Miles Grimshaw: The 5 Pillars of Venture Capital & Why Co-Pilot is an Incumbent Strategy | E1061

1. 0:00 – 5:10

   Who is Miles Grimshaw?

   1. MGMiles Grimshaw0:00

      Tens of millions of engineers would become AI engineers versus, like, hundreds of thousands of ML scientists. That would beget the need for an application sort of framework for AI, um, and tooling for that computing environment. There's randomness to it. How do you measure excellence of it? And there was an opportunity for Build to empower every engineer becoming that.

   2. HSHarry Stebbings0:22

      (techno music) Miles, we first met in, I think it was 2016, and then we met in person in 2017. I've wanted to make it happen since then. Respectfully, you made me wait six years-

   3. MGMiles Grimshaw0:31

      (laughs)

   4. HSHarry Stebbings0:31

      ... but I'm so glad that we managed it. So, thank you so much for joining me.

   5. MGMiles Grimshaw0:35

      A, a pleasure to finally do it. A long time coming.

   6. HSHarry Stebbings0:37

      Now, man, I would love to start with your entry into venture. First off, how did you make the first move into venture from college or university?

   7. MGMiles Grimshaw0:46

      Yeah, yeah. I would say, um, worth winding the clock back a little further than just there, sort of where the motivation, the inspiration kind of in- in- incepted in many ways. I actually grew up in the UK. We're here recording in the UK. And, um, I went to the US because my parents re- remarried and my stepfather, who was very much a father to me, was an entrepreneur. He founded one of the very first e-commerce software companies. Powered a bunch of the big, big sites at the time. And, uh, when I moved, he'd, he'd sort of taken that public in the dot-com. And when we moved over to the US, he was starting another company out of our, our living room, uh, our kitchen table actually. Um, it wasn't a garage. Um, that was probably actually the East Coast, a little too cold in the winter. It was the kitchen table. And it was, like, two people, him and a friend, and then three people, and then four people, and then five people. I sort of didn't really know what it was in many ways, but it was, like, really inspiring to come home from school and see him working, um, you know, with, with, with friends and working hard and talking about new ideas. It was e-commerce software again. And so I kind of, at that point, in many ways, the American dream was, was his lived experience. He's a Korean immigrant. The American dream was sort of mine in some sense, coming to, to, to the US from the UK. And that, that love of being around people like him and his friends who were creating, um, it kind of just got into the blood in many ways. And then fast-forward, you know, I didn't know what the job was to, to do things with those sorts of people per se, but I knew that was really intoxicating. And fast-forward to, to sort of around the tail end of college, um, New York City and, and sort of app development, you know, was having a really vibrant moment. In some sense it was sort of really early in cloud obviously. This is like 2010, 2011, 2012. Rails-

   8. HSHarry Stebbings2:24

      So, this is like Tumblr days.

   9. MGMiles Grimshaw2:25

      Tumblr days.

   10. HSHarry Stebbings2:26

       Yeah.

   11. MGMiles Grimshaw2:26

       Um, Rails-

   12. HSHarry Stebbings2:27

       Foursquare.

   13. MGMiles Grimshaw2:28

       ... Foursquare. You know, and New York City at the time, Warby Parker, um, Harry's, MakerBot, GroupMe. You know, there was this idea, it was funny to look back on it at the time, but there was vibrant sort of, in many ways the, the movie of the time of inspiration was probably, um, was the Facebook movie.

   14. HSHarry Stebbings2:44

       The Social Network.

   15. MGMiles Grimshaw2:45

       The Social Network.

   16. HSHarry Stebbings2:45

       "This is what inspired me to venture." Yeah.

   17. MGMiles Grimshaw2:46

       You know, the idea... Yeah, exactly. The idea that you, you know, could be a kid and you could build something in college. We were doing that. You know, we were hacking around with nothing, nothing like a Facebook, but we were hacking around with just fun ideas. You were totally empowered. Rails was a framework at the time, um, that had blown up and made it easy to build sort of modern web sa- web apps. Heroku was out there. So, it was really e- exciting. Um, you sort of felt like you got handed all these superpowers and could use. And there was this question at the time of, could you have, um, a Silicon Alley. Like, could there be tech built outside of the Valley? Um, here in the UK they were starting to talk about this because you have a Silicon Roundabout. And so the idea that could you build companies elsewhere? And I was on the East Coast and spending a lot of time in New York, and, um, I got to meet Josh and, and this guy Will Gabrick, and they were sort of setting up Thrive, and we just started spending a lot of time together talking about ideas, pursuing them, trying to help founders. And, uh, it, it was, it- it was infectious, that excitement. And so they, they invited me to join the team, um, as I finished up, and, uh, turns out marrying, wanting to be around amazing folks like, uh, my father and, uh, and, and, and sort of that ecosystem, you know, burgeoning at the time. You know, serendipity. Serendipity met, um, and been running ever since.

   18. HSHarry Stebbings3:57

       Can I ask you, you can call yourself the night before your first day joining Thrive with Josh there, and give yourself a piece of advice.

   19. MGMiles Grimshaw4:04

       Yeah.

   20. HSHarry Stebbings4:05

       Knowing all that you do now, what, what would you say to yourself?

   21. MGMiles Grimshaw4:08

       I knew it at the time, but it's sometimes... If you don't have as much historical context, it's sometimes hard to necessarily appreciate th- really fully appreciate the wave in terms of context and history and specialness that you're on. And if you go and, and look, call it 2012 to, like, 2022-ish timeframe. Cloud spend went from, like, 10 billion to 3, 400 billion. Like there's, there's a chart, you know, the banks put out, right? Sort of like-

   22. HSHarry Stebbings4:39

       McKinsey's got, yeah.

   23. MGMiles Grimshaw4:40

       ... "This is AWS spend and, you know, Azure spend," then he cuts, and all of the cloud SaaS. Like, 10 to, like, 300, 300, 350, 400 bill-... I forget the latest number. Um, but over that 10-year period, that's what happened. And that is just a tectonic shift. And I knew it. I was spending a lot of time in, in, in, um, you know, cloud developer products, cloud application products. But, uh, you know, I remember at one point I wrote this, um, sort of analysis of like sh-... This was before they went public. Shopify versus Etsy. Um, and,

2. 5:10 – 8:15

   Shopify vs Etsy

   1. MGMiles Grimshaw5:10

      uh, it's funny enough actually, Harley, the COO of Shopify, actually emailed me, cold-emailed me, uh, uh, having read this little post saying, "Hey, you wanna come, like, work at Shopify?"

   2. HSHarry Stebbings5:20

      (laughs)

   3. MGMiles Grimshaw5:20

      Uh, I- I- I was at a conference the other day spending some time with him, and I showed h-... I reminded him of this, and he dug up the email. He's like, "Yep." You know, I was like, "It's a lesson I give to so many founders now." Like, you should always be proactively recruiting. This was 2014, and so it wasn't like Shopify was small anymore. But anyway, it was Shopify versus Etsy. There should never be a versus. It should just always have, in some sense, been and. Like there was, it was such a big force that so much was still coming online. So, I'd almost be like-... you, you tell yourself, "Don't, don't try to be too smart," in many ways, and sum it all.

   4. HSHarry Stebbings5:49

      I, I am so with you and I love that in terms of don't try and be too smart. But then history shows you, and, (laughs) you said about kind of, Harry, going off-script, and so we are, but like, fuck it. Um, y- history shows yourself that being second, i- often generates so much less value than being first. Uber, Lyft, you know, Etsi's an incredible company at 9 billion, but Shopify is at 85. It does matter, no?

   5. MGMiles Grimshaw6:13

      Absolutely. And obviously there's relative in it, but in many ways, all of these were still sort of being first, right?

   6. HSHarry Stebbings6:18

      Mm-hmm.

   7. MGMiles Grimshaw6:18

      And Etsi and Shopify were different, right? We, we don't need to drill into those two specifically, but they're different. They serve different users, um, slightly different needs, and both can work-

   8. HSHarry Stebbings6:27

      Mm-hmm.

   9. MGMiles Grimshaw6:27

      ... um, especially when it's still that early. And sort of the, the thing I give my- re- remind myself if it was 2013 again, 2012 again is like, it's so early, um, in, in, in all of that. Um, I think another connected though to that other piece would be advice and sort of reminders I give, um, not myself always, but reminders I give other people really getting into venture, is there can be so much, so much terminology, so many frameworks, SaaS metrics this, you know, uh, MAU, DAU ratios that, that you feel like there are all of these kind of rules and vernacular and jargon. And the most important thing is always like, who's the user and why do they care? If you ground yourself in that always instead of sometimes this sort of like whirlwind of other, you know, framings from investing, y- it'll probably serve you pretty well. I almost think more, certainly every company I recommend it to, um, and more investors should s- sort of do it, is, uh, you get started with investing books, which are useful obviously, but the book like Working Backwards, which is about Amazon's culture, which is working backwards from the customer, serves all teams well in m- uh, in almost all cases.

   10. HSHarry Stebbings7:34

       Mm-hmm.

   11. MGMiles Grimshaw7:34

       And in investing, you know, that simple idea of like writing the product launch announcement or like there's a version of that in many ways working backwards as an investor where you can be like, "What's the MO? What's the..." It's, it's y- if you lose sight of the user, you get lost. That's, that really should be the tether to reality. And, um, and so that would be, that would be a big re- constant reminder and certainly emphasis to an early investor.

   12. HSHarry Stebbings7:56

       There's so many threads that we'll pull on in a minute, but, uh, when you say, "Who's the user," it's funny. I spoke to Vince Hanks before the show, and when I had him on to discuss actually his investment in OpenAI, he said that was the single biggest thing that he's been taught by being at Thrive, this maniacal focus on who's the user and solely focusing on value derived.

