20VC Sam Lessin on Why Bots Will Change Business & The Internet Has Mostly Failed

Harry Stebings, host of the 20 Minute VC, introduces Sam Lessin, a multifaceted tech entrepreneur and investor, in a candid conversation about the intersection of technology and entrepreneurship. Sam, a partner at Slow Ventures and co-CEO at Finn, shares his journey from founding Drop.io and its acquisition by Facebook to his current endeavors, including his role at his wife Jessica Lessin's publication, The Information. The discussion delves into the potential and hype of AI, the future of bots and conversational interfaces, the impact of self-driving cars on ownership models, and the necessity for a universal base wage in the face of automation. Sam advocates for honesty in the AI community and emphasizes the importance of mission-driven startups, highlighting his investment in Common, a co-living community initiative.

• Harry Stebbings expresses his romantic view of tech and introduces the theme of featuring tech couples.
• Sam Lessin, a partner at Slow Ventures and co-CEO at Finn, is introduced.
• Sam's background includes being VP of Product Management at Facebook and founding Drop.io.
• Harry also mentions Sam's role as an intern at The Information, reporting to Jessica Lessin, who will be on a later show.
• Harry promotes Lisa mattresses with a humorous reference to sea otters and a discount offer.

"Now, what some of you don't know is that I, Harry Stebbings of the 20 minutes vc, am a little bit of a romantic. And what we do not have enough of in tech is romance."

This quote sets the tone for the episode, highlighting Harry's unique perspective on tech and introducing the romantic theme of featuring tech couples.

"So joining me today, I'm delighted to welcome Sam Lessin to the hot seat. Now, Sam is a partner at Slow Ventures who've made investments in the likes of Facebook, Twitter, Mattermark, Angellist, Dropbox and many more."

Harry introduces Sam Lessin, emphasizing his role at Slow Ventures and his success in the tech investment space.

• Sam has a history of angel investing in companies like Makerbot, Birchbox, and Venmo.
• His experience as a founder enhances his capabilities as an investor and advisor.
• Sam's company, Drop.io, was acquired by Facebook, where he served for an extended period.
• He co-founded Finn with Andrew Cortina, another tech entrepreneur.
• Sam discusses the benefits of working with friends at Slow Ventures and the insights gained from being operationally involved in a startup.

"So I think the story goes back a bunch of years, which is when I had my first startup called Dropio in New York many years ago, I started doing a bunch of angel investing."

Sam shares his early career history, establishing his long-term involvement in the tech industry and his transition from founder to investor.

"And so when the slow four was being put together, which is a $65 million seed fund, I joined as one of the now four partners of that as well."

This quote explains Sam's decision to join Slow Ventures as a partner, highlighting the collaborative and friendly nature of the fund.

• Sam discusses the challenges and opportunities of being both a VC and a founder.
• He emphasizes the importance of having a missionary zeal for one's work.
• Maintaining emotional stability through the highs and lows is crucial for entrepreneurs.

"I think the question for me a lot is one, do the people. I think the only way to get through that and be successful is to truly be missionary about what you're working on."

Sam explains that he looks for entrepreneurs who are deeply committed to their mission, as this drives success and perseverance.

"And the second is, are they in an emotional place and a personal place where they're going to be able to weather the downs and also not get too manic at the ups."

This quote highlights the importance of emotional resilience in the entrepreneurial journey, a key factor Sam considers when investing.

• Harry Stebbings expresses his frustration with smartphones and hopes Finn will address this issue.
• Sam discusses Finn's purpose, driven by a personal dislike for the stagnation in phone technology.
• Finn aims to improve core functionalities like remembering, finding, and messaging, which have not significantly advanced in recent years.

"I just freaking hate my phone. Right. I feel like it hasn't gotten better in a very long time."

Sam shares his motivation for starting Finn, which stems from his dissatisfaction with the lack of progress in smartphone technology.

"At the core, things it's supposed to be good at, which is helping me remember things and find things and even message people to some degree. It's not much better than my BlackBerry was ten years ago."

This quote elaborates on the specific areas where Sam feels smartphones have not improved, justifying the need for a product like Finn.

• Sam Lessin discusses his personal desire to use his phone less and improve its utility.
• He mentions a long-term vision inspired by science fiction, where services know the user and their surroundings well.
• Sam emphasizes that while Finn has aspirational goals, the company is pragmatic and does not focus on AI hype.

"And so, for me, it's like this very personal thing, which is, I want to use my phone less, and I want it to be a lot better."

This quote highlights Sam's personal motivation for improving the way he interacts with his phone, aiming for a more efficient and less intrusive experience.

"I think most great companies just rip off science fiction."

Sam suggests that innovation often comes from ideas presented in science fiction rather than completely original concepts, implying that the genre is a rich source of inspiration for technological advancements.

