Thrive Raises New $10B Fund | OpenAI Buys OpenClaw | Stripe at $140B: Is Adyen Wildly Undervalued?

1. 0:00 – 0:42

   Intro

   1. RORory O’Driscoll0:00

      You've never seen a company grow 10X in GAAP revenue and runway year on year for three years. So you're leaning into the singularity here. Now, it's worth pointing out-

   2. HSHarry Stebbings0:10

      It is my favorite show of the week, Rory O'Driscoll, Jason Lemkin analyzing the biggest news in tech. Anthropic raises $30B. OpenClaw creator joins OpenAI. Thrive closes on a mega $10B fund

   3. RORory O’Driscoll0:25

      Wall Street has decided this is the bet they wanna make. Capital has decided this is the bet they wanna make. People are gonna try and make this bet. Wall Street fell in love with AI, and to do that, had to fall out of love with SaaS, right?

   4. JLJason Lemkin0:35

      Who wants to get back to early stage? I wanna do the Anthropic round. [laughs] Give me a [censored] break. I don't wanna, like, have to pick

2. 0:42 – 5:53

   Anthropic's $30B Raise at $380B

   1. JLJason Lemkin0:42

      which accounting software in four years might break out for AI. [laughs] No one wants to do that. Just show me the carry. Ready to go?

   2. HSHarry Stebbings0:50

      [rock music] Boys, it is so good to be back. Now, we might as well rename this show, for the first segment at least, This Week in Anthropic, because my God, the news announcements that came out. I wanna start with the fundraise itself. Anthropic raises 30 billion at a $380B post-money. Now, it was originally 10 billion, and it upscaled to a $30B round. I'm gonna hand the mic over to you. How did we think about this?

   3. JLJason Lemkin1:28

      I th- I think if you're not that, you're not of interest to 98% of venture. I mean, literally I, I had people c- I mean, I'm not even in the loop. I don't have an allocation to Anthropic or a pro rata, but people I saw on the periphery of this investment that I didn't even know would be on the periphery investment shocked me. So Rory can talk about, we can talk about whether it's cheap or not on a forward multiple basis. There's probably arguments each way. There's arguments it's cheaper than the last round, right? Just on a forward revenue basis. But not to be a, a, an echo or Captain Obvious, this is just w- you know, it's the same day Thrive or the same week Thrive raises 10 billion. This is what everybody wants to do. This is the only play in venture, um, when, you know, the public markets for soft- for software stocks are down 20 some odd percent this year. This is the play. It is that simple, right? There's almost no other play other than showing up to demo day.

   4. RORory O’Driscoll2:19

      I think actually Jason nailed it, the, the comment that this is the play. Look, the last three, four, five rounds have worked. The f- the two rounds in '25 have worked really quickly. You know, the 60 billion round at the start of the year, the 160 billion round at the end of the year. Remember we talked about it and we said, "Ooh, that's not actually crazy," and here you are getting a 2X again. You've now clearly reached the point where, as Jason says, if you have a multi-stage fund, you just gotta put some money in and get your 0.01% ownership and add value [laughs] because otherwise you're not showing up in the only thing that's working. And it really is one of the only thing that's working. I mean, if you eyeball down the unicorn list, what's amazing is, and I'm just doing it, yeah, reflecting on this, even two rounds ago, it was the second or third largest unicorn, and it's probably outperformed most of the unicorns that are one-tenth its size in terms of share price appreciation in the last 12 months. This thing is a juggernaut with momentum, and, you know, in the short term, in the short term, momentum massively outperforms value, so everyone is wisely getting in on the momentum play.

   5. HSHarry Stebbings3:21

      The thing that I think too is just, like, the elasticity of capital supply. Like, you know, I'm doing rounds today where even at the early stage, a $30 million Series A round has $1.2 billion of demand, and I've never seen so much money chase seemingly such a small concentrated number of companies. That's the insight I had.

   6. JLJason Lemkin3:41

      But they are hoping there'll be another Anthro- I mean, here's the thing. Here's the thing about Anthropic. I was thinking about, about this with the SaaS crash, is just, you know, gravity's almost gone up to Jupiter levels in tech. Everything's being pulled down, right? F- F- 6 billion is not enough for Atlassian. You've gotta be 6 billion like Databricks growing 60%, okay? Gravity is just pulling everything down, and so you've got to invest in these handful of folks that can achieve escape velocity, not just on Earth, but on... I mean, I'm not a, a, I'm no Elon Musk, but on Jupiter or something. Because e- the, the flip side is everything else is getting pulled down by gravity, down a [censored] gravity well, right? They're, they're unsellable. I mean, you look at AppLovin, 70% growth isn't good enough. Okay, Navan coming down. Look at Navan for the gravity well, coming down to a $2 billion market cap, okay? That is a gravity well sucking everything down when the ship can't leave the planet. And so with Anthropic, it's left the planet. I mean, c- you know, uh, um, uh, Cloud Code from 1 to 2.5 billion at the end of the year to today, right? That's escape velocity. And so I, you know, the early stage ones, that, that's why it's a head-scratcher for folks that have been around for a while, because the bet is that you'll, that you'll escape this, this massive gravity well. But if you do, there's, you know, there's, there's 10 billion from Thrive last week and 30 billion from Andreessen. But man, the gravity is, is, it's a bitch right now. It's a bitch, gravity. [laughs]

   7. RORory O’Driscoll5:03

      And when you say gra- what you... And let's be precise in what it is, 'cause I, I get the analogy. It's like, it's almost like it's a black hole in the sense of these two or three companies are sucking everything else in and spitting them out. Exactly what you said. So I mean, uh, now, over the medium term, is that massive overextrapolation? I think so. I, I think there's an element of projection going on here and, you know, a fair amount of discarding babies with bathwater. But short term, I mean, short term, we're narrative creatures, right? And you're right, Jason, the narrative right now is AI is gonna eat everything. Within AI, the narrative is arguably less clearly, um, but nonetheless, they have, the models are gonna eat everything, and it, and Anthropic looks like for enterprise it's clearly the best model. You, you take all that together and this is the thing that's gonna eat everything, and once you have that, you know, you can justify any price. That, that,

3. 5:53 – 20:53

   Why SaaS Stocks Keep Getting Crushed

   1. RORory O’Driscoll5:53

      that, and, and conversely at the same time, you see everything else just trading down to points where you sit there and you go, "Some of these SaaS companies are trading at eight or nine times cash flowRight? And are they really gonna go away in that t- period of time when they're growing 10, 15, 20% at the moment? So, my guess is, look, i- i- in the end, it will equilibriate, 'cause that's how price works. So, y- y- but you find yourself trying to articulate what's the forcing function that will kinda break this over investments, break the spell, right? And that's actually a hard question. 'Cause we're talking a lot about the value of the company, but really you should also be talking about the performance of the company. I mean, this stuff is working. Um, and that's the aha. The revenue accelerate, we've seen... I mean, the soundbite is gonna be three years of 10X revenue growth, right? Technically ARR growth, but yeah, revenue growth as well. And that's not only unusual. I went back and plowed through the early Microsoft, the early Google, the early Compaq. It's unprecedented, right? I even started trying to adjust for GDP growth, trying to adjust for inflation. The truth is, you've never seen a company grow 10X in GAAP revenue on runway year on year for three years, right? At this scale. It just hasn't happened. So you're leaning into the singularity here. Now, it's worth pointing out, Microsoft, Goo- many of these other companies that had 3X, 4X year on year growth for three or four years were also wildly profitable while they were doing that. Well, this company is still losing a ton of money. But from a growth rate perspective, this simply has never been seen before. And at the margin, we're all, you know, growth chasers.

   2. HSHarry Stebbings7:27

      It seems like, what other $380B company is there a CEO where they say, "But if we misspend on compute for a year, we're bankrupt"? There, like, seems to be this absence of fragility not being priced in when he openly says it.

   3. RORory O’Driscoll7:43

      I think it's bes- I, I... First of all, you're right, and this is a reference to Dario's long Antwarkesh podcast, where one of the very sensible... And I always find him, frankly, way more grounded than some of the other leaders in this space. Um, where he basically said, this is tricky because if you underinvest and you miss a cycle, um, the other guys pull ahead, and then your, then your growth dies, and we know what that's like. If you overinvest because the money is so much, if you overinvest and, you know, you hit the point where you don't get the returns to scale, then you are really long compute. And I think actually he w- I mean, there was obviously the element of, and then one could go bust. But I think part of the message was, we are trying to be a little more circumscribed than the other major player, OpenAI, in terms of our future commitments to make sure that doesn't happen. But yeah, no, it, it's, again, it is back to the same thing. These companies aren't like, you know, aren't like the explosive growth internet companies or software companies like Microsoft, because they are wildly capital intensive. They are much closer to semiconductor companies in terms of structure. You have to just, you know, put in 10... I mean, even Dario talked about the amount of CapEx he's looking at over the next three to four years. It's an astonishing amount of money. It's, you know, tens and hundreds of billions of dollars, right? These are not software companies with free cash flow. And that's probably one of the big risks. At some point, people go, "Hmm, it's just better to own companies where there's free cash flow than companies where there's not." Right? And intuitively, you know that you can get to free cash flow by slowing down, and that's actually the... Getting to free cash flow probably also assumes slowing down growth. And once you slow down growth, you wake up and realize, well, on a GAAP revenue basis, you did $4.5 billion last year, maybe 15 plus or minus this year on GAAP basis. You know, maybe 30, 40 times GAAP revenue is a little pricey. So it's gonna be hard to manage that.

   4. HSHarry Stebbings9:38

      What percent of the $1 to $14 billion in revenue do you think is customer acquisition from OpenAI customers versus net new customer acquisition?

   5. RORory O’Driscoll9:47

      Never thought about it, but doubt it's, doubt it's a huge amount. I mean, we're seeing some of the e- lots of enterprise having, you know, relationships with both, which totally makes sense. So maybe at the customer count, at the logo count level, probably not a lot. But at the individual token usage basis, I actually don't have insight to that. Someone like OpenRoute might have that and, you know, that's where it would show up. But I mean, to be fair, stepping back a million miles, most of Chat- most of OpenAI's revenues comes from ChatGPT on the consumer side, and Claude, less than 20% of the revenue is consumer. They really are slightly separate companies with an overlapping Venn diagram. Same raw technology, one very much gone enterprise and coding, the other mainly consumer, but with some enterprise and coding. So I don't think the narrative is, I don't think the narrative is at a direct level, Anthropic's winning, so OpenAI must be losing. I think the narrative is, you know, venture and soon Wall Street just loves AI and doesn't love anything else.

   6. JLJason Lemkin10:45

      Still, it is crazy. I don't think, um, I don't think... It's too early for Anthropic to be stealing enterprise deals for OpenAI, because even those deals are one year and they've just been signed, right? Anthropic said, uh, it's, it's 100K customers are up 7X in the last year. So there's not enough time to steal deals. Having said that, going from 5% of OpenAI's revenue to 64% in 14 months, that is stealing budget. You can't argue with it. I mean, it's, as, even though the budget is accelerating in ways we've never seen before, uh, you know, global software spend up 14% this year, which is unprecedented. You still, it's still a fixed pie, even if it's growing. So I don't think anyone thought when ChatGPT broke out that, uh, Anthropic would have 64% of its revenue at this point, and, uh, that's a lot of momentum, right? That is code red. You thought code red was about Gemini? [laughs] I guess it was, but maybe it's like Missile Command. They're coming from everywhere. [laughs]

   7. RORory O’Driscoll11:41

      I think you're right, Jason, and that's a great point. I mean, you know, there's a reason when we were talking about CEO of the year that it was clearly Dario. Because if you look at where the m- story was a year and a year and a half ago versus where it is now, I mean, Anthropic just ran in and scooped the money. And can't be great if you're the other guy.

   8. HSHarry Stebbings12:01

      Software spend is at 14%, Stas. You said the highest it, or higher than it's ever been. What do you think it is in 2030?

