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Josh Schachter:
Hey, everybody. I’m Josh Schechter, cohost of Unturned with Jon Johnson today. We are very excited. I always say that, but I really am very excited. This is my favorite VC in Santa Barbara. No. Actually, in the world.

Brett Queener:
It’s the only VC in Santa Barbara.

Josh Schachter:
That’s why that was the joke spread that yeah. Yeah. They got it. They got it. And just like John is my favorite cohost on this episode. So, but no. But Brett actually is. And, I don’t know what Brett feels about me.

Josh Schachter:
I know I I I annoy him. But in, like, a little brother way where he kinda We’re about to find out. Yeah. We’re gonna find out. He’s just sitting there, like, staring at me. Like, where the fuck are you going with this, John? But the guy’s super wise. He’s also on, like, I think, 52 boards right now. But, but he just knows the SaaS economy better than anybody and has really kinda gotten deep into AI, more than any other VC that I know.

Josh Schachter:
So, Brett, don’t let us down. Thank you for being on this podcast. Again, you were here about six, nine months ago, I think. Thank you for taking the time

Brett Queener:
to be with us. It’s my pleasure. We

Josh Schachter:
won’t take that as a euphemism. Okay. Alright. We are recording. Right? Oh, there we go. You know what? Riverside changed where they put the recording signal. So okay. Alright.

Josh Schachter:
So, Brett, I told you this yesterday when we spoke. I have promoted your blog to many, many, many people because I I truly believe it’s really valuable, and you also agree to that, that affiliate relationship. Yes. I get But it’s Tales from the Bonfire.

Brett Queener:
It’s easier it’s much easier to get paid by the word than it is to get DPI on a fund. But yes.

Josh Schachter:
Intelligence behind that.

Josh Schachter:
Yeah. Tales from the Bonfire. Tales from the Bonfire because Brett is a partner at Bonfire Ventures. Bonfire Ventures just raised, give or take, Brett, fifty Fifty two hundred and fifty million fund and a new Yeah. $250,000,000 fund. Really cool stuff. Congratulations on that. And I follow your blog post.

Josh Schachter:
They don’t come out they don’t come out so often. Right?

Brett Queener:
They won’t make you funny. I was like, where’s your I get people reach out. Did you stop writing? I’m like, folks, I have a full time job. And also, when I write, and they also it’s long. I’m like, well, I write when I have an anxiety Yeah. That I need to name. And if I have that anxiety, then founders have the same anxiety, investors have the same anxiety. And then despite anthropic helps me, it takes a while to put down in words what that anxiety is.

Brett Queener:
So, yes, I,

Josh Schachter:
you know So this article from from this week.

Brett Queener:
Couple of months, I’ll write something. Yes.

Josh Schachter:
And I like it. Every every every couple months, you’re profound.

Brett Queener:
Yeah.

Josh Schachter:
So so, this came out on March 22, and, like, it immediately resonated with me. Right? I stopped what I was doing when I was reading it, you know, then I continued, you know, and flushed the toilet. And then I I continued, you know, anyways, bad joke. But it immediately resonated with me, and it immediately resonated with with many people. Right? Because you you received a lot of

Brett Queener:
Yeah. I mean response about it. I get a lot of good responses in the articles, and it’s also interesting in South Stack. I can see who’s looking at it and how quickly it makes its way through Silicon Valley. But this one was interesting in that, real people lived into VC for twenty years, not an operator, as a VC. People that I look up to, reached out personally and just said that it really resonated because it I think it it put in words what they were feeling as they were either working with existing larger portfolio companies that were wrestling with what does AI mean, or how they would how would they would guide and advise sort of the newer class of AI startups. Because the playbook, you know, whatever. If you go to your whatever chapter of whatever

Josh Schachter:
Triple triple double double double or multiple whatever. Somebody’s that chapter The MVP.

Brett Queener:
If you go if you go to, like, the SAS chapter head in Des Moines who tells you the playbook of SAS and blah blah blah blah blah blah blah. Yeah. Ironically, most of those are run by nobody’s ever done anything anything in their career at any meaningful company, but that’s a separate conversation for another day. Yeah. There was there is nothing written. And you know me, I held a large number of opinions strongly, especially as it relates to SaaS. And what I found, and given that I’d run-in my prior career at Salesforce and Siebel and others, most function in every software company, but fast growing company, Either I was basically, either I was failing upwards or failing lateral, whatever it might be. I had an answer to, like, oh, you need to go do this? You do this.

Brett Queener:
Oh, you need to do that? You need to go do this. Oh, well, that’s what you would do. And I found more and more when a founder would ask me, I would pause and I’d be like, no. Don’t go do what I would tell you to do. Let’s rethink this. And that’s really fun and exciting.

Josh Schachter:
That’s what you did recently recently. During this this

Brett Queener:
AI boom. Six to eight months. Right? Like, no.

Josh Schachter:
Let Let me rethink my my advice to all these people.

