Elad Gil, Angel Investor & Founder of Color Health

Insights from World's Leading Solo VC

Members of SV Icons are huge fans of Elad Gil, and it was a great honor to host him for dinner last week. We so appreciate his time and willingness to share insights with us, which I have summarized below. Thank you so much, Elad!

Biggest Untapped Applications for Generative AI:

·      Consumer Social (like Can of Soup)

·      Copilots for white-collar services (like Harvey)

AI Apps Will Create Defensibility in 3 Ways:

·      Owning a workflow, fine-tuning their model, and acquiring special user data

How to Identify the Next Big Trends:

·      Chase technical interestingness and innovation, not money

·      Develop a diverse network of smart people

5 Use Cases of Crypto/Blockchain:

·      Generational replacement for gold

·      DeFi (wire money 24/7)

·      Privacy

·      Art

·      Digital identity (cryptographic proofs to authorize AI agents to share info on our behalf)

What We Underestimate:

·      We often underestimate TAM. Building a product with high ease of use can greatly expand the market (Uber for example).

·      We also underestimate the massive resources put in to optimize transformers for GPUs, which leads to a powerful hardware and software lock-in effect.

·      Transformer architecture is likely not even the best: Many models are sitting out there that no one is testing/using because they too expensive to train.

Future of AI:

·      Everyone (consumers, corporations, governments) will have multiple AI agents.

·      We are still likely 2+ years out from real LLM adoption by enterprises given long planning, testing, and building cycles. Usage and hype will only increase.

How Elad Invests:

·      While most investors focus on the team at the early stage, Elad focuses on the market.

·      Cited Andy Rachleff: “The #1 company-killer is lack of market. When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.”

Advice for Founders:

·      Be default building. Even at the earliest stages, the best founders are always making prototypes, iterating, and experimenting.

·      The best founding teams always have someone who is great at building and someone who is exceptional at selling.

·      Sometimes, the best marketing, not the best product, wins.

·      Good people extrapolate their behavior onto bad people. Don’t do that. If someone gives you a reason to mistrust them, do so.

·      Your GTM strategy should be a function of your business model (pricing, gross margins, average contract value). Many businesses cannot support sales reps.

·      Need to put yourself into mindset of person sitting across from you in a business context. Figure out what their incentives are and give them what they want.