Benchmark's AI Bets: Cerebras, Sierra, Legora, Fireworks, Starcloud, Gumloop..

**Everett Randle** (0:00)
We used to have golden rules or like North Star metrics in investing. When you think about software, there was like sort of five or six things that mattered. And it was very legible and it was very spreadsheetable. And now, all of the golden rules of the past that defined like the spreadsheet investing era are all gone in the new AI paradigm. You can have businesses that are well over a billion dollars in revenue that haven't proven out their unit economics, they haven't proven out durable product differentiation. You know, we have developers that are spending $3,000 per month themselves, each on Claude Code. So it's like, wow, okay, so that's $36,000 per developer. When you think about the Anthropic $380 billion round, if Anthropic was to go public and get liquid at a $1.5 trillion valuation, I just don't know if people really understand and are ready for the impacts that this much liquidity could have on the ecosystem.

**Molly O'Shea** (0:58)
Ev, welcome to Sourcery.

**Everett Randle** (1:00)
Thank you, Molly, it's great to be here.

**Molly O'Shea** (1:02)
I'm so happy. This is like the first interview I've ever done with someone from Benchmark. You're one of the newer partners. I did an interview with Jack before he joined, but now we have you.

**Everett Randle** (1:13)
That's great. I'm excited to be the first.

**Molly O'Shea** (1:15)
So what's going on? I know you guys are just coming off the heels of your ADM. You had a mass kind of collective reflection on the market today.
How are the vibes?

**Everett Randle** (1:24)
Yeah, vibes, I mean, the vibes within Benchmark are definitely high, I think. As a market, I think the whole venture growth ecosystem is going through this sort of phase of disorientation. Everyone sort of feels like down is up, up is down. I think that we were trying to, as we have kind of our annual meeting with all of our partners, oftentimes that's when we try to introspect and figure out how we've been feeling about the market and the things we've been looking at. And the one visualization or like the one framework that I came up with that I think explains a lot of it is that in the previous paradigm, especially in software, you had almost like this inverse relationship between scale and risk or like scale and risk of like mega impairment or like a company going into business. That's because historically, as you're scaling as a startup, you're sequentially de-risking different parts of your business. And so the first thing you de-risk typically is like, can you get product market fit? Like do people want to buy your product? And then you de-risk unit economics. Like are you selling a product for what will end up being unit economic positive over time? And then you de-risk things like the TAM of your market. Like are you able to grow not to just 10 million of revenue, but to 100 and maybe multiple billions of revenue? And then eventually market leadership. And if you don't de-risk those things while you're on the journey, you stop scaling. Like you just stop growing.
And so there's just like this nice clean relationship between those two variables, where if you're continuing to scale, it usually means you're becoming a less and less risky company. And I think that the thing that's changed massively in the new AI paradigm is that you can have businesses that are well over a billion dollars in revenue that haven't proven out their unit economics. They haven't proven out durable product differentiation. In many ways, it feels like the risk of impairment or a company either going to zero is the worst case scenario, but even just being devalued from its last round in a significant way, it feels like the risk of that over time is actually sort of flat, or even like maybe there's like a weird positive correlated relationship with scale and risk.
And it's a very disarranted thing because you're just very used to the fact that the bigger you are, kind of the safer the company is, and it doesn't feel like that anymore. And there's a lot of reasons for that that we can go into. But I think that's the reason why folks in the market and investors and our peers, and even us, feel like something is like the risk reward paradigm is very different these days.

**Molly O'Shea** (4:05)
How do you evaluate that as an investor? We were kind of talking about this beforehand, like you say this is the death of spreadsheet investing. So is that kind of what you mean? Is it categorical or what's the premise there?