AI Investing & VC Fundamentals with Nabeel Hyatt

"You need to build a firm that can kind of like rock to that and you can understand that... It is an artisanal business."

• Firms should embrace a hands-on, tailored approach.
• Aligning with the unique demands of AI markets is crucial.

"I spend a lot of time thinking about it... I think most of them fall into, if you just really think through the second order effects of it, fall into kind of like a near term arbitrage."

• Not all agent-based startups have long-term viability.
• Founders should focus on sustainable innovation beyond immediate gains.

"Every company has a thousand problems... The mistakes for founders is realizing that one, I got them wrong on one of these axes."

• Look for founders who confront challenges head-on.
• Assess their ability to balance speed and thoughtful decision-making.

"You look at the product and you try and learn about the humans behind the product by evaluating the product."

• Product analysis helps assess founders' capabilities.
• A strong product reflects the team's strengths and vision.

"I just imagine that in any other context of life, if I had somebody who was on my team... and they were fine, what would be the feedback?"

• Founders benefit from engaged investors who add value.
• Settling for mediocrity in investor support limits potential.

"We are now in a world where... you need rampant creativity inside of an org... all of it is in the nuances."

• Embrace the unknowns inherent in AI innovation.
• Foster creativity to solve unprecedented challenges.

"I'm not that price sensitive... There's always a number... There's always a price where it just doesn't make economic sense anymore."

• Invest based on conviction rather than strict price sensitivity.
• Recognize when a valuation exceeds reasonable expectations.

"You want to move really, really fast... We also want them to have taste and judgment... These two things are directly in conflict."

• Founders must execute quickly while making thoughtful decisions.
• Combining speed with good judgment leads to superior products.

"This actually is a framework that came in the mobile revolution for us at Spark and then reapplied... which is adaptation, evolution, and revolution."

• Adaptation: Adding AI to existing products.
• Evolution: Changing workflows with AI enhancements.
• Revolution: Creating entirely new markets through AI innovation.

"I think it's happening already, whether we like it or not... We can't really preach that a founder is supposed to adapt to a market... There's also frankly a thing called VC Market fit, and this market for AI is wildly different."

• Investors must embrace new strategies tailored for AI.
• Adapting to market changes is essential for venture success.