Who Wins in the Next Decade of VC | Margin and Price Matter Less in a World of AI | Sameer Dholakia

1. 0:00 – 0:59

   Intro

   1. SDSameer Dholakia0:00

      Intelligence is gonna be bigger as a market than oil. I've been in software for 31 years now. And the handful of other moments where I have felt magic, a trillion-dollar supercycle followed every single time. And it doesn't happen very often.

   2. HSHarry Stebbings0:14

      $5.75BN. That is how much Bessemer Venture Partners just raised. Well, I saw this and I thought, "We've gotta have Sameer on the show." Sameer is one of the leaders at Bessemer today. He led investments in Legora and Fireworks, and he's one of the best growth investors in the market today. It's a spicy show. Sameer was patient, he put up with me, and hell, did we have a discussion.

   3. SDSameer Dholakia0:35

      Not being a giant global platform or an incredible specialist who can add differentiated value and be better at picking because you are a specialist, I think it's a hard world to make money. I absolutely believe capital is a moat.

   4. HSHarry Stebbings0:47

      Ready to go? [upbeat music]

2. 0:59 – 4:41

   Why AI Is a Bigger Supercycle Than Cloud and the Internet

   1. HSHarry Stebbings0:59

      Sameer, last time that we did a show, uh, I was about 12 years old. Uh, you put up with some very, very poor questions then. So I'm hoping that-

   2. SDSameer Dholakia1:07

      A child

   3. HSHarry Stebbings1:07

      ... this will be an improvement. So thank you for joining me, dude.

   4. SDSameer Dholakia1:11

      Dude, I'm so fired up to see you. Last- I always say, "Long time listener, now second time caller." I'm f- I'm fired up to be here, man. Thanks for having me.

   5. HSHarry Stebbings1:17

      So we were just chatting beforehand and we said, "Ah, USV," and like $900M, and, you know, you guys just raised, you know, a, a size of the US Treasury it would seem. I think it was $1.75BN-

   6. SDSameer Dholakia1:28

      [laughs]

   7. HSHarry Stebbings1:28

      ... seed fund. We'll get into that, [laughs] dude. And, and-

   8. SDSameer Dholakia1:32

      Uh, seed and early. I'll talk about that later. Go ahead. [laughs]

   9. HSHarry Stebbings1:34

      Seed and early. And, and I think like five more in, you know, growth. Um, and so w- we'll get into that. But you said, "Oh." Well, for those that have, have seen it before, this is that time.

   10. SDSameer Dholakia1:46

       Man, when, when you're in one of these, I, I refer to it as, like, magic, right? Like, I've been in software for 31 years now. And the handful of other moments where I have felt magic, a trillion-dollar supercycle followed every single time. And, and, and it doesn't happen very often. But like, I mean, talk about lucky. I graduated college in 1995 back in the Dark Ages, but it was at the birth of the internet, and I was graduating in the heart of Silicon Valley, and it was magic. You could just see how people could create content and share it with everybody on the planet. And you're like, "This is magical." And, "Oh my gosh, we could actually do commerce on this thing, and I don't have to go somewhere to go get something." [laughs] Like, that was magical, right? And then, and then later in my career, so VMware, um, right, created this layer of software that disintermediated the, right, the hardware from the, from the OS and said, "I can spin up virtual machines. I can put 10 of them on that one box. And by the way, you wanna see magic? I can move that running workload from over there on the- w- on machine number 2 to machine number 8 and shut the other one down on- uh, whenever I want, and it won't interrupt the workload." Dude, that is magic. And I looked at that and I was like, "Holy cow." I didn't appreciate that i- the supercycle it would create was called cloud, right? Because there is no hyperscaler. There's no public cloud without the ability to do virtualization and motion VMs around, up and, and spin 'em up and spin 'em down, the elasticity of the cloud. And so every time I felt magic, I was like, "Holy cow, this is cool. I gotta go jump into that." And, uh, and then this one, I remember I, I started, um... I was actually on my sabbatical. I wasn't- I was in between Twilio. I thought I might be retiring. Got bored. But anyways, I was, I was doing some advisory work. And this young guy, um, [lips smack] Dave Rogenmoser over at Jasper, um, said, "Hey, can you spend some time with me and what we're building here? Uh, it's growing really fast." And I was like, "Yeah, let's. I'd love to learn more about it." And he shows me a demo of Jasper that's this AI marketing app sitting on top of GPT-3, right? And this is, like, in the f- winter of 2021. And I was like, "Magic. It's again. This is magic." [laughs] And so, and, and, and sure enough, well, you know, like, here we are now five years later, and it's been magical. It's, uh, you just see these transformational technologies. And this one is bigger than the last two combined in my humble opinion.

   11. HSHarry Stebbings4:10

       Why do you say that?

   12. SDSameer Dholakia4:12

       The analogy I often try to draw is intelligence is gonna be bigger as a market than oil because oil powers all the machines. Intelligence powers all the humans. Not some of the humans, all the humans. Consumers, prosumers, SMB, mid-market, enterprise, government. I don't care who you are [laughs] or what you are doing. You need more intelligence. And when you think about a market of that scale and scope, you understand this is magic and it's gonna

3. 4:41 – 7:37

   How Bessemer Underwrote Anthropic at a $15BN Valuation

   1. SDSameer Dholakia4:41

      be really big.

   2. HSHarry Stebbings4:41

      So if we actually go through the stack then, you did Anthropic.

   3. SDSameer Dholakia4:45

      Yeah.

   4. HSHarry Stebbings4:45

      Let's start at the, the heartbeat of intelligence that you mentioned there.

   5. SDSameer Dholakia4:49

      Yeah.

   6. HSHarry Stebbings4:49

      You did Anthropic.

   7. SDSameer Dholakia4:50

      Yeah, yeah, yeah.

   8. HSHarry Stebbings4:51

      Can you talk to me about the rationale, the underwriting, what you saw, what you didn't see when you look back now?

   9. SDSameer Dholakia4:58

      The, I mean... Yeah. I mean, the most important bit, um, I, I'm really proud that, um, we did it in the Series D.

   10. HSHarry Stebbings5:06

       What price was that, dude?

   11. SDSameer Dholakia5:08

       Uh, I think it was $15BN pre, $18BN post.

   12. HSHarry Stebbings5:13

       Oh, wow.

   13. SDSameer Dholakia5:13

       Um, it was early. It was the round that Menlo led and Lightspeed and, and Bessemer, uh, joined. Um, and, and this is, by the way, we were talking about my legendary partner Byron Deeter. Thank God for him 'cause he and Matt Murphy go back a long ways. And Matt called up his buddy Byron and said, "Hey, we're looking to build a syndicate here for this startup, uh, named Anthropic. And, um, you should check it out." And Byron said, "Hey, Sameer, you wanna come look at this thing with me?" And I was like, "Yeah." Like, I'm, I'm all in on, as I said, on all the, all the intelligence in the AI market. And I'll tell you, I think, you know, Byron and I grew up during the- Our careers probably centered, um, on, during those cloud days. And so, you know, of course, we all pattern match. Like, you just kind of, you use these mental frameworks. So for us, [laughs] I would say for myself maybe, I won't speak for Byron, I- when I looked at it, I looked at it as, "Look, I think this market is gonna be a cloud redux" was my, was my analogy. That in the cloud era you had a handful of hyperscalers. Right? There you have, you have AWS and Azure and GCP, and the reason is because it's massively capital intensive to build a cloud infrastructure. Well, it turns out that in, in the market we were looking at here, it was gonna be the same thing. It was massively compute intensive, and therefore capital intensive. And so it's gonna consolidate to a handful of players. But just like in the cloud era, we believed then, I still believe now, there would be hundreds of AI application of, of apps built on top of them. Just like you had hundreds of SaaS apps, you would have hundreds of AI apps, um, that were purpose-built for s- for particular things. And so if you have that mental model, then you say, "Okay, great. If it's really capital intensive, who are the people that have the balance sheet to actually go into the scaling laws that were being talked about?" And it's a pretty short list of, of players who could actually afford it, and you went across them and you're like, "Okay, Microsoft, yep, they partnered with OpenAI. Uh, Google, yep, they partner- they're gonna go build their own, called Gemini." And then you got to AWS, and AWS at the time had an internal model, I think it was called Nova, that was not particularly distinctive. I'll be generous.

   14. HSHarry Stebbings7:13

       [laughs]

   15. SDSameer Dholakia7:13

       Uh, and [laughs] and, uh, and they had just invested, uh, a very sizable amount of money into, um, into Anthropic. But, and by the way, at the time it was very non-obvious that, um, you know, Anthropic at the time was one of, I don't know, there were probably half a dozen or more, uh, other na- other labs that were trying to, to also build intelligence. Um-

4. 7:37 – 8:44

   Why Anthropic Was Bessemer’s Lowest-Voted Deal

   1. HSHarry Stebbings7:37

      Was it controversial in Bessemer?

   2. SDSameer Dholakia7:40

      [laughs] Oh, Harry, you have no idea. That was the... It was, uh, according to Byron, he said it was the lowest-voted deal in the history of the firm, uh, the, of, of the time he had been there. But the fact that, but, but the fact that we were both, you know, there and c- had conviction, um, I... And one of the things I love about Bessemer is it's an empowerment. Empowerment is one of the values of the place, and they're like, "Dude, that's where alpha comes from. If you guys really believe, go do it."

   3. HSHarry Stebbings8:06

      What did you not see that you wish you had seen?

   4. SDSameer Dholakia8:10

      I wish I had, um, the ability to convince us all to do a bigger check [laughs] that round. I, I feel like we saw it, we knew it, and but there, there were so many risks at that stage of the company. Um, but we knew that the AWS relationship was pivotal, that it would provide both the compute for the training critically, and that was like the, uh, it was really important, and then, and then distribution at that early stage. And, uh, I just wish, I wish we had written a bigger check, that's all. You know? That's all. I wish we knew that, we knew then that we

5. 8:44 – 10:35

   Do Open Models Threaten Frontier Labs?

   1. SDSameer Dholakia8:44

      didn't know now.

   2. HSHarry Stebbings8:44

      When we look at concerns today, one concern is the cost of intelligence shifts to open source because it's simply too expensive in frontier models, and we see that in, you know, a lot of data that's being produced by Vercel and Guillermo who publishes it, and, you know-

   3. SDSameer Dholakia9:01

      Yeah

   4. HSHarry Stebbings9:01

      ... we're both big investors in Fireworks.

   5. SDSameer Dholakia9:03

      Mm-hmm.

