Back in 2014, I wrote a post called The Dentist Office Software Story that outlined the lack of defensibility in enterprise software. Many people have told me how much they appreciated it when I wrote it.
But we now need an additional "chapter" in the story. An over-the-air update, if you will.
So here it is, with the new chapter in italics:
An entrepreneur, tired of the long waits he is experiencing in his dentist’s office, decides that dentist offices are badly managed. So he designs and builds a comprehensive dentist office management system and brings it to market. The software is expensive, at $25,000 per year per dentist office, but it’s a hit anyway as dentists realize significant cost savings after deploying the system. The company, Dentasoft, grows quickly into a $100mm annual revenue business, goes public, and trades up to a billion dollar valuation.
Two young entrepreneurs graduate from college, and go to YC. They pitch PG on a low cost version of Dentasoft, which will be built on a modern software stock and include mobile apps for the dentist to remotely manage their office from the golf course. PG likes the idea and they are accepted into YC. Their company, Dent.io, gets their product in market quickly and prices it at $5,000 per year per office. Dentists like this new entrant and start switching over in droves. Dentasoft misses its quarter, citing competitive pressures, churn, and declining revenues. Dentasoft stock crashes. Meanwhile, Dent.io does a growth round from Sequoia and hires a CEO out of Workday.
Around this time, an open source community crops up to build an open source version of dental office software. This open source project is called DentOps. The project takes on real life as its leader, a former dentist turned socialist blogger and software developer named NitrousOxide, has a real agenda to disrupt the entire dental industry. A hosted version of DentOps called DentHub is launched and becomes very popular with forward thinking dentist offices that don’t want to be hostage to companies like Dentasoft and Dent.io anymore.
Dentasoft is forced to file for bankruptcy protection while they restructure their $100mm debt round they took a year after going public. Dent.io’s board fires its CEO and begs the founders to come back and take control of the struggling company. NitrousOxide is featured on the cover of Wired as the man who disrupted the dental industry.
A decade later, a Dentist, tired of waiting for the latest update from the DentOps community, decides to vibecode her own custom dental office software product using Claude Code. Even though she has never written a line of code in her life, she keeps prompting, deploying, and modifying the software to meet the unique needs of her office that DentOps never could. She rips out DentOps and deploys her own software suite that she calls Dentsure. Her team loves using her software, and so do her patients.
I picked up my new Meta "Display" smartglasses a few days ago and have been playing with them a bit since.
The one feature that feels really important and powerful to me is "live captions."
Most people are familiar with closed captioning on TVs and in theaters, where the speech is translated into text and shown at the bottom of the screen.
The Display smart glasses have this feature on the lower portion of the lenses. You can turn it on to understand someone speaking your native language better and you can use it for real-time translation of foreign language speakers.
I tried to take a photo of live captions running in my Display glasses but could not figure out how to do that. So here is an image I took from Meta's marketing assets:
When USV commits to investing in a startup, we negotiate a term sheet and then hand over the details to our lawyers. The startup hires a lawyer, and we hire a lawyer. The startup's lawyer prepares the closing documents, and our lawyer reviews them. In addition, our lawyer conducts "legal due diligence," which primarily involves reviewing existing contracts, stock issuances, the charter, and other relevant legal documents.
This process is expensive and made worse because the startup typically pays for both lawyers.
This is how it has always been done since I started in the business in the mid-80s, and I have always been uncomfortable with how expensive it is.
So I decided to run an experiment over the holidays.
We committed to lead a round of financing for a company in mid-December. We negotiated a term sheet and signed it before everyone departed for the holidays. I reached out to a law firm that I have used many times for this sort of thing and asked for a quote to handle our side of the deal. The quote came back at $50k.
So I said, "screw it" and decided it was time to try something different.
I fired up Google's NotebookLM, which allows users to create "notebooks," which are a large collection of documents that can then be used to run AI queries.
I put a large collection of "closing binders" of investments USV has made over the years, particularly companies I worked on, into one Notebook. I added the signed term sheet to this Notebook.
To create a second Notebook, I pointed NotebookLM at the data room that the startup we are investing in provided for legal diligence. That data room had every legal document the startup had entered into, including those with its employees, since it got started.
When we received the draft closing documents from the startup's lawyer, I added them to the first Notebook and asked for a legal review of the draft documents against the body of legal documents we have signed over the years, and most importantly, against the term sheet we had signed. I asked for a memo that outlined all of the issues with the draft documents and highlighted the most significant ones.
I then turned to the second Notebook and asked a series of questions like "tell me about the structure of the company and its subsidiaries and who is on the board of each of them" and "give me a list of every employee, the stock they have been issued, and all of the agreements they have signed" and "are their arbitration clauses in every agreement the company has signed?" I spent about half an hour asking these sorts of questions and put the answers to each into a Google Doc.
