"Turpentine VC" | Venture Capital and Investing Turpentine

In this episode, Erik Torenberg sits down with Sequoia Capital Managing Partner Roelof Botha and Jacob Helberg, author, Palantir advisor, and founder of the Hill and Valley Conference. They delve into the challenges and opportunities around AI against the backdrop of US-China tensions, the role the government has in fostering tech innovation, and the debate between open and closed source models.
🔥 Apply to join over 400 founders and execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj
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SPONSORS:

🦾Level up your ineffective website chatbot with CommandBar. CommandBar builds a new type of web assistant which delivers highly personalized responses, real time co-browsing, and can perform actions on behalf of the users. Learn how Hashicorp, Gusto, Freshworks and more use CommandBar at https://commandbar.com/moz

💥 Access global engineering without the headache and at a fraction of the cost: head to choosesquad.com and mention “Turpentine” to skip the waitlist.
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LINKS:
The Hill and Valley Forum: https://www.thehillandvalleyforum.com/

Subscribe to The Hill & Valley Podcast:
Apple: https://podcasts.apple.com/us/podcast/the-hill-valley/id1692653857
Spotify: https://open.spotify.com/show/39s4MCyt1pOTQ8FjOAS4mi
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TIMESTAMPS:
 
(00:00) Intro
(01:06) Silicon Valley-Washington Relations
(07:33) Sequoia's Investment in Defense and Frontier Tech
(10:05) The TikTok Debate and US-China Relations
(12:58) Sequoia's Separation from the China and India Entities
(15:03) SPONSORS: CommandBar | Squad
(17:43) Technological Decoupling
(21:41) Tech Executives and Policymakers Working Together
(27:22) AI Supply Chain
(34:38) AI Regulation
(40:32) Open vs Closed Source Debate
(49:44) Closing Thoughts and Future Outlook on the Silicon Valley-Washington Relations
(53:42) Wrap

In today's episode, we discuss Benchmark's investment philosophy in the AI era with general partner Eric Vishria, and Sergiy Nesterenko, the Founder and CEO of Quilter. Sitting in for Erik Torenberg as host is AI Scout and Cognitive Revolution host Nathan Labenz. They cover the questions that Benchmark asks to determine whether a new company is solving an enduring or temporary problem, and the reasons why Benchmark hasn't invested in a foundational model to date. They also discuss the innovation behind Quilter's groundbreaking use of reinforcement learning to automate integrated circuit board designs. They delve into the importance of thinking beyond 'co-pilots' to fully automated AI solutions, and explore the balance of research and engineering in the AI space.

🔥 Apply to join over 400 founders and Execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj
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This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.
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SPONSORS:

🦾Level up your ineffective website chatbot with CommandBar. CommandBar builds a new type of web assistant which delivers highly personalized responses, real time co-browsing, and can perform actions on behalf of the users. Learn how Hashicorp, Gusto, Freshworks and more use CommandBar at https://commandbar.com/moz

💥 Access global engineering without the headache and at a fraction of the cost: head to choosesquad.com and mention “Turpentine” to skip the waitlist.
--
RECOMMENDED PODCAST: 10x Capital Podcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors: https://10xcapitalpodcast.com/

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LINKS:
Automating Circuit Board Design Using Reinforcement Learning w Sergiy Nesterenko, Founder of Quilter:
https://www.youtube.com/watch?v=XXH-KtwcevQ&ab_channel=AutopilotwithWillSummerlin)

Chris Dixon’s The Idea Maze:
https://cdixon.org/2013/08/04/the-idea-maze


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Follow on X
@eriktorenberg (Erik)
@ericvishria (Eric)
@sergiynest(Sergiy)
@turpentinemedia (Turpentine)
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TIMESTAMPS:
(00:00) Intro
(01:13) Eric's Investment Thesis at Benchmark
(03:35) The "AI and Done" Approach
(07:15) Diverging from Large Language Models
(09:27) The "Idea Maze" Framework
(12:40) Disruptive Innovation
(16:00) Exploring the Data Landscape
(16:45) Data Limitations and Reinforcement Learning
(18:06) Overcoming the Sparse Reward Problem
(19:17) Human Heuristics and Intermediate Rewards
(21:12) Extrapolation vs. Interpolation
(24:43) Trusting the Reward Signal in Circuit Board Design
(25:52) Physics as an Unambiguous Oracle
(27:11) User-Defined Search
(29:45) Compute Allocation
(31:53) Different Physics Simulation Techniques
(34:13) The Diffusion Model Approach
(38:07) Advantages of Reinforcement Learning
(40:08) Timeline and Bottlenecks
(41:43) Unsolvable Problems and Gradual Progress
(42:03) The Future of Circuit Board Design
(50:22) Benchmark Portfolio
(47:31) Challenges and Opportunities in Each Category
(53:34) The Gap Between Research and Engineering
(53:52) Call for Startups

