Founder/CEO at @Define_Capital | Adjunct Prof at @SchulichSchool | Ex-CEO at @RIVCapital | Ex-VC @OMERSVentures | 3x Father | #Tech fanatic. Coffee addict.
Joined November 2009
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Narbe Alexandrian retweeted
Long ago, someone told me...
“People like to see good people succeed. So to increase your chances, be a good person.”
I still use this advice every day.
Narbe Alexandrian retweeted
great parents don’t open doors for their kids; they gives their kids keymaking and wallbreaking skills.
Narbe Alexandrian retweeted
I have invested in 13 unicorns over the last 7 years and the best founders rarely have a “next project”.
The company they are building is their life’s work.
Truly generational defining companies take multiple decades to build and sustain.
Narbe Alexandrian retweeted
Such a simple but powerful framework by Bezos.
Bad leaders spend way too much time on type 1 decisions because:
- They can’t distinguish type 1 & 2 decisions
- They don’t fully trust their people
Narbe Alexandrian retweeted
"I like a crisp document and a messy meeting."
@JeffBezos on @lexfridman
"The document should be written with such clarity that it's like angels signing from up high."
Lots of goodness here. How it feels when everyone's reading your memo, how the process of writing it might look like.
No more bulletpoints for me!
Narbe Alexandrian retweeted
Forgive your younger self.
Believe in your current self.
Create your future self.
Narbe Alexandrian retweeted
A Short History of OpenAI
On Friday, OpenAI ousted its co-founder Sam Altman as CEO. While OpenAI cites a lack of consistent candor in Altman’s dealings with the board as the key reason for his removal, there is widespread speculation about other motives behind his termination. These range from disputes concerning the profit vs nonprofit motives of the company to the discovery of artificial general intelligence, a type of AI that can surpass human intelligence for most tasks.
We wanted to look back at the history and corporate structure of OpenAI to understand how we got here. Here’s the story:
Inception and Early Strides (2015-2018)
OpenAI was initially founded in 2015 by Sam Altman, Elon Musk, Ilya Sutskever and Greg Brockman as a non-profit organization with the stated goal to “advance digital intelligence in the way that is most likely to benefit humanity as a whole.” The company assembled a team of the best researchers in the field of AI to pursue the goal of building AGI in a safe way.
The early years of OpenAI were marked with rapid experimentation. The company made significant progress on research in deep learning and reinforcement learning, and released ‘OpenAI Gym’ in 2016, a toolkit for developing and comparing reinforcement learning algorithms.
OpenAI showcased the capabilities of these reinforcement learning algorithms through its ‘OpenAI Five’ project in 2018, which trained five independent AI agents to play a complex multiplayer online battle arena game called ‘Dota 2’. Despite operating independently, these agents learned to work as a cohesive team to coordinate strategies within the game.
A crucial development occurred in June 2018. The company released a paper titled "Improving Language Understanding by Generative Pre-Training", which introduced the foundational architecture for the Generative Pre-trained Transformer model. This later evolved into ChatGPT, the company’s flagship product.
Transition From a Non-Profit (2019)
In 2019, OpenAI transitioned from a non-profit to a “capped-profit” model. According to the company’s blog post, OpenAI wanted to increase its ability to raise capital while still serving its mission, and “no pre-existing legal structure they knew of struck the right balance”. Per the IRS, for-profit entities and not-for-profit entities are fundamentally at odds with each other, so in order to combine the two competing concepts, OpenAI came up with a novel structure which allowed the non-profit to control the direction of a for-profit entity while providing the investors a "capped" upside of 100x. This culminated in a $1Bn investment from Microsoft, marking the beginning of a key strategic relationship, but complicating the company’s organizational structure and incentives.
