Inherent Price Part One: Pattern Matching Fails (Same as #3)

Editor’s Note: “Chase Carey” has been sending us pieces for months. Email, InMail, once a printed stack to our office with no return address. Just last week, they sent us 40 slides on why B2B SaaS is "just the Whiskey Rebellion but with better margins."

They claim to work “around venture,” but their firm's website is just a Squarespace template and they’ve been in “stealth mode” on LinkedIn since 2016.

They are the author of our ongoing series "Inherent Price," which explores... something. We publish the pieces that seem most coherent, though coherent is relative.

I may or may not run a venture fund. The evidence is contradictory. There’s a wire transfer receipt for just under $70 million but it’s from an unintelligible email address and the memo line says “YOLO.” My LinkedIn says “Managing Partner” but I haven't logged in since 2016.

“How’s our portfolio?” my partner asks.

I check my spreadsheet. Every cell contains the formula =B2B+SaaS. This seems wrong but Excel accepts it.

It's possible I’m still at that strange party in 2016. Peter Thiel is explaining why monopolies are good, actually. Someone’s wearing Snapchat Spectacles indoors. They’re livestreaming to the four people who downloaded the app. “It’s like Google Glass,” they're saying, “but it’s funny because they’re dumb” The Chainsmokers are playing from someone's UE Boom. Every startup is calling itself “Uber for _______.”

Simpler times.

“What's your thesis?” a founder asks me.

Present tense. Tuesday. Every day is Tuesday in venture capital.

“Human judgment becomes more valuable as—”

“No, like, do you invest in API-first companies?”

“APIs are just modern-day Pinckney Treaties,” I don't say. “Establishing navigation rights through someone else's territory. Spain thought they were being clever in 1795. Then Jefferson bought Louisiana and made the Mississippi irrelevant. Every API is just waiting for its Louisiana Purchase. Everyone’s just one deal away from getting got.”

“We're API-first,” I say instead.

“Great. We're building Salesforce for Salesforce.”

“That exists. That's just Salesforce.”

“No, it's different. We're Salesforce for companies using Salesforce.”

“So... Salesforce.”

“You're pattern-matching. Every situation has unique edge cases. We’re really Salesforce agnostic.”

He's quoting my own thesis back to me. This is either very meta or I'm having a stroke.

My laptop shows a document titled FINAL_THESIS_v47_ACTUALFINAL_USETHISONE_NOSERIOUSLY.docx. Inside:

Taste gets rarer as options multiply — 1,000 good choices need curation, not computation.

But in 2016 we only had 100 good choices. Philz. Blue Bottle. The same six YC companies. Everyone wore the same Allbirds to the same offices to pitch the same TAM slides. The physical manifestation of a Pandora station trained only on The Chainsmokers.

Superstar markets — #4 might as well not exist

"Like Alessia Cara," my partner says.

"What?"

"The “fifth” in Fifth Harmony. No one remembers her."

"Huh? That was Camilla Cabello. She’s huge. Also, ‘superstar market’ is #4."

"Pattern-matching fails," she says, winking.

I realize she's testing me. Or I'm testing myself. Or this conversation happened in 2016 and I'm remembering it wrong. Either way, missed opportunity for a 4th Jonas Brother reference.

Context beats patterns every time — Same playbook, different company, opposite results

The founder is still explaining his startup. He's either 22 or 47. His face keeps shifting. Sometimes he looks like Martin Van Buren. This feels significant.

"Van Buren created the modern political machine," I start saying. "First real party system. Proved organization beats charisma. Then William Henry Harrison—”

"Are you okay?" the founder interrupts.

"We're investing $7 million," I announce.

"I haven't told you what we do."

"It’s the same as #3," I don’t reply because pattern matching fails.

“I’m a high conviction investor,” I say instead.

My phone buzzes. Bill Ackman explains why this latest blow-up actually helps Elon Musk.

Combustion-as-a-service is compelling. Love the consumables aspect.

Relationships compound faster than software — 10 years with one advisor beats 100 advisors

"Unless that advisor is John Tyler," I think. "America's first accidental president. No party, no mandate, no friends. They called him 'His Accidency.' Still served almost a full term. Quantity has a quality all its own."

"Did you just compare our LP relationships to John Tyler?" my partner asks.

"No," I lie.

"You're doing the thing again."

"What thing?"

"The thing where you pretend VC is complex, while you write checks to anyone who says 'network effects.'"

She's right. Our entire portfolio:

Each returned 10x. I don't understand how.

“Can you walk me through how exactly we got these numbers?” I ask.

“We're marking this fund in Base 7. At the end of the day, it’s about giving the LPs what they want.

“Ah.” 

“Oh, except for Texas Teachers,” she adds, “we report to them in hexadecimal. Managing LPs is an art, not a science kiddo.”

I jot down a note to check the GPA / CPI spread. Inflation arbitrage strategy?

LARPing as a global macro investor is fun sometimes.

Every decision needs a human name on it — "The algorithm did it" doesn't fly

But which human? I check our deal memos. Every signature is "Butler.AI,” our automated partner who just calculates Stanford proximity divided by TAM. Butler has a better track record than me, but Butler can’t show up to our AGM. That’s a uniquely human moat. On paper, we’re different. In the room, we’re the same.