   9. RORory O’Driscoll12:08

      Look, s- software has grown pretty steadilyTwo or 300 basis point, 2 to 3% above GDP growth for a couple of decades. And that's kind of the, the low rent, the kind of the low drama version of the Andreessen software will eat the world. It's kind of growing nice, but it's still, you know, 3 or 3% plus or minus the GDP, right? So the probable answer is, it gets back to the c- discussion we always have. It probably regresses to something like that unless you, unless you really see that AI unlocks productivity and labor spend, in which case you probably could see, you know, 5 or 6%. My guess is the swing on whether it goes back to its GDP plus 200 basis points or stays at GDP and 400 or 500 is all about massive labor and efficiency and productivity savings have to come from the AI. And if they don't, you know, growth will decline. You struggle to articulate a lot of bear cases for most of these AI companies, which is why we're all investing in them. Everything's working. Yeah, competition is tough, but the markets are huge. So you have to s- but there has to be some bear case. So probably one embedded one is, are you really getting the ROI from this, you know, 10, 20, $30B of spend that you're making in enterprises? If you are, then you'll probably do more. It'll go to 60, and everyone will be fine, right? The canary in the coal mine would be if a year or two, you know, enterprises are saying, "That was great, but we're gonna slow down on spend for a while 'cause we need to get the ROI. We didn't make the labor savings." That's probably the thing to watch to the downside.

   10. JLJason Lemkin13:42

       Here, here's what I think though, and th- this has changed since we did this show. I think it's even changed in 90 days or 60 days, which is that I think s- more and more enterprises are going to will this into existence. What I mean is you can make a decision. Do I want to invest? Like, no matter what anybody says, for a large enterprise, AI does not miraculously replace 10,000 employees in an hour. It doesn't work that way. So you have to make a... One, you have to make a bet, just like we've always made at enterprise software. But then you have to decide also, I just don't want a bigger company. I also want to do layoffs. I also want to be smaller. I want to be leaner. I want to do it. And so I'm gonna lean into this bet, and not only am I gonna do it, but my friend Rory over at Nabisco's gonna do it, and my friend Harry at Walmart. And I s- I see this, it's not just all the, the, the Dario and waving his hands. I mean, he's great, and, and all these podcasters. I think enterprises are gonna will this in existence. They want it to be true. And with AI, you can build almost anything you want now as we're doing this. You literally can build almost anything you want in software. So I generally, even if it didn't have to be true, even if this was less, a little bit less revolutionary and people might back off in two or three years. They might be like, "You know, I didn't see... This is classic enterprise. I didn't see this, the ROI I thought from that Salesforce module or Workday financials. I'm gonna, I'm gonna slow it down for a while." I, I think you can will these things into existence. I, I literally think you can make a decision, and I think by the end of this year, that, that train's gonna be so far out of the station that, that these nu- these growth numbers will be jaw-dropping because we will decide. Enterprises will- the Fortune 500 or Global 2000 will decide we are replacing humans with AI, even if it's not the right decision. [chuckles] 'Cause it's not the wrong decision, it's doable.

   11. RORory O’Driscoll15:19

       I think actually, Jason, you're right, and I think that's the single big picture statement here. Corporate America has decided they're gonna make this bet. The zeitgeist is making this bet. It's unstoppable now. I mean, even what you're saying on the... Wall Street has decided this is the bet they wanna make. Capital has decided this is the bet they wanna make. People are gonna try and make this bet, which is very different than saying when they made the bet, they liked the result. But that's two or three years out, right? My gut would be people will over-bet, over-invest, and you will have a retrenchment period, yeah, two-plus years from now. But I think right now you're just looking at two years where, you know, just as the hyperscalers said two years ago, "We're gonna do this, and we're not gonna blink." You're right. Corporate America's now gonna say, "We're gonna do this, and we're not gonna blink." Which means you're looking at, you know, one to two years of mega AI budget, not regardless of AI, of, of ROI, but on the presumption of innocence, which is it's g- the presumption of success maybe is your word, Jason. I like that. That's what they're gonna do. They're just gonna say, "It's gonna work. This is the thing you gotta do." And you know, CEOs generally have only two or three agenda items at any one time. You know, there was a whole period in the '90s, Jason, you remember, when it was all about right-sizing and efficiency. Then it became about getting on the internet, then getting on the cloud. And you're right. The number one thing now is, you know, make your big AI play. So everyone's gonna make it. Everyone's gonna spend. There's gonna be a couple more years of great spending, and then we'll see. That's the movie, which means that the next two years would be a good time to access the capital markets.

   12. JLJason Lemkin16:50

       It's also why I hate to say I'm just not... I wanna be really bullish and say that a lot of these public software stocks are, are oversold. And, and maybe it's true, but you know, when... I mean, Harry just had Sebastian from Klarna on, right? And he likes to be a rabble-rouser, but he's like, "I went from 6,000 to 3,000 employees." We know that. But then he said on Harry- maybe he said it other ways. He said on 20VC, "And in two years I wanna be at 2,000." Now he's trying to be a rabble-rouser and he was trying to say, "I, I, I, you know, I, I fired Zendesk two years ago and AI was magically perfect." But I think that's how everybody's thinking that I talk to, and that is great for Anthropic because we're gonna replace those humans with Anthropic's men. And it is terrible for, for not every software company. Maybe Shopify is oversold, maybe Navan is oversold, but overall it's not... Even for Mike Cannon-Brooks, it's not great for Atlassian if we're all gonna shrink our teams from 6,000 to 2,000. It certainly is... And, and maybe HubSpot and Monday and no pe- We're like, "Why the hell are these horizontal apps oversold? It doesn't seem fair because the numbers are great." But if this is the mode we're in, um, and nobody wants people, uh, it's hard for me to feel there's a bottom in this. And it's not valuations, right? It's hard for me to feel that they're, that enterprises are saying, "You know what? I wanna buy more seats next year, guys. I've changed my mind. I'm tripling my seat count." [laughs] At HubSpot next year. I've changed my mind, guys. We're going all in. [laughs] We're gonna hire 20,000 more people next year, humans, um, who complain and whine and quit every three months, and we're gonna get them all seats of software. I just, uh, nobody I talk to has that feeling today. Nobody wants to do that

   13. RORory O’Driscoll18:27

       I broadly agree, but I-- on the kind of sentiment, and I disagree on the statement that there is a bottom. I mean, in the end, price clears all markets, right? And what happens, what's happened on these, on the public SaaS stocks is you've gone from, as I said, the presumption of success, which is what AI now enjoys, to the presumption of failure, right? But that doesn't mean you fail, right? It simply means that you just look cold-eyed at it and you say, "What's the growth rate? What's the free cash flow? How do you value that?" There's gonna be a price at which these things stop declining and compound at, you know, a normal 15, 12 to 15% return a year, right? The f- you know, m- markets work. The other side will overshoot. This will be doable, but it's just not a number you like.

   14. JLJason Lemkin19:10

       But here's the thing, and of course you're right. If, if it's just, if you, if you have stable or growing free cash flow, there's a number, right? But, but here's what makes me pessimistic, and I don't want to be pessimistic. I want to be the guy saying, "We're never gonna remove our systems of record." I want to be that guy. But as a cohort, public software stocks are, are approaching, have fallen to almost 10% growth annualized, okay? Now, if AI just reduces that another 30%, we're in essentially the dead zone, right? We're, we're in that area in the deep, dark water where nothing grows because even the pl- the dead bodies don't fall that... You can't- like 5%, 4% is, it's, it's, it's even worse. It's, it's all just price increases and suing customers. There's nothing... If, if AI was bringing us from 30% to 20%, you could make a whole bunch of arguments. You could say, "Listen, we're, we're, we're, we're jot-- We're, you know, we got a little-- SaaS got a little older. We've slowed down. We're in senior marathon, but, uh, things are still good at 20% growth." At 6% growth, I don't see any future other than the next five years of free cash flow. I think it's a valid worry if, because it, things were bad before AI. Like, let's be honest. They, things had already fallen into the mid to low teens before the AI. It's not like SaaS was healthy, public SaaS companies. These were not thriving. Dropbox growing minus 1% a year is not crushing it, is it? That's why I think the market isn't overblown, because we were already at risk going into 2026. We were already weak and anemic. The overall blended growth rates. And Rory made the point with Mike last week, part of it is 'cause we haven't put new names in. When we drop Anthrope-- uh, Databricks and Anthropic in, it's all gonna-- And if we, if we allow them to remain of a pure basket, it's gonna look great. But the existing group is not looking healthy.

4. 20:53 – 22:21

   Wall Street's New Religion: AI Replaces Headcount

   1. HSHarry Stebbings20:53

      I- I- it's nice. If, if we, if we look at, like, a Duo, a Monday, a Navan, these businesses are, they're all doing okay to decent actually, but the price is f- through the floor. And we keep on saying, "Oh my God, it can't go lower," and it does. Uh, genuinely, what, what happens?

   2. RORory O’Driscoll21:10

      Well, I, look, I think the market's, you know, it, you know, it, it's like the old cliché, in the short term it's a voting machine, in the long term it's a weighing machine. We're going to the voting stage now, right? My big aha is, you know, is... And as Jason mentioned earlier, I was thinking a lot about the, the SaaSpocalypse and, you know, did AI kill SaaS? And I think what really happened is Wall Street fell in love with AI, and it fell out promptly and, and, you know, and, and had to, and to do that, had to fall out of love with SaaS, right? The burden of proof is the other way, right? But you g- you gotta shake out between them. If you take something like Shopify, I'm gonna say it, I don't think there is a credible near-in story that replaces a shopping, a, a website for shopping and a payments mechanism, which is, you know, 60, 70% of their business, with some kind of AI arm wave, in a way that there is for many of the workflow automation software companies. I'm just picking on Shopify, for examp- in a positive fashion.

   3. JLJason Lemkin22:06

      I'm super positive on Shopify.

   4. RORory O’Driscoll22:08

      Exactly. So-

   5. JLJason Lemkin22:09

      Super positive, right? But it is in the basket. It is cousins of the rest, right? It, it is probably over-- We could argue it's oversold, and if we were running a he- a long-short hedge fund, maybe we put 5% of the fund into Shopify, right?

5. 22:21 – 33:13

   The Bear Case for Shopify: What Could Go Wrong?

   1. JLJason Lemkin22:21

      It would make sense. There is, even though, here, just to be clear, I, I do think Shopify is oversold. It's easy for us to say on a podcast, right? I do think, though, there is a bear case for Shopify. What's the commonality between ServiceNow, Salesforce, and Shopify? It seems like nothing, but actually they all could be abstracted away into a database. Even Shopify can. If I am shopping on ChatGPT, right? Uh, I, I may not go to that merchant's store ever. And in the short term, it doesn't hurt Shopify because it is the plumbing of the store, right? And it takes a piece of the GMV. But ultimately, if the future of e-commerce is conversational commerce and it does not happen on the Shopify platform, that is not a net positive. And Shopify-- and Toby says the same thing. Like, that's why he's done more code commits in the last 60 days than the rest of the history, is because the Shopify software, even if it's only 25% of the revenue today, that software in two years may be obsolete. If Toby thinks it, and this is the most resilient AI, and Toby thinks it, what, what hope is there for mere mortals? [laughs]

   2. HSHarry Stebbings23:18

      I, I, I... But that assumes the UI of the future is conversational commerce, which if you actually look at-

   3. JLJason Lemkin23:23

      It is the UI of today, Harry. If you're deep in e-commerce, you talk to anyone

   4. HSHarry Stebbings23:26

      ... But it's the UI, it's the UI, it's the UI of today because it's what the most productive people in the world find the most optimal UI, which is Sam, Elon, Dario. Actually, when you look at consumer, most often they actually like browser-based UIs. They like discovery. They like an option set.

   5. RORory O’Driscoll23:42

      It's-- I, I, I agree. I, I think that, again, don't oversteer. I think, look, I definitely think, you know, chat is wonderful for research, which is why I've, despite your opposition in the past, I've loved the, you know, the Geo Marketplace. I think chat is the place you go for considered purchase and look, doing research on, you know, whatever you're buying, right? But then you go to the store, you look at the thing. I don't-- We're a long way from I'll just press the magic button on ChatGPT and have it come.

   6. JLJason Lemkin24:10

      No, but it might not be on Shopify's websiteIt might be on an age, agentic flight. It doesn't have to be ChatGPT. It could be Harry and Rory's shopping site that, that is better than the built-in conversational commerce in Shopify. Everything's at risk to an a- I believe every platform that is open is at risk that an agent is better than the native platform, and every platform that is closed is, is at risk of, of, of being at least slightly bypassed, and that's the risk, is that I don't go... Like, I haven't, I haven't logged into Salesforce in six months. But we use it every, every minute. Our agents use it every minute. I think it would be disingenuous to say that couldn't happen to Shopify, that agentic commerce agents... Forget about, uh, uh, part of discovery's gonna happen on my sofa, don't get me wrong, but all the stuff that really matters may bypass the user interface of Shopify. I just think it's a threat. I'm not s- whether the size of a threat is as large as it is to others, probably not. But it's, it's not to be dismissed given the incredible pace of, of progress we're making. The, it's, uh, like I c- I can't ke- I, I'm struggling to keep up.