3. 8:15 – 13:35

   3 Biggest Lessons from Josh Kushner

   1. HSHarry Stebbings8:15

      When you think back on your time at Thrive, I think it was six, six years and nine months according to the trusty LinkedIn-

   2. MGMiles Grimshaw8:21

      (laughs)

   3. HSHarry Stebbings8:21

      ... what were one or two of your biggest takeaways? 'Cause it was such a meteoric journey for you and for Thrive.

   4. MGMiles Grimshaw8:26

      Maybe I'd say three things that, uh, that jump out to me as lessons from Josh. There's lots of, um, skills and, and the like investing, but sort of maybe ways of looking at the world and, and being in the world, um, are the lessons that you really carry with you the longest. One from Josh would really be that kindness and competitiveness don't have to be oil and water, um, in, uh, in, in business. And sometimes the cliches treat those as, um, you know, opposite poles of a magnet. You're either, you know, a pushover or you're, you know, doggedly comp- And I think, um, he really showed that, that, that they can be in harmony, and, and, um, and that's a really special thing. So, kindness and competitiveness. A- another would be, um, sort of this idea like, yes, you can. Um, and I think belief in someone's potential and, and someone's possibilities is such a, an amazing gift. Um, he certainly gave me that gift, um, and I've watched him give many others that gift, many founders that gift of like, yes, you can. Uh, real belief in their potential. And it's a, it's a beautiful thing to give someone and it's an amazing way to go through, um, the world and keep, keep, keep with you.

   5. HSHarry Stebbings9:39

      C- just on that point, I'm always in awe of his ability to spot talent. When you look at your Chris Pike's, when you look at obviously you, but your Will Gabrics, uh, you know, even Vince now and Karim who've scaled incredibly well internally, what do you think makes Josh so good at talent detection on the investor side? (laughs) 'Cause I want to be as good as he is.

   6. MGMiles Grimshaw9:58

      (laughs) Um, I, I think it, I think the, the track record obviously is phenomenal in that regard.

   7. HSHarry Stebbings10:04

      Yeah.

   8. MGMiles Grimshaw10:04

      A big part, he talked about this recently on a podcast, you know, um, uh, in many ways it's sort of probably a, a, a combination of, uh, really an appreciation of will over skill. Some p- people will hire for, um, proven ability, you, you know, you already have the knowledge or, or, or the like, and again, back to this idea of like, yes, you can, um, and a belief in someone. Uh, uh, it's really a gift of, uh, uh, a confidence in someone, someone's work ethic and determination. And yes, they have to have the mental capacity and the intellectual capacity and all those things, right? But you, you can know that in someone. But the person who will, um, love it and is passionate about it, you know, I have six younger siblings, and sometimes I think about, you know, what, what lessons I'd like to potentially impart as I go sort of on them, and, and, and, uh, you think about these days everyone talks about follow your passion. And I kind of believe that for sure, but I believe it for the reason not where everyone else necessarily talks about it, but you should follow your passion because you'll just work harder. And if you think about compounding 10 extra hours a week, 50 hours a year, 500 hours, you know, not far into the future, um, you've just, you've, you've learnt more, you've caught up, you've, you're, you know, you're better, um, and you're always improving yourself. And so that belief in yes, you can, that belief in sort of will over skill in many ways I think has, along with sort of some base conditions, um, leads to a really powerful, um, compounding of, of, uh, individuals' kind of abilities.

   9. HSHarry Stebbings11:35

      I always laugh 'cause people always say, "Harry, you run the media company now, the fund's like ..." You know, how do you do it? And I say, "Well, if you add two 10-hour days on Saturday and Sunday, it's quite easy."

   10. MGMiles Grimshaw11:46

       You go a long way.

   11. HSHarry Stebbings11:48

       There you go. A long way.

   12. MGMiles Grimshaw11:48

       You can get a long way.

   13. HSHarry Stebbings11:48

       Yeah.

   14. MGMiles Grimshaw11:48

       Yeah. Which is why you should be passionate.

   15. HSHarry Stebbings11:49

       Yeah.

   16. MGMiles Grimshaw11:49

       So you can work more.

   17. HSHarry Stebbings11:50

       Yeah. But also actually, passion often comes from when you're good at something, and you get good by doing more of it.

   18. MGMiles Grimshaw11:56

       Yeah.

   19. HSHarry Stebbings11:56

       And so I think the hard work starts, like no one goes to the gym and is like, "Yes, I'm so good at this."

   20. MGMiles Grimshaw12:02

       Yeah.Yeah.

   21. HSHarry Stebbings12:02

       It comes from going again and again-

   22. MGMiles Grimshaw12:04

       Yeah.

   23. HSHarry Stebbings12:04

       ... and then you start enjoying it.

   24. MGMiles Grimshaw12:05

       Yeah. I just saw a quote, uh, Stephen, I think it was Stephen King, on writing, um, talking about writing. It's like, "The best, it's not that they're necessarily better, they just start." (laughs)

   25. HSHarry Stebbings12:14

       Yeah. Uh, my favorite is actually, um, "If I had more time, I would have written a shorter letter."

   26. MGMiles Grimshaw12:19

       Yeah, exactly. Yeah, yeah, yeah, exactly.

   27. HSHarry Stebbings12:20

       (laughs) I love that. What was the third one? Sorry, I cut you off there.

   28. MGMiles Grimshaw12:23

       The third one, um, would d- be this, um, again, the greatest gifts are things you sort of carry with you a- as, as ways of being, would be what I might call, um, impatiently patient. Again, sort of a little, a duality that almost shouldn't exist, um, uh, which is, "Why not now? Why not yesterday?" Like, hyperactive all the time, but still a really high standard and really patient for the long term. And so, that combination of, like, being fully present, like, fully engaged, new, um, and- and- and, um, and active, but also, like, high standards and not rushed. And that duality, I think, um, he- he really lives, and, um, you know, we were having a mentor like that, um, early on, who can show you that through their lived experiences, uh, is a really f- powerful thing to carry with you.

   29. HSHarry Stebbings13:17

       I think I find that the hardest thing building a firm today, like the need to move things forward every day, every week, but then also appreciating that Benchmark isn't built in a year or six months-

   30. MGMiles Grimshaw13:26

       Right, right.
4. 13:35 – 17:11

   Joining Benchmark

   1. HSHarry Stebbings13:35

      When you made the move, I'm sure you had a lot of people call you and just give you advice. You've obviously built an incredible set of friends, community around you. What advice did you get when you joined Benchmark?

   2. MGMiles Grimshaw13:47

      People at st- in many ways, I'd spent a lot of time in, not a lot of time, but a decent amount of time in venture, and so knew of, uh, different firms in many ways. Um, so I didn't really, uh, go and get advice on making the decision. The only person I really asked, um, was, uh, was my wife, which w- a- and- and I was like, "Are you really up for moving to California?" Um, and both of our families are on the East Coast, and family's important to both of us. She'd grown up entirely on the East Coast, didn't have friends, there's, you know, many ways out there, didn't have a life out there, and we wanted ch- children, and so we set roots out here. And so, uh, the main question was, "Are you really up for that?" And we'd only been married in many ways also like six months during the pandemic (laughs) , um, and she was- she was fully up for it, and so, um, that was the, uh, that was the- the biggest question.

   3. HSHarry Stebbings14:32

      Did Fenton and Gertie give you any advice on joining?

   4. MGMiles Grimshaw14:34

      I wouldn't say there was, um, ever any, you know ... Uh, in some sense we're always, um, as we go through it, like, giving each other thoughts and feedback and- and- and nagging each other to be better obviously, and so there wasn't, um, there wasn't sort of like some entry indoctrination or, you know, or whatever. In many ways, it was, um, "You be you." Like, "You be- be you totally kind of unfiltered and as authentic a- as you are, and- and the best version of you will be the best investor." And I think in many ways when you get rid of structure, um, and there's- there's no, like, level to be had or, you know, no- nothing like that, um, the- the "Just be yourself" is in some sense the hardest- the hardest thing.

   5. HSHarry Stebbings15:23

      I think a hard thing is a lot of people don't know who they are as an investor. It's funny, one of my friends just joined one of the biggest firms in the world, and he said, "Should I do this? Should I do this? Should I do this?" I said, "They hired you for you."

   6. MGMiles Grimshaw15:32

      Yeah.

   7. HSHarry Stebbings15:32

      "They hired you for what you've done already. Just keep doing that," and I think that's the most-

   8. MGMiles Grimshaw15:35

      Yeah.

   9. HSHarry Stebbings15:35

      ... important thing to remember.

   10. MGMiles Grimshaw15:37

       Yeah. Yeah.

   11. HSHarry Stebbings15:37

       How was the first partnership meeting? I always remember Pat Grady at Sequoia, who's a great friend of mine, said after six months, Rodolphe said to him, "Do you need to see a vocal coach?"

   12. MGMiles Grimshaw15:44

       (laughs)

   13. HSHarry Stebbings15:44

       "'Cause you don't seem to be speaking." (laughs) How was the first partnership meeting at Benchmark?

   14. MGMiles Grimshaw15:49

       We have no deal flow list, no sheet, there's no memos, um, there's no data room presentations, no-

   15. HSHarry Stebbings15:58

       How do you structure the meetings then? (laughs)

   16. MGMiles Grimshaw16:00

       There's no ag- there's no agenda. There's just a time block and we just hang out. Bizarre in some sense, you're used to, you know, in any other format, any other company, you might say, "Who owns this meeting? What's the agenda? What are we hoping to get out of it?" But it's a chance really, um, uh, to come together and share the learnings from the week, obviously talk about new opportunities, um, and new things we're seeing, um, inviting entrepreneurs to come and- to come and, uh, meet with us, um, and the space to obviously do that. But there's kind of a trust in the free flowing, uh, trust in each other and a trust in just having that time block, and therefore learning in it together, sharing in it together, and- and we'll get through. If something's important, we're gonna get through it. Um, but we don't necessarily need to put it on the agenda. So, in many ways very different, um, but very freeing in that sense.