The non-profit entity, OpenAI Inc., became the sole controlling shareholder of the new for-profit entity OpenAI Global LLC, which answered to the board of the nonprofit and retained a fiduciary responsibility to the company’s nonprofit charter. Crucially, the board was responsible for determining when OpenAI attained artificial general intelligence (AGI), which the company defines as a “highly autonomous system that outperforms humans at most economically valuable work.”
The structure of OpenAI is outlined below:
Becoming ChatGPT (2020-2023)
In 2020, bolstered by new funding, OpenAI unveiled GPT-3, a large language model (LLM) capable of understanding and generating convincing human-like text. This was a watershed moment for OpenAI and the broader AI community. As the company grew, its LLMs continued to become larger and more intelligent.
However, OpenAI's innovation didn't stop with language models. In 2021, the company expanded its horizons by launching Codex, a specialized AI model for programming, and DALL-E, an AI system adept at creating original artwork from text descriptions.
December 2022 marked another major milestone for OpenAI with the release of GPT-3, laying the groundwork for the consumer-focused application ‘Chat-GPT’. Chat-GPT rapidly captured global attention, becoming the fastest app to amass 100 million users within just two months of its launch. Capitalizing on this success, OpenAI introduced a subscription model and unveiled its most sophisticated model yet, GPT-4, ~10x more advanced than its predecessor and capable of analyzing text, images, and voice. Further developer tools and a turbocharged version of GPT-4 were announced at the company’s Developer Day on November 6th, 2023.
Removing Sam Altman (2023)
On Friday, OpenAI announced that it was removing its co-founder Sam Altman as CEO, citing a lack of consistent candor in his communications with the company’s board. According to the company's official statement, the board “no longer has confidence in Altman’s ability to continue leading OpenAI.”
OpenAI’s board of directors has undergone numerous changes since inception. Elon Musk resigned from his board seat in 2018, citing a “potential future conflict of interest” with Tesla’s AI development for driverless cars. Elon later expressed disappointment over the company’s for-profit motivations and dealings with Microsoft. Since Elon’s departure, a number of other board members have left the company, including former congressman Will Hurd who cited a Presidential bid, LinkedIn co-founder Reid Hoffman over an investment conflict, and Neuralink director Shivon Zilis.
The remaining board members who removed Altman are:
- Adam D’Angelo - CEO of Quora
- Tasha McCauley - Co-Founder of Fellow Robotics and adjunct senior management scientist at RAND Corporation
- Ilya Sutskever - Co-Founder and Chief Scientist of OpenAI
- Helen Toner - Director of Strategy and Foundational Research Grants at Georgetown University’s Center for Security and Emerging Technology
Altman’s removal as CEO prompted the resignation of President and Co-Founder Greg Brockman and three of the company’s senior scientists. Reports suggest that this may have been orchestrated by the company’s other Co-Founder and Chief Scientist Ilya Sutskever over concerns that Altman was pushing to commercialize the company too quickly. Sutskever was recruited to OpenAI from Google in 2015 by Elon Musk, who describes him as “the linchpin for OpenAI being successful”.
A tweet from Greg Brockman confirms that Ilya was a key figure in Altman’s removal.
xitter.cf/gdb/status/17257362421…
Since OpenAI’s for-profit entity was ultimately accountable to the charter of its non-profit parent, its rapid commercialization may have conflicted with the company’s primary goal of developing AGI in a safe way. According to their 2019 IRS filings, OpenAI does not have a written joint venture policy but the company’s structure explicitly prioritizes the purposes of its nonprofit entity over maximizing profits, preventing OpenAI from engaging in activities that would jeopardize the company's non-profit status.
As of this writing at 3pm PST on 11/19/2023, there are reports that the board is negotiating for Sam’s return, though it remains to be seen how OpenAI overcomes the challenges of its competing profit and nonprofit interests.
