{"id":36866,"date":"2025-10-29T06:42:01","date_gmt":"2025-10-29T06:42:01","guid":{"rendered":"https:\/\/agooka.com\/news\/usa\/a-sequoia-partner-warns-the-ai-gold-rush-is-built-on-shaky-experimental-revenue\/"},"modified":"2025-10-29T06:42:01","modified_gmt":"2025-10-29T06:42:01","slug":"a-sequoia-partner-warns-the-ai-gold-rush-is-built-on-shaky-experimental-revenue","status":"publish","type":"post","link":"https:\/\/agooka.com\/news\/usa\/a-sequoia-partner-warns-the-ai-gold-rush-is-built-on-shaky-experimental-revenue\/","title":{"rendered":"A Sequoia partner warns the AI gold rush is built on shaky, &#8216;experimental&#8217; revenue"},"content":{"rendered":"<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/69018d95599d46a4ccc10a51?format=jpeg\" alt=\"Alfred Lin\"\/><figcaption>Sequoia partner Alfred Lin says the AI boom could be fueled by &quot;experimental revenue&quot; that might not last.<\/p>\n<p>Big Event Media\/Getty Images for HumanX Conference<\/p>\n<\/figcaption><\/figure>\n<ul>\n<li>The AI boom has produced a surge of &quot;experimental revenue&quot; that might not last, said a Sequoia partner.<\/li>\n<li>Some startups are annualizing that pilot revenue and calling it recurring revenue, Alfred Lin said.<\/li>\n<li>He urges investors to focus on revenue quality, not hype-fueled growth.<\/li>\n<\/ul>\n<p>While AI startups are riding a wave of record valuations, a Sequoia Capital partner said investors should examine the numbers more closely.<\/p>\n<p>Alfred Lin, a partner at Sequoia Capital, said on an episode of the &quot;Sourcery&quot; podcast published Monday that the AI boom has produced a surge of what he calls &quot;experimental revenue&quot; \u2014 short-term deals and pilot programs that help startups fund research but might not last.<\/p>\n<p>&quot;People are willing to experiment because they don&#039;t want to be left behind in AI,&quot; he said.<\/p>\n<p>&quot;That&#039;s good and bad. It&#039;s great for founders, they get to finance some of their R&amp;D with revenue. It&#039;s bad because it&#039;s pilot revenue. It may go away,&quot; he added.<\/p>\n<p>Lin, who has backed companies like DoorDash and Airbnb, said some startups are annualizing that pilot revenue and calling it recurring revenue.<\/p>\n<p>&quot;A lot of founders know it&#039;s a joke, but they don&#039;t have any problems just taking whatever month&#039;s revenue is, that&#039;s all pilot revenue, and multiplying by 12,&quot; he said.<\/p>\n<p>Revenue quality matters, like whether customers stick around after the pilot. &quot;Retention is so important,&quot; Lin said.<\/p>\n<p>&quot;I prefer to have slower growth quality revenue than fast growth non-quality revenue,&quot; he added.<\/p>\n<p>Lin also said revenue may not be the best proof of traction for a startup.<\/p>\n<p>&quot;You have to look at the underlying metrics,&quot; he said, adding that some of the best companies took time to build before they hit significant revenue growth.<\/p>\n<p>&quot;The measurement should be about the velocity of the company, not just revenue growth.&quot;<\/p>\n<p>Lin did not respond to a request for comment from Business Insider.<\/p>\n<h2>AI gold rush<\/h2>\n<p>Lin&#039;s comments come amid growing debate over whether the AI boom could end like the dot-com crash.<\/p>\n<p>AI startups have been raising record amounts of money and soaring in valuations. Replit, which builds tools to let users code apps and websites with AI, expects to top $1 billion in revenue by next year, its CEO and founder, Amjad Masad, told Business Insider last week. That&#039;s about four times its current annual sales of $240 million.<\/p>\n<p>Several investors have warned that the AI market might be overheating and that the market is at risk of going the way of the dot-com bubble burst.<\/p>\n<p>Tech guru Erik Gordon told Business Insider in August that the AI bubble could dwarf the dot-com collapse because of its greater scale.<\/p>\n<p>Gordon, an entrepreneurship professor researching financial markets and technology at the University of Michigan&#039;s Ross School of Business, said in 2022 that AI is an &quot;order-of-magnitude overvaluation bubble.&quot;<\/p>\n<p>OpenAI CEO Sam Altman said in August that it&#039;s &quot;insane&quot; and &quot;not rational&quot; that some tiny AI startups are getting funding at high valuations.<\/p>\n<p>Others disagree. &quot;Shark Tank&quot; investor Kevin O&#039;Leary told Business Insider last month that the AI market isn&#039;t headed for a dot-com-style meltdown.<\/p>\n<p>AI wasn&#039;t &quot;the same hype that the internet bubble was, because today, you actually can see the productivity and measure it on a dollar-by-dollar basis,&quot; he said.<\/p>\n<p>Read the original article on Business Insider<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sequoia partner Alfred Lin says the AI boom could be fueled by &quot;experimental revenue&quot; that might not last. Big Event Media\/Getty Images for HumanX Conference The AI boom has produced a surge of &quot;experimental revenue&quot; that might not last, said a Sequoia partner. Some startups are annualizing that pilot revenue and calling it recurring revenue, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":36867,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":{"0":"post-36866","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-usa"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/36866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=36866"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/36866\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/36867"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=36866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=36866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=36866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}