Prioritizing Hard Tech "Good Quests" Over AI Hype

Key Quotes

"You know, I think the the distorting characteristics of AI have less to do with the ability to do interesting hard things and it has much more to do with how easy it is to do uninteresting unhard things. You know, there's the constant conversation that comes up about like the first company to a billion dollar valuation with one employee. It is possible to do that, but what that means is that all of these people that are coming out of college or that have aspirations to be founders, you know, they're doing like whiteboard founding."

Trae Stephens argues that AI's impact is not in enabling difficult tasks, but in making trivial ones easy. This leads to "whiteboard founding," where aspiring founders generate numerous ideas, often by leveraging AI APIs, resulting in crowded, highly competitive markets. Stephens contrasts this with "good quests" that involve tackling genuinely hard problems.

"And you also get these like old rush dynamics where like money's flowing and you can start a company quickly and there's like a lot of get rich quick ideas. And so I think for a lot of reasons this blog post is like super relevant right now and I'm just be curious to hear how you think about this concept of like choosing good quests like when we're in the middle of something like AI."

Jack Altman highlights the current environment, characterized by rapid capital flow and a focus on quick wealth generation, as a key reason for the relevance of Stephens' "good quests" concept. Altman is curious about how Stephens views the selection of meaningful pursuits, particularly within the context of AI development.

"The question is like an opportunity cost question in my mind. Like for our most talented people, you know, if you think of like every person in the tech ecosystem as like a Dungeons and Dragons character and they have like a skill set and they have ratings for different characteristics, if we take all of our level 100 players and we put them on AI slot companies, what does that mean for all of the things that aren't being done at the same time?"

Trae Stephens frames the pursuit of easy, AI-driven ventures as an opportunity cost for society's most talented individuals. Stephens uses the analogy of Dungeons and Dragons characters to illustrate how directing top talent towards less challenging, "AI slot companies" means neglecting other critical, complex endeavors that require high-level skills.

"I would argue is kind of where Anduril lives. It's this duty and responsibility like things that you have to do not because you want to glorify those things, but because they're really important for a functioning society. That's like everything from disciplining children to law and order inside of a society or defense of a nation or something like that."

Trae Stephens places Anduril within the "feels bad, is good" quadrant of his framework. Stephens explains that this category encompasses essential societal functions, such as maintaining order and national defense, which are necessary and important, even if they are not inherently pleasant or glamorous.

"I always tell defense tech companies this: it's like this is not the Field of Dreams. If you build it, they do not come. That's not how it works. Like if you build a perpetual motion machine and the point of the perpetual motion machine is like powering forward operating bases, you go to the Department of War and you say, 'I have built you a perpetual motion machine and I will sell it to you for a million dollars.' They would say, 'Okay, we're going to bid this out to market and we're going to have Lockheed Martin, a hundred billion dollar contract to rebuild from white paper, your perpetual motion machine.' That's how it works."

Trae Stephens emphasizes that in the defense technology sector, simply creating a product is insufficient for success. Stephens explains that government procurement processes are complex, involving competitive bidding and established contractors, meaning that innovative solutions must actively navigate these systems to be adopted.

"The real answer to the question is that we're a fund for founders, which means that if we believe that we could run a company better than a founder, like we want a board seat, we want to help you, we want to give all the strategic guidance. Like we would probably just started the companies ourselves. But we're investing in these companies because we believe that the founder is the right person to run that specific business."

Trae Stephens clarifies the ethos of Founders Fund. Stephens states that the fund invests in founders because they believe the founder is the optimal person to lead a company, rather than the fund attempting to manage it directly. This perspective guides their investment philosophy and their approach to supporting portfolio companies.