usually necessarily away from something you could otherwise be doing today. And that's the balance of capital allocation in any of these businesses, right? Microsoft has to do it, everybody has to do it, right? Capital allocation is not easy. But a good leader, I think, will allocate capital to those investment areas and allocate enough capital and then tell us. Story about why that capital is being invested, right? We spend a huge amount of money on R and D. We spend a huge amount on AI.

• 1:05:14Speaker 00

  I would argue if you're a public company today and you're not spending a lot of money on fundamental kind of new R and D around AI and your product category, you're probably in trouble. Now, you can't see that in any public company accounts, right? It's very hard to actually see where they are allocating their R and D dollars. But I would guarantee you a lot of them are moving more and more and more towards thinking, how is AI going to change my world? How am I going to hire in this era? How am I going to do this? And you have to tell a story to your investors and your shareholders, your stakeholders, your employees about why that's going to make a difference. Why are you going to be relevant and competitive in the AI era? Doesn't mean you need to make a foundational model, but you have to be relevant and competitive and you have to actually do both. Now, Rory, I think you're trying to make the point that maybe there's a world where the free capital in the private markets makes it impossible for those spends in the public.

• 1:05:59Speaker 00

  I don't, I don't think that's the case. You've had Adobe's and Microsoft be public for an awful long time. You have to make tough choices. You have to make capital allocation choices. You have to bet on the future to some extent, and not every company is going to get that right. But I don't think that's impossible at all. I think it's, it's what you have to do.

• 1:06:15Speaker 02

  A great answer because yeah, reading the commentary after your last result, you know, listing the things that people bust your chops on and you know, they're giving you grief about stock-based compensation. And then you're looking on the private side and you're like, these guys are doling out SBC like it's candy and no one even calculates it. I'm glad to see that it's not doing your head in, as we'd say in England, because it's almost like both teams are playing the same game, but one of them has to play it with different rules, which must be a little irksome.

• 1:06:41Speaker 00

  Yes, but the, the difference in rules, again, I, I've said this to a few people. We're a better company because we're a public company. Like we have become a better business, right? We're better at forecasting, we're better at planning, we're better at executing. What we have to do is not replace forecasting and planning, executing for strategy. I think that's where it gets wrong is where you just focus on that piece of the business. You still have strategically compete and grow and go into new areas, invest and build things, right? You absolutely have to do both of those things. Managing the finances of that is is very challenging at the moment, right? For all the reasons you pointed out, totally agree with the challenge that that's going on. Secondly, it's very hard for investors to see winners in that process right now, right? If I say it as generically as possible, I think that's the challenge, right? Is because where is that money going?

• 1:07:25Speaker 00

  What are those people building? What is the talent? What is that likely to change your strategic positioning with customers over the next few years? That you have sustainability and durability? That's very hard to see at this current time for investors, right? If you look at any list of AI winners and losers as above the fold, let's call it. Every list is different. That alone tells you people are like, I don't know, somewhere over here. That's our job, that's my job. I'm not complaining about that for a second. My job is to tell a great story about why we're a winner and then make us a winner and do both at the same time. And I have to fund that. You got to enjoy that or you should be doing a different job.

• 1:08:00Harry Stebbings?

  I love you and I'm so grateful to you for being a friend, being awesome, being so good. If the numbers are so good, but the stock price is down so much. Do you think you're doing a good job telling that story then?

• 1:08:12Speaker 00

  Oh, that's a great question. Depends on you, this gets to the CEO scorecard, right? We had a fantastic quarter. Our numbers in almost every category are great delivery of our goals. Sternal current time judgment of the delivery of those goals leading to future value is not in a good spot. There's no doubt about that and we're working hard to change that, right? We have the same business we had a year ago. We will still have a great business in a year and two years. And my job is to make sure we have a great business in five years' time. There's a mental health aspect of it for staff and things like this. And then there's a, we just got a lot of work to do. Let's, let's, let's get back to work and just go do that, right? And if we keep delivering great results, we're not short in the back of England here.

