CEO & Founder at SignalRank. Previously founding investor at TechCrunch. Publisher of That Was The Week
Palo Alto, CA
Joined May 2007
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The End? The Beginning?
open.substack.com/pub/thatwa…
1. The stock market just called time on the old internet.
ServiceNow -27%. Intel -29%. Reddit -25%. Alphabet’s worst month ever. Nasdaq’s worst month in over a year. It felt like 2002 all over again. But this was not a crash. It was a repricing. The market can finally see who captures the gains from cheap intelligence, and it is not the companies that ran the web for the last twenty years. Read why the losses are a birth, not a death.
2. 65 million to 7.4 billion. That is the real story of the week.
GitHub commits per month went up more than a thousandfold in two years. Software is being written at a rate no SaaS company could ever serve. The catch: a thousand times more code, zero times more software companies. People are building their own tools with AI. I did. SignalRank Intelligence was built by me and an AI, and it is now the leading data-driven venture portal. See what “smallness at scale” means for every software business you own shares in.
3. Google’s best product is killing Google’s best business.
AI Mode answers the question. No journey, no click, no ad. Search revenue still grew 12%, but Google warned it gets worse next quarter. Downstream, Reddit grew revenue 53% and still lost a quarter of its value because search referrals are falling by a million a week. Reddit’s answer is to lock the doors. I think that is exactly the wrong move. Find out what Reddit should do instead.
4. The money did not vanish. It moved. Fast.
Anthropic’s S-1: $16.3 billion in revenue in six months, 14x the year before, customers growing spend roughly 900% a year, 85% gross margins and over $130 billion in the bank. The headline “loss” is equity accounting, not cash. The value of the internet is not disappearing. It is relocating to the model layer, and the rate of relocation is accelerating. Tunguz and Jamin Ball decode the filing, including the $637 billion compute bill nobody can accounting-engineer away.
5. Fewer companies. Bigger cheques. A canvas wide open.
92% of Series B dollars last quarter went to rounds over $100 million, raised by just 14% of the companies. California startups have raised $385 billion this year, more than the entire US in any prior year. Capital is concentrating while the tools to build have never been cheaper. Is that bad? No. It is a whole new canvas for human endeavor, from drug discovery to the software on your own laptop. This is the week to lean in. Here is how.
A useful result is not enough to establish trust. Huang’s discussion of independent monitoring connects with our TWTW argument for visible, verifiable agent work.
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Producing more wealth and making more people wealthy are different things. Keith Teare argues that shared prosperity needs a mechanism: ownership of the assets creating it.
🎬 TWTW #40
thatwastheweek.com/p/from-in…
If AI creates more wealth, who owns it? Keith Teare makes the case for a Human Wealth Fund: productive assets owned by people, with dividends that could support their lives.
🎬 TWTW #40
thatwastheweek.com/p/from-in…
Open models still need infrastructure. Azeem Azhar’s distinction between model and infrastructure revenue adds to our TWTW discussion of funding access.
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From Intelligence to Abundance, by @kteare open.substack.com/pub/thatwa…
Missed TWTW #39? Read the editorial, watch Keith Teare's 4:43 solo video, or listen to its audio. Venture Opportunities - Hidden in Plain Sight:
thatwastheweek.com/p/venture…
Large AI investments can make sense. That doesn't make early-stage discovery obsolete. Different jobs, different investment strategies. Keith Teare's argument in TWTW #39:
thatwastheweek.com/p/venture…
Cheaper intelligence makes more uses practical. Azeem Azhar develops an argument we have been following in TWTW, including through his earlier work.
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Keith Teare still believes in early-stage investing. Bigger checks into fewer AI companies are not the whole story. A 22-second teaser; full solo video and editorial:
thatwastheweek.com/p/venture…
Good thinking. Aligns with my own - thatwastheweek.com/p/venture…
That said I do think exits from concentration will result in flow to the whole of venture from LPs who participate in it.
The ability to concentrate requires a small number of huge winners. That is a once in a blue moon opportunity.
Once past it money will flow to a more normal power law potential.
For a long time, concentration in VC remained fairly stable, as capital inflows were broadly distributed.
This changed in the last five years as exits dried up and the "illiquidity ratchet" kicked in — only the largest and least sensitive LPs have sustained allocation, to the largest firms.
(i.e. Smaller LPs need distributions to recycle into new comittments, and therefore rely on the market acting rationally to produce exits. On the other hand, large firms produce irrational behaviour.)