Brett Queener:
Me rethink my advice. And so, and I think the thing about the article is, you know, when I first started running an AI, the big thing that I talked about was that I’ve been in software for thirty years. I started I was that Jimmy Neutron kid. Got out of Harvard Business School because I went into a manufacturing company that was sitting on a deck vac screen screen. I brought him to client server. I remember trying to justify the $3,700 PO for the gateway computer. Remember gateway? The case and laptop with like boxes with the cows. The cow box.

Brett Queener:
The cow box.

Josh Schachter:
Right? Oh, my

Josh Schachter:
cow box.

Brett Queener:
Yeah. The cow box. But it was cool. Right? I think it was a April. Fucking sweet with Windows 95 and Mick Jagger and team coming out saying start me up. And then I went into on premise with Siebel, and then I went to Salesforce. And the the article about AI when I first started, when people were like, oh my god. And I wrote about this, like, midsummer.

Brett Queener:
And I went a little crazy on the predictions, and the predictions are fapping faster than I said they would. And not to give myself credit, about 80% right. I had to be a little outlandish.

Josh Schachter:
What what what are the so we’re gonna get to the change economy, which is the new article, but so yeah. What was the previous stuff?

Brett Queener:
The first article was really about how AI changes everything. And I was basically saying that I believe that 80% of the customer facing applications that we all use today disappear, and that 40% of the 50% of the application software traditional categories disappear. And it was basically because what was really cool, what AI really represented was for the first time, if I really reflected on my career, none of the software that I peddled actually helped somebody do their job.

Josh Schachter:
Mhmm.

Brett Queener:
They are CRUD databases where somebody enters stuff in, and then nominally somebody can see reporting back, and then analyze how they would go run stuff better. But for individuals trying to do a job, the software didn’t help you. And we are now at a moment where software could help you. And so if software could help you, well, similarly, the first time as a functional user in the on premise days, I would use one application, Siebel. At Salesforce, a salesperson uses 13 because of REST APIs. And, oh, god, an admin could change it. So I got 13 applications of hunting and pecking across that change all the time. And I don’t I don’t become master of my craft.

Brett Queener:
I become master of using software. And so the weird thing, there was this weird master not the right analogy, but I’ll use master slave analogy and that we were slaves to our software.

Josh Schachter:
Yeah.

Brett Queener:
But if the software is now an assistant that’s here to help you, my prediction was that one, users wouldn’t use nine. They would look at an assistant and be like, hey. That’s great. Can you do this and this and this? In a world where I don’t wanna go to many screens, it’s a lot easier for somebody to go do that. That was one. So consolidation of software within a category. And the second was

Josh Schachter:
And that and that and that the big platforms would be the winners. Was that was

Brett Queener:
that party

Josh Schachter:
relations? But that’s just my question.

Brett Queener:
I’ll get to that in a second. Okay.

Josh Schachter:
Quit reading it, Josh.

Brett Queener:
But second was that if you looked at AI now when I wrote that article, inference cost was very expensive. We didn’t have lovable dot dev and Replit in this stuff. At the time, I was saying in order for you to use LLMs to be intelligent, you had to have enough context in the problem you were solving that you could solve this better than somebody rolling their own. And so what I said was there were only certain categories where there were enough context that I would use your product off the market, or just roll my own on internal build, the return of internal build. And I predicted at the time that it was likely that Databricks or Snowflake would move up that stack. So I didn’t invest in the agent building platforms. And then we sold two days ago the hundred million dollar relationship between Anthropic and Databricks to be the agent building platform. That was my prediction at the time.

Brett Queener:
So that was great, and I think it’s all true. What’s become very interesting in the last six months is inference cost has basically gone to zero. And so now what

Josh Schachter:
What do you mean by that? What do you mean inference cost? Is I I think I

Brett Queener:
think by that in the past, we’re using LLMs in the last six months and trying to tune it up and make sure your schema was right so that if you had an agent or agent experience, it was actually that helpful. Like, if I asked you to do something, you could do meaningful work on my behalf. And inference, the cost of using the LLM was expensive. And so you would chain and try to figure out the minimum set of prompts when you were consuming tokens to do that. But then Deepsea came along and others and the cost of inference has gone. I have one company who was spending $500,000 a month in inference and now spending $7,200 a month. And they’re not even bothering with doing four prompts. Let’s do a hundred.

Brett Queener:
Who fucking cares? Just

Josh Schachter:
iterate. Just iterate.

Brett Queener:
So the thing that now is very clear and I also said speed matters. I’ve been spending the last six months. Speed matters. Because I’m watching my startups that are working kinda back in the day when I worked for Tom Siegel, where he would count the cars on the weekends. These people were working like twelve hours a day, and they are cranking, and they’re innovating, and they’re creating stuff that wasn’t possible before because the LLM models were advancing so quickly that what they could do and solve for a customer would change, like, every three weeks. Yeah. So instead of the old world of, like, I know what needs to be done. I use Atlassian to go measure the rest of it.

