The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: In AI Who Wins? Startups or Incumbents? What Happens to Wealth Inequality? Why Will $10BN+ Companies Only Have 10 People | Why Defensibility in Startups is BS & Speed is Everything? Why Large Groups Worsen Decision-Making with Sarah Guo

Apr 28, 2023

Sarah Guo, Founding Partner at Conviction Capital and former General Partner at Greylock Partners, delves into the transformative impact of AI on startups. She discusses why speed trumps defensibility in venture capital and warns of potential wealth inequality from AI-driven billion-dollar companies run by small teams. Sarah emphasizes the need for deep customer engagement in selecting startup ideas and evaluates the changing dynamics in tech investment, highlighting how strategy can differentiate startups from incumbents.

44:32

Creator website

Episode guests

Sarah Guo

Highlights

AI Chapters

Episode notes

The Opportunity for AI: services not software

01:04

The Importance of High Resolution Customer Conversations

01:46

The High Cost of Training Large Models and Alternatives for Most Companies

00:45

The Thesis Behind Investing in AI with Conviction

00:38

Intro

4min

Navigating Career Transitions in Venture Capital

15min

The Speed Advantage: Startups vs. Incumbents in Tech Innovation

2min

Navigating Startup Success: Idea Selection and Investment Dynamics

11min

Navigating Growth and Challenges in the Podcast Landscape and Beyond

2min

Navigating Venture Capital Challenges

7min

Enhancing Team Efficiency with Key Productivity Tools

3min

Sarah Guo is the Founding Partner @ Conviction Capital, a $100M first fund purpose-built to serve “Software 3.0” companies. Prior to founding Conviction, Sarah was a General Partner at Greylock where she made investments in the likes of Figma, Coda, Neeva and many more incredible companies. Sarah also hosts her own podcast, No Priors with the wonderful Elad Gil.

In Today's Episode with Sarah Guo We Discuss:

1. From Large Multi-Stage Firm to Founding Conviction:

Why did Sarah decide to leave Greylock?
What are 1-2 of her biggest lessons from her time at Greylock? How did they impact her mindset when building Conviction today?
What does Sarah believe are the most surprising or hardest elements of firm building?

2. The Future for AI: The Opportunities and the Challenges:

Why does Sarah believe AI is the most foundational technology of our lifetime?
Why did Sarah decide to centre the entire fund around AI? Is AI not an enabling technology that will power all sectors in technology?
Is Sarah concerned by the further wealth inequality that AI and billion dollar companies created by 10 people, will inevitably bring?
How does Sarah think about the potential for malicious AI use? What can be done to prevent this?

3. Startup and VC Principles That Are BS:

Why does Sarah believe that defensibility is BS?
Why do Sarah and Harry both believe that reserves in venture funds are a suboptimal use of funds?
"Great founder, bad market, market wins". Does Sarah agree? How does Sarah prioritize the centrality of founder vs market?

4. Sarah Guo: The Investor

How has Sarah changed most significantly as an investor over the last 5 years?
What is Sarah's biggest miss? How did it impact her mindset today?
What is Sarah's biggest win? How did that alter her risk appetite?
How does Sarah see the future of venture?
If Sarah could invest in one multi-stage firm and one seed-stage firm, which would it be?

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