STARTUPS PULSE - How Mistral AI makes money and Why you should put leadership over measureship

Mistral AI Rises with Le Chat, Challenging OpenAI Amid Modest Market Share RevenueCat Expands with $50M Funding to Innovate in Mobile App Development and AI Put Leadership Over Measureship #startups, #AI, #leadership, #MistralAI, #OpenAI, #mobileappdevelopment, #funding

Episode Transcript

(00:00):
Welcome to Innovation Pulse, your quick no-nonsense update covering the latest in startups and

(00:09):
entrepreneurship news. First, we will cover the latest news.
Mistral AI, a French startup, is challenging open AI with Le Chat and a 6B valuation,
while Revenue Cat revolutionizes mobile app subscriptions with 50 medullar series C funding.
After this, we will dive deep into the phenomenon of

(00:31):
measureship and how businesses can leverage leadership over metrics for competitive advantage.
Mistral AI, a French AI startup, is gaining attention as a potential competitor to open AI,
especially after launching its chat assistant, Le Chat, on mobile platforms.
Despite its 6 billion dollar valuation, the company still has a low global market share.

(00:58):
But notable endorsements, like that from French President Emmanuel Macron,
are boosting its profile. Founded in 2023 by former AI researchers from Google and Metta,
Mistral AI has raised about 1 billion and 40 million dollars in funding with major partnerships,

(01:19):
including Microsoft, which invested 15 million euros. Mistral AI offers a series of AI models
such as Mistral Large 2, Pixtral Large, and DevStrawl, which cater to various tasks from
coding to language processing. The company distinguishes itself by promoting openness in AI,

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offering some models under open source licenses. While many services remain free, Mistral AI
generates revenue through paid tiers of Le Chat and licensed APIs. Its collaborations with major
firms and institutions enhance its strategic positioning and potential for growth, making
its products valuable and unique in the competitive AI landscape.

(02:06):
Revenue Cat is revolutionizing the mobile app subscription landscape by simplifying how
developers implement and manage subscriptions. Currently, one-third of new subscription apps
use Revenue Cat's software, powering over 70,000 mobile apps. The startup's unique value lies in

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offering developers tools that streamline subscription management without excessive coding,
addressing common industry pain points. Following a court decision in the Apple Epic
Antitrust case, Revenue Cat is also focusing on web-based payments, providing insights and
tools to help developers navigate this new opportunity. The company recently raised

(02:51):
$50 million in Series C funding, led by Bain Capital Ventures, pushing its valuation to $500
million. With this funding, Revenue Cat plans to broaden its product offerings, much like
Shopify's expansion in e-commerce, by addressing other challenges developers face,
such as customer acquisition and cash flow management. Revenue Cat stands out by using

(03:17):
data-driven experiments to guide developers in decision-making, such as determining the
viability of handling payments independently. Furthermore, the company is exploring opportunities
with AI-driven app development, indicating a forward-thinking approach in an evolving tech
landscape. And now, pivot our discussion towards the main entrepreneurship topic.

(03:47):
All right, everybody. Welcome to another Deep Dive on Innovation Pulse.
I'm Donna, and as always, I've got my co-host, Yakov Lasker here with me. Today,
we're tackling something that I think every single one of you listening has experienced,
probably multiple times this week alone, but maybe never had a name for it.
Oh, this is going to be good. Lay it on me, Donna.

(04:09):
Well, picture this. You're at the grocery store, there are 20 checkout lanes,
but only one is actually open, and you're standing there for 15 minutes, holding a gallon of milk.
Or you go to use a public restroom, and there's literally a tablet asking you to rate your bathroom
experience with smiley face buttons. Stop right there. I actually encountered one of

(04:29):
those last week. I'm thinking, I just want to wash my hands and leave, not provide customer
feedback on my restroom journey. Exactly. Well, there's actually a term for this phenomenon
that's been taking over our economy, and it's called Measureship. And, Yakov, I think this
concept is going to completely change how our listeners think about business strategy.

(04:52):
Measureship. I love that term because it perfectly captures what's happening.
Instead of actual leadership, we're getting management by measurement.
Everything gets quantified. Everything gets a metric, and somehow the human experience just
disappears in the process. Right. And here's what's fascinating about how we got here.

