The Automation Endgame, VCs Returning Cash, and the OpenAI Wager | E2019

"So again, this technology is going to get rid of jobs. Hopefully, we can have some basic humanity while this happens."

"I think it's getting harder and harder to actually put the largest container ships through major throughways like canals, for example."

"This is not just a port labor story. It's much bigger. But I do think lately this flashpoint underscores, as you said, the upcoming battles between labor and automation."

"So one salesperson sells twice as much, which if you look at the revenue per employee, it's doubled in Silicon Valley at some of these companies. Meta's doubled its revenue in the last couple of years and has less employees are the same. Uber doubled its revenue, same number of employees."

"It's a great and beautiful thing that every business should have operating leverage. It demonstrates how businesses can achieve increased profitability without increasing headcount, which is crucial in today's competitive landscape."

"You're going to get all that work done inside of Notion with their new AI tools. You can draft an outline, draft an email, draft a meeting agenda. I mean, you could draft anything. And it's just all there built into Notion's new AI."

"The labor movement is facing new challenges as companies increasingly lean into automation. First, let's talk about the labor movement here, I think. It's a good point."

"We also have learned that humans are resilient and can, in fact, if they want to, fly things in at three, four, five times the price. We've seen that things can return to normal pretty quickly."

"I make enough money being a super commuter, and then I can get in a self-driving car and drive 90 minutes, watch a TV show, whereas I wouldn't take that 90-minute or two-hour commute previously."

"In the case of Shanghai, when they automated their ports, I think they saw something like a 70% reduction in labor costs. And so like these things, yeah, 70% reduction in labor costs and 50% boost in productivity by automating a port in Shanghai."

"But I'm worried about that gap period. And frankly, societal unrest here in the US and around the world. I mean, you and I are pretty big bulls on how much of the world is going to get automated in the next five years."

"So, there is an argument here as well that you'll need less money and you'll need to be employed less because you will not require as much money to do things. And this is actually scary to capitalism."

"There's going to be very – the amount of money you need to sustain yourself in America could go down in the modern world greatly."

"You cannot stop the economic forces behind it. It is a wave that is approaching every economy in the world at once. The concern here is if we don't automate away the on-ramps to labor, what will happen to those first-time workers?"

"The average household in the United States is 2.5 people. You start looking at how many people live in other households... If you look at Asia and the Middle East, Oman, they have bigger families, larger family structures, parents stay with the kids, they live on compounds."

"This is VC distributions over time. Essentially, VC distributions as a share of net asset value for funds age five to 10 years has fallen to basically a tie for the all-time low at 5%. It was as high as about 33% in 2021."

"And now, you know, it's, there's a lot of funds who just haven't distributed and there's not a lot of IPOs, but hopefully that picks up. This tension you're describing is pretty pandemic in the venture industry."

"It's literally like 2009, but what you see from 2009, 2010, which is when I started angel investing and became a Sequoia scout, it was straight up. And we just had this really great run. So hopefully we go back to the future."

"It's a little bit dissonant to see the crisis and then also the enormous infusion of cash. I worry, but also I love the boldness of it."

"I think the people who invest now will have a good shot at doubling their money. There's an outside chance. Maybe they run away with it. I doubt it."

"I don't think it's a great use of capital to invest in this round. I think it's all strategics."

"At the pace of the company's growth in the last 12 months, I think that your projection of year-over-year growth rates is just about half of what other people are expecting. If you take that into account, it compounds relatively quickly."

"You have, if you have open AI on your webpage as an investment fund, other people come and say, 'oh, you're an open AI.' It kind of creates a reference point in the investment world."

"It's not the first place I would put money, but think about entries in Horowitz and other major funds. People want to put a lot of capital to work."

"But the point is this impacts 36 ports, of which 14 are considered major. And without longshoremen, you cannot get stuff on and off of boats."

"And ironically, in this case, the U.S. is much further behind in terms of automating its ports. While we may view Europe as overly regulated, they are outpacing the U.S. in port automation."