20VC: The 8 Moats of Enduring Software Companies: How to Analyse for Durability and Defensibility in a World of AI | Why Dropouts are "AI Maxing" the World & Remote Early-Stage Companies are Dying with Gokul Rajaram

“The first mode is data mode. Second is the workflow mode. Third one is regulatory mode. Fourth mode is a distribution mode. Ecosystem mode. Sixth one is a network mode. Seventh one is the thing you mentioned, physical infrastructure, right? And the eighth one, I would say scale mode.”

“I haven't talked about brand. I think brand is no longer a strong word. I explicitly excluded brand. Businesses are much more rational in thinking about it, less irrational and the alternatives are going to be much stronger. I think on the consumer side, consumers are much more like dollars and there is dollars and cents, but there is a natural inclination to just trust brands. I think on the business side, it is going to get weaker.”

“Square Capital, which was basically a cash advanced product that really came from the fact that Square controlled the payment flows and knew exactly the merchant's credit history and could underwrite based on basically money going in and out. It was a beautiful product. The interesting thing about having a multi-product portfolio is that not every product needs to generate profit. People are always like, oh, it's not making money. Square Capital didn't make much money, but it was very good for retention.”

“I think it's Mike Moritz betting on Instacart. Why? Because he lost 370 million on Webban less than a decade ago. He burned it through. Same space, Apurva comes to him, he bets on it. He bets on it after losing hundreds of millions of dollars. It is not all Sequoia money, but the whole thing burned to the ground. And think about the first prince was thinking needed and the courage needed to make that bet. I think it's brilliant.”

“Shopify. I remember seeing Shopify at a billion. And I was like, how many e-commerce merchants are there really? Or maybe even before a billion, one of the early rounds. Tam felt really concerned. I think what I missed was that Shopify was not just selling e-commerce, it was basically allowing anybody to sell. So it basically changed any entrepreneur on the planet, anybody who wants to sell something. And so it wasn't just existing e-commerce merchants.”

“That's why I think one of my biggest regrets is actually passing on Vanta because I met Christina but I had already committed. I was like, this person is going to win the market, but I've already committed to another company in the space. And sadly enough, I believe in once you invest in a company, as an angel, I didn't have the time to scan the landscape and meet with all the companies in the space. And that's what I do now. I have time, but Vanta will be definitely part of my anti-portfolio.”

“I used to think pure remote would scale for early stage companies if you had the right culture, but I don't think that anymore. I think you've got to be in person at least a few days a week. I think just seeing a few companies where literally the companies died because the founders were unable to agree. They had everything going, but the founders were just not in the same place, and they were just not able to move fast enough and agree on a line on the strategy and change things.”

“I feel even at companies, I feel some of the companies that are not hiring young people, they're making a huge mistake because young people are more AI maxed, as you could call like looks maxing AI maxing than anybody else. The younger people are adopting tools better and they just live and breathe differently than others. So I am a huge fan. I've actually invested in more dropouts as an angel now over the last few months than I have invested in in by rest of the last 15 years I've been investing.”

“I know it feels exciting to start a company. Everyone's doing a startup, AI is a new way, but my strong advice is to first get two to three years of work experience at a company, at a good company. You won't regret it. You learn a lot, both the experience and the network of people. It will be invaluable for you. So just two or three years, don't be impatient. Life is long.”