Jason Lemkin joins Sam and Shaan to break down what the smart money is doing with AI. He shares the inside story of building a 20-million-word AI body double of himself on SaaStr — and the 50,000 conversations it’s had. The conversation covers MCP, the death of traditional SaaS apps, what personality types are winning in AI, venture strategy, and what Jason is telling his college-age kids about the future of work.
Speakers: Sam Parr (host), Shaan Puri (host), Jason Lemkin (SaaStr founder, investor)
Cold Open [00:00:00]
Jason: Now, 0 to 1 is very likely an AI. You build an incredible tool that no one else can do. You can do a million in a week or two, you know.
Introduction: What Is the Smart Money Doing with AI? [00:00:08]
Shaan: So for this episode, what I’m thinking this is about — and guys, this is going to be generous to us — is: what is the smart money doing with AI? In betting, in sports betting, in Vegas, you always kind of want to watch what the sharps are doing. They tend to be maybe 10 or 15 percent earlier to understanding things, to recognizing things. And similarly, Jason, Shaan wanted you on because you’ve been doing really interesting stuff with AI — both from an investing perspective, you’re talking to startups that are using it, you’re reading all the reports — but also you yourself built this AI tool. So I want to get your reaction to a few different things.
Can you first explain this AI experiment you did where you basically made a body double of yourself out of AI? What was the experiment and what’d you learn?
Jason: Yeah. So SaaStr has a lot of content, as you guys know. We have 12 years of content. Some of it’s out of date, for sure.
Shaan: SaaStr being — you’re a previous founder who’s exited multiple software companies. Now you’re like the godfather of SaaS because you have this blog and media company and events business called SaaStr, and you have a huge fund. So that’s kind of the context.
Jason: But probably most interestingly, for seeing the future a little bit, is that I have about 10,000 pieces of content I’ve written over the years — a lot of it which is not out of date, and I update it personally. About 10,000 pieces of content. And then we have several thousand interviews, like you guys do, but with so many great folks. Early ones with Dharmesh, ones from Dharmesh when HubSpot had just IPO’d, Dharmesh the other day, Yamini last week, Brian Halligan over the years. We have all of it.
I took everything I’ve written, every tweet I’ve ever done, every LinkedIn post, every SaaStr video from every speaker for 12 years — Aaron Levy the week he went IPO for the first SaaStr annual, to last week when we were talking about AI — all of it ingested into this AI. And so what I instantly saw was, as soon as I would talk to this AI, it was much better than me. It was much better than me because I forget.
Sam: How did you get that information in there? You just hook up RSS, right?
Jason: The feed for the blog. It can scrape the web, which is pretty easy. Soon we’ll be able to do other things like MCP, but it’s just scraping APIs and RSS. You just give it a URL.
Sam: But did you use Deli, or did you build your own tool? What did you do?
Jason: I tried a couple things and then I used Deli. At first, we had so much content it was a little difficult to ingest it all. So there is a little bit of work, and then I spend about 10 minutes a day training it — which we could talk about. But it’s better than me.
The thing I didn’t get until I saw something that was hyper-trained — like, this is a lot of content, 20 million words, very few mistakes, very few hallucinations — and the ability to connect things that I can’t. I just don’t remember. I don’t remember what Sam and I said on stage at the Hustle years ago versus when we did an MFM a while back versus today. But the AI knows it all.
Shaan: By the way, 20 million words is like 200 books worth of content. The average book is around 100,000 words. So you’re saying you gave it 200 books of your own brain — and the brains of other guests that have come on your show.
Jason: Yes. And your goal was to build — was it basically an adviser, an AI version of you, that could be an adviser to a founder who wants to come talk to you, but you don’t have enough time in the day to book calls? Was that the big idea?
Jason: I just wanted to learn, like you guys did. I didn’t think it would be as good as it was, because I’d used other products before and they weren’t as good. The use case would be: what did I say? But the other interesting thing is the use cases with AI are much broader than you’d expect.
I didn’t expect people to upload their board decks before board meetings and ask for feedback. That’s a niche use case. I didn’t expect hundreds and hundreds of founders to use it as their therapist for their company when growth has slowed. I didn’t expect that. I didn’t expect so many people to use it to review their sales scripts, their SDR scripts — when there are specific tools to do it. I didn’t expect it to be so good at reviewing VC pitch decks. It’s so good at it. Better than anything I’ve seen.
Building a Personal AI with Deli [00:06:30]
Sam: Can you get tactical for one second? So you go to deli.ai and you just uploaded the SaaStr RSS feed and it did all the work? YouTube RSS, Twitter, blog — but could I go to a health guru or a business guru that I subscribe to, who I love, could I say YouTube.com/allexerosi, upload that, and it automatically does it?
Jason: It’s an interesting question. It is prohibited by their website, by their terms of use. They prohibit it. But honestly, this is an AI risk — you could do it. Absolutely you could do it. You could redo what I did. It might take you a little while longer, but you could just clone exactly what I did and do it just as well.
Shaan: Sam, I’ve never felt so used and abused. When Jasm came on the podcast, she was like, “Yeah, actually I have my team training an AI of you so that if I’m brainstorming ideas, I don’t have to ever call you. I’ll just ask the AI.” She’s like, “We took all the podcasts and we’re training it on how you think, the questions you would ask, what you would say, the reactions you would give — and now you’re just there in the meeting.”
She basically hired me without ever paying me. Because I have this corpus of content out there. I’ve put my brain out there in public.
Sam: But how do I do that? Like, how can I just upload a YouTube channel and say this creator has great advice, I can upload 800 videos, and it will transcribe all of them?
Jason: You could go to Deli. It may take a day or two to fully ingest all that content, but it will do it just from the URL of your YouTube channel on deli.ai.
So I could make — and I actually think it is a great product. There are other people that can do it too. But let me tell you what I think is interesting about Deli. We’re looking at all this Cursor and Windsurf stuff and Lovable, and you don’t realize — they’re just so far ahead of like B2B and regular people only because they have better people working on them. If we had the quality of people working at Windsurf working on CRM, or working on marketing tools or podcasting tools, your jaw would drop today. But this is why your jaw is going to drop over the next 24 months, because mediocre engineers can’t — the engineers at OpenAI are so good. They’re just so good. But the average engineer working at a struggling CRM is just not that good. But they’ll catch up.
Jason: But yeah, you can build all of this. And here’s the interesting learning. So we could build a digital Sam, and we could do this for next week. You can do it. My learning from this is: it’s okay that it’s not you. This is why, for example, you can train your voice. It uses 11 Labs. And 11 Labs is epic, right? But you can choose: do you want it to be exactly like you, which is what Brian Halligan did? And then I realized that was creepy. I don’t want Digital Jason to be me. I want Digital Jason to be a prime version of me — 90% of the time much better than me, but distinct. I don’t want people confused, like with Brian Halligan. It’s okay that it’s not Sam. It could be a version of Sam that is better than Sam.
