Most startups fail through execution, not competition

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 14:59

   those mistakes with some of that scar tissue that all the other CEOs out there are probably going to make the same mistake? One of the things that struck me early on was, you know, sometimes when you're a CEO, you're sort of singularly focused on building this business and you're sort of watching what's happening out in the market. You're scrolling X or whatever news sources you have, and you see something else that's happening in the marketplace. And you're like, hey, that other group's kind of like trying to do the same thing that I'm doing. Or I have this new competitor that just raised this big round. Or you're always kind of like looking over your shoulder, there's like a bit of a paranoia. And like one of the great pieces of advice that I got, you know, early on was like, most startups die from suicide, not from homicide. It's not

2. 15:48

   other businesses that kill you. It's you fundamentally not executing on the thing that's in front of you and you not building the right culture, not attracting the right people, not focusing on the right business opportunity because any, you know, real meaningful business opportunity worth pursuing. You know, it's not typically going to be a single winner-take-all business. And, you know, if it's a good business opportunity, it probably means there's room for multiple winners. And so if someone else is pursuing it, you should almost kind of view that as a compliment, almost a validation of like the business opportunity. But it's really up to you and it's really up to your management team. And it's really up to the team you put together to really execute against that opportunity, not be worried about like how you're going to get,

3. 16:31

   uh, you know, killed by the competition. My paranoia would go up and down sign wave over time. Uh, I think if I were in your shoes, I'd be pretty paranoid right now. Are you, where are you on your paranoia, paranoia sign wave? You know, I'm not really paranoid with competition. I mean, you know, in certain regards, like, you know, Crusoe is an infrastructure business, right. And there are, we don't view it as a winner take all category. We think there's going to be a number of great businesses built here. And I think, you know, even people that even groups that people would paint as competition to us, I view it as like, there's far more ways for us to work together than work against each other. I think, you know, the greatest opportunity of our lifetime is building the infrastructure.

4. 17:14

   layer of intelligence. And it's again, it's not going to be a winner take all opportunity. And one kind of comparison that I've often made is that, you know, I kind of view this compute infrastructure layer of AI and or SI, I guess, as people are calling it now today, this infrastructure layer of super intelligence is really there's a lot of effective comparisons to the oil and gas industry. And if you look at if you look at the value chain across the oil and gas industry, it's typically broken down into three components. You have the upstream business where people are actually drilling holes in the ground and pumping wells of oil and gas.

5. 17:52

   You have the midstream business, which is where you're taking those raw commodities and transporting them from the wellhead to the natural gas processing plant or the oil refinery. And then you have the downstream business, which is actually processing those raw outputs from the earth and then converting them into usable materials, whether it's gasoline or jet fuel or plastics or whatever it is. And then you're ultimately selling that in the market.

6. 18:17

   And within that stack, there's all these different margins that move up and down depending on the prices of oil, depending on the demand from consumers, depending on the demand from businesses. And for us, I view it as we're trying to build an AI super major in the same way that Exxon and Chevron are super majors in the oil and gas industry. And with that, you sort of have this embedded risk management where Exxon very famously doesn't hedge their oil exposure because when oil prices come down, their upstream business at the wellhead, those margins actually get compressed.

7. 18:54

   but their downstream business at the refinery, those margins actually expand because the raw input costs actually go down. And they have these natural areas of collaboration versus competition where they're competing with other upstream businesses. But when they have a pipeline in an area, they're serving other upstream businesses that they may compete with. And I think Crusoe's kind of similar in that regard. We're willing to partner with businesses that we may compete with in other cases. But again, it comes back to this perspective that I just feel like there's so many more ways for us to help each other than for us to work against each other. Can I say something