Brett Queener:
There are areas where customers, can you do this? Like, I don’t fucking know.

Josh Schachter:
Right.

Brett Queener:
And then you go to the lab and you how about this? Oh, that’s amazing. What does it cost? I have no idea. I just built this. You know, I don’t know. Like, we you know? So what this article is on is if you then if I really think about my career, like, what was I? What was I paid to do? I was paid to build and hire teams at scale to get the intersection of go to market and product right and scale that with the marketing, the demand gen, the sales team, the success, the and but in all of that world, your product innovated, like, once a year. At Salesforce, we would think of, like, Dreamforce, or you John, you were at user testing, whatever the hell Andy’s user Zoom, whatever the fucking conference was. But we’d always say, like, well, we’re on stage that once a year. What’s the big unveil or pandemonium at Todd? The big reveal.

Brett Queener:
And so, like, you’d have, like, a long time to plan for this. Right? But what I’m saying now is that your product and the value of your product is going to change every month. And it better Yeah. Because your competitors were. And in that world, the way in which we’ve run software companies almost in every function isn’t isn’t set up for that.

Josh Schachter:
Yep.

Brett Queener:
And we need to think about that right now. And I’m seeing it in some of my one of my companies is

Josh Schachter:
So so the so the subtitle of your article is evolving how you run a software company when your software evolves at warp speed. Correct. Yeah. I wanna ask

Josh Schachter:
a couple questions, Brett, because, you know, you’re talking to Josh, the other founder. I’m not a founder. I see the need for founders’ tech, all of that stuff to grow fast. What I don’t see is when you’re talking about running these software companies is getting marketing, CS, support, sales into the same DNA of an an AI modeled company. Like, you you said earlier before we started recording about, it’s not just you have to be fast. Companies have to grow at the speed of AI. And there’s a lot of companies that don’t have AI, and they’re gonna get left behind not just from a growth standpoint, but from an opportunity standpoint. How are you thinking through this change economy that is actually starting from the founder, from the build standpoint, and trickling it down to the rest of the organization?

Brett Queener:
As an investor or as an advisor to founders?

Josh Schachter:
Adviser to founders. And Josh, listen.

Brett Queener:
Well, I took I took the first swag of it in this article. It could have gone longer, Which is what’s very interesting to me is that product and teams have talked about jobs to be done framework for a long period of time, but they fail on it. They fail on it. Product fails on it. We don’t market it that way. We don’t sell on that way. What’s interesting about an agentic product, whether it’s Why do

Josh Schachter:
we sell on it? You mean, we don’t deliver on what we promise. Is that all? Just

Brett Queener:
It’s not the lingua franca across the company in the way we think about it. Like, how many different kill sheets do you still oh, battle card. Oh, here’s this feature for that feature. And at the end of the day, what’s always been true and at Salesforce and SIPA, we did this well. Which was, look, at the end of the day, what’s somebody trying to do? And can I convince them that what they’re trying to do, I can help them improve that far better than somebody else? And they should do it now, or they’re screwed. That, if you really think about really good software companies, that’s what they do. And then the question is, do you deliver on it? Either through the product or success. And hopefully, your product does well enough that you don’t, like, you know, try to blame success for everything, and they’ve gotta pick up the pieces.

Brett Queener:
You know, in the early days of most software companies, you overinvest in success because the product is crap until, like, series a or b, and then you get them success to love the company before they actually love the product. But then the problem is you success too much as a crutch, and you don’t actually deliver on the product promise. What’s interesting about AI is the product’s an assistant. It’s either doing work on behalf of an individual or instead of an individual. There’s nowhere to hide. It either does or does not. And especially for a pricing model, if you’re trying to move from pricing, from seat based licensing to some outcome licensing or some licensing based as a percentage of payroll. Because then I look at it as, it’s no different.

Brett Queener:
Should I hire this employee to do this job, and are they good at it? Or does the software do this job? And so within that world, what’s great about that one, I think it’s great because it basically, you’ll see the haves or have nots hopefully quicker. You understand what’s retention versus not. Like, the concept of recurring revenue in an agentic world is probably the next thing I’m gonna write on. Like, what are the new metrics to really think about this? Is it’s very clarifying, which is, as an advisor, I basically say, write down the jobs that your customers care about to be done. Which of those do you do today, and how well do you do them, and why do you do them better to somebody else? And as you think about expanding quickly, because that’s the other weird thing in this agentic world, is that you can quickly build a compound product much faster. Right? In the old world, I had to figure out and design 47 screens and schema and get the workflow and then get user testing to do user testing, and then all that didn’t work, and then get Pendo on the back end to, like, put in some guides. You don’t need all that. So There’s no time.

