How Wing VC separates tracks from trains to predict which AI companies will endure | Jake Flomenberg

Jake Flomenberg (0:00)

Is the blast radius going to change your entire company, your entire decision-making process, or just the way a couple of people are working together?

Brett (0:11)

Welcome back to another episode of Builders. As always, this show is brought to you by frontlines.io, Silicon Valley's leading B2B podcast production studio. If you're bringing technology to market and want to learn from your peers, we have a library of more than 1200 interviews with venture-backed founders and marketers where they talk all things go to market. Of course, if you want to launch your own podcast, we offer podcasts as a service to more than 80 tech start-ups. The idea there is very simple. You show up and host and we do everything else. Now with all that said, let's jump into today's episode.

Our guest today is Jake Flomenberg, partner at Wing Venture Capital. Jake, welcome to the show.

Jake Flomenberg (0:48)

Thank you so much for having me, Brett.

Brett (0:50)

Of course. Excited for the conversation. Let's go ahead and jump into the questions here. As an investor, what do you find yourself just coming back to over and over again?

Jake Flomenberg (0:58)

One of the things that just keeps coming up for us, whether it's every decision we're making in our IC meetings, the notion of enduring differentiability.

It's getting harder and harder as opposed to easier and easier to ask. In the past, we'd look at these companies and they might have a couple million of ARR, they might have some strong customer feedback, and that was enough. Now, it's really hard to answer, will this company be differentiated in a few years? Will it be made irrelevant by a new model release? That's a pretty uncomfortable position to be in as an investor when our job is to know the answer to the question.

Brett (1:37)

It makes sense. It's just crazy times. I feel like if you're just on Twitter every day, and obviously it's exaggerated, but every day it's, this company is dead, or say goodbye to this, or blah, blah, blah. It's like, Claude, ChetGPT, everyone's just shipping versions of companies that have been around forever now.

Jake Flomenberg (1:52)

Yeah, 100 percent. And so we wind up in a situation when there's this new model release. It's like, hey, what companies are going to be killed today, or not relevant tomorrow? And sometimes, I think people get it partially correct and partially wrong, right? And so there was this big model release, like this Mythos thing, right? And it has all these security capabilities and it can find bugs. And so everyone said, wow, maybe everything that has anything to do with application security and bugs, it's no longer relevant.

And it's sort of conflating a model capability with a whole genre of companies. In some sense, a model capability, it might supercharge some of these companies, it might make people realize, oh my God, if attackers could find vulnerabilities in real time, well, maybe we need a triage and patch things in real time now, so this is much more important. And so that bit of confusion in terms of how the market is reacting in the macro, and we've seen really weird things. We see big public security companies that have nothing to do with this, that are dropping 10 percent in a day, as a reaction to that, has really just made me think about how to come up with frameworks and ways to just tease out what's really going on. And the way I would ask it in the most simplified question is, if OpenAI or Anthropic, if they launch a model that's 10x better, maybe not 10x better, however much better, in a way that's relevant to your business, does your company still have a reason to exist? And if yes, explain yourself, what is this reason?

Brett (3:22)

And what are the common answers that you hear that you disagree with?

Jake Flomenberg (3:26)

We'll figure it out later, we're going to build more, the situation will change. And so if you don't have a crystal clear answer to this one question, don't start a fundraise. You need to think and prepare an answer to this question, and not rush. It's not all about hustle, like how can I get a POC or make some initial money. This is a fundamental question that should be answered before you start a company in this day and age.

Brett (3:53)

And are founders getting comfortable and knowing they need to have this question be answered? I feel like a year ago, maybe not, but it seems like now we're in May 2026 How do you not have an answer to that question at this point?