The AI Edge With Investor and Builder Collin Wallace

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TL;DR:

• AI evolution is accelerating because it can self-correct and iterate at scale, unlike previous tech waves.
• Perishable knowledge, what's happening now, can’t be captured by AI, which creates opportunities for founders to build.
• Founders must balance speed and stability by toggling between exploration and exploitation throughout their startup lifecycle.
• AI success in enterprise depends on clarity around outcomes; many failed implementations lacked clear value metrics.
• What sets winning startups apart is not revenue volume, but consistent, repeatable growth that shows signal and direction.

‍Before we dive into the key takeaways from this episode, be sure to catch the full episode here:

Meet Collin - Partner at Lobby Capital

Collin Wallace, Partner at Lobby Capital, brings a rare mix of experience as an operator, founder, and educator to early-stage startups.

He co-founded Zero Storefront, which was acquired by Grubhub, and previously led innovation there. He’s also launched Techstars programs with JPMorgan and eBay and made over 80 investments in companies at the intersection of AI, marketplaces, and the future of work.

At Stanford, he teaches founders to think about how to compress knowledge, build with purpose, and scale without losing clarity.

Collin believes startups succeed by aligning on outcomes, building trust through consistency, and evolving with intention. Whether mentoring or investing, his focus remains on helping builders create something that lasts: products, systems, and ideas that outlive their creators.

AI’s Evolution Is About to Outpace Every Tech Wave

Collin Wallace explains that AI is unlike any previous technology because of its self-evolving nature. 

“It is the first technology that can make incremental changes to itself and then iterate billions of times.” — Collin Wallace 

Unlike cloud computing or mobile, which scaled infrastructure and connectivity, AI compounds its own improvement. This makes the pace of advancement exponential. 

“It’s going to change faster than any of us expect, and that creates both opportunity and chaos,” he adds. Collin believes that founders need to build with this in mind. Technologies that reshape themselves will outpace traditional planning cycles. 

The winners will not just adapt to this acceleration but embed it into how they experiment, release, and recalibrate over time.

Why Perishable Knowledge Still Belongs to Humans

Collin points out that while large language models are trained on vast amounts of data, they cannot access what is happening right now. 

“There’s magic in what’s not in the model yet,” he says. He calls this “perishable knowledge”—the fresh insights, context, and observations people carry in their heads. 

It is the current state of the market, the subtle changes in user behavior, or the new regulation not yet captured in the data. 

“That perishable knowledge is where founders build unique value.” — Collin Wallace 

‍Startups that rely entirely on AI without contributing their own perspective risk being generic. The best founders take what they know, combine it with what the model provides, and act faster than anyone else.

Building With AI: Balance Exploration and Exploitation

Startups often struggle to know when to pivot and when to double down. 

Collin frames this tension as the balance between exploration and exploitation. “Exploration is figuring out what works. Exploitation is doing more of it,” he says. 

Founders must alternate between these modes, depending on where they are in the company’s lifecycle. Early on, it is about trying ideas quickly and failing fast. 

Later, it is about doing fewer things with more precision. “The trick is knowing when to switch gears,” says Collin. Teams that explore too long lose focus. 

Those who exploit too early risk building the wrong thing. In the age of AI, this balance becomes even more important because feedback loops are faster and consequences scale quickly.

Startups Need Revenue But Not for the Reasons You Think

Collin emphasizes that early-stage revenue is not about financial viability but about signal. 

“Revenue is not about volume. It is a signal that people care enough to pay,” he says. 

Many founders think investors want to see big numbers. In reality, they want to see validation. “You need to know that someone cares enough to swipe a card, even if it is ten bucks,” Collin explains. 

Early revenue proves there is urgency behind the problem and that the startup has built something people find valuable. It is also the first test of whether the business can convert attention into action. “Money is the strongest signal,” says Collin. 

It tells you what people actually value, not just what they say they do.

Trust and Taste Are What Make Founders Irreplaceable

In a world where AI can generate text, code, or even music, Collin believes the irreplaceable traits of founders are trust and taste. “You can clone Jay-Z’s voice, but not his perspective,” he says. 

That perspective is shaped by lived experience, decision-making under uncertainty, and intuition built over time. The same applies to great founders. 

Their taste informs what not to build, which users to listen to, and when to say no. Trust comes from consistency and clarity. “Founders who make good decisions repeatedly build trust with their teams, their investors, and their customers,” says Collin. 

AI may help you go faster, but it is the founder’s judgment that ensures you are heading in the right direction.

Would you like to learn more about AI and how it can scale business operations? Check out this episode on AI that starts with people ft. Jimmy Iliohan.