AI has created one of the biggest shifts venture capital has seen in decades. New companies are reaching unprecedented growth rates, valuations are climbing, and founders have more ways than ever to build software. But according to Jay Po, Co-Founder and Managing Partner at Stage 2 Capital, the fundamentals of building a great business haven't changed nearly as much as people think.
In this episode, Jay joins Justin and Josh to discuss how AI is changing venture investing without changing what ultimately matters. He explains why customer obsession, repeatable growth, and retention continue to separate enduring companies from short-lived momentum, why investors are rethinking pricing models and valuation, and how founders should approach fundraising in a market filled with both opportunity and noise.
Tune in for more on outcome-based pricing, forward-deployed engineers, customer success as a growth function, venture capital discipline, and why the next generation of market leaders will be defined less by AI itself than by how effectively they solve meaningful customer problems.
Chapters
00:00 Introduction and guest background
02:17 Stage 2 Capital's investment thesis and history
05:30 Market evolution from 2018 to today
10:07 Impact of AI on venture and market opportunities
15:04 The role of curiosity and innovation in startups
20:42 Pricing models and outcome-based strategies in AI
25:46 Customer success, retention, and long-term value
30:09 Valuation approaches and market dynamics
36:09 The messiness and opportunities in early-stage investing
40:14 Valuation discipline and market noise
45:05 Future outlook and strategic positioning
References in the Show:
Quote of the Show:
“One thing that I've been finding pretty interesting is how companies are being funded relative to their underlying fundamental performance from a revenue perspective and whatnot. Just being so obsessed with what is the customer's pain point, life cycle, use case priorities, criticality, because there's no amount of capital that can solve that for you. Right? Like there's no amount of capital that's gonna have this manufacturing plant not wanna change their behavior, but still find value in your product.” - Jay Po
Ways to Tune In:
What is The Cheat Code & Friends?
Serial entrepreneurs and operators Justin Gray, Josh Wagner & Sean Kester combine decades of B2B and GTM expertise with unwavering honesty to unpack the latest news (fake or otherwise) on The Cheat Code & Friends Podcast. Combined with a rotating guest list of founders, practitioners and investors, the no-nonsense forum gathers fortnightly, holding court to translate headlines into reality and discuss the impact for early-stage businesses. The Cheat Code is just that, the trusted folks we look to for advice and insight, and we hope to bring the same to you.
Game over.