   17. HSHarry Stebbings16:49

       Can I ask you, when you said there about kind of like deal flow and, uh, and you know, updates on where companies are at, I always think there's kinda four pillars to venture. There's, you know, sourcing-

   18. MGMiles Grimshaw16:58

       Mm-hmm.

   19. HSHarry Stebbings16:58

       ... there's selecting, there's winning, and then there's like servicing or helping. Like, if you were to rank yourself one through four, one being the best, four being the worst, across those, where would you put yourself and why? I think about this a lot for

5. 17:11 – 21:27

   The 5 S’s of Venture Capital

   1. HSHarry Stebbings17:11

      myself.

   2. MGMiles Grimshaw17:11

      I call them the five S's.

   3. HSHarry Stebbings17:14

      All right, hand me this.

   4. MGMiles Grimshaw17:14

      If you want-

   5. HSHarry Stebbings17:14

      This is great.

   6. MGMiles Grimshaw17:15

      If you want-

   7. HSHarry Stebbings17:15

      Yeah, I want the five S's.

   8. MGMiles Grimshaw17:16

      Uh, 'cause you mentioned four, and there's actually a fifth. Um-

   9. HSHarry Stebbings17:19

      W- what's the fifth? S- well X, I think, but that's not an S.

   10. MGMiles Grimshaw17:22

       So, so, so, it is. You can make it an S.

   11. HSHarry Stebbings17:25

       (laughs)

   12. MGMiles Grimshaw17:26

       So, sourcing-

   13. HSHarry Stebbings17:27

       Do you work at McKinsey? (laughs)

   14. MGMiles Grimshaw17:28

       Exactly. But it's just you remember it, right?

   15. HSHarry Stebbings17:29

       (laughs)

   16. MGMiles Grimshaw17:29

       You're gonna tell... Sourcing, selecting, signing, supporting, and then I think of it as summitting. There's no such thing as an end summit, a peak summit.

   17. HSHarry Stebbings17:38

       (laughs)

   18. MGMiles Grimshaw17:38

       Y- you could call it separating, but actually there is, it's only a great investment in some sense when the, you know, shares are distributed to a broader shareholder base, um, in terms of distribution or the like. I think people forget about, you know, in- in- in the push for forever funds and forever, you know, people forget that- that- that, uh, uh, an investment actually sort of is consummated at- at some point. Maybe not the company obviously is not, is not, um, finished, but, uh, you know, that's the responsibility. Um, the- the piece I like the most of those is really that connection of spending the time on connecting up strategy into, um, sequencing of the company, into sort of structure and organization, into operations, is that- is that work of, um, specific company thinking, um, and- and execution. I really do think that starts, a- and there's a harmony between that notion of that sort of due diligence in getting to know someone and- and the work afterwards. In some sense, we make a-... full, total commitment, um, and so we're not reassessing, but you're constantly working on strategy, which is, I think, that, that work of selecting in many ways. In diligence, I think it should not feel like an examination, it should, it should feel more like looking ahead at the future together and stepping into shoes together, which is the sort of work you'll be constantly doing with a founder. Um, sometimes I'd say, it should feel, it should feel like planning an adventure, not a colonoscopy.

   19. HSHarry Stebbings18:59

       (laughs)

   20. MGMiles Grimshaw18:59

       And I use planning an adventure because when you plan an adventure, like a real expedition, like, there are serious topics you've gotta-

   21. HSHarry Stebbings19:05

       Sure.

   22. MGMiles Grimshaw19:05

       ... grapple with. What are your resources? What, what, what are, what are the plans? Like, which people do you need on the team? Like, on it, on the side, helping, you know, maybe in HQ and sort of back, down the mountain. Like, there's real, serious questions that you have to grapple with. And so it's not like you shouldn't take it seriously, but, but it should feel like planning an expedition, which is the work you'll keep doing, versus, um, versus that examination. And so-

   23. HSHarry Stebbings19:29

       (laughs)

   24. MGMiles Grimshaw19:29

       ... that, that's really where I get my energy.

   25. HSHarry Stebbings19:31

       Are you able to plan expeditions, if we carry on that analogy? Because the majority of A investors with a hot company, or a company that's raising great seed investors, says, "Hey, we're not raising," like, and actually spending the time to build that relationship. Um, how do you build relationships in a world and a landscape where actually people often raise in very static fundraising blocks?

   26. MGMiles Grimshaw19:52

       I think you can create, even if it was in a short amount of time, you can create that, that feeling. When we're, when we're our best, every founder who spends time with us, um, should really be able to say they got a lot out of that meeting. And, and I'd encourage (laughs) all founders to, um, to take advantage of us, right? Like, some- sometimes there's a, "Oh, I'll only pitch Benchmark when I've got the perfect pitch." Like, that's, that's silly. That doesn't need to be the case. We're, we're also unique in that, um, you might end up pitching other investors multiple times because they have growth funds, or cross-sell, and all this other stuff. We're only early, and so you get, you get sort of a chance at it, but also, we're not gonna be able to... We're not gonna re-judge you in the future based on what you told us now, because whereas other funds won't. And so, take advantage of us, and it should feel like we, we, uh, we really work hard and aspire to have it feel like the founder got a lot out of that meeting. And the way you, you, they get a lot out of that meeting, hopefully, is you really stepped into their shoes together. And there's a certain amount of, obviously, context you've gotta assimilate-

   27. HSHarry Stebbings20:46

       Sure.

   28. MGMiles Grimshaw20:46

       ... quickly, right? Like, what, what they're working on, who their customer is, you know, who their sp- aspirational customers, et cetera. But, but very quickly, um, trying to move to being in the shoes together, planning that expedition, um, looking forward. And of course, you don't know exactly how the expedition's gonna go and the metaphors, but, but like, it should be looking forward, not an examination of like, state of today. The examination of today is only a means of sort of taking stock to think about where we're going. And so, that, that, that's the experience that, that should be felt. And I think you can feel that and, and engage in that in any 60-minute, you know, kind of conversation. And, and, um, and if it's great, the founder, you know, should say, "Let- let's do

6. 21:27 – 26:37

   Benchmark’s Biggest Challenge Today

   1. MGMiles Grimshaw21:27

      more."

   2. HSHarry Stebbings21:27

      I've had Sequoia partners on the show before many times, and actually all of them share the same challenge. Well, biggest challenge, which they say is, exactly as you said, actually, which is, founders are nervous to approach us and want to do it last, but the perfect pitch, that kind of training, go to tier twos and tier threes first and perfect it along the way. Would you say that's your biggest challenge?

   3. MGMiles Grimshaw21:46

      I certainly think it is a challenge. Um, and I'll, I'll share two thoughts around it. One is a fun, fun story, and then how to, how we think about, um, in some sense, the very best founders. As a fun story, we had, uh, a founder came and pitched us, um, you know, came to the partnership, um, and, and presented a while back. Um, and we were talking, we were talking about strategy going forward and how to think about it, and, uh, and one of my partners sort of goes, "Well, when you think about kind of the LTV of a, a customer, you know, the, the important thing might be to..." And the founder goes, "Sorry, what's, um, LTV?" As in lifetime value. Yeah-

   4. HSHarry Stebbings22:23

      Oh, wow, yeah.

   5. MGMiles Grimshaw22:23

      ... okay, yeah, it was t- Uh, uh, yeah. And, and you might say, "Wow, that's, like, kind of embarrassing, like, they didn't know what LTV was."

   6. HSHarry Stebbings22:29

      It is pretty fundamental, yeah.

   7. MGMiles Grimshaw22:29

      But they're an engineer, and this was a company in its infancy. And obviously, it's great if they know LTV, but the fact that they're willing to say, "I don't know," and quickly learn and grok it, um, is, is really, I think, like, the most important thing, that rate of learning. And in fact, I'd say most of us saw it as a strength. After that pitch, I mean, it would be easy for us to say, speak of imperfect pitchers, right? It'd be easy as to say, "That was, that was, like, a no-go. They don't know what that is." But they haven't lived in that world, and that's okay. Like, they're gonna learn it fast. And I think the rate of learning and the willingness to engage in that discomfort, right? Learning is, um, an exciting thing, but kind of an uncomfortable thing to be, um, not knowing very much. And my partner Eric has this great saying which I really like. "The very best entrepreneurs are always making mistakes. The really great ones are just making new mistakes each time." And I think there's a lot of truth to that. And so that slope and, and, and pace is, um, is the most important.

   8. HSHarry Stebbings23:29

      Do you think that is okay? If I'm honest, to me, I don't think that's okay. Like, I'm sure he's a great founder and, you know, (laughs) I will, you know, miss deals because of it. But with the freedom of information today, with the transparency of podcasts like this, the availability of SaaS materials basic-... That's not an acceptable thing, I think, if you're gonna start building a SaaS company. This is the core mechanics of any business in SaaS. And like, y- if you're looking at a cake recipe, you know that there's gonna be eggs and flour because it's just the fundamentals. It's not acceptable.

   9. MGMiles Grimshaw24:02

      In this case, um, you know, regardless of whether we did or didn't make the investment kind of thing-

   10. HSHarry Stebbings24:07

       Mm-hmm.

   11. MGMiles Grimshaw24:07

       ... we, we won't share anymore. It's not a binary condition for me now, for sure. Um, and I think, look, if the person's... Again, there's all sorts of situational costs.

   12. HSHarry Stebbings24:15

       Yeah.

   13. MGMiles Grimshaw24:15

       If the person's 35...

   14. HSHarry Stebbings24:17

       Yeah.

   15. MGMiles Grimshaw24:17

       Okay, we've got a different situation on hands, right?

