Having a pitch without a prototype is no longer acceptable.
So do you think that now that it's very easy to build with AI, that creativity is the bottleneck?
I mean, to some extent, ambition, creativity, resilience. It's really funny because we always lionize the people that did two things: that wrote code and that made movies or did creative work. We always said, 'Wow, if only I could do those things, I would do them.' And now three years later, we have these models and anyone can do it, and yet it's the exact same people that are doing those things.
Do you actually sometimes think, is this a feature that can be copied by OpenAI or Anthropic? How do you look at that?
No, I think we overestimate the probability of that. You know, there's a sort of venture firm that I won't name, but they famously missed all of tech in the 2000s because they thought that Google was just going to win it all. And I think this mistake gets made over and over again.
What's one thing that they should be doing differently Monday morning?
Oh, you have the wand. You got to build a thing that can't be ignored, that gets to scale, that follows some of the patterns that I described. And I promise, like, you don't have to email me — I'll be emailing you.
Yeah. Yeah. Yeah.
And together this evening, I have with me Anish. He is a general partner at a16z, focusing on investing in AI-native companies. He's actually a serial entrepreneur. I know that a lot of people think that they're serial entrepreneurs, but you have founded SocialDeck, sold it to Google also. So you have founded Snowball, sold it to Credit Karma.
So they have like a proper founder.
I mean, the story — it feels a lot better when you read it on LinkedIn than living it, you know.
We can start actually with a recent article that you have posted. It kind of gained, I think, like a million views — like, that AI is one of the most human technology ever made. Yeah, I was wondering, what is the background of that? What made you write that?
I mean, honestly, it's a little bit exhausting, like all of you, that every article I read about AI, especially in the mainstream media, is about jobs, right? Are we gaining them, are we losing them? And whether we are or we aren't, just so boring to constantly read about the same thing over and over. I think for so many of us that grew up loving software, for us, software was a medium for self-expression, right? If you're building a game for yourself, if you're tinkering on something, so many of these things were not about economic importance, right? Economic importance was like a nice side effect. So I think that's the thing that's being discussed about AI, which is like, hey, the skill is being divorced from the ambition. If you want to make it, you can. And that's a pretty cool thing for, you know, just for human self-expression and flourishing. So that's really what inspired me to write the post.
This kind of touches a little bit about, you know, like the next big company is going to look like a toy in the beginning. What do you think — what looks like a toy now in the AI world?
Yeah, so this is a famous Chris Dixon-ism. If you haven't all read his posts, you definitely should. He's sort of, you know, he's upstream of a lot of our thinking at the firm, and really in the industry is one of the best consumer investors. And, you know, when he famously said that some of the best businesses start out looking like toys, I mean, look at Discord, look at Oculus, look at, you know, a lot of the big social products — they were dismissed as silly or non-serious.
And so I think this is a very important thing for all of us to embrace, which is, as you guys know, being a founder is a highly embarrassing exercise, right? Your friends and family don't know what you do, your parents — you can't really explain it to them. People secretly worry that you were fired from your job, or at least they did for me. But I think that's actually where a lot of the alpha is. So the things that interest us most, which are often things that feel like toys, are signals to us about kind of demand and intuition. And when we try to build serious things with a capital S that, you know, maybe would make for a good MBA case study, those things never tend to work out. But that's been my kind of empirical observation.
I remember I just talked with a founder and he was about to go on stage, and I was like, 'Oh my god, like, wonderful. You're doing so great.' And he's like, 'Look, Caroline, like, the first five years I looked very stupid. No one believed it. And now, like, the last five years I look like a genius.' Yeah. There's no, like, in between. And you also, you kind of mentioned the embarrassing fact. I know there is actually a big difference between, let's say, Europe and the US when it comes to shame. In the US, if you try to build a business and it kind of doesn't work out, it's still — you're appreciated. Whereas, like, in Europe, maybe if you fail, that type of embarrassment maybe has like a different nuance. What would be like your advice for, you know, maybe founders in this room that kind of feel this shame and embarrassment, that they don't know what to do, because everything kind of looks like a play or like a toy?
Well, I think a lot of this is self-perception, but I understand the culture because I built my first company in Canada. I love Canada. I'm a proud Canadian, but it's a different environment. You know, it's a cautious environment. It's an environment in which it's impolite to, you know, to be too bold sometimes. And I noticed actually when I came to Silicon Valley, when I was pitching, I got this advice from another Canadian founder who'd been very successful. And he said, 'You're pitching this company like a Canadian would, which is you're telling me everything that you're definitely going to do, and I believe you, but when I hear it, it sounds unambitious.' He's like, 'Look, this is how Americans tell their story: they tell you something that feels insane, and then they try like hell to make it happen.' And that's the sort of style of storytelling that Silicon Valley investors expect. And that's not delusion, right? That actually has to be grounded in some reality, some belief, some kind of a tangible plan. So I think there are these sort of social norms and cautions, but a lot of it is in our own heads, because if you go on X and you post about whatever you worked on that didn't work in an earnest way, I bet you'll get more positive comments than negative ones.
Trusted by over 2,000 companies, including Notion, Spotify, and Parloa, and hosted in a GDPR-compliant setup, Leapsum connects your entire employee life cycle, from recruiting to HR operations, performance, and learning, with AI agents that handle the busy work so your team doesn't have to. If your HR software hasn't moved in years, missed the AI wave completely, and the price keeps going up anyway, head to leapsum.com and book a demo today to see what they can do for you. That's Leapsum, spelled L-E-A-P-S-M.com, and book a demo.
And also, you guys invest from pre-seed, or you particularly like to invest from pre-seed up to Series A and Series B. What does a pre-seed round look like now in the age of AI? Like, what are the metrics? What do you look at? How do you assess team, product, traction?
I think the number one thing is like, you know, having a pitch without a prototype is no longer acceptable. You know, I mean, maybe if you're building a chip, maybe, but now it's just so trivial to be able to build things, and the best form of storytelling is through product. Well, that's what we all know. So I think you just — you have to come with a product, and ideally you're in market. You know, it may be early and there may be caveats, but it's so much easier for me to extrapolate from some sort of a, you know, small but still statistically significant sample than it is for me to kind of dream a dream alongside a founder. So I just think the kind of expectation of progress is pretty far ahead of what it was three years ago.
Absolutely. Okay. And also, like, when you look at the market, because let's say you do something with Lovable or with Replit or other tools, and then you go into the market, you find a couple of customers, you do get traction. I guess for you guys as an investor, you want to see that this can get big enough, but at such an early stage, at pre-seed, you don't always know. So maybe the founders will have to pivot, maybe they will have to increase the market size. How do you look at the market?
Yeah. You know, there's almost two opposing ideas you have to hold in your head. But I often find this, and this is not the only way to illustrate the story, but I think being extremely ambitious in terms of where you want to go long-term, but being almost narrow in how you get there short-term. Like, I think the most common pattern for success is monopolization of a seemingly very small niche. And the question that you almost want to get is, 'Isn't that too small?' I think if you can get 80% market share in something that feels too small, you're going to start to discover the adjacencies around it. Versus when you try to compete in something that's highly competed and very horizontal, and, you know, the greatest lie we tell ourselves is, 'If I only get 1% of the market' — like, it's very hard to get 1% of the market because it's highly competed. So I'd say the alpha is where you can monopolize and dominate something even if it feels too small, and that is a great stepping stone in the sort of interest of doing something very, very large. I mean, like, famously Mark Zuckerberg, that you guys invested very early on, right? He was asked, like, how big did you want Facebook to be, and he was like, 'I wanted everyone at Harvard to use it.'
