Venture Capital Gravitational Physics (with Ravi Mhatre)

Hey, it's Eric Newcomer, author of Newcomer. This week I have a great guest over the top behind the scenes venture capitalist, Ravi Mottre, who co-founded Lightspeed in 1999. Ravi's invested in Nutanix, MuleSoft, AppDynamics, Zscaler, Aurora, and Blend Labs to name a few. He's perhaps the key partner at Lightspeed, which has raised $7 billion, and announced $7 billion in 2022. We talk about the Silicon Valley Bank debacle, how the laws of gravity in venture capital world may or may not be changing. And generally he talks about what it's like to run a venture capital firm and invest at the same time. Give it a listen. Before we get there, I want to thank our launch sponsor, Vanta. Newcomers brought to you by Vanta. To close and grow major customers, you have to earn trust. But demonstrating your security and compliance can be time consuming, tedious, and expensive. Until you use Vanta, Vanta automates up to 90% of the work for the most sought after security and privacy standards. Save time and money on compliance with Vanta's enterprise ready trust management platform. For a limited time, Newcomer listeners get $1,000 off Vanta. Go to vanta.com slash newcomer to get started. Robbie, great to have you on the podcast. Thanks for coming on. Yeah, thanks for having me. I'm happy to be here. I feel like you don't do a ton of podcasts. I've had a couple behind the scenes players now, and I was very happy to get you on the podcast. I wanted to start off just like, you know, really zooming out. These are someone who understands sort of the venture landscape, you know, built light speed. You co-founded in 1999. Is that right? Yeah. So that's just as the dot com is unwinding. What was that like, founding a firm right ahead of dot com in 1999? And what inspired you to start light speed at the time? Well, I guess the first sort of observation with hindsight and, you know, it's the same with founders of our company. Sometimes it's better that you don't know what you don't know. Had we known there was going to be sort of an existential downturn that affected every corner of technology, you know, nine to 12 months after we started the firm, I certainly would have done some things differently. We started the firm. We raised a relatively large fund one, even by today's standards. It was in the high hundreds of millions, you know, and our focus was at the time there's a high high velocity market, but was to work with early stage founders and really be high conviction. And it feel like you might not make it through like the chasm when we really realized how severe the trough was going to be. We probably had deployed about a third of a fund already. And you know, with hindsight, when you get into sort of downturns that big, it's like the rules of gravity. Just somebody made that, you know, change them and the rules of gravity that you were penciling out all your assumptions, you just don't apply anymore. So you're in the state of a little bit of vertigo and weightlessness where you've invested money in companies, their premise of how they're going to spend that money to build a product. And frankly, even who's going to have a sort of money in the market to buy your product, everything from the root assumptions up and the top assumptions down have changed. And so you're in a position where you're sort of staring at it and saying, hey, we did all of things, you know, we think kind of right, but when the kind of fundamental laws of physics change, you have to reorient in a way. And frankly, some of the things you've done, you just can't get the math to compile in a new, in a new environment where you're weightless and floating. And before you knew that there was some, you know, kind of pulling force to keep you grounded. That's like the perfect metaphor for the question of this podcast, like the rules of gravity changing the rules of physics changing. Does it feel like we're in that type of world now where the rules of gravity have changed? I mean, to sketch it out briefly, 2022 was sort of a brutal correction for tech stocks. To me, it seemed like early 2023, we had hope and now we have this sort of SVB Silicon Valley bank crisis and broader banking situation. Summing that all up is that rules of gravity have gone away level situation to you or not quite now having, you know, personally seen and at light speed, having experienced, you know, three major, I'd say cyclical events for technology first, the 1999 through 03.com burst, then the financial crisis in 0809, most recently COVID, you know, there are some things that are the same about companies having, and I'll get to this fundamentally retool how they think about what they need to do to operate their businesses. So there are some laws of physics that have changed and they are going to be more or less painful, you know, to realign to depending on how much a business was optimized for the 2021 and before environment. But what I would say is different at this point, and this is really more about the technology industry as a whole. When we started light speed in 99 of the top 10 most valuable companies in the world, one was a technology company was Microsoft has valued around 200 billion. I think today, if even in the sort of depressed market environment, if you looked at the 10 most valuable companies in the world, it's something like seven or eight are technology companies. And this is Google, Facebook, Amazon, Baidu, Tesla, Apple, and there's a couple I'm probably forgetting. But these are companies that are valued in summer in the trillions and many are in the high hundreds of billions. So if