AI power users are showing up outside tech. The fastest-growing Codex adopters since February: Legal: 108x Sales: 41x Recruiting: 41x Marketing: 26x Healthcare: 24x Charts of the Week: a16z.news/p/charts-of-the-we…

Announcing a new division of Midjourney called "Midjourney Medical"

I helped an SMB owner make $1M this weekend.  here’s the story 👇 A small business owner was looking to expand to 4 more locations. if successful, this would net him $1m/ year. The problem? If it fails he’s millions in debt and he was relying on: > gut feel > personal experience > randomly clicking thru google maps So I helped build an AI agent that scouts locations. We combined: > his 10+ years of industry knowledge > data across population, demographic, income, competitor, comparable businesses types > 30+ factors from a decade of experience. Then ran it across every subdivision in the United States. The result? We overshot. By a lot.. We ended up finding 50 exact-match expansion opportunities. The exact profile he was looking for. He was stunned. 4x locations makes him one million/yr this list is closer to $10M. But here’s my favorite part: These capabilities used to be reserved for large companies but are now rapidly becoming available to those with less resources. This kind of sophistication you’d normally expect from a company like Starbucks. Now available to a small business owner. Giving opportunities to people who didn’t think they had them. The type of scale he didn’t think was possible. Pretty damn cool.

“I was told outright, repeatedly — no one was even making an argument, they were just stating it: ‘You can’t build a billion-dollar business selling into SMBs. You can’t do it.’ … And that was wrong. That was completely wrong.” Acquired for $3.6B

Accounting roll-ups are attracting significant attention right now. The playbook is the same: Purchase high-quality local accounting firms, then leverage AI and centralized infrastructure to drive productivity, margins, and growth. Similar to Berkshire Hathaway and Kelly Partners Group, Thrive Holdings is also leaving meaningful minority stakes with local partners to maintain entrepreneurial incentives and client relationships. Add long holding periods instead of the traditional PE model of buying and selling, and you have a great compounding machine.

Introducing Claude Fable 5: a Mythos-class model that we’ve made safe for general use. Its capabilities exceed those of any model we’ve ever made generally available.

You can raise millions and fail. You can raise almost nothing and win. Investors are not validation. They don't know whether your idea will work. Fundraising is not traction. The market decides. Not investors. Don't confuse it with progress.

During a pitch a prominent VC once told us the market size for global logistics was only $6B. My CFO’s response: “So you’re saying it’s smaller than the market for USB cables?”

If you’re looking to build a startup, build an AI Native Service. my favorite AI playbook by far. Instead of selling AI products, use it yourself. You’ll reap far more benefit that way: > higher prices > larger market > better product > more defensible These days it’s hard to tell what companies will stand the test of time. These companies will.

Some of the biggest companies of the next decade won't be software businesses. They'll be services companies like insurance carriers, law firms, and tax practices rebuilt from scratch with AI doing most of the work. In this episode of Startup School, YC Visiting Partner @CharlieWarren walks through the playbook for building AI native services companies, covering how to pick a market with the right traits, why variance kills these businesses faster than anything else, and the P&L math that’ll transform your business model. 00:00 — Intro to AI Services Companies 01:01 — Picking the Right Market 02:55 — Markets YC Likes Right Now 03:43 — The Sam Altman Test 04:35 — The Right Founding Team 05:28 — Building the Product 06:19 — Variance Is the Existential Problem 07:08 — The Early Demand Trap 07:53 — How to Price AI Services 08:41 — The P&L Walkthrough 09:33 — AI Operating Leverage 10:27 — Don't Buy Your Way In

Common fundraising deck mistake: using boring slide titles like "Team" and "The Problem". Instead, state the conclusion that you want investors to take away from the slide, and use the body as supporting evidence. If an investor only read the titles on your slides, would they understand your business and want to invest?

A founder kept saying "if only we had money we'd do X." Money is not the fire. Money is gasoline you pour on a fire that already exists. You don't have a funding problem. You have a "people don't want it yet" problem. Go make the first fire.

Sometimes they're a good reason to work on something. When people say a market is "crowded," what that often means is that there's a real problem and none of the solutions are good enough yet.