Charles HudsonFounder and Managing Partner, Precursor Ventures

The Reality of AI Adoption #ai #investment #venturecapital #siliconvalley

14 Mar 2025 · 1 min

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Charles Hudson (speaker) contrasts the value of net revenue retention (NRR) versus headline top-line growth when evaluating product stickiness. He gives an anecdote about a large enterprise AI purchase (approximately $2 million) that saw little actual usage because employees relied on other tools (e.g., ChatGPT or cloud subscriptions). He emphasizes that high NRR (example cited as 200%) signals product utility and stickiness more clearly than top-line revenue alone.

Questions this video answers

200% NRR

$2 million

Chapters

And half the time part of the story that is leaked is the part of the story that is most favorable. When someone tells me they had 200% NRR their net revenue retention, that's really impressive. That tells me much more about the stickiness and utility of your product than a top line revenue growth number where I don't know anything about usage. I was at an event, I talked to someone who has bought, I don't want to name the product who bought a big AI product and they sold it top down. And so the C suite signed off on it and I think they paid $2 million for it. And I'm like well what's the usage like? He's like nobody uses it. I'm like what do you mean? He goes well it's a really cool tool but everybody in our org either has like a ChatGPT or cloud subscription or has found some other collection of tools.