you just do that math, it's an example or a barometric reading of how much broader and secular technology is today. It pervades every industry. It's not really a vertical industry anymore. So, you know, when you say that, and there is a downturn, and there are things that companies have to do to retool to the new physics. On the other hand, if you are a technology innovator, it is not a situation where every kind of potential buyer or consumer of what you do, you know, has essentially gone into a mode where they're in a defensive posture. And that is good news because it means that, you know, it's not like somebody said you went from having gravity to being weightless. It's more saying, Hey, we went from an environment where we were at, you know, kind of five gravities in terms of a poll in the market in 2021. And you didn't have to worry about, you know, whether you were making a profit because with low interest rates and the ability literally for capital to be available on demand at a higher price at a very, you know, non-deluded basis, you could make those assumptions about the fuel you were going to have, and you could build product and you could grow. And I'd say that the laws of physics that have changed now are, Hey, maybe we're in a half gravitational poll environment and you know, you're feeling like based on the way you ran your company before your feet are slipping a little bit on the ground. But if you take a hard nose, look at what you need to do, there aren't still buyers there, but one needs to look at how you operate a business in a way that is fundamentally more operating efficient that, you know, what people are buying allows you as a company to extract value back from your customer. And then in terms of how you operate your business, flow that through to something that can generate, if not profit, only sort of a much smaller margin of loss. And so that can be a pretty traumatic exercise in terms of the DNA of the company organism. But it is a doable transition. It is it is not as much of a binary transition where I really feel like in the 99 downturn, there were just many companies where, you know, the rules of gravity have changed so much there was never going to be a scenario where what they were proposing a value would make sense in the new world post the downturn. I mean, you know, specifically, you've got what mule soft app dynamics, eutatics, like sort of software and software as a service businesses, you know, you get this world. One of my favorite stories that I wrote was like November 2021. I had this list of like seven companies that had raised at a billion dollar valuations with less than 10 million dollars in ARR. Right. I mean, when the SaaS multiples just like went to the moon, it felt like anything was possible. I mean, if somebody raised a, I don't know, a series sea round and, you know, 2021, late 2021, like, is that recoverable? Or how are you helping these sort of SaaS? If you just happen to have a good company, but raise sort of at the wrong time, or you thought it was a great time, you raised it wonderful prices. But now looking back, you raised it super high prices. Are you seeing those companies find a way to sort of get on the right footing? Yeah, I think essentially what you're asking is we went through a period of cheap capital availability for all kinds of companies. And then in 2022, that availability of capital on an inexpensive basis went away. Right. And so you're sitting here with lots of companies that had, you know, near term, you know, pre fat balance sheets. And what 2022 and now into 2023 has become is a period where nobody wants to raise money because the immediate spot market for raising money, the prices are just much lower. It's like the real estate market. The first thing that happens in a residential real estate market is when prices go down, everybody takes their home off the market because nobody wants to sell if they're going to get a lower price. And there's some analog to the private company, you know, funded in market revenue generating, you know, technology startup or growth company. Essentially, everybody took their took their company off the market. And in the ensuing year and a half, you see a vetting or a separating process that happens sort of naturally where the companies that have arguably stronger product value propositions, the companies that can retool and get their models closer to being operating efficient. So they burn less cash. They're creating more time to run the experiment of, Hey, as I let time pass and I'm able to get more customers, am I able to kind of grow my revenue and grow my business in a way that looks operating efficient relative to the new norms? How far can I get to catch up to that valuation I raised in 2021, which again, as the laws of physics changed, now say was too high relative to the maturity of my business. And some are making it. I think it's probably not the majority. I think there are a lot more companies that in the 2021 environment, when it was easier raised money, it was probably frankly easier to sell the product, even if it wasn't at the very top of the, you know, the food chain in terms of value to the customer. But they're able to grow somewhat. They maybe have made some improvements in their operating model, but they're not getting to the point where the state of the business today in the new physics environment means that you've crossed over the valuation where you last raised money. And I think we see that those situations are now starting to happen. And I think companies are basically the good news for the companies that have strong businesses is I think in today's