James Currier: Network Effects, Savage Founders, and the Future of AI

James Currier, co-founder of NFX, recently sat down for an in-depth interview covering his journey as an entrepreneur and investor, as well as his insights on network effects, successful founders, and the future of technology.

From Humble Beginnings to Silicon Valley Success

Currier's story is one of humble beginnings and seizing opportunities. He grew up on a dirt road in New Hampshire, selling worms to fishermen as his first entrepreneurial venture at age six. A pivotal moment came in sixth grade when, after being bullied, a friend introduced him to the concept of prep school. This set Currier on a new path, eventually leading him to Harvard, Princeton, and a successful career in tech.

He recounts: "So exit or paid for it and so that that really set my whole life off in a different direction and I you know I had you know uh used clothes from Goodwill and everybody else had fancy clothes and you know but and everybody was grinding we just grinded."

This early experience instilled in Currier a deep appreciation for the opportunities and assistance he received along the way. He emphasizes that most successful people are not truly "self-made," but rather the product of key relationships and moments that alter their trajectory.

Network Effects and Building Valuable Companies

As co-founder of NFX, a venture capital firm with nearly $1.6 billion under management, Currier has become an expert on network effects and how they drive value creation in technology companies. He defines a network effect simply:

"A network effect is every new person who uses your product makes the product more valuable for the other users of the product."

He points out that the most valuable tech companies today - like Facebook, Google, and Microsoft - have powerful network effects at their core. NFX has identified 17 different types of network effects that can create defensibility and exponential value.

Currier argues that entrepreneurs should think beyond just building a product or choosing an industry. Instead, they should focus on choosing and cultivating valuable networks:

"Don't think of yourself as choosing a job or choosing an industry think of yourself as choosing a network."

This network-centric mindset applies not just to business, but to all aspects of life - from where you live, to who you date and marry, to the friends and collaborators you surround yourself with. Currier co-authored a popular article called "Your Life on Network Effects" exploring how this framework can be applied to major life decisions.

Traits of "Savage Founders"

When evaluating founders and companies to invest in, Currier looks for what he calls "savage founders." He explains:

"In order to do something extraordinary you have to be relatively savage which means you have to be very fast you have to be very competitive and and you you tend to have to be pretty aggressive and and you just can never can never stop."

While many traits contribute to this "savage" quality, Currier says it ultimately comes down to speed:

"If we measure speed when we're meeting with the founders that's the main thing that determines and and if you look at their speed over the next 5 6 7 8 10 years when we're working with them that's the main thing that determines their success."

However, he clarifies that speed isn't just about working long hours. It's about emotional flexibility and the ability to rapidly iterate and change course as needed:

"It's about an emotional flexibility that allows you to abandon what you were doing before and do the right thing going forward it isn't speed on your original idea it's speed toward success."

Currier notes that many founders are held back by fear and limiting mindsets instilled by "normie" culture. Overcoming these mental blocks is key to achieving the extraordinary speed and flexibility required for massive success.

Views on AI and the Future of Tech

As an experienced investor and technologist, Currier offered his perspective on artificial intelligence and where he sees opportunity in the rapidly evolving landscape:

"AI is going to touch everything uh and so I think that AI has created a whole new set of consumer experiences i think the window there will be open for three to four years for people it hasn't even really started."

He's particularly excited about opportunities in consumer AI applications, robotics, and the continued growth of the space industry. However, Currier is skeptical of the massive investments being made in large language models and AI infrastructure companies:

"I don't get it i don't get it i think they're making a big mistake... AI is going to be like water you're going to get free unlimited AI processing on your CPU on your phone within 3 to 4 years."

Instead, he believes the real value and defensibility will accrue to companies building network effects at the application layer or operating system layer. He's focused on investing in vertical-specific AI applications that can rapidly grow and establish network effects.

Lessons on Entrepreneurship and Life

Throughout the conversation, Currier shared numerous insights from his journey as a founder and investor:

On naming and language: "Pick the word first and then figure out what the product does behind the word because the word has a promise to it."

On relationships: "The most important thing you learn and people don't focus on them you go to conscious leadership that's a great program you got Joe Hudson doing programs you got Hoffman Institute doing programs there's all these ways to just further yourself and deepen yourself and that makes relationships like Stan go easier."

On perspective: "The billionaire life is available to you today it's just in your mind because I know a lot of billionaires i'm not one but I'm nearby and they all wear the same socks you do they eat the same steak you do they drive cars that are as safe as the car you can drive if you can drive a Toyota Camry they have a hot shower just like you have a hot shower the distance between your life and a billionaire's life is 99% in your mind."

On priorities: "What matters is in the end is deep friendship like if you work hard like even if you don't work look my point is the billionaire life is available to you today it's just in your mind because I know a lot of billionaires i'm not one but I'm nearby and they all wear the same socks you do they eat the same steak you do they drive cars that are as safe as the car you can drive if you can drive a Toyota Camry they have a hot shower just like you have a hot shower the distance between your life and a billionaire's life is 99% in your mind and so it's really not about the money it's about the creativity it's about the connection it's about the friendships."

Currier's journey from selling worms as a child to co-founding a major venture capital firm offers valuable lessons on seizing opportunities, cultivating relationships, and maintaining perspective. His insights on network effects and the traits of successful founders provide a framework for entrepreneurs looking to build truly valuable and defensible businesses. As technology continues to evolve rapidly, Currier's network-centric approach and focus on human factors like speed, flexibility and relationships offer timeless wisdom for navigating an uncertain future.

Article created from: https://www.youtube.com/watch?v=ZPp_2kILoJU