"But we're a deeply pragmatic company, and so what we're building, we don't actually talk about AI."

The quote indicates that Finn, as a company, is focused on practical solutions and is cautious about the hype surrounding artificial intelligence, preferring substance over buzzwords.

• Sam Lessin expresses skepticism about the current state of AI, suggesting it is overhyped.
• He discusses the strengths and weaknesses of computers and humans, advocating for a blend of human intelligence and computer intelligence.
• The goal is to create a service that feels magical and genuinely assists users in living better.

"AI is just the concept that computers are really, really good at certain things."

Sam clarifies his view of AI as leveraging the specific strengths of computers, such as memory, while acknowledging their limitations in areas like empathy.

"How do you build awesome services using a bunch of computational power that we now have at our disposal that we didn't before?"

This quote poses the question of how to effectively use the increased computational power available today to create services that enhance users' lives.

• Sam is excited about the potential to augment human memory with technology.
• He identifies the problem of the Internet providing generic and unhelpful information, despite its promise as an informative platform.
• Sam suggests that there is an opportunity to deliver personalized and contextually relevant answers to users' questions.

"The thing that I love the most is augmenting my memory."

Sam shares his enthusiasm for technology that can help compensate for human memory limitations, which he personally struggles with.

"How do we actually deliver the right answer to the right person in the right context?"

This question underscores the challenge of sifting through abundant information to provide tailored and useful responses to users' queries, a problem Sam believes technology can solve.

• Sam discusses the current excitement around bots and whether this represents a major disruption or an evolution in interface paradigms.
• He questions whether conversational interfaces will lead to new behaviors, interactions, or business models.
• Sam points out the cyclical nature of technology trends, citing previous iterations of bots and messaging platforms.

"This isn't the first time around this."

Sam reminds us that the current trend of bots is not a new phenomenon but part of a recurring cycle in technology.

"Are there behaviors or interactions or business models? Probably most important, that couldn't work before. That can work now."

Sam poses a critical question about whether the rise of bots enables fundamentally new ways of doing business or interacting with technology.

• Sam discusses the business model for Finn, which involves charging for their service due to the costs of running an AI-driven platform.
• He expresses uncertainty about the viability of bot business models and compares them to the App Store model.
• Sam challenges the idea of an affiliate model for bots, suggesting that it is a less effective form of advertising and questioning its sustainability.

"I don't know what the business model is of bots yet."

Sam admits that the monetization strategy for bots is still unclear and that finding a successful business model is crucial for the future of the technology.

"I haven't seen anyone articulate yet a good bot business model."

This quote emphasizes the current lack of a clear and effective business model for bots, which is a significant challenge for the industry.

• Sam critiques the concept of affiliate models for bots, considering them an inferior form of advertising.
• He doubts the long-term viability of affiliate models as a business strategy.

"That's like a worse form of an advertising model, right? Affiliate models in general, that's like taking ads and making it more performance driven."

Sam expresses skepticism about affiliate models, suggesting they are not a substantial improvement over traditional advertising models and may not be sustainable.

"There are very few companies that have made them sustainably good businesses."

This quote reinforces Sam's doubt about the effectiveness of affiliate models as a long-term business strategy, indicating that few companies have succeeded with this approach.

• Commerce is inherently a challenging industry.
• Affiliate fee-based business models are difficult to sustain long-term.
• The competitive nature of commerce involves collecting small margins on transactions.

"Commerce is a very difficult business in any form."

This quote summarizes the inherent challenges in commerce, emphasizing its difficulty regardless of the business model.

"A world in which everyone's just collecting cents on the dollar, affiliate fees, trying to get you to use them and not someone else to buy something you were going to buy anyway."

This quote describes the competitive and low-margin nature of businesses reliant on affiliate fees, highlighting the struggle for differentiation and profitability.

• Apps have historically competed for engagement and home screen presence.
• Most apps fail to maintain user attention, with few dominating.
• Bots may change the dynamics of engagement and business models.
• Sam expresses disappointment in the internet for failing as an information platform, attributing it to business model issues.
• He believes bots could lead to new and successful business types but is unsure of the specifics.

"The story of apps ultimately has been a story of engagement."

This quote establishes the importance of user engagement in the success of mobile applications.

"Bots are not going to have again, you can think of all of a sudden chat as the OS which people like to talk about."

This quote suggests that the rise of bots and chat as a platform could redefine the concept of engagement and the user interface.

"I fundamentally believe that if you don't have high engagement from the people who are using you, it will quickly become irrelevant."

Sam highlights the critical importance of engagement for any business's relevance and longevity.

• Engagement is crucial for relevance in any business.
• Positive engagement should be distinguished from negative engagement.
• Finn focuses on providing high-quality and speedy services to drive engagement.
• The company is early-stage and still developing its approach to engagement metrics.
• Metrics should align with business goals and the unique aspects of bot interfaces.