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This isn't just one trend. It's like a perfect storm of different forces all hitting at once.
Think about it. We've moved from an era of cheap money and innovation, what economists call an
efficiency period. When interest rates were near zero, companies could afford to experiment and
take risks. Now, it's all about squeezing every penny of efficiency out of what already exists.

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And that ties directly into the second force. Technology has made it possible to measure
absolutely everything. I mean, we can track how long someone spends looking at a webpage,
how many times they scroll, whether they hover over a button. Just because we can measure it
doesn't mean we should. But that's exactly what's happening. It's like having a really

(06:01):
sophisticated microscope and then using it to count grains of sand instead of discovering new cells.
The capability is amazing, but the application is missing the point entirely.
Perfect analogy. And here's where it gets really interesting. This whole
measures ship approach creates these predictable weaknesses that smart competitors can absolutely

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exploit. Let me break this down into what I call the four fatal flaws. I'm ready. Hit me with flaw
number one. Anti-human. When everything becomes a number on a dashboard, companies lose touch with
actual human experience. Remember that bathroom tablet you mentioned? That's a perfect example.

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Some manager looked at a metric that said customer feedback increases satisfaction scores.
So they stuck a tablet in every bathroom, but they never asked the basic human question.
Do people actually want to rate their bathroom experience? It's like they forgot that behind
every data point is a real person trying to live their life. And I'm guessing this leads to your

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second flaw. Exactly. Directionless. When you're measuring everything, you lose sight of what
actually matters. It's like trying to navigate with a compass that has a hundred different needles
all pointing in different directions. Companies get so buried in measurement theater and bureaucracy
that they can't tell which metrics actually drive their business forward. That makes so much sense.

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I've seen companies with dashboards showing dozens of KPIs, but ask them what their top
three priorities are, and they can't give you a straight answer. What's the third flaw?
No new ideas. And this one's really insidious. In a measureship driven company, every forward
looking decision has to be justified by backward looking data. Think about that for a second.

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How do you innovate when you can only make decisions based on what's already happened?
Oh wow, that's like trying to drive while only looking in the rearview mirror.
You might avoid hitting the same pothole twice, but you're definitely going to crash into whatever's
coming next. Brilliant analogy. And that leads us to the fourth flaw, lazily value extractive.

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When companies can't innovate, when they can't create new value, they have to squeeze value
out of existing systems. That's why we get things like Ubersurge pricing that doubles in real time,
or websites with 17 different pop-ups asking for your email address.
It's like they've given up on making their product better, and instead decided to make

(08:36):
the experience of using it more profitable for them and more annoying for us. But here's what I
find encouraging. You were saying these weaknesses are actually opportunities for competitors, right?
Absolutely, and this is where the concept of leadership over measureship becomes really powerful.
Let's think about this strategically. If your competition is focused on optimizing the status

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quo through measurement, what should you be doing instead? Well, if they're being anti-human,
you should be relentlessly pro-human. If they're drowning in irrelevant metrics,
you should focus on the few that actually matter. Am I on the right track?
You're exactly right. Let me walk through what this looks like in practice.
First, have empathy and be relentlessly pro-human. Instead of managing through dashboards,

(09:27):
you roll up your sleeves and focus on the actual human experience,
for both your customers and your employees. You start with the principle of creating value for
people, not extracting it from them. That sounds simple, but I imagine it's actually pretty
revolutionary in today's business environment. What does that look like day to day?

(09:48):
Well, instead of asking what metrics can we optimize, you're asking what problems can we
solve for real people. Take Southwest Airlines as an example. While other airlines were optimizing
for revenue per passenger through fees and seat assignments, Southwest focused on the human
experience of making flying simple and affordable. They measured fewer things, but the right things.