Conclusion:
While the details of Altman’s removal are still unfolding, it is becoming increasingly clear that OpenAI’s convoluted corporate structure led to conflicting motivations and incentives within the company. There is a key learning here. Whether you are a for-profit or non-profit entity, there are tried and true corporate structures to help you achieve your stated goal. Because just doing that is hard enough as it is. But once you decide what the goal is, you should work as hard as possible to achieve it; you should never compound unnecessary risk into this journey like iterating on corporate structure. While it can make a hero out of lawyers, it is one of these unnecessary risks that’s only blindingly obvious in the rear view mirror.
Sam and I are shocked and saddened by what the board did today.
Let us first say thank you to all the incredible people who we have worked with at OpenAI, our customers, our investors, and all of those who have been reaching out.
We too are still trying to figure out exactly what happened. Here is what we know:
- Last night, Sam got a text from Ilya asking to talk at noon Friday. Sam joined a Google Meet and the whole board, except Greg, was there. Ilya told Sam he was being fired and that the news was going out very soon.
- At 12:19pm, Greg got a text from Ilya asking for a quick call. At 12:23pm, Ilya sent a Google Meet link. Greg was told that he was being removed from the board (but was vital to the company and would retain his role) and that Sam had been fired. Around the same time, OpenAI published a blog post.
- As far as we know, the management team was made aware of this shortly after, other than Mira who found out the night prior.
The outpouring of support has been really nice; thank you, but please don’t spend any time being concerned. We will be fine. Greater things coming soon.
Narbe Alexandrian retweeted
MUST WATCH: Elon Musk tells Joe Rogan that George Soros "fundamentally hates humanity" and that he advances agendas that "erode the fabric of civilization."
Musk also points out that Soros' key skill is spotting arbitrage opportunities. He saw that it was a better return on investment to spend vast amounts on local races because if you can change how the laws are enforced, there's no need to change the laws.
He's 100% right.
Narbe Alexandrian retweeted
The news JUST broke that WeWork is filing for BANKRUPTCY next week
The same WeWork that was valued at $48 billion is now worth ~$48 million
I sold my company to them in 2019. And was briefly the head of Product Strategy of WeWork.
Here's what went wrong and what we can learn:
#1 People can turn on you on a dime
In the WeWork corporate halls, I witnessed folks singing praises of Adam Neumann, almost to the point of worship.
Adam could do no wrong, Adam knew all the answers, Adam could fix this.
But as soon as they realized their stock was tanking, they turned on him.
It happened overnight. Literally.
This taught me a lot about human nature.
Trust can be broken in seconds.
#2 Doing too much in business never works
WeWork was working on like 100 businesses at once, but never really figured out the economics of the core business.
Seems obvious, but get your house in order first, before you go and decide to venture out.
I’m a big believer in the multipreneur movement, owning a portfolio of businesses that cash-flow, not a bunch of businesses that drain cash aka WeWork.
#3 The valuation of your venture-backed business really doesn't mean a whole lot.
I met people at WeWork in summer 2019 that told me they were excited for the IPO so they could buy their house.
They were already house shopping.
"Yeah, I'll probably put $600k into renovations too. I know a good contractor if you need one."
I cringed.
Pretty delusional.
Never count on your stock options.
Consider it gravy.
(Thankfully I had very little stock.)
#4 The community piece was actually on-point.
This one is kinda a hot take.
Probably because the community-adjusted IPO was pretty made fun of.
But that's not what I'm talking about.
The idea of WeWork being a community is a valuable one.
Because when you build a community, you have trust and attention.
And when you have trust and attention, you can build products to support their rituals.
So, here's what would have made WeWork more successful:
I think if WeWork built vertical-specific co-working, that would have worked better.
WeWork for designers, WeWork for artists, etc.
With the ultimate goal of building a portfolio of vertical SaaS.
I think there is a tremendous opportunity to:
Step 1) Build community
Step 2) Build vertical SaaS on top of it
(I'll link an interesting graph on the state of verical SaaS in the next tweet)
If WeWork would have had a smaller portfolio of niche co-working spaces, say in NYC, London, and LA only... and built their enterprise value via vertical software...