   6. HSHarry Stebbings9:03

      And so we both believe in open models, too.

   7. SDSameer Dholakia9:06

      Uh, absolutely.

   8. HSHarry Stebbings9:07

      To what extent-

   9. SDSameer Dholakia9:07

      And-

   10. HSHarry Stebbings9:07

       To what ex- extent do open models not deprecate the business model for the majority of frontier providers?

   11. SDSameer Dholakia9:13

       Look, I'm, I'm a, I'm a genius of and on this one, versus the tyranny of the or. This, it is and, not or, here. Uh, a- as I said, I come back to my, my comments about just the scale of the market for intelligence. You j- we just can't get our heads around it. I mean, you think about this, like [laughs] Harry, when we invested, I think, like, my, my, my bullish bull case was that we could get to, you know, some, some mass evaluation. And, and I'll just say that I missed the mark on what, how big of a, of, of a business could be created at the frontier by factors. And so, um, when, when you're in a market that big, predicting with any precision the mix between closed tokens and open tokens is irrelevant. You just... It's gonna be big. [laughs] You're in. You... R- right? Do you understand what I'm saying? Like, uh, uh, when it's that large of a market, um, the ratio is, is, uh, is, is actually not, not, not a concern. And, and I really do believe that there are all those different use cases from pro- from consumers up through enterprise and government, um, and they're all gonna want intelligence of different types and different flavors, and that is why we're both, we're investors in both on Anthropic and, uh, and in Fireworks, and the closed tokens and the open tokens. We'll get, we'll have exposure as a, as a fund and as a firm to both. Um, but I think both are gonna be huge.

6. 10:35 – 12:23

   Will Enterprises Use Chinese Open-Source Models?

   1. HSHarry Stebbings10:35

      Do you think US enterprises are willing to use open-source Chinese models?

   2. SDSameer Dholakia10:40

      Uh, I think that there are... Once that Chinese model is hosted by Fireworks, it's no longer a Chinese model, first. Um-

   3. HSHarry Stebbings10:51

      Do you think they see it like that? Me, me and you both know that to be true, but when you speak-

   4. SDSameer Dholakia10:55

      Yeah

   5. HSHarry Stebbings10:55

      ... to CIOs they go, "I don't want it. If the provenance is China, I don't want it."

   6. SDSameer Dholakia10:59

      [laughs]

   7. HSHarry Stebbings11:00

      And you're like, "It's downloaded code on your local drives."

   8. SDSameer Dholakia11:04

      Yeah.

   9. HSHarry Stebbings11:04

      "And I still don't want it."

   10. SDSameer Dholakia11:06

       Yeah. No, I, I... Listen, I've talked to some CIOs who, who share that opinion, for sure. There's no question that is out there. And by the way, um, uh, I, I do, uh, think that we should have a great open-weight model, um, that is, is US-based, and I think that would be awesome. I think there's a big hole in the model, um, in that market. Um-

   11. HSHarry Stebbings11:25

       Is that, is that a great business?

   12. SDSameer Dholakia11:26

       We invested in Mistral that's... Uh, it can be. For sure it can be, yeah.

   13. HSHarry Stebbings11:31

       But if you look at, like, a thinking, uh, you know, if you look at the thinking machines that are a $40 billion price today, is there a $500 billion open model US to be built, or is just open a much harder business model to monetize and therefore it won't be that large?

   14. SDSameer Dholakia11:45

       Oh, no, I, I, I believe it absolutely can build a, uh, a big business. Whether it's at that particular scale, I don't know, but you can build a very large business and get venture returns. Um, i- if you are the leading provider of a open-source solution, I mean, just look at history across, you know, all these other categories, whether you're going from Red Hat to, you know, fill in the blank in the database market. I mean, you can build, you can build a very... You can find ways to monetize it, um, for sure. Uh, and, and, you know, most enterprises don't wanna be responsible for the open- The open source, they're gonna want some provider with the right talent behind it. All, all the reasons that open source businesses have been great businesses for, for decades

7. 12:23 – 14:11

   Is There Actually a Bear Case for Frontier Models?

   1. SDSameer Dholakia12:23

      now.

   2. HSHarry Stebbings12:23

      Totally get that. Can I ask you, if you were to present a bear case for frontier models, what would it be?

   3. SDSameer Dholakia12:32

      Do I think there's a bear case for the frontier labs? Uh, I really don't, because I believe that the, at the frontier, intelligence solving problems that were heretofore unsolvable or solving them at a pace that was, um, heretofore unimaginable, [laughs] I just think, uh, there's no shortage. Humans have so many problems to solve, Harry. We got a lot of problems in this world. We have a lot of them, and, and we- we're, we're nowhere... It's not like we're at the 90, we're on the nine- you know, 99th percentile of problems solved, and we're just trying to get to the last one. We have a lot of problems to go solve, and that's what these things will help us solve.

   4. HSHarry Stebbings13:11

      The majority of people on the pod come on and say we'll see 99% of token traffic flow through open models, but we'll see 99% of dollars flow through closed models. Do you think that's apt, or do you think that's kind of a bullshit throwaway comment? [laughs]

   5. SDSameer Dholakia13:24

      I, I think that, I think that ratio is wrong. I really do. I don't think that's quite the mix. But, but to my previous comment, I don't think we have to get the mix pre- precise. Um, I think everybody just has to understand that, that, um, uh, you just have to look at the size of the, of the TAM.

   6. HSHarry Stebbings13:39

      15 billion, it seems now like ridiculously cheap. How could you? That's amazing. 15 billion at the time was freaking wild. I got brought OpenAI at the-

   7. SDSameer Dholakia13:49

      It was insane

   8. HSHarry Stebbings13:50

      ... Yeah, I got brought OpenAI at 30 billion, and to my stupidity, I said, "Oh my God, if this is 100 billion, I like just three exit, not including dilution. Oh my God." The small-mindedness that I had was just im- unbelievable. I think it's important to admit to it.

   9. SDSameer Dholakia14:05

      Harry, get out of my mind, man. That, it is exactly... Well, I went through the exact same thing, and the

8. 14:11 – 15:33

   The OpenAI Investment Sameer Passed On

   1. SDSameer Dholakia14:11

      reason we ended up investing-

   2. HSHarry Stebbings14:11

      So, so how did you get over it?

   3. SDSameer Dholakia14:13

      Um, was because in the intervening time, right, so you remember that, that's, that OpenAI, uh, opportunity that I also passed on. I had the exact same thought pattern that you did in, and that was right after the ChatGPT moment, right? So whatever that was, December, you know, no, call, the, the conversation was in December. And then in that intervening time, that little OpenAI went from 40 million, um, by the, to the time that we then looked at that first round of Anthropic. OpenAI had gone from, like, 40 million to about, I wanna say, I'd have to go back and look at the numbers. You could fact-check me. But it was something well north of a billion, billion and a half, maybe approximating two, and, and clearly we got it wrong, and that is one of the both, I think, one of the most humbling things about this job [laughs] is that you will get them wrong, and sometimes you'll get them wrong on really, really important decisions, and you have the opportunity to fix it. You have the o- it's, it's not a one- once in a lifetime opportunity. You could go back and fix it. And, uh, and that was when Anthropic came along. The imagination was stretched. To your point, like, we were, our imaginations were capped at a certain... Even if it got to 100 billion, and, and, and now obviously, you know, you could, you could see the growth potential of how big this market could be, um, because of what OpenAI had done in, in calendar '23.

9. 15:33 – 18:48

   Does Entry Price Still Matter in a World of $2TN AI Companies?

   1. HSHarry Stebbings15:33

      In a world of $2 trillion ISIS, do you care about price anymore? Like, is LP focus on price misplaced?

   2. SDSameer Dholakia15:41

      Entry price always matters. Every venture capitalist has taught me that. I'm, by the way, I mean, you know me. I'm four and a half years into this second career of mine, so I'm still learning. I appreciate that it is a craft like every other, uh, and so I don't pretend to have all the answers by any stretch. But I know how important entry price is, and I will say that what matters most is whether or not you believe it can grow at scale for, and compounded, for a very long time and still make you a venture return. And so I'm just very focused on the, on the looking out the, as they always say, the windshield as opposed to the rear view mirror. Um, and, and I, if I look at some of my, uh, the investments of which I'm most proud, they were at current ARR multiples that would make most venture capitalists throw up. I mean, [laughs] and they were difficult conversations in our, in our firm, uh, IC, right? In the investment committee. I mean, I think of, like, when we invested in Abridge, they were at 5 million of ARR, and, you know, we were paying, uh, whatever it was, seven, $800 million valuation. When we invested in Anthropic, in, in Anthropic in that 15 billion round, I think they were at 100 million. [laughs] You know? Like 150 times current ARR. At Legora, you know, 20 million of ARR when we invested and led that $1.8 billion round. That's insane. And, and if you're, if you're only looking at present and backwards, you'll say, "Sameer, do you not understand math?" [laughs] Like, "100 times? That's what you're paying to get in?" But, but if your view, as was mine in each of those instances, was that, yeah, but on an NTM basis, and that's what I care about, I'm, I'm looking at what do I think in the next 12 months this thing can be, and do I feel like that's a, a, this is a reasonable multiple in the next 12 months?

   3. HSHarry Stebbings17:26

      So you look at end of year next year. Again, this is me trying to learn. You look at end of year next year-

   4. SDSameer Dholakia17:32

      [laughs]

   5. HSHarry Stebbings17:32

      And then you look at gross profit on that-

   6. SDSameer Dholakia17:33

      Not even end of year. Not end of year next year. I'll go, uh, NTM, next 12 months. And yeah, depending on the business, next 12 months only, um, because, you know, depending on where you are in the year, and that could be, that could be more like 18 or 24 months, and I won't pay that far forward, um, because it's really hard to see that far forward in any business, and I've been an operator. I've been a CEO. I know how hard it is to predict that far into the future when you're scaling at these rates. But, but next 12 months you should be able to get your arms around, um, at least, at least get closer.

   7. HSHarry Stebbings18:02

      What is exciting enough in that respect then? When you look at NTM, what is green versus red?