   7. RORory O’Driscoll25:18

      What I don't like about this discussion and what makes-

   8. JLJason Lemkin25:20

      Yeah

   9. RORory O’Driscoll25:21

      ... it hard is, and actually, I, it was one of the most insightful things I saw about, in the last couple of weeks about the SaaS discussion is it's really hard to disprove a negative, right? I think your stock might go down. How do I disprove that? I think you might be displaced by AI. Once the... I mean, my big a-ha is in the, I'm gonna repeat it again. In the short term, we're narrative and momentum creatures, and all that's happened now is the narrative and momentum has shifted to AI's gonna do everything. So the people who are left trying to prove that that's not the case are left, as you say, trying... You can always articulate a scenario, right? And the question is, on a prob- balance of probability basis, is that going to happen? Right now, so... And the thing is, smart traders don't fight the tape, right? Right now, the moment- b- basically, in the short term, the momentum is all around this narrative of AI replaces everything, right? That's the way the momentum trade's going. At some point, I don't believe it will. I think it'll do, I think it'll be amazing, just like software was amazing. Let me repeat. Software was the best industry of the last 20, 30 years. At the end of 20, 30 years, it accounts for 4% of the US GDP. We'll still want to eat, we'll still want to drink, we'll still want to drive cars. Everybody should get a little bit of a grip and not extrapolate to the end. But whatever, right? That's the movie right now. So until, while that is happening, you would be a buffoon to get in the way of the momentum trade. At some time, the momentum trade will dissipate and people will go, "Ooh, this is really amazing, but it's just not quite the universal everything." And that's the point at which you'll see a correction. But until then, n- narrative dominates valuation in the short term. Nothing you can do.

   10. JLJason Lemkin26:56

       I think that's right. I just had one thought as investors, right?

   11. RORory O’Driscoll26:59

       And I pity the poor public SaaS CEO who, as I say, trying to, you know, prove a negative. I, let me prove to you why I'm fine. It's just too hard.

   12. JLJason Lemkin27:06

       Just one thing. The tough thing as an investor and, and, and maybe, i- is you have to, you know... You, you do also have this, um, this lab. It's called your portfolio.

   13. RORory O’Driscoll27:15

       Yes.

   14. JLJason Lemkin27:15

       And, and your portfolio, one thing you can say today is, "Hey, my early-stage companies aren't truly at, at scale." Scale is north of 500 million or a billion in revenue, so they don't matter. But on the other hand, you may be seeing the future in your portfolio. And publics aside, when I look at my last fund, right, you know, and I see what's happening, and it, it, the fund's in good shape, whatever, 4.5x. But honestly, like, two companies are, like, massively benefiting from the current world in B2B. Ma- massively benefiting, accelerating. One I would say is a push, like it's benefiting, um, north of, in, in nine figures of revenue, but also being hurt, and everything else is struggling [laughs] because of AI. All the rest of that last fund. And, and, and you can, and, and the, the, you know, it's not all growing zero. I'm not saying that. But man, like, and every- and, and it was so similar in 2023. So is that the past or the future? I get confused. But if you have a portfolio of companies exposed to all these things, they, they can't hide in high GRR like ServiceNow. They can't hide in price increases like Salesforce. They're getting whiplash at a pace much faster than the publics. And so when you see this on the first of every month when you get updates, it's hard to be optimistic in 2026 about anything not already getting a boost from AI because you see the dramatic effects.

   15. RORory O’Driscoll28:33

       I think that's correct.

   16. JLJason Lemkin28:34

       And it's just hard to, to keep s- grinning and smiling and saying, "Go, guys," when, when you don't see any AI boost in your February or March investor updates. It's, it's hard to remain, uh, optimistic.

   17. RORory O’Driscoll28:45

       I think that, on the other hand, is probably true, right? I think, and, and so I just want, one comment on definition. Everyone always does the SaaS is dead, and it's such a use- it's such a useless word because we have to define our terms just a little bit more carefully. If you, if you're, if you think software as a service means selling software on a monthly basis for a, you know, a fixed or variable price, then the, the thing is Claude is SaaS, Harvey is SaaS, and Salesforce is SaaS, right? So when people say SaaS is dead, are they saying... There, there's this kind of two separate threads here. There's, within the new world of AI, are we talking about how much the model will get versus the next, the, kind of, I call them new school SaaS, like the Harveys of this world, the next generation companies that pejoratively are called wrappers and, um, optimistically are called, you know, standalone companies that can, you know, leverage on top of ChatGPT. Then separate from that, there's old school SaaS. So I think what people are... People, most of the time, people are saying old school SaaS. In other words, stuff that was built pre-2022, pre-GPT, is what we're really talking about here, right? Most of the time. Then sometimes people go up, go all the way to the, you know, all software's dead and the model's gonna eat everything. First of all, you have to just distinguish between those two scenarios, right? What you're talking about, Jason, and I agree, is let's, for lack of a better word, old school SaaS built pre-2022, right? It, and what you're saying, which I think is also true, is that if you're public already, you're now living in a lower, in one of those companies, Salesforce, ServiceNow. You're now living in a lower growth-World where you gotta make the model work financially while at the same time investing in the future. Because if you just make the model work financially, as Mike Cannon said last week, the good news is you have five years of 30% ca- um, free cash flow, and the bad news is in year six your revenue goes to zero, right? So you gotta do the two... You gotta be financially disciplined while adding AI to grow it, right? And I think what... So I, that's, that's, again, 'cause I wanna distinguish public versus private. That's the public SaaS company movie, right? Anyway, then the la- the tough category is the small, private, pre-2022. You've, if you're not getting SaaS lift, you really gotta worry about what you're doing, right? Especially if there is a credible SaaS story in your space. I do believe, again, just to say it, there's a lot of markets even pre-'22 that are software plus payments, software plus reg that aren't all AI. It's not a baby bathwater thing. I mean, but definitely the sweet spot of your argument is workflow, horizontal workflow-related software built pre-2022 that's not public with critical mass. That's probably the hardest place to be.

   18. HSHarry Stebbings31:22

       I just see a realization in my portfolio now of companies that are in the 8 to 20 million ARR range, not benefiting massively, but growing 80 to 100% that are basically like, "Okay, we've raised our last venture dollars, and we're gonna have a good business, but we are moving off the venture train because we can't align to what is needed today to make that next round work." And that realization I'm seeing set in.

   19. RORory O’Driscoll31:46

       Yeah. That's probably fair.

   20. HSHarry Stebbings31:48

       Uh, is Figma a baby getting thrown out with the bathwater?

   21. RORory O’Driscoll31:52

       No, because, I mean... So there's two questions. Is it and should it, right? The is it question, it's still valued at 12 billion plus or minus, right? It's still an amazing outcome. It's still, I think, roughly 10 times plus or minus revenues, right? And I remember, I used to know the growth rate, and now I don't. I, yeah, it's, it's, you know, 30, 40. I, I don't swear to this in that kind of, it's not 10X-ing. It's 30 or 40. It's not down to let's call it miserable single-digit SaaS. It's a perfectly great public company, 30, 40%, maybe higher growth rate story. So, yeah, at tw- at 10 times revenues plus or minus it's absolutely not getting thrown out with the bathwater. It's probably, it's probably just getting valued correctly in the absence of narrative lift, right? Whereas two years ago it would've been valued at its value plus narrative lift, right? It's, it's gone to, to use the other one now, it's gone from the voting to the weighing part of the capital markets. It's now, right? So from, that's from a value perspective. And then the other part of it is, you know, wh- where does it... What's driving that is the where does it go comment, and I'll defer to Jason on that. Where, where do you-

   22. JLJason Lemkin33:01

       Well, here's the bull case on Figma. You can't argue... Like, here's the existential problem with public s- You can't argue with the current numbers, right? You can't argue with the current growth north of a billion. It's great, right? The other thing you can say is, okay,

6. 33:13 – 50:27

   Replit & Lovable are Proof Figma Missed Out: Figma; Buy or Sell?

   1. JLJason Lemkin33:13

      let's go back to your favorite. Replit level, um, number one use case for both is product teams building prototypes, okay? This, Anton said this last week. Number one use case at scale. Not one Harry invest. Number one use case today for both, okay? That is all revenue Figma should have. Figma Make is a failure. And I don't mean to be dramatic, but I, I, I think folks at Figma, if they're honest, would agree. Like, it's, they thought this was revolutionary, but that is 500, 400, 300, 400 million of ARR Figma should own. They should own this. They, R- Lovable and Replit should not be owning product prototyping and development for product people. Figma should own this. They don't. They missed a whole generation here, and that's the, that ties into all of this. Figma, can't argue with Figma today. It checks every single box on, on, on growth, market share, everything. But good God, they missed 400 mi- 300, 300 million of growth in their core for AI. Um, I, I'd be pretty critical, right?

   2. HSHarry Stebbings34:13

      It's actually, it's actually double that. Both Replit and Lovable are 350 independently.

   3. JLJason Lemkin34:17

      Yeah, but not all of it is pro- It's just the number one use case for their enterprise. I'm, I'm just guessing. It's, for both, it's their number one use case for their larger customers. That's the majority of the revenue today versus the minority, but it's not all of it, right? So I'm, I'm, I'm assuming that, that morphs to 300 million of bookings, but Figma should've gotten all of it if Figma Make was better. Why do I wanna buy another tool to do this? Especially 'cause these tools weren't even really good until the fall. As you guys remember when we started this, these tools weren't that great in the beginning, okay? Figma should've owned this. This is just the bear case, right? And my God, now we're in 2026. Wh- why is... And the earnings will come out, I think, before this pod comes out, but why is it Make a $300 million, 400, $500 million ARR business? Like, this is much easier to sell than these damn seat licenses where we have to bang our heads against the wa- uh, the, the, the desk to get 20 bucks or 50 bucks for Figma. I can just sell multi-million dollar deals of Lovable and Replit just because the, uh, my product guys can now ship functional prototypes. Like, they, they miss this huge change.

   4. HSHarry Stebbings35:15

      Base44 have also absolutely crushed within Wix, and their growth is-

   5. JLJason Lemkin35:18

      They have. I don't know that they sell to product teams like this for Figma, though. I, I think what... Here's just my criticism of Figma, and again, it's easy for me to say, good God, I didn't build the greatest company as Figma, okay? But the, the, the honest criticism behind closed doors is Replit and Lovable shouldn't have gotten here, guys. We own this space. We let it go. And we're just see- And this, this may happen to everybody, guys. Everyone that's too slow. If Figma was too slow, what hope has some of these other public companies? [laughs]

   6. RORory O’Driscoll35:44

      And I think you're exactly right. Well-

   7. JLJason Lemkin35:46

      It's brutal

   8. RORory O’Driscoll35:48

      ... I, I, first of all, I think you are correct. So let's do Figma first and then the other companies. Uh, yeah, and I think back to the valuation, I think the valuation is perched between, you know, if you'd done this and you add another 3, 400 million of revenue, your growth rate would be north of, you know, 100, 120%, you would probably be valued at 20 times revenues, 25 times revenues, right? If you don't get on top of this soon, that 10X revenues is gonna go down to five and four and where the other 7% growths are. So markets are doing their job. There's probably, there's an embedded probability that they make a better product and become, you know, take more share here, and then some of them probably don't, right? And it's kind of in the middle. And you're right. Fast-forward five years, there's really only one of two stories. They get on top of this, they get a third market share, you know, valuationYou know, continues to grow, they're fine. If they don't get on top of it, you know, you, you trend down to the horrible multiples, right? But I, the, the one that I would make though is I do be- and again, this is back to the not everything will roll over in one day, right? I do believe, ironically, even though Figma I think is one of the most exciting companies of the last five, 10 years, I think that space was very vulnerable to disruption, 'cause it turned out to be very AI adjacent, right? And I do think, and I'm not trying to sound boring, I do think there's a continuum across all these companies of how adjacent you are to what the models can do, and there are companies that are very close to it and are gonna get, as you say, sucked into the gravitational field, and there are companies that are fairly far away from it, right? I've, for example, you know, I don't believe account... I, I, I believe there will be change in accounting. I believe the next generation of accounting software companies, we've looked at them, they're super interesting. They're adding AI. But fundamentally, 80% of the value in an accounting software package i- i- is independent of AI. It's just, it's debits and credits and a good UI.

