PodcastsThe Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch20VC: Why AI Models are not a Moat, Where Does the Value in AI Accrue; Startups or Incumbents, What the World Has Got Wrong About AI, Why AI Needs a New Story and Who is the Right People to Tell it with Cris Valenzuela, Co-Founder & CEO @ Runway

20VC: Why AI Models are not a Moat, Where Does the Value in AI Accrue; Startups or Incumbents, What the World Has Got Wrong About AI, Why AI Needs a New Story and Who is the Right People to Tell it with Cris Valenzuela, Co-Founder & CEO @ Runway
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The PitchSun Aug 27 2023
Founding Moment of Runway:
- Cris Valenzuela met his co-founders Alejandro and Anastasios in art school, where they started experimenting with AI models for creative tools.
- They realized there was something special about merging AI models with the art world.
- The company founded them, rather than them founding the company.
Being an Outsider:
- Cris has always felt like an outsider due to his diverse background in economics, business, film, and programming.
- Being an outsider allows him to reason from first principles and merge different domains and professions.
- It gives him a unique perspective and creativity.
Running From Tradition:
- Cris grew up in Chile, which had a strict traditional structure that he didn't resonate with.
- He is running away from tradition and norms that restrict his curiosity and passion.
- He wants to explore what he's truly passionate about without being told what to do.
High Performance:
- Cris defines high performance as having a vision, motto, and value of "just figure it out."
- Learning how to learn and being able to figure things out without complaining or getting stuck is a superpower.
- High performance comes from being proactive, taking initiative, and continuously learning.
Approach to Learning:
- Cris takes a hands-on approach to learning by building projects from scratch.
- He dives deep into specific topics by building experiments and trying things out himself.
- Being active in the learning process helps make sense of the world.
Dealing with Slow Learning:
- When learning is slow or not happening, seek help from brilliant people who can provide guidance and support.
- Surround yourself with people who inspire you and can help you overcome challenges.
Model Size vs Data Size:
- Model size matters because larger models are better at multi-modalities but it depends on the specific use case.
- There are opportunities for smaller models that are more specific to certain tasks.
Verticalization of Models:
- There won't be a single model to rule them all.
- Different models and approaches will emerge for different domains and use cases.
Model Lifespan:
- Cris believes that models are not a moat and eventually don't matter.
- What matters most is the people building those models and their ability to change and learn from them.
Hallucinations as Feature or Bug:
- In language models, hallucinations can be seen as bugs because they provide creative interpretations instead of factual answers.
- In video and image generation, hallucinations can be seen as features that add creativity and new possibilities.
AI Community Needs Better Stories:
- Cris believes the world has got AI wrong by reducing it to just chatbots and language models.
- We need different stories about what AI can do and will be in order to tap into its full potential.
- The responsibility of telling these stories falls on various groups, including screenwriters.
Hiring Performance First Team:
- Focus on hiring people who can figure things out and get things done.
- Look for individuals who have a proactive mindset and are hungry to learn and contribute.
Biggest Mistakes in Hiring:
- Focusing too much on credentials rather than finding people who are passionate, curious, and willing to learn.
- Avoiding people with definitive views or rigid mindsets that may hinder adaptability in a fast-changing field like AI.
Fundraising Lessons Learned:
- Emphasize the vision of the company during fundraising pitches.
- Ask questions to investors about their values, goals, and alignment with your company's vision.
- Don't rely solely on investors to build your company; success comes from grinding, tenacity, and learning from mistakes.
Valuation Perspective:
- Valuations are not the main focus; optimizing for valuation alone is not beneficial for long-term success.
- Focus on building a great team, executing the vision, and creating value for customers.
AI's Role in Society in 10 Years:
- AI will become ingrained in everything we do, to the point where it is no longer referred to as AI.
- It will be seen as a tool rather than a separate entity or technology.
Changing the AI Community:
- Cris believes that people don't yet realize how transformative AI will be.
- The current understanding of AI is limited, and future developments will challenge existing assumptions.
Balancing Work and Family Life:
- Cris believes that if you care deeply about what you do, you can find a balance between work and family life.
- Being passionate about your work allows you to prioritize and make time for both aspects of life.