Today's episode features a discussion from 2023 with reknowned independent analyst Benedict Evans (formerly a16z and Mosaic Ventures) about his predictions and frameworks for AI, VR/AR, Crypto and blockchain, the cloud, automation, and more. AI scout and podcast host Nathan Labenz (The Cognitive Revolution's host) joined for the last 20 minutes to deepen the discussion on AI. Crush your 2024 goals and learn a new language with Babbel - get 60% off at Babbel.com/torenburg

🔥 Apply to join over 400 founders and Execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj
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SPONSORS:
🌐 Ready to achieve your 2024 goals? Start learning a new language with Babbel in just three weeks. Enjoy app lessons, live classes, and podcasts designed for real-world conversations. Get up to 60% off at babbel.com/torenburg

💥 Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.
--
This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.

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RECOMMENDED PODCAST: 10X Capital Podcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors
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LINKS:

Benedict's website (featuring his 2024 presentation): https://www.ben-evans.com/
Benedict's podcast with Toni Cowan-Brown: https://another-podcast.simplecast.com/
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TIMESTAMPS:
(00:00) Intro and Preview
(00:26) Predicting Tech Trends
(02:20) Esco Model
(03:42) Deployment of Older Ideas
(05:39) Netflix: A TV Company, Not a Tech Company
(07:06) Software's Impact on Different Industries
(11:43) Regulation and Technology in Healthcare, Education, and Housing
(13:51) Direct-to-Consumer
(15:16) Overestimating and Underestimating Change
(16:15) Blockchain and VR: Still Early Days
(17:54) Sponsor: Babbel | Squad
(20:55) "Killer App" Fallacy
(23:37) Web 3.0 and Crypto: Overhyped and Underappreciated
(28:07] Decentralization and the "Can't Be Evil" Thesis
(30:05) The Limits of Decentralization
(42:54) Defining the Metaverse
(47:30) The Impossibility of True Portability
(49:25) Consumer Surplus and Business Models
(1:00:43) AI: Unbundling Jobs and Bundling Apps
(1:05:15) Vin's Paradox and the Automation Cycle
(1:09:40) The Speed of Technological Change
(1:13:15) Deploying New Technologies Takes Time
(1:14:56) Questions for the Future

This episode was initially recorded before a live audience in 2018. Erik Torenberg talks with Naval Ravikant and Balaji Srinivasan about the history of money and centralization and why crypto has the potential to fulfill the promise of the internet. Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.

Balaji Srinivasan is a founder, investor, and author of The Network State.
Naval Ravikant is an entrepreneur, investor, and former CEO of Angellist.

🔥 Apply to join over 400 founders and Execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj
--
This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.
--
SPONSORS:

🧲 Learn why Craft, Bedrock, NEA and 100s more trust Harmonic’s data to source deals. Harmonic is the most complete startup database, finding new companies as soon as they incorporate and tracking them through IPO. Head to https://bit.ly/harmonicturpentine (and make sure to mention Turpentine VC during your demo.)

💥 Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.


RECOMMENDED PODCAST: 10x Capital Podcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors: https://10xcapitalpodcast.com/
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Today's episode of Turpentine VC is a throwback to a conversation Erik Torenberg recorded with Parker Conrad and Parker Thompson that debates how much "value-add" investors can offer founders, issues around the misalignment between investors and founders, and the underdiscussed factors that influence VC deals. Parker Conrad is the co-founder and CEO of Rippling (and co-founder/CEO of Zenefits) and Parker Thompson is a current partner at SAX Capital (formerly Partner at Angellist). The conversation was recorded in 2018. Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.