Brett Queener:
What what are the additional jobs you would do for them that would be valuable to them? If you get to that construct, it then allows you very quickly to go, well, how would I move fast? Well, it means that you need to be communicating from a marketing and sales perspective very clearly what jobs you do to be done and why you do it better and what the value is. Your sales team need to be able get into that. I don’t need all this Miller Heiman, pink sheet, blue sheet, and the rest of it.

Josh Schachter:
Yeah.

Brett Queener:
Like, get to the product very quickly. And then on the success side, where I think actually this is where the biggest rethink has to happen. And I’m having this with, execs that were at very successful SaaS companies coming to this agentic world and, like, how do they rethink what success looks like? And don’t give me this AM, hunter farmer, seventeen people show up on a call like you work at frigging IBM, or you need to hire a facilitator or some do you remember these meetings where there’s a third party facilitator for a media? Like, what the hell is this? So because the big thing is what founders don’t get. Until all our customers are robots and all our employees are robots, human comprehension of understanding and getting to competency, either in marketing or selling or deploying to a customer, or a customer’s own ability to take advantage of what new things that can be done. We’re not robots. Right? We so, you know, I’m kinda forcing them, and I say in the article and, look, for years, founders would be like, ah, when do you ship? I ship daily. I’m like, stop. Why? Because nobody cares.

Brett Queener:
It’s like a tree fell down in the forest, but nobody heard it. Tree didn’t fall down. So I’m actually forcing them. And they were mad then, and then they moved to quarterly because they realized they couldn’t do the cadence. And I’m like, look. At least monthly, let’s do a refresh. One day a month. Shut the company down.

Brett Queener:
Let’s do a refresh. What’s new? What do we do? How are we updating our messaging? How do we get our customers educated, etcetera? Because doing a bunch of innovation when you’re selling to corporate clients, if you’re delivering it faster than they can consume it, then you get no credit. So but I’m organizing them very much around the jobs to be done. And before jobs to be done was a product concept, but it didn’t leave the product team. And it needs to be the way we think about it from a marketing, selling, success, and deployment perspective. I don’t have all the answers, but that’s my first my first take at them.

Josh Schachter:
No. I like that. And, you know, I actually just came off of going to both Pandos customer conference and the human insight with user testing last year. And one of the big things that that both companies on on CX side kinda talk about is this, you know, 80% of product never gets touched. Right? And those data points are presented as a sales as a sales tool for Pendo, and yet they buy Pendo and they use Pendo, and 80% of product still doesn’t get used. Right? How much that goes to the the heart of what you’re talking about at the beginning of this is that actually, like, half of or whatever percentage you said of software isn’t going to exist. And it’s not that we’re replacing something. It’s that we are becoming more intelligent at what people are actually using and giving them what they use versus

Brett Queener:
Well, the other reality is we say 80% of product isn’t used. What do you think about what I read in the article, which is if you think about everything that I would have given founders advice over the last thirty years how to run a company, It was all the amount of the advice was directly tied to the amount of friction between the product he sold and the person actually getting their job to be done more effectively. A lot of explaining CSMs showing up at QBRs. Oh, you’ve used this capability, but did you know you could do this and what the outcome is? Like, god forbid, poor. You know, when we say 80% of product isn’t used, it means that a user didn’t leverage any 80% of your capability because they didn’t either know or grok how it was gonna help me do my job, or it was too painful to go do it. Right? I think the interesting thing with UserZoom and Pendo, we’ve had these conversations is, Agentic has come along at the right time. Because if you think about those products, there’s a lot of analytics that those products produce, a lot of insight that then require people to go do something. But what’s interesting is well, I was talking to Todd about this.

Brett Queener:
You know, they were they introduced the most successful product last year was their their, full story competitor session replay. And already today, oh, I could stare at the session replays. That’s great. But if the session replay shows these seven people hitting the same thing, Let’s just go summarize that and put it in a Jira ticket. Yep. And that’s what it does today. And I’m like, what can we extend it? Is there an ID to cursor? And then just forget the Jira ticket. Skip the Jira ticket.

Brett Queener:
Just take it. Ask me, like, every time I see this, can I just let me just go back and submit the code? Like, that’s the opportunity. Right? Yeah.

Josh Schachter:
Is that where you drive so by the way, you’re on the board of Pendo. Is that where you’re trying to push them, like, to that extreme direction?

Brett Queener:
Look. I’m I’m not push I push everybody equally. Todd has Encourage.

Josh Schachter:
Has

Brett Queener:
a very strong vision on his own. I am there to be supportive of that. But, yes, I think I think Pendo is in a great opportunity in terms of all the data that it has and the relationship it has with product managers. And I think product managers this world that there was product and there’s dev, I think becomes munched. Yes. Right? Because in the old world, devs were super expensive, super precious, and we needed to make sure we never wasted their time. So we spent unlimited time making sure, whether using user testing, or Pendo, or whatever, to get the requirements exactly right in t shirt size, so we could get it down to the canonical unit, so we made sure they were writing the stuff. But in a world where 80% of the code can be written by AI, you can you could go to Lovable or what.