Now that could have been not just a $47 billion startup, but a $470 billion business.
What do you think about this whole WeWork bankruptcy?
--
If you want more stories like this, reply to this tweet so I know you liked it.
Follow me at @gregisenberg if you enjoyed, and link in bio for deeper stuff like this. It'll take a few seconds
I don't share stuff that ChatGPT wrote, but real raw stories of my unedited thoughts.
Have a beautiful day!
Narbe Alexandrian retweeted
I have learned from experience that the experts, the government, and conventional wisdom are often wrong. ‘Inflation is transitory.” “C19 did not escape from the Wuhan lab.” “@Ukraine will fall in less than a week.” “Its not possible because it hasn’t been done before or because it hasn’t happened before.”
It is often the outlier with no experience in a field that challenges the status quo, that makes the important discovery, that has the unique insight, or creates the transformational innovation.
@elonmusk was not an expert in payments, electric cars or rockets. The ‘experts’ were at Visa, GM and NASA.
When you are part of the establishment, it is hard to challenge the conventional wisdom. You are incentivized not to. And when your economic livelihood can be threatened by an alternative point of view or a new innovation, you are less likely to believe it or its viability.
The greatest opportunities for discovery, innovation, understanding, and profits often exist in the unexplored paths, the unasked and unanswered questions, and in the improbable possibilities.
Our best investments have been: (1) in the stock of a real estate company going bankrupt, (2) from betting that a triple-A rated company was insolvent, and (3) betting that a virus in China would cause a global economic shutdown.
Each of these investments were met with extreme skepticism at the time they were made. In each case, we were the naive ones when we made these investments. We were not bankruptcy investors, experts in bond insurers or credit default swaps, nor did we know anything about viruses or pandemics.
From my experience, knowledge is advanced and insights are gleaned by studying alternative points of view from conventional and unconventional sources of information, and by not discrediting a point of view simply because it comes from someone who is not an accredited member of the relevant establishment, who does not have an advanced degree in the subject at hand, and/or someone whom has been criticized in the media.
In an effort to get to the truth, I try to keep my mind open to alternative possibilities and weigh them against each other. I often find that truth can emerge when two or more articulate and intelligent individuals in an open forum discuss and debate a controversial subject and are required to address unscripted questions from a knowledgeable audience or moderator.
The above is why I added to the pot in attempting to convince @PeterHotez to discuss vaccines with @RobertKennedyJr on @joerogan. I think knowledge will emerge from the discussion that will catalyze further explorations or investigations that will bring us closer to the truth and help us answer questions about vaccine efficacy and safety that remain unsettled for many. And if @PeterHotez is not the best or most knowledgeable advocate for vaccines, then we should find another one.
In getting to the truth, I want to hear from the greatest skeptics and advocates. Both deserve a platform on the path to truth.
And no, I am not an anti-vaxxer.
Narbe Alexandrian retweeted
While casting shade on @elonmusk for what he’s done, is doing, or will do, try to pause & remember that he made electric cars a normal thing in society and he commercialized space — for cargo, satellites, & people.
Count him among those who are inventing civilization’s future.
Narbe Alexandrian retweeted
🧐You can buy the top 33 #Gold Miners globally for US$249b with 643m ounces of reserves worth US$1.224 trillion (at today's spot price)
Source: Factset Screen
Narbe Alexandrian retweeted
You aren't an entrepreneur if you aren't buying domain names you don't need
Narbe Alexandrian retweeted
Not enough cannabis companies acknowledge this.
In most US states, it takes over 5 years for half of the illicit market to be displaced by legal sales.
Narbe Alexandrian retweeted
Society is moving from the physical realm to the digital realm
Our rights have to move with us. The only way this happens if there are public spaces in the digital realm too.
Right now, that is only crypto. Everything else is someone else's private property & you are a guest