A founder asked me last week about how ai is making capital markets more efficient.. My answer surprised them, and it might surprise you too.
Capital markets are the lifeblood of the global economy, and AI is making them more efficient than ever before. I’m exploring how AI is being used to improve everything from price discovery and liquidity to market making and trade execution. This is the engine room of the financial system.
The Counterintuitive Truth
Here's what surprised me most about how ai is making capital markets more efficient.: the best practitioners do less, not more.
When I was building MovieLaLa, we tried to do everything at once. We had the best technology, the smartest team, and we still almost failed because we spread ourselves too thin.
The lesson I took from that experience, and from watching hundreds of other companies, is that the best solutions are often the simplest ones. It sounds simple. It's incredibly hard to execute.
What I've Learned From 135 Companies
After investing in 200+ startups and running two companies to successful exits, I've developed a pretty clear picture of what works with how ai is making capital markets more efficient..
The biggest misconception is that you need to the market doesn't care about your roadmap. That's backwards. The companies that win are the ones that you should focus on one thing and do it exceptionally well.
I remember sitting with the Anthropic team early on and discussing how they thought about how ai is making capital markets more efficient.. Their approach was counterintuitive but brilliant.
The Numbers Don't Lie
I've tracked the performance of companies in my portfolio that take how ai is making capital markets more efficient. seriously versus those that don't. The difference is stark.
Companies that invest early in how ai is making capital markets more efficient. see, on average, 2-3x better outcomes within 18 months. That's not a small edge. That's the difference between raising your next round and running out of runway.
One of my portfolio companies went from struggling to profitable in under a year after they finally got serious about this. The founder told me later that they wished they'd started sooner.
This connects to broader themes around AI fraud detection, robo-advisors, algorithmic trading, fintech AI, AI banking that I've been thinking about a lot lately.
Final Thoughts
After two exits, 200+ investments, and more mistakes than I can count, here's what I know for sure about how ai is making capital markets more efficient.: there are no shortcuts, but there are smarter paths.
The smartest founders I work with treat how ai is making capital markets more efficient. as a competitive advantage, not a checkbox. They invest in it early, measure it obsessively, and never stop improving.
If you're just getting started with how ai is making capital markets more efficient., don't be intimidated. Everyone starts somewhere. The key is to start with the right mindset and the right framework, and then execute like your company depends on it. Because it probably does.
Frequently Asked Questions
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.