What’s 🔥 in Enterprise IT/VC #467

Jeff Bezos on Building Heavy Companies in a Rapidly Changing World

It was another insane week anchored by OpenAI Developer Day where every founder and investor held their breath to see which startup category would get annhilated instantly 🤣. While OpenAI wants to be your front door to all applications via a chat interface, the other big news was the launch of its agent builder. More on that in the Enterprise Tech section below.

However, IMO, the big winner this week was Google and Gemini.

Google is finally aligning all of their cool tech into a cohesive product strategy with their own version of the enterprise front door and agent builder with security and governance as a key 🔑 component. For me, having lived through these existential crises moments over 30 years, none of this was earth shattering. Agent builders are not dead as enterprises still want open model selection, last mile customization, and security and governance rails. That being said, it’s clear that both companies are continuing to move up the stack from platform to app layer and that is something to be aware of.

Moving on to some more enduring thoughts, I watched the Jeff Bezos interview from Italian Tech week and shared a few key comments Jeff made about entrepreneurship and building enduring companies. In this world of instant gratification, it’s important to watch, listen and absorb some of these hard earned lessons.

Is it a bubble moment?

“The second thing that happens when people get very excited as they are today about artificial intelligence for example is every experiment gets funded, every company gets funded, the good ideas and the bad ideas and investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas and so that’s also probably happening today......but it doesn’t mean that anything that’s happening isn’t real like AI is real and it is going to change every industry in fact it’s a very unusual technology in that regard in that it’s a horizontal enabling layer“

Legendary investor Ben Graham stated that ““in the short term the stock market is a voting machine in the long term it’s a weighing machine” - Jeff reiterates a founder’s job is to build a “heavy” or enduring company. I wonder if many of these $0-100M ARR in 12 month startups are going to be heavy companies in the long run.

“That’s one observation about bubbles in general: the fundamentals can be disconnected. The fundamentals of the business—and of course as entrepreneurs you’re focused on the fundamentals of the business—the stock price is an output, an ultimate output that you actually have very little control over.

In the year 2000 when the internet bubble burst, Amazon’s stock in a very short period of time went from $113 a share to $6 a share.

But I looked at the numbers in the business and every month as the stock price went from 113 to six, the number of customers went up every month, our gross profits went up every month. Every single business metric—new customers, customer repeat purchases, everything that we were monitoring through that entire period—kept getting better

Benjamin Graham the great investor is famous for saying in the short term the stock market is a voting machine in the long term it’s a weighing machine and so as founders and entrepreneurs and business people our job is to build a heavy company we want to build a company that when it is weighed it is a very heavy company we do not want to focus on the stock price and so that is you know that will be misleading ing because it can be disconnected from the fundamentals”

Love ❤️ this on why wandering is so important at the ideation stage - it’s ok to wander, and it’s a process you need to go through before you are ready to sprint.

“Wandering is so important because wandering is a kind of humility. Sometimes when people think about, ‘Oh, how much should I wander?’ wandering sounds so inefficient. But the only way to go straight to your destination is if you know where you’re going, and sometimes you know where you’re going, but sometimes you don’t. And so wandering is that acknowledgment that in life, and in business, and in exploration, and in invention, in building a company, a lot of the time you can see the mountaintop but you can’t see the trail. And you have to explore, and you have to wander. It may feel very inefficient, but it’s actually very valuable, and it’s really a recognition—it’s a humility that you don’t know where you’re going“.

Here’s Jeff spin on the classic Henry Ford quote I like to use, “If I had asked people what they wanted, they would have said faster horses.” Jeff emphasizes the need for founders to invent, not just rely on customer data and feedback. Founders need to use their intuition and gut and something that I like to call “intuitive TAM”

Finally, this is one of the most important lessons Jeff shares - prioritizing ideas and releasing work that the organization could absorb!

Jeff Wilke came to me one day he worked for Amazon for a quarter of a century but this is when he probably knew me only for a year and he said “Jeff you have enough ideas to destroy Amazon.” And this was such a shocking idea for me

Jeff said you have enough ideas per minute per day per week to destroy Amazon. I was like what do you what do you mean? He’s like you have to release the work at the right rate that the organization can accept it and he was a manufacturing expert and so you know his view of the world was every time I released an idea I was creating a backlog a queue work in process and because it was just stacking up it was adding no value and in fact it was creating distraction and so he said ‘Look you have to figure out when to release these new ideas at a rate that the organization can accept them and this was I mean this sounds so obvious but it was not obvious at the time to me and this was a profound insight for me and so I started prioritizing the ideas better keeping lists of them keeping them to myself until the organization was ready for the ideas and then I also started figuring out how can I build an organization that can be ready for more ideas that’s about having the right senior team and the right leadership and getting those people the executive bandwidth so they could do more ideas per unit time and so and and that is what we built we built a company that’s very good at inventing and doing more than one thing at a time and you do want to build as the company gets bigger you do want to be able to do more than one thing at a time but that idea of releasing the work was very profound for me and it made it made us operationally more effective while still being inventive and do you think you’re a better inventor

Watch the video above if you want to build a durable, enduring company!

As always, 🙏🏼 for reading and please share with your friends and colleagues!

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Scaling Startups

#PSA - founders in order to win, tech is not enough, need to think about distribution from day one, and as I like to say, product often goes hand in hand with you think about GTM - top down enterprise epensive product different motion than PLG

#another important note for founders from Jake Stein, multi-time founder who is now running CommonPaper, a boldstart port co

#👀🐶

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Enterprise Tech

#it’s working…

#it’s working…

#more agents please…

#must read State of AI Report - chock full of data, thoughts, LLM benchmarks

#recap from Insight’s ScaleUp AI enterprise conference - love seeing the Crew mention on it’s astonishing growth (a boldstart port co)

#🤯 with 800M weekly users this will only become a bigger source of customer acquisition for all of these initial partners like Figma, Booking, Canva and others

#which is why AEO - answer engine optimization - becomes even more massive over time as users search and transact through OpenAI and others

#brilliant marketing - showing up all over social as badge of honor which means they’ve spent a shit ton of 💰

#🤣 best endorsement and also why rumored to be raising at $30B 🤯

#💯 sorry there is no scale or surge for robotics data

#how CISOs buy - super long post so cut off but clickthrough for more

#along those lines

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Markets

#👇🏻

#state of the world - kind of like the AI version of the British Empire where the sun never set

#and this from Bloomberg