Back in 2014, I wrote a post called The Dentist Office Software Story that outlined the lack of defensibility in enterprise software. Many people have told me how much they appreciated it when I wrote it.
But we now need an additional "chapter" in the story. An over-the-air update, if you will.
So here it is, with the new chapter in italics:
An entrepreneur, tired of the long waits he is experiencing in his dentist’s office, decides that dentist offices are badly managed. So he designs and builds a comprehensive dentist office management system and brings it to market. The software is expensive, at $25,000 per year per dentist office, but it’s a hit anyway as dentists realize significant cost savings after deploying the system. The company, Dentasoft, grows quickly into a $100mm annual revenue business, goes public, and trades up to a billion dollar valuation.
Two young entrepreneurs graduate from college, and go to YC. They pitch PG on a low cost version of Dentasoft, which will be built on a modern software stock and include mobile apps for the dentist to remotely manage their office from the golf course. PG likes the idea and they are accepted into YC. Their company, Dent.io, gets their product in market quickly and prices it at $5,000 per year per office. Dentists like this new entrant and start switching over in droves. Dentasoft misses its quarter, citing competitive pressures, churn, and declining revenues. Dentasoft stock crashes. Meanwhile, Dent.io does a growth round from Sequoia and hires a CEO out of Workday.
Around this time, an open source community crops up to build an open source version of dental office software. This open source project is called DentOps. The project takes on real life as its leader, a former dentist turned socialist blogger and software developer named NitrousOxide, has a real agenda to disrupt the entire dental industry. A hosted version of DentOps called DentHub is launched and becomes very popular with forward thinking dentist offices that don’t want to be hostage to companies like Dentasoft and Dent.io anymore.
Dentasoft is forced to file for bankruptcy protection while they restructure their $100mm debt round they took a year after going public. Dent.io’s board fires its CEO and begs the founders to come back and take control of the struggling company. NitrousOxide is featured on the cover of Wired as the man who disrupted the dental industry.
A decade later, a Dentist, tired of waiting for the latest update from the DentOps community, decides to vibecode her own custom dental office software product using Claude Code. Even though she has never written a line of code in her life, she keeps prompting, deploying, and modifying the software to meet the unique needs of her office that DentOps never could. She rips out DentOps and deploys her own software suite that she calls Dentsure. Her team loves using her software, and so do her patients.
I picked up my new Meta "Display" smartglasses a few days ago and have been playing with them a bit since.
The one feature that feels really important and powerful to me is "live captions."
Most people are familiar with closed captioning on TVs and in theaters, where the speech is translated into text and shown at the bottom of the screen.
The Display smart glasses have this feature on the lower portion of the lenses. You can turn it on to understand someone speaking your native language better and you can use it for real-time translation of foreign language speakers.
I tried to take a photo of live captions running in my Display glasses but could not figure out how to do that. So here is an image I took from Meta's marketing assets:
When USV commits to investing in a startup, we negotiate a term sheet and then hand over the details to our lawyers. The startup hires a lawyer, and we hire a lawyer. The startup's lawyer prepares the closing documents, and our lawyer reviews them. In addition, our lawyer conducts "legal due diligence," which primarily involves reviewing existing contracts, stock issuances, the charter, and other relevant legal documents.
This process is expensive and made worse because the startup typically pays for both lawyers.
This is how it has always been done since I started in the business in the mid-80s, and I have always been uncomfortable with how expensive it is.
So I decided to run an experiment over the holidays.
We committed to lead a round of financing for a company in mid-December. We negotiated a term sheet and signed it before everyone departed for the holidays. I reached out to a law firm that I have used many times for this sort of thing and asked for a quote to handle our side of the deal. The quote came back at $50k.
So I said, "screw it" and decided it was time to try something different.
I fired up Google's NotebookLM, which allows users to create "notebooks," which are a large collection of documents that can then be used to run AI queries.
I put a large collection of "closing binders" of investments USV has made over the years, particularly companies I worked on, into one Notebook. I added the signed term sheet to this Notebook.
To create a second Notebook, I pointed NotebookLM at the data room that the startup we are investing in provided for legal diligence. That data room had every legal document the startup had entered into, including those with its employees, since it got started.
When we received the draft closing documents from the startup's lawyer, I added them to the first Notebook and asked for a legal review of the draft documents against the body of legal documents we have signed over the years, and most importantly, against the term sheet we had signed. I asked for a memo that outlined all of the issues with the draft documents and highlighted the most significant ones.
