Precursor VenturesA classic pre-seed and seed stage venture capital firm

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

14 Mar 2025 · 1 min

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Precursor Ventures (YouTube, Mar 14, 2025) discusses what matters when evaluating AI product adoption — emphasizing net revenue retention (NRR) over top-line revenue because NRR reflects stickiness and product utility. The speaker cites a concrete figure (200% NRR) as a strong indicator, then shares an anecdote about an enterprise that purchased a large, top-down AI product (~$2 million) that went largely unused because employees preferred ChatGPT, cloud subscriptions, or other tool collections.

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.