environment, there was so much investor capital raised, those companies are still able to raise money at, you know, sort of flat or many cases up rounds. Because again, the aperture for tech innovation is still broad. The technology innovation cycles, they really are decoupled from, you know, the kind of macroeconomic innovation cycles. So that marched forward is happening. And you're seeing good examples of company and rules, one at Lightspeed Invested. But I mean, it's a very interesting company, again, where you just look at the kind of adoption of the product set that they have, and you know, they were able to raise a large up round. There are others, but you see that in some cases. But I think you see many other companies where the reckoning is, Hey, we have a business, it feels like one that is accreting in value. But we have to accept that the norms of this macro environment are such that whatever, you know, the pricing was we did in 2021 or before, you know, it's like my home, maybe I will, you know, decide to sell it for a lower price. So how does that manifest? You're seeing a lot more spade of these converts, which are really an ability for money to come into a business that has value. But nobody wants to try to pinpoint the value of the business today. It's too hard to do. The founders of the management don't want to take it down around investors, you know, aren't ready to commit to an up round. So you kick the can down the road and say, I'll give you money. And I wanted to turn to Silicon Valley Bank. Depositors have been protected now. Well, do you think a lot has been lost? Are you worried about sort of just the absence? I mean, you know, they're trying to run as usual now. I'm just curious from what you can see at the moment. Yeah, how much is Silicon Valley going to be disrupted by the troubles of Silicon Valley Bank? Yeah, there's absolutely something that's been lost at this point that I don't think can be regained. And you know, Silicon Valley Bank, their impact extends well past Silicon Valley. They've been obviously a critical part of the innovation, you know, ecosystem and economy for, you know, nearly 40 years. You know, we have a strongly held view that in light of what they have done for the innovation economy, Silicon Valley remaining in some form, you know, whether it's as an independent spun out entity or as a independently operating subsidiary of a larger financial institution, you know, we think that would be really good for technology, ecosystem, technology startups going forward. You know, what does Silicon Valley Bank do? I mean, some of it is qualitative. When you have an institution that is focused very specifically on the needs of founders who are building tech forward or tech innovative companies, they develop some level of expertise around understanding not just sort of simply how to bank those companies, but what the financial needs and, you know, potentially, you know, how to underwrite how to, whether it's venture loans, whether it's providing, you know, extensions of credit, whether it's introductions to other investors, they understand by seeing a very large cross-section of those companies who are banking clients, something about how to help those types of companies evolve that larger financial institutions that are providing, you know, pure financial banking services will not understand. That is going to be much more expensive for startups. Is that one thing that will be more expensive or frankly not available? Yeah. And that, again, we'll just create a little bit more of a chill on the vibrancy of the tech ecosystem because if you, a capital look is the reality is part of how you fund the innovation economy because the vast majority, almost all tech startups are going to run unprofitable for some period of time while they build product and figure out what their business is. And so if you take a platform that is fundamentally focused on providing capital to that ecosystem, it's risk capital at some level and you eliminate it and you take bigger institutions who don't focus and have the expertise on, hey, you know, maybe this is a company building a really innovative product backed by, you know, three or four really well known and established VCs and some really smart partners. If you're Silicon Valley bank, you understand that that company may deserve the opportunity to have more capital so it can really lean into what it's building, but a larger institution just would have difficulty getting to that granular level of expertise. So I think it will put some kind of a chill. I don't know how much but on the ability for this ecosystem to be vibrant. And, you know, more importantly, I think Silicon Valley bank just they understood that, you know, what their role was in this ecosystem. Some of it is when your bank, it's like, like a community bank or a co-op part of your job is to be a connector and it's to have events for the community. I mean, they would, you know, sponsor of my upcoming conference. There's some element about the sponsor. I was like begging them like, Silicon Valley bank sponsors everything. I can't get you guys. And then literally, I feel like I must be one of the last things they sponsored before, you know, they went under because I think they're always quick to do that. To understand that sponsoring an event that brings people together in the ecosystem is it may not result in direct business for them. Maybe the branding is helpful, but also that's really valuable. I mean, they're they understand the ecosystem at a pre horizontal level and their agenda is not necessarily that of any one investment institution. And so there's