• 1:08:55Speaker 00

  But like at some point, you're like, I don't know, we got, we got to do what we got to do, right? And you got to also adjust. I said this in my, in my shared letter, we spend a lot of time writing our shared letter. You got to accept reality as well. Sometimes I see people and as I said, I do a lot of, at the moment, there's a lot of SaaS CEO therapy going on. One of the things I've told a few people is, dude, you've just got to accept reality and then, and then go build something, go do something, right? You can't pontificate about the technology, about creation and everything else. Guess what? Part of creation is destruction. You've got to go build value for customers. You've got to go build new products and technologies and services. The way I see it, we're going to create our way out of this problem. We're not going to like hide in a hole and like wait for it to go away.

• 1:09:36Speaker 00

  And part of that is accepting the reality of what's changed and also what's changed in a positive way. That always seems very negative. We can build things way faster and way better than we ever have been able to before. If we re-founded Atlassian today with three hundred and fifty thousand customers, fifty thousand enterprise customers, couple of billion bucks in the bank and ten thousand people in R and D, and a great distribution engine to get to all those customers and deliver new value, you'd be like, it's a pretty good starting point to start a business, right? Like, let's go build some stuff, right?

• 1:10:04Harry Stebbings?

  You're right, mate. When you talk about creating value, we as three VCs know exactly how you feel. We are the value creators.

• 1:10:12Speaker 02

  Just to be clear, it's clear when Harry's been sarcastic.

• 1:10:16Speaker 01

  I think it's a good, I think what Mike said is great. I think though, I would say, I don't know what you think of your, I mean, your, your SaaS group's pretty elite, Mike, but I would say maybe only the best SaaS B two B C I knows are really up for that. A lot of them are introspecting. A lot of them, I talked to one that quit at the end of the year at hundreds of millions of revenue and said, I was told AI wasn't important in our space. That was, that was the goodbye message. And so not everyone has it in them to go through, to, to push through this next wave. Maybe only the best, maybe only the best do. I mean, you're, you're one of the best, right? We don't have to rank you.

• 1:10:46Speaker 00

  And, and that's okay, right? I think we shouldn't pass judgment on that.

• 1:10:49Speaker 02

  I totally agree. It's not even the best at all. Totally. Look, it's the same in our industry. Some people decide I've done enough. I'm fifty. Some people have done enough. I'm forty. You only got one life. Someone really want to go to Bali at fifty. I, I'm totally with you, Mike, on that one. It's like, actually, it's a better call. If you don't have it in you to do it, I actually admire more the person who says you guys should get someone else than hanging on, waiting to get the headshot. Just call it.

• 1:11:14Speaker 00

  I actually agree. That's, that's a harder call to make, right? That, that's a very difficult decision.

• 1:11:18Speaker 02

  In our business, one partner said to me years ago, he said, Our business is a learning business and the day you stop learning is the day you should say to your partners in about a year and a half, he should be replacing me. Because you can't take the money and not play the game. And I agree, actually, so you should tell those guys who aren't feeling it, it's really simple. Congratulations, you've made life-changing money. You don't have to do it anymore. How's your number two? Because he's in charge now. Bring back that founder who left.

• 1:11:44Speaker 01

  Are you working harder, Mike, than you have in the last few years? Are you working harder?

• 1:11:47Speaker 00

  Am I working harder than I have in the last three years? Yeah, well, my co-founder, God love him, we had a whole bottle of wine not before last. You know, he retired a year and a half ago, so that that makes like, you know, that's a big adjustment after twenty, twenty-three years. And he has, he's full of gratitude, which is really nice. He understands, right? That creates more work. And there's no doubt the era, man, I start working at 5:00 AM every day at the moment, right? Yes, yes, people are working harder now than they have before. A hundred percent true, right? Because of the disruption and the speed and the change and everything. And that's, I think that's not a bad thing. That's, that's a normal thing. That's an okay thing, right? The question is, do you enjoy it? And do you have enough balance? Again, I am the worst person to be a therapist to any of these CEOs and sales founders.

• 1:12:30Speaker 00

  But I do tell them, like, what you're saying, those people are making the choice, is balance, right? Do you have enough time with your kids? Do you get out in the trees? Do you walk around? Do you do some access? Whatever it is that's your jam in terms of balance? Stop doing that for a year or two, you're going to be in trouble, I believe. Like, I've done this long enough. You can't shortcut those things. Secondly, are you enjoying it? And don't just tell me yes in one second. Wait, think, go away, take a weekend, drink a bottle of wine, drink a green tea, whatever is your thing. Are you enjoying what you're doing? Would you choose this job again today? Because it's tough out there. It's gonna be hard. Welcome to the technology industry. If you're not enjoying it, no harm, no foul. Go do something you do enjoy, right? Move to a different arena.