   9. JLJason Lemkin37:36

      How adjacent is Canva to AI?

   10. RORory O’Driscoll37:40

       Probably pretty close, too. I mean, anything that's creative, I mean, w- individual creativity, individual coding and individual creativity strike me as extraordinarily close to AI, because it's happening right now. You know, conversely, I mean, I'll say it, even Salesforce, we talk a lot about Sal- and Jason, I hear you on your agents, but the truth is, the level of disruption in go-to-market software hasn't been as acute as it's been in some of these creative areas, our coding, our customer support. Now, I'm not saying it won't. I, I love the, what you're doing with your agents, but just being objective about where is, where is the eating happening fast, where is it maybe happening slow, maybe where has it not happened at all, right?

   11. JLJason Lemkin38:20

       Yeah, but, but, and you're, of course you're right. But I just, listen, I'm a, I'm an investor in a company called Monaco, um, that, that, that Harry knows. It's, it's, it's, it's the next AI SDR for us. We already have four, okay? And they launched last week, and we, we, we went live last week at the same time. A couple things that are interesting. First of all, from a technology standpoint, it booked us a six-figure deal the first day. None of our other agents could do that. It booked it on its own, a six-figure deal. Now, that, that is interesting, um, because that is the pace of progress. Our other, uh, pro- products, we had Agentforce, Artisan, Qualified, and a few others. They're all great. We use them every day. They couldn't book a deal on its own the first day. So the rate of progress is accelerate. Like, we couldn't believe it did it on its first day, okay? And then here's the second point, and then, uh, [laughs] they, they have every demo booked up through the summer. [laughs] If they had enough manpower, they could do two to three million their first month, because the demand is so strong. The demand... Now, there's fragility, there's turnover. We could talk about how prompts are portable, and the fact that this is so good that we would throw out an agent we bought a couple months ago shows you how fragile everything is. But my point is that the demand is so strong. As, as soon as the products catch up to the demand, everything that, maybe these sales tools are not safe. Like, so much demand in one week, just, just a torrent of, of demand. Um, and I see it in all, all of these products, that it is, it is inexorable. And, and the, and it just gets, my, it just got s- like, this one is better than the one from two months ago, which is better than the other one. It booked a six-figure deal on its own the first day. Jesus, holy, people don't like in the pod when I say JFC, but holy cow. [laughs]

   12. RORory O’Driscoll40:04

       When you say booked, what do you mean?

   13. JLJason Lemkin40:06

       It reached out to a leading hyperscaler, we've talked at this, that wa- that wants to do a six-figure sp- sponsorship at Saster. On its own, no human required. It decided who the targets were, it loaded them up, it went out to the person, and it booked the meeting.

   14. RORory O’Driscoll40:22

       The meeting or the money?

   15. JLJason Lemkin40:24

       Well, okay, it didn't close it. That's the end of the year.

   16. RORory O’Driscoll40:26

       Yeah. Okay.

   17. JLJason Lemkin40:27

       But, but, but don't, but don't be, but no- none of these agents could do this before February. They couldn't, they could do a lot of it. They could send emails. They could do a Marketo or HubSpot 2.0. They could customize it, but they couldn't literally go out to a VP at a very busy tech company and get the meeting entirely booked and loaded and ready to go. Like, it is, and that, that's just progress in 60 days. What will it be like in, in, at the end of the year? It could completely close it. [laughs]

   18. RORory O’Driscoll40:55

       Right. It, it, yes. It, it sent an e- it, it sent a, a well-written email and was able to schedule a meeting.

   19. JLJason Lemkin41:01

       Yeah, and, and you can, you can crap on it if you want, but my point is the products weren't this good-

   20. RORory O’Driscoll41:07

       I agree

   21. JLJason Lemkin41:07

       ... 60 days ago. You can say, "Oh, I have this company in my portfolio that could do it." Well, show me the money. Like, we've sent, we've done all the, we have 20 agents. I'm gonna tell you this wasn't possible on its own. You could get close, right? You could have folks qualify themselves in and go to Rory's website and say, "I want him," and the AI would, like, move it down the funnel. But to do it raw, um, people talk about it. I don't mean to spend all of our time on it. It's just, I, this is why I, I really wonder if anything is safe from disruption, and I actually don't think any of the agent vendors are safe from disruption, because we will s- even us, like, everyone's promiscuous with agents. We will switch. It, like, this is so much better than what we had two weeks ago. We'll switch to the next one if I... [laughs] They're too good. [laughs]

   22. RORory O’Driscoll41:52

       A- as is often the case, I, I, I, I hear you on the narrative, just pushing on the conclusions. 'Cause, look, I, I, I totally get the AI SDR use case. We're in Reggie. We've absolutely seen things get better and better. What's been super interesting is the product a year, year and a half ago had a medium level ROI, low level ROI. It's taken iteration after iteration, and now you're starting to see, with the reasoning models, increased performance, as you say, starting to be able to convert, you know, old leads to active leads. You're starting to be able to predict who you should reach out to. Definitely a lot going on here with the top end of the sales tech. But my point is just compare it, for example, with, as you said, to take one of your other two examples, coding. There's a two and a half billion dollar market already taking place. There was not a two and a half... Not all the markets are moving at the same speed. If you take, you know, again, to your ca- example of-I'm sorry, my brain, um, Figma, right? The, the, the maker, the next generation product, um, tools like Lovable and Replit, right? They're doing three, $400 million in the space. My point is merely the pace of adoption is not consistent across the board. There's a sequencing question here.

   23. JLJason Lemkin42:58

       For, for sure, and this, we could spend all this time, but a- at a meta level, like it, I, in, in some ways I don't think it matters because there'll be spaces that are destroyed, right? Like, and there'll be spaces that are maimed, and I don't know that it matters on a terminal basis. Like, if your space is gonna be killed in eight years versus eight months, if it's, if, if, if, if you've gone on to hospice care, does it really matter how long you stay in, in hospice? I mean, to the care- to their employees it does, to the family, but everybody pretty much knows when that SaaS company goes into hospice, it ain't coming out.

   24. RORory O’Driscoll43:28

       Depends on how long it's gonna be. I mean, look, you say, yeah, I mean, there's a period of time in which you probably haven't got time to adapt, and then the longer you have, you know, the mo- look, the more chance you have to adapt. Again, as I say, it, it's utterly boring trying to pr- you know, you will play the game and find out, right? I don't know if everything gets rolled over in two years. I think, look, give you an example here-

   25. JLJason Lemkin43:50

       Not everything. N- not, not everything. The closer you are to code, the, a- and support, the faster the disruption's been no argument. Let me just re- rest on one thing, just this is why I, I, I feel anxious about everything, but it, but it, I don't have to run this. Figma IPOs in July of 2025, like right when we got this podcast going, right? Frigging Rocketship, right? Actually, at the margin seem to be benefiting from AI. At, at the margin, right? Just since July, Replit and Lovable take $300, $400 million of their market since July and, and maybe even since September or October because the product didn't even really work until, until September or October. Good God, this is the best... I mean, we were ti- saying Figma was the best of the best that, that there had ever been in July, and now AI has stolen... And, and yes, product is one derivation away from coding, like no argument. But let's not view any islands of stability when in July this was the best thing we'd ever seen.

   26. RORory O’Driscoll44:44

       Yes, J- and as a reminder-

   27. JLJason Lemkin44:45

       It's only February

   28. RORory O’Driscoll44:46

       ... we went around the room in July when the stock was at 110 and asked, "Where do you think it'll be in six months?" My vote, I think, was 35, so it's 20-something, but I was pretty, pretty right at the point in time, and so I get it. But on the other, pushing back, now the, the SaaS rep- again, the question is the velocity it happens. I was just thinking about kind of the SaaS change and, you know, we both started investing and look at the stuff, you know, early 2000s, right? So, um, you know, Salesforce went public in 2004, and ServiceTitan, which is also a SaaS company, went public in 2024, right? So it took around 20 years for the whole thing to transition, right? I don't think it'll be that slow here, right? But I also don't think it'll be two years, right? And I think there is, and I think that matters a lot in terms as an investor where you choose to place your bets, right? I mean, I think that, I mean, I, what we find ourselves thinking about is which, which markets are gonna adopt quickly and which markets are gonna take more time? Because, for example, two of the most interest- interesting apps categories other than co- coding and customer support we've talked about. But if you look at it, two of the most interesting apps categories have been, um, the entire law field and the entire, um, healthcare doctor information field. And it's no accident that both of those didn't really have a compelling old school alternative, right? It was much more greenfield than some of these places where you are competing against existing SaaS companies. Just worth pointing out that the sweet spots of adoption, it's, it's this kind of jagged edge idea. It's not all happening uniformly. Some places it's happening now, and those have been amazing categories. For categories that frankly weren't great in SaaS land. I mean, legal was a miserable category in SaaS land. It's been amazing in AI land because LLMs manipulate language and lawyers manipulate language too, and however you want to interpret manipulate, right? Whereas some of the other more structured apps, it's been a lot slower. That's my point of view.

   29. JLJason Lemkin46:43

       Well, you know what? Maybe it is, maybe just to wrap up on the point, I mean, Harry's the boss, but maybe it is an interesting investing question, right? 'Cause we started this Anthropic. You could have two strategies to investing in AI and software. One is let's invest in massive disruption today. That's Anthropic. That's most of capital. Another strategy, and, and maybe Harry would crap on it, is, listen, actually, I want to invest in AI. I want to invest in the categories that are changing the slowest, [laughs] but with the best founders. But, but with the best founders. That way there's, there's a little bit of extra time. Um, some folks may be missing it. It's not that it's not coming. It's gonna be as disruptive as, as Anthropic and the rest. It's just I've got two, three, four years instead of two weeks, right?

   30. HSHarry Stebbings47:24

       It d- it doesn't work unless you can do life cycle funding as well. Like, 'cause it, with the opportunity cost of cash, you have the concentration going to a certain direction. If you take the second route of the contrarian approach-
7. 50:27 – 56:51

   Stripe Raises at $140BN: Is Stripe Wildly Overvalued or Adyen Undervalued?

   1. HSHarry Stebbings50:27

      You said about, about 20 minutes ago about, like, a narrative chasm or a narrative shift with regards to one of the companies we were talking about. When I think about narrative chasm and news cycles today, the most striking is Stripe being worth $140 billion and Adyen being worth a third of that. Can we just try and understand, is Stripe wildly overvalued? Is Adyen wildly undervalued?

   2. RORory O’Driscoll50:53

      Actually, no. I, I went into this thinking, "Oh, I wanna find some narrative story," right? But in fact there was, you know, perfectly rational reasons with one caveat why they are where they are. I mean, for start, so zooming out, Stripe just raising privately I think $130 or something like billion. Uh, Adyen's publicly traded... Oh, my God. I looked at it this morning only. My brain is gone here.

   3. HSHarry Stebbings51:17

      50-ish.

   4. RORory O’Driscoll51:18

      Less than that now, right? It's half... So a couple of things. One is, um, Stripe's doing $5 billion plus or minus. Adyen's doing, uh, $2 billion, right? So it's half the size, so two and a half times the size. So instantly you have to multiply by two and a half, right? You don't have to... Adyen is very, very profitable, right? But the growth slowed, right? Stripe, it's not clear. It's profitable, not clear as much, and it's not clear what the growth rate is. So they're a lot closer together than one would think when allow for size. But what's real- so what's real- so then on top of that you have the, it's the classic s- I mean, it's, it's a little like the whole SaaS AI story. Do you want m- mid-level growth and massive profitability, or do you want more growth even at the expense of profitability? And right now people are opting for the latter, right? I mean, basically, instead of saying, you know, the Stripe price is wrong, the Adyen price is right or something like that, just saying is that it's the eternal venture question. How much extra in revenue multiple do you play for how many extra points of growth, right? If Adyen's growing 20... And I'm sorry, I knew these numbers, but we're starting early in the morning. I looked at them last night and the detail is gone, but I'd gone through the, uh... I had the sense of the relative order. If Adyen's growing at 15%, 20%, how much e- and you pay f- you know, 10 times, how much extra revenue multiple do you pay for something growing at 25%, 30%, right? And I think that, the, those are the contrasting narratives here, right? I do, you know, I do- I mean, look, Adyen's a wildly profitable company. It's, like, almost 50% operating margins. Growth slowed.

