About This Episode

In this provocative 2-year anniversary episode, Patric and Shub use Netflix's Ozark as a satirical metaphor to examine what they see as potential systematic issues in the current AI venture capital ecosystem. They muse about the possibility if many generic VCs could be creating artificial demand by funding AI companies that primarily sell to other VC-backed startups (funded by their friends and vice versa), and discuss how legitimate construction tech companies using AI can protect themselves from potential fallout when this cycle ends.

In This Episode

How the current AI VC ecosystem (satirically) mirrors the money laundering schemes depicted in Netflix's Ozark, with investors controlling both sides of transactions

The observation that many horizontal AI startups achieving high ARR primarily by selling to other VC-backed companies rather than genuine enterprise customers

How it could be that some AI companies are operating with negative gross margins while claiming rapid growth, and what this means for the sustainability of the sector

Strategic advice for construction technology companies that legitimately use AI to differentiate themselves from speculative bubbles

The potential consequences when the current AI investment cycle ends and how it could impact even genuine AI innovations in architecture, engineering, and construction

Timestamps

(00:00 ) - Introduction and 2-year anniversary celebration

(02:00 ) - Setting up the Ozark metaphor and "cabaret" discussion format

(07:00 ) - Explaining money laundering principles from Ozark

(15:00 ) - Drawing parallels between Ozark and current AI VC practices

(25:00 ) - Discussing the breaking point and sustainability concerns

(35:00 ) - Advice for construction tech companies using AI

(42:00 ) - Real examples of negative gross margin AI companies

(45:00 ) - Government connections and regulatory implications

(47:00 ) - Conclusion and wrap-up

Resources or Companies Mentioned

OpenAI: https://openai.com/

Amazon: https://www.amazon.com/

Autodesk: https://www.autodesk.com/

Connect With Us

Practical Nerds Website: ⁠⁠https://practicalnerds.com/⁠⁠

Subscribe to the Newsletter: ⁠⁠https://www.linkedin.com/newsletters/practical-nerds-7180899738613882881/⁠⁠

Foundamental: ⁠⁠https://www.foundamental.com/⁠⁠

Patric Hellermann: ⁠⁠https://www.linkedin.com/in/aecvc/⁠⁠

Shub Bhattacharya: ⁠⁠https://www.linkedin.com/in/shubhankar-bhattacharya-a1063a3/⁠⁠

Youtube: ⁠⁠https://www.youtube.com/@foundamentalvc⁠⁠⁠

The Daily Blueprint: ⁠⁠https://tinyurl.com/the-daily-blueprint⁠⁠⁠

#AIInvesting #ConstructionTech #VentureCapital