   16. HSHarry Stebbings24:20

       That's fair.

   17. MGMiles Grimshaw24:20

       They've had 13 years, stereotypically-

   18. HSHarry Stebbings24:22

       Yeah.

   19. MGMiles Grimshaw24:22

       ... of career at that point. If the person's 21-

   20. HSHarry Stebbings24:25

       It's different. I get you, yeah. Yeah.

   21. MGMiles Grimshaw24:26

       ... and they've spent their entire, you know, um-

   22. HSHarry Stebbings24:29

       They've come out of university.

   23. MGMiles Grimshaw24:29

       ... last ten years-

   24. HSHarry Stebbings24:30

       They're a CS grad.

   25. MGMiles Grimshaw24:31

       ... grow do- doing CS, uh, and are an amazing engineer, and if I went into their world on architectures, languages, frameworks, technologies, you know-... I, I wouldn't know some of the latest stuff they might know about. And simultaneously though, if they, if they were ... if someone was dismissive of that idea, right, of customer retention, right? If they were dismissive of that idea and didn't care for the concept obviously or whatever else, okay, we've got a problem.

   26. HSHarry Stebbings24:57

       Yeah.

   27. MGMiles Grimshaw24:58

       If they know that to be true, they just don't necessarily know some of the terminology yet-

   28. HSHarry Stebbings25:02

       (laughs) That's fair.

   29. MGMiles Grimshaw25:02

       ... because they haven't done that, and they're willing to acknowledge that versus hide it, that's, that's a superpower.

   30. HSHarry Stebbings25:08

       Okay. So, if we're going back to the rankings, and we're doing one through five because y- you like your five S's. So, we've got number one, you're best at, like, strategy pre-deal, like picking.
7. 26:37 – 31:16

   Do VCs do more harm than good?

   1. HSHarry Stebbings26:37

      do, though? You know, often people say on the show, "VCs do more harm than good." Do you think that's fair?

   2. MGMiles Grimshaw26:42

      Look, I think-

   3. HSHarry Stebbings26:43

      Because I do worry often, like bluntly with my advice, I'm the first to say, "I (laughs) actually don't know. I've never done this, but let me introduce you to someone who has." Because I'm very nervous of what I say, because people do put weight on it as a founder.

   4. MGMiles Grimshaw26:56

      I'd say two. One, you should always have the Hippocratic Oath. Do no harm, for sure. I've been in some, some board meetings where investors don't really get the product, don't really get the strategy that has to be pursued. They're trying to a- a- apply, like, procedures and checklists, you know, versus strategies, um, specific to the instance. It becomes a reporting structure, it becomes a distraction, it becomes a management burden for the founder. And so, yeah, Hippocratic Oath. The second is, though, I think that i- it's not that you always have the answer. Part of it is that a founder trusts you to say, "Hey, I've got ... I'm, I'm working on this," and come to you with it, and you go work on it together. And so, I don't think you have to always, um, uh ... In fact, it would be dangerous, I think, to assume you've always got, like, the perfect answer and opinion on everything, so much as to say, with that context, with that trust, with the, with high-velocity, you know, um, communication, you, you can go work through it.

   5. HSHarry Stebbings27:55

      D- I'm so enjoying this. So, I had Sam Lessin on recently, and he was like, "The best founders, they don't need me. They don't need me." When you look back at your best founders that you've worked with, do you agree with that statement, the best founders don't need you?

   6. MGMiles Grimshaw28:08

      I think the best fou- ... Like, ab- they, they will have done great things absent, um, an investing partner, sure.

   7. HSHarry Stebbings28:14

      Yeah.

   8. MGMiles Grimshaw28:14

      Um, can it f- further supercharge that? I think so.

   9. HSHarry Stebbings28:18

      Yeah.

   10. MGMiles Grimshaw28:18

       Yeah. Like you say, maybe if recruiting in some sense, or any sort of ... I don't think of it as coaching be- per se, but you can't coach height. Gotta have it. And so, yeah, I think the very best are very capable. I think the very best with a great trusted partner as well, um, deeply committed to them, can, uh, can add to that. Go look at even the very best. Go look at Jeff Bezos, for ... He's still got a board, and he's still got, you know, partners who've been with him that entire journey. Their help is not to take away from his success, right, in any stretch of the imagination, to say he couldn't have otherwise, but to say, um, "You know, we all have our fallacies. We all have our, our lens." And, and to say, again, helping a founder make the very best decisions, some other perspective, some other challenge. Even if you still make the same decision, you'll probably move forward with more confidence. And so-

   11. HSHarry Stebbings29:03

       I always say to my mother, it's like an ice cream with hundreds and thousands of sprinkles on top.

   12. MGMiles Grimshaw29:06

       (laughs) Yeah.

   13. HSHarry Stebbings29:06

       The ice cream's still great without the sprinkles.

   14. MGMiles Grimshaw29:08

       Yeah, there you go.

   15. HSHarry Stebbings29:08

       But it makes it a bit nicer-

   16. MGMiles Grimshaw29:10

       Yeah. Yeah. Yeah.

   17. HSHarry Stebbings29:10

       ... and better.

   18. MGMiles Grimshaw29:11

       Yeah.

   19. HSHarry Stebbings29:11

       Um, no, I totally get you. Okay, so we've got servicing, uh, as number two. We've got, you know, selecting as number one. What's three, four and five as we go down the chart?

   20. MGMiles Grimshaw29:20

       You know, a- again, I, I really think of them ... If you think of, um, investing as betting-

   21. HSHarry Stebbings29:26

       Yeah.

   22. MGMiles Grimshaw29:27

       ... um, I think you spend a lot more, you know, a lot more energy on, uh, the funnel and, and winning the first ... It's like you're placing chips on a roulette, a roulette table. And, um, I just don't ... I don't think of it that way. I really think of it, um, the work we do as, as making a commitment, not a bet. And if you were to sit around our partnership meetings and the like, you really wouldn't hear the word bet come up very much in that regard. And I think if you listen to many people in the industry talk, you'll hear the word bet. "I bet on this, I bet on that," you know, "That's a bad bet," all the time. And I think if you're more wired that way, you think of it more, sort of as that funnel, sort of the sourcing funnel and coverage, you know, to make sure you get exposed to the best bets and, uh, and sort of the, the signing of them being kind of the end of it as the most important. So-

   23. HSHarry Stebbings30:09

       Yeah.

   24. MGMiles Grimshaw30:09

       ... those would be after the other two for me. In which order, um, I'll let others tell me. (laughs)

   25. HSHarry Stebbings30:13

       No. Listen, I, I, I totally get you, and I agree in terms of terminology. I remember Doug Leonis who absolutely killed me, because, uh, I said about like deal. And he was like, "No, it's not a deal."

   26. MGMiles Grimshaw30:22

       Yeah.

   27. HSHarry Stebbings30:22

       "We partner-"

   28. MGMiles Grimshaw30:23

       Yeah.

   29. HSHarry Stebbings30:23

       With ... I went, "All right. Sorry, Doug." Um-

   30. MGMiles Grimshaw30:25

       I think, yeah, I do think language really matters-
8. 31:16 – 37:46

   Founder vs Product vs Market

   1. HSHarry Stebbings31:16

      approach. How do you think about that rubric between founder, traction, and market?

   2. MGMiles Grimshaw31:21

      I'm gonna give you an annoying-

   3. HSHarry Stebbings31:23

      It depends? (laughs)

   4. MGMiles Grimshaw31:23

      ... answer in many ways, yeah. Like, well, no, it depends, but rather, it's the integration of it all. And-

   5. HSHarry Stebbings31:30

      But I thought it was interesting, Nikhil was like, "I can't do anything pre-traction. If it's like, if- if- if it's pre any data, I just don't know. I have no idea."

   6. MGMiles Grimshaw31:38

      I used to do more growth investing, later stage investing.

   7. HSHarry Stebbings31:41

      Yeah.

   8. MGMiles Grimshaw31:42

      Um, and I actually, uh, would always push myself and- and- and the team on the idea that we should have a point of view of what data should look like. We should be able to have, um, strong theories absent any data. We should always start from, like, product and customer, not data. And data should be in some sense validation, um, not learning. Sort of like a, simply said, maybe like data second investor. And so, I'm quite happy, um, uh, doing that personally. Um, and- and- and- and I think early, even, actually even thinking early stages, like, data can be a trap.

   9. HSHarry Stebbings32:20

      Yeah.

   10. MGMiles Grimshaw32:20

       Um, I often say with companies I work with or companies I'll meet with, like, they'll be like, "Oh, we're aspiring to get to, you know, X million of revenue, so we'd grow at Y percent for the year." And- and I'm usually much more like, "What do you really want to have proven in the year? What do you really want to have learned in the year? What- what would be the right customer adoption in the year?" And often cases, I'd rather take less growth in the right ways than more growth in the wrong ways.

   11. HSHarry Stebbings32:42

       Yeah.

   12. MGMiles Grimshaw32:43

       Um-

   13. HSHarry Stebbings32:43

       The revenue's always an annoying one for me 'cause it's an output metric.

   14. MGMiles Grimshaw32:46

       Yeah.

   15. HSHarry Stebbings32:46

       And I'm like, "What's the input metric that got you there?"

   16. MGMiles Grimshaw32:48

       Yeah.

   17. HSHarry Stebbings32:48

       "What's the seed expansion we need?"

   18. MGMiles Grimshaw32:49

       And it's nothing you can't ignore by any stretch of the imagination.

   19. HSHarry Stebbings32:51

       Sure.