• 1:13:13Speaker 00

  If you wanna use the, you know, we throw that around all the time in the tech industry. The enjoyment is sometimes forgotten in the ego, the need to win, to disrupt, to grow, those sorts of things. Like you said, if you built a great business, a couple of hundred ARR, whatever it is, do it decently. Like, you know, give your team time, give your company time, make, you know, there's a thoughtful way to do any of these sorts of things. But I think it should be seen as a mark of, you know, amazing human achievement.

• 1:13:39Speaker 01

  The problem is if Mike said that to most of the people, I know they'd quit. Are you really enjoying, do you love, do you love every minute of your job as founder CEO? Are you getting enough time with your kids? Are you walking enough? If not, you should, I'm being a little facetious, but, but not completely, right? But not completely.

• 1:13:54Speaker 00

  I'm not, I'm not being Pollyanna at all, right? Like there are parts, there are days that suck, there are times that suck. But over some average of a 90 day, one year, Rory's point, you got one life. We, we got into this, we enjoyed creating things, we enjoyed building teams and businesses and delivering value to customers. Not in the tried like way, but literally sitting down with customers and seeing what they do with your shit is awesome. And you're like, man, that's so cool. Hey, let's go do some more of that, right? You've got to enjoy that part of the job. It doesn't mean every part of the day or the job is gonna be easy. It doesn't mean you don't sit there with your team and go, how the fuck are we gonna deal with this? Right? These guys are coming over the wall. But if you don't enjoy that, I don't know, there's some analogy that, that every era is going to be different. The echoes are the same, but there's different ways to your point of learning.

• 1:14:38Speaker 00

  You, you gotta learn, you gotta think about how you're gonna compete. You're not sitting there with bows and arrows if people are coming with the machine guns. But I do think you can be balanced. I do think it's important.

• 1:14:48Speaker 01

  Don't you think all founders are a little crazy?

• 1:14:50Speaker 00

  Yes.

• 1:14:51Speaker 01

  Yeah. How can you be balanced if you're crazy? Like there's no bat, like you're, cause you're gonna be miserable or bored or you're not building. You know, I don't think Elon doesn't look too happy to me. All the good founders are crazy.

• 1:15:00Speaker 00

  There are some people who have unique choice sets. In whatever way you enjoy what it is that you do. And you choose to be intentional with your own time. I spend a ton of time with my kids because it's super fun and it's super different. And they're awesome little human beings and I'm trying to grow them into awesome big human beings, right? And help them on, on whatever journey they're on. That is enjoyment. I think it makes me a better CEO to do that. I don't spend sixty hours a week with my kids. You know what I mean? They're sleeping and this and that and other things. But I don't spend a hundred hours a week at work, right? Now, when we were younger, we did, and that's the evolution. But you have to learn to do that. I think if you spend a hundred percent of your time at work, you make worse decisions. But you

• 1:15:44Speaker 00

  have to do the job, right? And the balance is really tricky. The intentional time management is really tricky. Do I spend as much time with my mates as I used to? No, right? We catch up once a quarter, we do this and that, like, so there is things you got to trade off. All I'm saying is if you don't do any of that outside work, because you're like, this era, I've got to knuckle down and do a hundred percent of this is right now. I don't think that's sustainable. Maybe that's just not for me.

• 1:16:07Speaker 02

  It's not. Every time I give that speech to my, this era, I've got to do, and she just looks at me and says, stop, you're just gonna go insane. And then you're going to become irrational, and then you're going to make bad decisions. So we're going for a hike for the next hour and a half. And I just say, okay, I'm going. And Harry's moving into the kills to tell us, we're too old, and we're gonna get rolled over by him.

• 1:16:26Harry Stebbings?

  Well, I do think that, but that's a little bit rude. And we have a guest, Rory, so I wouldn't say that with our guest, obviously. No, I actually have a secret for you, Mike, which is just work with your great mates. I have become great mates with Rory and Jason, and I now get dedicated time with them every single week. What a joy for me.