just some lubricant and some notion of creating a sense of identity and community around technology startups that is it's absolutely valuable. And you know what? I also think they've been great at following, you know, the kind of innovation curve globally, you know, they understood that tech innovation was happening, you know, in Silicon Valley and Boston and in a lot of important parts of the US, but then also in India, you know, in China, in Israel, you know, I just look at what they have done as an institution. And I mean, if we're, you know, believe that tech forward and tech innovative companies are important to how, you know, the world economy functions and where we go in the future, I think they've been an instrumental part. And there's something about the collective institutional wisdom of that firm. That it would be a shame if it goes away. Did you have a strong point of view on the VC bank run, like both weather, I don't know how advice giving was handled and weather. Yeah, you know, the actual fear was a primary driver here. I don't actually know what your your private Yeah, I don't know exactly how to comment on that other than to say, you know, some of it. I think VCs who were, you know, vocal and I'm not saying they were wrong, but vocal about their fears and anxiety. It's like any kind of bank run. If you if you have someone yell fire in the middle of a crowded movie theater, you've created a crisis of confidence where everybody makes for the exit. So I think we've got to own as a venture industry venture community that some of that happened for sure. And you know, we need to own that and be at some level accountable or, you know, just sort of understand how we do better next time. On the other hand, I think that was not the only thing that precipitated the crisis. The reality was that there was a balance sheet hole that as we be, you know, tempted to fill, I'm not an expert, but I think there was a unsuccessful attempt to initially fill that, you know, that was spearheaded by a large, large financial institution. So there were other compounding factors. But once the crisis of confidence happened, I think my perception is from venture firms, we know, I believe light speed, our peers, you know, acted in a fiduciary responsible way, which is if you know that an institution where, you know, a underversified all of your funds or all of the company's funds are deposited and they may not have access to it, you have a fiduciary obligation to, you know, do anything you can to help these companies to move some of their funds or have a way that they can have confidence to have. Remember, these are all companies that are by definition, most are losing money. The capital is not money that they're trying to invest. It is the lifeblood of how they are going to operate their businesses, how they make payroll. And so I think it, and it happened very quickly. So did you feel real fear? Like, was it a scary moment or you thought it would? Let's just say, I mean, this crisis unfolded over Thursday and Friday and over the weekend, by the weekend, you know, and I'm sure I wasn't the only one, but you know, most of the partners at Lightspeed worked around the clock over the weekend. I'm sure other firms did too to really understand where, you know, we were going to have our companies who were going to have payroll issues and we were, you know, frantically trying to find solutions. Zooming out to sort of, you know, the venture landscape, basically, you know, as somebody who co-founded a top venture firm and has managed and seen, you probably could tell the story of Silicon Valley through venture firms better than I could. But you know, you had sort of like the old guard firms and then, you know, Lightspeed breaks on and certainly by the time I started covering Silicon Valley and like the 2010s, you were sort of a super established firm by then, then we have sort of, you know, Andresin sort of flooding in and the market sort of the pricing competition. And then I think into the late, you know, to the end of this cycle, we had this sort of solo capitalist and just lots of different sources of money, like individuals and new funds. I'm curious where you think in two years or in four years, like where will be? I mean, especially with the Silicon Valley bank situation, you sort of saw the lack of control. There wasn't like, Oh, there's a limited set of venture firms, they can sort of come together and decide what happens. It felt very diffuse. Do you think that's where we remain? Silicon Valley has just grown up like private equity. There are going to be a ton of different firms competing or do you think we're going to see more of a retrenchment from LPs and there'll be sort of a smaller group of venture funds going forward? You know, it's a good question. I mean, the venture fund model allows for fun formation and then capital commitments and flow through to happen over a 10 year period, usually with a couple of extensions. So when you're really talking about venture funds and therefore venture firms that have become established, their capital bases aren't going to go away overnight. That overhang will exist. The money they got raised. On the other hand, I do think there's the roots of consolidation are going to start to, you know, form. And I think there will be that cross current dynamic. And what I mean by that is it's just that in this environment, if you raise the fund and you let me put it this way, in this environment, companies are going to have to take a much longer view that idea that if you are a more recent firm, whether it's a small, you know, angel oriented firm or a larger firm, if