YouSaid · the spoken record

Elad Gil

lines on the record: 145
first: 2025-05-13
most recent: 2025-05-13
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“And then there's another. Yeah, it's back to what's your utility. Like, what do you care about? What's your utility function? What's driving you? And based on what's driving you, the people that I know who have been very successful were driven solely by money end up miserable. Because they have money and then what?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know. I mean, say somebody's really good at product market fit, but they're not that aggressive. And once they get a different level, they're not that ambitious. Part of it too is like, what's your utility curve? Like, what do you care about in life? Do you care about status? Do you care about money? Do you care about power? Do you care about impact? Do you do things because it's interesting? Like, why do you do stuff? And imagine people where that is a big part of everything they do, right? Because I think the average person may have mixes of that, but they're also just happy going to their kids and hanging out, you know. And like, it's a different life, right? Like the average Google engineer is not going to be. This insanely driven hyperdrive person anymore.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And sometimes that's just product market fit, and then they grow into the role. There's some businesses that just have either such strong network effects or just such strong liftoff early on. And they're obviously very smart people and all the rest of it, but you don't feel that same drive underlying it or that same need to do big things. It's almost accidental. You sometimes see that”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“I've noticed that they have this commonality of when you talk to them very early, they're like 20 years old or whatever, and you meet them. The set of interests that they have is very, very broad. And they tend to go very deep on each thing that they get interested in. Whether it benefits them or not, they just go deep on it, right? Because it's interesting. They're driven by a certain form of interestingness in addition to being driven by impact. And then I think there's a third set of people who end up with outside successes.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's more like when you talk to them the way that they think about the world and the set of interests they have is a little bit different from the first group of folks. And I'm not talking about Travis specifically because I didn't know him well enough to have a perspective on that, but I just mean more generally.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Sabana and the other Patrick are running it alongside him called Arc. Brian Armstrong is now running a longevity company in parallel to Coinbase, or he has somebody running it. So there's a lot of these examples of people doing Axe 2, Axe 3, and doing it in other fields. Honestly, that's a little bit of a new development relative to what you were allowed to do before, right? Because there's both activist investors who try to prevent that in public markets in particular. But also it was just a different mindset of how do I show impact over time.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Which I'd view as people who are equally smart and driven but a bit more polymathic may be the wrong word, but they just have very broad interests and they express those interests in different ways while they're also running their company. And often they have a period where they're just focused on their company and then they add these other things over time. Examples of that. I mean, obviously, Elon Musk is now that, right? In terms of all Patrick Collison, he's running a biology institute, or his”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, this is something I've been kind of riffing on lately, and I don't know if it's quite correct, but I think there's like two or three common patterns. I think pattern one is there are a set of people who are, and by the way, all these people are incredibly smart, you know, incredibly insightful, et cetera, right? So they all have a few common things. But I do think there's two or three archetypes. I think one of them is just the people who are hyper-focused. They don't get involved with other businesses. They don't do a lot of angel investments. They don't, you know, do press junkins that don't make sense. They just stay on one track. And a version of that was Travis from Uber. I knew him a little bit before Uber and run in once or twice since then, but like he was always incredibly focused. He used to be an amazing angel investor. I think he made great investments, but he stopped doing it with Uber and he just focused on Uber. And as far as I know, he never sold secondary until he left the company, right? He was just hyper focused on making it as successful as possible. So that's one class of archetype. There's a second class.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“The family is like, hey, your uncle shows up drunk all the time. You kind of tolerate it because it's your uncle. If somebody showed up drunk at work all the time, you shouldn't tolerate that, right? You're not a family. You're a sports team. You're trying to optimize for performance. You're trying to optimize for the positive interchange within that team. And you want people pulling in the direction of the team, not people doing their own thing, which is a family, right? And so I think there was a lot of these kind of conversations or discussions that were more like it's a family and bring yourself to work and all the holisticness of yourself. And it's actually, well, no, you probably shouldn't show up at work drunk and look at bad things on the internet.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“They tried to cancel him aggressively, which was sort of the playbook, right? And this was happening inside of companies too, right? You'd say something and you'd get canceled for it. And so you can have a real conversation around some of these things. And again, that just reinforced it. And I think Brian stepping forward made a huge difference. To your point, Toby, I think, did it really well. I still sometimes send the essay that he wrote for that to other people where he had a few central premises, which is we have a specific mission and we're going to focus on that. We're not focusing on other things. Not a family, we're a team.