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20VC: The OpenAI Memo: Why Invest? Is it too Late to Catch OpenAI? Are OpenAI's Models Truly Defensible? Does the Value in AI Accrue to Incumbemts or Startups - Application Layer/Infrastructure? What Happens with Regulation? with Vince Hankes @ Thrive

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May 3, 2023

Vince Hankes, a Partner at Thrive Capital and seasoned investor, discusses his journey from Tiger Global to leading significant investments in OpenAI and other tech pioneers. He delves into the dynamics behind the OpenAI deal, exploring market evaluation and long-term defensibility. Hankes posits that AI will define this generation, questioning whether value will flow to incumbents or startups. He also emphasizes the pressing need for collaboration between tech firms and regulators in navigating AI's complex landscape.

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ANECDOTE

Career Path

Vince Hankes started at Goldman Sachs, working on large companies like AT&T and Verizon.
He transitioned to Tiger Global after working on Flipkart, where he focused on software investments.

INSIGHT

Investment Philosophies

Hankes learned financial rigor from Tiger Global, prioritizing P&L analysis.
Thrive Capital emphasizes product and customer empathy, focusing on founder relations.

ADVICE

Building Trust

Build trust with founders by being predictable.
Make sure founders understand your thought processes to facilitate open communication and mutual understanding.

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Vince Hankes is a Partner @ Thrive Capital where he has led the firm’s investments in OpenAI, Melio, and Airplane.dev. He currently sits on the board of Airtable, Benchling, Lattice, and Melio. Prior to joining Thrive, Vince was an investor at Tiger Global where he learned the craft of venture from the legend that is Lee Fixel.

In Today's Episode with Vince Hankes We Discuss:

1. From Tiger Global to Partner @ Thrive Capital:

How Vince made his way into the world of investing with Tiger Global?
What are 1-2 of his biggest takeaways from working alongside the legendary Lee Fixel?
Why did Vince make the move from Tiger to Thrive? How do the two firms differ?

2. The OpenAI Investment: The Memo:

How did the OpenAI deal come to be? What were the round dynamics?
Market Evaluation: How did Vince and the team analyze the market top down?
Competition: Who did Vince identify as the core competitors to OpenAI?
Defensibility: How did Vince think through the long-term defensibility of OpenAI's model? Does Vince believe these models will become commoditised?
Price: How did Vince and the team get comfortable with the $29BN price?

3. AI: Hype or Generational Defining Transformation:

Trend or Transformation: Why does Vince believe AI will be the defining technology of our generation?
Startup vs Incumbent: Does Vince think the value will accrue to the incumbent or the startup?
Open or Closed: Does Vince think we will operate in a closed (one model rules them all) environment or an open-source environment with many models?
AI Talent: Where does Vince think the majority of the best AI talent will concentrate?
Speed: Why would Vince be scared if he were a startup today looking at the incumbents?

4. The Changing Investor: Lessons from Good and Bad:

How has Vince changed most significantly as an investor over time?
What has been his single biggest investing mistake? How did he learn from it?
What has been his biggest investing success? How did that change his mindset?
What has Thrive done in their org structure to allow them to make bets very few other firms can do?