Casado argues that the market creates the company, not the other way around. He first determines if a market is viable and growing, and only then asks if the founder is the right fit for that specific market, reversing the common founder-first VC mantra.
The concept of AGI is so ill-defined it becomes a catch-all for magical thinking, both utopian and dystopian. Casado argues it erodes the quality of discourse by preventing focus on concrete, solvable problems and measurable technological progress.
Unlike the dot-com bubble's revenue-less companies, the current AI wave involves companies that can deploy capital and immediately generate revenue. This indicates real value creation and suggests we are in an early, sustainable phase of the cycle, not a speculative peak.
Casado views his journey from engineer (abstracting lines of code), to founder (abstracting a single company), to VC (abstracting a market of companies) as constantly "zooming out." Each step provides a broader perspective and faster, parallelized learning cycle than the last.
Ben Horowitz advised that pricing is the most critical decision for a company's valuation because it is the primary lever impacting both growth and margins. Founders often treat it glibly, but it deserves deep strategic thought as it underpins the entire business.
A16Z's transformation from a small, generalist partnership to a large, specialized firm was a deliberate answer to a fundamental industry problem: the traditional partner model doesn't scale for deploying capital and making decisions in today's massive, professionalized venture market.
Casado believes AI's novelty and power are so compelling that they naturally attract early users, overcoming the cold start problem. However, long-term defensibility still requires building traditional moats like network effects, integration, or workflow ownership.
Casado holds up Broadcom CEO Hock Tan as a potential GOAT in infrastructure—a business-focused operator who personally drives massive, complex acquisitions like VMware with an unparalleled grasp of detail and legendary work ethic, despite staying out of the limelight.
Casado asserts that current AI is an individual prosumer technology. Corporate AI projects often fail because they misapply it. The immediate organizational value comes from the aggregate productivity gains of employees using consumer AI tools like ChatGPT on their own.
Instead of using AI for simple information retrieval, Casado uses tools like Grok's audio mode to engage in analytical conversations about concepts from books. This transforms AI from a fact-checker into a thinking partner for synthesis and deeper understanding.
Casado argues that while VCs preach non-consensus investing, later-stage funding rounds become increasingly consensus-driven as check sizes grow. Startups that are too far off-consensus risk being unable to secure the necessary follow-on capital to survive and scale.
Casado, a lifelong developer, states he never would have guessed AI would become so proficient at coding. He identifies it as the single area where AI has surprised him most, suggesting a multi-trillion dollar market opportunity.