   20. MGMiles Grimshaw32:51

       But when you're in these early stages, and I call early suddenly even tens of millions of revenue, not just like one, um, you're- you're- you're setting up systems. You know, you're setting up learnings and systems for the future for s- for repeatability and scale in the right way. Other success can, sudden revenue can be empty calories, right? If you think about it as a diet, like you wanna make sure you've got a good diet, not empty calories. And so anyway, back to, you know, the sort of aspects of it, I really think about it as- as- as an integrated system. And so the gut check, uh, the real question I, uh, I think about a lot, um, which- which gets to that sort of holistic nature of it is, how do I imagine recruiting for this?

   21. HSHarry Stebbings33:29

       Huh.

   22. MGMiles Grimshaw33:29

       Um, if you think about the journey after investing, you know, if I take something like Benchling, which I've worked with now for seven years, eight years, or Lattice, um, um, or Monzo, they're like, "I'll probably do many hundreds of recruiting calls between exec interviews as they took, change exec teams on that journey, between individual ICs that I might help out with early on." Uh, if you then add in other investors you're gonna have talked to about the company, conversations like this that you might talk about, you end up like pitched the company in many ways hundreds and hundreds of times. And- and- and certainly just applied to the recruiting, which is the core bulk of that. No- no recruit is like just on how big, you know, well, how much money can I make? That's a very, you know, mercenary recruit too.

   23. HSHarry Stebbings34:19

       Mm-hmm.

   24. MGMiles Grimshaw34:19

       So, the mission matters. Like, who are they working for matters, and the team, and it's called... And so, like, a recruiter's thinking about it in a holistic way. And so we actually just had a partner meeting the other day, and, uh, one of my partners was a- literally did, before asking any other question, asked- asked my other partner, um, "Can you recruit for that? Like, are you excited to recruit for that?" Um, and so I think it is this sort of integrated, um, holistic question that really, like, really is a cool, um, one for me. If you say, "Okay, Miles, what do you really look for when you're- you're making a new investment?" I- I, more- more- more with investor speak, um, I think the biggest one is, what's changing? Like, where's there a gap? Where's there... What- what's- what's new either from their perspective, what's a gap in the market that's opening up? And change, uh, begets the opportunity for new, begets the opportunity for dislocation. Um, and then you gotta have a founder who is authentic to that, you know, a strategy that can get on the field and work in interesting ways with that business model that you think could be valuable once, upon success within that. That change or the ability to, for when a founder comes to a creative act to sort of try and make change is- is the core of being able to really get going. And so-

   25. HSHarry Stebbings35:34

       So, actually it's market timing even more specifically.

   26. MGMiles Grimshaw35:36

       You might call it that.

   27. HSHarry Stebbings35:37

       Yeah.

   28. MGMiles Grimshaw35:37

       I don't personally think about it as much from sort of a timing lens so much as the- the investigation and the thinking of like, what's different? What's new? What's a dislocation? What's emergent? Uh-

   29. HSHarry Stebbings35:50

       Will you take adoption risk? I mean, I think, you know, I had (...) on the show before, and he's like, "You know, I'll take all the market timing risk in the world, but I won't take adoption risk." And so what he means by that is like, you know, a specific anti-smoking tablet or whatever we wanna go for here.

   30. MGMiles Grimshaw36:06

       Mm-hmm.
9. 37:46 – 40:45

   How to Work With Your VC Partner

   1. HSHarry Stebbings37:46

      team it up at Benchmark, where you say, "Hey, Chethan, let's get on this together," and then you discuss it as a partnership, but you and Chethan are the leads? How do you bring everyone with you in your conviction for a company?

   2. MGMiles Grimshaw37:58

      Yeah, we do, we do a lot of that.

   3. HSHarry Stebbings38:00

      Yeah.

   4. MGMiles Grimshaw38:00

      Like, "Hey, come, come, come join this. Hey, let's go meet together." There's ultimately one person who is, takes a board seat, right, uh, manifested that way. Um, but it is a, again, we're an equal partnership, so it's a whole firm commitment. No person is incentivized to, to, to do more, help more one thing versus another. A founder really gets the whole partnership, um, but obviously, they, they have a principal relationship, a dominant relationship with one person. But we're, we're constantly pulling each other in. Actually, just before I came here, a founder who works with Bill Gurley, I'd spent some time with recently, had sent me a text, like, remembering something I'd said to him in a line because he was using it again and again. And so, we're, you know, we're always pulling each other into current investments, future investments, um, sort of in a very fluid way.

   5. HSHarry Stebbings38:48

      It's interesting, you said also about being data second. I actually think reserves are financial mismanagement. And people go, "What?" And I go, "Yeah, because fundamentally, it's predicated on data most often." Like, immediate traction next, you know, 6 to 12 months post-investment. And when you look at it, and I'm applying it to the Benchmark portfolio now, but like a, a Docker of the world, we're probably not ... And I don't know the specific trajectory of the company, but an example for me would be, respectfully, Clubhouse. If I were to do reserves, I would have concentrated all my reserves into Clubhouse. Actually, that would have been the wrong decision. Or for Docker, you would have not invested in ar- like, you know, subsequent rounds of Docker because of traction misleading you. How do you think about reserves management today given data can mislead you very often?

   6. MGMiles Grimshaw39:37

      W- we really don't think about it very much. If you were to hit the spreadsheet of our investments, um, almost all the capital we invest is the very first, um, uh, very first time we partner. And yeah, we have reserves, you know, because tough times happen, you know, or who knows what, right? Like, we, we certainly have reserves, but we don't reserve, um, with a mindset of buying more, um, later. Um, we don't reserve with a mindset of, "Hey, we started, we got some ownership now, we're gonna try and buy, um, some later." Um, we're either fully in and it's a whole commitment and that, that, that's, that's what we're doing, or we're not in. And so, we don't reserve with a, um, with a future investment orientation.

   7. HSHarry Stebbings40:27

      I, I, I wish I could just ... Well, I mean, I was gonna say I wish I could record that and play that to LPs, 'cause I say very similar. Um, but it is recorded, so that's a rather wonderful thing.

   8. MGMiles Grimshaw40:36

      There you go. I'm not sure it's the wisest thing per se, like, you know-

   9. HSHarry Stebbings40:39

      Y- y- you said beforehand, you know, sometimes, Harry, you can pick holes. If I'm not, not picking holes by any means, but Benchmark are, like,

10. 40:45 – 43:28

    Where does Benchmark fit in the VC landscape?

    1. HSHarry Stebbings40:45

       famed on being the series A investor, and then you actually look and you're like, "Airplane.dev," which I think is announced, um, was, like, the first money in. And then, like, Airtable was, like, the series C. We had Howie on the show the other day. How do we think about where Benchmark sits in the landscape given moving to first money in in series C?

    2. MGMiles Grimshaw41:06

       I pulled this the other day. I think it's something like 50 to 60% of all the investments we make, we're the first partner.

    3. HSHarry Stebbings41:14

       Whoa.

    4. MGMiles Grimshaw41:14

       Right? I don't want to use the word real, right? But like, first sort of institutional investor, so to speak. Institutional sounds, you know, so lofty, but that, that a, that a company has. I think it's something like 30 odd percent we're, like, literally the first investment. We don't use the term incubation. Um, I'm sure may- there's a bunch of things we've done people would call incubations. Um, we don't, we don't use that term. But, like, I think probably about a third of investments are like that inception. Um, not all those will be- fit other people's incubating criteria or whatever. But like, um, it's really early. And so, it's not to say that's really the focus. There are occasionally exceptions. Focus.

    5. HSHarry Stebbings41:53

       Do you worry in terms of positioning then, in terms of competing with a very busy and vibrant seed ecosystem? What I mean by that is, like, I'm sure we both know Phaedra at Blossom in London, but she very specifically doesn't do seed because she always wants to be non-competitive to seed players. By doing 50 to 60% as first institutional capital, you know, that first kind of firm check, you are competitive, I guess, to seed managers.

    6. MGMiles Grimshaw42:19

       I think the whole ecosystem, like, I don't think it's zero sum by any stretch of the imagination. The end of that in a given year, even for that percentage, is like three companies, right? And so, it's not like we're doing 30, uh, that way in a g- You know, so, so the end is small. There's a lot of new companies formed each year. Um, and so, I don't think of us as, um, competitive. I think, uh, to our point earlier, some people maybe think of us later, later, and, and, um, you know, I would, I would, I would encourage all founders to, to ... There's no such thing as too early for when we invest. There's no such thing as not enough traction. We love going on that journey of sort of taking ...... partnering to help a founder take that raw clay and idea, um, and mold it into, into something spectacular. Um, so-

    7. HSHarry Stebbings43:12

       Th-

    8. MGMiles Grimshaw43:13

       ... no, n- no such thing as too early.

    9. HSHarry Stebbings43:14

       Speaking of something spectacular, before we move on to the AI landscape, which we have to touch on, because I spoke to Harrison actually about it and it was a great discussion. Thanks for the intro there. (laughs) Um, but my question to you is, we learn a lot from successes and failures. You mentioned your Lattice,

11. 43:28 – 47:45

    Biggest Lesson from Wins

    1. HSHarry Stebbings43:28

       your Benchling. God, I remember you introduced me to Sajith, like, years and years ago-

    2. MGMiles Grimshaw43:32

       Mm-hmm.

    3. HSHarry Stebbings43:32

       ... when they were not very well known at all. Um, but Benchling, Lattice, Monzo, there's many more. But when you think about your biggest wins, what have been your biggest lessons or takeaways when you reflect on those wins? Because they do ingrain lessons.

    4. MGMiles Grimshaw43:46

       I think if you looked at Realized, it would probably be a GitHub or Segment. If you look at Unrealized, maybe, uh, Benchling or Monzo. Um, and so in Benchling and Monzo, it's funny, you learn two very different things. (laughs) Um, Benchling really is, is, um, a visceral felt story of, of the power of someone perfectly matched to a totally new market, and a story of what could maybe seem like a small market, because it's a vertical market, um, getting opened up and being the leading provider to grow with that market. Y- if you want the positive feedback loop to small but growing markets with, you know, high degrees of market share in them, um, and a founder perfectly matched to, to, to dominate that market, uh, and what could be possible, it's a great... It's a, it gives you a feedback loop for that-

    5. HSHarry Stebbings44:38

       Yeah.

