The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified
418. Why Market Size is Irrelevant, Patterns from Working with the Best Founders, & How AI Compares to Past Paradigm Shifts (Gaurav Jain)
Jan 29, 2024
Gaurav Jain, venture capitalist and partner at Afore Capital, discusses why market size is irrelevant, AI's impact on venture capital investments, evaluating founders' abilities in a fast-paced startup environment, the state of the pre-seed market, and the importance of right-sized rounds in startup funding.
43:06
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Quick takeaways
- AI represents the first software-to-software paradigm shift, enabling faster adoption and value creation without new hardware interfaces.
- Disrupting existing software incumbents requires identifying new markets and use cases that incumbents overlook, and utilizing innovative pricing models for fully automated services.
Deep dives
AI as the First Software-to-Software Paradigm Shift
AI is being compared to past paradigm shifts, such as desktop to mobile and on-premise to cloud. While those shifts were driven by hardware catalysts, AI represents the first software-to-software shift. This allows for faster adoption and value creation, as AI does not require new hardware interfaces. AI is likely to have a pervasive impact across various industries and may enable new markets and use cases. It is important to identify opportunities outside the incumbents' focus and consider new business models to monetize AI-powered automation.
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