   8. SDSameer Dholakia18:07

      Uh, you know, uh, I think, you know, depending on the business it'll, it'll, it'll vary, but, you know, something, something that's in the 10 to 15 times NTM I don't think is crazy, especially if there are these, these businesses that are growing at rates that I, that I, I have never been seen in the history of business and I've certainly never seen in my career of 31 years. Um, I don't feel like paying 10 to 15 times NTM is all that crazy 'cause they're gonna blow through it, and I look at, you know, Legora. We invested at 1.8 billion leading that round, and that seemed insane at the time, you know, but the company just went, you know, 20 to 200. And I know we're, I think we're in that together. I know you know Max well. You know, they're, they're, uh- You know, they're on fire and, and I feel pretty good about that $1.8 billion

10. 18:48 – 20:54

    How Sameer Underwrites Revenue Quality and Margins

    1. HSHarry Stebbings18:48

       We- we- we're gonna get to Legora, and I completely get that. Does your feeling good about that $1.8 billion change depending on customer makeup, um, quality of revenue, run rate versus enterprise revenue? We see some quirky ways to calculate-

    2. SDSameer Dholakia19:02

       Yeah

    3. HSHarry Stebbings19:02

       ... revenue today. Does that change?

    4. SDSameer Dholakia19:04

       [laughs] Uh, for sure. Um, quality of revenue matters, um, deeply. Uh, you know, I, I prefer I'm an old school. I've been in, uh, enterprise B2B software since 1995, so, uh, that is my bias. I prefer the G- the gross dollar retention rates, the net dollar retention rates of highly sticky customers that for whom your thing is super strategic, and they're gonna keep, they're gonna keep expanding. Um, so I will, I would pay a much lower multiple for, like, a, a prosumery business or a consumer business. Um, uh, you know, churn, it can, can kill you, so.

    5. HSHarry Stebbings19:38

       What about margins? You look at someone like a Legora, who we both love, their margins are, are good. Um, they're not enterprise software margins.

    6. SDSameer Dholakia19:48

       Look, I think margins... So this is where, you know, again, having done this for a while, like, it, it depends on your lens. Am I worried about their gross margins in the next 12 months? I am not. I have got a hold period of five to seven years at a, at a growth stage check. Um, and so when I think of it over the next five years, what do I think that's going to grow into and why? You have to be really thoughtful on, um, if it's, if the gross profit picture doesn't look pretty and you're envisioning some, like, you know, fun with math and a spreadsheet that all of a sudden it's gonna be magically hit 60 or 70% in five years, you sure as hell better defend that. [laughs] You better know why you think that that is possible. Um, but in a lot of businesses, economies of scale really matters. Um, share and position, um, really matters. And you know, I, I, [laughs] I can remember most of the businesses I invested in, gross margins at the time we invested in this AI world were meaningfully lower than they are at scale today. I mean, meaningfully lower. And so w- like, factors, uh, improvement inside of 12 to 24 months.

11. 20:54 – 23:22

    The Bull Case for Legora at a $1.8BN Valuation

    1. HSHarry Stebbings20:54

       When we look at, say, a Legora of the world, okay, I'm an investor. I always hold my hands up. I'm a big fan. You did it at $1.8 billion, okay? The legal market is $300 billion in the US. If we assume a 20% take for software, and that-

    2. SDSameer Dholakia21:11

       Yeah

    3. HSHarry Stebbings21:11

       ... is $60 billion, and we assume that it's split up between a couple of different players, including your Harvey of the world, you can get to, like, a, a 5 to 10 billion maybe in revenue. Is that how you thought about it? And how do you get to a 1020X when you enter at 2 billion on a company like Legora? Help me.

    4. SDSameer Dholakia21:32

       Well, I mean, uh, that, that math not, not terribly off. I would just say we included the whole world 'cause you and I both know Max, and he has global ambitions. [laughs] Um, and when you add in the rest of the world, by the way, you don't grow the TAM a little bit. You add another 60%. You know, it's, the US market is only 40% of it. Um, but, uh, but yeah, I think that, that math is, is, is not way off. I do believe you can get after, um, the labor, the labor spend, uh, that is, the services dollars, I'll say, that go into, into the legal market. It is, you know, the cliché that everybody keeps talking about Jevons Paradox. I do believe there's a lot of legal needs that don't get served today because the prices are too high. So I, I just think there's, the, this market, when you just have... The way we thought about it very simplistically, I'll say, is there's about a trillion dollars of legal services spend in the world. And when, when you're just thinking about this, that size of the TAM, I, I just, I believe that, um, th- they, they, they don't have to take any meaningful share of that to go build a massive business. And by the way, if they build a 5 to 10 billion dollar revenue business, that thing is gonna be worth... You know, you put any multiple on that that is, that is reasonable, and, and you're gonna make, you're gonna make a very good return.

    5. HSHarry Stebbings22:45

       Totally will. The thing that's interesting when you look at all markets today is the competitiveness has changed. Dude, when you were building, you know, SendGrid-

    6. SDSameer Dholakia22:53

       Yeah, yeah, yeah. Yeah

    7. HSHarry Stebbings22:53

       ... uh, you know, no offense, there weren't that many competitors. There were, there were several, but not the depth that we have today. And when we look at, like, a, a Legora and a Harvey, I- I'm gonna be unpopular. I think both will do very well. When we look at a Fireworks-

    8. SDSameer Dholakia23:09

       Yeah

    9. HSHarry Stebbings23:09

       ... I think Base10 and Modal will do well too. I think Fireworks will win, which is why my money's there.

    10. SDSameer Dholakia23:15

        Yeah.

    11. HSHarry Stebbings23:15

        Has the competitiveness changed in your mind? And does that shape how you think about investing and market outcomes?

12. 23:22 – 26:04

    Why Capital Has Become a Moat in AI

    1. SDSameer Dholakia23:22

       I actually don't believe, um, that the competitive breadth has changed. What's changed is the capital intensity behind the competition, and therefore it leads to this competitive intensity, right? [laughs] Like, if you looked at the, the war chest, the amounts of money that, take, a Legora and Harvey have both raised, that leads to a competitive intensity that absolutely is different than, than what I dealt with in my era.

    2. HSHarry Stebbings23:49

       Is capital a moat today? Is that the differentiator?

    3. SDSameer Dholakia23:52

       By the way, I, I absolutely believe capital is a moat. Uh, that I've always said that, uh, markets pick winners, and then it becomes a self-fulfilling prophecy, right? Like, in our day, you know, SendGrid and Twilio were the API building blocks to, to plug into your application to go send communications. And then once developers had decided that, it was game over. We had won. Like, that, you, you g- you were the default, that you became the market winner. And, and that does happen, and we see it in, in our, in these markets, um, if we take that one as a, uh, as an example. There are lots of legal tech companies, lots of AI legal providers, but if you ask anybody, uh, at, at, at, at a big law firm who are the major legal AI companies, they would, they would name those two. And so, um, I, I do believe that the capital creates the, both the ability to scale at an extraordinary pace, and it also, and it creates, uh, and therefore a, a brand, um, for those businesses. Talent, uh, then ends up flocking, and then you just get this reinforced flywheel.

    4. HSHarry Stebbings24:52

       Yes.

    5. SDSameer Dholakia24:52

       Then they win more customers, and then that just, you know, the virtuous cycle continues.

    6. HSHarry Stebbings24:56

       Do you believe in king-making? I, I, I do. To your point that capital is a moat, if capital is a-

    7. SDSameer Dholakia25:01

       Yeah

    8. HSHarry Stebbings25:02

       ... moat, excessive amounts in short amounts of time give inherent advantages. Do you agree in k- with king-making like I do or not?

    9. SDSameer Dholakia25:11

       Yes and no, Harry. I, um, yes, because I believe everything you said, which is that capital is a moat. Um, and, and it is a signal to the market. And having built software companies for a very long time, your product has to be exceptional. Your company leadership has to be exce- It's, I, I would say in the, in, you know, uh, uh, in, in math speak, it's necessary but not sufficient. It is a necessary condition for you to win the market that you have the, the biggest war chest, that you have the most capital. I really do believe that you are in that kind of a game, and it's because the compute is so scarce, and therefore the compute is so expensive, that if you don't have that, you just can't play. So yes, I agree with you the first part of your statement, but it is not sufficient. You have to then deliver an amazing product that your customers rave about, love about, tell their friends about, if you wanna be the king. Otherwise, you have no chance.

13. 26:04 – 28:22

    Is Triple-Triple-Double-Double No Longer Enough?

    1. HSHarry Stebbings26:04

       So I agree with you completely there. Um, and I also agree with what you said earlier, which is like, you know, the 10 to 12X and the, the growth rates now are very different to what they were. When you look at what you're seeing today growth rate-wise, is the-

    2. SDSameer Dholakia26:17

       [laughs]

    3. HSHarry Stebbings26:17

       ... Triple-Triple-Double-Double that SaaStr and me and Jason-

    4. SDSameer Dholakia26:21

       Oh

    5. HSHarry Stebbings26:21

       ... al- always talked about, is that-

    6. SDSameer Dholakia26:23

       Yeah

    7. HSHarry Stebbings26:23

       ... is that wrong? Is that not enough anymore?

    8. SDSameer Dholakia26:26

       It is not enough to attract capital from venture capitalists who have opportunities to put them into these hypergrowth companies that are growing much, much, much faster. And, and, uh, you know, all of us as venture capital funds, you know, your c- your capital, as big as these funds are, we just raised $5.75 billion [laughs] It's still scarce capital. There o- there are deals to be done at, at crazy hypergrowth rates. Now, all that said, um, I do still believe in finding companies that are doing the T2D3, um, because the entry prices on those, um, i- in this environment can be dramatically different, a v- very different multiple, and you can still make a great venture return on those. Um, I just think that right now, uh, if you-

    9. HSHarry Stebbings27:09

       Do you buy that? Like, do you remember the, the-

    10. SDSameer Dholakia27:11

        Yeah

    11. HSHarry Stebbings27:11

        ... kind of ex- I call it the Excel deals. Do you remember the Excel growth deals, like the 1Passwords, the Qualtrics, where they found-

    12. SDSameer Dholakia27:17

        Mm

    13. HSHarry Stebbings27:17

        ... these kind of amazing assets in less obvious locations that were maybe more capital efficient? They then juice them up with some growth capital, and then it turns-

    14. SDSameer Dholakia27:26

        Yeah

    15. HSHarry Stebbings27:26

        ... into an even better business. Do you believe those will exist in the next gen, or actually not, you have to have that capital to get to the scale?

    16. SDSameer Dholakia27:34

        Uh, I think that over time, we'll s- we'll see a bunch of application companies that, that can look like what you just described. Um, I just don't think that that's where the venture dollars are gonna flow in the near term. When you have opportunities to invest in things that are 10X-ing at scale, and your opportunity is something that's doubling, of course you're gonna go to the 10X-ing. That's just like an intelligence test.