I then turned to the second Notebook and asked a series of questions like "tell me about the structure of the company and its subsidiaries and who is on the board of each of them" and "give me a list of every employee, the stock they have been issued, and all of the agreements they have signed" and "are their arbitration clauses in every agreement the company has signed?" I spent about half an hour asking these sorts of questions and put the answers to each into a Google Doc.
I have had moderate hearing loss for at least a decade and struggle to hear in loud environments (busy restaurants, large events, sports arenas, etc). I hear fine in most places but certain environments give me real problems.
I've tried traditional hearing aids a few times and they have not worked well for my issues. I am a personal investor in one startup making advanced AI powered hearing aids that are delivered in eyeglass frames. I am excited to try them when the first units are ready soon and will blog about them then.
But it is also possible that a solution for people like me is live captioning. I am already familiar with captioning and we use it frequently on our TV at home, even for english language TV shows. So the idea of using the same approach to deal with hearing loss is very interesting to me. I plan to take the Display glasses with me the next time I dine at a loud restaurant or big event and see how they work.
I am also excited about using the foreign language translation when we travel overseas. It won't help me speak back in a foreign language but it will certainly help me understand.
Like most technologies when they arrive, live captioning feels "early." The UX around turning it on and off is clunky. For it to work well, it needs to just know when I need it to come on and when I don't. The current version of live captioning only works if you look directly at the speaker. These issues and others make it suboptimal in its current form. But I am confident all of that will improve in time.
But experiencing live captioning in my smartglasses has been an "aha" moment for me. I think the possibilities of this technology are quite powerful and important.
There is one issue that came out of all of this legal work that I need to understand better and possibly change in the documents. I scheduled a call with the company and its lawyer to go over that. Otherwise, I came away from this process confident that the company's legal affairs are in good shape and the closing docs reflect the term sheet we agreed to and mirror the customary provisions and protections USV receives in investments we make.
While this did take about two hours of my time, we did not incur any legal fees. NotebookLM is either free to use, or comes with USV's Google Workspace subscription. I honestly don't know the answer to that.
There is one more thing we can do in the VC industry to make this process even better. We can all agree to use standard docs like the NVCA documents that are publicly available to use.
With standard documents and Notebook Lawyer, prediction number four in my 2026 predictions can easily come true.
4/ A majority of venture capital deals close without lawyers on either side due to standardized documents (like the NVCA ones) and AI tools for review and legal diligence.
All we need is startup founders to demand this. And VCs to have the willingness to say yes.
This VC has already done that.
I have had moderate hearing loss for at least a decade and struggle to hear in loud environments (busy restaurants, large events, sports arenas, etc). I hear fine in most places but certain environments give me real problems.
I've tried traditional hearing aids a few times and they have not worked well for my issues. I am a personal investor in one startup making advanced AI powered hearing aids that are delivered in eyeglass frames. I am excited to try them when the first units are ready soon and will blog about them then.
But it is also possible that a solution for people like me is live captioning. I am already familiar with captioning and we use it frequently on our TV at home, even for english language TV shows. So the idea of using the same approach to deal with hearing loss is very interesting to me. I plan to take the Display glasses with me the next time I dine at a loud restaurant or big event and see how they work.
I am also excited about using the foreign language translation when we travel overseas. It won't help me speak back in a foreign language but it will certainly help me understand.
Like most technologies when they arrive, live captioning feels "early." The UX around turning it on and off is clunky. For it to work well, it needs to just know when I need it to come on and when I don't. The current version of live captioning only works if you look directly at the speaker. These issues and others make it suboptimal in its current form. But I am confident all of that will improve in time.
But experiencing live captioning in my smartglasses has been an "aha" moment for me. I think the possibilities of this technology are quite powerful and important.
There is one issue that came out of all of this legal work that I need to understand better and possibly change in the documents. I scheduled a call with the company and its lawyer to go over that. Otherwise, I came away from this process confident that the company's legal affairs are in good shape and the closing docs reflect the term sheet we agreed to and mirror the customary provisions and protections USV receives in investments we make.
While this did take about two hours of my time, we did not incur any legal fees. NotebookLM is either free to use, or comes with USV's Google Workspace subscription. I honestly don't know the answer to that.
There is one more thing we can do in the VC industry to make this process even better. We can all agree to use standard docs like the NVCA documents that are publicly available to use.
With standard documents and Notebook Lawyer, prediction number four in my 2026 predictions can easily come true.
4/ A majority of venture capital deals close without lawyers on either side due to standardized documents (like the NVCA ones) and AI tools for review and legal diligence.
All we need is startup founders to demand this. And VCs to have the willingness to say yes.
This VC has already done that.
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