Brett Queener:
I could come up with four iterations relatively quickly in two hours and go, is this it? Right? And so I think Yeah. What Todd and I have been talking about is it’s about iterative. So I’ve been trying to come up with a new word. It used to be waterfall in the on premise world. It was agile in SaaS world. I don’t think it’s agile right now. It’s it’s like Well It’s like maybe it’s it’s it’s it there’s a level of iteration that this the speed to iterate and deliver on what the signals you’re hearing, information you have, is what defines a killer r and d organization.

Josh Schachter:
It’s a big con bond, actually. Right? You’re constantly refreshing, constantly taking from the top of the queue based on what you learn.

Brett Queener:
Well, I think the interesting question I put in on I don’t know the answer is, what’s the definition of GA?

Josh Schachter:
Yeah. Okay. Well, I’m gonna I’m gonna insert something here because I think from all of my experience, engineering resources were precious.

Brett Queener:
Right.

Josh Schachter:
And what they wrote was precious. And if you put a hash in the wrong place, everything broke. Right? And it was like, there was so much tribal knowledge, and there’s the tons of jokes that are like, oh, this engineer put a hack together and did it this way, so we always have to do it. Otherwise, everything dies. What you’re talking about actually makes code almost recyclable. Like, the you should think about it in a way that says, I I if if these agents are actually coming up in in creating this code and the human is actually looking at the weight, right, and the importance and the connection, then it’s not the code that’s precious. It’s the experience.

Josh Schachter:
Yeah. But you guys I think you guys are both being I I agree with you. Yes. And and you’re both being a little bit hyperbolic. And and and because at the end of the day, like, you you give me a start that’s gonna be, like, super successful without without 10 x engineers. You’re not gonna find it. No. No.

Josh Schachter:
I think

Brett Queener:
the I think the I don’t think that’s not worth saying. Mhmm. Okay. Engineers are as important. Like, when we do startups, I’m like, go hire 10 devs. I’m back before I’d be balanced, like some devs, some sales, and marketing. Go get go get 10 great devs. The work that those devs are doing has moved much higher order.

Brett Queener:
Right? And and Lovable, the rest of them, and the big take in some of these these are prosumer apps. These are apps you can roll out relatively quickly. They don’t have to work with, like, a giant existing repository of code the rest of it. I’m not trying to be hyperbolic. What I’m just saying is the really exciting thing for product and dev people is that you’re gonna be spending so much of your time trying to think through, does this actually solve the problem and iterating on it, as opposed to the mungy jungy of gathering requirements or checking code and the rest of it. Yeah. That’s that’s all that’s all I’ve said.

Josh Schachter:
Do you think that it also, because of the accessibility of data, gives you a lot more, I don’t know, like, comfort in what you’re building that it it actually has to be in line with your customer success. Like, you talked about that. Yes. Yes. Feedback loop is gonna be so iterative that it’s like, nope. This didn’t work. What’s next? And then you

Brett Queener:
set the interesting thing. Like, I put in there. I know the right thing, but m a u d a u w a u, that’s not it. I mean, if nobody’s using it, you’re dead out of the water. But, John, you’re in success. Josh, you know about success. How many customers have churned even though they had high usage? But wait. We had a warning.

Brett Queener:
There was high usage, and the reality was whatever outcome they were trying to drive in their business, regardless of high usage of the product, they didn’t get there or they didn’t associate using your product with that. And I think in the world of Agentic, that’s much clearer. Either does or does not. Like, I read an article at some point, which is like, we used to think which of our accounts are red, yellow, or green. I don’t think there’s yellow. I think it’s red or green.

Josh Schachter:
It’s very clear. You drove the outcome or you didn’t. And and you have in your article, you comment on the importance of product marketing. I do wanna talk about that Yep. Because I think that’s really important. I wanna go back, though, to to really kind of the beginning, of what you were saying, which is that you labeled your anxiety. You know, your your therapist and executive coach would be very proud. Right? And and so, but you also labeled my anxiety and everybody else’s anxiety, and that’s why I reached out to you when you wrote the article, and I emailed you also just because I was looking for a touch point with you to continue the the relationship that I nag you on.

Josh Schachter:
But, but I reached out to you because you really re it really struck a chord in a way that I hadn’t really articulated myself yet in my own mind about my anxieties, about just kind of the the current state of SaaS as a founder. I can tell you what resonated in a moment, with me from your article. But tell me, like, what is the anxiety as an investor as, you know, in the as a proxy of being a founder? What’s the anxiety that you labeled?

Brett Queener:
There’s two. As an investor, what the hell is an application software company anymore? $250,000,000 at seed. That’s a very large seed fund. Very few, you know, emerging VCs. I mean, this is a fund that was started in 1617. Most of the VC money has been raised by, like, seven mega funds. And we invested the application layer. And so the anxiety is what is what is a defensible application layer that can go the distance in a world where twenty years ago, companies went public at 20,000,000 and now it’s $2.50.