your investment experience has always been about, I am going to deploy capital in a growth environment, where there's always an assumption of more capital available at higher prices. And frankly, the companies and the ideas and the founders I back, I am very focused on their ability to simply raise more money and grow faster, but not necessarily have the expertise around how you ultimately create a mathematically operating efficient organization around there or business around that that compiles. If that's essentially the totality of your experience. And frankly, a lot of firms, I won't say all, but you know, we've been in an up market environment. I've been on record about this before largely since 2008, nine, and that's a long period of time. And so if all your institutional wisdom is, is about sort of growth without the notion of operating discipline in whatever entity you create, I think it becomes tough. You may have capital that overhang exists, but your understanding of how to take the investments you've had and help them evolve to the new laws of physics or gravity. I think it's more limited than firms and people who understand this sort of cyclical transition. And because there literally are a lot of things that need to change. That's both in how you think about, you know, how you work with your companies inside all of these companies. It's sort of some tough transitions that founders who may not have ever been through or lay off before founders need to do a lot of different things now and they'll need to get out of their comfort zone. And some will be able to do that some won't. And for the ones that won't, it's going to be helping them figure out who they can bring in as partners to help do these things. So I just look at the venture landscape. And I think you'll see it's a time of separating function. Some of the people with that type of experience historically, I think, you know, have seen it before, it'll be more a natural adaptation. They'll be able to do the things that allow their companies as and in as investment firms, their portfolios, to feel like they continued to be interesting vibrant portfolios that are going to create value in the new normal environment. And I think some of the firms that are newer who don't have that prior investment experience, if they don't figure out how to adapt, I think what will happen is they'll look like they have capital, but they're going to have portfolios that don't look like they have adjusted to the new environments. And so, you know, nothing will have changed about the companies they back. But if the was all like kind of growth at all costs, they're not going to look as interesting as firms to LPs going forward. And that won't play out in 12 to 24 months. But as we get into new fundraising cycles, you know, you'll see that drift start to happen where, you know, firms that really are, you know, transitioned and then, you know, by association, they've really influenced their companies to transition to this new environment are more likely to raise more capital. And you'll see a trail off in firms, or, you know, frankly, sometimes early stage investors where they didn't really think about getting into the investment business to sort of have a long view and think about how they're working with founders through all parts of the sort of economic cycle. They were really more just backing people where they assumed other money was available and things would grow. And you could kind of get in low and maybe get out higher. I think for those kinds of platforms, there will be a pullback and there'll be less capital available. It'll take time to play out. It's hard. It's hard. It's not to hear Andreessen or it's a lot in some of the behavior you're saying a firm that is. I'll tell you this. And I don't, you know, I think they built a really a great firm that's had a lot of success. I do think that the firm started, you know, post the last major economic downturn. And so they built a firm that has had a strategy where it is had to succeed and grow value in kind of a macro up environment and technology up environment. But I will say about Ben and Mark, you know, I know them a little not that well, but you know, I know the journey they went through at Loud Cloud that became Offswear. And I think that the two of them had to endure as kind of operators and founders, one of the most severe, you know, kind of downturns that this was. It was partly that, you know, 99 through 03 downturn that killed most businesses trying to do what they were doing. And they were doing and they found a path through that, again, if you go look and look back at the sort of hard decisions they have to make, I have an enormous amount of respect. Totally. They did and hard things. You know, actually, yeah, Ben wrote that book. I think that, you know, I would just sort of sense that from that experience, you know, they understand a lot of the hard lessons and they may have to make the adaptation of the venture firm they built, but they are not without experience and I'd say some track record of knowing how to make very, you know, I just say significant and acute transitions to the business they're in to sort of survive and then ultimately go on to thrive. Lightspeed, you know, announced, I think it was like more than $7 billion in funds, I think July 2022. You referenced earlier the dot com, you know, a third of it deployed and how you sort of navigated that. Similarly now, like, how do you think about sort of the pace of deployment with the 7 billion? I mean, I think founders funds that they were going to, if not give back to their LPs, like shift some of the money, I