(10:13):
That's a great example, and I'm guessing the second strategy involves those qualitative
signals that measureship companies tend to ignore. Exactly. Elevate qualitative signals.
While measureship driven companies only trust numbers, leadership driven alternatives understand
that qualitative feedback provides essential balance. Customer complaints, employee frustrations,

(10:38):
market sentiment, these aren't just soft metrics. They're early warning systems for
competitive threats and opportunities. It's like having both radar and sonar instead of just
one detection system. You get a much fuller picture of what's actually happening. What's the third
strategy? Create narrative driven strategies. Here's something really important. Human beings

(11:00):
respond to story, narrative and metaphor, not just to numerical targets. If you want to beat
competitors who are stuck optimizing the status quo, you need to articulate strategies through
clear, compelling narratives that excite your people to change things rather than just optimize
them. So instead of saying increase customer satisfaction scores by 3.2%, you're saying

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something like, let's become the company that customers actually recommend to their friends.
Perfect. You're giving people a vision they can rally around, not just a number they need to hit.
And that brings us to strategy four. Use minimum viable metrics. While measureship organizations
waste time measuring everything. Smart alternatives focus on the few measures that really matter

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so they can spend most of their energy creating value instead of measuring it.
This reminds me of that old saying about not being able to fatten a pig by weighing it more often.
But what's the fifth strategy? I feel like we're building to something big here.
Lead through new ideas. This is the big one, Donna. Because measureship companies struggle with
innovation, the leadership alternative is to be the one bringing new ideas to the table.

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When you do that consistently, you force your measureship competitors to play catch up.
And here's the beautiful part. They can't catch up because their whole philosophy prevents them
from leading with new ideas. So you're essentially playing a completely different game than they are.
They're trying to optimize chess while you're inventing a new sport entirely.

(12:32):
But let me ask you this. Is measureship always wrong?
Are there times when measurement focused focused approaches make sense?
That's a really thoughtful question. I think measurement becomes problematic when it becomes
the primary management philosophy rather than a useful tool. Every business needs some metrics,
right? You need to know if you're making money, if customers are happy, if your products work.

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The problem is when measurement becomes the end instead of the means.
So it's not about eliminating measurement. It's about putting it in its proper place as a tool
that serves leadership rather than replacing it. Exactly. And here's what's really exciting about
this moment we're in. With all the talk about artificial intelligence and generative AI,

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measureship companies are trying to squeeze these new technologies into their existing
optimization frameworks. They're using AI to create reports that other AI summarize
because they're too boring for humans to read. That's hilarious and sad at the same time.
They're automating their way to even more irrelevance. Right. But that creates a massive

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opportunity. While they're using revolutionary technology to optimize the status quo,
leadership driven companies can point these same tools at creating something radically better.
They can leave the status quo and the measureship philosophy that demands optimizing it,
completely behind. This feels like one of those moments where the future belongs to the people

(14:04):
who are willing to completely rethink their approach rather than just doing the old thing
more efficiently. That's beautifully put. And I think our listeners should pay attention to this
in their own organizations. When you see excessive measurement, when you see human experience being
sacrificed for dashboard optimization, when you see innovation being stifled by demands for

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who are historical data to justify new ideas, those are competitive opportunities waiting to be seized.
So the takeaway for our listeners isn't just to recognize measureship when they see it,
but to understand that it represents exploitable competitive weakness.
Companies stuck in measureship are predictably vulnerable to competitors who choose leadership

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instead. Exactly. And the beautiful thing is that leadership over measureship isn't just
better strategy. It's more human, more creative, and ultimately more sustainable. When you focus on
creating value for people instead of extracting it from them, you build businesses that people
actually want to engage with. Well, Yaakov, I think we've given our listeners a lot to think about.

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Next time they're standing in that endless grocery store line or being asked to rate their
bathroom experience, they'll know they're witnessing measureship in action, and maybe
they'll start thinking about how to build something better instead. And maybe they'll be the ones to
show these companies what leadership looks like. Thanks for diving deep with us today, everyone.
Thanks for tuning in to Innovation Pulse. Until next time, keep questioning the status quo and

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remember, just because something can be measured doesn't mean it should be optimized.
As we wrap up today's podcast, we've explored how Mistral AI is challenging industry giants with
innovative AI solutions, and how Revenue Cat is revolutionizing mobile app subscriptions,

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while also delving into the importance of balancing metrics with human-centric leadership
to foster true innovation. Don't forget to like, subscribe, and share this episode with your friends
and colleagues, so they can also stay updated on the latest news and gain powerful insights.
Stay tuned for more updates.