    17. HSHarry Stebbings27:54

        We call it cake or death. You, you ever seen Adi Izzard? He goes, uh, "Cake or death" And you go-

    18. SDSameer Dholakia27:59

        Yeah

    19. HSHarry Stebbings27:59

        ... "Cake, please." [laughs]

    20. SDSameer Dholakia28:00

        Cake. [laughs]

    21. HSHarry Stebbings28:02

        Like, wow.

    22. SDSameer Dholakia28:02

        What a surprise. I wasn't expecting that.

    23. HSHarry Stebbings28:04

        What a tough- [laughs]

    24. SDSameer Dholakia28:06

        [laughs] What a tough question. I, so I, I, but the, all that said, like, do I think we can make money investing in companies that are T2D3? Absolutely, you can. Um, and so then it becomes a little bit of a, of a mixed question. Like, how many, how much do you wanna have in one versus the other, you know?

14. 28:22 – 30:32

    Does It Now Take a $1BN Fund to Win at Seed?

    1. HSHarry Stebbings28:22

       So you mentioned the $5.75 billion. Um, it's quite a lot, to be honest. [laughs]

    2. SDSameer Dholakia28:29

       [laughs]

    3. HSHarry Stebbings28:30

       Let's just, let's just, uh, let's start with the $1.75 billion seed and early. Seed and early.

    4. SDSameer Dholakia28:36

       Yeah.

    5. HSHarry Stebbings28:37

       Um-

    6. SDSameer Dholakia28:37

       Seed and early

    7. HSHarry Stebbings28:38

       ... do, do you need a billion dollars to do seed today? We just saw literally earlier today USV announce their $900 million funds. Do you need a billion-

    8. SDSameer Dholakia28:47

       Yeah

    9. HSHarry Stebbings28:47

       ... to do seed?

    10. SDSameer Dholakia28:48

        Seeing the prices that I'm seeing, the valuations we are seeing for the early-stage deals coming in from my teammates on the, on the early stage side, if you just think about the number of shots on goal you need to have to find the winner, I, I, I don't know how, um, I, I, I don't know how you would have a small seed fund and be successful. I don't.

    11. HSHarry Stebbings29:07

        W- what are you seeing in that pricing and ownership level?

    12. SDSameer Dholakia29:10

        Well, I think, you know, um, depending on the business, if it is a capital compute intensive business, and a lot of these AI businesses are that, right? So, uh, it also depends a little bit on where you wanna play, where in the stack do you wanna play, how capital intensive of a business do you want to invest in. If you're like, "Hey, I don't need to invest in, I don't know, something that requires hardware, robotics," or, "I don't wanna invest in something that's, like, training a model for compute," or, you know, maybe there are places where, where you don't need that capital intensity. But I just think, uh, in this era of, of intelligence and AI, I just, I think a lot of them do. And so if you assume that that's the case, man, um, you're, you're gonna be paying, uh, the math just won't math for the, for the entrepreneur or you [laughs] if you're not paying, uh, what... You know, in my day, look, I've been doing this for, you know, I've been in software 31 years. Like, a seed check in the day was, like, $3 to $5 million on a 20 to $40 million valuation. Like, the, you know, it was a dramatically different time. [laughs] And that just-

    13. HSHarry Stebbings30:11

        And what is it today?

    14. SDSameer Dholakia30:11

        ... doesn't get it done now. Uh, I don't, uh, that I don't, I, I don't have the specific numbers. Um, but it, but I know that it's factors higher. Uh, that I know. That I know. It's, it's way more. Um, a- and, and when, when your factor's higher off of that, you know, you really, you, you, you really gotta hope that you're a great picker. And this is where I get into my, one of my other kind of worldviews,

15. 30:32 – 33:05

    Why Venture Is Splitting Into Mega-Platforms and Specialists

    1. SDSameer Dholakia30:32

       if you will. I'm just a bus- just a humble business guy, Harry, and I think about the venture industry like any other industry. And so to me, I b- I, when I was evaluating coming in and starting it as a second career, I looked at the venture capital asset class and I said, "This looks nothing like what I grew up with in the mid, late '90s," um, where everything was hardware, software in Silicon Valley and principally early stage. And now it is global, every sector you could imagine, and everything from a pre-seed check through up into IPO, where you're investing hundreds of millions of dollars. Every one of the vectors that I just mentioned of location, stage, and sector Are dramatically different and broader. It's just the professionalization of this asset class. And so if you think of it in that context, you're like, "Okay, well, in most industries when they professionalize and they get to scale, you either have to be on this end of the spectrum, which is a giant global platform that consolidates a whole bunch over here, or you need to be an extreme specialist over here that is doing fill in the blank. You know, I'm doing AI deals in San Francisco early stage, right? You gotta optimize specialty on all three dimensions. [laughs] You could be one of those two, and if you're in between, uh, good luck. I think that's a rough place to be. I really do, and it's the reason that Bessemer is go- You know, we have- I think Bessemer is a, is a big global platform. But man, I tell you, like not being a giant global platform or an incredible specialist who can add differentiated value and be better at picking because you are a specialist, I think it's a really hard job. I think it's a hard world to make money.

    2. HSHarry Stebbings32:09

       So what happens to the billion-dollar funds?

    3. SDSameer Dholakia32:11

       I don't know, but I'm glad I'm not at one of them.

    4. HSHarry Stebbings32:13

       [laughs]

    5. SDSameer Dholakia32:14

       I'll tell you that. I, I think you have to be on either end. I really do. I really do. Uh, and, and look, you can ... Yeah, I mean, I'm sure there's a path to success for everybody. Good luck. I, I, I just f- uh, you're ... I'm just giving you my outside in, unvarnished view, uh, just as a business guy looking at an industry. You know, I'm, I'm just analyzing it clinically and I'm telling you what, that's what I've seen in the history of business is when markets get big, they consolidate and they have special... I mean, you take like automotive. It doesn't matter what industry you pick. There will be, you know, your big three in the US or, you know, the Toyota Hondas in Japan. [laughs] Like, you get a handful of giant players on one end, and then you can be like, "I am a Porsche or a Ferrari or a specialty player on the, on, uh, on the other side of the spectrum." But being in the middle is a tough place to be, I think.

16. 33:05 – 36:32

    Are Early-Stage Investments Really Just Options?

    1. HSHarry Stebbings33:05

       It is. I think it's a very tough place to be. Can I ask you, when you look at the two different vehicles today, I had Venky from Menlo on the show, mutual friend of ours, and he-

    2. SDSameer Dholakia33:14

       Yeah. Love Venky

    3. HSHarry Stebbings33:15

       ... he, he, he, yeah, he got some stick for saying that, um, early stage and seed investments were option bets, and you build a portfolio-

    4. SDSameer Dholakia33:25

       Oh, I saw that. Yeah

    5. HSHarry Stebbings33:25

       ... option bet. Yeah. Uh, it's hard-

    6. SDSameer Dholakia33:27

       Yeah

    7. HSHarry Stebbings33:27

       ... not to have seen that. I think we're at about five million views.

    8. SDSameer Dholakia33:30

       [laughs]

    9. HSHarry Stebbings33:31

       But he's by definition right. If you have-

    10. SDSameer Dholakia33:34

        Yeah

    11. HSHarry Stebbings33:34

        ... the majority of your dollars-

    12. SDSameer Dholakia33:35

        Yes

    13. HSHarry Stebbings33:36

        ... at late stage, by nature of doing early stage-

    14. SDSameer Dholakia33:39

        Yeah

    15. HSHarry Stebbings33:39

        ... unless you've said, "I'm deliberately not going to invest in anything that I do early," which would be utterly moronic and irrational, it by nature-

    16. SDSameer Dholakia33:47

        Yeah

    17. HSHarry Stebbings33:47

        ... has to be an option.

    18. SDSameer Dholakia33:49

        Yeah. Yeah. I, look, I, I, [laughs] um, I think, um, a- having been on both sides of the operator and venture thing, I think what people were taking, uh, umbrage with was the notion that maybe, maybe this is what they're... I don't know. Um, was that the, uh, uh, "I- I'm an entrepreneur of a small thing. I don't wanna just be an option." I don't b- ... I know Venky well. I know him personally. He's a great dude. They're a great firm. That is not what he meant. But, uh, what he meant intellectually is 100% correct, right? It is an option, and if it works, then I'm gonna put more capital behind it. I mean, anybody in venture capital, I believe, that, that listened to that or thought through that understands that to be a truism, and I think there may have been a little bit of, of flak on the, maybe on the, the human entrepreneurs that are doing the hard work of trying to build these things and, "I don't wanna just be an option." But I, actually, I would c- I would challenge those entrepreneurs, having been one myself, and I would say, uh, "No man. Like, understand that your business, you have to earn the right to keep scaling. You... To earn the right to the next round, to get more capital, to keep building towards your dream. That is the game. And, uh, if you're, if you don't think that is true, you're not understanding the game."

    19. HSHarry Stebbings34:57

        Can you help me understand? I to- totally agree. When, when you have the 1.75, does that have reserves baked in? Or is the idea that you have no reserves there and then you double down from the 4 billion, which is growth?

    20. SDSameer Dholakia35:09

        Uh, both. Uh, we ha- we absolutely have reserves baked in, uh, to the 1.75, but, but, um, we don't wanna just be, like, doing pro rata checks. Like, in the companies that we believe are taking off, we wanna back up the truck, um, as we've done. Like, we just announced, uh, a round with Elisei where, you know, we were gonna be investing nearl- uh, nearly $200 million that we just announced. And, and so, like, when we see the winners that we think are in big markets, are gonna build great companies, like, we're like, "Yep, let's go."

    21. HSHarry Stebbings35:35

        What does that look like then, that interplay? And do you worry about the signaling risk of, like, Sameer jumping all over one company and not another company?

    22. SDSameer Dholakia35:47

        No. I don't, I don't. Um, I, I just, a- at the end of the day, I believe the truth will set you free. Just like if the signaling risk is they haven't backed up the truck of my company yet, uh, the signaling there is simply, yeah, the business hasn't yet demonstrated that it is gonna be going like this. That's okay. I, I, I, I led one of those. It takes a while. It's hard to build businesses, man. [laughs] Like, uh, I, I don't, I don't worry about the optics on stuff like that, um, uh, 'cause I've been in the seat. And I think, I think the entrepreneurs and the CEOs, they know the business they have. They know what they're working on. They know what they have to do to take it to the next level. And, you know, uh, if they're not yet at the next level, I don't think they're, uh... Most CEO entrepreneurs aren't gonna wanna try to pretend

17. 36:32 – 42:42

    How Bessemer Builds a $4BN Growth Portfolio

    1. SDSameer Dholakia36:32

       that they're not.