• 1:16:42Speaker 00

  I agree. Any of the best things that we've done, and we've had a series of fantastic leadership teams, really good friends that I still hang out with, I had a whole bunch of them, you know, over the Christmas period, old time at Lassian Leadership Team, people that came to join us. They're amazing people. We've been in various trenches and scuffles and fights together. We've had some victories, we've had some losses. Do you get enjoyment from that part of it? You're winning more than you're losing, great. And you go back and you can have people that you can have a cup of tea with, ten years later, man, like, we did a good job there, you know what I mean? Like, there's a part of the human tribal getting together that your leadership team, wherever you are in whatever business, that has to be part of your enjoyment, right? And you have to create that. And it's hard

• 1:17:26Speaker 00

  to create. Don't get me wrong. Like, it's tricky. You can treat people as employees and mercenaries, or you can say, hey, we got a challenge to do, and we're a group of people in a room, we're trying to deal with this challenge. We need help. We all need help to do that for each other.

• 1:17:37Speaker 02

  One last thing, this may not end up on the show, but someone, actually, my son and I sent this to me. Have you heard the Death of Software song on Spotify?

• 1:18:10Harry Stebbings?

  We finish every show with that rendition. It's like our halo song.

• 1:18:14Speaker 00

  It's your anthem for the era, right? It's a depressing country song about the love of tickets is, you know.

• 1:18:24Harry Stebbings?

  But before we leave you today, are you a founder working nonstop to raise your next round? Are you an investor doing all you can for your portfolio companies to help them stand out? Funding and scaling a vision is challenging. Banking should not be. HSBC Innovation Banking caters to tech and healthcare founders all over the world who need a really great banking partner that matches their pace, offering fast onboarding, product packages designed for your business, and capital solutions built for high-growth startups and the VCs investing in them. With HSBC Innovation Banking's rapid onboarding, you can get access to your new accounts and facilities quickly, so your team can stay focused on building and scaling what's next.

• 1:19:05Harry Stebbings?

  You'll be paired with your own dedicated team of venture ecosystem veterans who have the network and experience to guide companies in your specific sector at your specific stage. And behind that support is this real strength. HSBC's $3 trillion balance sheet and global network that provides this stability and international reach needed to grow your operation with confidence. To see how HSBC Innovation Banking can support you, whether you're on day one or day a thousand, visit innovationbanking.hsbc to learn more and connect with an innovation banking specialist. That's innovationbanking.hsbc. While HSBC manages your corporate banking needs, Deal helps you build the global team behind it.

• 1:19:49Harry Stebbings?

  Two minutes can change your startup's trajectory. The pitch by Deal is a global startup competition where founders... Pitch their company in just two minutes for a chance to win a $1 million investment. You'll compete with startups from around the world and get in front of experienced judges who back ambitious teams. If your startup is ready for its next step, take your shot. Apply at deal.com/20vcpitch. That's deal.com/20vcpitch. Once Deal helps you hire your global team, Framer gets them wowed on the way in. Your marketing website sets the tone for your brand, let's face it, and it's the one touch point every single one of your customers has.

• 1:20:31Harry Stebbings?

  So if you're struggling to make small changes and simple updates, you're falling behind, and that's why so many companies, from early-stage startups to Fortune 500s, are turning to Framer. Framer is an enterprise-grade, no-code website builder that works like your team's favourite design tool, and it's used by companies like Perplexity, Miro, Mixpanel to move faster. Designers and marketers can fully own the site with real-time collaboration, a robust CMS built for SEO, and advanced analytics that include integrated A/B testing, so you're not just shipping pages, but you're maximising what works. And when you're ready to ship, changes go live in seconds with one click: publish, without relying on engineering.

• 1:21:10Harry Stebbings?

  Plus, Framer is built for scale, with premium hosting, enterprise-grade security, and 99.99% uptime SLAs. Whether you want to launch a new site, test a few landing pages, or migrate your full dot com, Framer has programmes for startups, scale-ups, and large enterprises to make going from idea to live site fast. Learn how you can get more out of your dot com from a Framer specialist, or get started building for free today at framer.com/20vc for 30% off, 30% off a Framer Pro Annual Plan. That's framer.com/20vc for 30% off. Framer.com/20vc. Rules and restrictions may apply.