Brett Queener:
So over a ten or fifteen year run, what is it I have to believe when I’m investing? We’re investing in a company, and how do we look at that differently in this new world? What is the moat? Is there a moat? Which one would it be? How would I think about it? That’s one anxiety. And then as an investor, what is the guidance we would give founders from C to A or A to B or B to C? And how does that change dramatically from the guidance we may have been giving over the last twenty years? And I think the anxiety as a former operator who is in all my group’s Slack channel. If I showed you, like I don’t know. This may be crazy, but I’m in every investment Slack channel. I can see what’s going on. So the founder doesn’t have to tell me, hey, what’s going you know what’s going on. The anxiety is how do you scale a company in a manageable way given this pace of change? It feels like I have to work twenty four hours a day. It feels like it’s never ending.

Brett Queener:
It feels like the goalpost and everything’s changing all the time. It’s hard enough to run a startup. How do you build some repeatability in this rate of change? Is that anxiety that founders face? And then four, in that, the biggest thing I wrote in the article, we really look at it is, we forget that best companies are talent density magnets. They attract to best people in the industry. They go there. We did that at Siebel. We did it at Salesforce. You know, all day long when someone says, who should have one competitor? I go to hire their top four reps.

Brett Queener:
That will kill the company in six sauce. Go. What then are we hiring for? Because if you hire somebody who’s been doing the SaaS playbook for twenty years and isn’t looking for a first principles perspective, Yes, they know leadership and the rest, but they may execute yesterday’s playbook that’s irrelevant today. When I bring in a kid who has no experience and doesn’t have any confidence, how do I think through that? And so then how do we think through what’s the blend of talent? How are we managing that talent? And then similarly, in a world that changes that quickly, I have a management cadence for for companies that quarterly is great. I can probably best out there. It’s the v two mom framework. What’s that new management cadence? And then the last one is, our companies can only grow as fast as the rate of growth of the founders. And so what is that rate of growth? How much does it accelerate? Where is it still the same? And how do we guide them on them? So those are the five things.

Brett Queener:
And

Josh Schachter:
That’s it. Anything else?

Brett Queener:
Nothing else to

Josh Schachter:
add, Brad?

Brett Queener:
It changes all of them. So that’s the anxiety.

Josh Schachter:
Yeah. I mean, listen. The anxiety that all resonates the anxiety that really kind of, resonated with me the most was was the the speed of change and the defensibility. And this idea that, okay, is the rat race ever gonna end now? Is that it? Am I just in a rat race? You know? Well, there’s just a hundred

Josh Schachter:
other rat races going on at the same time.

Josh Schachter:
Well, there’s but it’s the rat race, but it’s also the rat race of, like like, you know, just like when when Brett, like, ghosts my text messages, he’s like, you know, just kinda go away ShoeFly. Like, I feel that way with, like, all the the YC companies, like ShoeFly. Like, all of these like, they’re just coming out of nowhere.

Brett Queener:
I know you’re gonna say send a second and a third within four minutes, so I’ll just wait for the third one.

Josh Schachter:
So you just wait for that one. Right? But I know there’s gonna be another second and third Y Combinator in the next batch. Right? And, like, that’s actually what gives me anxiety. And it’s not a it’s not a it’s not a a ding at my own, you know, abilities or confidence or anything like that. But there are so many young it doesn’t matter. Young guns are not. Like, there’s you’re right. There’s no defensibility.

Josh Schachter:
There is, you know, who’s closer to the latest innovations, you know, in Silicon Valley. We’re not based in New York, not in Silicon Valley. Like and so it’s just the rat race and the lack of defensibility.

Brett Queener:
I do think, however, there is some defensibility. What’s the silver lining? If you as a founder have unique insight to a problem that really exists and you really sit in that product market fit, and you understand that cold as opposed to quickly hiring execs and scale beyond it. AI gives startups an opportunity to deliver kick ass products far faster in their life cycle than they could before, get real time feedback what’s working, what not. And those customers are going to ask you to do more quickly. And there is an opportunity for winner take all. That who moves smarter and faster and has people around them with customers and continues to solve these problems and solves more problems for them and delivers on the promise, that’s always been the case. I think AI separates the wheat from the shaft very quickly. I do believe if you’re solving a broad enough problem and you gather data in my article seven months ago, I said data didn’t matter.

Brett Queener:
Metadata mattered. I don’t think that’s true. If inference costs go to zero, if you have a set of data, it’s still you’re still gonna use off the shelf LLMs that you’re gonna train based on whatever data and process you have. And if you have more customers and more data, your agentic interface is gonna be that much more useful. So but I think it’s good because it’ll also tell people, look. I have a five to ten million dollar business. This is a good one. You look at it like, don’t raise venture.