    2. HSHarry Stebbings36:33

       So you have $4 billion then in growth going to your segment of the market.

    3. SDSameer Dholakia36:37

       Yeah.

    4. HSHarry Stebbings36:38

       How does that look? When you look at the portfolio there, how concentrated is that? What does the check size look like? What does the reserves look like? I'm just fascinated how you construct a $4 billion portfolio.

    5. SDSameer Dholakia36:51

       Yeah. It, it's, it's incredible 'cause the numbers are obviously kinda, are staggering. They're, they're, they're large. Uh, but, but I, I don't think that the, the fundamentals are, are perhaps not all that crazily different in that we still wanna have concentrated bets. We're, we're... And, but, and so what that means is a concentrated bet means, shoot, we may write, you know, 200 to $400 million into a given ... opportunity into a given company be- if we have that much conviction. And it'll probably be over a couple different rounds, couple of few rounds. But, but, but you're still looking for a, a relative concentration, you know, of whatever it is, you know, call it-

    6. HSHarry Stebbings37:26

       What percent of the fund would you be happy to go up to for a single company?

    7. SDSameer Dholakia37:30

       Up to 10 if, uh, on, uh, a 5 to 10% is sort of what I think our average check size will be. Um, and, uh, for late stage growth to be clear, for our, for our late growth funds. Um, early growth is a little bit different. But, but late, late growth, um, 5 to 10% feels fine. And I'll just tell you, our last growth fund, our, our Century II, um, I think we had 20% into one name. The name was Anthropic. I feel pretty good about it. So, uh, we will flex it up if we believe it is a generational company.

    8. HSHarry Stebbings38:00

       You have an early growth and a late growth?

    9. SDSameer Dholakia38:03

       We do. Yeah. Yeah, yeah.

    10. HSHarry Stebbings38:05

        Oh, fucking hell. Fucking hell.

    11. SDSameer Dholakia38:08

        [laughs]

    12. HSHarry Stebbings38:09

        What the fu-

    13. SDSameer Dholakia38:09

        What? What?

    14. HSHarry Stebbings38:11

        Oh, fuck off, Sameer.

    15. SDSameer Dholakia38:11

        Early growth is very different than late growth.

    16. HSHarry Stebbings38:13

        Come on. Come on.

    17. SDSameer Dholakia38:14

        It's so different. Why?

    18. HSHarry Stebbings38:16

        No, it's not.

    19. SDSameer Dholakia38:16

        Okay. Tell me, tell me, tell me. Go ahead.

    20. HSHarry Stebbings38:18

        They're both growth. That, they're both-

    21. SDSameer Dholakia38:20

        No. No, no, no, no.

    22. HSHarry Stebbings38:21

        Well, like, what do we, what do we do mid growth?

    23. SDSameer Dholakia38:23

        Companies are companies.

    24. HSHarry Stebbings38:23

        What do we do in early growth-

    25. SDSameer Dholakia38:25

        [laughs]

    26. HSHarry Stebbings38:25

        ... mid growth, a not so late growth, a late growth-

    27. SDSameer Dholakia38:28

        Uh-

    28. HSHarry Stebbings38:28

        ... a pre-IPO gr-

    29. SDSameer Dholakia38:29

        You gotta draw... I will concede, Harry, that there is a arbitrary distinction cutoff line somewhere, but I will tell you qualitatively, there is a big difference between investing in a company that is in there in the 20 to 40 million of revenue range or is between, you know, call it, I don't know, half a billion to a billion dollar valuation, versus I'm coming into, uh, a, a Fireworks at 15 billion. That's a... I mean, you're talking about a very different stage of company. You know, what you know about the business is different. The risk profile is different. The, uh, the, the check size is gonna be different. All the things are gonna be different.

    30. HSHarry Stebbings39:07

        I, I, I get all of that, but I think what matters is your multiple on invested cash. And actually, I think if you look at, say, a Fireworks, um, I think the, the upside is just fricking enormous if this works.
18. 42:42 – 52:31

    Why Culture Is a Competitive Advantage

    1. HSHarry Stebbings42:42

       I spoke to, uh, b- many people on your team beforehand, and they said the, the real focus you have on culture, and I thought-

    2. SDSameer Dholakia42:50

       Mm

    3. HSHarry Stebbings42:50

       ... oh gosh, how boring. Um [laughs]

    4. SDSameer Dholakia42:54

       Come on, man. It's the most important topic

    5. HSHarry Stebbings42:56

       Oh, for, for every CEO is like, "I wanna talk about culture" and then you speak to, you know, their team and it's, uh, different. Um-

    6. SDSameer Dholakia43:04

       [laughs]

    7. HSHarry Stebbings43:04

       ... and your, uh, you know, it's just like every marketing team is like, "Talk about culture, talk about culture." Um, I, I did hear something though that I would like to ask. Talia-

    8. SDSameer Dholakia43:15

       Yeah

    9. HSHarry Stebbings43:15

       ... told me to ask you about teammates and friends beat colleagues and coworkers-

    10. SDSameer Dholakia43:21

        And coworkers

    11. HSHarry Stebbings43:21

        ... every day-

    12. SDSameer Dholakia43:22

        Every day

    13. HSHarry Stebbings43:22

        ... and twice on Sunday

    14. SDSameer Dholakia43:23

        ... and twice on Sunday. That's right, man. I, I have used that line repeatedly for a decade now. Um, and I just deeply believe-

    15. HSHarry Stebbings43:30

        Well, how does that impact how you build a venture firm today, then?

    16. SDSameer Dholakia43:34

        Well, look, I, I, um, uh, first I'll explain the genesis of the, of the, of the line and then, and then I'll talk about why I think it's so important even, even in, in firm building, um, as much as it was. Uh, it came from when I was leading, uh, and serving at SendGrid, and, and I have just always believed, like building businesses, the hardest thing to do is to align masses of humans, so many people, to work in a coordinated and orchestrated way towards a singular goal. That is really effing hard to do, man, and every, every CEO listening is like, "Yep." They, they hear that. They know that. That is the hard bit. And, um, and I have found it was a strategic competitive advantage if your team, if your humans actually liked each other, if they actually cared about each other, and they thought of each other as teammates and not colleagues. Teammates, and the reason, Harry, is that teammates work harder for each other. They're not working for themselves. They're working for their teammates, and they're working for their team, and you never wanna effing let down your teammates.

    17. HSHarry Stebbings44:38

        Okay, I get you. I obviously agree. Can't disagree. But then how do I... Teach me. How do I then, um, put that into practice to turn coworkers and colleagues into teammates? What can be done?

    18. SDSameer Dholakia44:53

        Hmm. I'm gonna start with the very, the, the most important basics. You have to be aligned on culture and values. Like how we do our work has to be super clear and, um, and everybody aligns up to it. There's no changing of the standard. You can't have the asshole that's a great performer that doesn't abide by the rules if you say, or whatever it is. Whatever your culture and values are, they, you have to get everybody working in the same way. You gotta protect that. And everybody has to be empowered on the team to be like, "Nope, I'm gonna call that out if you are deviating from our culture and values."

    19. HSHarry Stebbings45:25

        So culture and values, I think a good value is something that could be argued for, for or against. Um, what, what, what is the-

    20. SDSameer Dholakia45:33

        Disagree

    21. HSHarry Stebbings45:34

        ... culture?

    22. SDSameer Dholakia45:35

        No. No. The value isolated from the organization, sure, anybody could agree or disagree, but you have to have a set of them that you're like, "This is our way. This is the s- you know, this was the SendGrid way of doing things." We had our four Hs, happy, hungry, humble, and honest. Four Hs, happy, hungry, humble, honest. And, and those were our four, and everything we did had to reinforce those four. If you deviated, and so-

    23. HSHarry Stebbings45:58

        You can't argue that you shouldn't be happy, you shouldn't be hungry. We, we want unhappy, unambitious liars.

    24. SDSameer Dholakia46:06

        [laughs] No.

    25. HSHarry Stebbings46:07

        Well, no. [laughs]

    26. SDSameer Dholakia46:08

        Okay.

    27. HSHarry Stebbings46:09

        Well, no

    28. SDSameer Dholakia46:09

        I'll, I'll, I'll push back. I'll push back. Give you, here's the example. Um, I always said that S- and I loved SendGrid, our culture. I thought it was amazing. I think our teammates, if you could go track down any Gridie out there and say, "Hey, did you enjoy working at SendGrid? Was it a special team?" I am, I, I know to my bone that 100 out of 100 of them will say, "Yes, it was." But, um, the, the, and the reason for that though is like take the humble H. Our, it, but it was, it would've been seventh hell as a place to work for a certain group of humans, right? Like our humble H was we, not I. It was about, you know, we would ask people in interviews, you know, "Harry, tell me about a professional accomplishment of which you are most proud." And then we would sit back and do a pronoun count. How often does Harry say we? How often does Harry say I? I want the people that say we. Now, that was just, that was our value. That was SendGrid's value. That doesn't mean it's the right value. To your point, you could argue either side of that. I don't care, but for our company, our team, the way we work together is this way, and if you're not that way, that's fine. It's a big labor market. Go find another place to work. That's great. No harm, no foul. [laughs] But, but man, like it matters that the people you bring in want to work together in a certain way, and that's how you build a team and not colleagues and coworkers. A- and by the way, so that's number one, but number two, I'll get, I, I gotta get to number two. Number two, which is also equally important, um, to get teammates and not just colleagues, is you go spend time together not doing work. I know this sounds so crazy. Like when I was leading SendGrid, we took, we flew the entire company every January down to Mexico for an annual kickoff. The whole effing company. Not like a sales team, you know, uh, uh, presidents club. I mean the whole company, and we'd lock them in a room for a day, and we would get lined up on here's the vision, here's the mission, this is why we're doing what we're doing, here are the goals for the year, blah, blah, blah. Like we'd, and then they would have the whole second day was go find somebody from another office and go kayaking together, go mountain biking together, go sit by the pool and have a drink together. I don't care what you do, just do it together. 'Cause you know, and the reason this matters, Harry, is that for all the CEOs listening out there, they will understand when I say this. Shit goes wrong when you're building businesses. It's hard. And when you have a group of colleagues and coworkers, you know what, you know what they do first when shit goes wrong? They either go like this, and for those listening, I'm pointing my fingers as if you're pointing at each other, right? They, they, it's blame placing. Sales isn't responding to the leads fast enough. Marketing isn't generating enough pipe for me, right? When things aren't going well, you, they point fingers, or worse, they just head for the doors 'cause they're just like, "Well, I'll go to the next company 'cause I'm just a colleague. This is just a job." But a teammate, teammates and friends in hard moments when you're building a business, and believe me, there are many- Those t- that, that group of people in a team are gonna come together. They don't, they don't start pointing fingers. They come together, and they go across and be like, "Harry, dude, I spent time with you mountain biking, or kayaking, or sitting by the pool having a beverage. You're a good dude. We gotta figure this out for our team." That's how you solve problems. And when times are hard, and I'm just telling you, man, teammates and friends will beat colleagues and coworkers every day and twice on Sunday.

