Investor Stories 333: Disruptive Forces (Neumann, Kaiser, Beller)

Investor Stories 333: Disruptive Forces (Neumann, Kaiser, Beller)


On this special segment of The Full Ratchet, the following Investors are featured:

  • Jerry Neumann
  • Joe Kaiser
  • Morgan Beller

We asked guests to discuss the factor that could cause the most disruption to the industry going forward and how that will change the next decade of venture.

The hosts of The Full Ratchet are Nick Moran and Nate Pierotti of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.

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Transcribed with AI:

0:18
Welcome back to TFR on today’s special segment, we asked guests to discuss the factor that could cause the most disruption to the industry going forward, and how that will change the next decade of venture. Here’s the segment called disruptive forces.

0:39
On today’s special segment, we have Jerry Newman of new venture capital. Jerry, what factor could cause the most disruption to the VC industry? And how will that make the next 10 years look different than the last time? I have

0:51
a minority opinion on this? I think that a little technological revolution, we’re in the computer technological revolution, the information technology revolution, all of the low hanging fruit has been picked. This is my opinion, more than an opinion. This is my hypothesis, all of the easy things to do all the things where you can start a company and make a bunch of money because that company needed to exist. Those things are all done, and AI included. And I think that means that many more startups these days are, instead of creating new markets or creating new industries, they’re taking a tiny slice of a market that’s already huge, right? And it just as venture capitalists, you have to deal with this. You have to invest differently. You can’t be the outsourced r&d. I just think that’s a bad bet. Generally cruise automation aside, I think generally, if you were outsourcing your somebody’s outsourcing r&d to you, that means you’re taking the risk and not making as much money. I think VCs have to look for operators not visionary at this point.

1:56
On today’s special segment, we have Joe Kaiser of Mercado partners, Joe, how will the next 10 years of venture capital look different than the last time? Oh,

2:05
another great one. So I think I think one, I think we’re finally eating our own dog food. And by that I mean, historically, this business has been very artisan, it’s we’ve been a collection of artists under a roof, as opposed to a functional business. And I think that is changing very quickly not and that’s not just to say everyone should become multi stret asset aggregators by no means. But I think there are opportunities for us to improve our product, the same thing that we’re coaching our companies to do, we can improve our product, we can improve our sales motion, we can improve top of funnel and targeting. And I think the tech that’s coming to market now via AI is going to enable us all to become much better at everything, every aspect of our business, except for the relationship building. And that I think will always hold true. But all other aspects of what we do, I think we’re going to tech is going to enable us to get much, much more efficient. And so I think our abilities to either go deeper or broader, are going to expand tremendously over the next 10 years.

3:17
On today’s special segment, we have Morgan Beller of NSX Morgan, what factor could cause the most disruption to the VC industry? And how will that make the next 10 years look different than the last 10

3:27
pins on stage? So what do you think? So there’s a spectrum of art to science, like seed investing is, you know, more of an art growth investing more of a science or just more number, you know, you could plug more things in. And so as an example, a i like it could make growth investing in the private markets, and hedge fund investing where it’s, you know, comes becomes close to a perfect market. Because there’s so much information out there that you know, exactly who to Spearfish, you know exactly what valuations to give, et cetera. And then what does that impact and impacts like the brand of those funds, which is already like true to an extent, but it probably only accentuates that. Something that’s already happened that I think like, in hindsight, we will look at as having changed the industry for 10 years that were maybe presently and it’s just like, how much fucking money there there is. That’s kind of ruining it for a lot of people. I forget the exact stats. My partner James, I knocked on the room next door would tell me but you know, when he started adventure, there were a handful, no less than, you know, 50 maybe venture firms now there’s like 1000s. So I think that’s something that, like the object hasn’t is in motion has been in motion. So people haven’t necessarily stopped to breathe, but like that is dramatically changing the way the industry works. AI in a different sense to what I was saying before that I think software companies and massive generalization but are more replicable than they ever were. So if it’s so easy to spin up some of these products and get distribution for various reasons, maybe just investing in software isn’t what it was. We’ll never see the multiples we saw in SAS companies ever again. It’s not just like a bear market just will never happen again, as they’re not as unique, defensible, etcetera.

5:09
I hope you’re wrong.

5:10
I hope I’m wrong too. But that’s like what space and rockets I’m like, you know, I think there’s like, potentially some irony and if that’s the right word, but like, we’re all of these things that were seen to be bad investments like rockets, physical things, robots, et cetera, because relative to SAS, they were takes more money to build them harder to make, they can fail more easily harder than SAS. As far as like inputs and outputs. Like that also may be true like they still might be like worse investments than SAS was, but I have a hypothesis that they might be better investments in SAS is and will be, because they’re going to be the only if no one’s starting a company to compete with stuff. You can’t do it. Better than that were better than that. So even though like they still may end up being worse returns than SAS was for the past 10 to 15 years. There I am. There’s a birthing hypothesis hypothesis in my brain that it might be better. Investments in like SAS will be in like the coming 10 to 15 years just because they’re actually defensible, and by that

6:17
that will conclude this installment of investor stories. If you’re enjoying the program and would like to see it continue. Take a moment and leave a five star review in iTunes. Okay, that will wrap things up for today. Until next time, over prepare, choose carefully and invest confidently thanks for joining me