20VC: Lessons from Jensen Huang on "Founder Mode" | How to Know...

Shiv Rao identifies his primary motivation as the thrill of winning, aiming to build big things and create or bend new markets.

Rao reflects on the five-year "wilderness period" Abridge went through, discussing lessons learned about market timing.

Rao describes the early fundraising environment in 2018-2019 as not easy but not overly difficult, with their seed round valuing the company at $15 million.

Rao details his strategic approach to securing Union Square Ventures (USV) as an investor, involving years of research and identifying shared values.

The discussion delves into the concept of "taste" as a differentiator in building companies and distinguishing human creativity from AI capabilities.

Rao elaborates on "taste" as the ability to see patterns and connect things in meaningful and authentic ways, reflecting the human element behind successful companies.

Rao discusses the difference between "tightly held" and "loosely held" opinions, identifying the company's expansion limits and pace as a loosely held opinion that has evolved.

Rao highlights unexpected challenges in go-to-market (GTM) strategy, particularly the need to be mindful of segmenting the complex US healthcare market.

Rao notes that their success was partly due to market conditions post-pandemic, where burnout and financial pressures created an opening for their AI solutions.

Rao stresses the critical importance of being one of the first in vertical AI, countering the idea that being early is equivalent to being wrong.

Rao explains how Abridge evolved through different AI eras, from post-Transformer to pre-LLM, and then adapting to the LLM and agent-based paradigms.

Rao asserts that competing directly against foundation models will lead to failure; instead, companies must find ways to collaborate and leverage their tailwinds.

Rao redefines Abridge as an AI company serving a massive opportunity in healthcare, emphasizing the ability to go "millions of miles deep" into specific workflows.

Rao shares that approximately 40% of Abridge's model outputs are generated by in-house models, with this percentage fluctuating based on development and optimization.

Rao explains the decision to build in-house models, driven by the need for superior performance, latency, and user experience, especially in high-stakes healthcare workflows.

Rao states that their reliance on frontier models versus open-source models is dynamic, with the ultimate driver being the end-user experience and product quality.

Rao addresses cost consciousness, noting that while not their primary optimization focus currently, maintaining flexibility in their P&L is important for long-term agency.

Rao views the biggest barrier to AI progression in large enterprises as data cleanliness and structure, which is a significant challenge in healthcare organizations.

Rao explains why the announcements from OpenAI and Anthropic about forward-deployed engineers signal a significant opportunity for vertical AI, due to the complexity of enterprise integration.

Rao emphasizes the strategy of attacking a scalable workflow, like note-taking in healthcare, to build a foundational product that can then be extended to other areas.

Rao states that to fulfill their enterprise value, they must move closer to the flow of money, which is a deliberate strategic goal.

Rao highlights the challenge of appealing to multiple stakeholders in enterprise healthcare (CMIO, CIO, CFO), each with different priorities.

Rao clarifies that Abridge doesn't compete directly with Epic; instead, they build an intelligence layer on top of systems like Epic, using conversations as a wedge.

Rao reflects on a past strategic mistake of focusing too much on the patient-facing consumer app, suggesting they could have spent more time on R&D or focused earlier on enterprise business models.

Rao discusses the evolution of pricing mechanisms, acknowledging that they are still learning but started with a simple, sensible enterprise licensing model.

Rao attributes their market success to creating a distinct category rather than solely relying on competitive positioning against companies like Nabla or Candid, suggesting bundling wasn't the primary threat.

Rao advises founders to focus on their product and competitively position against rivals, identifying and counter-positioning against large companies' soft spots.

Rao explains that they do not sell data because trust is paramount in healthcare, and building that trust has been a core to their rapid growth.

Rao believes a moral imperative exists to leverage data for the greater good, but it must be done with partners' full awareness and consent.

Rao discusses their in-house model development as a strategic choice to own their destiny and control their P&L, driven by the need for specific workflows and user experiences.

Rao prioritizes talent over exclusive access to frontier models, believing that strong teams can build their own models and leverage external ones effectively.

Abridge aims to save time for healthcare professionals, reduce costs, and ultimately save lives, empowering clinicians to feel like superheroes.

Rao views automation of high-frequency, low-stakes care as inevitable, but emphasizes that complex tasks requiring judgment and "taste" will still require human expertise.

Rao references a Goldman Sachs estimate of a 24x increase in token consumption due to AI agents, agreeing with the directional trend even if the specific number is debated.

Rao identifies hiring exceptional executives with high judgment as the hardest role, as they need to be adaptable and capable of challenging existing priors.

Rao interprets "founder mode" as undertaking specific "tours of duty" to tackle critical challenges, rather than micromanaging.

Rao believes that founders must adapt their DNA to embrace the demands of their business, citing his own transformation into someone who enjoys living on airplanes.

Rao humorously notes that HR is not his strength, which he expressed in a tweet that garnered significant backlash, highlighting a potential blind spot.

Abridge currently operates on a three-day in-office policy, with plans to adjust based on employee needs and the company's evolving dynamics.

Rao believes it's possible to maintain an "all A player" team of 450 people by continuously assessing performance and fostering a culture of high expectations.

Rao believes there's no definitive playbook for scaling a company and that trust in hiring managers and executives to embody company culture is crucial.