think, to like future funds, like that certainly set a ripple through, I think, VC world. I'm curious, yeah, how you're thinking about sort of the big set of funds that you raise and how you're deploying them and your strategy in this down. Yeah, I think the pacing of deployment generally, whereas funds in over the past five years have been on more of a two to two and a half year cycle, we are moving back to a deployment cycle. It looks frankly more like it did historically of three to three and a half years per fund generation. And I think we are thinking a lot, you know, we were very deliberate about the amount of capital we raised across our early stage, our mid growth and our crossover funds. And in the new environment, we have been really bottoms up and saying, hey, if we wanted to deploy this capital, how would we do it in light of the new circumstances in companies that we think are, you know, able to get operating efficiency? And what is all that kind of compiled to in terms of the length of deployment, we think three and a half years is realistic for us. And, you know, again, I think we feel really good about, you know, this time around, unlike in, you know, the late 90s, we really have built, in some sense, what we think of as a platform where to make these changes to the environment, there's a lot of telemetry about our companies, about how we think about even what is, you know, required if we are going to make an investment that can flow through pretty quickly. So if we need to adjust, it's not a seat of the pants adjustment. It's more like, you know, like our companies, we're very very deliberate about saying, hey, what do we need to change about, you know, our behaviors? What do we need to change about when we talk to our founders, what they need to achieve? And therefore, from that, what it is going to take for them to unlock more capital, whether it's from us or others. And you know, that ultimately ripples through. But we don't feel like, again, from what we raised before, it was done in a pretty deliberate way with a lot of, you know, I'd say planning underneath. So we're feeling, we're feeling like it's very manageable. Again, I think there's still the tech innovation cycle in a lot of areas is still very healthy. Right. You know, investments particularly at the early stage are, they're absolutely all out of things we continue to be excited about where it's very smart people who have pretty ambitious views of how, you know, whatever new product or architecture they want to deliver could be transformational. And we're not seeing a shortage of those ideas either across our different, you know, kind of global geo's where we play or, you know, a lot of the different sectors where lightspeed has expertise now. So I think we feel good about that. But I think the pace of deployment will be longer than it was, you know, circa 2021, 2021 and before, you know, we went through this period of crypto hype now for in a period of AI, high that, you know, I guess I'm personally a little more enthusiastic about the AI, then crypto hype. I don't know. I'm curious. I mean, tech investing and venture sort of just clearly goes through moments when something super hot. How do you think about sort of like investing through these hype cycles? And then in particular, like what do you make of like all the enthusiasm around generative AI companies at the moment? Yeah, it's the old saying that if something seems too good to be true, and I would characterize any technology trend where we're at the peak of the hype point in the life cycle of these things, we then go through the, I don't know, the trough of despair and then back up to real deployment. But if something in terms of how people are narrating it seems too good to be true, it probably is. That doesn't mean there aren't core, you know, fundamentally interesting things happening. And I feel like that just sort of phenomenal enough how new technologies become absorbed and ultimately deliver, you know, kind of existential value has happened again and again and again. And so, you know, my view on generative AI is yes, we're at the peak of the hype cycle where there is absolute, I think, promise and, you know, there's a fundamental and we can talk about it. Instead of breakthroughs that are going to enable, I think, a lot of productive benefit to the world broadly society as we know it. But I think the kind of the conversations about how this will play out right now are a little bit hyperbolic and, you know, some of the kind of endpoints people are talking about, I think are, I don't know if it's too good to be true. Some people are talking about AGI, which is a little dystopian, maybe too bad to be true. I just feel that you have to kind of be able to discount that. You need to be able to invest now because there is a lot of the innovation happening, but you need to really have a calibrated view of, hey, seven to 10 years from now, what do we think is a more measured through line and how do we take that kind of a view if we're going to invest now and not kind of get on the ride at the peak of the hype cycle where we buy into all the assumptions. And then I think the reality is we're going to have like a, you know, the the cart's going to go down a pretty steep drop off before it then kind of inflex back up. And I think crypto look, crypto has been through many cycles. I continue to believe in we have people who are continuing to look at an actively investing crypto at light speed and at the joint femture we established called faction. If you look at the fundamentals again about developer activity, user activity on some of the more notable