6.14.25
AI doesn't understand taste, consensus in opposition to being great investor, conviction in fast-moving markets, follow-on funding for hard tech
Hi all! Happy Saturday! It’s another beautiful day in Marin, and I’m excited to get out for a hike. A quick update — I’m taking a vacation over the next two weeks, so TBD on whether I post, but I’ll be back when I’m back.
One thing I’ve been thinking about is how I often circle back to the same thoughts. Maybe there’s a better way to structure and start linking them together. More to come on that — but until then, regularly scheduled musings…
AI doesn’t yet understand taste
Had a super interesting conversation on Monday around product/design becoming more of the bottleneck as AI coding tools improve, particularly for application-layer companies. We chatted about what this means for team building: if the “old” paradigm was 1 designer for every 8 engineers, the new paradigm might be 1 designer for every 4 engineers as engineering speed increases.
If you’ve ever hired designers, you know how incredibly hard it is. I actually think it’s by far the hardest role to hire for. And this got me thinking: implicit in this (and sure, AI will improve) is that while AI dramatically increases efficiency, it still can’t define “taste.”
This ties back to an earlier musing where I reflected on creativity as the opposite of legibility. It’s this concept of “slop.” There was a lot of chatter around the fully AI-generated ad, and when I watched it, it felt like the literal opposite of taste. Once the shock factor wore off, I just felt... kind of gross. Anyway, I digress — the point is: as AI coding tools improve, design becomes a bottleneck. And that feels important.
Does rising the ranks at a firm make you a better or worse investor?
Two things came out this week that sparked a lot of conversations: a piece by Mike Dauber/Justin Gage at Amplify and a tweet by Evan Charles. Both hint at the underlying political dynamics at firms. This isn’t meant as a dunk on how firms operate, but if you’ve ever worked at one — regardless of size — it probably hits close.
I loved this line from Mike’s piece:
“Our best deals are almost never universally loved at the time of our first investment. And that’s the point. The point isn’t that everyone loves it. It’s that someone sees it — even if nobody else does.”
There’s something really powerful there. Consensus doesn’t typically lead to the best outcomes, but the market seems increasingly driven by consensus bets. I struggle with this. How do you stand out in a field that feels increasingly focused on fitting in? (Follow-on capital is overwhelmingly concentrated around consensus bets now — the market is more efficient, but I’m not sure that leads to the best outcomes.)
Closely related — and something I’ve said before — is this: being an associate is an incredible way to learn the job. It’s invaluable. But many of the traits that make you great at that stage are the ones you have to unlearn as a partner. You have to find independent conviction.
I loved this line from Evan’s tweet:
“My biggest errors at KV were near misses. I met several teams that went on to create multi-billion-dollar companies, and though I had a positive instinct about the founders, I either overthought the opportunity, wasn’t able to convince others, or — most regrettably — didn’t feel like convincing others. At a firm with legendary partners, I tried to think like them. While an incredible learning experience, I was not able to transition to truly thinking for myself.”
That hit me. How do you build truly independent conviction — and filter out the noise around an opportunity? A lot here, but it’s been on my mind all week.
Conviction in a fast-moving market is hard
The market feels like it’s moving at warp speed — which I’ve talked about before — but that makes getting conviction both more critical and more elusive. I find it so much easier to get to know someone over time, track their execution, and then make a decision to work together when the moment is right. But that luxury is increasingly rare in today’s market.
It’s a founder’s market — which is great for founders! — but it makes my job harder. Capital is a commodity. You have to play the game. That’s part of why I’ve been wading into less obvious waters — and honestly, really enjoying it.
Follow-on funding for hard tech
Lastly, I met a fantastic investor this week and asked about her framework. As many of you know, I’ve been obsessed with this for months. She boiled down follow-on capital for “hard” tech into the simplest two-part approach:
Invest in a founder with such intense “founder energy” that other VCs with deeper pockets have to pile in.
Back technology that’s so much better that you’re convinced customers will sign long-term agreements — which over time enables debt financing. Notably, a 20–30% improvement isn’t enough — you are really looking for step-change functionality.
And with that, a tune…
Stay weird. Stay curious.
-CBR