00:19:36 · Aditya Agarwal, Elad Gil
[00:19:36] S1: So what is the world? It's great. We'll be all, you know, we'll be all at [00:19:42] S0: the edge of this. I'm sorry. I got a little bit distracted. [00:19:45] S1: I was gonna be like, here is Satya. Eat it bright. Do you have me happy?
00:19:45 · Aditya Agarwal, Elad Gil
[00:19:45] S1: I was gonna be like, here is Satya. Eat it bright. Do you have me happy? [00:19:50] S0: They should not ask me questions like this. This is a loaded question. I don't know whether they're gonna afford an interview. Yeah. Exactly. So I If you look at durability, there's strategic ways that you can be durable. And by the way, if you look at... You know, the whole wrapper around a model thing, don't really buy. Because if you look at a SaaS company, is this a wrapper around a SQL database? And I'll fix it. Those things just just bite. Right? I think usually what you need is you need to build a multiproduct company. So there's three theories. One is there a system of record? You're basically where core data about a thing is stored in all its attributes. And so, you know, that's a workday for all the people working at your company or whatever. And so then you keep all the dozen applications around it, and it's very, durable. That's that's one hypothesis in terms of what creates durability. I think the single biggest thing is just, can you build a dozen different products that you're cross selling roughly to the same customer or user? They're deeply integrated, and therefore you have multiple workflows. And I think then you're very defensible. So for example, if Harvey has two dozen different workflows for different legal applications and use cases, that's defensible. If they're just, you know, let's chat with the legal document, they're not very defensible.
00:20:57 · Aditya Agarwal, Elad Gil
[00:20:57] S1: It's a good observation. I actually haven't... Maybe I've said this publicly before, but that's interesting because it's a very, know, kind of what Parker always talks about with the tech startup. [00:21:06] S0: It's Rippling. It's HubSpot. It's actually Microsoft. [00:21:10] S1: It's a lot more doable today because you can just crack that stuff out. [00:21:13] S0: Yeah. It's what's the surface area of your product, and I think it's very under discussed and is often discussed as a revenue driver, which it is. And, you know, you have different wedges in that you can cross sell against. You can cross sell to the same account. It's hugely defensible. Right? Because usually what happens is, a founder will start a company that build one product, and they'll win because a product is 10 x better, and that'll get in distribution. And then they, keep going, and they forget the fact that now that they're the incumbent and they have all these customers that can build a product that's 80% as good as the best thing and still win because they're just cross selling. They've already done the security review. They've already done the purchasing. They were... You know, they've gone to procurement. They've gone through everything legal. And so it's really easy to start cross selling, in which case it becomes very defensible. Right? It's really hard to rip out a dozen things instead of just one thing. [00:22:00] S1: I was gonna say this, why we don't really like to sub Teams. [00:22:04] S0: Teams is such an interesting example of that. Right?
00:22:04 · Elad Gil, Aditya Agarwal
[00:22:04] S0: Teams is such an interesting example of that. Right? [00:22:06] S1: Yeah. So... Yeah. But it's actually an interesting example of what you said. Yeah. [00:22:09] S0: Yeah. Teams, it's fascinating if you look at it. So the early days of a startup, the primary thing you're competing with is other startups. And then incumbents often used to have five to seven years to react, literally, because they could just cross sell to everybody. And so that's Slack and Zoom versus Teams. Right? They were both like this, and then they flattened out, and then Slack had to sell. And the reason is because Microsoft bundled it in Teams, gave it to everybody, and then cut off their growth, and they won. And so in the olden days, like last decade, you had five to seven years of fighting other startups, and then an incumbent would come in. And if you could escape that incumbent, you won. Now maybe, there's less time for the incumbent triad because you can iterate so quickly on code and the markets are open and everything else. But the incumbent can also build share way faster even if if they're getting in their own way. And so there's this interesting dynamic that that timeline should shorten on both sides. And if so, we'll see what happens there.
00:22:09 · Elad Gil, Aditya Agarwal
[00:22:09] S0: Yeah. Teams, it's fascinating if you look at it. So the early days of a startup, the primary thing you're competing with is other startups. And then incumbents often used to have five to seven years to react, literally, because they could just cross sell to everybody. And so that's Slack and Zoom versus Teams. Right? They were both like this, and then they flattened out, and then Slack had to sell. And the reason is because Microsoft bundled it in Teams, gave it to everybody, and then cut off their growth, and they won. And so in the olden days, like last decade, you had five to seven years of fighting other startups, and then an incumbent would come in. And if you could escape that incumbent, you won. Now maybe, there's less time for the incumbent triad because you can iterate so quickly on code and the markets are open and everything else. But the incumbent can also build share way faster even if if they're getting in their own way. And so there's this interesting dynamic that that timeline should shorten on both sides. And if so, we'll see what happens there. [00:23:04] S1: That's interesting. I mean, you could argue that whatever baseline speed you are starting off, a startup should be able to accelerate it at a far fast start exponent. So you should have technically an advantage in a world where you can crack out a lot of code. I I would argue it's probably still harder for Microsoft or Google to generate a bunch of... But you never know. I get it. They're fast moving. They're also a good company.
00:23:04 · Aditya Agarwal, Elad Gil
[00:23:04] S1: That's interesting. I mean, you could argue that whatever baseline speed you are starting off, a startup should be able to accelerate it at a far fast start exponent. So you should have technically an advantage in a world where you can crack out a lot of code. I I would argue it's probably still harder for Microsoft or Google to generate a bunch of... But you never know. I get it. They're fast moving. They're also a good company. [00:23:27] S0: Yeah. They're good companies, and they have that distribution. And, traditionally, they've been... You know, probably the biggest hectic for them is they end that five to seven years, and maybe they have two or three years. Right? But, there is time. [00:23:37] S1: There is time. Yeah. Yeah. What is the most common mistake that you see AI startups make in our legs? Or maybe even call it startups in... Like, is there a Blah. Is there a common failure mode that is emergent based on the environment that you're in right now?