Juicy⚡

Memes are back and the Internet is entertaining again.

Some thoughts on how to come up with the "big idea" on which business to start: Let's think about the difference between being original and being contrarian. An original idea is an idea that no one else has. A contrarian idea is one that everyone disagrees with. They can be related but very different processes to arrive at the end result. One is much easier than the other. To have an original idea, you need to think of something that no one else has ever thought of before. Originality places an emphasis on being novel - conceiving of things that have not been conceived of. That sounds like a high bar as it is. To have a contrarian idea, you need to think of something that everyone else agrees with and take the opposite view. It's actually quite easy to think of things that everyone agrees with - the real question is can you get your head around the opposite view. Often times when people think about being an entrepreneur, they put pressure on themselves to find that "original" idea that no one else has pursued before. They're going down the originality path. That can seem very daunting because every idea seems to have been taken. I'd suggest an alternate approach that is much easier - rather than focus on being original, focus on being contrarian. By that I mean, think of something that everyone agrees with, and pursue the opposite idea. You will have a contrarian idea - and actually it just might be original as well. As an example, if you were in a room full of 1,000 people 20 years ago - and you asked yourself the question - what do all 1,000 people in this room agree on? One of them might have been: don't get into cars with strangers. Every single kid growing up in my generation was taught the same thing - don't get into cars with strangers. All 1,000 people would agree: don't get into cars with strangers. So, the opposite idea would be: I'm going to build a service to make getting into cars driven by strangers as a normative form of transportation. Exactly 0 out of 1,000 people would have agreed that that's a good idea 20 years ago. And there you have your contrarian idea that became Uber and Lyft. So if you're trying to figure out your big entrepreneurial idea - try this step. Put on the board a list of ideas or concepts that basically everyone agrees with. And, write next to each idea the contrarian entrepreneurial idea that disagrees with each of those agreed upon concepts. And, see which contrarian idea you think you can build a business around. You will have plenty of runway to go after that idea because everyone will be stuck in the same worldview. And once the world catches up with your thinking, you may just have a great business on your hands.

Rightly or wrongly, it was the presumptive position of all the LPs I spoke with that AI is in a bubble and the bubble will burst.

LP: What do you think people are getting wrong about AI today? When we imagine what an AI-native company looks like, we're imagining the wrong thing. For all of business history, a business has been about bringing together human talent, to leverage human intelligence and capacity, to build products and services for humans. Therefore, when we think about what an AI-native company looks like, it's natural to imagine it as adjacent to the only model we've ever known. We are inherently anchored to a human-centered model. AI-native companies are built on a completely different set of assumptions. They are foundationally built on machine intelligence, with agents as the primary unit of labor, within a specifically designed agent habitat, to leverage AI capacity to develop products and services for agents (and humans). They are not a relative of the old model, they are a completely different species. For certain, human-centered businesses that leverage AI can be very successful, but I wouldn't conflate that with AI-native companies that are built on a company different foundation and worldview.

One LP said something interesting to me at the annual meeting - he said that most companies that his GPs are projecting at a ~2x return, e.g. just an okay outcome, he's expecting them to ultimately be <= 1.0x. He thinks the large swath of muddled companies will end up being losses. There's a lot of experience in that comment. Essentially, he's saying there are a lot of companies that are muddled in their performance for whom there will be little to no market for and performance will continue to erode. In a different market, those companies might have been able to work towards a more positive outcome, but he's more sanguine about their prospects now.

Met with a number of LPs who are eagerly awaiting the Anthropic IPO. Most appear to be sellers anywhere around $1T or above - too big of a position to risk on any sort of AI correction.