513. Harnessing AI and Experimentation in Startups feat. Jeffrey J. Bussgang

unSILOed with Greg LaBlanc

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What are the ways founders are using AI to experiment and optimize their start-ups faster than ever before? How does this shift affect the various makeups of different companies and industries, and who will be the winners and losers in the new age of AI?

Jeff Bussgang is the GP and Founder of Flybridge Capital, a senior lecturer at Harvard Business School, and also the author of the new book The Experimentation Machine: Finding Product-Market Fit in the Age of AI.

Greg and Jeff discuss timeless methods and timely tools for startups. Jeff elaborates on the scientific approach to entrepreneurship and the importance of combining timeless principles with modern AI tools. He shares insights on how generative AI can enhance every aspect of a startup, from ideation to customer engagement, and discusses the evolving roles of founders, venture capitalists, and even employees in this new landscape. Their conversation includes practical advice for founders on prioritizing experiments, scaling, building customer value propositions, and leveraging AI to become more efficient and effective.

*unSILOed Podcast is produced by University FM.*

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The startup path is unpredictable but patterns exist

03:08: Startups are highly nondeterministic, and so there's really no single playbook or single formula. And yet, there are timeless methods that you can apply to improve your odds of success. Now, you're never going to guarantee success. It's not an engineering formula where certain inputs result in certain outputs. There's just too much randomness. And as I said, nondeterminism is out there, and every age, era, context, startup, and individual are so radically different. So it's highly unpredictable. Yet, as I said, timeless methods. And then, as you noted—and I write in the book—timely tools. I mean, the tools, they're not just getting better every year, every month, every week, every day.

Strategy in startups is all about test selection

10:36: This question of test selection being strategy is the essence of what founders need to think through because, anytime you have an organization with limited bandwidth and a limited envelope of resources and capital, you need to make prioritization decisions. You need to focus, and so what I advise founders, both that I teach and also through my Flybridge investment activities, is that they should select the tests that are going to uncover the most controversial part of their business model and have the highest likelihood of leading to a valuation inflection point if the test is successful.

Why judgment, strategy, and creativity are timeless values for founders

51:26: The notion that founders need to leverage their strategic thinking, creativity, and human judgment—and apply that again and again to prioritize these scarce resources—even if the resources can be stretched more fully—is still a competitive market, and everybody is stretching the resources and being more productive. I still think that that judgment is going to be very valuable.

AI won't replace founders—but founders who don't use AI will be replaced

47:41: AI is not going to replace founders anytime soon; but founders who don't use AI are going to replace founders who don't. I also believe that joiners who use AI are going to replace joiners who don't, that our portfolio companies are looking for AI-native employees, and that we may see a world where employees and candidates come to companies instead of with a team of engineers, marketers, or salespeople, as we have seen in the past—as the HubSpot mafia travels from company to company. [48:32] So I think there's going to be just a really rich set of opportunities for native joiners, and there's going to be a high bar that will be tested by employers about whether their individuals are native and facile with the AI tools.

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