Dwight Churchill
Appearances
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think the arms race is ensuring that we're delivering always way in front of what our customer even needs today. Whenever we're releasing something, it gets commercialized on day zero, immediately. We're not like testing it with a bunch of people and seeing what they need and seeing if we're actually solving anything. No, no, no. We're building this for their work.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
We're incredibly ingrained in how they do their work, whether you're a large enterprise or all the way down to the free consumer. Ultimately, to Gaurav's point, by inventing those design patterns and the way someone can interact with these new models, We're literally paving the way for how people even think about doing their work. And that's the really exciting stuff.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
That is the arms race in my mind, but that's not necessarily against another company.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think that's cool again now.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Yeah.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Drinking.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Olympics.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Yeah.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
The scarcity aspect too is that some of these are not new problems. The corollary around movies is that a Michael Bay film, $250 million budget or something like that blows up half LA, Transformers or something, I don't know. Tons of people go out and see it, blockbuster film, but all those people are paying $25 per ticket or something.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
The same thing happens for a low-budget film if they can get into the box office, but the ticket price is the exact same. I'm actually very excited about a world in which lower-budget filmmakers and video creators in general can just create more and do more complex things with not necessarily the budget restraints. That's a massive hurdle for film creators and just creators in general.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think it just up-levels everyone. I think the craft maybe shifts a little bit or this and that, but those high budget films, as Gaurav mentioned, like technically it's generated, it's not synthetic or it's not real. Some of those things are real, I've realized, but it maybe even creates more premium on some of those aspects.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
What our duty ends up being then is we have to give them all the resources and such to be able to do their work. There are a lot of these folks, you know, in AI labs that can't release anything they're working on for better or worse, at least from that place's opinion.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And when you're able to bring some of the ingredients that we have, whether it be like compute data, the environment, it ends up not being that complicated in terms of recruiting negotiation and stuff.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And the pricing around labor and hot topic right now is seed licensing versus labor or like aligning to labor costs or something. I think people are maybe rushing into the labor argument that it actually has a very similar path or has had a very similar path. Turns out the CFO would like that number to go down. It's not some special number or something.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And if you remove the human element to it, my guess is that that probably only puts more downward pressure on it. It's like, great, we can do more with less. And it's like, perfect. Whatever the software is doing, if it's writing code or if it's the automated SDR, you know, whatever it might be, like there is downward pressure against those things.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think people are getting a little excited about running towards that. And don't get me wrong, pricing towards output and such is pretty cool. I'm sure there is something there and there's some equilibrium we'll find. But I do think people are rushing to it maybe a little faster than they should be in that there actually might be more continuing alpha in the typical subscription.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
yeah sure maybe that's not the salesforce seat the classic comparable but there's just some market exploration that needs to happen and we probably haven't fully seen that yet
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Maybe from a public equity side, there are a lot of smart people out there, so I'm not going to give them too hard. I don't think it's fully being appreciated how much this is changing. We're like, everyone's saying that and all that. But I think there's continued talk of, oh, there's all this R&D spend or capital expenditure. And it's like, where's the value and stuff?
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And I think there's just so much attention on the large AI labs that are Effectively, what Gaurav was talking about before is that solving intelligence. That's a very, very different mission than the company who maybe is creating the automated software developer. Two very different worlds.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And so I think paying more attention to things outside of that is pretty important for it to really understand how this is changing inside of their companies.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think it would be hard to find a company today, a successful company today, that hasn't and or isn't exploring an AI tool of some sort to either completely replace an activity inside the company or, quote unquote, do more with less in another capacity. I think that's true of every function of essentially every successful company today. And that's where you're seeing like a lot of the adoption.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
So even discussing the foundation model versus some of these companies who are just fine tuning the model as something open source or something. There's a ton of alpha in getting these tools inside of their company. So if you're talking to someone who's, how do we do this and roll it out as a larger enterprise? Yeah. I think there are already examples. There are massive enterprises that you go in.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Someone was telling me the other day that L'Oreal, the beauty company, you can go in and they have like an internal GPT, basically, an internal LLM of some sort. Any employee can ask any question. I don't know how much that's really being baked into their thought.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I think there's just so much attention towards these particular AI labs and the way that they're running their businesses, which is extremely different than some other companies, in particular, if they have the backing of Microsoft or something. Yeah, it's inherently just being driven differently. And yeah, I think if you were to go into those, I think your viewpoint would potentially change.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And that could definitely inform a better understanding on how this is actually going to change work.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And I think on the like, what does this end up looking at a mature business end, call it some threshold. I genuinely believe that these can look like very high margin businesses, whether that be the deflationary behavior of GPU and just compute in general, like it's incredibly early, like We're talking about NVIDIA's latest chip, et cetera.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
You're already seeing the cost come down from on H100s as the H200 architecture and stuff is being rolled out. Throughout history, these prices have never gone the other way. It's highly deflationary as the next one rolled out because ultimately that is their business model. They make them more efficient, they make them more powerful, whatever it is.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And so I think generally speaking that that is 100% guaranteed, at least from my perspective. I think the... Interesting thing, though, is that like when you're earlier stage and companies are earlier stage and just talking about startups in general, is that higher margin businesses actually sound to me like perfect attack vectors for another entrepreneur.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And I think you should be very wary of companies that are operating at really high margins in the particular earlier stage. For these types of businesses, there's a ton of margin expansion opportunities. And then that also goes for the later stage companies, though, too. I think you're seeing it right now, the CRMs and companies operating 80, 90% margins. It's great, typical SaaS kind of stuff.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
They seem like great opportunities for companies to essentially go right after. In reinventing some of this stuff, those companies don't have the same pricing power that they did 15, 20 years ago. At the same time, though, the great ones are thinking about that right now and reinventing themselves.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
And so it does feel like a little bit of, as we discussed some of these business model changes, I think it is a bit of a shifting ground
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
I mean, it's hard for me to not say the kindest thing is probably my wife. And we started this company. We were already married. We had our first kid. Pretty hard not to call it that. It could have obviously not gone that way. I decided not to start the company, not to do a bunch of this stuff. And yeah, enabled me to take more risk. And yeah, yeah.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Yeah, exactly.
Invest Like the Best with Patrick O'Shaughnessy
Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
Yeah, I don't think people are entirely able to grasp that yet. I think the way that that influences how they do their work every day, the workflows that end up getting reinvented, new paradigms of all that, which is arguably part design problem, part just product problem in general. This is pretty close, the timelines that Gaurav was talking about. People are experimenting today.
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Gaurav Misra & Dwight Churchill - Building Captions - [Invest Like the Best, EP.405]
It's extremely early. And I think that companies' adoptions and stuff around that, we're not far off at all of really reinventing a lot of how people end up doing their everyday work.