"You kind of get what you measure."

This quote emphasizes the impact of chosen metrics on a company's direction and outcomes.

"Engagement does matter. But there's an interesting challenge with when you talk about what type of engagement you're going for."

Sam discusses the complexity of targeting the right kind of user engagement and setting appropriate metrics.

• Self-driving cars are seen as an inevitable future development.
• The auto industry may struggle due to reduced demand for private car ownership.
• The sharing economy could extend beyond cars to other owned items.
• Efficiency gains from automation could lead to a rental-based society.
• The transition to this future depends on the timeline and unfolding of technological advancements.

"I cannot come up with a possible construction of the future where [self-driving cars] doesn't happen."

Sam expresses his firm belief in the inevitability of self-driving cars altering future society.

"I cannot come up with a possible world where we don't end up sharing cars."

This quote predicts a future where private car ownership is replaced by a sharing economy.

"I think we're going to live in a world where the only people who don't rent everything are the people who can't afford to."

Sam speculates that increased efficiency and sharing could lead to a predominantly rental-based economy, with ownership being a marker of lower economic status.

• The speaker believes that the future of capitalism is uncertain and potentially exciting.

"I don't know how capitalism survives that, which is going to be, I think, really exciting."

The quote expresses anticipation for the future of capitalism, suggesting that it may undergo significant changes.

• The quick fire round involves short statements and immediate thoughts.
• Each response in the quick fire round is intended to be concise, with about 45 seconds for elaboration.

"Okay, so a quick fire round. Short statement, immediate thoughts. How does that sound?"

This quote sets the stage for the rapid, succinct nature of the quick fire round.

• "The Three-Body Problem" series is appreciated for its unique, Chinese perspective on the future.

"I really like the three body problem right now and that series of books. I think it's a really interesting, slightly different view of the future coming from a Chinese perspective, which I appreciate."

The quote highlights the speaker's current favorite book series and the value they find in its distinct cultural viewpoint.

• The speaker's wife is his biggest mentor, an entrepreneur who provides him with daily learning experiences.

"My wife is an entrepreneur. She's building an awesome premium business where they just focus on really high quality journalism. And I think it's been cool to help her where I can, but at this point, I'm learning so much from her every day, and she's definitely mentoring me as much as the other way around."

This quote emphasizes the reciprocal mentorship relationship between the speaker and his wife, highlighting her role as an entrepreneur.

• Amazon Alexa (Echo) is seen as the future and a taste of what's to come, with the speaker being heavily invested in its potential.

"It's the future. I mean, it's a total taste of the future. I cannot tell you how excited I am about echo. I have five in my house. Literally. I've built applications for it myself."

The quote conveys the speaker's enthusiasm for Amazon Alexa and his personal investment in its development.

• The speaker has learned the importance of earning the right to progress to the next stage in business from Mark Zuckerberg.

"One is, I just think he gave me a phrase I really deeply think about a lot, which is that at each stage in a business or whatever you're doing, you have to earn the right to do the next thing."

This quote reveals a key lesson the speaker took from Zuckerberg, which is about progression in business being a right that must be earned.

• Finn's morning updates are the speaker's other go-to source for handcrafted news, besides The Information.

"Honestly, Finn sends me morning updates every day, know, handcrafted news that I care about."

The quote indicates the speaker's preference for personalized news content, specifically from Finn's updates.

• The speaker believes a universal base wage is inevitable, though currently not financially feasible for society.

"I don't think that we as a society, probably numerically can afford that. But in theory, once we can, I think we should."

This quote reflects the speaker's view on the financial challenges and eventual necessity of implementing a universal base wage.

• The speaker calls for honesty in the AI community, suggesting that there is an ongoing hype cycle that exaggerates capabilities.

"But I think honestly, we're in a little bit of a hype cycle right now where a lot of the great work ends up getting pushed in a direction or told in the popular media as stories that just aren't that true."

The quote criticizes the current state of AI representation in media, calling for a more honest portrayal of its capabilities.

• The speaker is excited about an investment in Common, a co-living community in New York, emphasizing the importance of community.

"And it's the idea that the community where you live is as important as having a cool apartment or whatever."

This quote underscores the speaker's belief in the significance of community in living spaces, which is a driving factor behind his investment in Common.

• The speakers express gratitude for the enjoyable interview experience and look forward to future engagements.

"Well, Sam, it's been absolutely fantastic fun having you on the show. Thank you so much for joining me today."

The quote conveys the host's appreciation for the guest's participation in the interview.

• The speaker admires Lisa for its social impact missions, including donations to shelters and environmental initiatives.

"Not only do they sell fantastic mattresses, but they have extreme social impact missions."

This quote praises Lisa for integrating social responsibility into their business model, highlighting their charitable activities and environmental efforts.