   5. HSHarry Stebbings52:51

      This is a company also that just wildly miscommunicates-

   6. RORory O’Driscoll52:55

      Yes

   7. HSHarry Stebbings52:55

      ... or communicates very little about their, how much cash they have, about how they're gonna use it. And I think alternatively, Stripe communicates in an incredibly strategic way, uh, while telling a brilliant narrative, ironically, given the fact that it's private. And there is this, there, I do think there is this narrative chasm, and I do think you can actually blame the communication of leadership at Adyen directly for a valuation mismatch aligned to that.

   8. JLJason Lemkin53:18

      Do they even have a podcast at Adyen management?

   9. HSHarry Stebbings53:21

      Do you... They should give up then. They should, they should give up the $40, $50 billion if they don't have a podcast.

   10. JLJason Lemkin53:25

       What do, what do the Dutch drink? Not a cheeky pint. They need something to drink. They're the Dutch. I don't know what it is. [laughs]

   11. HSHarry Stebbings53:30

       21% H2 2025 year-on-year revenue growth. Would you rather buy Stripe at $130 or Adyen at $40 or $50?

   12. RORory O’Driscoll53:39

       I would go with Adyen because the likelihood of it being mispriced is lower. Uh, to, to, to the downside, to the, to the upside is lower, right? In the sense of-

   13. JLJason Lemkin53:49

       Bold, Rory.

   14. RORory O’Driscoll53:50

       Yeah, you're trading on value. I mean, look, you, you, you, you have access to the data. You know it's wildly profitable. You can value it, right? On the other case, you don't have access to the data. It's a private market. It's a wonderful company. I admire that company enormously. This is not meant to... Again, you have to distinguish-

   15. HSHarry Stebbings54:05

       Disclaimer, people. Uh, for the callers that are listening to this episode, Rory is not in any way being detrimental to Stripe. None of his comments are seen as a criticism-

   16. RORory O’Driscoll54:14

       Yeah, no

   17. HSHarry Stebbings54:15

       ... and he is intensely sorry for even talking in any negative light about your company. Please continue.

   18. JLJason Lemkin54:19

       I'll tell you the simple reason I would take Stripe.

   19. RORory O’Driscoll54:21

       No, well, but that's the, the, the role of price is to equilibriate between the other issues.

   20. JLJason Lemkin54:26

       This, I'll tell you the simple reason I would take Stripe, and it kind of echoes in my brain from, from Michael Cannon-Brookes last week, right? Is just the, the flexibility and agility today you have from being private. In today's world, it's so stressful being public. There's so much going on. You, you heard Mike's point. I gotta be more profitable and massively invest in AI. I mean, he was great, right? He, it was such a great one, right? But you could hear that, and he was up for the challenge. Like, to his kudos, right, he's up for that challenge. But to not have to make that trade-off perfectly and be private, um, even his sort of cheeky comment of his buddy Cliff didn't have to deal, maybe he'll wait to IPO, [laughs] like that. I mean, I'd rather be Stripe. And, um, so I'm gonna bet on Stripe on this one, just because I think you have more flexibility today to respond to change.

   21. RORory O’Driscoll55:13

       As yet, my prediction is back end of this year we'll see the big three guys diving for the public line. Um, Anthropic, OpenAI, and SpaceX. And I don't think it matters when you're profitable like Stripe. You really can stay private forever. But companies that need big CapEx for the foreseeable future are gonna go public.Because, you know, I w- they've sucked up all the private capital, and now they need to go.

   22. HSHarry Stebbings55:34

       Isn't it a funny time where the public markets are both at the same time the most attractive place in the world for a company, where it has the ability to be memed or consumer loved like never before, but also at the same time be the single most hellish spot on Earth, and it's both the same time for two very different sets of companies?

   23. RORory O’Driscoll55:54

       Yes. It sucks.

   24. HSHarry Stebbings55:56

       Yeah.

   25. RORory O’Driscoll55:56

       It's, it, it's, it's, it's problematic for the public markets because, yes, you have this thing whereby you can only be in this pu- public market when you're pristine and your narrative value is high, and the problem with that is not all the companies all the time, which is why the number of public companies continues to decline, right? I do think at some point it has to be an easier place to be public while you're dealing with, you know, while, while you're dealing and managing transitions. If the idea is every time you have to deal with a problem, you have to go private to fix it, that strikes me as a little absurd, and it's a combination of lawsuit avoidance, board exposure, you know, I think indexing and very much shareholder bases that have little patience, activists. There's a whole bunch of reasons why it's shitty to be public, and the only good reason to be public is when you're hot, capital is dirt cheap, and there's lots of it. That's an okay value proposition for the best companies in terms of going public, but it's not a great value proposition overall.

8. 56:51 – 1:09:56

   OpenAI Buys OpenClaw

   1. HSHarry Stebbings56:51

      Uh, you mentioned OpenAI there as one of the companies diving for the line. Uh, very big news was, uh, obviously, uh, OpenClaw creator, I'm gonna probably mispronounce it, but Peter Steinberger joining OpenAI, um, uh, the open source bot becoming a foundation. How do we break this down, Jason? I'm so intrigued to hear your thoughts on this, 'cause you spoke about how Malt was running different agents and how you were experimenting with it. How did you analyze the news of the acquisition by OpenAI and Peter's joining OpenAI?

   2. JLJason Lemkin57:19

      Well, look, I don't... O- on the one hand, when it, when, when, when O- OpenClaw or whatever it was called back then, uh, Claude, ClaudeBot or whatever it was, at first, I was like, and I said this to one of the top CTOs I work with, I said, "You, you're gonna churn off this," because I was already there last summer when an agent deleted my entire database. And now basically what this app does is it's designed to break guardrails. It's designed to allow you to go onto your C drive and onto your desktop and access things that the, the, the, the leaders don't want you to do because they know it's a problem, right? And it's designed to r- to sort of run pseudo, not really, but pseudo autonomously 24/7, which Anthropic or OpenAI could do, but chose not to do. So I'm like, "You're gonna... There's no- there's- you're gonna churn off..." It's, it's, it's, it's a, it's a dalliance, right? It's a proof of concept. Um, probably still true. You're not seeing amazing applications in the last month that have come out of it, but, one, it has ignited the developer community like something we have not seen in a long time. So buying into that mojo has some value, right? Buying into one of the fastest-growing stars on GitHub, fastest-growing deployment. The fact that e- every cool engineer is playing with it, it, it may be ephemeral value, but it's real, right? The fact that Zuck lost the deal and cloned it on Manus yesterday pretty much shows you the technology itself is not that differentiated, [laughs] right? Now it's available mostly hosted as of last night on Manus. Um, so, you know, I, I, you know... Is it worth 100 million in, in, in, to OpenAI? M- maybe if that's what the price, I don't know what the price is. But, um-

   3. HSHarry Stebbings58:56

      100 mil. I think this would be worth a billion plus

   4. JLJason Lemkin58:58

      I don't buy that it was sold for a billion. I don't buy it. But, but maybe it's true. You, you have the numbers. Um, I don't-

   5. RORory O’Driscoll59:04

      I don't, do you? No. Tw-

   6. JLJason Lemkin59:05

      I think, I think it's about 100. Um, that would be my, my, my guess based on a, a number of things. Uh, maybe it's more. Um, obviously he probably turned down more from Zuck, right? Which is a, a great, which would cer- [laughs] which is a great insult. But, um, but I, I think what it opened everyone's eyes to is, and I think this is why Anthropic was so dismissive of it at first, was the, the safe thing is we don't want a t- semi-autonomous agents running. We don't want agents running rogue 24/7 with no guardrails, okay? Breaking guardrails, saying crazy... Like, this is the AI, today's AI nightmare. There's future AI nightmares coming, but, but it's too late. I think it's too late now. Like, now every developer wants to develop truly autonomous agents. And whether this platform will decline, right, if he gets bored and goes on to the next thing or not, I don't know, but the, the horse has left the stables for these autonomous agents, um, and the risks associated with them, and, and the risks associated with them. Um, there's no reason that, that, that, uh, that OpenAI and Anthropic couldn't have built this last year. They just didn't think it was safe. [laughs] They just didn't think it was safe, but it's too late now. Just like Elon said, whatever, c- six months ago, "I, I wish we could delay AI three to four years, but since we can't, I'm going all in on X AI." [laughs] I think this is the moment where we shouldn't be doing these, these auto- semi-autonomous agents, but we're, it's too late. We're doing them anyway. So the risk has been elevated, but the developers have just... Everyone's excited, so the amount of innovation that will come, it's hard to predict, right? When all of our apps run 24/7, making their own decisions, brea- deciding whether guardrails are appropriate, working around them, uh, the, the, you know, it's, it's-

   7. HSHarry Stebbings1:00:46

      Jason, what does this do for inference requirements?

   8. JLJason Lemkin1:00:48

      In theory, it's, it's, it... That's an untenable thing, right? That's why we're not only are we buying Mac Minis, we're buying Mac Studios that can run a full model on the Mac, the, you know, the 4,000 or $6,000 Max- Mac Studios. Um, but we'll figure it out, right? I mean, uh, you know, so I... Listen, there's a limit of my expertise, but you can run 24/7, right? And you can run on mini models, and you can run on, on, um... Sorry, I use it. What's the really cheap one from Anthropic? It costs almost nothing. So I, I think, listen, you can't run Opus 4 6 24/7 and not bankrupt yourself. Maybe you run Haiku 4 5 and you're actually not running it 24/7. You're, you're, you're, you're doing, you're running it every 20 minutes, right? And so you figure out the cost. Haiku's like a 20th the cost of Opus 4 6. So it's, it's manageable, especially for, for apps where there's budget.I, I don't know. I think we'll figure it out

   9. RORory O’Driscoll1:01:38

      Well, the, a- a- agreed. I thought it was awesome. I think the interesting thing is, is they're going, how does the overlap come between apps for which does budget and apps, you know, and an agent that has that much power on, you know, your desktop? [coughs] 'Cause when I mentioned to my IT guy that I'm planning to download and try it, he pretty much had a conniption, so obviously you just have to go and do your own little thing offline. But it will... I agree. It, it was like, wow, this is the agent untrammeled with no controls over what it can do on your desktop. I don't think they... That's obviously not a sustainable corporate thing, but as you say, Jason, it opened everyone's eyes to what you could do if you had this. So now there's gonna be a whole plethora of how do you have it untrammeled but with some kind of security guard, some kind of controls, and to get, you know, the positives of it without kind of literally having it nuke your entire hard drive or delete everything on your hard drive. But it's the way it's going. It was great.

   10. JLJason Lemkin1:02:35

       I mean, I know, like, r- well, I mean, one of the things people got excited about in, in Opus 4.6 was that it was easier to spawn a bunch of agents. You could spawn six or eight agents that would go off and do things at the same time the humans spawn. Um, I know, I'm sure it's true in Lovable too. I know on the next release of Replit, not only does it happen, c- 'cause they've built their own set of guardrails, but the agents do it at night. So in the ne- I know in the next release of Replit, when you log in the next day, it will have built three to four features for you on its own. That's coming, like, in the next release, in V4 of Replit. So imagine that happens to every app, where you go to bed and you wake up in the morning and it's done all your general ledger, it's done all of your what- whatever. And, and you can say maybe it'll be slower to accounting this and that. It will have built all of your assets. It will have rebuilt your entire website. That might be a threat to Canva when when you go to bed and you wake up in the morning, it's built four versions of your website. I mean, r- I know... And I'm not saying others won't do it, and I'm saying Vercel and Lovable, but I know this is in the next release of Replit. That's pretty disruptive. And OpenClaw is kinda like the, the, the hippie version of that. It, it, it's cool. We may not all use this exact product as it [laughs] is today, but, uh, the idea of autonomous agents doing work for us, I mean, it's, it's coming in 2026, and it, part of it is pretty scary.

   11. RORory O’Driscoll1:03:46

       In one sense, you're right. Anyone could have done it, but maybe in the big labs they said you shouldn't, and you think this guy just put it out there and everyone loved it.

   12. JLJason Lemkin1:03:53

       Yeah, that's why Anthropic threatened to sue them. They're like, "This isn't safe. This is the last thing we wanna do. Get our name off [laughs] this horrific thing that's gonna go and, and released." And just, you know, because when, when both OpenClaw and, and Mopebook immediately published everyone's private keys, private passwords, private... They're like, "This is exactly why we have a safety team. [laughs] We're going to sue you if you use our name. This is terrible." But then every single developer thought this was, was, was off to, you know, off to the Apple Store, uh, or worst case, Best Buy. They're buying Mac Minis and Mac Studios 'cause no one was more excited to spend nights and weekends building these things. And, uh, I, that's why folks are like, "Anthropic fumbled this." I mean, maybe it's just the worl- like, they thought this was not the wrong thing to do, completely unsafe. Um, and, and Zuck and, uh, and Sam Altman had another month and a half to think on it and said, "This is a movement." Like, this is a frigging movement in AI.