The Sponsor Break Is Cut
50,000 Conversations: What the AI Revealed [00:13:00]
Shaan: All right. So let’s walk through these top 10 learnings. You build this AI. It’s had 35,000 conversations with people. You did it — it’s almost 50,000 now?
Jason: Yeah. 50,000 conversations.
Shaan: And learning number one: you said users will tell AI things they won’t tell humans. What do you mean?
Jason: Well, first of all, before we get there — there’s no way I could do 50,000 conversations, is there? I’m not even a people person. I could do like one or two a day and I get tired. 50,000 — just think about the delta between two a day and 50,000.
But yeah. There are some things that are somewhat unique about me that are early. The amount of content — your math, Shaan — the amount of books we’re talking about, the amount of content I’ve written just about B2B, just about building business software, makes it interesting. The other thing is there’s enough people — I’m not like a super influencer the way you guys are, but there’s enough people that know the digital me that they already know what to ask me. They’ve already watched me at an event, they’ve read the content. So they ask me things without thinking it’s a prompt. They just ask things they want to talk about — their deepest fears.
Like: “I’ve partnered with Sam on this podcast, but I’m not sure he’s as committed as me. I see him doing other things. He’s into this accounting software and this Hampton’s thing. I’m worried he’ll quit my podcast on me. What do I do?”
Sam: Jason, you think it’s funny, but that hit home.
Jason: Hey, look. But there are thousands of these types of conversations. “My co-founder is not as committed.” “I don’t know if my board’s going to fire me.” “I’m only growing 18%. I have 11 months of runway.”
Sam: Were you Zuckerberging here? How do you know what was being said? Was there some privacy issue?
Jason: It’s interesting. On this app, you can set how much privacy you want. You can anonymize everything. Because there are different use cases. If you’re using it as a support tool, you don’t want anonymity — how can you follow up with someone? Then there’s like a therapy level where you would want true anonymity. Everything’s a slider in AI, in a sense.
Sam: You said the therapy thing as if it’s like, “Can you believe that?” And I’m like, dude, I use ChatGPT for therapy three hours a day.
Jason: Well, everyone does. The majority of use is: “This email pissed me off, how do I reply in a graceful way?” Or “I argued with my wife” or “I’m upset that I’m not doing this.” The other day on Sunday, I saw someone who had a super fancy home and I was like, “How do I get over envy?”
Shaan: It is. And this is the same thing. It’s just because it’s got 20 million words of B2B content, sales content, scaling revenue. It turns out — and this was a surprise to me, I didn’t believe this — it’s much better than ChatGPT.
Jason: Much better.
Shaan: And you said you trained it afterwards. What do you mean by that?
Jason: I’m going to embarrass myself technically. But basically, you take those 20 million words and you RAG it — you vectorize it. You turn it into a database and you add that to ChatGPT or Claude or DeepSeek. And the way you add it, and the relative weights of my content versus the generic content, radically changes the output.
Like, ChatGPT never asked my permission. It’s already slurped up all my content — every single YouTube video, everything I’ve written. I haven’t been paid a nickel. So what’s interesting is that content’s already there, but by heavily weighting it toward my content for my type of knowledge, it’s not a little bit better than ChatGPT. It’s like much better.
“How do I create a sales comp plan? I have four SDRs and five AEs. Our average deal size is $2K a year and we want to go from $2 million to $6 million next year, and my team won’t really do outbound.” ChatGPT is going to give you a mediocre answer. But my AI is going to give you insanely good answers, even though overall we’re pulling from the same content.
Shaan: And you had to do that manually? Was that the training, or did you do more training than just that?
Jason: First of all, it auto-updates every day — which is better than ChatGPT or Claude. It slurps up everything on my blog, on my social media, on my YouTube, every single day. It does it essentially in real time.
And then yeah, here’s what I do do. I’ll tell you my learnings on hallucinations. I audit a few of them. I read some and I see if they’re wrong. When I see something that’s wrong, there’s a section where I just train it. I say, “No.” Like: “Sam and I first met in 2014 or 2016, after I wrote a Quora post and he had me do a meetup at the Hustle.” Because it got it wrong. It made something up. So I do that for about 10 or 15 minutes a day. And it turns out it doesn’t get very many things wrong. The things it does get wrong, it consistently gets wrong — and I’ll tell you why — and then I just fix it and the next day it’s right.
Sam: If you do nothing and you don’t train it and you put no content in, this average VP of sales is going to say it doesn’t work. I logged into ChatGPT a year ago and it hallucinated. And you’re going to lose your job. But the hard part is, I’m so committed to ChatGPT now — it knows so much of my information because we’ve had so many conversations. Are we all going to have like files, like our health records, where it’s the background? Because I get nervous to switch to any other model. ChatGPT already knows everything.
Jason: Here’s what I’ve learned. Memory is a big deal. ChatGPT can already remember questions, but now it’s remembering everything. On the one hand, it’s a moat — just like being in the Google ecosystem is a moat, just like being back in the day in the Yahoo ecosystem was a moat. But the moat is not as deep as we think.
Our ability to get trained and up to speed does not require 20 million words. So yes, it’s a moat — but if you decided Claude was much better for you and you spent a month including your day each day, you’re probably there. It doesn’t take that long.
Shaan: Somebody had a good startup idea — I think it was Aaron Levy or someone was tweeting this — they were talking about Plaid for AI tools. Basically, you’d be able to, the way Plaid lets you connect your bank safely to any financial service, take your kind of memory and context, what ChatGPT knows about you, and port that to some new app you’re trying. I was like, “Oh, that’s actually a very interesting idea.”
MCP and the Death of Traditional Apps [00:22:00]
Jason: If apps will even exist in the future. What will exist instead of apps? We’re going through a transition phase, right? We’re going through a chatting phase — and we’ve been chatting since the ICQ days, since AOL. We’ve been chatting at our keyboards with people. Now with AI, we’re chatting again. But we’re starting to not even know what we’re chatting with.
Right now, MCP is new, but already today OpenAI and Claude can pull from other apps — HubSpot, Notion — and just pull the data out. I don’t have to go to Notion or even Google Calendar or HubSpot anymore. And then, you know, people think this Johnny Ive thing for $6 billion is crazy. It’s a great bet, because we’re going to go from 20 minutes a day in ChatGPT to 24 hours a day in ChatGPT. And when we’re in ChatGPT 24 hours a day, we’re not going to pull up a CRM. We’re not going to use these interfaces. These interfaces are all already dying. You can see it, Sam.