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And can work with all sorts of diverse people and be effective and doesn't bring all their mores and values and everything else into the workplace that don't have a place in the workplace. There's a subset of those that do, but many don't. We live through a decade where not only were those things encouraged, but the traditional conventionalist executives brought that stuff with them. And I think it was probably bad for a lot of cultures. It defocused them from their mission. It defocused them from their customers. It defocused them from doing the things that were actually important.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And then the second you start bringing kids to work, you're like, I sure as hell don't want this guy walking around, right? And that's bring your whole self to work. Like, why would you do that? You actually should bring your professional self to work. You should bring the person who's going to be effective in a work environment.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Was founder mode. Yeah, I think we lived through a decade or so, maybe longer, where a lot of forces came into play in the workplace that were not productive to the company actually obtaining its missions and objectives. And a lot of that was all the different forms of politics and bring your whole self to work and all these things that people were talking about, which I don't want somebody's whole self at work. You know, I remember at Google For Halloween and maybe we should edit this part out, but there's somebody who would show up and ask us chaps every Halloween. And you're like, I don't want to see that. Like I'm in a work environment. Why is this engineer walking around like this?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's very true, and it really depends on whether you're talking about the generic case of hey, it's a big company and you're at a. Related large company that's 100 years old has been run a certain way, I wouldn't be surprised if you could roughly interchange the CEOs of a subset of the pharma companies in terms of the org structure probably would still roughly work. They may not have the chemistry with the people or the trust or whatever, but like the org structures are probably reasonably similar. That's probably pretty different than if you looked at how Oracle has been run over time versus Microsoft over time versus Google over time versus whoever.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a very different structure from how Satcha's running Microsoft or Larry Ellison has run Oracle over time. You look at these other sort of giants of industry and management and everything else. And so I think you really need an org structure that reflects you. Now there's going to be commonalities and there's only so many reports most people can handle and all the rest of it. But I do think you kind of want to have the team that reflects your needs versus the generic team that could reflect anybody's needs.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Certain types of people where there's lots of commonalities, particularly if it's people who came up the corporate ladder, and they're all used to doing things the same way. But if you're more of a founder, CEO, and you're going to have your quirks, and you're going to have your obsessions, and you're going to have all these things that founders often have, you need an org structure that reflects you. And so like Jensen from NVIDIA talks about this, right? The claim is he has like 40 direct reports. He claims that he doesn't do many one-on-ones or things like that. And the focus is more on finding very effective people who've been with him for a while and who can just drive things, right? And then he sort of deep dives into different areas.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And so that's actually a failure mode for longer term related areas. You could argue Sacha Microsoft is a good example of somebody who has more of a founder mindset. I'm going to reinvent things. I'm going to rethink things. I'm going to do these crazy deals. They backed OpenAI at GPT2, which is like a huge risk. They've done all sorts of really smart acquisitions. So that's an example of somebody who actually did a smart succession there in terms of finding somebody who's a bit more product founder mentality. In terms of other ways that CEOs fail is they listen too much to conventional wisdom on how to structure their team. And really the way you want to have your team function at a larger organization is based on the CEO. What is the CEO need? What are the compliments they need? What is the structure they need? And if you were to plop out that person and plop in a different CEO, that structure probably shouldn't work like half the time.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. I think it's two or three things. One is figuring out who else you need to fill out your team with and how much can you trust them and all the rest One piece of it is very innovative founder CEOs always want to innovate, and so they reinvent things that they shouldn't reinvent, like sales is effectively process engineering that's been worked through for decades. You don't need to go reinvent sales, you can hire a sales team and it'll work just fine. So one aspect is getting out of your own way on reinvention. There's certain things you want to rethink, but many of them you don't. Part of it is hiring people who are going to be effective in those roles and more effective than you might be. Often you end up finding people who are complimentary to you. Now that really breaks down during CEO succession because what happens is often the CEO will promote the person who's their compliment as the next CEO instead of finding somebody like them who can innovate and push on people and drive new products and new changes. And so often you see companies have a golden age under a founder and then decay and the decay is because the founder promoted their lieutenant who was great at operations or whatever but wasn't a great product thinker or technology vision like the”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“In some cases, yeah, if you have an oligopoly market that's usually where it ends up, eventually this is why people are so worried about collusion, right? Eventually the companies decide, hey, we should be in a stable equilibrium instead of beating up on each other in shrinking margins.