    29. HSHarry Stebbings49:24

        No, I totally get that. I do. I, I, I completely agree with that headline. I, I think I'm very trained and strongly believed in the values being differentiated and arguable. So, like we believe that hard work, like hardest of work, leads to better results. I don't buy the rest days.

    30. SDSameer Dholakia49:43

        Amen.
19. 52:31 – 56:08

    When Should VCs Take Money Off the Table?

    1. SDSameer Dholakia52:31

       the team down with you.

    2. HSHarry Stebbings52:32

       Totally agree with that. Can I ask you, if we go back to venture, we're seeing some of the most incredible value accumulation from these businesses. You, we've mentioned Legora-

    3. SDSameer Dholakia52:43

       Yeah

    4. HSHarry Stebbings52:43

       ... we've mentioned Fireworks. I think you're in File as well. Um-

    5. SDSameer Dholakia52:47

       Yeah

    6. HSHarry Stebbings52:48

       ... how do you think about when's the right time to sell? And with-

    7. SDSameer Dholakia52:54

       Yeah

    8. HSHarry Stebbings52:54

       ... IPOs being continuously pushed-

    9. SDSameer Dholakia52:57

       Yeah

    10. HSHarry Stebbings52:57

        ... maybe as many more stripes. How do you think about-

    11. SDSameer Dholakia53:00

        Yeah

    12. HSHarry Stebbings53:00

        ... liquidity events?

    13. SDSameer Dholakia53:02

        No, look, I, I, I joke about being new to the business, um, four and a half years into venture, but, but I do know that DPI matters. [laughs] I'm not that new. I know that liquidity matters. DPI matters. Our LPs are not in the business of handing us the money for perpetuity, so we gotta get it back to them in multiples. And, uh, and I get that. Um, right now I think because we're still so early in this AI wave, it's not a, it's not a principle concern. But I would say, because I think these businesses are gonna keep compounding and keep compounding at scale, um, but, um, but I do think that we should look for opportunities, um, just, just practically, just being, you know, um, uh, prudent r- risk-aware business people. You should take some chips off the table along the journey to make sure that you're getting, um, some, some DPI and, and, and, uh, and locking in gains for, for your LPs and your funds. You should. It's crazy not to.

    14. HSHarry Stebbings53:58

        Do you find that you're a- this is a backhanded compliment. Do you find that you're able to, given the brand of Bessemer, is often a, a very premium brand in a round?

    15. SDSameer Dholakia54:08

        Yeah. Yeah. No, I, I appreciate that, and I do think we have a great, a great brand. Um, I think it's, I think that when you're, when we're looking for, uh, a little bit of liquidity to d- you know, to take some chips off the table and bring DPI back, it tends to be at very late stages of the, of the journey. And, and most people see it for what it is, which is yeah, they've, they've got an enormous position here. They're gonna make lots and lots of money, and the whole thing is gonna continue to compound. But to take a little bit off the table to d- to get back to LPs, I, I just find people are more matter-of-fact about that now. And this is back to the whole professionalization of the asset class. What used to feel like a personal decision, um, and like, "Do you not believe in me anymore? Do you not believe in my business anymore?" People are... I, I just think that, that, uh, at the scale of the businesses that, that we're, we're building, the size of the checks that we are now writing, at the valuations [laughs] that we're writing them, I think people get it. I think, I think, I do. I think CEOs are, are very... I've been on the other side. Like, they're, they're sophisticated businesspeople. They understand. [laughs] They understand the math.

    16. HSHarry Stebbings55:12

        I totally agree with you there, and I think people oscillate too much on the, "Oh, they'd be so upset if you sold." I think founders are actually very rational and, and smart about it

    17. SDSameer Dholakia55:19

        Super rational. Look, I mean, you tell me, how- what percentage of the founders that when you- that you're working with that get to crazy late stage don't take any, uh, in secondary themselves as the rounds of financing go through? Uh, most of mine are, [laughs] and, and they're doing the right thing for their families, right? And I tell them to. I'm like, "Shoot, you should, you should probably sell a little bit here, bud, to make sure that y- you know, you're financially secure for your family." And I think that's, uh, great. No problem.

    18. HSHarry Stebbings55:46

        I think it makes better founders. I completely agree with you. You think with a much longer-term vision

    19. SDSameer Dholakia55:50

        Yeah, and then they're willing to swing for the fences, right?

    20. HSHarry Stebbings55:52

        Yeah.

    21. SDSameer Dholakia55:52

        Yeah.

    22. HSHarry Stebbings55:53

        Com- completely agree with you. Can I ask, do you think we see the number of IPOs drastically reduce as Stripe shows that public markets can be harder than private markets if done well? How do you think about that?

20. 56:08 – 1:02:16

    Why Companies Will Stay Private Longer

    1. SDSameer Dholakia56:08

       I will say, uh, only a few comments here. One, I believe that it is a permanent structural shift that companies will stay private longer. The, the asset class of private venture capital is just that much bigger. There are that many more dollars in the market and that many more firms, that many... I mean, it's just, so that will ha- that will- they will stay private longer. Um, and I think that is a given, and I think, you know, you're gonna see crossovers that are spending more time here. I think LPs are allocating more to the asset class 'cause they get that. They can't reap the rewards of this generational boom if they're waiting for them in the public markets. Most of that, uh, run-up will have already happened in the private markets. So I, so I absolutely believe that is true. Um, I also believe that we will see an unlock in the IPO markets next year, l- later next year and in 2028. I think a lot of companies will go public. Um, and, and I just think we've had this... You know, the window's been shut for so long.

    2. HSHarry Stebbings57:10

       Why, why, can I ask you, why will that unlock happen? What, what will cause it?

    3. SDSameer Dholakia57:14

       I believe in s- uh, you know, I'm an economist by training, man, and, uh, so supply and demand is a thing. It's just a thing. And so what's gonna happen, in my humble opinion, is you'll see a, a bunch of great businesses go public, um, that, uh, will have a lot of success in the market, but there will be an obvious appetite from investors in the public markets to get pure-play AI exposure, and they don't want it from just a few companies. They're gonna want it in dozens or hundreds of companies that are pure-play AI exposed. And, and I just think the supply and demand, the demand will be so incredible that they will be willing to pay price, and then supply and demand works. Prices move, and I think we'll see, um, a lot of companies that, the, the window will be open. A lot of people will come out. I, I'll say one last point on the IPO thing which is, having done it myself, um, I believe it makes for a better company. Deeply believe. Like, you, you run a tighter ship when you are a public company. I always used to say at SendGrid, I was, I said, "I, I, we need to be IPO worthy." Before when we were building up to our IPO, I was like, "We gotta be IPO worthy." And what does that mean? I mean, it is a high bar to be, to withstand the scrutiny of the public eye. That is hard [laughs] to, like, quarter in, quarter out predictably deliver on what you say you will do, um, is hard, but you build a really rigorous and operationally disciplined machine. And, um, and I hope a lot of companies, um, will, will take, take advantage of that. I do.

    4. HSHarry Stebbings58:47

       Do you, do you still buy that? And what I mean by that is, like, you know, when you look at a lot of, yeah, Canva released their numbers, and when they released their numbers or the great numbers, you have similar kind of reactions. Like, the expectations have just shifted, and these companies have those expectations anyway. And I would argue that actually Stripe is able to do a lot of things because of their private nature that Adyen is not able to, which make them structurally advantaged. I think you are forced, you are enabled to be better because you're private rather than-

    5. SDSameer Dholakia59:20

       Mm

    6. HSHarry Stebbings59:20

       ... the discipline.

    7. SDSameer Dholakia59:21

       Uh, yeah. I, look, I, I hear that. I think there's, there are pros and cons to anything. I think, um, you're right. You do, you have latitude to make ch- you know, partic- like, big product investments. You can go, you know, deep in the, um, in the red for periods of time if you think you need a shift. "I gotta take a big hit," whatever. Like, um, but on the flip side, there are things that you can do as a public company. Like, I have a currency. I can go do M&A. I can... There are lots of th- there are, there are pros and cons on both sides.

    8. HSHarry Stebbings59:47

       I get you, but Stripe doing a M&A for OpenRoad for $8 billion. I mean, they, they wanted to buy obviously, um, PayPal for $55 billion.

    9. SDSameer Dholakia59:56

       Yeah.

    10. HSHarry Stebbings59:56

        Like, y- you have that now. You have liquidity for employees and investors. I'm just wondering actually are we seeing really-

    11. SDSameer Dholakia1:00:04

        Mm

    12. HSHarry Stebbings1:00:04

        ... the winnowing of that IPO attractiveness.

    13. SDSameer Dholakia1:00:07

        Yeah. Maybe. Maybe. I, I don't know. I just, when I talk to our companies, uh, that we're invested in, I think a lot of them are still talking about-

    14. HSHarry Stebbings1:00:14

        They still wanna go public.

    15. SDSameer Dholakia1:00:15

        Yeah, they still... It is, and by the way, in cer- in certain markets, um, it's still a, it's, you know, the, it, it's a badge of credibility, right?

    16. HSHarry Stebbings1:00:23

        Mm.

    17. SDSameer Dholakia1:00:23

        Like, those companies, um, their customers care. They're like, "Okay, these guys are legit. They're real. They're at scale. They're public." Like, they, you know, it connotes something.

    18. HSHarry Stebbings1:00:30

        Iron- ironically for things like, for things like Aura, I think it also totally makes sense, a consumer brand, one where retail-

    19. SDSameer Dholakia1:00:36

        Yeah, yeah

    20. HSHarry Stebbings1:00:36

        ... wants to be part of it. Um-

    21. SDSameer Dholakia1:00:38

        Sure

    22. HSHarry Stebbings1:00:38

        ... do, do you think retail should be a much larger part of the LP base of venture funds? If we have so much more gains now in private markets-

    23. SDSameer Dholakia1:00:49

        Yeah

    24. HSHarry Stebbings1:00:49

        ... do you think retail should play a large part in the LP base of venture?