Brett Queener:
Yeah. Eventually, it

Josh Schachter:
carries a few hundred million

Brett Queener:
in revenue, and then you’re gonna you’ll build a 40 or $50,000,000,000 company, and you’ll feel like a loser because you you end up owning none of it. You’re always missing some no. Don’t do that. Yeah. Just take pay yourself a lot. Whatever. Tell it to somebody. Like, too many people raised venture that weren’t venture scale opportunities.

Brett Queener:
That’s what happens when there’s too much capital in the market. So I do believe that it will be a lot more clarifying. I also think if the company is just doing okay in the old world of SaaS, they’re zombie companies where it takes a while for 80% retention to, like, play it out, and it’s kinda well, it’s hard, and then you lose people. Whatever. I think in this world, people like I think retention rates are gonna be like NRS be like a 50 or like 25.

Josh Schachter:
What is it?

Brett Queener:
And you’ll know, like, you know what? The next four years of my life is better off doing something else.

Josh Schachter:
Yeah. Yeah. I mean, my favorite part of it actually has been able to get closer to our customers because they have expectations, they have needs, and now you’re able to really work with them and listen to them in real time and and make those changes and enhancements in real time.

Brett Queener:
The coolest thing about that. This stuff and you know it. When you get your customer, and you show a product, in that moment, they look at you and go and they go like, Josh, what the fuck is that? That doesn’t work.

Josh Schachter:
They’re like,

Brett Queener:
No, it doesn’t work. That doesn’t work. It can’t actually do that. No, it actually does. No way. Get out of here. That’s that’s awesome. As opposed to somebody going to G2, looking at 47 things and reviewing, and they’re all the same shit.

Brett Queener:
And you’re using shit, and then you gotta figure out, is this shit less shitty than the shit you use? Like, blow all of that up. They just look at something and they go, Oh shit. What does it cost to come up with some number you’re like, Well, if that works, why not? That’s fun. That’s not been the conversation with most founders in software the last thirty years.

Josh Schachter:
Alright. So, I we I still wanna get to product marketing. Before we get to product marketing, maybe it’s related, you’ve got a startup team knocking at your door with their pitch deck. They they want you to invest. It doesn’t matter concept. What are you looking for? Let’s say it’s three cofounders, whatever. What are you looking for as the winning formula for those guys? Those people.

Brett Queener:
Sam Lesson wrote something good on this. Look, I invested the seed stage. It’s theme like, what is the problem they’re trying to solve? Like, do I believe this is, like, a big problem that hasn’t been solved effectively? And it’s the team. Like, is this a kick ass team? Is this a team that’s gonna go hard? And they’re gonna be a talent magnet and a customer magnet. And they’re gonna be gritty and iterative and won’t stop. And I actually look for crazy people. And the key is to figure out the good crazy or bad crazy. And our best investments for people where we had that question.

Brett Queener:
They’re crazy, but if they’re good crazy, they’re awesome. These are the types

Josh Schachter:
of Do you literally do you do you on the at the IC table, do you literally talk, you know? Are are they a little crazy? Are they a little out there?

Brett Queener:
I do. Yeah. Because the ones where I bet that were crazy and turned out to be good crazy, These are the founders who call you on a weekend and be like, look, my company’s grown here. I wanna four x it, but I am a leader in fucking up. I’m not the leader the company needs to be to get there. What should I do? Which is much better than going to a board meeting where somebody’s doing performance data and there’s an appendix of 40 slides and you can see that business is clearly struggling and there’s some kind of like board dance that everything’s okay and then at the board you gotta be like, you know, you have to figure out the nice way of saying like, what the fuck are you doing? Right? But that’s always a struggle. So that’s what I look at. I think the big difference now is at Seed, for the last twenty years, you’re never looking at an amazing product in B2B software.

Brett Queener:
Right? Because it’s like three to five people, they’ve got an engineer, there’s some basic wedge, and then you’ve got to believe that they’re going to hire engineers, and then they’re going to go do this. But at Seed now, show me the product. I get amazing products that I look at at seed.

Josh Schachter:
And revenue. I take it.

Brett Queener:
We invest generally when there’s $300,000 to $500,000 in revenue. We need to see enough, because we believe a Series A is you got to be at $300,000 to $4,000,000 of revenue. So if it’s too early

Josh Schachter:
Is that what it is now? $300,000 to 4,000,000?

Brett Queener:
That’s what we’re doing. Right? If we can get to 3 to 4 and we’re because you have to understand the later stage funds have raised so much money that what they’re underwriting to, they’re not underwriting to a hundred million dollar revenue outcome. They’re underwriting to $2.50, 5 hundred, etcetera. And so especially in the AI world, we need to understand is this revenue vibey? Churney, churny? People just oh, this sounds good. Is it experiment? Or is this, like, enduring revenue that you can deliver on? And so, and and the the the beginnings of a sales and marketing acquisition and retention motion with numbers that make sense. Because it used to be in series a, you would give somebody 10 to 15,000,000, and you were investing in something that worked where you get some level of return. So that’s what I look at. I look at theme, person, and product.