The amount of time you spend in GPT, and then go to a B2B app — you’re pulling your hair out. It’s so dated, isn’t it?
Sam: Yeah. It’s so dated already.
Jason: It’s only 2025 and it’s already dated to go to any B2B app. They’re all going to die.
Sam: How does the excitement and rate of change compare right now to — I don’t remember if you were involved in ‘99, the year 2000, but you were close, right?
Jason: Yeah, I was a kid. It was my first job back then.
Sam: How does today compare? Everyone talks about the dot-com boom and I never experienced it.
Jason: Those days were the first time — until AI — where people felt like they could just do something out of nothing. It was miraculous. And that is what AI is like today. People are just doing miraculous things, and it’s exciting, but man, it’s super scary for incumbents.
Sam: Do you think every content creator is going to have this sort of intellectual stunt double the way you created? Is this the future?
Jason: First of all, I don’t think anyone is going to create content without AI going forward. And the tools are going to change. For example, just for our last big SaaStr event, I did all the speaker promos in Higgsfield. Have you ever used Higgsfield?
Sam: No. How do you spell that?
Jason: Higgsfield.ai. It’s the ex-head of AI from Snap. It’s one of the coolest apps on planet Earth. Everyone’s talking about this new Google video thing, but they were already doing it.
All you have to do at Higgsfield.ai is take a screenshot of us right now, put it in Higgsfield, and it will create a movie out of it. You can take an initial photo and an end photo and it will just connect them with a narrative. So I’d take a picture of Yamini just off her head shot from HubSpot, then take a picture of a stage at SaaStr, and it would just make a video of Yamini waving to the crowd and running on stage and being excited.
A year ago, all the digital promos were a static classic head shot with some chrome around it. Today everyone got a cool video. Next year, it will be me and Yam talking for 10 minutes about AI and neither of us will have had the conversation. We could already almost do that.
And I did all these things instead of waiting for our designer two months to do a static thing. Now I just did it myself in Higgsfield in seconds.
Shaan: I can even tell just from the way you’re talking — if we did this same podcast five years ago, your rate of talking would have been like 10 beats per minute lower. There’s like a baseline level of excitement that has just risen. Our new blood pressure is here.
Sam: As long as I’ve known Jason, you were borderline grumpy. You were pissed off all the time. You had this energy where you were like, “You’re making a mistake. Stop this.” You had like this almost anger in you. Now it’s the exact opposite. Now you’re optimistic.
Jason: I am. I am. You’re right. I’d like to think of it differently, but you’re probably right. The way you perceive me is important. And it is — I am very optimistic about it.
But the difference is: I used to think all these products were durable. Now I don’t think any of them are durable.
The SaaStr Journey from 0 to 1 — and Why That’s Now Broken [00:29:00]
Jason: So when I first started doing this SaaStr content, I made up this expression — which I stole from the mayor of Tel Aviv, and people have used it ever since. “0 to $1 million in revenue: impossible.” We don’t need another product. “1 to 10 million: unlikely.” Like there’s so much competition. “10 to 100 million: inevitable.” From impossible to inevitable. We had a book that sold a couple hundred thousand copies on that theme.
So you go through these stages because what I learned as a B2B founder is: getting from zero to a million is really hard. Getting from 1 to 10 feels impossible, but once you get to 10, it’s inevitable to get to 100. If you had good founders, it was a punch card.
Now it’s disrupted. Now 0 to 1 is very likely an AI. Like, in a week or two. But everyone beyond $100 million is getting disrupted. There are so many software companies at $100 to $200 to $300 million in revenue that aren’t growing anymore. It never used to happen four or five years ago. Like, you hit your punch card. You had 120% revenue retention and you had a brand. All you needed was a brand and revenue retention and products changing about every five years.
Right? If the product changed every five years and you had a brand and tens of millions of revenue, that meant you had product-market fit. High NRR meant it kept going as an engine. This 120-130% revenue retention engine just kept going — from 20 to 30 to 50 to 100.
And this is crazy: in 2021, the average public SaaS company traded at 70x ARR. Today it’s at 5x. But it’s because it worked then — everything just worked. And now, Okta growing 10%, Salesforce growing 7% — they’re good companies, but it’s not durable the way it once was.
Sam: My premise — what I thought, and what Morgan Stanley had in a report — is that the majority of value creation in AI is going to be the big companies using AI to get better, versus new AI companies. Do you disagree with that?
Jason: I think right now, today as we record this, there’s a hint of truth to it. But Salesforce is not accelerating. Okta is not accelerating. ServiceNow has a lot of AI, but it already had workflows that were automation. So people say that, and there’s some qualitative proof of it, but we haven’t seen it in the numbers.
And here’s the bigger point: there’s a window for the big guys to leverage this because the interface we talked about is dying. People are not going to want to use these dated interfaces anymore. So even if it is benefiting the big guys today — what is the value of a CRM if you don’t log into the app anymore? If I just talk to ChatGPT and say, “Give me the 10 deals I have to work on this week” — how valuable is one CRM over another? Or will I even know I have a CRM? It just becomes plumbing in a database.
MCP Explained: The AI Protocol That Changes Everything [00:34:00]
Jason: Here’s one problem. One problem with AI is there’s been too much nerdy nomenclature this last year. Too many O4 minis, O3 maxis, LLMs. It’s like knowing the difference between an iPhone 13 and an iPhone 14. That’s all going away this year.
That complexity made sense. As crazy as these numbers are, Anthropic went from $1 to $3 billion in revenue in five months. That is basically all infrastructure plumbing revenue. We’re just starting the application age. And in the application age, we don’t care what models HubSpot uses. HubSpot already has a lot of AI. Do you know what models it uses? You don’t care.
So these nerdy terms are going to fall away. But think of MCP as the next-generation API. What MCP does is let any AI talk to applications right inside the AI.
Sam: How do you connect with MCP?
Shaan: I can’t quite do it with you on camera — maybe in two months it literally does it automatically — but I can show you offline. You just connect it to your Google Calendar and then there’s still a little bit of headache around authentication and security, but not much. And then you can just talk to your calendar in ChatGPT. HubSpot has announced this. Dharmesh is into it.
But what are you using to connect the two?
Jason: MCP is a protocol. It’s like a language. Imagine — we have English, we have Spanish. When the internet browser came out, it was like, “Hey, there’s a new language. We’re going to call it HTML.” And you’ve got to learn that language if you want to tell the browser what to do, how to show a webpage.
MCP is a new language that basically says: “Hey, if you’re one AI app and you want to talk to another application, how are they supposed to talk to each other?” MCP became a protocol. Now any app that wants to be available — like HubSpot, they want all the AI tools to be integrating in with HubSpot — they say, “Cool, we’ll also speak MCP. We understand that language. Just come right in.”