The HHI (Herfindahl-Hirschman Index) is a standard measure of market concentration. It is the sum of the squared market share of each participant.
A score of >1,800 designates a highly concentrated industry, trending toward oligopoly, which receives extra antitrust scrutiny on M&A.
This must also factor the "relationship-based" of venture capital, where firms are not independent actors operating in competition with each other.
So, it's possible to calculate a "similarity-adjusted" score which considers the level of enmeshment — how frequently the portfolio companies of a particular firm share the same set of investors.
Bu this measure, venture capital has clearly reached a point where concentration is problematic, surpassing the 2023 antitrust threshold and even the higher original threshold from 2010.
As the market becomes more concentrated, this manifests as conesensus investing and increasingly inflated prices for mediocre assets.
The eventual "buyer" is yet more downstream private capital, each getting marked up by the next. There's no bagholder if the bag keeps getting passed around.
It's unclear how this is corrected without some form of intervention.
The size of AI investment cannot settle the bubble question. Azeem Azhar’s discussion of demand is a useful companion to our August TWTW debate.
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Venture Opportunities - Hidden in Plain Sight
This is not a Crisis
open.substack.com/pub/thatwa…
@kwharrison13 @fredwilson @jcal7
Three takeaways from this week’s issue:
1. Venture capital is separating into different businesses—not simply failing. Financing the scale of established AI leaders and discovering companies before consensus require different LPs, funds, checks and skills. Kyle Harrison sees strategy drift; Fred Wilson argues bigger funds can preserve investment discipline.
2. The overlooked opportunity is financing the discoverers. Specialist early-stage managers still find exceptional companies, but large LPs increasingly need somewhere to deploy enormous checks. Silent Ventures illustrates how specialist discovery and separately supplied follow-on capital can work together—not proof that small funds universally outperform. SignalRank's pro-rata as a service to smaller managers is similar.
3. AI’s next business opportunity is making capability usable. The “diffusion gap” and rise of deployment companies point toward integration, workflow redesign and accessible products. Better models alone do not produce paying customers. That creates room for startups beyond the frontier labs. There is opportunity everywhere.
AI safety requires engineering. Huang’s discussion of controls sits alongside our TWTW discussion of how technical rules are developed and enforced.
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If automation creates the wealth, who should own the rewards? Keith proposes share ownership for all citizens. Andrew questions practicality. Winning support is part of the job. 🎬 @andrewtkeenon
thatwastheweek.com/p/men-and…
You can say “please” to AI without thinking it is a person. Keith separates courtesy from human rights. Andrew challenges the certainty—and admits he says “thank you” too. 🎬 @andrewtkeenon
thatwastheweek.com/p/men-and…
Your AI still gets instructions wrong. Keith calls that unfinished engineering; Andrew compares it to children. Better controls are a job to do, not a reason to declare victory. 🎬 @andrewtkeenon
thatwastheweek.com/p/men-and…
"Because exits aren’t coming fast enough, the fund structure itself is getting rebuilt with continuation vehicles, NAV loans, tender offers, and GP-led secondaries. Assets passing from one fund to the next."
True, but not for the best funds...
Men and Machines
open.substack.com/pub/thatwa…
1. Being smarter doesn’t give AI the right to decide for you. What matters is what it can access, what it can do and who can stop it. Those controls must be engineered and enforced. A more intelligent model is no substitute for accountable humans.
2. “Find me the best insurance” isn’t permission to buy it. That distinction is the foundation of useful delegation. Your agent needs enough freedom to save you time, with clear boundaries around spending your money, sharing your information and making commitments.
3. Your AI should work for you, not the website selling to you. A shopping agent should help you compare offers and walk away from a bad deal. Businesses can defend against abuse without shutting out your representative. You shouldn’t have to pay a toll to escape the advertising funnel.
4. You can say “thank you” to a machine without making it a person. Human-like conversation doesn’t establish human feelings or rights. Both worshipping AI and treating it as an enemy distract from the people building, deploying and using it. They remain responsible.
5. AI’s democratic promise is more power in your hands. More people could gain the ability to understand complex issues, challenge experts and hold institutions accountable. That won’t happen automatically. It depends on who gets access, whose interests the tools serve and whether the benefits are widely shared.
Are You Afraid of Your Light Bulbs? nitter.cf/i/broadcasts/1YGNrbmAX…