Brett Queener:
And on the product side, you know, and if it’s not if they don’t have a very strong thesis about how they’re leveraging AI to deliver something fundamentally better, I can’t look at it. I can’t. Can’t be like, Here’s some deck, and oh, by the way, agents on some slide. And then we’re going to do agents. Like, no. Because like if that’s the case, they’re not even thinking of integration correctly. The coolest thing right now if you really go study OpenAI operator and anthropic MCP, in the old world it’d be like, Oh, I got this thing, but it has to integrate into this part that they’re using, But I can’t get their API unless they pay the 50 k or it’s a closed API. That shit’s all gone.

Brett Queener:
For many of my customers, they just log in and use an open if it’s not it doesn’t need HIPAA, OpenAI operator can log in on behalf of your user and use that other application as if they were using your application. Yep. Or if if I need to integrate to things that have integrated to Anthropic NCP, not only does my agent understand how to answer a question within my database or do a job within my metadata, it can do long form. It can if it’s a if it’s something that needs to go across other applications, my agent can now do that. You can build new amazing beautiful applications that add value to people that could never be built before. So that’s what I look for very early. Like, do you have an amazing product? Can I talk to three to five customers like this is the greatest thing since sliced bread?

Josh Schachter:
Listen, my my last my last question here. I’m gonna cut you off quickly because I know we gotta run-in a second. And, and like you said, how can you talk to your customers? Like it’s the greatest thing since sliced, but we talked a lot about like jobs to be done and, you know, now we’re finally really solving the jobs to be done, through these workflows. And you write in your article here that companies should invest disproportionately in product marketing talent. Product marketing becomes five X more important in this world of AI. The, the best winners, including anthropic have the best of the best in the industry. Explain.

Brett Queener:
In a world in which writing code is easier for you to win, you have to be better at explaining to people you’re trying to sell to why your product answers three questions. Why this? Why should I even bother looking at this? If you don’t do that, you’re not gonna have a stage one opportunity. It’s not it’s gonna be lost to no opportunity. It doesn’t make any sense for them to dig in. It doesn’t get to, like, stage two or three. Why you? Why do you solve this job better than others? Then you don’t get to BOC. And then the most frustrating, why now? Because I hate being in BOC deals that keep slipping and slipping. So why now? And if you can explain those three things really well, you’re gonna dominate.

Brett Queener:
And, oh, by the way, that has to change every month. Not only what you do, but you also have just what everybody else is doing, because it all has to be relative and differentiated. Seems to me, product marketing enablement become really, really important. Really, really important.

Josh Schachter:
That’s great. How do folks follow you, Brett? What’s the best way? You wanna give them your cell so they can text you like I do? What’s the best way to to keep in touch with your wisdom?

Brett Queener:
Just I’m on LinkedIn. You can follow me on LinkedIn. If you’ve got a startup that you want that’s got some traction where you believe it fits those criteria, you can email me at bret on fire b c dot com. I do respond to cold inbound. This whole world of like, I’m only taking something from someone that’s a referral from somebody I know. Like, if somebody writes something meaningful, because I leverage AI to go through my inbox. It’s not as bad as an ATS screening everybody out, but like,

Josh Schachter:
you know, I try to

Brett Queener:
be as responsive as possible. And if we talk, if it doesn’t work, if it’s not a fit because we only I only do, like, two to three investments a year. I have, like, a thousand people I talk to. I’ll do my best to be helpful and give you guidance on what you should do if if you don’t you don’t think it is condescending, but understand from where it comes from as a former founder.

Josh Schachter:
And everybody follow Brett’s blog. It’s some

Brett Queener:
It’s a fun blog.

Josh Schachter:
It is. It’s a fun. Yeah. It’s a fun blog.

Josh Schachter:
Well, let us know, Brett, when you productize the Brett Queener LLM for us to

Josh Schachter:
Yeah. The GPT.

Brett Queener:
Anyways, appreciate it, guys.

Josh Schachter:
Thank you.

Brett Queener:
And then, John, we should catch up on, your new great question. Because I wanna look at it because I have a hundred portfolio companies across Bonfire that I’m always looking for great tools and how they rethink about how they do stuff. Because I I do think there was a world in which you’re like, oh, you don’t need designers in this new world. And I’m like, I think the role design changes dramatically. But I think in this world, because we’ve yet to figure out the new UX paradigm, it’s not just manage an agent or here’s a chatbot. I think taste matters. There’s an article that was recently written called Taste Really Matters in product, and I think taste will come to the forefront. As as a designer before, you were trying to make 47 screens and shitty workflow work, God forbid.

Brett Queener:
And now it’s like, no. No. No. No. No. How are we how do we put flavor and and taste? So I’d love to catch up with you.

Josh Schachter:
Yeah.

Josh Schachter:
Love it. I’ll reach out.

Brett Queener:
Alright, guys.