More data creates more anxiety — Information overload increases demand for judgment

"You wrote this one twice," the founder notes, reading my screen.

"How can you see my—"

"Pattern recognition. You're drawing electoral college maps. You always do that when you're anxious. Classic tell."

This founder knows too much. I check his LinkedIn. It just says "Time Traveler at Self. Boulder, CO"

More data does create more anxiety. I realize I still have no idea what year it is. If it was 2016, I would be more sure. There was less data then. Fewer choices. Just think about Chipotle. Simple. Great chicken. Great moat.

"That's what everyone gets wrong," he says.

I'm still hungry. My stomach makes a sound like a dial-up modem. The founder doesn't flinch.

"We're solving the gap between theory and practice in enterprise sales," he continues. "Theory gets funded. Practice is just repetition. No one writes checks for practice."

I'm becoming intrigued. "B2B SaaS?"

"Better. It's AI. AI is the answer."

"Answers can’t scale," I don't say.

"I know what you’re thinking," he says, "Same as #3."

I glance at my notes. Historical capitals of the United States won’t help me here.

Trust transfers but can't be manufactured — Reputation takes decades to build, seconds to destroy.

"Matt Drudge," I mutter.

"What?"

"Nothing. The Drudge Report proved that incumbents can become quite vulnerable when you target an underserved niche. High user engagement naturally leads to a sticky product.”

"We're pre-seed."

We're somehow on Zoom now. But Zoom doesn't exist in 2016. Or we're in person. Either way he founder's background is the Sistine Chapel but Adam is reaching for a term sheet.

"B2B SaaS?" I ask, hoping.

"B2C2B," he says. "We sell to consumers who sell to businesses."

"That's just B2B with extra steps."

"Exactly. That's our moat."

"We help enterprises make better decisions," the founder continues.

"Decisions about what?"

"About choice. Democratizing access to choice through a liquid decision market is what B2C2B is all about.”

“B2C2B isn’t a business model.”

“You’re pattern-matching, chief.”

I’m sensing a pattern, but we’re data-driven here. Feelings don’t return funds. Facts do. I ignore it.

Same as #3.

“I thought you VCs were supposed to be focused on the future,” he says.

“We are focused on the future, but you’re asking for money today. Not in the future. Today.”

"What year is it now?" I tack on at the end.

"Does it matter?"

He has a point.

Our fund is up 400%. Or down 400%. The numbers are the same but the arrow changes direction when I blink. Schrodinger’s IRR. My partner says this is "normal volatility." She's eating celery sticks. What an absolutely disgusting snack. It’s literally nothing wrapped in gross.

“How do you eat that stuff?” I ask. “It’s literally nothing wrapped in gross.” Sounded funnier in my head.

“Yes, but your brain thinks it’s food. Whether it’s nothing or something is all about perspective. I try not to think about it.”

Schrodinger’s snack?

"Should we do this deal?" she asks.

I check my notes:

"What does the company do again?"

"AI-powered decision infrastructure for decisions about decision-making infrastructure."

"So it helps VCs decide whether to invest in decision-making companies?"

"No, it helps decision-making companies decide which VCs to pitch."

"But that's just—"

"Pattern-matching. Yes. But with AI."

"Was AI a thing in 2016?"

"Machine learning."

"Right. The thing we called AI before we called it AI."

"Now we call it AGI."

"What do we call AGI?"

"Divine providence. Like Manifest Destiny but for compute."

I write the check. Or I already wrote it. Or I'm about to write it. Time is a flat circle and the circle is a U-curve and the U-curve is just two parentheses having an argument about which way to face.

"Hey," the founder says as he's leaving. "Is it true you once asked a founder if their company was named after James K. Polk?"

Has he been here the whole time? No time to ask. I can’t resist.

"That's ridiculous," I say. "It was Franklin Pierce."

"What was the company?"

"Pierce.AI."

"What did they do?"

"B2B SaaS."

"But specifically?"

"Does it matter?"

"I guess not."

"Exactly."

He leaves. Or he's been gone this whole time. Or he never existed. Our Docusign shows his signature but it's just the ASCII art of a shrug: ¯_(ツ)_/¯

My partner looks at me. "You know what's funny?"

"What?"

"We're actually good at this."

"At what?"

"Whatever this is."

My partner pulls up our portfolio. Every company is named after a forgotten president. 

McKinley.vc just raised a seed round to disrupt trade shows with their conventions-as-a-service platform.

She's right. Our returns are spectacular. Our LPs are happy. Our thesis makes no sense but neither does anyone else's. 

Pattern-matching fails, I've written. Experience wins.

But what is experience except pattern-matching that got lucky?

What is luck except experience that hasn't failed yet?

What is failure except (same as #3)?

"Want to grab drinks?" my partner asks. "The Chainsmokers are-–”

“Playing at Temple?" I ask?

"How did you—?"

"Because they're always playing at Temple.”

"What year is it?"

"Does it matter?"

No. It really doesn't.