blockchains, whether it's Ethereum or polygon, there is absolutely a steady march of increase in the amount of activity there. And yes, some of the applications that got built in the hype cycle are they no longer work, the laws of gravity don't longer apply and you're seeing fallout. But I do think that there are fundamental reasons why again, this sort of trustless distributed ledger where people can anonymously exchange things of value or exchange digital things that are truly unique. That has a place in the world. And it is, you know, something that is going to take a while to be absorbed because consumers need to understand it. You know, these chains even they just need to get to the point where they're reliable and secure and scalable and a billion people can, you know, orchestrate a transaction on it at one time. The maturity just isn't there yet. And so, but at that end state, I absolutely, you know, believe based on 25 years experiences as an investor and doing a lot of things in kind of core enterprise infrastructure and distributed systems that will create value in a set of applications that are faster, better, cheaper, enable new things that are very hard to do today. And so, I would say that with AI, we are, you know, at the point where the euphoria and yeah, feminism are, you know, they're kind of fun to see or, you know, maybe the dystopian worry, you know, less fun to see. But I think these things, they kind of overshadow the fact that underlying that there is fundamentally, I think, a major technology unlock around generative AI. Right. I think it's the idea that really you've created a much better natural language interface where people who, you know, are not technically at all knowledge workers or people who don't have technical educations are going to be able to have a massively more productive way to engage with computers and machines at its core. And that's the thing that we can all, I hope, optimistically, use our imaginations for, you know, I was a huge Star Trek junkie when I was in my teens and, you know, I guess the more recent analog Ironman with Jarvis, but where you really can anyone can speak to a machine and it can reflect back to things. Emotively that, you know, they're going to make you with a human feel better. It can have edits, sort of fingertips, the world's knowledge in a way that it is, you know, sort of curatable for you. It's just there are things that allow people to take advantage of the best of what computers and machines and, you know, kind of infinite memory have to offer in a way that is natural to a person to feel that they want to engage with these machines. And that doesn't exist today. Now, the reality of how that ultimately, I think, manifests in terms of value in society is going to be that we, you know, there's a long learning curve of how do we take that new language, so to speak, that's just a better, more fluent language that computers speak. And how do we attach that to all of the existing things in the world that are already built? A lot of like technology scaffolding, you know, a lot of things that are systems, you know, physical systems that exist, I mean, core bets in the you that you all are trying to make, or have you seen the those sort of manifesting companies yet? It's very early days, but I think the core, again, long view premise we have again, light speed, we're always trying to think about, Hey, who are people who have a view past the hype cycle of something that really could have, you know, the value and meaning in the world, I guess. So, you know, some of those are, it's very early, but you can start to see, you know, breadcrumbs, you know, in enterprise where light speed has traditionally been strong. It's the, again, core idea that, you know, of, hey, if I had this better interface and somebody is a designer or somebody, you know, as a copywriter, how do I allow that person to do the things that they would do today in a business enterprise, but just in a way that's more natural. And I do think with generative AI, you know, they could kind of have 10x the capability, maybe it's 10x, the ability to write 10x more copy or to generate 10x more derivative images of the coke brand on a bottle, because that helps the business connect with users in a more personalized way. It turns out as an example, we'd back to company called typeface and I don't want to show for them, but it's, I think it is a very clear example of if you said, Hey, generative AI is just amazing technology. If you look at how in a company context, you know, designers and copywriters and brand ambassadors think about connecting with consumers, they are limited by the ability of when they have a new idea. It's a pretty nitty gritty process to take that idea in their head and go to somebody who can create a new concept or, you know, maybe take that idea and if it's needs to be normalized for a campaign that's going to happen in India because it's Diwali, it's just, there are all kinds of things in just the roll out of that new idea. It requires collaboration. It requires data sharing. Generative AI, if you could create a new application where generative AI sits at the core, it could allow people, and we've seen that this is what typeface really understood, you know, could, I mean, literally 10x faster or, you know, 10x more of the iterations, you know, they could in a company context allow generative AI to, it's not take the human totally out of loop, but it has allowed the people who are doing, you know, the kind of ideation and the creation and the collaboration around how to make this happen for consumers to move much more quickly and have something