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“You stop building the thing the customer actually wants and you lose differentiation relative to your competitor You start doing things that can hurt your competitor, but they don't necessarily help you. And sometimes your competitor will retaliate. An example of that would be in the Pharmaceutical distribution world. 20 years ago, there was roughly three players that really mattered of any scale. And they used to go after each other's market share really aggressively, which eroded all the pricing, which meant they were bad businesses. And at some point, I think one of them decided to stop competing for share, but just protect itself. And then the others copied it, and suddenly margins went way up in the industry. They stopped being as focused.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think there's two or three of them. It depends on the stage of the company. For a very early company, the two ways that they die is the founders start fighting and the team blows up. Or they run out of money, which means they never got to product market fit. They never figured out something that they could build economically that people would care about. So for the earliest stages, that's roughly everything. Every once in a while, you have some competitor dynamic, but the reality is most incumbent companies don't care about startups. And startups have five, six years before an incumbent wakes up and realizes it's a big deal and then tries to crush them. And sometimes that works. Sometimes you just end up with capped outcomes. So for example, you could argue Zoom and Slack got capped by Microsoft launching stuff into Teams in terms of taking parts of the market or creating a more competitive market dynamic for them. You know, the other types of self-inflicted wounds, honestly, sometimes people get very competitor-centric versus customer-centric.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's really bad for society at scale. I mean, it's kind of like there was a different wave of this, which was 10, 15 years ago with fragility and microaggressions and everything can offend you and you need to be super fragile and all this stuff, right? Which I think is very bad for kids. And I think that has a lot of mental health implications. The wave we're in now, which is basically taking away independence, agency, risk-taking, I think that has some really bad downstream implications in terms of how people act, what they consider to be risky or not, and what that means about how they're going to act in life and also their ability to actually function independently. So I agree. I think all those things are things that we've accumulated over the last few decades that are probably quite negative.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And certain legislatures are happy to just legislate it. So I think there's lots and lots and lots of examples of that in society if you start picking at it. And you realize it pervades everything. It pervades aspects of medicine.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, but it's positioned as safe as a parent, of course, you want to protect your children. No, seriously, right? And so, but then it has other implications. It's like you can't easily transport the kids in certain scenarios because you don't have the car seat or you can only fit so many car seats in a car and it's a pain in the butt. And do you upgrade the car if you want more kids? And can you afford it? So it has all these ramifications. And it's because I think A, it's lucrative for the Car Seat companies to sell more car seats for longer. You get an extra six years on the kit or whatever. Parents will, of course, say, I want safety no matter what.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for six extra years, we keep people in booster seats and car seats, at least against the data, right? If Eronomics podcast actually had a pretty good bit on this, and there's multiple papers now that reproducibly show this retrospectively. You just look at all the crashes.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so in California, for example, the law is up until age eight. You have to be in a booster seat or a car seat or whatever. If you actually look at crash data, real data, and people have now reproduced this across multiple countries multiple time periods, it's the age of two”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I think when people talk about safety, they have to really define clearly what they mean. And then they have to create a clear view of why it's a real concern. It's sort of like if I kept saying, I think an asteroid could at some point hit the Earth and therefore we better do X, Y, Z for the, we should move the Earth or whatever. At some point, these things get a little bit ridiculous in terms of safetyism. There's actually a broader question societally of like, why has society become so risk-averse in certain ways and so safety-centric? And it impacts things in all sorts of ways. I'll give you a dumb example. After what age does the data suggest that a child doesn't need a special seat, they can just use a seatbelt.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And then the third area is sort of this existential safetyism, like AI will become self-aware and destroy us. And when people talk about safety, they mix those three things. They conflate them. And therefore, they say, well, eventually maybe something terrible happens here, so we better shut everything else down, while other people are just saying, hey, I'm worried about hate speech.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so there's basically three or four forms of AI safety that people talk about and they kind of mix or conflate them. The first form of AI safety is almost what I call like digital safety. It's like, will the thing offend you or will there be hate content or other things? And there's actually a lot of rules that already exist around hate speech on the internet or hate speech in general or what's free speech or not and how you should think about all these things. So I'm less concerned about that. I think people figure that out. There's a second area which is almost like physical safety, which is we'll use AI to create a virus. We'll use AI to derail a train, et cetera. And similarly, like when I look at the arguments made about how it will create a biological virus and et cetera, et cetera, like you can already do that, right? The protocols for cloning and PCR and all this, it's all on the internet. It's all posted by major labs. It's in all the textbooks. That's not new knowledge that people can't just go and do right now if they really wanted to. So I don't know why that matters in terms of AI.