   13. HSHarry Stebbings1:04:46

       Well, well, actually, let's... Do you think Anthropic fum- fumbled the bag by not investing in this, by not trying to buy in?

   14. JLJason Lemkin1:04:52

       I just think the world cha- this went from something that is a seemingly goofy guy with a shit-eating grin on his face and can bench press 400 pounds, and it seemed like a goofball guy almost mocking us with this, and, and, and your legal team, and it's unsafe, and Dario's about safety, we don't want this on our platform, to, to, like, utterly the coolest thing that's been built in six or eight weeks. I just think that everything changed. It's, it's, it's just like investing. I don't think they fumbled. It was hard to tell at the time. Maybe threatening to sue him wasn't cool. Maybe the legal department could chill on the [laughs] next one and just instead of the cease and desist, maybe send [laughs] maybe just chill for another couple weeks. Maybe that was the error. But I, but I think it was too early to know it would be a movement. But it just, it just... If you talked to CTOs in your portfolio, it just all... Whatever it was, it was only like two weeks ago, right? Just all of a sudden everyone was using this two weeks ago. Everybody. And I'm like, "You're not gonna like this, man. It's gonna delete your database. It's gonna steal your credit cards." [laughs]

   15. RORory O’Driscoll1:05:48

       And they're like, "But look what it can do."

   16. JLJason Lemkin1:05:49

       But it's so cool. But, um, okay, what's the great app that you did? Well, I built a TikTok and it sent, it sent an email for me last night. Oh, great. [laughs]

   17. RORory O’Driscoll1:05:58

       For what it's worth, I, I think that's a great take, Jason, 'cause you're right. My initial was, oh my God, they've... Anthropic fumbled it, but you're exactly right. You, you set yourself up as a safety company. You're extremely careful about what you allow to have happen. That has been your brand and a wildly successful brand. You're right. The idea of some cowboy pretty much half taking your name and doing almost... I can see why they reacted as if they're being stuck, you know, with a stick, right?

   18. JLJason Lemkin1:06:22

       The fact that Manus built this in one night said it wasn't about building the technology. You could do it in one day, and it's just we underestimate how important these guardrails are. They're doing everything from, from the, from, you know, the, what, what the agent says to folks that have suicidal thoughts to how they're interacting with your data. You know, the easiest thing in the world is just to take a guardrail off and sell... It's like selling data. Like, the, one of the easiest things to do is sell data you're not supposed to sell, right? Data brokers. Another thing that may be easy to explode is, is removing a guardrail you're not supposed to remove. You might get a million developers to use that in two weeks. [laughs]

   19. RORory O’Driscoll1:06:51

       See Glock for details. Yeah.

   20. JLJason Lemkin1:06:53

       Yeah.

   21. HSHarry Stebbings1:06:53

       Who is the responsible provider of guardrails, do we think? I don't wanna get into, like, too into it, but is it, you know, the, the vendor who's offering the agent? Is it the data holder which holds the data, your Salesforce, your ServiceNows, your you-name-its? Or is it an independent third party that sits as a layer between?

   22. JLJason Lemkin1:07:11

       I think we're learning, right? I, I, I think, I think there's a lot of responsibility. I've talked with, I've talked with a lot of the chief AI officers and others at some of those public companies, and there is a weight of responsibility on their shoulders for what these agents do that the guy from OpenClaw don't have, okay? He's, he don't have that weight on his shoulders. Um-

   23. RORory O’Driscoll1:07:28

       And were they, Jason, were they tech providers or tech users? Were they customers of these agents?

   24. JLJason Lemkin1:07:33

       Some of the top chief officers at public B2B companies have a lot of weight on their shoulders about, about responsibility for, for their own guardrails, which are much more narrower than what, uh, OpenAI and Anthropic have. I mean, you take the guardrail off, uh, uh, OpenAI can shoot a gunYou know, hook, hook a gun up to your LLM and have it, and, and change the outcome of the LLM and, and say, "Someone's threatening, uh, my home." Uh, uh, and it, and it, it takes it the other way and it shoots... It could shoot a person. Ask your LLM if it could do that. It could say it's possible, right? You gotta have the guardrails [laughs] especially if you hook it up to the real world. You, you laugh, but it's not that funny. Take someone, take, take someone that's, that's angry in the world and allow an LLM to control that, crazy things could happen. So I think the weight of responsibility is huge for guardrails. It, it is, it's massive.

   25. RORory O’Driscoll1:08:20

       Leaving gun comments aside, 'cause I think it's a little far-fetched right now, you are right. If I'm a B2B software company and my agent goes from a very constrained agent that I'm selling to third parties, goes from a very constrained agent to something like, you know, the, the, the, the slightly safer equivalent of, you know, OpenClaw, you're selling a, a software product to your customers that can exfiltrate all their data. You could make a 24-hour career-ending, company-ending move here. You're right. So you are, I actually, you... Now that I think about it, those guys are bearing it. 'Cause Harry, to your point, there's two separate questions. Who's, I mean, who's, you said, who's responsible for this? I actually think it breaks up to who's gonna be fired if they get it wrong, and then what software will there exist to help ensure they don't get it wrong? And those are separate questions. My guess, the answer to the former is anyone responsible for initiating these, no one's gonna care whose fault it is. If you let it into your company and it goes crazy, you'll be blamed. The interesting question now at this point-

   26. HSHarry Stebbings1:09:15

       I, I think there's multi-layered to that-

   27. RORory O’Driscoll1:09:16

       Yeah. Go ahead

   28. HSHarry Stebbings1:09:16

       ... because lots of different, lots of different people can bring in software, but CISOs, chief security officers, will be blamed also. Like, there's multiple-

   29. RORory O’Driscoll1:09:24

       Absolutely. So my guess is even as we speak, there's people building really compelling agent-first security products to make darn sure that doesn't happen.

   30. JLJason Lemkin1:09:34

       Or planning.
9. 1:09:56 – 1:12:46

   Thrive's $10B Growth Fund

   1. HSHarry Stebbings1:09:56

      there, and then Thrive and the $10B. Now, $9B for growth. A- actually, I know it seems less than Andreessen's 15, but actually their growth vehicle is bigger than Andreessen's at six. My question on Thrive is just, like, how much bigger funds do we get in venture? Like, is Lightspeed and GC gonna come out with 20?

   2. RORory O’Driscoll1:10:16

      I mean, again, as we've said, y- thinking of it as early-stage venture is just a mistake. It's, yeah, these... Again, how big should a fund be when companies raise $30B rounds? Now, there's only a few companies who raise those kind of rounds, but if, you know, if there's four or five companies valued at north of $100B, a 10% for that, which is, you know, the two model companies, SpaceX, Stripe, and there's, and Databricks. Again, when you deal with $100B-plus market cap companies, potentially one of them as much as a, a, a trillion, you know, a typical, a 5% ownership position is 5 billion bucks. It's just math, right? So as long as these companies are staying private, the growth funds to finance them are gonna get bigger. It's as simple as that. I mean, I think we said it in one of the shows early on, Thrive has done an amazing stock-picking job of backing Stripe, of backing Databricks, of backing OpenAI, and of backing them at scale. The companies need the money. The investors who have money wanna get in those companies. Stripe, um, Thrive is in the middle saying, "I'll make this happen," right? I go back to my comment, in a more sensible world, all these companies would be public, and we wouldn't have to pay all these fees to just, you know... [laughs] Someone could buy Fidelity small cap growth and get, um, actually in this case, mid cap and large cap growth, pay 50 bips and buy the same stock. But in a world where these companies stay private, the need for someone like a Thrive with $10B is acute, and they've stepped up and filled the need, and there's probably room for more.

   3. JLJason Lemkin1:11:44

      Plus, it, it makes it simple. When you're Thrive and your model is to, to, to do every round, right? Not to, not, not to, not to, not to back off when the number gets big, your fun- your fun becomes fairly simple.

   4. RORory O’Driscoll1:11:54

      Yeah.

   5. JLJason Lemkin1:11:55

      You quickly consume whatever the maximum amount your winners can consume, where you have your super pro rata. It's just, if you don't, if you don't beg off at the $380B or the $760B round, um, y- it actually makes your fund construction much simpler. Get into the winner and do all of the rounds. [laughs] Just do all, all, all of them at the maximum you can. It's a, it's a, as long as the numbers work, it's a very calming model. The, the partner meeting's very simple. Anthropic also wants to raise at 8- 8- $800B. We can do $3B in. [laughs]

   6. RORory O’Driscoll1:12:26

      It'd be fair.

   7. JLJason Lemkin1:12:26

      We don't have to... It's just, it's our model. It's our model. We're in. Next, Harry has, Harry has this AI agent company. I don't know about that one, but-

   8. RORory O’Driscoll1:12:33

      Yeah. No, I'm gonna give them, I'm gonna give them credit, though. They actually specifically, unlike some of the other firms that have invested in both, they specifically are a fund that said, "No, we backed OpenAI. We're not gonna back Anthropic." So they at least-

   9. JLJason Lemkin1:12:44

      Okay. I should've said OpenAI was raising at $1.2

   10. RORory O’Driscoll1:12:45

       ... they're at least being monogamous

10. 1:12:46 – 1:17:26

    Arif Janmohamed Leaves Lightspeed for New Firm

    1. RORory O’Driscoll1:12:46

       here.

    2. HSHarry Stebbings1:12:46

       One thing that I do think is interesting is actually in the same week we saw Arif Janmohamed, who I'm, I'm sure you guys know just through years in the Valley, I, I've known him through years in the Valley, announcing that he was leaving and starting his own thing. We saw Max Gazool leave CRV and start his own thing, Striker. And I guess the question to me is as we start seeing these AUM gatherers to the extreme, are we just gonna see a continuing flow of these great operators within firms? And I, I really respect Arif, I'm sure you guys do, leaving in the desire to return to early venture.

    3. JLJason Lemkin1:13:19

       Desire. It's just, I mean, I, listen, I don't know. It's always about money. I mean, Peak, Peak XV almost i- imploded, right? Because the, the managing partner wanted to keep all the economics, right? Um, just the other day. It's, it's not about getting back to... Who wants to get back to early stage? I wanna do the Anthropic round. [laughs]

    4. HSHarry Stebbings1:13:34

       [laughs]

    5. JLJason Lemkin1:13:35

       Give me a fucking break. I don't wanna, I don't wanna, like, have to pick which, which accounting software in four years might break out for AI. No one wants to do that. [laughs] Just show me the carry. [laughs]

    6. HSHarry Stebbings1:13:46

       I, I don't think that's true, though. I, I do think there are people who've made a... You know, I'm su- Barney, I'm sure Arif's made a fuck ton of money.

    7. JLJason Lemkin1:13:52

       Yeah. Of course he's made a large ton of money, right?

    8. HSHarry Stebbings1:13:54

       And I think he loved working with founders, and I think he's bored of the bureaucracy of a big firm, and he's like, "I wanna go back to picking cool founders and having fun."

    9. RORory O’Driscoll1:14:02

       Yeah, I think there, there's definitely some of that. I mean, Jason, your cynicism is often warranted and is often overlaid. But you know, first of all, there's the human need to want to do your own thing, which you just gotta respect. You know, you, you're very post-economic, right? What- do you really wanna be sitting there with five other people having an opinion on your deals? At some point you kinda go, "Maybe I just don't wanna do it this way." Right?

    10. JLJason Lemkin1:14:23

        You might if you like them.

    11. RORory O’Driscoll1:14:25

        You might if you like them, but, and then, but then if they have too many opinions, I finally not like them. Look, the two of you guys are solo GPs, so I can speak to this.

    12. JLJason Lemkin1:14:32

        Yeah.

    13. RORory O’Driscoll1:14:33

        But my point is, a- again, there's a lot of... My point is simply, it's a little bit reductionist to say it's about the money, though that can be a part of it. There's also a sense of autonomy, and then there is a sense of if you're running a big firm, especially a multi-stage firm, first of all, as a senior lead, a lot of your time is spent on firm management stuff is my guess. And then on top of that, you're right, 90, 90% of the, of the decision-making is about, you know, do you, in Lightspeed's case, brilliantly lead the $60 billion pre-round at Anthropic, and it's not about do you put $10 million into this early-stage founder. And if that's what you wanna do and you've made a gazillion dollars, go do it.

