Get Paid with Manny Medina REPLAY - Pat Grady (Sequoia) - What actually works in AI startups
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Nov 14, 2025 In a captivating discussion, Pat Grady, a partner at Sequoia Capital known for investing in AI and enterprise companies, reveals key insights into AI startups' success. He argues that building an AI company is mostly about traditional fundamentals and that trust is often overlooked. Pat highlights how the best AI products build user confidence through transparency and persistence, contrasting effective companies with those chasing fleeting 'vibe revenue.' He also predicts a shift toward outcome-based pricing models, emphasizing the founder's relentless execution as the most significant competitive advantage.
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AI Companies Are Still Mostly Companies
- Building an AI company is 95% the same as building any company: hire great people, clarify mission, and rally the team.
- The remaining 5% matters, but people problems and execution dominate success.
Trust As A Design Pattern
- Trust is a critical design pattern for AI products because users don't inherently trust black boxes.
- Showing work and citations helps customers validate outputs and builds trust over time.
Push Beyond The 80% Magic
- Persist past the 80% magical prototype and grind to deliver the final 20% that earns trust.
- Avoid throwing an 80% solution over the wall; iterate until customers can rely on it.