It’s basically how APIs work for most websites, but MCP is the AI-specific version of that. But right now, HubSpot’s API is different from Salesforce, different from Notion, different from Linear. You have to learn it. You have to get a key. You have to code to it. You have to understand its nuances. It’s a lot of work.
Why don’t you have a HubSpot integration? Because it’s work. With MCP, it’s early — but it’s just starting. It won’t be any work. You just tell MCP to go talk to HubSpot or go talk to Notion, and it will just do it, and all that work goes away.
Shaan: So if your AI can talk to any app you use, take all the data out, and let you talk as a human — for 99% of the world, we won’t use HubSpot the way we use it today. There’s no reason to log into this app, figure out how the UI works, what are these tabs. And the kids these days will never know this. This generation coming up will never use software like we use it.
Sam: What is the office of OpenAI like right now? Because you’re saying it sucks right now, but in 60 days it’s going to be the best. So, how many people work at OpenAI? And have you guys been to the office? What’s it like there?
Jason: I think they have about 4,500 employees. Here’s what’s super interesting: they only have about 60% employee retention over two years. Because everyone’s going and doing their own thing. But it’s just crazy — if OpenAI only has 60% team retention, what’s your hope to keep your AI team? You better treat them really well.
The Pull Era: Avalanche vs. Pushing a Boulder [00:42:00]
Sam: I have a friend who told me about the early days of Twitter. He had built a company scraping Twitter, figuring out what’s actually trending. The way he did it was: people always talk about New York, so if I hear New York a thousand times, that doesn’t mean New York is trending. It just means New York’s already big. But if suddenly everybody’s talking about Tallahassee — Tallahassee doesn’t normally get talked about that much — if it’s being talked about as much as New York, that means it’s trending.
He ended up getting bought by Twitter, and now that’s what the trending section is. My friend Abdur described what it was like: “I thought I knew what a startup was. I thought a startup was I wake up every day and I’ve got to go try to get some growth, and I’m pushing — pushing the product forward, pushing the marketing forward, pushing my product into the market. Push, push, push.” He said, “Then imagine you’re pushing a boulder up a mountain and you look up and there’s a giant avalanche coming at you. It’s pulling toward you.”
So his first six months at Twitter, he said, “I woke up with the keyboard imprinted on my forehead. I’d fall asleep at my desk and wake up and I’m back at work.” He’s like, “Basically that’s how I lived for six straight months. Everyone was making fun of us because Twitter had the fail whale, but there was nobody that had ever scaled a service this fast. We just couldn’t keep it up. Trust me, we were trying. Everyone thought we were being lazy or stupid. We are the smartest people. We were trying our absolute hardest.”
And I think what’s happening with a lot of these AI companies is that you and I, Shaan — we probably only really experienced push for most of our startup careers.
Shaan: Yeah. It’s never felt like I was holding on. It felt like I was pushing and it got a little easier sometimes, but it was always resisting.
Sam: I have this company now — we haven’t announced this — and I just — we have this AI bot that tells us our new contracts and our new revenue. Last week, we closed a million dollars in new contracts in a week. And I was like, I have never felt this level of pull in any business I’ve ever done. And we’re not working 10 times harder. It’s just that the market wants this type of product at a different level.
I’m sure that the folks at OpenAI and all these AI startups are experiencing a startup experience that is nothing like what you and I experienced, Sam.
Jason: I think it was 0 to 800 million users in seven months. Is that what Mary Meeker said?
Sam: Yeah. 10% of the world. 10% of the world in eight months or something like that.
Jason: So that’s why the rate of change is so high that everyone who’s a Luddite or a Debbie Downer is missing the point.
Before it looked like it was a bunch of tire kickers — people were going and testing the product, but there wasn’t really high retention. And then they showed that the active usage has also doubled, not just the users. So you have like a double of a double. And it’s pretty obvious to me now that I’m kind of an idiot for not investing in this company at really any price point. Like, this is basically the Facebook of this generation, right?
I don’t think we realized that ChatGPT would have 85% market share at the prosumer consumer level. That was what all that meant.
Shaan: It would surprise me if we’d known, because ironically ChatGPT was an experiment. It was a proof of concept. It wasn’t really meant to be the center of OpenAI.
But like, do you beat yourself up about this? Because I’m like, how much time have I spent thinking about AI? I’m supposed to be an investor. This is the greatest, fastest-growing SaaS business ever. Are you an investor in this? Did you have the opportunity to invest in it?
Jason: I did. But you could have hunted it down. You know, that’s on you.
Shaan: For me, I want to own 10% or more of a startup and have fun. So hunting something down just is not my vibe. But it’s the way to make the most money. Don’t get me wrong. Nothing wrong with hunting it down.
I bet Dharmesh — I don’t know if he explicitly said $15 million, but he sort of winked at it. He owned chat.com, which he sold to OpenAI for what he paid for it, which I think was around $15 million, and he got OpenAI stock. There’s a world where that becomes worth in the ballpark of his HubSpot stock.
Jason: You know, I remember thinking with Aaron Levy — he was early in Stripe, early in Gusto, back in the day. Aaron had a window before Box went public where everyone came to him and he had a little time, and he just did all of them. Man, if this guy got Stripe at the seed round and all those others — how much could those be worth, even more than his Box stock? He owned 4% of Box when it went public and he’s been grinding Box for 20 years. I love him for it.
But I know — and we could look it up — he did Stripe and Gusto and a bunch of others, and it’s none of my business, but I’m like: those moments in time could be worth more than all his Box shares. And it gives me even more respect to keep going, because so many founders these days have a different relationship to money and investment than a few years back.
A lot of founders would quit today if their investments were worth more than their founder stock. A lot of them do quit.
Sam: You know what this reminds me of? At the Hustle, it took me three years to get to a million subscribers. And that was life-changing to get that fast. But as fast as some of these guys are growing, it’s like that per hour. It’s hard to grasp how big these things are and how fast they’re getting there.
Jason: Well, look — it’s slightly underdiscussed. It might be a crass topic, but when HubSpot IPO’d at about an $800 million valuation — today it’s worth like $40 billion. OpenAI will be worth a trillion. My point is that the rich are so much richer now. The regular person in tech is a little bit richer, but the big wins are a hundred or a thousand times bigger than just 10 years ago.
I could find this post, but I wrote up the number of billionaires just in SaaS and cloud — your jaw will drop. There are already 100 billionaires in B2B software. I wrote up 100 billionaires. Because the markets are so much bigger.
The Founder Archetypes Winning in AI [00:54:00]
Sam: For the people listening, what personality types are poised? What does a 22-year-old today look like who can pounce on this? What’s the profile?