    25. SDSameer Dholakia1:00:52

        Harry, I, I think it's hard to argue in terms of the, you know, what we would call kind of the democratization [laughs] of, uh, access to that. I think it's hard to argue against. I do. Um, you know-

    26. HSHarry Stebbings1:01:02

        Well, do, do you? Because I-

    27. SDSameer Dholakia1:01:03

        What we do is high-

    28. HSHarry Stebbings1:01:04

        Okay, uh, 'cause I could argue against it. Sorry, I'm gonna really-

    29. SDSameer Dholakia1:01:06

        Yeah

    30. HSHarry Stebbings1:01:07

        ... I am going to this. Because, like, dude, you, honestly Bessemer is a very over-funded product. There's so many people that want access to it If you just had a random people's fund, I don't know if it would beat out the hospitals and pension funds. And so then you have adverse selection, and then retail just goes into shit funds, would be an argument
21. 1:02:16 – 1:05:10

    The Bull Case for Fireworks Becoming a $250BN Company

    1. SDSameer Dholakia1:02:16

       I would go.

    2. HSHarry Stebbings1:02:17

       Can you paint... Uh, one of my favorite companies, period, is Fireworks. I think Lynn is generational. Um-

    3. SDSameer Dholakia1:02:23

       Yeah

    4. HSHarry Stebbings1:02:23

       ... can you paint the bull case for how this is a $250 billion business?

    5. SDSameer Dholakia1:02:28

       Look, I think, um... And by the way, I, I couldn't agree more. Uh, Lynn is extraordinary and, uh, and so is George Hu that just joined her team as president.

    6. HSHarry Stebbings1:02:39

       On the first call with me, I get on, I've never met him before, okay? First call-

    7. SDSameer Dholakia1:02:43

       Yeah

    8. HSHarry Stebbings1:02:43

       ... Lynn gives me to him and, and this is before. It's like to determine whether I'll be able to invest. I go-

    9. SDSameer Dholakia1:02:49

       Yeah

    10. HSHarry Stebbings1:02:49

        ... "George, I've heard so much from Mark," and I'm trying to be charming. He goes, "Yeah, yeah. Cool. So tell me, how are you gonna increase the value of this business?"

    11. SDSameer Dholakia1:02:57

        [laughs] That is my man.

    12. HSHarry Stebbings1:03:00

        [laughs]

    13. SDSameer Dholakia1:03:00

        That is my man, George. [laughs]

    14. HSHarry Stebbings1:03:03

        I'm like, "Okay. Yeah."

    15. SDSameer Dholakia1:03:03

        He's gonna cut right to it. [laughs]

    16. HSHarry Stebbings1:03:05

        No talk about the weather. Sure, George, let's go straight into it.

    17. SDSameer Dholakia1:03:08

        [laughs] Let's get to it.

    18. HSHarry Stebbings1:03:10

        Sorry, I, I interrupted

    19. SDSameer Dholakia1:03:11

        George-

    20. HSHarry Stebbings1:03:12

        You, you were saying about yourself and George

    21. SDSameer Dholakia1:03:13

        I just want to hear George. We worked together at Twilio. He was deeply involved in the diligence to, to, uh, when we were doing the Twilio SendGrid acquisition. We were in the same exec leadership team room with Jeff Lawson, who's extraordinary, and a bunch of great people, and, uh, you know, in the, in that, in those trenches together for 18 months. And I'll just tell you, I've been doing this for 31 years, he is absolutely one of the very best, um, software executives, uh, in the industry, period, full stop. And so when you pair-

    22. HSHarry Stebbings1:03:40

        Why? What makes him so good?

    23. SDSameer Dholakia1:03:41

        ... his brilliance... Ah, uh, uh, so first off, George, he's, he's an exceptional thinker. He's super strategic. He's very analytical. He has been doing this for decades, and he knows how to run... He knows how to build a pla- a, a, a build a go-to-market engine, Harry, like very few people in technology, uh, in the market today know how to build. And so when his, his joining Lynn, um, and Fireworks, uh, pr- I'll just say preceded our investment by about a month or two because George joined and I'm like, "Dude, these guys are gonna r- crush," because you have the brilliance of Lynn, strategic thinker, deep technologist, unbelievable technol- technical team from Meta, and now George building the go-to-market engine. I, I, I mean, that, that is the pitch right there. You asked me for the bull case. You take that, those two together at the top of that company, um, leading, they're gonna build an enormous business. So I, I'll leave it there. I will say, though, in terms of the TAM and the market and what they're doing, um, I think their, I think their general pitch of, um, enterprises are not gonna wanna rent intelligence from somebody else, they're gonna wanna own their own. I just think it's, like, the simplest, um, uh, and, and, and really compelling tagline for any enterprise CIO buyer. And, and personally, I think there'll be a healthy, healthy amount of both, but, but man, they're gonna... I, I, I can't... It's, it's hard to imagine, um, a business saying, "Yeah, no, I, I don't wanna own any of my intelligence." Every business is gonna wanna own some of their intelligence, for sure.

22. 1:05:10 – 1:08:28

    Why Sameer Believes in Sovereign AI Models

    1. HSHarry Stebbings1:05:10

       Do you buy the sovereign model argument?

    2. SDSameer Dholakia1:05:13

       I do. We, uh, we're invested in two. Um, we're invested in Sarvam in India, and we are invested in or investing, uh, in Mistral right now.

    3. HSHarry Stebbings1:05:23

       Hmm. And so you think that, hey, countries and kind of geopolitical regions will, for obvious geopolitical concerns, need to have access to their own. Is, is that it? And to what extent then do we just go down the stack of we, we need our own energy providing, we need our own...

    4. SDSameer Dholakia1:05:41

       Yeah, yeah, yeah. Uh, I'll say in, in certain, um, in certain markets and for certain use cases, right? So like, and they're different. Like in India, I think, you know, one of the things that makes India such a ripe, uh, opportunity for intelligence local to their market is the Indic languages. There are so many different languages, um, and, and training the models for their, on, on their own content, and so... And that's multimodal. It's, it's voice, it's text, it's all the things. There's, there's a very particular argument there. Uh, and not to mention, of course, they have some of the best technologists in, in, in, uh, it at scale [laughs] in India who can work on the problem. Um, in, in the case of, of a Mistral, look, at the end of the day, like, uh, you know, if you're in, trying to determine, um, my whatever, my military strategy for fill in the blank, there's certain use cases where if it's a government use case or a regulated industry or whatever, that having it be a, a sovereign model is probably gonna feel more comfortable to that buyer. Uh, and again, when you got a market as big as intelligence, it doesn't have to be all the buyers. Some of the buyers decide that they wanna use that sovereign model for some of the use cases in some of the industries, and you're gonna build a very large business.

    5. HSHarry Stebbings1:06:56

       When you're writing a check, how does the upside requirement change depending on the vehicle that it's in? And so for us, it's, I'll put it very simply, you know, from the early fund, we need to see a fund returner, which means a 50X.

    6. SDSameer Dholakia1:07:12

       Hmm.

    7. HSHarry Stebbings1:07:12

       And from a, you know, growth fund for us, we need to see a 10X. Doesn't need to be a funder-

    8. SDSameer Dholakia1:07:16

       Yeah

    9. HSHarry Stebbings1:07:16

       ... but a 10. How does that upside requirement change for you? And look

    10. SDSameer Dholakia1:07:22

        What you said actually is, is very consistent with how we think about it, uh, also. Like, that to get to, um, w- you know, we want, we want 5X plus funds, right? Like, um, that's, that's just really hard to do at any stage. Um, but the math only wor- you can only get to that if at the later stage you're putting big dollars behind businesses, some of which may be lower than that, but some of which are gonna be way higher than that. And in the early stage, man, you, you know, you know by definition, not- your hit rate is gonna be so much lower because they are earlier stage. They're just less developed businesses. Um, you're gonna need some 50Xs to, to account for and pull up all the, all the ones that don't work out. Um, obviously it's, it's de-risked when you get to the growth stage a little, uh, a lot more. And so, so the, the upper bound doesn't need to be quite that high. Um, you don't need 50Xs in growth, although some of ours I think [laughs] may, may approach that. Um, but, but it's, but that's not, that's not the same bar. Uh, in terms of the MOIC, um, I think the blended gets to the same place.

23. 1:08:28 – 1:14:40

    Can $5.75BN Venture Funds Still Return 5x?

    1. HSHarry Stebbings1:08:28

       Do you think you can still do a 5X given the fund sizes being as large as they are?

    2. SDSameer Dholakia1:08:33

       100%, no hesitation. 100%, especially in this era because of what is happening in the world right now. We're- I mean, you see build- when you see businesses scaling at the rates we are scaling them, Harry, the, the value creation. And so it's not a hypothetical anymore. I sounded like a crazy person three years ago [laughs] when I would say this stuff, but now I don't- now everybody just looks at me like, "Oh, yeah, that's true. I can, I can think of 10 examples." Um, a-and so, like, there's no debating, um, that we're seeing value creation in this era unlike anything we have ever seen. And so absolutely I believe we can generate those kinds of returns.

    3. HSHarry Stebbings1:09:11

       You can only invest in one of those funds. Early, early growth, or late growth.

    4. SDSameer Dholakia1:09:17

       Ah. Ah.

    5. HSHarry Stebbings1:09:19

       Which one do you invest in?

    6. SDSameer Dholakia1:09:20

       If I could only, if I can only pick one. P- yeah, I mean, per- me personally, obviously, I'm focused on the growth stage. Um, and, and I really do like the, the opportunities in late-stage growth.

    7. HSHarry Stebbings1:09:29

       But I actually think we'll do better there. I think outcome scenarios are bigger than they've been in a long time, which means the upside-

    8. SDSameer Dholakia1:09:34

       Yeah

    9. HSHarry Stebbings1:09:34

       ... and the multiple invested cash is much bigger. Like, I think we both-

    10. SDSameer Dholakia1:09:37

        Yeah

    11. HSHarry Stebbings1:09:37

        ... did Fireworks at, like, a 15 price.

    12. SDSameer Dholakia1:09:40

        Yeah.

    13. HSHarry Stebbings1:09:40

        I think there's a 20X in that for us.

    14. SDSameer Dholakia1:09:43

        Yeah.

    15. HSHarry Stebbings1:09:43

        Fantastic.

