The 2 Things VCs Really Want
January 3, 2025
When you take a multi-million dollar check from a VC, they’re really only looking for 1 of 2 outcomes. This can cause some very strange behavior in the future.
This week Google announced it’s made a major breakthrough in quantum computing. We’re still years away from this tech being used in everyday life, but Google now has a huge advantage in hardware.
This is a massive change for a company whose revenue is almost all based on software. But this adaptation is absolutely necessary, and not because of antitrust, as Google is suddenly losing the battle around search to OpenAI and the LLM companies.
Meta is also undergoing the same process, as youth and governments push back against social media, they have turned to open source software and sunglasses as their lifeline. After a large and incorrect bet on Virtual Reality, Zuckerberg needed to invest ideas very different from their past successes.
Amazon, of course, has already successfully diversified, perhaps out of necessity due to the razor thin margins in e-commerce. Amazon Web Services generated $90B of revenue in 2023 and is a double digit percentage of their total revenue.
The monopolies of the past failed to adapt and the next generation of companies took their mantle. In the 21st Century, we may see more monopolistic companies thrive, but on a different path.
