Investors are pricing a head start that an acquirer's legal team can delete

The $100M growth check Harry Stebbings floated at Instinct would have bought about 4 percent of the company at its last mark ^[8][1], and the ceiling Jason Lemkin named sits 20 percent below that mark ^[2]. His product objection was crowding: Gorgias will have its own Instinct for e-commerce, Meta will have one, and there will be 20 in the next YC batch and a hundred startups doing a version of it ^[10].

The more useful part of his answer is his own comp. At EchoSign he shipped real-time document collaboration and redlining online five to eight years before anyone else, by running Word in a container in a VM, which violated Microsoft's terms of use ^[5]. "A five year head start, gone, because a public company's legal team gets a vote and a startup's doesn't," Lemkin said in SaaStr's account of the episode ^[7].

The current products have the same dependency. Instinct scrapes LinkedIn in ways you are not supposed to scrape LinkedIn ^[2], and some of the outbound calling flows are prohibited or illegal in parts of the US ^[3]. Lemkin's conclusion is that a real share of the excitement is the rule-breaking itself, and that this is an advantage available only to private companies and to Elon ^[4].

Rory O'Driscoll took both sides. "No business at scale ever got built on scraping LinkedIn or breaking Google's ToS," he said ^[13]. Then he named Uber, which blustered through, broke the laws, and got popular enough that the politicians folded ^[14]. What he called predictable was narrower: if the agents become ubiquitous, the booking systems will build the separate API and the rate segmentation ^[16].

Stebbings put the counter-case as a pattern, noting that the same commoditization argument was made about Lovable, also dismissed as a light wrapper ^[21]. Instinct's founder shipped location sharing, then a OnePassword partnership, then the next thing, on a weekly cadence, with Index and Benchmark behind him ^[18]. "Shipping cadence is the answer to cloning," Stebbings said ^[19]. O'Driscoll's framing of the check is blunter: in a consumer investment like this there is no financial math you can use to buy the stock ^[17]. You are saying the category is huge and the team has the early lead, and monetization comes later ^[17].

The writeup lists Anthropic walking from a multi-billion dollar deal after diligence among the episode's topics, and does not identify the deal or what diligence turned up ^[20]. I would pass at that price too, though not on the cloning argument: at this mark the buyer is paying for the weekly release cadence, and the ToS-dependent features are distribution bought with legal risk instead of cash ^[18][2]. The way that view breaks is on the record in the same conversation. If the booking platforms ship paid agent APIs and Instinct is the surface consumers point at them, the rule-breaking bought a position that survived being made legal ^[16]. Then Lemkin repeats the Loom pass he already regrets ^[12].