Sam Lessin on Startups & Entrepreneurship

Essays

From the Podcast

I mean, I think, look, I was talking to one of our founders earlier who works on, uh, our MeritFirst testing platform. And, like, it is interesting how that, like, let's just drive hard on meritocracy, and, like, the best people should have it, open competition, et cetera, went from being kind of fringy to, like, completely mainstream. As part... I think we just have this, like, separation. We have, like, Mondami, nihilism, socialism, and then we have, like, a bunch of people that are in the minority numerically, but maybe not in terms of wealth and power, who are just like, "No, like, we want freedom, and capitalism, and meritocracy." Like, that's the trifecta. And so I just think that the world's very split, um, and that's what's making it super interesting. History says we're all about to get guillotined, but we'll, we'll find out.

— Sam Lessin, More or Less Ep 157

Yeah. Well, I was saying like, I was saying like, look, everyone's joking about how Hollywood's dead, which it obviously is, but I would actually argue in some ways it's like, it's kind of like an Obi-Wan Kenobi situation, which is by striking me down, I'll become more powerful than you can possibly imagine, 'cause now everything is Hollywood, right? And like, what does that mean? I mean, like, one, like companies are valued on what they actually do, profit, revenue, whatever, and then a multiple on top of that, right? But everything is multiple dominated. You can like make your revenue go up, it doesn't matter. What matters is like people's, what multiple they're gonna assign you and like how they think about you. You know, studios, cabals rule everything just like in Hollywood, right? You need to be able to align with Club Elon or Club OpenAI or Club Meta or Club Google to be valuable. Like if Elon says space data center, overnight anything that has space data center in the title is worth a fortune, even if the day earlier it was worth nothing, right? And so like there's a whole cabal studio system developing. And then there's star power that really matters, right? Meaning like there's people who can open movies, there are people who can open startups.

— Sam Lessin, More or Less Ep 158

I did ask i- in our back channel, like i- if the SpaceX IPO makes it harder or easier for other startups to go public. And the, I, I don't know what I was expecting, but uh, several people chimed in harder in the short term because the comps are kind of like not great.

— Sam Lessin, More or Less Ep 154

Well, they have Alpha Camp in summer, but it's effectively just a trial week at their school program. And the program is such, the first two hours of the day, each kid gets a laptop. The laptop evaluates exactly how smart they are at each subject, and then figures out exactly how to get them to, like, an 80% success rate every single day. And, and they play games. So it's like instead of math, they're doing a math game, but they're getting, like, 20% wrong, and they're slowly, like, growing their skills and teaching them in all these different courses and, um, parts of academics. Then the rest of the day, six hours, is, like, workshops and fun stuff, and, like, entrepreneurship, financial literacy. Like, our, our 10-year-old learned how to suture a wound, like s- with stitches. Um, they built apps. They did smart greenhouses. They played with micro:bits. They built, like, catapults.

— Sam Lessin, More or Less Ep 156

The thing I was gonna also say is, in that conversation yesterday with this founder Dave's talking about, what it came down to at the end too, you know, he's trying to recruit his like founding engineer. Everyone's a great e- a lot of people are great engineers. You know, of course some are better than others, fine. But cultural fit I think matters way more now than ever before, when like the, the ability to be a, a great engineer is like much easier than ever before. And so it's like teaching these people how to be human, maybe a little throwback to etiquette school, but also like having street smarts, being a cool person, high integrity, like vibing with the team, I think is, is going to matter more than ever over the next few years for teams.

— Sam Lessin, More or Less Ep 156

It's fine. I- AI can make... If the AI can make the trailer, here's the thing, they should use AI to make it. I- if AI will always make the same fucking trailer over and over again, which means I will instantly get bored of your trailer, right? It's like, it's like, it's like Transformers number 87. Boring, right? I don't care about your trailer. But if you use AI to make an amazing, like to help your improve your storytelling, like, God bless. But basically, I wanna wake up every day as a VC and instead of looking at my inbox, I wanna watch an, a hour of like movie trailers before I get to the meeting I have to go to. And like, I will pick which movies I wanna see/which startups I wanna invest in based on the movie trailer. This is the future.

— Sam Lessin, More or Less Ep 151

No, no, the video mon- I don't give a sh- The money raising thing is stupid. Like, that's not a good story. That's a boring story. But there are great stories. It's like if you can't make... If you, how about this? If you can't make your startup into a sick movie trailer, don't do it, right? It's like you should be able to tell, have a sick movie trailer for your startup. And if you're just like, "I'm making something," and you can't articulate the vision. So, like, Elon companies have sick trailers.

