Tomasz Tunguz: How I Raised $230M; ChatGPT vs. Google; How LLMs Work; Trump vs DeSantis | E1004

Any time we talk about machine learning, there's always this question around, like, "What is the moat?" I think the answer is the one that it's always been, which is better execution is the moat.

Tom, it is such a joy to have you on the show. I just checked, and it is, uh, 2016 when you were last on the show, so seven years ago. I've missed you dearly, my friend. But thank you so much for joining me today.

Uh, thanks for having me back, Harry. I can't believe it's been seven years. Time flies. Look at you, huge audience, new font. I mean, look how far you've come. It's incredible.

I mean, that is so, so kind. But I wanna start with, uh, you, bluntly, which is obviously we recently founded Theory, such an exciting time. I wanna dive in and say, first, why did you decide to leave Redpoint and why did you decide to start on your own?

Yeah, I had, I had a great time at Redpoint. I was there for 15 years, learned from many wonderful people. And, uh, after, after that amount of time, I decided that after seeing so many founders start companies, that I really wanted to start one of my own. When I was, when I was about 17, I started a little, little company. And, uh, over the last 15 years, maybe more, 20 years, I've watched all these startups grow and, uh, I really, I, I wanted to have that feeling for myself, and I also wanted to experiment a bit more and try a little bit... You know, everybody has an idea about how they wanna create their own business, and, uh, as you know, I've been a startup, uh, student of startups for a long time, and so I really wanted to, to build a venture firm in, in a slightly different way. Uh, and so in September of last year, jumped in and, uh, and we were off to the races.

Man, uh, there's nothing more special than having your own firm. I couldn't agree with you more. You mentioned that, like, the learnings in the 15 years. If there are one or two big takeaways for you from your time at Redpoint, I'm asking you to distill 15 years of lessons-

(laughs) Yeah.

... into, you know (laughs) , a short sound bite, but what would they be and how does that influence how you think about building Theory moving forward?

Yeah, so I really believe in thesis-driven investing, and what that means is going deep into space and spending six, nine, 12 months researching it and really understanding it. Uh, as a board member, I will never know about, uh, as much about a space as a founder, but if, if I can deeply understand a space, then I think I can be a very helpful board member, and that's one of the reasons why Theory is called Theory. The other reason or the other sort of difference is I, I really believe in concentration. Like, uh, venture capital, the industry is governed by a power law, and the more dollars you can have closer to the Y axis, so to speak, on the power law, the better your returns will be. And so I wanted to set up a firm that was set up for thesis-driven concentration. That was the whole idea.