How AI Is Changing Startup Distribution Models

"One of my favorite books... is Larry Ellison's autobiography... You get a sense of what happened... The more things change, the more they stay the same."

• Study historical successes and failures to gain insights.
• Apply timeless principles to modern challenges.
• Learn from industry pioneers to inform your own strategies.

"One of the things that people oftentimes don't recognize about Glean... is the fact that they have a really great retrieval architecture... they spend a lot of time and energy building that prior to the LLM era."

• Develop strong core technology that differentiates your product.
• Invest ahead of trends to position your startup for future success.

"I think a lot about competition and competitive intensity... when I get in... sometimes the other players in the room determine the ceiling of where this company could be."

• Understand how competition affects your growth and valuation.
• Demonstrate to investors your potential to lead the market.

"I think defensibility is also a question around why is this company growing fast... Is this because of true product-market fit, or is this because the business is selling a dollar for 90 cents?"

• Ensure growth is from genuine product-market fit, not unsustainable tactics.
• Continuously evolve your product to stay ahead of competitors.

"The common narrative today is AI agents could do things that humans don't want to do or the toil that people don't want to touch... unlocking those 90%... is actually more interesting now."

• AI agents automate tedious tasks, boosting productivity.
• Integrate AI to unlock unstructured workflows and add value.

"AI certainly makes all business models more efficient... but whether a business is capital intensive... the better predictor is actually distribution model versus whether this business is AI or not."

• AI improves efficiency but doesn't eliminate capital needs.
• Distribution model predicts capital intensity more than AI does.

"If there's an existing budget... the path to... building ARR... is more laid out... but you have incumbents... On the flip side, a category creation story... you have to be patient... but once the switch is flipped... it's a really good dynamic."

• Existing markets offer clear targets but have strong competitors.
• New categories require patience but can result in market leadership.

"I don't think I'm telling my company to go after those people... unless you're building a model... you generally don't need to go after those people."

• Focus on hiring product people who can integrate AI effectively.
• Recognize that building models isn't necessary for most startups.
• Offer impactful work and flatter organizations to attract talent.

"Pitch something that you truly believe in... and find someone who truly believes in the vision."

• Be authentic and pitch a vision you genuinely believe in.
• Seek investors who share your vision and commitment.
• Build relationships with investors who can support you through turbulence.

"I think the number one thing I really look at... is really engagement of this tool."

• Focus on user engagement, not just growth metrics.
• Identify power users and analyze their behavior.
• Monitor if users return over time, indicating lasting value.