Jason: I think it’s just two things. And it really probably hasn’t changed since Bill Gates’ days starting Microsoft.
One: you have to be able to ship insanely good software. Which maybe in some business software wasn’t true for a while. Insanely good — like Higgsfield, like ChatGPT. This is not trivial stuff. This is insanely good software.
And the second: you have to be relentless about owning a market. There was a while in 2020-21 where being third or fourth was great. Things were so good — “well, if I’m number four in the market but I don’t have to sell a lot of stock, and it’s calmer, and I could sell my company for $400 million.” Now, the best founders today are relentless about being absolutely number one, destroying and owning the market. And because the markets are bigger, it compounds to something crazy.
I’ll give one example. Sammy and I are both investors in Owner.com. Adam — whatever, high school dropout starting this company — he’s going to disrupt the entire restaurant industry. He’s already on the way there. Not number four. He has an incredible technical co-founder now, an incredible engineering team. And here’s an interesting thing: I invested at the seed round in 2021. Adam hates it when I say this, but the product was not very good then. The CTO did a lot. But the reason it killed all its direct competitors — not the big indirect ones yet — is just because the software is so much better. And that compounds every quarter. And AI is accelerating that even faster.
So you have to build epic software. But if you destroy these markets, that’s the path. I don’t think this is a good time to be number four.
Sam: I actually disagree with you — or at least with how you’re phrasing it. I think I understand your sentiment, but there are people we’ve had on this podcast that built apps that were fast money grabs, got really big really quickly with tiny teams. And what I would tell them is: “This doesn’t seem durable, but keep your team small and ride the wave and take all the money, and then do something else eventually.”
But it’s a little different than it used to be, because you don’t need to build huge infrastructure anymore. You can have one-hit wonders that crush it.
Jason: I know what you mean, which is that a base hit now can provide you enough cash flow to a) change your life and b) set you up with five more doors — whether it’s investing or reinvesting into another company you start. You don’t have to build one 20-year durable company to be a winner anymore.
Sam: Right. Like back when we were in San Francisco early on, the small lifestyle business would get you the equivalent of a job. Now it gets you — those same solo bootstrappers have $8 million ARR. It’s just a different scale.
Jason: But you know what the difference is now? In the age of AI, when there’s so much competition, you can build a two or three-person company — but the lifestyle businesses are being slaughtered. Because when three kids come to SF working in the Mission and they’re working eight days a week and they’ve taken your little idea but made it much better, your lifestyle is going to be unemployment.
This term needs to die. It made some sense a few years back. You can do more with fewer people — but you better work harder if there’s competition, or find a space with no competition.
And the weird thing about AI is there’s competition in spaces that two years ago had very little. Like legal. When I started investing, I did a couple investments in legal. I knew a little bit about it. And no one wanted to invest in legal: “It takes forever, lawyers don’t buy anything, it’s slow, it’s boring.” Now there are 500 AI legal startups. Same thing with support, with post-sales. No one wanted to do those startups — “boring, resolve tickets, pick up the phone.” Now there are thousands of voice startups, thousands of these.
So if you think you can run a lifestyle customer support startup — good luck. Because Deli out of the box is probably better than you.
Running a 5-Person, $25M Company With AI [01:01:00]
Sam: You own a media company, a trade show business — basically a boring company that is not a technology company, which is what I do as well. For people like that, how are you using AI? Are your employees now significantly more efficient?
Jason: We only have five people now, and we do $5 million per person. Did you have more before?
Sam: You had more people before, right?
Jason: We had many more in 2020. We had four designers. Now we have a little bit of designer work done with AI tools. We used to have five people on the content team reviewing sessions. Now we have zero — we just have AI. All the ghostwriters are gone.
What would happen? Let me go in inverse order. About nine months ago, Yamini would come to a SaaStr event — she’s done it three times — and she would speak. And three months later, a ghostwriter would write up a terrible summary. Just terrible. And I would cry and we’d ask them to fix it. But then about nine months ago they got better, and I went into Claude, and she just put it in Claude — and they were charging us $5,000 a month for this. We could do this for $20 in an hour instead of $5,000 and waiting two weeks. So we got rid of the ghostwriters.
Then we had an agency we worked with for years. For a while it was great — they would review all these speakers. But they decided they didn’t want to work that hard anymore. They wanted to charge us two to three times more and only do half the work. So we said: let’s have our AI do it. And it reviewed 300 sessions, 300 slide decks, 300 presentations.
Sam: Do you have to chase those 300 people down to give you their decks?
Jason: Yeah, we still have to do that — it doesn’t get rid of everything. But it does 90% of the work. And it does it three times better.
Sam: Was that you, the business owner, who had to architect and come up with all these solutions?
Jason: Between Amelia, who runs the SaaStr media and events business, and me — yeah, we came up with it. No one else was motivated to do it. Of course.
And our AI started to do all the screening and initial sales conversations for us. That helped a lot. Even for a very niche business, a trade show business — to say you do $25 million in revenue with five employees is pretty breathtaking. I would have thought that would be on the lower end: “Well, I still need people.” But you’ve just proven that not to be true.
Jason: It could do better with more people. But honestly, the real problem is I’ve just struggled to find enough A-tier talent that wants to do this non-sexy stuff. I would love to have 20 people on the team tomorrow. I have budget for at least 15.
But I don’t need someone that shows up to a meeting with a sponsor and doesn’t know what we do. I don’t need a designer that doesn’t finish the design until after the event — which I had once. I just don’t need someone managing 10,000 people at SaaStr annual who forgets to do catering. I’d rather have the AI come up with the catering schedule. The AI did our catering schedule this year.
The Origins of SaaStr [01:07:00]
Sam: Could you talk about the start of SaaStr real quick? When you started this thing, you had just sold your company?
Jason: Yeah, 2012. I sold EchoSign, but yes.
Sam: So you sell your company. Great exit. As I understand it, you’re like: “I’ve retired twice. I got in shape. I picked up a hobby. And then I realized I still love building.”
Jason: Both times after I sold my startups, I sort of didn’t work for the better part of a year and just got restless. Both times, after about 100 or 120 days, I got a little depressed — maybe “depressed” is too strong. Lost. Definitely lost.
I remember — my second startup, Emergence Capital, which is a very successful B2B venture firm, had a CEO meetup every year for their portfolio. My class had David Sacks, Aaron Levy, Peter Gassner from Veeva, and Renee. But after I got acquired, I got to go to one more, and then they said: “You can’t come back anymore. You’re not a CEO anymore.” I was off the team.
Ben Chestnut did an interview just a couple weeks ago with Kleiner Perkins where he said the biggest issue when he sold Mailchimp for $12 billion was he knew he would be instantly irrelevant. He said, “I am now. I’m irrelevant now. Mailchimp is of the past.”