— Sam Lessin, More or Less Ep 151

... I just, I'm just saying that, like, I think, I, I don't know if I can mention it publicly, so I won't, but, like, there's a company that I've known for a while, we put a small C check into 18 months ago. I lo- It's, like, the coolest story, right? And, but the storytelling was never, like, quite there beyond the one-liner, and they sent me their recent video where, like, we've got a video person now, they're doing video, like, every month and helping us with the storytelling, and I'm like, "This is so much better." Like, this is now so compelling, and you're telling it so well because you're fitting it into a narrative format in an era of narrative capitalism. So, like, of all the things that I'm super skeptical of and hate, I actually think this, like, let's give, like, storytel- Like, the future of Hollywood is gonna be, like, storytelling for companies and, like, we should do the sto- we should do the documentaries of startups and, like, continuously be doing high quality video. It's like the anti-TikTok. I'm, like, super it, into it, and I'm, I'm only annoyed, I'm only annoyed that I've, like, been on this 100K documentary thing for a while and, like, really wanted to do this, and I have not done it, and I haven't executed it, right? Like, and so I'm... But, so but it's, it's totally a thing, and I think it is such a thing that, like, one Sam structural mistake is I always, like, see someone else do something and I'm like-

— Sam Lessin, More or Less Ep 151

Fifty million is like TechCrunch 500K of, like, the aughts, you know? And, like, this is where we're at. The, the... Here's the movie trailer thing. I actually love this. I think it's one of the best things I've seen. I've now, to Dave's point, seen several startups, some of them which I really like, who literally... I mean, I've been in this 100K documentary thing, like, why don't we produce more, like, video, high quality vid- They're starting to make really good storytelling videos about what it is their startups do. I love it. I think it's great for investors. I think it's great for narrative development. I think it's consumable. I think it's hard for bots to make it well. Like, you can't, you... A bot can make a deck. Like, I don't care. Someone sends me, like, an awesome fucking movie trailer for their business, like, I'm gonna watch it, right? And so, like, I'm actually very along this trend, and, like, I'm annoyed that I haven't been further out ahead of it. The people investing in, like, mini docs and high quality video production to tell stories of their startups. Like, I think it's great. I've seen... Or just for the wor- for anyone. Like, I just think it's like, I know there's one-

— Sam Lessin, More or Less Ep 151

So what, like, what's the... I was just talking to the founder of Pi, like, two days ago. Like, what, like-

— Sam Lessin, More or Less Ep 148

I had to text... I recently texted someone who used to work for me, um, 'cause someone was trying to get something fixed at Anthropic. I was like, "Oh yeah, this person works at Anthropic." And I texted him. This is a person who worked for me a long time ago. And when I pulled up the text thread, it was hilarious 'cause the last texts I'd had with him were, like, 18 months to two years ago, and he was deciding between two offers, one between Anthropic and the other, uh, like it was a st- a smaller startup, and he's, like, comparing the comp packages and what they were, the valuation of Anthropic. So I have all this data from him. And it's really funny 'cause I'm of course like, "Well, I think they're both overvalued," blah, blah, blah. And then I'm doing the math, I'm like, "Good for you. You just made a lot of money."

— Sam Lessin, More or Less Ep 146

Well, right, right, right this second, I feel like there's still this world, though, of people who are like... Like, I, I've heard this from a lot of entrepreneurs. They're like, "In this moment we're experimenting. This is experimental budgets. We're spending way too much on Clauud, but we don't care 'cause later we'll just drop the cost," right? And I think that's, like, the right mentality. And look, again, I go back to, like, imagine they were humans, and let's pretend Clauud is, like, a triple PhD that's really expensive. Like, you're gonna... But, like, you're not gonna ha- you might have them do a little bit of stuff, but the, it's not the vast majority of your work, right? And so I think the reality is the vast, vast majority of work, everyone will just, like, go to cheaper labor and, and no one's gonna make money on it.

— Sam Lessin, More or Less Ep 146

You've got big foundation model companies are out there buying the Slack instances of failed startups to get more data.

— Sam Lessin, More or Less Ep 145

I just don't, I don't, I don't think that's gonna, I mean, my personal view is this is the real conundrum is Dave, what you're describing. I love entrepreneurs too. I obviously backed them. I think they're great. Let's pretend I am not worried about the top 1 % of anything of intelligence, of drive or whatever. They're going to be fine. They're going to figure out how to build cool businesses and things on top of platforms will make it easier and more efficient for them. Whatever. I think the question is what happens to the P 50 P 75 people, right? You're smart. You're not the smartest. You're driven. You're not the most driven. There's like, that's most people by definition. And the problem is, is that of all of a sudden, I don't need anyone to build my super good idea. I can just do it on my own, which is super fun for me. Then the problem is, is that like, it creates this dynamic where like, I actually do think it's a real problem. It basically says that if you were exceptional, you're going to do great. And so the question is, your only option is to try to create an economy where everyone is an exceptional at something. And therefore everyone can be in the top 1 % of what they're doing, which I think is extremely difficult to do. Or you have this fundamental problem, which is you just need so many fewer people and so much less labor, both physical and mental to do anything that you don't take anyone along for the ride.

— 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

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