    6. MGMiles Grimshaw44:38

       ... lived reality. Monzo is the exact opposite in many ways, in that it was banking, (laughs) like, outside the UK audience, um, they, they might not have barely heard of Monzo 'cause it's a UK phenomena, but in the UK there are something like 60, 70 million core checking account users-

    7. HSHarry Stebbings44:59

       Mm-hmm.

    8. MGMiles Grimshaw44:59

       ... in the UK. Monzo now has 7 million accounts.

    9. HSHarry Stebbings45:02

       Mm-hmm.

    10. MGMiles Grimshaw45:02

        It's like a 10th of the British population has signed up to this thing.

    11. HSHarry Stebbings45:06

        (laughs) Do you wanna hear the funniest thing?

    12. MGMiles Grimshaw45:07

        Um-

    13. HSHarry Stebbings45:07

        I was at Atomico when you did that deal.

    14. MGMiles Grimshaw45:09

        Right.

    15. HSHarry Stebbings45:09

        And I was meeting with Tom, and all we heard was, like, "There's a US firm coming." And Europe has this thing, when we hear a US firm coming, we're like, "Oh, shit. Everyone's gotta go." And I just remember respectfully, just, like, your... And I spoke to Tom before and he said it was okay, but you're seeing what others didn't see with Monzo, 'cause he did get some nos.

    16. MGMiles Grimshaw45:30

        Yeah, he got, he got a lot, I think. (laughs)

    17. HSHarry Stebbings45:31

        Yeah, he got a lot of nos. But, you know, listen, the journey still hasn't played out, but you saw something that was right.

    18. MGMiles Grimshaw45:37

        Yeah. So, um-

    19. HSHarry Stebbings45:39

        What was the l-

    20. MGMiles Grimshaw45:39

        And bo- and both of these, by the way, like, Benchling was five people. Monzo was probably more like 30 people, but about, like, 5,000-

    21. HSHarry Stebbings45:47

        Yeah.

    22. MGMiles Grimshaw45:47

        ... maybe kind of test accounts. It didn't even have a full banking license yet. And so now Monzo now is 7 million, it's like a 10th of the British population. I think it's a couple 100,000 small businesses-

    23. HSHarry Stebbings45:56

        Mm-hmm.

    24. MGMiles Grimshaw45:56

        ... have, have accounts. It's, it... A feedback loop, right, to, to, um, strengthen, uh, confidence-

    25. HSHarry Stebbings46:03

        Mm-hmm.

    26. MGMiles Grimshaw46:03

        ... in the idea that a ferocious founder with a s- sort of no hold back, full, all the elements attack on a market can break through in ways you... That are unimaginable in many ways. Um, and Tom, like, really did that. He did everything from get a full banking license, to build out all the technology from scratch. And this is where, uh, you know, for me it's a, it's a story of a founder, again, um, incredibly mission-driven, incredibly mission-driven and ferocious, where it, it's all against that. Like, there's so many marginal and, and incremental decisions that he makes, and, like, they're all that way. And I remember when we invested, uh, uh, and then, and then a little later on too, he really wanted to do crowdfunding rounds. And again, the whole, the whole mission of the company, right, was it was a bank for everyone, a bank you can trust. And again, it flows into all the decisions. So he wanted to do, just to use an instance of it, an idea of this, he wanted to use... do crowdfunding. And he'd done I think one of them and then another, and then he wanted to do another. And, like, no company in England had done that many crowdfunding rounds and had that many individual shareholders this early. It was actually at a moment in time where people thought crowdfunding platforms would emerge, in part because if you've got Monzo as your crowdfunding client, like, you, you thought that this was all gonna be possible and all and m- way more people would do it. And every lawyer we'd get on the phone with would be like, "Do you really need to do this? It's really complicated in these ways." And he was just like, "Nope, we're doing it." And I think it speaks to us, an anecdote to me that speaks to sort of that, that ferocity, that sort of totality of mission that a founder to break through. And to me, it's like a feedback loop on how special

12. 47:45 – 52:32

    Biggest Founder Detection Error

    1. MGMiles Grimshaw47:45

       that can be as well.

    2. HSHarry Stebbings47:46

       On founded detection errors, my biggest error is when a salesman founder or saleswoman founder is very good at selling and actually their execution doesn't align to the quality of their sales. That would be my biggest founder detection error. What would you say your biggest is, where you thought you saw something that wasn't there?

    3. MGMiles Grimshaw48:05

       The greatest regrets I have are, um, uh, where I thought someone was really, really special, and I got too hesitant on, on market more than anything. And so-

    4. HSHarry Stebbings48:16

       What was an example?

    5. MGMiles Grimshaw48:17

       I'll give you three.

    6. HSHarry Stebbings48:18

       (exhales) .

    7. MGMiles Grimshaw48:19

       Uh, Dylan at Figma, Zach at Plaid, uh, and, um, and Alex at Scale. And I have enormous respect for all three of them. Um, got to know all three of them (laughs) really early. And I just, I struggled with-

    8. HSHarry Stebbings48:32

       When did you get to know Figma? 'Cause there was that intersection with the A1 and it... John early did the A, and it wasn't a live product. I mean, there was nothing, and it was kind of in this kind of desert-like zone. The product was developing, but there was noth-

    9. MGMiles Grimshaw48:42

       Yeah.

    10. HSHarry Stebbings48:42

        ... it wasn't released.

    11. MGMiles Grimshaw48:43

        Yeah. I spent time with Dylan, um, was fortunate to spend time with him, um, at the round that Kleiner ultimately did.

    12. HSHarry Stebbings48:50

        Mm-hmm.

    13. MGMiles Grimshaw48:50

        Um, and then also again at, um, at when Score invested. It is definitely the one I, um, I'm most mad at myself for. And my hesitation was, um, I didn't think design as, was a terribly big opportunity or big market. Like, the end of designers is not... Certainly relative to, like, say engineers, is tiny. If you go looked at most of your companies and got a headcount of designers, it's a very small n.

    14. HSHarry Stebbings49:17

        Mm-hmm.

    15. MGMiles Grimshaw49:17

        Um, the, uh... At any later stage company there's, uh, uh...... I'm almost certain there'll be more like accountants than there are designers, right? And so if you're thinking about seat software, it's, there's not many. On Figma, the hesitation I had was that I didn't think designers was a particularly large end. I think if you went and, uh, asked how many designers there were in many of your companies, certainly relative to engineers, it would be a tiny fraction. Um, I think end of designers relative to accountants at some later stage start- startups would be tiny. So what did you miss there?

    16. HSHarry Stebbings49:48

        You missed...

    17. MGMiles Grimshaw49:48

        Yeah, what I missed, um, was that, uh, the adoption brought r- m- far more users into the product. And it, and I know, I, you conceptually knew it, but I didn't weigh it enough at the time and that's what eats at me, um, the most because I think about doing this when I look at products and be product first, um, is w- sort of what's that nature of the product? And the nature, uh, of design inside a company of digital product like really brings, copywriters come in, marketing people come in, product managers come in, engineers need the handoff. There's a lot of people that orbit that asset inside of a company, that workflow inside of a company, and I was like stupidly, myopically thinking of it as a design seat, as design software. And, and what I-

    18. HSHarry Stebbings50:31

        (laughs)

    19. MGMiles Grimshaw50:31

        ... should've been thinking about it is, as, as, as the nexus of collaboration for digital product of which design is the core stakeholder but all these other people orbit it and are very involved. And it's, if you go and look at the data at the time, (laughs) it actually was there. It was in front of me. Sometimes maybe not being data first enough is a, is a miss. Uh-

    20. HSHarry Stebbings50:48

        What was the data that showed it?

    21. MGMiles Grimshaw50:50

        There were a bunch, there were a lot of others-

    22. HSHarry Stebbings50:51

        Because their revenue wasn't... I remember when they, it's public, but they were-

    23. MGMiles Grimshaw50:53

        Yeah.

    24. HSHarry Stebbings50:53

        ... at 4 million in ARR when Andrew did them at 400.

    25. MGMiles Grimshaw50:56

        Yeah, yeah, yeah.

    26. HSHarry Stebbings50:56

        And everyone was like, "Pff."

    27. MGMiles Grimshaw50:57

        Yeah. Uh, th- th- Dillon had showed charts. Um, I just didn't, it didn't sit in my mind properly enough at the time of all the other non-design users inside the companies using it and them as active seats, them as paid seats. Um, and I think now, I've done this, um, anecdotally with a few teams I work with and later stage teams, um, if you go ask what they spend on Figma, many of them probably spend more than Slack. Um, which is, was wild to think about now and I would never have guessed wh- But when you, when you think sort of first principled about it, the nature of that product, it sort of makes sense. And so, how that actually plays out is probably a third of the company, from my surveying, has paid seats inside of Figma, and they pay about three times as much as they would for something like Slack. And so the bill, um, and the revenue they're driving is, is, is enormous. I, I just, I, I didn't appreciate that. And so I, it, it's a lesson for me in really thinking about and, and sort of ex- inspecting, um, and inspecting, getting to know and understand like what's unique? Like, what, what's sort of counterintuitive? And any time you're getting to know a team and thinking about a product, even post that, if something seemingly unintuitive or at least unintuitive to some is happening, um, that's potentially cause for a lot of excitement.

    28. HSHarry Stebbings52:16

        Yeah.

    29. MGMiles Grimshaw52:16

        Um, and, and certainly, uh, to, to be a student of. And I like to think of myself that way (laughs) and so it's the one that greats me the most because it was right there, um, and I didn't weigh it enough.

