Linkblog: What AI Model Should Your Startup Use, What Your VC Can’t Do For You, and More

I’ve got a few flights next week so hopefully more original content coming then, but for now, sharing some good reads.

a raccoon, sitting in a tree, reading a book, while drinking a soda, cartoon art

Which AI Model Should You Pick for Your Startup? (Tomasz Tunguz) – My former Google colleague and fellow VC provides a guide to Big Model vs Small Model (as well as a Third Way).

“A product manager today faces a key architectural question with AI : to use a small language model or a large language model?”

Where Your VC Can’t Help (Ellen Chisa) – Product manager turned founder turned VC chimes in with some of the areas that your VC can’t (or shouldn’t) help. Specifically “I can’t tell you what product or company to build,” “I can’t find your first engineer,” “I can’t help you ship,” and “I can’t make someone use your product.”

Entrepreneurial Archetypes (Jared Hecht) – The founder of GroupMe and Fundera compares and contrasts five types of entrepreneurial motivation (the serial inventor, the opportunist, the problem obsessor, the industry expert, and the academic), along with the pros/cons of each. Jared starts to get into what I think would be a great follow-up post, which is what about cofounder pairings? Which combo well together and which are too much, or too little, of a good thing.

What Happens When Small and Large VC Firms Decouple and Have Less in Common? (Charles Hudson) – You all know how much I love Charles’ posts and tend to agree with most of them. Here he talks about the bifurcation of models and incentives among funds of different sizes.

“In a world where all funds were part of the same ecosystem, the venture capital business worked like a relay race. The pre-seed and seed investors worked with companies to get traction, the Series A and B investors provided capital and support to help them prove out scale, and growth-stage investors helped prepare them for life as public companies. Each participant had their own lane and specialty and mostly focused on the thing or things they did well until it was time to transition that company to the next person in the chain.”

He also touches on how company exit size (and its return to normal expectations on average) is such a huge impact on fund models. The smaller funds that lack concentration will find that even winners don’t really move the needle enough (you need several) and the larger funds are trapped by their own AUM. Summer 2022 this was one of my two biggest statements about what the downturn means for startups and venture.

Enjoy the reads!