Episode #83: Tony Fadell on Building Products That Last, SAFE Adjusted TVPI, Kirkland's $500M AI Bet

**Charles Hudson** (0:00)
I think I've gone back to something that I used to spend a lot more time thinking about. There's pain and then there's 10x relief. If you have a deep cut on your forearm, you need a suture, not a band-aid. A band-aid will lessen the pain a tiny bit. And I feel like lately I've met a lot of companies, I'm like, well, the thing you've built is a band-aid. We need a 10x better, undeniably superior product. And if your product is just incrementally better than the status quo, it's not gonna be enough to get people to change unless the environment changes.

**Mia Farnham** (0:29)
It's the week of June 8th. Welcome to The Learning Corner, a Precursor Ventures podcast.
Welcome to The Learning Corner by Precursor. I'm Mia Farnham and I'm joined by our GP and managing partner, Charles Hudson, where we will be talking about the articles and good reads that caught our team's attention over the past week. For our first topic this week, Lenny Rachitsky interviewed Tony Fadell on his podcast, Lenny's Podcast. Tony is the person behind the iPod, the iPhone and the Nest Thermostat that nearly hour and a half long conversation went in so many great directions, but a large center point of it was Tony's argument that AI is making it easier than ever to build things, and that makes tastes and craft far more important, not less, all things that we've talked about in weeks prior. He draws this analogy between fast fashion and what he calls fast software, where AI-generated code can work and even look right, but it's brittle, it's hard to maintain, and accumulates technical debt fast. His line was, if you're gonna build a real company, it can't be a throw away. He also gets into something he calls cognitive surrender, this idea that builders are outsourcing, not just the execution, but the judgment itself to AI, which he sees as genuinely dangerous. The piece is anchored in real examples from Apple and Nest and how opinion-based decisions get made when data isn't enough yet, and why sometimes having singular, informed points of view still matters even when you can generate 100 options instantly. Going back to that analogy between fast fashion and what he calls fast software, his argument is that AI makes it easy to generate code that works on the surface but is really fragile underneath. He calls it the H&M versus luxury brand problem. You can get something that looks right very quickly, but it falls apart after one wash.
His broader point is that even if you can vibe code a product into existence, you still need all the other functions around it. You need marketing, you need sales, distribution to actually bring it to life and straight to the customer. Where do you feel like founders might be getting this wrong most of the time? Is it on short sight into the long-term technical debt side, or is it this assumption that a great product will sell itself?

**Charles Hudson** (2:44)
I really liked this podcast. It reminded me in so many ways.
I worked in online games for a long time, and when online games discovered AB testing, everyone was like, we don't need to think anymore. Just AB test everything and take the outcome of the test, and I'm like, well, that's not judgment. We didn't use the word taste. That's just letting the machines decide. And that did not produce engaging, fun games. It produced lowest-come denominator kind of slop. And I think in some ways, the just AB test that has turned into just ask Claude or ChatGPT and go with the results. And I think that also leads to uninspired work. And it's funny, I just wrote a blog post this week about this whole thing about my experience as a software developer and also just learning that you can vibe code just about anything. It doesn't mean it's going to work or be easy to maintain or will be useful. I still don't think there are many great shortcuts to producing amazing quality work. I still think it takes a point of view. And again, I think this notion, I talked to a lot of our portfolio companies, I almost wrote this post called Doing Things Quickly Versus Doing Things Well. I think right now you can do a lot of things quickly. And I meet a lot of companies that are like, this is great. We've never shipped more features and products. I'm like, but are they the right features and products? Are you so quick to respond to customer requests that you're missing the opportunity to go deep and figure out what's behind the ask? What is the thing that they're really searching for? And I worry that a lot of this instant software stuff is companies are missing out on the chance to learn from what their customers are really trying to tell them. And so I thought the part about the iPod Nano was like, sometimes if you have a point of view, the data will not always go your way right away. I've lived through this at Precursor. I've had a lot of beliefs about our firm and why we need to exist. And for a long time, people were like, I don't think you're right. I'm like, well, I think I'm right.