    14. JLJason Lemkin1:15:12

        For, for sure. For, for sure. It, uh, there's no question that, I mean, I certainly, if it were me and I was a partner at Lightspeed and I was the same person I'm today, I would, I would retire into my own fund, right? Just to not deal with the bureaucracy, right? Um-

    15. RORory O’Driscoll1:15:26

        Jason, there are well one firm that'd get to you first.

    16. JLJason Lemkin1:15:29

        Yeah. But, but the thing is-

    17. HSHarry Stebbings1:15:30

        They'd say you'd be pushed. [laughs]

    18. JLJason Lemkin1:15:31

        But the thing is, maybe they're kind, but walking away, like, uh, very few firms, I'm sure Scale's different, very few firms, and my-- and Harry has more data than me, are kind with carry vesting when you leave. Very few firms are kind. Okay? Uh, I mean, Chamath, all his ex-partners have sued him. M- Mamoon sued him. The Grok guys, he sued. Like there's... I'm just saying people aren't as kind to carry when you leave. I'm not saying Light- now, Lightspeed might be the opposite. They might be the kindest, and I know some are kinder than I would've expected. But my, my meta point is it's not simple to walk away from vested carry. It's not simple. It's not... These, these are carries. Many funds now vest over 10 years. Some even backload carry, right? Because they wanna penalize the folks that leave. It is not free to walk away [chuckles] in many cases from a successful fund, where you literally could just half check out.

    19. RORory O’Driscoll1:16:23

        Okay. There is a significant economic cost at any point. I mean, look, especially a successful, and the more successful the fund, and Lightspeed's having an amazing run, the more-

    20. JLJason Lemkin1:16:31

        Yeah

    21. RORory O’Driscoll1:16:31

        ... the more the cost is. You're right. Anyone leaving is gonna... Even it- even if while you're walking, even if there's nothing kinda crazy, even if there's no loss of carry, you're still walking away from unvested embedded value, right? That's, again, back to being post-economic.

    22. JLJason Lemkin1:16:45

        And you gotta start from scratch.

    23. RORory O’Driscoll1:16:46

        Oh, yeah. It's a lot of work.

    24. JLJason Lemkin1:16:47

        As great as it is to work with these early-stage founders, I'm walking away from a couple hundred million of carry. I get to start from scratch, and maybe in 18 years I get back. As long as you start when you're 18, like Harry did, it's easy, 'cause then at 34 you're back to where you were. Um, but, uh, Arif looks pretty young, but I don't think he's 18. I mean, he's pretty fit. He's got the hair. But, uh, 18 years could be a while.

    25. HSHarry Stebbings1:17:09

        Dude, starting young was such a competitive advan- I was lucky. I, I didn't realize how lucky it is starting so young. Um, guys, we can choose one more topic. Is there one more topic that we have to discuss? Netherlands, Highspot, Anduril, Workday. Any that jump out?

11. 1:17:26 – 1:25:15

    Workday's Founder Returns as CEO: Will it Work?

    1. JLJason Lemkin1:17:26

       You know, I, I mean, I think you, you're, you have a good stuff. I, I don't wanna overdo the Workday thing, but man, it is interesting that Anil had to go back in, like, eight months to run Workday. It's a pretty fast boomerang and, uh-

    2. HSHarry Stebbings1:17:37

       What, what is that? What's it called? It's fucking ghetto

    3. JLJason Lemkin1:17:38

       ... you know, and Owen at Andreessen makes the point constantly that this is the age for the founder CEO, and I, I, I agree with him 7,896%, right? You think Anil wanted to go back as the solo CEO? [laughs] Just as much as Daniel wanted to go back to UiPath. I mean, these guys were chilling. [laughs] But he couldn't even make it a year, right? Uh, and so it goes to Ro- Rory, Rory's earlier point, I'm not challenging you, but your point that some folks' spaces, uh, will see the impact more slowly. You would think Workday would be one of those spaces that isn't gonna be disrupted overnight, and Anil had to come back as CEO? He had to come back?

    4. RORory O’Driscoll1:18:15

       That's a fair, fair pushback in what it says-

    5. JLJason Lemkin1:18:17

       Man

    6. RORory O’Driscoll1:18:17

       ... because what I do agree is that, and you know, again, look, talent is back. Widely talented executive. But what, what you're seeing here maybe is a combination of what the problem is not is go to market, what the core problem is product roadmap. And typically, that's where a founder can do really well, right? So I, I c- I, I can s- i- imagine that that's the narrative here, and it probably makes sense. Because, yeah, Jason, you're right. It is interesting. I would've guessed HR software and financials would have had a long lead time to adapt to AI, and it's not obvious that some... I, I don't think something AI agentic is gonna displace the whole damn thing tomorrow. So it is a canary in the coal mine that they felt the need to make that change, and I probably should go away and think about that a little more. You know, what... It'll be interesting to see. Was it, is it product roadmap anxiety? Is it identity crisis anxiety, or is it something specific? It would be interesting to see then what changes in 12 months, and that's probably how you judge this thing.

    7. JLJason Lemkin1:19:15

       I think a lot of these boards don't w- want this, too. They want the founder back right now. There's too much disruption. And you can't... This was Owen's point, too. You talk to folks at Salesforce. This is why you should bet on Salesforce of, of... I mean, listen, most, most public B2B companies are founder-led, right? Most of them are. But the amount of stress in that organization is so high at Salesforce, and I, it's a good thing because Mark is driving mass... Now, we can, we'll see whether it's successful, right? But the amount-- He's driving more change the last eight months than the decade before that, and who but a founder could drive that level of stress and anxiety and change across the company? Like, everyone, everyone thinks they've got to step it up, right? And, uh, it's just as an outside CEO hanging out at the SKO, RKO in Cancun, it's just hard to drive that change.

    8. RORory O’Driscoll1:20:01

       I, I think you're right. I mean, it's funny, and I was thinking about this, 'cause I normally, I tr- I try and be contrarian, and one of the things I try and say is, "Is that really true? Can it just be the founder?" You, you know-You love founders, you back founders, but you also wanna try and not over-dramatize or over-attribute uniqueness to founders, 'cause, you know, at scale, companies all have to be run by non-founders. But I've decided in this case you're right, because the thing is, if you have to do a turnaround with a problem of a business challenge, I can totally see a hired executive saying, "You know, we've got a cost problem, we got a go-to-market problem, we got a segmentation problem." All those things are classic playbooks, and someone will... You know, there's lots of folk who get it. But if the problem is the core thing you built has to be changed for a new way of building it, then having the memory of how you built it, what were the business choices you made and the kind of customer choices you made 10 or 15 years ago when you were building it the first time, my guess is you're right. That's a problem where uniquely the founder, if they are flexible, can say, "I know the trade-offs I made before. Someone from the outside would take two years to even figure it out. I just know can we do it this way." So I'm coming round... So th- in this case, I think you are right, Jason, is that you just come to the table... Maybe the way to crisply articulate it is what you don't need in this kind of situation is generic business skills. What you need is massively specific knowledge and skills, and courage to make the changes that you know you have to make. And that is where a founder has advantage.

    9. HSHarry Stebbings1:21:29

       Do you think it will work bringing Anil back? The board is clearly trying to increase share price over the long term. Do you think Anil will be able to increase the share price significantly in a 12 to 24 months period?

    10. RORory O’Driscoll1:21:43

        I don't have a developed opinion, because I think that, again, it's back to the I don't know if there's a magic p- I don't think there is a magic pixie dust that can make the growth rate of this category change from what it is now to something dramatically different, right? It's not even like the Figma example where you say there was an adjacency and if you pick it up you'll get another 40% lift. I think this is a mature, established category. Yes, you've gotta add, uh, AI, um, you gotta tell the story, but it's not obvious to me that there's a magic fix. It may well be a combination of a whole bunch of fixes, including on product, add up to a better growth rate. I don't know. I don't have enough opinion to-

    11. JLJason Lemkin1:22:22

        I think at least he will drive faster change, and he'll make quicker bets. And whether that, whether he's the Jobs coming back to Apple or Schultz coming back to Starbucks, we don't, we don't know. I think a lot of these bets won't work. But, uh, I'd rather have him running Workday or Daniel running UiPath when massive ch- mass... Because here's the thing. The, the amount of resistance to change is so high on the employee base. It- this is the thing. It's not just that the founder can make these fa- these just two-year decisions in two weeks, to Rory's point. It's not just Michael Cannon-Brookes' point that he can make five-year decisions and today decisions at the same time, which an outside CEO struggles with, right? Because if he makes five-year decisions, you lose your job if you don't see growth, right? It's not just that. Those are hard enough. But no one wants to do the work in the age of AI. You gotta go talk to the regular VPs at these tech companies. N- none of them wanna do the work. Yeah, none. So the amount... It is just so hard to drive change when most of your employees do not wanna do what it takes to change. And you can say that's not true, but I talk to senior execs at these companies all the time. They n- everyone wants to, to, to, to w- to do the same job of 2023. That is human nature. They all wanna do it. And, and the smart folks actually are quitting all these companies, and they're going to hot AI companies that are hiring recycled SaaS executives where it's just easier. That's what you should do. You should immediately quit these public companies and go to the hottest AI companies where the product almost sells itself. Here's the thing. The 2023 t- 2022 toolkit works perfectly well at the hottest AI companies. [laughs] It really does. It really does.

    12. HSHarry Stebbings1:23:55

        I, I, I re- I released a show with the head of sales at, at Eleven Labs.

    13. JLJason Lemkin1:23:58

        It was good.

    14. HSHarry Stebbings1:23:59

        It was quite insanely popular show. I mean, I can't even tell you how insanely popular it was. And it, it, uh, the thing that everyone oscillated around was the 20X sales comp. If you wanna succeed in Eleven Labs in the sales team, you have a 20X on your head. If you don't hit it, you're out.

    15. JLJason Lemkin1:24:16

        Yeah, but I was with another one, another, uh, another AI leader where the sales team has $4 million quotas. That's not that different than the Eleven, that, that space of the Eleven Labs map. They just rolled out their, their 2026 plan. It's a $4 million quota.

    16. RORory O’Driscoll1:24:29

        A- and I think the best... I, I saw the commentary on that, and as someone said, that doesn't... You know, it's not that you're hi- 'cause the typical, you know, SaaS quota is around a million bucks, right? It's not that they're hiring 4X better salespeople at Eleven Labs. It's that when people wanna buy your shit, it's easy to sell it, right? It gets back to the same thing. It's all about momentum in the short term. If the cus- and the customers have woken up and said, "These are the two or three things we wanna buy in 2025 and 2026," and if you're in those things, you can sell, you can grow like crazy, your stock price can go up, and if you're not, it's damn hard. But it's, you know, it's just the constant reminder of just keep it simple. Do... Invest in companies that are in markets that are exploding right now. End of complex analysis.

12. 1:25:15 – 1:28:58

    Which Founder Returns Next: HubSpot, Twilio, Gitlab?

    1. HSHarry Stebbings1:25:15

       I agree. Fi- final one, and it's a bet.

    2. JLJason Lemkin1:25:18

       Oh, God.

    3. HSHarry Stebbings1:25:19

       Okay? Oh yeah, don't worry, Rory. It's gonna be great, okay? Uh, which public company fou- what founder will return to the CEO seat which they left next?

    4. JLJason Lemkin1:25:30

       I'd say it ain't gonna be Dustin Moskovitz, man. He just left the keys on the table.

    5. RORory O’Driscoll1:25:34

       Yeah.

    6. JLJason Lemkin1:25:34

       "I quit. This job is stressful. I don't like people. I quit." [laughs]

    7. HSHarry Stebbings1:25:40

       Yeah, dude, and with an Anthropic holding like he has, I totally don't blame him.

    8. RORory O’Driscoll1:25:43

       Yeah.

    9. HSHarry Stebbings1:25:44

       Like, peace out. Guy Halligan, like, sorry, Rory, you can recuse yourself from this conversation.

