Lenny Rachitsky: belief

Transcript context

…So I'm just going to jump into another startup here just so we can see what this sheet looks like with scores on it. So this is a startup called Mellow. Anyway, the standard classic differentiators where we start, they are fast to slow, smart to not so smart, easy to use to hard to use, free to expensive, focused to one size fits all, simple to complicated and integrated to siloed. And so you could probably argue there's these others that should be included or some of those should be taken off. But what we like about this is that it's a small set. They're easy to understand. We know customers can understand these and they create a great starting place for your team to think about differentiation because you can quickly look at this list and start scoring where you think your product could be on these scales and you know that if you can use one of these, people will understand it. But it also starts to make the team comfortable with this notion of differentiation. And again, we want to make differentiation something that all of the co-founders or core team can participate in. It's not just the job of the person writing the pitch deck. It's not just the job of the marketer or the salesperson, but we're getting everybody's perspective in on it and this is a great warm up activity before we start to write our own custom differentiators. Awesome. And then again, this is just inspiration for coming up with more ways to differentiate. Something that is a common question I think for founders is price as a differentiator. Is there any insight you guys have there? How often do you land on price being a good differentiator with the startups you work with? I think price is rarely the most important differentiator. Part of what's interesting about going through these classic differentiators, these standard ones first and then jumping into the custom ones is that the classic ones are sort of universal, but it is going to be hard beat the competition on very many of these. It's going to be hard to build a product that's faster than what Google can build or what OpenAI can build. It's going to be harder to be cheaper than those competitors because they just have so many more resources. They can have lost leader products that are underpriced. Where I think pricing has become a really clear advantage for some companies is those that are leveraging AI to solve problems that were previously unsolvable with software. So we have a company that we invested in called BindWell and they use AI to design precision pesticides. And we ran a foundation sprint with them right after investing and five years ago you couldn't design pesticides with AI. It wasn't possible. Even if you had that idea, you wouldn't have been able to build it and now you can. And so for them, one of the big advantages is yeah, these pesticides, they can be a lot cheaper because it doesn't require this massive team of R&D chemists to tinker and experiment with things in the lab to try to create new pesticides. We can design them with AI. So it is more often true in AI companies like that, but it's very difficult to compete on price in general. And we think we find that it is not as durable of an advantage as some of these other things.…

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