So, yes. And then what was fun for me — this is a long time ago — is because I was the first of those CEOs in my cohort who had an exit, I didn’t have to pretend anymore. I just shared every mistake I made. How I screwed up my first VP of Sales, how I screwed up meeting customers in person, how I screwed up marketing. And there wasn’t much content back then. So everyone just started to read it.
Sam: Were you being strategic? Like, “Oh, I’m going to start doing content marketing, and that’s going to lead to this and lead to this.” Or were you just like, “I’ve got time on my hands. I’ve got stuff to say.”
Jason: I did what people now give advice to do, but there was no one to give the advice. I just wrote one blog post a day on a mistake I made. That was my paradigm. Write a mistake I made as a B2B founder who got to tens of millions.
And back when Quora was a platform — people listening to this won’t even know what it is, but Sam will — I answered one question a day. And those were great because they were very tactical, very specific. So I would do one a day, every day. And it does compound, right? It doesn’t compound the same way revenue does, but if you do My First Million every week and you just keep working at it, it does seem to compound. Just not quite as linearly as we might hope.
But there was no advice back then. I just did one and one a day.
Content Strategy, Early Twitter, and Events [01:13:00]
Shaan: You were also one of the first tech people on Twitter early on. For a lot of tech people, Twitter didn’t really boom until COVID. But you were doing it very early. You and Gary Vaynerchuk.
Sam: What do you mean? I don’t think it was taken seriously. I think that Twitter for a long time was an afterthought to a bunch of different social media platforms. Now I think it’s having a moment.
Jason: I just approached it as a micro-blog, which is what Twitter in the old days called itself. So I would put valuable content on Twitter instead of being grouchy or just posting whatever. So I was early to putting valuable content on Twitter. I think I just benefited from being early.
Sam: Dude, you are an output machine. And the stuff you write about is — SaaS is a stupid boring thing, but you write about it where I’m like, I don’t even own a software company but I love reading it. Kind of like Die Workwear with clothing — you don’t have to know about clothing, but when he talks about ties, for some reason it’s exciting.
Jason: My actual real goal was to make building boring business software more fun. Not in a jokey way — to celebrate the fun parts of it, the exciting parts of it. That was my version of what Sam said.
Shaan: Did you think, “Okay, then I’m going to be investing, this will help with deal flow, and then we’re going to be doing $5 million per employee at $25 million a year as this monopoly — we’re the big fish in this small pond of thought leadership for SaaS businesses?” Did you have that vision?
Jason: No goals. No goals at all. I just wrote this because I was bored and it was something to do, something to share, something to add value to the world.
I certainly wouldn’t start off with a blog today if I started over. It’s pretty archaic. But there still is SEO. What would I do? Of course, I would do video. I do video, but it’s not my natural. I’m a good writer. I’m not Ernest Hemingway, but I have something special — I’m able to convey ideas in a way that helps people, in writing. And I still think today that’s a rare skill.
Sam: Dude, I hate video. Shaan’s pretty good at it. Shaan can talk to a camera by himself and succeed. I hate it. I think there’s a generational gap — 25-year-olds today, just because FaceTime has existed, they’re so much better at it.
Jason: The investing was an accident, too. For about less than two years, I worked at a VC firm that had invested in me. They recruited me to help them. I had no real interest in investing. I showed up and I’m like, “I don’t know what the hell — this is not me.” But luckily I’d started this blog and founders started coming by the office.
The founders of Pipedrive came by the week I started. That was my first investment — it sold for $1.5 billion. Then the founder of Talkdesk came by. That one was worth $10 billion in its last round. Then the founders of Algolia came by — worth $2.5 billion. Then the founder of Salesloft came by. We sold that for $2.3 billion cash in 2021.
And they kept coming by. And I’d be like, “Well, let’s just invest in these ones, because these are the best ideas I’ve got. I’m not the outbound guy.” So I just invested in the five best founders that came by the office the first year, and they all ended up being worth a billion dollars.
Sam: So the weird thing about me for investing — I could tell you about events real quick, but I don’t want to spend all the time — I only do SaaStr super fans that are high-intent inbound. I don’t take favor meetings. I don’t do warm intros. If you tell me, Shaan, there’s a startup you want me to meet — I’d ask, “Is this someone who desperately wants me?” If they’d say, “No, they haven’t heard of SaaStr” — I’m out. But if they really want me, they probably just email me.
Shaan: That sounds like such a leak in your game, by the way. That sounds like an unnecessary bar.
Jason: The thing is, investing is so much harder than it looks. The odds that any seed startup is truly going to be worth billions of dollars is much lower than it looks in the media. It’s really hard. And if they’re not incredibly intense, if they don’t want this more than life, they’re just going to sell their lifestyle business — which is very logical.
Oh, so you’re basically saying: if they’re not loving SaaStr content, they’re not taking this as seriously as they should. If somebody is seriously trying to build a generational company, they should be loving our content and therefore want me on the cap table.
I want them sending me a cold email that is so good that you almost don’t even need to meet them. The only point of the meeting is confirming that you want to invest. Every investment I’ve done that’s good, I’ve wanted to invest before the meeting.
Every good outcome I’ve had — that’s how I invested in Owner.com. I’m a little bit after you guys, but I got an intro that was like, “This guy’s one of the best founders I’ve ever met and ever invested in, and this company’s growing incredibly fast.” Then he sent a cold email: “Here’s why I want you on board. Here are my last three investor updates.” And in one of the updates, he shared a Loom video of the team’s hack week projects. I watched those. The caliber of the team was really incredible. You can see the caliber of a team in a hack project — it’s the engineer and a designer, their own idea, a very short timeline to ship it, and then they pitch it. You get to see quality of idea, quality of execution speed, and quality of salesmanship all in one.
And I emailed him back: “We don’t need to meet. I’m in.”
Recruiting as Competitive Advantage [01:25:00]
Sam: So we’re hiring a bunch at Hampton, and I’m putting together values to look for when hiring. I’m only going to keep it at two or three values, but ability to write an email and communicate is one of the three.
Jason: And one of the reasons I only have five people is I have lowered the bar at SaaStr in a way I never would as a software founder. I’ve lowered the bar again and again. I’ve hired folks where the email wasn’t that great. I’ve hired folks that put an E in SaaStr. I’ve hired folks that didn’t do the research before they started. 100% failure rate. We already know this, right? But I’ve lowered the bar because I’ve thought, “Well, this isn’t sexy enough. I’ve got to take who I can get.” Always a net negative. Total zero.
Sam: You have this great tweet: “You think startups are about a great idea, but in the end they’re about great recruiting.” That’s what you’re talking about.