    10. RORory O’Driscoll1:25:48

        I know nothing. I mean, when we're long since out of that. I think-

    11. HSHarry Stebbings1:25:52

        Yeah, yeah, but like, you know, you're looking at 12 and a half billion now market cap for them, down 45% in the last six months. Halligan sitting there. I love Brian. He's amazing. We all do. Amazing

    12. JLJason Lemkin1:26:03

        You know, it's not fair because I, I mean-

    13. RORory O’Driscoll1:26:04

        Yeah

    14. JLJason Lemkin1:26:04

        ... maybe I c- HubSpot and GitLab are the only candidates I can think of where there's just not enough boomerang people-

    15. RORory O’Driscoll1:26:12

        A good sample set.

    16. JLJason Lemkin1:26:13

        I don't think-

    17. RORory O’Driscoll1:26:13

        Yeah

    18. JLJason Lemkin1:26:13

        ... Brian's going back, and, and Sid is, Sid seems o- you know, he had his cancer scare, but he seems off on his own initiatives. But I can't think... And maybe I'm missing so- I can't- there just aren't enough. Like, there's too many Michael Cannon-Brooks out there for this, for... We, we, we... There's not enough candidates. [laughs]

    19. RORory O’Driscoll1:26:26

        But that's, that's exactly right. And, you know, another candidate who obviously won't happen, but it was, he was a great guest, Jeff Lawson, who was at Twilio-

    20. JLJason Lemkin1:26:34

        Yeah

    21. RORory O’Driscoll1:26:34

        ... is now like, "I'm doing Fusion." You, you people knock yourself out with your, like, telco stuff.

    22. JLJason Lemkin1:26:39

        Yeah, Jeff could've been one-

    23. RORory O’Driscoll1:26:39

        I'm not-

    24. JLJason Lemkin1:26:40

        ... if the ball had bounced another way, but he's not l-

    25. RORory O’Driscoll1:26:41

        He's not

    26. JLJason Lemkin1:26:41

        ... yeah, likely going back, right?

    27. RORory O’Driscoll1:26:43

        And I, yeah, and given that the activists were mean to him, why would he bother? Again, back to the same thing, why would I flog my way through that one when I could-

    28. JLJason Lemkin1:26:50

        Well, I think you'd get over the a- like, I, I mean, Jeff was-

    29. RORory O’Driscoll1:26:52

        Yeah

    30. JLJason Lemkin1:26:52

        ... very direct. It was a great sh- it was a really great show.
13. 1:28:58 – 1:33:43

    Is Monday.com a Screaming Buy?

    1. HSHarry Stebbings1:28:59

       Monday at 3.8 billion, is that a buy or not?

    2. RORory O’Driscoll1:29:03

       Again, I, I'm... The thing is, Ha- can make a comment here. Let me tell you why I'm... And I'll answer it very quickly.

    3. HSHarry Stebbings1:29:08

       Well, uh, well, I'm gonna give you some detail 'cause I know what you're gonna say.

    4. RORory O’Driscoll1:29:11

       No, and stop.

    5. HSHarry Stebbings1:29:12

       But at one point-

    6. RORory O’Driscoll1:29:12

       Before you do, you, you have to give... 'Cause the, the interesting comment is this: You can answer... Narrative stocks you can get away with on a momentum story, right? So you're right, is that you could have asked me about pick an AI store. I'm like, "Yeah, the market's big. They're the leader. Buy at any price." You're right. When you're dealing with something like Monday, you gotta look at the revenue, the growth rate, the free cash flow, the SBC, the DCF, and it's a grind, and you're still playing for 15% IRR.

    7. HSHarry Stebbings1:29:37

       All right, we got 1.25 billion in revenue at 27% year-on-year growth. Okay?

    8. RORory O’Driscoll1:29:44

       Yeah.

    9. HSHarry Stebbings1:29:44

       Uh, 2026 guidance, uh, expects 1.45 billion. Um, non-GAAP operating income 175, 14% operating margin. Would you buy or sell?

    10. RORory O’Driscoll1:29:58

        The free cash flow is? What did you say the free cash flow is?

    11. HSHarry Stebbings1:30:02

        Uh, uh, non-GAAP operating was 175, 14% operating margin.

    12. RORory O’Driscoll1:30:08

        Yeah, so te- I mean, it's about right. It's like 10 times plus or minus. It's 1.7 billion. What's the stock pos- And you said the market cap's three billion, and I bet you they have a billion in cash.

    13. HSHarry Stebbings1:30:17

        Yeah, it's three and a half billion.

    14. RORory O’Driscoll1:30:19

        Of market cap and it... Yeah, I mean, this, it's the classic... Maybe to make the positive one, there's two questions. If you can manage the SBC, which is a minor but important question, and the major question is if you... 10 times cash flow for something growing sustainably at 20% is wildly cheap. The question is, it goes back to Jason's comment, is how durable is that growth rate? If you have a product roadmap that can survive in the age of AI, that's probably an underpriced stock. If you have a pro- if you're destined, as Jas described earlier, to the gradual attenuation of your business, then, you know, you have to price this thing as if it can go away entirely, and you end up in a different place. So it all boils down to product roadmap, product direction, the age of AI.

    15. JLJason Lemkin1:30:59

        I mean, if you believe it's durable, which we all did in December, then the fact that the stock's down 51.3% of the year makes it the screaming buy of the value stocks of the public cloud companies. If you believe... And we all believed it was durable just in December. [laughs] Has, has it really ch- I mean, I do believe it's changed for this whole conversation, but if you don't believe it's changed that much in f- 47 days, this is the greatest buy that there is, is Monday. You should just lo- load up on Monday, especially... And you have great founders. This is still a founder-led company. You have two founders at the top, incredibly driven, incredibly ethical, who know their market cold, who are still selling primarily outside of tech, right? Which has less disruption. Um, how could you... If you believe the revenue's durable, how could you not buy this one? You must be saying, "We believe that the, the, none of this revenue is durable anymore."

    16. RORory O’Driscoll1:31:49

        How do you... Do you have a dur- do you have a durable matrix in your head, like, like... I'm just gonna do durability of this versus Salesforce. Let's take Salesforce 'cause it is the original St- SaaS. Like, let's make benchmark of one. Do you think this is more durable, less durable than Salesforce?

    17. JLJason Lemkin1:32:04

        I am-Long on Salesforce as a platform for agentic agents for, for real. But the fact that we are at 10% growth with a lot of inorganic acquisition and a lot of price increases doesn't suggest high durability, does it? Um, and, and by... And I mean durability means it has to organically grow. Durability doesn't count as dial-up at AOL shrinking every year, okay? That's not durable that we have a 30-year business. Durable has to mean f- durable always meant for B2B, like we have over 100% net revenue retention for real, not just based on price increases and threats. And that means no matter what we do, next year we're bigger. The only question is how much bigger. That's durable, right?

    18. RORory O’Driscoll1:32:44

        Harry's waving his hand as if to say-

    19. HSHarry Stebbings1:32:46

        I'm going, "Gi- give us an answer, dude."

    20. JLJason Lemkin1:32:49

        What do I think? What, what's that?

    21. HSHarry Stebbings1:32:50

        Come on. You- you're being a Rory.

    22. JLJason Lemkin1:32:51

        Me-

    23. HSHarry Stebbings1:32:51

        What's more durable? Is it Monday-

    24. JLJason Lemkin1:32:53

        ... durable-

    25. HSHarry Stebbings1:32:53

        ... or Salesforce?

    26. JLJason Lemkin1:32:55

        M- sorry, the question is Monday or Salesforce?

    27. HSHarry Stebbings1:32:57

        Yeah.

    28. RORory O’Driscoll1:32:58

        Yeah.

    29. HSHarry Stebbings1:32:58

        What's more durable?

    30. JLJason Lemkin1:32:59

        I think they're the same, we just, just SMBs happen faster. That's the reason it's a, it may make sense to be more skeptical of Monday than HubSpot only because SMBs buy faster, they churn faster, everything's faster. ServiceNow will be the slowest. 99% GRR with five-year contracts? I mean, you know, it'll, it'll, it'll be the next generation that'll really see that de- decline, right? Five-year [laughs] contracts, 99% GRR. Um, you know, the, the, the, the Mondays will churn faster than HubSpot, right? And HubSpot will churn faster than Salesforce. It's just, it's just delayed churn, right? It, that, that's the thing, is, you know, ServiceNow takes you 10 years to get off that platform.
14. 1:33:43 – 1:36:50

    Jason and Harry Bet $200,000

    1. HSHarry Stebbings1:33:43

       it's down 50%."

    2. JLJason Lemkin1:33:44

       Look, I gotta tell you. So, so I wanted to do for the show, uh, I think two weeks ago I wanted to go and buy 200 grand for fun of four stocks, okay?

    3. HSHarry Stebbings1:33:52

       Yes.

    4. JLJason Lemkin1:33:53

       Uh, Shopify was my top one, okay? And I wanted to do four. And I thought it would just be fun because I'm like, "Look, worst case it goes down another 20%, I lose 40 grand, but I can write off the loss. It's really 20 grand in California 'cause our taxes are 50%." I'm like, "This'll be fun for the show." [laughs] And I could, I did it last year actually. I don't wanna tell you what the companies were 'cause Rory invested in some. But, um, I couldn't do it. I couldn't do it, and I love Shopifies because I just, I don't see the floor. This was me and my gut. Like, I just wanna do it for fun, for the con- for the content, for the content.

    5. HSHarry Stebbings1:34:20

       You, you don't see the f- oh, dude, I'll, I'll match you. You don't see the floor for Shopify?

    6. JLJason Lemkin1:34:24

       I did. I was gonna buy it right before earnings, and it crushed earnings, and it didn't help.

    7. HSHarry Stebbings1:34:31

       Bummer, isn't it?

    8. JLJason Lemkin1:34:32

       Yeah. And I'm like, "Well..." And then I said, "You know what? I wanna do this for the show for the content, but I'll wait until after earnings," and then it blew out out the quarter, and it didn't help. [laughs] And I'm like, "I'll still do the bet," but I, I thought it'd be a fun... But, but my, my point, my honest point is I was gonna do it for the content-

    9. HSHarry Stebbings1:34:47

       I understand

    10. JLJason Lemkin1:34:47

        ... and I didn't actually do it.

    11. HSHarry Stebbings1:34:48

        I get it, but-

    12. JLJason Lemkin1:34:49

        Like, I'm like, I, I didn't do it

    13. RORory O’Driscoll1:34:50

        Yeah, you, you, you, you pull the trigger. You couldn't, you just looked at it and said-

    14. JLJason Lemkin1:34:52

        Yeah. And, and the worst exposure was, uh, was 20,000. I'm not saying it's not nothing, but it's not as dramatic as it sounds, right? Because, you know, it c- it's not gonna go to zero. I'm like, "And why the hell didn't I do it?" It's just because I, I couldn't see it. [laughs] I couldn't see the bottom. But we can do it for next week. We could all, we could do the 200. We gotta pick four candidates.

    15. HSHarry Stebbings1:35:11

        Oh, shall- okay, okay.

    16. JLJason Lemkin1:35:12

        We gotta pick four candidates.

    17. HSHarry Stebbings1:35:13

        Ja- Jason, what, what, what, what, what are you getting at?

    18. JLJason Lemkin1:35:14

        I'll buy it for next week.

    19. HSHarry Stebbings1:35:15

        You're gonna buy Shop?

    20. JLJason Lemkin1:35:17

        No, we gotta buy f- you gotta put in 200 grand, and we each pick four candidates, 50 grand for each, and we, we watch it for the rest of the year. It, no, because this isn't a startup. You're not gon- it's, you're not gonna lose 200,000. Rory's not, Rory's gonna agree. You're not gonna lose $200,000, right?

    21. HSHarry Stebbings1:35:31

        Uh-huh.

    22. JLJason Lemkin1:35:32

        And, uh, so it's-

    23. HSHarry Stebbings1:35:33

        It's 10 times cash flow. No.

    24. JLJason Lemkin1:35:34

        Yeah, it's not as big a risk as it sounds, so we gotta pick four by next week. And I'm gonna put Shopify at the top of my list again, like just w- but I, I'll do it.

    25. HSHarry Stebbings1:35:41

        Okay. L- l- let's do this. We're gonna do this.

    26. JLJason Lemkin1:35:44

        Okay.

    27. HSHarry Stebbings1:35:45

        But we're gonna announce which four we're choosing next week.

    28. RORory O’Driscoll1:35:49

        I got, I need two weeks. I'm traveling, guys, sorry. I need to think.

    29. JLJason Lemkin1:35:52

        Okay. You're gonna have-

    30. RORory O’Driscoll1:35:52

        I'm not committed to it.

Episode duration: 1:37:01