[alephnerd]

One of the our job responsibilities as VCs is to

1. Advertise our thesis by building a narrative

2. Evangelize our portfolio

By posting a narrative (that most likely went through some form of Strategic Comms team) comparing Zoho against a vibe coded product while also showcasing some of YC's star vibe-coded products, Garry is able to both craft a narrative that helps support YC's portfolio as well as bring a couple of people to start thinking about Vibecoding. It also acts as an indirect attack on G-Suite without calling out a massive organization like Alphabet by name, which YC needs to coexist with because a large portion of YC portfolio companies will either be acquired by Alphabet or will take or have taken some amount of funding from Alphabet and Alphabet related personal, and Alphabet personal are LPs in YC.

It doesn't matter if the take is right or wrong - it's started a discussion, and maybe one or two Zoho customers have now heard of a couple YC products to consider (outside of the HN bubble, very few people know about vibe coding or AI/ML).

All businesses do this, and knowing Zoho, they will probably leverage this as well as a way to market data sovereigninty and "make in India" by raising the specter of the big bad American capitalist trying to undermine a bootstrapped Indian company.

Anyhow, Zoho has built it's own foundation model [0] and offers an Agents marketplace for domain-specific agents [1]. I'm not sure if can compete head on against a LLaMa or DeepSeek on from sheer performance perspective, but it's good enough (something which a lot of engineers forget is more important than being perfect) to build a "data sovereignty" and "tech nationalism" story which they will absolutely run with as a result.

[0] - https://www.zoho.com/zia/llm.html

[1] - https://www.zoho.com/zia/agents/

[noobermin]

The only thing about this constant discussion about the metas and what not is that clearly everyone knows this, so who is this supposed to be for? I'm a peanut gallery member here, not a VC or a person who needs to appeal to VCs honestly, but then you can take my opinion as an unbiased third party... I could have guessed 1 and 2 are were motives for this kind of talk. But...clearly everyone else who actually cares about this game because it affects their livelihood or money is already aware VCs do 1 and 2, and unless you're exceptionally impressionable, it wouldn't work on you, no?

I have a theory but the primary one is not very flattering to those involved.

[mamonster]

>The only thing about this constant discussion about the metas and what not is that clearly everyone knows this, so who is this supposed to be for?

LPs. Your LPs want to hear about how you are using their capital for A.I. If A.I fails 2 years down the line you will get to hide out in the crowd. Contrarianism in an institutional setting is actually very hard to do.

[alephnerd]

> who is this supposed to be for

1. A number of media and substack articles about a Twitter beef that becomes a submarine article for Replit, Emergent Labs, and Taskade

2. A couple executives who may have not heard about these startups (this is actually very common outside the tech IC bubble) and will now ask their tech teams to contact them to see if they fit their needs

3. LPs who invested in YC by further reshoring Garry and YC's entire investment thesis.

> it wouldn't work on you...

It doesn't matter that it doesn't work on me - everyone does this form of narrative building (that's the entire point of Strategic Comms teams) so you have to play the game because that's how a Nash Equilibrium be.

Building a zeitgeist is a core part of demand gen, and yea it is transparent and tacky, but even 1 conversion for what was basically 1 hour of drafting makes the RoI positive.

[bgwalter]

It's for the press and the general public who don't really understand the tech. The hype can usually be sustained for around two years.

The press nearly always obliges in the first year. It works for wars and pandemics, too. In the second year the first dissenters begin to show up. We are now in past the stage of opinion reversal, where the press and the public mostly hate "AI".

This is also why it is wrong to compare "AI" to the early Internet. After the Internet bubble burst, the public still liked the Internet.

[alephnerd]

> This is also why it is wrong to compare "AI" to the early Internet. After the Internet bubble burst, the public still liked the Internet

The comparison is from a business perspective, and I absolutely stand by the comparison with the early generation of Internet companies with the early generation of AI companies.

Anyhow, the general public doesn't matter. It's capital (private and public) along with business cycles that create markets, and most of the public doesn't have the knowledge or the capital to make a difference.

[piva00]

It's capital that can force markets to exist but without the public to consume it's just wasted capital if value doesn't materialise.

The crux of the whole AI boom is exactly how much value it can materialise given the capital expenditure being absurdly astronomical, if it doesn't become the next trillion+ US$ market it will be a huge misallocation of capital.

[alephnerd]

The AI/ML products that are FCF positive and seeing significant traction are those that are complementing workflows in some shape or form by reducing

AI is now a loose used term that is encompassing 3 loosely connected markets that have now fallen under the same umbrella:

1. Construction/Land Speculation: a large portion of the AI story you hear about is a DC construction story

2. Hardware: a large portion of the AI story is just a rebranding around GPU fab and design, especially due to issues around subsidy disbursement under the CHIPS act

3. SaaS/Applications: a lot of products being derisively called as "LLM wrappers" are not cool from a technical perspective, but from an RoI perspective are good enough - $30k for data entry automation that is 80% right is cheaper than hiring a data entry team of 4 who cost $60k each.

Much of the bubble is due to 1, but 2 and 3 are somewhat insulated because of FCF and adjacent markets and narratives to pivot to (eg. For 2 it was "Chip Wars" 2-3 years ago and before that it was "ML" for 1-2 years and before that it was "Precision Medicine"...)

> without the public to consume...

The AI story really isn't a B2C story no matter how much people try to shoehorn it. The Cs are perpetually broke and margins are shit. The value that arises from automation like AI is around workflow and workforce augmentation in some shape or form, which makes it a B2B play.