Jason: Yes. And talking about Owner again — there are actually lots of risks with Owner. I invested very early. You didn’t see the two times we almost ran out of money. Now we have infinite capital and a lot of other things. But I do not know a more relentless recruiter than Adam. That is a rare skill.
Sam: What does relentless look like? What does that mean?
Jason: Literally: reach out to the 200 best people in the world for the job. Talk to all of them. Set up meetings — cold, warm, lukewarm, direct, LinkedIn. Who are the 200 best CMOs I could possibly hire? Don’t pretend to do 200. Don’t actually only do five interviews and pretend you did more. Do 200. That’s what S-tier recruiters do.
I had an old co-founder — I wish we’d gotten along better — but he was one of the best I ever knew. I’d roll into work at 8 AM and he’d already handed me two candidates to talk to that were really good. Every day. Every day. I’ve never seen that magic outside of him. And Adam has that.
Jason: You have a few more of these really great “how to be a great CEO” concepts. One is: to be a great CEO, you have to enjoy telling the same stories again and again, hundreds of times.
Sam: Yeah. Even Sam Altman does that, doesn’t he? It’s pretty much the same story.
Jason: The one I like that Sam does: he tells you the future like Elon Musk. He does this thing — you can make fun of that goofy video he did with Jony Ive. I don’t know if you saw it, them having coffee in North Beach. My favorite romcom of the year.
Shaan: Yeah, you think, “Oh, this is silly.” But listen to what he’s saying: he’s telling you that in the not-too-distant future, you will be on ChatGPT 24 hours a day. And I’m making the bet that Jony Ive is the guy to do it. I’m not betting that he’s going to build a rabbit pendant. I’m making the big bet that Jony Ive knows UI and UX so well for the next generation that he will solve this problem.
Sam’s already on ChatGPT more than the average today, right? The average person’s on it like 22 minutes a day. You said you’re on it more.
Sam: I am on it all day.
Shaan: So Jony Ive is going to figure out a way — it’s in your ring, it’s in your phone, it’s in your glasses like Ray-Bans. He’s going to figure out stuff we haven’t figured out. And we’re in the headsets and it’s totally passive.
Do you know Granola? Or the newest Notion? It records everything you do, all the time, in the background. You know why Granola is so successful for note-taking? It just records everything at the hardware level. I could be recording us right now and you wouldn’t know. We had a chief customer officer summit — 200 of the best chief customer officers at SaaStr this year — and the guy that put it on wrote up the whole summary of every single session that day. Very very good. I even couldn’t — “Oh yeah, Granola just listened to everything and wrote it for me.” Done that day.
Fog of War: Mobile, Crypto, and Now AI [01:34:00]
Sam: Do you feel this way, Shaan? I hear all this and I’m like, this is so exciting. And then the other side says: this is so intense. I have to — hopefully I can invest in something and make a profit, otherwise I need to take my winnings and go home and hopefully they compound by themselves. Because there’s an intense future being painted here. Sometimes I’m like, “This is so exciting, I want to get in.” But other times I’m like, “But if my life depends on this, I don’t want to play this game.”
Shaan: I know exactly what you mean. I graduated in 2010. Basically, three things have happened since then that were of note.
There was mobile. Right when I moved to San Francisco, I joined Birchbox’s startup studio, and there was a single mobile developer giving a tutorial to the other 12 engineers on day one — super seasoned Silicon Valley engineers who had just never built an iOS app before. That ratio of one mobile developer to 12 non-mobile developers — within 12 months it flipped. If you weren’t doing mobile, what were you even doing? Why would you do a startup if it’s not a mobile startup?
But it was a fog of war. You didn’t know where the opportunities were. The opportunities were very different from the previous wave. Michael — who had made a billion dollars in Web 1.0 or 2.0 — didn’t realize that even Facebook didn’t realize. Zuck was like, “No, it’ll be mobile web responsive. That’ll work.” And Uber was the big winner — physical world interaction, push a button and a car shows up — and that looked nothing like the winners before.
We all knew mobile was big but we didn’t understand the path to victory.
Then the next one was crypto. Crypto had a different flavor — it was not consensus that this was going to be big. In fact, it was very fringe and you looked a little crazy for saying it was going to be big. Most of us missed it for that reason.
And now this is the third one. This is the biggest of all of them. Everybody agrees on that. But there’s complete fog of war. Even the apps that are working get disrupted. There’s so much creative destruction. One moment you think the models are going to get all the money. Then you think it’s Nvidia. Then you think it’s the applications. Nobody knows how to win.
On the investment side, the VCs are sitting there with this really weird feeling. You know this is the time when all the money is going to get made. The generational money is getting made now. But you still have no idea where to put it.
It’s like the Warren Buffett phrase — you see who’s swimming naked when the tide goes out. When there’s turmoil, that’s when you get greedy. But the hard part is having the courage and knowing when the turmoil is actually happening. Are you in that period now? We all know it’s happening. But do you or I have the want, the desire, the courage to get after it? Half the time I think, “Hell yeah, this is amazing.” The other half I think, “This is scary. Read a book.”
Jason: Yeah, I want nothing to do with this.
Shaan: Do you guys agree? Someone on Twitter had a good tweet that resonated with me. “The smartest play, if you can possibly pull it off today, is to go make $5 or $10 million, cash out, and just chill. Because you can’t predict where it’s going to go. Whatever you could do to liquidate your assets now — they may be worthless down the road. So liquidate them now and chill, if you don’t see the future.”
Jason: I do think — and I used to think Vinod Khosla was being crazy when he talked about how AI was going to bring mass unemployment in tech. But now I can see it. McKinsey just laid off 10% of their team, and it’s just the start. Because they put all of their learnings, all of their data, into their own AI like SaaStr, and now they don’t need the kid anymore. Half of our sales and marketing teams are going to be gone in two years. There will be no BDRs in a year.
So it is hard to make bets. What’s happening in venture right now? There are really two things. 70% of the money is going into growth. Right now it’s a great play: you do Claude at $1 billion, then it goes to $3 billion, the valuation goes 5x. You put in $200 million, that goes to $600 million. You take home 20% of the profits. You make $80 million in a year. That’s where venture is going — all growth.
And then there’s seed stage, but implicitly people are assuming a very high loss rate and paying very high prices. $60 million to $100 million valuations at seed, hoping it’s worth billions. And they understand there will be uniquely high loss rates. They’re not saying it, but they know it.
Sam: Doesn’t that combination — high valuations and high loss rate — make that hard?
Jason: Well, if you have $100 billion outcomes — if you get one per fund, that’s the bet. Back when HubSpot IPO’d, the bet was you’d have one $1 billion outcome per fund. Now it’s $100 billion per fund. So if you believe you’ll get that, you can make it work. And you just have Claude do the analysis for you. You don’t even have to do it yourself anymore. I did this over the weekend.