🔥 Apply to join over 400 founders and Execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj
--
SPONSORS:
🧲 Learn why Craft, Bedrock, NEA and 100s more trust Harmonic’s data to source deals. Harmonic is the most complete startup database, finding new companies as soon as they incorporate and tracking them through IPO. Head to https://bit.ly/harmonicturpentine (and make sure to mention Turpentine VC during your demo.)

💥 Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.

This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.
--
RECOMMENDED PODCASTS: The 10x Capital Podcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors: https://10xcapitalpodcast.com/.
--

TIMESTAMPS:
(00:00) Intro
00:46 The Mystery of Startup Bill Jackson: Unraveling the Twitter Persona
(02:11) Investor Insights: The Good, The Bad, and The Ugly
(05:51) The Role of Investors: From Therapists to Strategists
(08:18) Brand Power and The Investor's Influence
(09:15) The Board Pleasing their LPs
(18:57)Navigating Founder-Investor Dynamics: A Real Talk
(19:28) The Seed Stage Perspective: Aligning with Founders
(26:07) The Boardroom Dilemma: Control, Influence, and Alignment
(36:44) Choosing the Right Investors: Lessons from Zenefits to Rippling
(37:01) Navigating Investor Relationships: Insights and Advice
(38:34) The Ideal Board Composition and Investor Dynamics
(39:22) Understanding VC Power and Protecting Your Company
(41:03) Real-world Challenges with Investors and Board Members
(42:51) Strategies for Entrepreneurs Facing Investor Pressure
(43:52) The Importance of Knowing Your VC's Business Model
(45:24) Raising Capital: Balancing Valuation and Partnership
(51:02) The Role of Unions and Standardization in Entrepreneurship
(54:33) Optimizing Fundraising Strategy for Long-term Success
(1:07:22) Closing Thoughts on Venture Capital Dynamics
(1:09:08) Wrap

This episode of Turpentine VC is a live panel from the Hill and Valley Forum held in May 2024 on the pivotal role of novel technologies and AI in modern warfare and defense strategies, and how venture is helping rebuild the capital formation of the industrial base. Senator Mike Rounds moderates Joe Lonsdale, Managing Partner at 8VC, Josh Wolfe of Lux Capital, and Matthew Steckman, CRO at Anduril to discuss the novel military applications of the technologies they are working on and the shift in culture at the DoD that could usher in a new future of warfare. Source better deals with the most complete startup database: https://bit.ly/harmonicturpentine

🔥 Apply to join over 400 founders and Execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj

RELATED PODCAST: Subscribe to The Hill & Valley Podcast
This season brings together Silicon Valley innovators and lawmakers to address the most pressing problems: the techno-economic war with China, AI regulations, and the next space race. Hear new episodes with Alex Karp, Jacob Helberg, Alexandr Wang, Jack Clark, Roelof Botha, Delian Asparouhov, and Vinod Khosla.
Apple: https://podcasts.apple.com/us/podcast/the-hill-valley/id1692653857
Spotify: https://open.spotify.com/show/39s4MCyt1pOTQ8FjOAS4mi

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SPONSORS:
🧲 Learn why Craft, Bedrock, NEA and 100s more trust Harmonic’s data to source deals. Harmonic is the most complete startup database, finding new companies as soon as they incorporate and tracking them through IPO. Head to https://bit.ly/harmonicturpentine (and make sure to mention Turpentine VC during your demo.)

💥 Access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com and mention “Turpentine” to skip the waitlist.

This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.
--
RECOMMENDED PODCASTS: The 10x Capital Podcast
If you like Turpentine VC, check out our show The 10x Capital Podcast with David Weisburd, where David talks to the investors behind the investors: https://10xcapitalpodcast.com/.
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LINKS:
https://www.thehillandvalleyforum.com/
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TIMESTAMPS:
(00:00) Intro
(01:32) Introductions and Expectations: Panelists Share Their Vision
(01:53) Spotlight on Defense Innovation: From AI to Aerospace
(06:46) The Future of Warfare: AI, Autonomy, and New Technologies
(09:23) Venture Capital and Defense: Bridging the Gap for Battlefield Superiority
(12:11) AI in Defense: Opportunities, Challenges, and the Path Forward
(14:50) Sponsor: Harmonic | Squad
(17:20) Australia's Defense Modernization, With the Help of a US company, OSUC
(28:14) Leveraging AI Beyond Weapon Systems: Healthcare and Maintenance
(31:29) Closing Remarks