63 lines
2.3 KiB
Plaintext
63 lines
2.3 KiB
Plaintext
# How we make money
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> In a great market — a market with lots of real potential customers — the market pulls product out of the startup.
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>
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> - When a great team meets a lousy market, market wins.
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> - When a lousy team meets a great market, market wins.
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> - When a great team meets a great market, something special happens.
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>
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> — Marc Andreessen
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## Our Markets
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We focus on markets where these breakthroughs are just beginning:
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| Market | 2025 | 2032 | Growth |
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|--------|------|------|---------|
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| AI Agents | $3.7B | $104B | 44.9% |
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| Edge AI Hardware | $27B | $270B | 33.3% |
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| Datacenter AI Hardware[^3] | $142B | $837B | 34.3% |
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| GPU Cloud | $6B | $74B | >35% |
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| Hyperscaler [^5] | $231.2B | $2.1T | 37.8% |
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| Generative AI | $40B | $1.3T | 42% |
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| Robotics | $90B | $350B | 15.2% |
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These markets represent massive potential. Even a small slice—just 0.01%—would mean $213.4M in revenue by 2032.
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But the real opportunity is in creating the value.
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### Value Creation vs Value Capture
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> "A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it's a platform." — Bill Gates
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We build for creating value:
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- Create massive value through open source
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- Grow the entire industry
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- Capture a small percentage of the expanded market
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This creates a virtuous cycle:
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1. Open source drives adoption
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2. Adoption expands the market
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3. Market expansion increases our opportunity
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4. Small percentage of large market = significant value
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## Being Frugal
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Success equation: Revenue minus Costs. We're good at the second part.
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Constraints breed innovation:
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- Resourcefulness over resources
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- Creativity through limitations
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- Solutions without spending
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Menlo started as an open source project, with very little money. This has shaped our DNA:
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- Choosing essential tools (e.g. Discord over Slack)
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- Growing at $0 CAC without ads
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- Building by creating value, not burning money
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The foundation of our perspective is [Lateral Thinking](/handbook/philosophy/lateral).
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## Sources
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[^3]: [GlobalNewsWire: AI Server Market](https://www.globenewswire.com/news-release/2025/01/13/3008197/28124/en/AI-Server-Market-Global-Outlook-to-2030-by-Processor-Type-Function-Form-Factor-and-Cooling-Technology.html)
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[^5]: [Fortune Business Insights: Hyperscaler Market](https://www.fortunebusinessinsights.com/hyperscale-cloud-market-107832) |