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Of AI. Yeah, it's kind of hard because AI is the only market where the more I learn the less I know. And in every other market, the more I learn the more I know and the more predictive value, or the more I'm able to predict things. And I can't predict anything anymore. I feel like every six months things change over so rapidly. Fundamentally, there's a handful of companies in the market that are doing very well. Obviously, there's Google, there's Meta, there's OpenAI slash, there's Microsoft Anthropic and AWS or Anthropic, X.AI, Mistral has done some interesting things over time. So I think there's like a handful of companies that are the ones to watch. And the question is, how does this market evolve? Does it consolidate or not? Like what happens?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“And Meta was kind of on the list because of all the money they have, but in Prowess and engineering and fair, and they have a lot of great things, but they weren't the one I would have guessed as the most likely. They were on the list, but they weren't the most likely. And then there's other players with tons of money and tons of capabilities. And the question is, are they going to do anything? What does Apple do? What does Samsung do? You know, there's like half a dozen companies that could still do really interesting things if they wanted to. And the question is, what are they going to do?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of paid for itself in some sense as an open source tool or open source sort of form of money. I don't know why AI would be different. A couple years ago was trying to extrapolate who is the most likely party to be the funder of open source AI. And back then I thought it would be Amazon because at the time they didn't have a horse in the race like Microsoft and Google or maybe be Nvidia.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“There's been all sorts of times where open source has been very important strategically for companies. And if you actually look at it, almost every single major open source company has had a giant institutional backer. IBM was the biggest funder of Linux in the 90s as a counterbalance to Microsoft. And the biggest funders of all the open source browsers are Apple and Google with WebKit. And you just go through technology wave after technology wave. And there's always a giant backer. And maybe the biggest counter to that is Bitcoin and all the crypto stuff. And you could argue that their own backer through the token, right? So Bitcoin financially effectively has fueled the development of Bitcoin.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. I don't know how meta specifically is thinking about it, so I think I'd be sort of talking out of turn if I just made some stuff up. I think that in general”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“It does a couple things. One is it levels a playing field for different types of uses of this technology, and it makes it globally available in certain ways. It's important. Second, it allows you to take out things that you may not want in there. And because it's open weights and it's open source. So if you're worried about a specific political bias or a specific cultural outlook because it's really interesting if you look at the way people talk about norms and what should be built in a models and safety and all the rest, it's like, who are you to determine all of global norms with your own values? That's a form of cultural imperialism, if you think about it, right? You're basically imposing what you think on everybody else. And so open source models gives you a bit more leeway in terms of being able to retrain a model or have it reflect whatever norms of your country or your region or whatever lens on that you want.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct because GPT 10 perhaps is so much more capable. Well, the nine that everybody else has at nine is already building 11 and it can build it faster, smarter, et cetera than everybody else. And so it really comes down to what proportion of the model building task or model training and building task is eventually done by AI itself.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Next version of the model faster than anybody else. And then you maybe have liftoff, right? Maybe that's a thing that ends up dramatically far ahead because every six months becomes more important than the last five years. And so there's another world you can imagine where you're in a liftoff scenario where there's a feedback loop of the model effectively creating its next version. So GPT 5 or 7 or whatever, GPT-7 would create GPT-8, which would help create GPT-9, which would even faster create GPT-10.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'm not sure. I think you can imagine two worlds. World one is where you have an asymptote. Eventually, things kind of all flatline against some curve because you can only scale a cluster so much or only have so much data or whatever. In which case, eventually things should converge really closely over time. And in general, things have been converging faster than not across the major model platforms already. Where a second world is if you think about the capability set built into each AI model If you have something that's far enough ahead and it's very good at code and it's very good at data labeling and it's very good at doing a lot of the jobs that allow you to build the next model really fast, then eventually you may end up with a very strong positive feedback loop for whoever's far enough ahead that their model always creates”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. And you would have done that no matter what, just given that everything moved to clouds, like these third party clouds that you can run on. So that's enabling, but at least for these sort of language models, they're increasingly just a moat due to capital scale.