Incubating Brain Co: Elad Gil’s AI Bet wi...

1. Key Themes

Enterprise AI Adoption Requires Different Go-to-Market Strategy

The largest institutions need specialized approaches to AI adoption that traditional startups can't provide. Elad explains the founding thesis of Brainco: "The world's biggest institutions need to be able to have an easy way to adopt AI for various workflows and purposes...we can attract a caliber of engineer to work with them that they just won't necessarily have access to in any other way." He describes a hub-and-spoke model where they "build out this platform...a common piece of infrastructure that everybody can use. But then on top of that, we can build the spoke apps and then resell those apps to other people in the same vertical."

Technology Adoption Cycles Follow Predictable Patterns Despite Early Criticism

Every major technology wave faces the same skepticism before achieving massive adoption. As Elad notes: "I remember when people said that SaaS was stupid and cloud was stupid because why would an enterprise ever move their data to a third party cloud that wasn't secure...It's always the same thing." He uses mobile as an example: "The first BFA like mobile website was really bad...and then 10 years later you can do these amazing things in the app...But it took a decade. And it just takes time to adopt these things to learn new patterns of usage."

Market Structures Vary But Follow Identifiable Patterns

Understanding whether a market will consolidate to monopoly, oligopoly, or remain fragmented is critical for investment decisions. Elad explains: "Some things actually naturally are just one player really dominates. It's kind of like Uber in the US...There's many markets...that are actually oligopoly market structures...And then there's markets where things are just default fragmented. It's like the restaurant business." He identifies key moat types: "One mode is a scale effect...There's ecosystem or platform effects. Some businesses have long-term contracts...there's only a handful of ways to do this and they tend to be very consistent."

2. Contrarian Perspectives

"Follow Your Passion" Is Terrible Advice for Most People

Counter to popular wisdom, Elad argues: "Most people's passions are really bad dead end things to follow...Do you want to have a good job or not? Do you want to have a family?...I think, societally, we've been giving really bad advice around very basic aspects like that." He only endorses this when "your passion lines up with something really important for the world...But most of the time, it's really bad advice and it actually leads people to a suboptimal state in life."

Winning Is the Primary Driver of Good Culture, Not Perks

Contrary to popular startup culture wisdom, Elad states: "Sometimes founders ask me, what's the biggest way to create a good culture? And the answer is winning. That's the best way to create a good culture. It's not the motivational speeches and the kombucha...when you're winning, everybody's excited and they want to show up and they want to do good work."

The MIT AI Pilot Study Misses the Point About Technology Adoption

While the study claimed 95% of AI pilots fail, Elad dismisses this as missing historical context: "Often the AI adoptions that go to big enterprises, you have a small team is doing almost like skunk works or research...It's a new technology and it takes time to learn how to use it...if you look at mobile as an example, when mobile first came out, everybody said the exact same thing or the internet." He emphasizes this is "old wine and new bottles" - a pattern repeated across all major tech waves.

Most Media Coverage Is Fundamentally Unreliable

Elad references the "Gell-Mann Amnesia Effect": "You'll read something and be like, oh, I know this and this is obviously false and then I'll read the next one and be like, oh, of course this must be true." His experience during COVID reinforced this: "My chief of staff pulled all the data off of the government websites and it was very clear the demographics that were actually impacted by COVID...We got calls from the White House. We got calls from the UK government...And then of course policy went in the opposite direction."

3. Companies Identified

Rippling - HR/Payroll Platform

Context: Example of redemption arc and oligopoly market structure Quote: "Parker Conrad from Rippling. I backed him at Zenefits. I was an angel in that company, and then I invested in the first round of Rippling. That was a good example where there was obviously controversy around the company. I always thought he was amazing. I always thought he would have some amazing redemption arc."

Brainco - Enterprise AI Platform

Context: New company incubated by Elad focused on Fortune 100 AI adoption Quote: "We kind of realized that the world's biggest institutions need to be able to have an easy way to adopt AI for various workflows and purposes...Eric Wu came in as sort of a founder and chairman. And then Dan Ashton who you know and Mersha and others came on as sort of the initial founding team. And we kind of just were off into the races from then and Clemens recently joined the CEO of the company."

Notable investors: "I, my fund and Jerry's, which is Affinity, Coletta, so we just put in half" - includes CEOs of Databricks, Perplexity, Coinbase, Stripe (Patrick Collison), Reid Hoffman, Andre Karpathy, OpenAI executives, former EY and Dow Chemical CEOs, Blackstone Real Estate co-head.

Braintrust - AI Development Platform

Context: Started as side project, became company Quote: "Anker Goyle, who's the CEO and founder of Brain Trust, came up with Brain Trust, which I thought was a great name. And I helped him really early get that up and running and did a lot of really customer calls. And initially we talked about just doing that as like an open source project."

Anduril - Defense Technology

Context: Example of backing controversial founders Quote: "Palmer Lucky is another one where I backed Anduril in the very first round, and he was controversial given what happened at Meta early on with him. I think in both cases they basically got thrown into the bus in one form or another."

Brex - Financial Platform

Context: Portfolio company, sponsor of podcast Quote: Referenced as trusted by "more than 30,000 companies, including one in three venture backed startups in the US."

OpenDoor - Real Estate Platform

Context: Multiple investments with founder Eric Wu Quote: "I backed his very first company Moody like years ago. And then I backed Open Door. And I've worked with him over the years. And then I started working with him on Branco...he's really taking things at the next level."

Databricks - Data Infrastructure

Context: Example of ongoing enterprise infrastructure migration Quote: "The whole migration to a data bricks would be an example of something that some companies are still doing...to get to data lakes and modern data infrastructure."

Stripe - Payments Platform

Context: Example of naming and oligopoly markets Quote: "Like Stripe and a few other companies, we just could never come up with anything better" (regarding Brainco naming). Also: "Payments is a good example. There's Adyen and there's Stripe and there's PayPal. There's a variety of players."

4. Operating Insights

Identify Industry-Specific Early Adopters to Accelerate Enterprise Sales

Rather than following traditional SMB-to-enterprise progression, find the taste-makers in each vertical. Elad explains: "In every industry, there's a set of early adopters...if you're selling HR software, I think it's Costco and Home Depot...these are big, you know, impressive enterprises. But they often adopt things before younger companies...other HR departments call them for advice and view them as sort of a leader." This allows you to skip years of market development.

Founders Project Their Own Psychology Onto Employees (Don't)

New founders make a critical mistake in management. Elad notes: "As a founder, for example, you project the way that you act on to employees if you haven't managed before. And founders are perfectly fine with chaos and uncertainty and risk. And most people aren't. Most of your employees want a stable direction. They want to feel like the thing is working and they want to know where to go."

Reality Clarity Separates Great Founders from Others

The Steve Jobs "reality distortion field" is misunderstood. Elad shares from a friend who worked with Jobs: "The