20VC: Benchmark's Eric Vishria on Where is the Value in AI: Chips, Models or Apps | Why Nvidia Will Not Be The Only Game in Town | The Commoditisation of Foundation Models | Which AI Apps Have Sustaining Value vs Hype and Short Term Revenue

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 25 September 2024

⏱️ 62 minutes

🔗️ Recording | iTunes | RSS

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Summary

Eric Vishria is a General Partner @ Benchmark Capital, one of the world's leading venture firms. At Benchmark, Eric has served on over 10 boards including Confluent (CFLT), Amplitude (AMPL), Benchling, Contentful, Cerebras and several other private companies. Prior to joining Benchmark, Eric was the Co‐Founder and CEO of RockMelt, acquired by Yahoo in 2013.

In Today's Episode with Eric Vishria We Discuss:

1. How to Make Money Investing in AI Today:

How does Eric think through where value will accrue in the stack between chips, models and applications?
Why does Eric believe foundation models are the fastest commoditising asset in history?
Why does Eric believe that Nvidia will not be the only game in town in the next 3-5 years?

2. How to Invest in AI Application Layer Successfully:

How does Eric analyse between a standalone and deep product vs a product that foundation model will commodities and incorporate into their feature set?
How does Eric differentiate between the 10 different players all going after customer service, or sales tools or data analyst products etc?
How does Eric analyse the quality of revenue of these AI application layer companies? What does he mean when he describes their revenue as "sugar high"?

3. How the Best VC Firm Makes Decisions:

What is the decision-making process for all new deals in Benchmark?
As specifically as possible, how does the voting process inside Benchmark work?
What deal was the most contentious deal that went through? What did the partnership learn?
How has the Benchmark decision-making process changed over 10 years?

4. Does AI Break Venture Capital Models:

Does the price of AI deals and size of their rounds break the Benchmark model?
Will foundation model companies all be acquired by the larger cloud providers?
Unless multiples reflate in the public markets, does venture as an asset class have hope?
Why does AI make paying ludicrously high prices potentially rational?

Transcript

Click on a timestamp to play from that location

0:00.0	Foundational models are the fastest depreciating asset in human history.
0:08.2	I don't believe Nvidia is going to be the only game in town on infrastructure.
0:11.5	We have a major, major shift in AI, which could be bigger than any of these other shifts,
0:16.0	maybe combined.
0:17.1	It's simultaneously the most exciting and most disorienting time in my 25 years in technology.
0:22.8	There's a lot of uncertainty, but we've been more active than we've been since 2010 and 2011.
0:29.8	This is 20 VC with me, Harry Stebbings, and today we have Eric Vichria, general partner at Benchmark, joining me in the Hot Seed.
0:36.5	Now, what is amazing about Eric is the breadth of his investing success partner at Benchmark, joining me in the hot seat. Now, what is amazing about
0:37.7	Eric is the breadth of his investing success, from Benchling to Amplitude, to Cerebrus, to Confluent.
0:44.4	These are incredible companies, but in totally uncorrelated in different industries, a once-in-a-generation
0:50.4	investor, a true picker, and one of the greats. But before we dive in today, all of you
0:55.3	listening use tons of software every day. Sometimes it fills us with rage. You can't figure
1:00.2	something out. The chatbot in the bottom right is useless. You keep getting bombarded with these
1:04.6	useless pop-ups. And for those of you who build products, no one wants their product to feel like
1:09.4	this. Thankfully, a company exists to help
1:11.8	users without annoying them. Command bar. It does a couple of very helpful things. First, it's a chatbot
1:17.7	that uses AI to give users extremely personalized responses and deflect tickets. But it can be
1:22.6	beyond just text. It can also co-brows with the user and show them how to do things inside the UI, magic.
1:29.3	But it can also detect when users would benefit from a proactive nudge, like a helpful hint,
1:33.9	or an invitation to start a free trial.
1:35.8	Command Bar is already used by world-class companies like Gusto, Haschicorp, Yotpo, and Angelist.
1:41.0	If you're a product CX or marketing leader, check them out at command bar.com
	...

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