Jack Raines on Slow Ventures' AI thesis: vertical AI is the new vertical SaaS, not AI-for-AI's sake

Yeah. Yeah. Okay. This is great. We got We got We got four. Great. Don't Don't give this away. We'll quiz We'll quiz folks on whether they're on GPUs or they merely sit on top of hyperscalers. We got Jack from Slow. How you doing, Jack? What's up? Good to see you. Oh, the suit. Did you have to Good to see you.

I can't believe it. You look fantastic. Well, you look fantastic. Thank you. Thank you. How we doing? How is how is demo day? It's been fantastic. It's been great. Uh tons of cool companies, a really wide Everybody's kind of kind of ripping.

We kind of came in thinking like let's try and find the theme cuz like uh other than AI cursor for Yeah, there there's like a little bit of an AI theme, but we had metal we had uh Zane. We had metal cutting. We had a missile company already.

Uh there's been a few different companies and I I feel like the narrative is shifting now to just like AI is just a tool like cloud computing. It's just like are you using like a pi like a python or you know it's like or are do you have a mobile strategy or are you pulling mobile off the shelf?

No, it's like like it's like at this point you're not going to use like oh yeah I know we're building in the cloud everybody. It's like what are you actually doing? It's like okay yeah you're a software company but like what are you actually doing?

So it very much feels like we're in this era of like vertical software for AI. So it's like vertical AI this is vertical SAS all over again. Um but the traction is really good. The businesses are super niche and super interesting.

So, you're learning a lot about like a guy who set up a 311 line in Florida and he's getting a lot of calls about alligators and like that's interesting to me. Yeah. Uh, anyway, what's new with you?

Well, so it's funny like everybody most of the investors are here to like invest capital and quickly introduce yourself for the story for those who don't know. Um, I'm Jack Reigns. I'm on the investment team over at Slow Ventures early stage venture fund. We um run about a billion dollars now.

Invest generalist little bit of everything$ 1 to3 million checks. But unlike every other venture fund here, we actually are launching the uh the slow ventures etiquette finishing school. So I don't know if you can see this. You guys are dressed sharp. Obviously our I remember this photo. This is a fantastic photo.

We had this. We got to Photoshop you on there. I know once I make once I make GP, maybe I can be on there. Um but you know there's there's a lot of capital floating around now. That's like like financial capital to invest in founders. But the real problem in San Francisco is you don't know how to dress.

Like wait, but if people don't know how to dress, why is you're just expecting them to go to a black tie event? Well, you know, they can we we say that it's self select. You show up in a sloppy top. You want a high bar and then you want to take you want to constructive feedback, right?

I don't know if you guys were in like fraternities in college, but there's this whole like you kind of get hazed if you're like, this is just like pitching a startup. come to you, the the the pitch is a little sloppy. You go around, by the time you come back and pitch the second, third time, the business is polished.

Yeah. Literally. And it's like there's, you know, there's there's business upside of this. Like fixing your etiquette makes you like you can command a boardroom better, but also boardroom generals. We love boardroom.

And like we also want to help founders like get girlfriends or boyfriends like there's especially in SF like everybody's complaining. You know, the 996 is great except you know. has uh has slow flipped bullish on a uh question. Are you guys still bearish? Speak for the entire firm right now.

For the entire firm and especially friend of the program, Sam, my boss who owns my paychecks ideally watching this right now. Um we're bullish on AI when it's a good company that uses AI. It's like the whole like our our take the whole time has been that like the models are going to eat pretty much everything.

Microsoft's going to eat everything. I mean, that's what we're seeing today. Micros Microsoft is going to eat Nebius. A lot of the companies I feel like are in that Sam Leon idea of like AI cherry on top I think is his phrase.

I I like that framing and I thought he it's the more the more vertically integrated and the thing is like if the founders actually have like real domain expertise in the thing versus like somebody who knew AI well and then they're trying to like oh this is an obvious problem maybe but you're seeing some interesting like one co-founder is incredibly sharp in AI been doing machine learning forever and then the other co-founder actually is that dude in their space for 20 years that's when it gets interesting is he him so he's when when you have AI wizard plus co-founder who is him or her or her.

Yeah, that's that's the magic. So, I would not say that we're bullish on AI anymore than we have been, but like, you know, we respect AI used well. It's like AI is table stakes. If your only thing is AI, get a get a post out there. Slow respects AI. Slow respects AI. Yep. You heard it here first. Breaking news.

Uh, okay. We've been asking everyone lightning round. Uh, who is your favorite entrepreneur in history of all time? In history. Um, probably outside of Jesus Christ, our Lord and Savior. This is like ESPN. Are you supposed to say that? Um, no. John D. Rockefeller. Rockefeller. Rockefeller. What about you guys?

Uh, I don't think we've uh I don't think we've answered the question ourselves. Mine is always Steve. It's just the obvious answer, but growing up Yeah. use just it's it's uh my favorite products ever have consistently been Apple products. Yeah. And I I just would listen to so much founders podcast.

