Sam Lessin on Business Models & Strategy

Essays

From the Podcast

So here's the thing I would buy. It's not the business model they're pitching, and certainly not what they do, but I could imagine it working this way. Everyone in the world uses open source. It's pretty good. It's like having your IQ like 100 audience, IQ 110. It does almost everything you need, super fucking cheaply, whatever. But every once in a while, there's a rebellion, right? And that rebellion fucks you, right? And so who do you call when you have a rebellion? You need to call in like the fucking Navy SEALs and stealth bombers, which are super expensive.

— Sam Lessin, More or Less Ep 159

No, and all that stuff. It's just, there's a v- this is like the French make great art, doesn't make it a great business. So like, that's kind of my take. Here's an interesting thought experiment. What if the business model for the frontier labs actually is not a- actually about being used, it's more as a weapon systems? So hear me out.

— Sam Lessin, More or Less Ep 159

There are very funny, um, like, Instagram memes about people talking to the voice mode being like... Or some guy's like, "ChatGPT, build me a billion-dollar business. Make no mistakes. Be quiet, be quiet, be quiet. Do this. Do this. Like, SaaS app," you know. And, like, so those will get better, I guess. Maybe that's an impact.

— Sam Lessin, More or Less Ep 158

No, it's actually funny. It's like what I say I do, but in practice, I just don't care and give all my money to Anthropic. I know how to do it a little bit, but here's the... And the reason why, Dave, is an interesting one. This goes back. For me, the incremental cost of like I just want it done, I don't care if it costs a little bit more money, and I think that like is worth overspending on to a point, and I'm not at enough scale that I actually care. Like if it was like if it was thousands of dollars a month, maybe I'd care more. It's hundreds of dollars. But the que- But like I don't know what the counterfactual is 'cause it's hard to measure the output of like one model versus another in like a lot of the types of tasks I do. So this is gonna be like a big game. Is this a thing where you're like, "Look, I have to just trust Anthropic, and I'll let them turn the dials on me, and they're gonna extract enormous margin," and it's actually kind of a like enterprise li- Or is it a totally flat open electron marketplace with no barriers and no regulation, in which case terrible business. Although it still might not matter because number go up.

— Sam Lessin, More or Less Ep 149

I like sw- switching roles with you, Dave. It's fun. The counter to all that, and we just talked about Google and the Google Search business. I think the thing that I, with Anthropic in particular, that I just don't know how this plays out, is the beauty of Google and Facebook, especially even Google more than Facebook as the best business models in the history of the world, is they get to turn the dials. Like you need some more money, just add, add another ad. You know what I mean? Like you, you can, you have total marketplace control. The interesting story with Anthropic is, oh, you need to make your quarter? Just like make it spend a few more tokens. You need... You're a little, little bit too much capacity, like a little not enough capacity, eh, tap down the tokens, make them a little more expensive. If they can get away with the dials themselves, it's an unbelievable business because even if for all of my curmudgeonliness, like you'll find ways to tune the dials to make money. The question is, how much of a marketplace is it? Because if they can't turn the dials because it's an open routery situation, oh, they're like cheating me here and I know they're cheating me, so I'm just gonna like use another provider of multiplying matrices, then it's a terrible-

— Sam Lessin, More or Less Ep 149

... and like bye-bye ad models, and like bye-bye the entire business model for the whole thing. The second cataclysm o- of AI is gonna be you're just gonna like have all these agents running around doing crazy shit, and including things they have no idea what they're doing. And they'll check the APIs and be like, "Yeah, that thing works," and it sort of will, but there's gonna be like a bu- like something hidden in it. And like everyone's gonna do it, and no one will trust anything, and the whole thing collapses.

— Sam Lessin, More or Less Ep 142

I mean, I did it, but I think for me, it's like the story of open AI is like the business model go round and round of like, what did it, how they're going to make money.

— Sam Lessin, More or Less Ep 140

This is probably Hollywood's new business model is basically betting on the things they make. Like you make the movies for free.