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you could have done that either way, right? You didn't have to take money from them because they're happy to be a customer”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's what one and a half, two, three billion, a quarter, right? So the financial incentive for Microsoft to fund OpenAI as it feeds back into its cloud. It feeds back in other ways too, but it feeds back into its cloud. And so I don't think it's surprising that the biggest funders of AI today, besides sovereign wealth, has been clouds because they have a financial incentive to do it. And people really miss that. So I think that is part of what really helped lock in this oligopoly structure early is you had enormous capital scale going to a handful of the best players through these cloud providers. And so the venture capitalists would put hundreds of millions of dollars into these companies. The clouds put tens of billions in. And that's the difference”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Or at most an oligopoly. And the reason was this point that you made about capital. And back then, it costs tens of millions to build a model. But if you extrapolated the scaling curve, every generation is going to be a few x to 10x more. And so eventually you're talking about billions, tens of billions of dollars. Not that many people can afford it. And then you ask, what's the financial incentive for funding it? And the financial incentive for the cloud businesses is their clouds. If you look at Azure's last quarter, I think it was like a $28 billion quarter or something like that. I think they said that 10 to 15 percent of the lift on that was from AI being sold on the cloud.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe one or two counter examples. So open AI is roughly partnered with Microsoft, although Microsoft also has its own efforts. Google is its own partner in some sense, right? Amazon has partnered with Anthropic. Obviously Facebook has Llama, the open source model. But I think for three of the four, and then there's X.Ei, which is Elon Musk's just sort of ability to execute in such an insane way that's really driving it. And access to capital and all the rest. But if you look at it, and I wrote a blog post about this maybe two, three years ago, which is basically what's the long-term market structure for that layer? And it felt like it had to be an oligopoly.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think all that's true. I guess it's more of a question of when does that sort of scale matter and why wasn't there anybody who was able to partner effectively with an existing automotive company? When didn't other things happen? The market. For this current wave of AI, it really depends on the layer you're talking about. And I think there's going to be enormous value for both incumbents and startups. On the incumbent side, it really looks like the foundation model companies are either paired up or driven by incumbents.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“Effectively, yeah, a lot of the early self driving systems were basically people writing a lot of kind of edge case heuristics. So you'd almost write a rule if X happens, you do Y or some version of that. And they moved a lot of these systems over to just end-to-end deep learning. And so this modern wave of AI has really taken over the self-driving world in a really strong way that's really helped these things accelerate to your point. And so Waymo similarly has gotten dramatically better recently.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“So you kind of go through wave by wave and you ask what are the characteristics that make something better or worse? And if you actually look at self driving, which was sort of an earlier AI revolution in some sense, the two winners, at least in the West, seem to be Tesla, which was an incumbent car maker in some sense, by the point that they were willing to step out, in Google through Waymo. It's a two incumbents won in self-driving, which I think is a little bit under discussed because we had like two dozen self-driving companies, right?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“GPS. So you had Uber. Everybody has a camera, you have Instagram, et cetera, right? And so the things that became big companies in mobile that were startups were able to do it because they took advantage of something new that the incumbents didn't necessarily have any provenance over. Crypto was 100% or roughly 100% startup value, right? It's Coinbase and it's the tokens and everything else.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“A ton of capital. Yeah. I think in general every technology wave has a differential split of outcome for incumbents versus startups. So the internet was 80% startup value. It was Google. It was Amazon. It was all these companies we now know and love. Meta. And then mobile, the mobile revolution was probably 80% incumbent value or 90%. And so that was mobile search was Google and mobile CRM was Salesforce and mobile whatever was that app you were using. And the things that emerged during that revolution as startups were things that took advantage of the unique characteristics that were new to the phone.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“When do we not have enough data to generate the next versions of models, or do we just use synthetic data? Will that be sufficient? Or how big of a training cluster can you actually get to economically? How do you fine-tune or post-train a model? And at what point does that not yield as many results? That said, each one of these things has its own scaling curves. Each one of these seems to still be working quite well. And then if you look at a lot of the new reasoning stuff that OpenAI and others have been working on, Google's been working on some stuff here as well. When you talk to people who work on that, they feel that there's still enormous scaling loss for that still left, right? Because those are just brand new things that just rolled out. And so these sort of reasoning engines have their own big curve to climb as well. So I think we're going to see two or three curves sort of simultaneously continue to inflect.”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's a really interesting question. And I think there's people who are better versed than I am in it because there's this ongoing question of when does scaling run out for which of those things?”
2025-05-13 · The Knowledge Project with Shane Parrish · Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World · IDENTIFIED FROM THE TRANSCRIPT · source