The time has come for “Institutional AI”

3 trends in startups/tech/venture

📈 The time has come for “Institutional AI”

• With AI making everything (from engineering to sales) faster, startups’ biggest constraint is often in their people — and, in turn, their organizational design.

• The problem? Productive individuals do not automatically create productive firms. In fact, uncoordinated AI use often creates not just “AI slop,” but organizational chaos.

• The result? We’re now seeing a shift from "Individual AI" (personal productivity tools) to "Institutional AI" (organization-wide intelligence).

• Companies best at making this shift from individual to institutional AI often do so by empowering “fractional founders” within their organizations to drive change from within. I spoke more about this very topic at EY’s Global Clients & Industries Leadership Summit. You can learn more about the Summit here.

🤖 Posting anonymously online? LLMs can now figure out who you are

• The latest research revealed that LLMs can now correctly match anonymous posters on Hacker News (a popular tech forum) to real LinkedIn profiles with 90% accuracy.

• In the past, only governments wielded technologies that could unveil individuals’ privacy at this level of precision. Now, anyone can do the same using off the shelf LLMs.

💰 Up to 70% of venture capital gains were driven by emerging VCs

• Per the latest data from Cambridge Associates, PitchBook, and Sapphire Partners, new and emerging VC managers drove between 40%-70% of the total venture capital gains each year over the past 10 years.

• In fact, new and emerging managers drove the majority of venture capital gains (>50%) over 8 of the past 10 years.

• The takeaway? While capital is consolidating around established brands (I previously wrote about venture concentration hitting unprecedented levels here), LPs (investors into VC funds) would miss out on the majority of venture capital gains if they didn’t invest into new and emerging managers.

2 theses on what’s next

🤖 AI makes human judgment ever more important

• While AI can automate 90% of a task, the final 10% — the human judgment — is now 10x more important and valuable. Whether something is valuable will now come down to what’s done at the "last mile.”

• For example, David Solomon, CEO of Goldman Sachs, recently shared at an event in Palo Alto that AI can draft 95% of an IPO prospectus in minutes. It used to take a 6 person team 2 weeks. The last 5% now matters 10x more because the rest is now a commodity.

• I had the opportunity to discuss this idea more in-depth with some of the sharpest minds in tech, media, and academia at a Jeffersonian dinner. You can learn more about my takeaways from the dinner here.

🤔 The best founders turn chaos into order

• Startups are filled with chaos and uncertainty, so the best founders are often those who can not only tolerate but thrive in less predictable environments.

• So, where does this ability come from? Some believe that it’s nurture and not nature: the people most able to tame chaos are also those who grew up in less predictable environments. Some even go as far as to argue that this explains why immigrant founders do so well in the U.S.

• The data backs it up: according to the latest data from Stanford, nearly half of America’s billion-dollar startups were founded by people born outside of the U.S.

1 tool I love

🎓 The U.S.’s first AI-enabled collegiate university

• AI is changing how knowledge is created, taught, and applied. Colleges need new infrastructure to keep pace.

• As an investor in and advisory board member at Woolf, I’m excited to see the team launch America’s first AI-enabled “collegiate university” (a university is divided into smaller colleges—think Oxford and Cambridge, which each have over 30 smaller colleges).

• The next step? To invite brick-and-mortar institutions to join the network through an open RFP.

• Woolf’s goal is to create an academic and regulatory backbone that allows colleges to focus on teaching, research, and student success in an AI-shaped world. You can learn more here.

More of my work 👇🏼

🎤 Decode videos | For top Berkeley and Stanford founders

• DECODE is the largest founder community co-hosted across UC Berkeley and Stanford. The DECODE annual conference focuses on helping founders in their earliest stages of starting a startup.

• I’ve had the honor of serving on the DECODE board since 2016. You can find videos from the latest conference I helped host here 👇🏼

🤖 Founders' prompt library

• My team and I have crowdsourced the largest AI prompt library optimized for founders – especially fractional founders — to help them build, sell and operate 10x faster and better.

👥 Pop up board

• I regularly host pop-up boards, a unique 45-minute session where founders ask their toughest strategic questions and get tailored advice from top builders and operators from Google, Microsoft, Meta and more.