    30. HSHarry Stebbings52:27

        Mike Maple says like, "What secret do you believe-"
13. 52:32 – 54:29

    Why Miles Missed on Plaid

    1. HSHarry Stebbings52:32

       that question.

    2. MGMiles Grimshaw52:33

       Yeah. Yeah.

    3. HSHarry Stebbings52:33

       What did you miss with Plaid?

    4. MGMiles Grimshaw52:34

       Th- this to me would be a, a, a story of the way the world, sometimes the way the world doesn't necessarily work the way it should work, uh, hyper-rationally.

    5. HSHarry Stebbings52:43

       (laughs)

    6. MGMiles Grimshaw52:43

       Plaid really solved OAuth for, um, bank accounts, which was done in an arc- arcane way before penny drops, uh, where you have to wait six days. So it was a radical improvement. Um, but the idea that OAuth, to your bank account, OAuth in, in general was a hard problem, was like not that hard. Like, Reddit I think probably has an OAuth system. Like no, you just, you can build an OAuth system. Conceptually the way that it should work is every bank, and it's by the way highly concentrated in the US, so like five banks control over 50% of accounts in the UK, in the US. Um, the idea that those five banks couldn't offer an OAuth system to get account and routing numbers, that's all you need, two routing number, two numbers out of them to authenticate. There shou- in my mind it should work. Now they have no incentive to do that because if they let you do that, it's easier to move money out, and they don't want you to move money out because they make money on you storing money there, that's how a bank works. Um, uh, you get lock-in to other products but also just you get net interest margin on the core assets you, you manage. And so no bank has an incentive to actually offer this. And so again you think user first, eco- you know, incentives in the system, um, it sort of shouldn't work like this, but it's not a complicated technical product in the grand scheme, so it should work like that. And I, I, you know, I probably got, I got too intellectual about it. Um, and again, amazing founders, like people I, um, I feel lucky s- to, to still call friends, um, and, uh, and just, just sort of people who even then I, I knew I wanted to just work with and that's the magic of this journey. And so those are, those are the big regrets.

    7. HSHarry Stebbings54:14

       (laughs) Yep. I, I, I can understand that. Uh, the thing that strikes me when I hear you discuss those and then also think to LangChain and then some of your hits including Segment as well as you mentioned earlier and GitHub, is actually the breadth, the breadth

14. 54:29 – 59:03

    Specialist vs Generalist

    1. HSHarry Stebbings54:29

       of material and landscape you need to cover. And I actually spoke to the Dipsy founders before this and they said, "Ask him about specialist versus generalist because he is able to be so broad unlike many others." How do you think about that breadth and generalist versus specialist?

    2. MGMiles Grimshaw54:45

       Yeah. Firstly, I can't help myself. Um, that's I think just how I'm wired. Um, I have, I have a lot (laughs) of curiosity, maybe, you know, too much curiosity. Um, that said, I thought I had a lot of curiosity and then, uh, and then I really got to know my partner Peter Fenton. He pr- I think he has like clinical curiosity. Even my curiosity (laughs) has a ways to go to, uh, uh, to, to, to, to catch up. Um-

    3. HSHarry Stebbings55:11

       What makes you say that about him? Like he just cannot stop?

    4. MGMiles Grimshaw55:14

       Yeah. Yeah. Yeah. Just sort of insatiable desire to learn. I think most people I know, most friends and others would say that's true of me as well, but w- when you see someone with it even more so, um, you know, it puts you in your place. Um-... not, not that it's a competition for curiosity. Uh, but, but I, in some sense, well, how have I... Why the breadth? I, it's just curiosity pulling me into, into different places. And, and, and usually, in many ways, very founder-driven. You have an inkling of interest in an area, and, and someone like, you meet someone like Tom, and you go, "You wanna work with Tom." It's, you meet someone like Dylan, you meet someone like Zach, you meet someone like Saji of, uh, uh, Benchling. I think of us, uh, I think of myself as sort of a generalist, but, but really ending up being a specialist in helping founders like that accomplish their dreams, right? To, to make the very best decisions. And, and I think of myself as becoming a specialist in, in, uh, not in the same degree, but in many ways, in their companies, um, and, and their situations, and a specialist in helping them connect up that strategy and vision into the sequencing, into, um, into, into the organization. Many of the... Almost all the great companies are not, like, a carbon copy replica of, um, a playbook from some other prior either, right? And so, there are lessons absolutely to learn from the past, but I don't think it's a stamp, stamp it out, you know, assembly line process, right? Stripe is not PayPal. Um, at Segment, there was a lot of pressure to... And we did, also, in a positive way, learn lots of lessons from Stripe, but we're very different to Stripe. Um, even though we were developer sole product, um, and too much of the Stripe lesson was detrimental, actually, to being the best version of ourself. And so, I don't think greatness is, is, is a carbon copy either, and so I, so I think in order to be the best partner to a founder, making the very best decisions, you become a specialist in this. But, but it's about, um, applying, like, strategies and learning from strategies, not learning procedures. And I think the more you become a, a s- sort of theoretical specialist or the more the temptation is to say, "Here's a procedure. Here's a checklist." And I think the very best, uh, are, are not that. Um, and so, I can't help it.

    5. HSHarry Stebbings57:25

       Do you feel insecure? And, uh, I say this 'cause I do. When I sit down with our mutual friend, Nico, and Nico just comes out with the most rigorous, uh, benchmarking on cacs for consumer subscription companies. And I'm like, "Fuck. Shit, I'm not as deep as that." Do you get insecure when you hear specialists speak in the depth that they do and go, "Fuck, I can never be that"?

    6. MGMiles Grimshaw57:47

       Yeah, absolutely. But I think, hopefully, can, um, help people get connected to, to those people for those expertise, if that's really what makes it. And there's, there's a lot else that goes into building a company, uh, you know. And, and there's, there's moments probably where those metrics are the wrong things, right? Like, where benchmarking perfectly to the playbook of that vertical, like, you're gonna break it in some ways, gonna look different in some way. And I think the, the generalist, um, in many ways, i- i- i- i- I've talked about this a bit before, this idea of sort of being a biologist versus a physicist. And I think the, the specialist can become a bit more physicist. Like, "Here's the playbook, here's the rules." And I think of myself as a b- biologist, in that you're constantly looking for, like, new adaptations, new variants, um, and, and curious of. Which is why the Figma thing annoys me so much with myself, right? It's a new adaptation. That's the sort of psyche one applies it to. I think if you're... If you wanna deploy capital, being a specialist is probably good 'cause you say, "Hey, if I pass enough of these rules, and I have a li- wide enough portfolio, it'll be good enough." But I just don't, I don't think like that.

    7. HSHarry Stebbings58:51

       You said about new variants there. Thing I do wanna ask is, you know, obviously, you've had the LangChain deal, one of the hottest and most competitive deals, I think, when you'd added another subsequent round. Um, my question

15. 59:03 – 1:31:00

    Investing in AI

    1. HSHarry Stebbings59:03

       to you is, and actually Harrison's, how did you first get into AI and LLMs when you did, which was considerably before everyone else, actually?

    2. MGMiles Grimshaw59:12

       Yeah, so I was spending time, sometime in 2022, probably early. Like, not that early in the grand scheme of things, right? Um, but I guess earlier than the marginal-

    3. HSHarry Stebbings59:23

       Zeitgeist.

    4. MGMiles Grimshaw59:23

       Zeitgeist. We're captivated. You saw the first versions of things, which were, um, uh, just sort of spitting out content, right? Um, but you started to see in mid-2022 or so, this idea that the, the models had some amount of reasoning capacity. There's, there's two things I might point to in that. One, one is they can do things like know which colors are like each other, which things are... The, the ability to do math. Um, now, in some sense, that's learned from the language, and it's just statistics at the end of the day. Um, but the fact that those properties were kind of there was fascinating. And then you've got things like the ReACT paper, which was sort of this reasoning and actioning and the model kind of giving feedback to itself. And you started to see, or at least I started to s- see when I saw those, is like, "There might be so much more here." It might be, um, uh, uh, a sort of new computing paradigm in a way. And there's more power in this than just sort of marketing copy. And you combine that with, um, another thing, another aspect that I felt could be possible and, and is proving out to be true, is that ML had, had been, in many ways, mostly kind of just, like, um, reserved for ML wizardry, right? It, it was sort of the, the, the folks who knew how to build the models, change the, you know, weights of the thing. Many teams had ML folks on the team, right? Just for their application, just doing stuff with their data. Um, but it, but it was sort of like a separate group than every engineer. And you start to feel, um... And I started to think in, in, in mid or so, um, 2022, every engineer would become an AI engineer, right? AI would be a part of it all. You know, Hugging Face. You go to Hugging Face, it's for, it's for the ML wizards. It's like, which variant of which model with which, you know, weights... And, and instead, it would be part of every application engineer's, like, core thinking. And so, you would get, you know, I don't know how many GitHub users GitHub has now, but, uh, many tens of millions, like, 30, 40, probably 50. Tens of millions of engineers would become AI engineers, um, versus, like, hundreds of thousands of ML, um, scientists.... and that that would beget the need for app- an, an application sort of framework for AI, um, and tooling for that computing environment, which is very different. Like, the, it's sort of stochastic. There's randomness to it. Like, how do you measure excellence of it, like, et cetera, um, in a many-model world as well? And there was an opportunity for Build, Build to empower every engineer becoming that, um, which is what you sort of saw happening and, and certainly what led to partnering with Harrison from LangChain.

    5. HSHarry Stebbings1:02:04

       Can I ask, you said before that the comparison to mobile, which many have made, many have said that actually this is similar to mobile and actually the incumbents will need to shift to it-

    6. MGMiles Grimshaw1:02:13

       Yeah.