that's going to feel a lot more, you know, attractive and unique to a consumer. Venture funds are always coy about talking about, you know, who's in charge, but you're sort of in charge. I would say, no, I would say though, to your earlier question, do I, if you asked me about the portfolio, which is now large, it is, you know, I think I have to come active companies in, you know, in the 400 plus range and we have seeds. I mean, I would say that I could give you sort of a short form on, you know, I may not remember all the names, but on the founders, on the core product or sort of, you know, kind of technology idea on why we align with that founder of money to invest in probably 80% or more of the companies. I mean, it's more that is my passion point. And I think it is one, but not, you know, the only thing that has allowed Lightspeed notwithstanding federation to kind of scale in the way that we, I think our approach to investing and as, you know, anyone who's, you know, a Lightspeed investor, how they show up, that it's consistent because, you know, you need some people who kind of are keeping the faith and are able if we get, you know, really too far out of position to say, Hey, is this really what we do? And I'd say, you know, that's probably a strength I have. But there are definitely, I don't know, when you defining charge, we're not a hierarchy. As an example, I am not on the comp committee of the firm. There's a set of senior leaders in the firm who, you know, we federated that who are responsible for compensation. There's a separate set of people who, you know, are committee that are responsible for, I don't know, marketing and other functions that are in the business. But yes, you know, I am a founder at the firm. I'm one of, you know, a smaller number of people who are, you know, are most tenured at the firm, obviously, given that I started in 99. And I think, you know, with that, it's less of a, the theory, X of management. It's not really so much of a top down as it is. But more it is sort of, we think about it as anyone who becomes senior here at service leadership. And it's the idea that, you know, yeah, we should be leading by example. And yes, if there are times when somebody needs to raise their hand and say, Hey, is this is a decision that's important? If it is a conform to our values, that could be in terms of how the firm operates. It could be in terms of an investment we make. And yes, you know, there is needs to play that role. And I'm one of a much smaller group of people who, you know, who does play that role that's needed. But I'd say the ideas, it shouldn't be needed a lot. Should founders be chasing you down for new deals or how much are you focused externally versus internally? Are you trying to do a lot? I definitely again, given I'd say, you know, probably a thing that has been more in my wheelhouse is, you know, I'm not just, I love and I love to learn. And that's kind of a lifelong thing. So I spent a lot of time trying to be engaged with new companies that the firm is looking at. But my role now I am not trying to make investments individually in the sense of being an individual full stack craft investor. I am trying to combine the things I do as it relates to investments with working with other partners at the firm. So I can play a mentorship role. And frankly, for founders, I tell them the best thing they can get out of me is really, you know, maybe the benefit of my experience. And that's part of what a platform like Lightspeed has to offer. But you know, the 80% of what the platform is really about access to the network, if it's helped with recruiting, it's connectivity, you know, there are other partners who are much better suited to doing that on a, you know, literally on a daily and weekly basis. So I partner with other founders and, you know, it has to be, it has to be a situation where the found where there really is value of founder, really a preseason that would be value. And I'll get involved with another partner at Lightspeed in a kind of more of a dual relationship. But I'm, I'm not trying to be an investor individually in companies anymore, because I don't think that helps a founder get the most out of the platform. And I don't, you know, in terms of the scale of things, I have to do both. Yeah, as a leader of the firm and, and kind of helping other people in the firm, it's not, you know, a way that's scalable for right. I'm one person I haven't, I haven't figured out the sort of science that I give hard of calling myself. So this is the last board you stepped up. Yeah, the last board I joined was in partnership with one of my partners named Brevi Rajjain. So the founder has two technically revvies on his board from Lightspeed. But this was typeface. This was a company started by Abi Aparasins, who was a chief product officer to Adobe, who, you know, is really trying to make a generative AI with the next generation of how, you know, enterprises do brand design and, and, you know, brand localization to their customers. Sweet. Well, thank, thank you so much for coming on the pie guest. Yeah, great. And thank you for having me, Eric. Yeah, it was a pleasure to do it. And, um, yeah, I'm looking forward to spending more time together in the future. That's our episode. I'm Eric Newcomer. Thanks for listening to Newcomer. Shout out to our editor, Tommy Herron, my chief of staff, Riley Kinsella, young chop and scheme, who created the theme music, like, comment, subscribe on YouTube, follow us along at newcomer.co and subscribe to the newsletter. See you next Tuesday. Thanks for listening. Goodbye. Goodbye. Goodbye. Goodbye. Goodbye. Goodbye. .