— Sam Lessin, More or Less Ep 139

You can't make any money on those. And the reason you can't make any money on those is because with open access, someone will always overbid or overprice. It just doesn't work. So it turns out that when markets get too efficient, they're bad businesses. And technology and AI makes markets efficient. The only way to have a good business, the only way to do a good venture deal is to have proprietary deal flow. You need a dark pool of deals that no one else knows about or dark pool of founders that no one else knows about or access that no one else has that's sustainable and ideally compact. And I think we're going to see this in a lot of things. We're like, the internet was all about bringing liquidity to marketplaces saying, okay, there is this inefficient market and we're going to make it more efficient and make money on it by effectively aggregating demand, supply and demand and hosting the market. I think that goes to zero value because it's too efficient and everything becomes in a company building sense about forget the software, forget the market story. It's all about can you own and control dark pools of value effectively? and then monetize them consistently.

— Sam Lessin, More or Less Ep 139

Well, think dark, like dark pools are basically here's my, here's my, here's my dark. Here's my, here's my, my, my thing. I've talked to a bunch of companies recently. I've been thinking about a bunch of this from a bunch of different angles. I actually think one of the things that LLMs and this arrow will do is going to be the death of the open marketplace. Right. Because you can't make any money in an open marketplace. It's too efficient.

— Sam Lessin, More or Less Ep 139

CRM, it's so good. It's so good. There's a stuff you doing six months ago, you had to manually patch. Now it just understands how to... But it's just too easy. No one's going to build a company doing any of this stuff because it's too easy to build. There's no software defensibility to any of it. So you just have to be really pure on business model and why it is that you're have a compounding advantage versus you did something... that was quote unquote hard that a customer asked for and that's somehow valuable. I this is my number one rant. I've had several meetings this week where I feel like people are still stuck in the old model of building companies where they're like, I'm like, what are you working on? They're like, we did this. I'm like, why? It's like, well, we talked to the customers and the customer said they wanted X. So we built it for them and now we'll sell it to them. I'm like, no, you're not going to sell it to them. They might want X.

— Sam Lessin, More or Less Ep more_or_less_indian_wells_2026_03

Yeah, they're just going to speed run. Just like with everything that they are, you're just speed running all of history all over again, right? Like experimental budgets, the real budgets to like buy whatever it's like everything just speed running, you know? So yeah, like there's no way it's not the idea. Like the whole thing with SaaS, right? Was everyone was like, this, once you acquire a customer, they're infinitely valuable because they will never cancel and subscribe forever to this thing. And so like, they could like spend all this money, but That turns out to be bullshit, right? And like, it'll the same thing I'm gonna do with this. It's like, there's just general intelligence. It's low margin. It's, I mean, it's great. I'm like literally building stuff as we talk. I'm like into it, but I think it's a terrible business.

— Sam Lessin, More or Less Ep more_or_less_indian_wells_2026_03

not because honestly, I'll be honest, it's exactly the type of thing that 10 years ago, I would have gotten super fucking excited about, right? And like, I would want to build I'd be like, Yes, of course, the future of human small business marketplace, like it's it says all the words I like, right? Like all the words I like are packed into this. And like, so you're like, of course, I want this to work. But then Sam of 2025 is like, you have a business, right? And like, that's where I'm like, I don't see it, right?

— Sam Lessin, More or Less Ep 99

And like most of the beds are the same, right? And you're like, whatever. It's like a marketplace. There's a scale to it. It's like bound. This is much more like, yes, people should be able to build these businesses, but they're the tip of the spear, the brand and the identity, not just like.

— Sam Lessin, More or Less Ep 99

There's a whole bunch of businesses to build there, but it feels more Shopify-y to me, right? Where like the value is based around the identity and the brand and the person and the influencer is the unit of value. It's not like a clear to marketplace where like, it's kind of like, you know, I don't care what the fitness person is, just give me a fitness person in Austin, right? Like, so I that's like the big challenge when you get into the details here is like, it's not actually, Airbnb is like, I need bed, right? And like,

— Sam Lessin, More or Less Ep 99

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