I say Jay Gould, of course. But can we can we flip around? Who's your least favorite least favorite entrepreneurs ever? Uh least favorite entrepreneurs. They had to be good enough to be famous, but you just don't like probably SPF or something. One of those like that's a good pick.

Although although maybe he's underrated cuz he got that anthropic bags and he's ripping now. Okay. SPF. Underrated venture investor. Underrated entrepreneur perhaps. Perhaps not the sharpest operator. Do you think overrated gamer do you think the Elizabeth Holmes Twitter account is real?

Uh it I I believe it is run by her husband. Okay. Uh and I do not believe I I actually disagree.

I I don't I don't think uh I it screams like ghostriter coded because for it to be run by her husband, her husband would have had to be like hyper online on X and like it just feels like very go like you can tell when an account is ghost sure and it's ghostritten.

I believe that he probably has the keys hired a ghost rider at Ghost. But we agree that she does not have a prison phone the the everything app installed on a phone that is connected to some sort of 5G network within the prison. We agree on that. Okay, great. Could she because SPF is tweeting from prison right now?

It is possible, but it's very much looked down upon.

And of course, like as soon as it as soon as the tweet goes out, like the warden should be able to get the news and like someone calls the warden because like someone sees the post, calls the the governor, and then the governor calls the warden and says like one of your prisoners is breaking the rules, like can you do something about this?

Like it should flow through. I don't know. Maybe if she I don't know what her prison terms are, but like if and when she gets out, like how quickly do you think she could raise like 50 million$100 million?

Do you think it do you think it's like I mean John John's take is John's take is the pitch if you really want to she she can rebuild her her personal brand but that's and and people people are already like people are just it just marketing works right so she's just like marketing to the timeline right now people are deciding like oh maybe I like her like oh she's making me laugh so people naturally start to like her I don't think it's going to repair her brand in the in the capital markets I think if she wanted to truly repair the brand, it would be like deep threads and long posts on biotech.

That was my take was Martin Skrey. Uh he has posted about biotech, about trading. He's gotten a lot of picks, right? He talks about capital markets. He talks about yes, he he did get in legal trouble, right? Uh but he has but he has said the thing that I was doing before I went to prison.

I I'm still doing it and I'm an expert and you can kind of judge me by my opinions and my takes and I'll go on live streams and you can judge me by my words and I haven't seen enough posts from her on the state of mRNA or the state of of GLP1s or the state of of gene editing technology.

Like if she really is an incredible biologist who's been like wrongly convicted, like show me some incredible biology takes, right? Don't just be okay. Yeah, you're just a mean.

the the Martin Skrey like shortselling reports where like it's like Friday at lunchtime and he just tweets this company's a fraud like their tests are going to fail. Stock drops 70% on Monday. Incredible performance. Yeah. Yeah.

And it shows that he's like he's like at least a student of the game in in in the world in the financial world. Now he has a kid, you know, dropped his kid on the internet. Anyway, uh we have a lightning round. Uh we did the we did the favorite entrepreneur.

The second one is how did you make your first dollar online or in business? Oh, that's uh first dollar online or in business. Um I was trading spaxs in my Roth IRA which is Yeah. So like most people lost money on these.

I one of my buddies I made the I swear to God this is why Sam this is why Sam hired me cuz he really appreciated my spack story. But basically like I graduated December 2019 was bored co hits like the first week I start my job corporate finance very boring.

And one of my buddies texts me he's liked DraftKings is going public through a spa. if you buy this thing, you'll own DraftKings stock. I was I didn't get it. I was like, why don't they just IPO?

I read through the structure and it's like, oh, if you buy these warrants, it's like a call option that doesn't expire for five years. And then Spaxs turned into a bubble. I built some web scrapers that would like ping me whenever um whenever like a new spack got listed or like a merger was announced.

So, this was like fairly autistic, but I saw that Apollo had a spack, and I noticed that they had changed their website header from oil rigs to windmills in like June 2020. And my hypothesis was everybody's chasing the next Tesla.

They're going to announce like an EV deal and the warrants are going to go from 50 cents to like whatever. And I just put all my money in Apollo warrants. And then they announced a deal with Fisker Automotive like a month later. Made a lot of money. And I just basically got out. I just parlayed that like 20 times.

My first online money was trading spaxs in my retirement. That's a fantastic story. So, shout out Chimath. A lot of people lost money on his spaxs. I would like to thank him for uh bank rolling a trip to Argentina. Oh, let's go. Hopefully, you have steak, his bottle of wine, maybe some tequila.

And spaxs are back, so maybe it's time to do it again. Maybe. Maybe. Maybe this time is different. Couple IPOs coming for good. Fantastic. We'll see you. Great to see you. Bye, guys. See you. And we will bring in our next guest to our YC Demo Day stream. We are live. How you doing?