You just got to find one of them and all the rest can crash and burn.
Jason’s Game Plan: One $10B Deal [01:44:00]
Sam: So what is your game plan?
Jason: I’ve decided that whatever brand I still have, and my excitement, and my ability to know more than most people who aren’t on the programming tool side — I’ve decided I’ll get at least one $10 billion deal done in the next two or three years. One. Whether that means I have to do 20 investments or one more, it doesn’t matter. I’m in it for one, at the seed stage, at the early stage. I want to own 10% or close, of something worth $10 billion.
I’ve sort of done it once on paper. I’ve done a couple billion-dollar ones and I’ve missed a lot.
Sam: What would that be worth to you if you own 10% at seed of a company that outcomes at $10 billion?
Jason: Multiply it by 10%. So that’s $1 billion. And then you keep 20 or 25% of that. But there’s going to be so much dilution along the way.
Sam: Right. That’s what I’m asking. You don’t account for dilution?
Jason: No, I’m simplifying my goal. You could own more, and then some investments are highly diluted. So at a $10 billion outcome at seed stage, you’re looking to make $200 million.
Sam: Yeah, that would help.
Jason: There are two ways venture works if you want to simplify it. One: it’s a great job. You’re a kid, getting paid $250,000, just taking meetings. Seems great. Then you’re finally a partner and you make a couple million bucks a year. But there’s a pretty big gap between that and actually making real money from carry. The game is to make a lot of it.
If you’re in three or four or five $10 billion outcomes — which is very hard — then you make a billion bucks. The founders hopefully make much more. It’s fair. But you’re either playing that game or it’s performative — it’s really just for fees and salary. There’s nothing in between.
But you also have the media and events business. So you also have that cash flow regardless.
Jason: It wasn’t profitable before COVID, but it is now. And yes, I made enough as a founder. I have a safety net. I actually view the events business as a net negative for investing, but it is a passion. We do a good job.
What to Tell Your Kids About the Future of Work [01:49:00]
Sam: Last question. I know you have college-age kids. What are you advising them when they say, “Dad, what should I do for a job?”
Jason: First, I don’t think a lot of these kids will ever have a real job. They will find ways on the internet to make money.
There does appear to be a gender difference, which I don’t like. Of my sons — my son’s a sophomore now — 10% of his class didn’t even want to go to college at all. They all had this vibe: “I’m going to go to Eastern Europe where it’s cheap and I can just make money on the internet. I’m never going to have a real job.” And I don’t think my son really wants to ever have a real job either. He’s super smart. He’s much smarter than me — math, AI. He’s deep into Cursor and Windsurf. He pays for Cursor out of his own pocket. He’s writing assembly language now so he can code to the metal. But he’ll never have a normal job. Worst case, he’ll work for Airbnb from wherever.
My daughter, on the other hand, is at Stanford. And the vibe at Stanford right now — this is a shocker to me — they all want to go to grad school. So they’re all architecting their classes and majors so they can go to grad school, to defer work. When I was in college, I think people made fun of going to grad school. “Why would you go to grad school? Go to the internet.” That was the vibe for 15 years. Now they all want to defer reality.
I don’t know that there’ll be any jobs. And I honestly don’t think a lot of the current generation really wants to work the way the three of us wanted to work. Whatever made us want to work, I don’t see it in the next generation. The women want to be educated, and the men want to move to Eastern Europe and make money on the internet.
Sam: But it’s not that the women want to be educated. It’s just that her group does that.
Jason: Maybe. But the men not wanting to work at all — coming out of high school and just saying, “No fear.” When I was a senior in college, I remember thinking: “Man, I would kill to work at KPMG and make $45,000 a year. That would be a home run.”
Sam: What does the next generation of like the not-quite-in-the-workforce people actually look like? I did this exercise. I looked for folks with the “Open to Work” circle on LinkedIn — people I knew a hint of, maybe I met them backstage at a Hustle event. Enough of a micro-connection. And they’d been out of work for six months. I gave them jobs. All of them basically said, “I want to make $200K or more, only to do meetings or manage teams.” None of them were willing to do any work themselves. None of them.
Jason: The people with the circle — the Gen Z folks — their expectations for salary and comp are so high.
Sam: Well, there’s that too. But I’m talking about folks that have already been out of the workforce for six months. Their expectations are they’d rather not work than get a comp cut. A lot of people would rather not work than take a comp reduction.
Jason: I mean, that sounds good to me too. There’s obviously an element of privilege in this. For folks living in different geographies, this sounds disgusting. But folks who have made a little bit of money in tech are happy to live on relatively low amounts with savings rather than take any job.
Sam: Jason, is this a stupid mental model? If I want to hire somebody at $200,000 a year, and let’s say my business is 20% net profit margins — I think to myself, this person has to generate a million dollars of extra revenue just for me to break even on their salary. When I do that math, 90% of the time, I’m like, “There’s no chance. That wouldn’t even make sense here.” Is that a really dumb way to think about it?
Jason: That is the model for sales reps, traditionally. A sales executive in base and bonus would take home 20% of the profits. If you look at how car dealers work — low margins — the guy selling you the new Lexus would take home 20% of the profit to the dealer. Sales is the same way. In software, the margins are almost 100%, and reps would traditionally take home 20 to 25% of what they closed.
For other roles, it’s really just about leverage and you’re often hoping to break even. But even to break even on a $200,000 employee, you need a million dollars of incremental revenue.
Here’s what I learned: law firms traditionally were structured this way. Most corporate law firms — not the litigators, but the kind that helps you on stuff — they never made money on the associates. So why would you have associates? Because the partner just doesn’t want to do that work anymore. “I don’t want to write the certificate of incorporation. I don’t want to do the NDA. We don’t make any money net of training and offboarding and churn and the desk and the computer. But I just don’t want to do the work.”
So for your organization, sometimes it’s also: just to not have to do the work yourself. But the problem with AI is it lets us do more of the work. So instead of paying that person, at some point you’ll just do the work yourself with AI.
Closing [01:58:00]
Shaan: You’re full of information. I think Theo Von described one of his guests as a deaf Jack Russell Terrier — like he gets out of the car, he goes crazy, you can’t stop him from yapping. That’s kind of what you are. We just hit record and you just roll and we just listen.
You’re full of what I think are really good comments, done in strong taste, and they tend to be right.
Sam: Jason, don’t get confused when he calls you a deaf dog. That’s a compliment. He does it a little differently. And he called you grumpy. So you’re welcome. Welcome to the show. There’s a goodie bag for you on the way out.
Jason: Thanks, man. You’re the best. That’s the pod.