    16. SDSameer Dholakia1:09:44

        I agree. I agree 100%. And, and so when you can get, um, early venture return MOICs on late-stage de-risk companies, man, I'm with you. Uh, that is, that is a great spot. I will say that, um, you know, we have a world-class early stage franchise that's been doing pre-seed, seed, early, you know, Series As for a very, very long time. Um, if you can buy 10 and 20% ownership early for small checks, man, that's fantastic too. I would love, I would, I... You know, we're gonna continue to keep doing that all day long. But, um, yeah, it's definitely an and. That's why I love our model as a giant platform, right? 'Cause we're, we're doing the synergy of that practice with our early growth practice, with our late practice, like, it is really, really something.

    17. HSHarry Stebbings1:10:29

        I, I wanna do a quick-fire where I papper you with questions and you give me your immediate-

    18. SDSameer Dholakia1:10:33

        Oh, all right. Do it

    19. HSHarry Stebbings1:10:34

        Okay? Okay.

    20. SDSameer Dholakia1:10:34

        Okay. I'll try.

    21. HSHarry Stebbings1:10:35

        Who's the best picker in all of Bessemer? The picker.

    22. SDSameer Dholakia1:10:39

        I think we got a bunch. Um, I think Byron Jeremy, uh, Adam Fisher in Israel, and, and David Cowan out here has been doing it for three decades. But if I had to pick one, I will say Byron Deeter, mostly because when we were going public, the morning of the IPO, we're in the New York Stock Exchange, um, we brought out every SendGrid-er who had been at the company for more than four or five years. So we had this room full of SendGrid employees. The president of the New York Stock Exchange comes out to welcome and greet us before the bell ringing ceremony. And he says, "You know, I just wanna welcome all you SendGrid employees that are here. You should be so proud. SendGrid management, so great to, to have you all. Um, esteemed board members, thanks for coming and being part of this special moment. Byron, great to see you again." And he just pauses. He's like, "Byron, how many times have I seen you here in the last..." Uh, this is, by the, mind you, this is a decade ago. And, uh, and Byron sheepishly, 'cause he's a very humble guy, says, you know, and I can't remember the number at the time. He flashed up, like, I don't know, like six. And, uh, and, and, you know, we just laughed, like, you know, that he had been there for, like, multiple of these IPOs in the re- in the recent time. And then I was sitting right in front of Byron, and I l- and I just started to count in my head, and I could come up with more than what, more than the six. I'm like, "No, no. You've done more than six." And I turned back and I was like, "No, it's more than that." And he said, "Six here." NASDAQ was another [laughs] another big number. He has had so many from early stage all the way through IPO. I mean, it's hard, it's hard not to say Byron Deeter. Guy's amazing.

    23. HSHarry Stebbings1:12:07

        Okay. Byron is the picker. Who is the winner? And what I mean by that is when you're like, oh, Sequoia are around this, Founders are around this, Besse-

    24. SDSameer Dholakia1:12:17

        Yeah

    25. HSHarry Stebbings1:12:17

        ... Benchmark. Who is the, who is the one person who closes founders better than anyone else?

    26. SDSameer Dholakia1:12:23

        Oh, that's a good one too. So let me kinda revise my answer then. Knowing both of those two, I would go with David Cowan as the picker 'cause he finds stuff that everybody thinks is crazy, like Rocket Lab, that then becomes, you know, an enormous business and nobody knows what he's doing. Um, uh, you know, uh, and then, and but, but when it comes to closing, uh, uh, Byron Deeter every time, for sure, 100%.

    27. HSHarry Stebbings1:12:46

        Byron-

    28. SDSameer Dholakia1:12:46

        That guy is, he is, he is a force of nature. He's charming. He's funny. He's smart as all get out. His experience is ridiculous. Um, he knows how to have a good time. He'll host people, uh, whether it's at a 49ers football game or up, uh, skiing at his house in Montana. I mean, the guy is as, as, uh, he's an amazing, amazing closer.

    29. HSHarry Stebbings1:13:07

        What company is Bessemer not in that universally the firm rues and wishes it was in?

    30. SDSameer Dholakia1:13:13

        Oh, so many. I would say Stripe. I mean, think about, like, we were, uh, the developer API venture capital firm. We were, well, you know, led the seed in, in I think, in B in Twilio, led the Series B in, in, uh, SendGrid. We had Auth0 that David Cowan led. I mean, we were the developer API company and we weren't in Stripe. That hurts. Um, that's probably the... I'll, I'll, I'll use that one.
24. 1:14:40 – 1:15:17

    Why the Open-Model Economy Is Bigger Than Sameer Expected

    1. SDSameer Dholakia1:14:40

       numbers.

    2. HSHarry Stebbings1:14:40

       What, what have you changed your mind on in the last 12 months?

    3. SDSameer Dholakia1:14:43

       Uh, in the last 12, um, I would say just my deep appreciation for how big the open token economy is gonna be. I didn't- I just didn't see it 12 months ago. I didn't appreciate it. Uh, it's a big part of the reason we're, we're, um, investing as much as we are behind, um, Fall and Fireworks, both Fall on the gen media side, uh, uh, on the infrastructure side there. Uh, and they're going up and down the stack. They're amazing, amazing business, amazing team. Uh, and, and Fireworks, obviously we talked a lot about. Those two, um, I, I just didn't appreciate how big that market was gonna be

25. 1:15:17 – 1:16:59

    Why Robotics Could Be at Its “2021 GenAI” Moment

    1. SDSameer Dholakia1:15:17

       12 months ago.

    2. HSHarry Stebbings1:15:17

       Final one for you. What are you most genuinely excited about moving forwards?

    3. SDSameer Dholakia1:15:22

       Uh, I'll say two. One is, um, I'm wildly fired up about all things r- um, robotics and embodied AI. Like, we invested nearly $200 million into Waymo, and I just think that, you know, autonomy, uh, and, and h- what that changes and how that changes the way we work and live I think is awesome.

    4. HSHarry Stebbings1:15:41

       Is that humanoids, or is that not humanoids?

    5. SDSameer Dholakia1:15:44

       I think it, it can be. It can be. Uh, and, and certainly an area that we've been looking at. Um, and I think we're probably in the equivalent in embodied robotics in that sense, I think we're probably at circa 2021, uh, relative to the generative AI era. So I think it's- we're still- we've got a, a couple, few years to go, but it's, it's on one of these curves, man. It's gonna go. It's, it's happening fast. So I think we will get there faster than e- than most people think, and it's an area of deep interest for the firm.

    6. HSHarry Stebbings1:16:13

       Are you in any of the robotic data c- companies? We saw Macca just get done by Sequoia yesterday. You've got MicroAGI in Europe. Are you in them, and how do you see the data market for robotics?

    7. SDSameer Dholakia1:16:24

       We are not yet that I know of, um, or that I can think of offhand. Um, but I know that we have spent a lot of time around robotics, and so I'm sure there's... my early stage partner's listening, going, "Sameer, come on, man. We met with, like, 20 of these. We're gonna make this pick." I, I don't actually know offhand. Um, but, but I know that that p- I think there's a lot of excitement in the firm around that area. Um, I'm personally looking at the, uh, autonomy. You know, we did Waymo, but now you're like, okay, well, what about autonomy in construction? What about autonomy in mining? What about autonomy in agriculture? You know, there's tons of areas.

    8. HSHarry Stebbings1:16:58

       So I,

26. 1:16:59 – 1:18:29

    Why Waymo Could Become a $1TN Company

    1. HSHarry Stebbings1:16:59

       I... This is a good quick fire. You do Waymo at 115, and Uber-

    2. SDSameer Dholakia1:17:03

       Yeah

    3. HSHarry Stebbings1:17:03

       ... has a, a market cap of 120, 125.

    4. SDSameer Dholakia1:17:06

       Yeah.

    5. HSHarry Stebbings1:17:06

       Why am I a moron?

    6. SDSameer Dholakia1:17:08

       [laughs] Because you're looking at the r- the ride hailing market as the only market. That's not the only market, Harry. Think, I, I have a 16-year-old son that I just bought a car for. Uh, if that thing, if I could've bought that car with an option to have a Waymo driver on it and pay them a subscription every single month for that car- on that car, or any car that we bought as a family, i- it'd be a default purchase. Of course I would do it. Just like Tesla, and Elon's got it for his FSD on his cars. I think Waymo has the opportunity to do that for every other OEM on the planet. Are they doing that today? It's not, it's not their near-term focus. They're focused on ride hailing. They're crushing it. They're rolling out both nationally and globally to every city, and they're gonna build an enormous business on that side. They're gonna unlock use cases in ride hailing, um, that, that didn't exist before for folks like your mom or for my teenage daughter going to, coming back from, you know, whatever. Like, uh, there's so many more things. That will be a very big business, but when you take that same technology and capability and apply it to personal car ownership, and then apply it to trucking, and then apply it to logistics, Waymo's gonna be an extraordinary, I, I think a trillion-dollar business, easy.

    7. HSHarry Stebbings1:18:23

       Okay. Good. One is that. What was the second one? [laughs]

27. 1:18:29 – 1:19:40

    Why AI Drug Discovery Could Compress 50 Years Into 10

    1. SDSameer Dholakia1:18:29

       It, it kind of follows your, your lead, which is therapeutics.

    2. HSHarry Stebbings1:18:33

       Mm.

    3. SDSameer Dholakia1:18:34

       Using AI to, as they say, drug the undruggable. Like, to figure out cures, uh, is by far the greatest, I think, um, potential and impact, um, that we'll see out of this technology. And, and I believe, I mean, you're just seeing the pace of things. We're gonna automate, you know, there, wet labs are gonna become automatable, and you put an AI brain that can see and reason over mass sums of data sets and, uh, in ways that a, a single human simply can't. And, and I think we're gonna have a pace of discovery in biology and therapeutics and drug development over the next decade that we have, that would, uh, I really do believe what Dario says on that in, in Machines of Love and Grace. I think we're gonna see in the next decade what would've taken us half a century. I really believe that.

    4. HSHarry Stebbings1:19:23

       Dude, I, I think you've been so patient with me today. I mean, you have been. I, I mean, you're like-

    5. SDSameer Dholakia1:19:28

       [laughs]

    6. HSHarry Stebbings1:19:28

       ... I came for a nice chat, dude, and then you're just like, bam.

    7. SDSameer Dholakia1:19:31

       I mean, I love this. Harry-

    8. HSHarry Stebbings1:19:33

       [laughs]

    9. SDSameer Dholakia1:19:33

       ... you're, you always do this. You, you're so frigging entertaining, and you're smart, and you ask great questions, so-

Episode duration: 1:19:50