The "Titanic rule" is a cultural principle at Abridge that emphasizes responding to messages within three hours to drive efficiency and urgency.

The concept of "chips on shoulders making chips in pockets" highlights how individuals with deep-seated drive and overcoming past challenges can achieve significant success.

Rao believes that in a rapidly evolving market like AI, there are no "peacetime CEOs," and founders must remain competitive and adaptable.

Rao views product-market fit as an ongoing series of chapters, where companies constantly need to find new fits as they evolve.

Rao finds the phase of company development where there is a lack of pressure or a sense of coasting to be the most challenging, as it can lead to stagnation.

Preventing budget looseness after raising significant capital involves hiring principled finance leaders and maintaining discipline, while also recognizing that certain expenditures can foster culture.

The hardest round to raise was A1, which was a weak round during a difficult period for the company.

Rao dismisses the notion of becoming a "jewel in a VC's portfolio" as a concern, believing that the focus should remain on executing the company's mission.

Rao doesn't dwell on the shift in power dynamics with VCs as the company grows, emphasizing the importance of staying focused on the company's job.

Rao believes that achieving balance between being a CEO and a parent involves making trade-offs and sacrifices, and that the idea of having everything is a myth.

Rao's mentor advises him to go to sleep with perspective, purpose, and gratitude, recognizing the demands of his work while prioritizing his family.

Rao suggests that San Francisco might not be the ideal place to start a company due to talent acquisition and retention challenges, despite the concentration of talent and ideas during the current AI boom.

Abridge's move to San Francisco in 2022-2023 was timed precisely with their inflection point in the AI market, enabling access to talent and mentorship.

Rao has changed his mind on how companies can operate and be built, now favoring a flatter organizational structure with more individual contributors.

The most generous thing anyone has done for Rao was early investors betting on him when he had little to show, instilling a sense of inevitability.

If starting a new company, Rao would partner with Elad Gil due to his comprehensive wisdom and ability to add value at every stage.

Rao considers Ron (likely Ron Vachris) of Costco to be an underappreciated CEO for his cultural stewardship and ability to grow the business over decades.

Rao believes the AI revolution in healthcare is not just about deploying new models but fundamentally changing the business model to align stakeholders towards prevention and patient-centric care.

A prompt for founders is to consider what their marketing team could achieve with an extra 30 hours per week if freed from manual tasks.

Ava, Artisan's autonomous AI BDR, sources leads, enriches prospects, writes personalized outreach, and handles objections to book meetings autonomously.

Monaco offers a unified AI-native platform that replaces traditional CRMs and sales stacks, automating lead scoring, outbound sequences, and deal management.

Monaco's platform aims to increase meetings, conversion rates, and revenue growth by streamlining sales processes.

Rao feels the healthcare market is fundamentally misaligned, with stakeholders often working against patient interests, and sees AI as a tool to reorient the industry towards prevention and value-based care.

Rao believes founders must remain competitive, akin to a "war time CEO," especially in a fast-moving market like AI, and sees no real "peacetime CEOs" except perhaps in more stable industries.

The most impactful lesson Rao has learned from Elad Gil is about the importance of corporate development and aggressive, focused execution.

Rao's core cultural element, the "Titanic rule," emphasizes extreme efficiency and urgency in communication.

The XKCD comic depicting company structures as silos with guns pointed at each other accurately represents the misalignments within the US healthcare system.

Rao is most excited about the potential for AI to fundamentally shift healthcare business models towards prevention and value-based care.

Rao's biggest lesson from Elad Gil has been about corporate development and the need for focused execution.

The "Titanic rule" is Abridge's cultural emphasis on efficiency and urgency, requiring responses within three hours.

The most underappreciated CEO, in Rao's opinion, is Ron Vachris of Costco for his long tenure, cultural leadership, and sustained business growth.

Rao believes that the biggest barrier to AI adoption in enterprises is data cleanliness and structure.

Rao states that Abridge does not directly compete with Epic but builds an intelligence layer on top of EHRs, using conversations as a wedge.

The most challenging phase for Abridge was the "wilderness period" before significant market adoption.

Rao is most excited about the potential for AI to realign the healthcare industry towards prevention and patient-centric care.

Rao advocates for founders to focus on their product and competitively position against rivals, exploiting their weaknesses.

Abridge develops in-house models to optimize user experience and workflow integration, particularly for tasks requiring low latency.

Rao believes hiring high-judgment executives who can navigate ambiguity is the most difficult role to fill.

Rao's core cultural element, the "Titanic rule," emphasizes responding to communications within three hours to foster efficiency and urgency.

Rao believes that in a fast-paced market, founders must operate as "war time CEOs" and remain highly adaptable.

Rao stresses the importance of hiring principled finance leaders and maintaining discipline to prevent excessive spending after significant funding rounds.

Rao views early investors betting on him as a young founder as the most generous act, instilling a sense of inevitability.

If starting a new company, Rao would partner with Elad Gil for his broad expertise and ability to contribute at all stages.

Rao's biggest lesson from Elad Gil is the importance of corporate development and aggressive execution.

Rao's perspective on company operations has shifted towards favoring flatter structures with more individual contributors.

Rao is most excited about the next decade's potential for AI to fundamentally reshape healthcare towards prevention and patient-centricity.