    7. HSHarry Stebbings1:02:13

       ... like they did to mobile. You said before maybe that's not the right analogy. Why do you think the comparison to mobile is not the right analogy?

    8. MGMiles Grimshaw1:02:19

       Shifts happen. W- We want to analogize. And, and no analogy is gonna be perfect. In many ways, um, I'll compare it more to the idea of what the internet enabled, the mobile enabled, but like both of those were also new distribution channels and this is not a new distribution channel. Um, so both of them are fundamentally flawed in that way. I'd also argue though if you think about distribution as closer to the internet in that the internet was a distribution channel that also catalyzed, um, the sort of buying. It catalyzed the, the idea of sort of buying an internet-native solutions, right? You, you think back to the story of Microsoft and, and, um, '95 Bill Gates wrote sort of the Pearl Harbor memo of like we need an internet-native kind of like strategy to it, right? It was a catalyst for, um, consumption and sort of change within those organizations, more so than mo- But n- but none of them are perfect. The reason why I think mobile is, is a more flawed way to think about it is that mobile really was, um, the same sort of architecture and business model as, as what was before it. Um, the way we architected applications didn't really change. Um, the business models associated with them was pretty much the same. And those things can really lead to, um, disruption, can lead to new startup competing. And most of the incumbents before mobile were the successes in mobile. What w- the new people that won really took advantage of, um, native consumer experience with a ton more time that got unlocked by mobile, because mobile unlocked a ton of consumer time, or what was really enabled by, by, um, GPS on mobile. And so you get Uber, sorry, you get Snapchat and Instagram on the native consumer time-

    9. HSHarry Stebbings1:03:56

       Mm-hmm.

    10. MGMiles Grimshaw1:03:57

        ... getting unlocked. But it wasn't a new, um, uh, maybe it augurs a touch of a new architecture in some ways using the na- you know, a native camera. But it's kind of the same in that way, um, but what really got unlocked was, um, geolocation services, so things like Uber and DoorDash. You might also argue, if you want to get really specific, that gaming did get really unlocked by mobile and it was because, uh, a whole new business model really got supercharged, which was free-to-play as a distribution strategy. Mobile, again, with consumer time, unlocked a huge, um, amount of consumer time, so distribution into that with a free-to-play mechanic that, that changed. But let's put gaming as a idiosyn- synchrocy aside. The internet though really changed the architecture and business model. We went from on-premise, license-based SaaS, you s- install it, you manage it, to SaaS 1.0 which was, we manage it for you, you buy monthly access to it, um, and that begat Siebel becoming Salesforce, that begat PeopleSoft becoming Workday, and that was total disruption, right? It was, there was an old architecture and an old business model and we have a new architecture and new business model. Y- you then unlocked with that new business model, uh, an ability to reach n- new segments that wasn't maybe as possible before. SMB starts to open up, you get things like HubSpot-

    11. HSHarry Stebbings1:05:12

        Mm-hmm.

    12. MGMiles Grimshaw1:05:13

        Um, uh, prosumer starts to open up b- and so s- so you get all sort of PLG companies.

    13. HSHarry Stebbings1:05:18

        Mm-hmm.

    14. MGMiles Grimshaw1:05:18

        Um, but that's enabled by that architecture and, and, and business model. And I think if AI is to be the, the force that it can be, I think you will get a new, um, architecture and new business model emerging from it versus what we only see right now which is kind of a sustaining architecture which is just that of a copilot, um, which fits on top.

    15. HSHarry Stebbings1:05:39

        What is the new architecture and what is-

    16. MGMiles Grimshaw1:05:40

        Yeah.

    17. HSHarry Stebbings1:05:40

        ... the new business model?

    18. MGMiles Grimshaw1:05:41

        The way to encapsulate would be this idea of selling the work, not the software, and that we'll move from a paradigm where, um, w- you might think of it as moving from what we see right now as a copilot and moving to what I think about as a control center where we'll sell an SLA on work, not an SLA on uptime. And so we'll move from a world where we all, as users of software, kind of are like monkeys doing data entry usually. Like what's most software? It's a, it's a database with a form on top of it for users to manage information, put information, and get information out. And-

    19. HSHarry Stebbings1:06:16

        And so an example is you set your objectives on your marketing spend and what you want in terms of CAC and LTVs and then actually as, you know, marketing efficiency engine will go across channels, spend, and deliver you back results.

    20. MGMiles Grimshaw1:06:30

        That, that might be an example, right? And so we'll move from, um, a world where the users are doing all this work to a world where the application is doing a lot more of the work, right, where the AI, the notion of agents inside of it, et cetera, is doing it. And where right now like you go to any SLA for any software, you get uptime, you get s- support SLAs for questions and things like that. I think there's a world where we move to in the future where like an SLA m- maybe almost looks more like a BPO would in some sense. An SLA will be you wanted a efficiency of X on your market, we delivered that. You wanted, um, this many leads from an SDR team, like, we do that. You wanted this sort of, um, you wanted accounting and, and books closed by two days at the end of a quarter, we'll give you an SLA on that, not on the software is up. If it's to be an architectural change and then a business model change with it that- that's offered up by this, you'll go from, um, copilot to, to control center. It'll be a UX for worker which is dominant to a UX for managers. You'll go from a seed add-on to software and labor and you'll go from, um, SLA on like reliability to SLA on like outcomes on work performance. Um-... and I think that's what, that's what can be offered up by this. It's the, you see very little of it so far. I'm starting to meet teams who are thinking this way, but I think if we get... I think it... AI is offering the potential for that architecture shift, and if we get that, the, the whole seat model, the whole, "The worker does it," and the product paradigm, the distribution in terms of who you can reach changes because ACVs change. And in that way, uh, I think it will be very different to, to mobile, which was mostly another UX, um, uh, but the same architecture, the same business models.

    21. HSHarry Stebbings1:08:16

        Do you think the supply side is ready for that business model change, and do you think the demand side is ready? The supply side obviously being the providers, the, I mean, teams that we work with, or do you think they're just layering on traditional SaaS models? And do you think actually the buyers, large enterprises, are thinking about a new business model for the technology that they buy?

    22. MGMiles Grimshaw1:08:34

        Most of what we've seen has been copilot stuff, and I think copilot is an incumbent's strategy. Um, incumbents own distribution, they own data, they own the UX, and they own a business model that all aligns to a copilot idea.

    23. HSHarry Stebbings1:08:48

        What... When you say "copilot," can you just explain that for the audience?

    24. MGMiles Grimshaw1:08:50

        Uh, think, think of copilot as GitHub Copilot, right, like inline, um, suggestions. Um, think of it, uh, like how most... L- go to, go to any Microsoft product right now. Every Microsoft product now has a copilot experience, and so the sidebar, and autofill, things like that. The core product is a layer on top of it, right? It's immediately added in, um, which is also, um, you know, totally a incumbent strategy. And it's still about sort of supercharging that worker, but still where every user has a seat and every user's doing most of the work. Um, and it works probably, you know, if you think about the evolution here, um, the, the models, um, most of what's rolled out might not be good enough for some of this yet, right? But that's what will come around the corner. You know, if you think back to Salesforce disrupting SE- Siebel, Salesforce launched like five years after Netscape launched. Like it might take a moment, um, for, for that to happen. The copilot, this idea of, "I'm still the pilot, I'm still the user controlling everything, and it's sort of like giving me assistive suggestions," like GitHub Copilot, um, it, it fits into the UX of incumbents, it fits into the business model of incumbents, and they already control all that distribution. And so I think, uh, the opportunity offered up to a startup, um, i- i- i- being a copilot for something else, like, probably won't be that amazing. And there might be pockets of it where it can really work, but the opportunity, um, to disrupt is to, to, to, to be orthogonal to the incumbents, right? To be-

    25. HSHarry Stebbings1:10:18

        Is it not... I always thought of it as a transitionary period, and what I mean by that is, like, I saw a company the other day that's actually changing it to say, "AI for legal," whereas the copilot for anyone in the legal industry. But then through the proprietary data requisition that they get from, uh, you know, different user inputs and different user modeling, they're able to then sell the work over time, or they say they will be able to. Is it a transitionary period where you do copilot to then be able to sell the work, or do you think we'll see a shift?

    26. MGMiles Grimshaw1:10:47

        I think there's so much holistically in a company that gets wrapped up around a business model, right? And if you have a copilot business model, your product is wrapped up around that way, your distribution model's wrapped up the w- that way, sales education's wrapped up around it. And that's why I think business model, which encapsulates product, and, and distribution, and end markets, i- if you can, um, be orthogonal to that, to an incumbent strategy there, it... And, and obviously you have to be correct. It is so-

    27. HSHarry Stebbings1:11:15

        What does it mean being orthogonal to an incumbent?

    28. MGMiles Grimshaw1:11:16

        ... much this idea that you would have a UX not for a worker, you'd have a UX for a manager, the idea that you'd sell work and outcomes, not software, right? Like, the idea that you're Salesforce, right? Selling, uh, cloud subscription managed by (?) . Selling an on-premise license, you install, you manage, you get patched for life. That's orthogonal, right? Um, there's so much wrapped up in, in, in the arc fundamental business as in company architectures and all the systems internally and all their operatings around that, that it's really hard to just change, right? That's why it's, ends up being asymmetric competition. It's not to say they can't and they won't. It's a lot more painful of work to be done of, of organizational change to enact. And so I think any... A startup's opportunity is to build their strength and, and, and build from scratch that strength in a way that is really orthogonal to those incumbents, and I think it's this idea of this more all-encompassing change in architecture, um, and business model that AI enables in the way that the internet really enabled a total... You know, enabled SaaS 1.0, enabled a totally different, um, architecture product model, and distribu- and business model, and, and distribution.

Episode duration: 1:43:38