Felicis, the 16-year-old Bay Space-based early-stage enterprise agency, has a status for investing globally. Certainly, agency founder Aydin Senkut — who spent a handful of years at Google as a product supervisor in its earlier days — was born in Turkey and talks typically of the hustle he sees in founders all over the world.
Felicis can also be recognized for the very sturdy observe report it has established over time, with early bets on some breakout corporations as Notion, Canva, Adyen, Cruise, Flexport, and Shopify, to call only a handful. Nonetheless, the agency isn’t content material to relaxation on its laurels, apparently. As a substitute, Senkut and group typically seem at — and in addition generally sponsor — trade occasions to which founders flock, and such was the case final week at a StrictlyVC occasion, which the agency volunteered to anchor as a associate. Fortunately, they’re the very best type of associate to have, provided that each Senkut and associate Viviana Faga, who joined the agency in 2021 from Emergence Capital, occurred to have loads of attention-grabbing insights to share concerning the AI corporations that they’re assembly and generally competing aggressively to land as portfolio corporations. (Amongst Felicis’s associated bets: it has funded the app improvement firm Supabase and the content material creation firm Runway AI.)
We talked with the 2 in fast chat which you can see at web page backside, and excerpts from which have been edited frivolously beneath for size and readability.
We’re listening to each different day about this or that AI analysis group that’s spinning out of Google or one other large firm. These are sizzling tickets proper now. How do you compete with the various enterprise corporations attempting to nab their consideration?
AS: It’s humorous, I used to be at Google when there have been solely 30 folks now there are, like, 200,000 folks. So loads of these individuals are like household, we all know them. In order that’s one large benefit. . . We’re additionally thesis pushed, as properly, so we attempt to do a very good job of [conveying that] there are specific areas that we’ve got confidence [and that we think are] actually gonna decide up, and we’re educated about [them]. [But] you don’t must be in each AI firm to do properly. You simply must be in the proper ones. I’m simply actually blissful there’s loads of exercise [and that] folks in AI [are] selecting up the startup ecosystem once more. For you aspiring founders [in the audience], I hope you discover success not directly. It’s bringing some positivity again into our ecosystem.
Clearly not everyone seems to be lower out to be a founder. How have you learnt who has what it takes? Social proof?
AS: I hope that we’re not making our choices simply on social proof. There are loads of AI researchers, however a number of the high ones have the very best variety of citations. Then there are analysis individuals who’ve labored on analysis that’s way more broad reaching and way more essential than others. After we had been working with Runway, they really co-authored [the deep learning model] Steady Diffusion and had been arguably one [set] of perhaps 20 folks in that space.
[Even still] constructing an organization isn’t a straightforward factor, so what market you decide is essential. One of many brutal legal guidelines that I’ve discovered since I left Google is that you need to actually decide your space as a result of in case you’re going towards incumbents which have wonderful distribution, you may provide you with [something] that’s even 10x higher, however it’s a lot simpler for [that outfit] that has 100 million customers to supply an AI function and cost $1 a month than for a brand new firm to provide you with a superb product. In order that’s the place you need to actually make a judgment name when it comes to, how essential is that this and does this actually have an opportunity of carving a distinct segment of its personal? That’s why there are lots of fewer corporations that may rise above that noise.
VF: Again to that time, does a founder know how you can leverage that distribution? [Runway CEO and cofounder] Cris [Valenzuela] was very methodical and now has a partnership with Canva, and with Getty. That is a few of what you need to search for while you’re backing these AI researchers — have they got that industrial go-to-market thoughts?
Picture Credit: Slava Blazer / TechCrunch
How are these groups in a position to compete for expertise? Google simply laid off lots of people; I ponder if that”s impacting something.
VF: The warfare for expertise is completely brutal. It’s a board stage dialog when you’ve got Google, Meta, etcetera providing $1 million-plus packages. So it actually comes right down to discovering these people at an early stage, giving them a big fairness package deal, and hopefully, they imagine within the mission of constructing an iconic category-defining firm, proper. That’s what has labored for us, however it’s extremely exhausting proper now.
AS: Who you’re employed with additionally issues. One of many issues I discovered by working at Google with [Google’s chief scientist] Jeff Dean, is that the world’s greatest and smartest folks wish to work with the world’s different greatest and smartest folks. So in case you begin with an A or A+ group [it matters]. There are solely so many people who find themselves actually well-respected within the trade, and everyone does their analysis, the identical method they do their analysis on us. So in case you don’t have a superb story, you don’t have a mission and also you don’t have an A+, I don’t assume you’re going to have nice success.
Viviana, you talked about go-to-market methods. Are these a lot completely different in relation to at the moment’s AI corporations versus “conventional” enterprise corporations?
VF: It’s fairly completely different, go-to-market within the AI period versus what it was for the final 10 to twenty years with SaaS. A few issues that we speak about rather a lot [as a firm] is pace of iteration. It was once that you could possibly launch an online web page and launch a few options over a few months and that was sufficient. Now, AI corporations launch new options every day, and people are all the time the best-performing options. We speak rather a lot about group, too. Corporations are launched on Discord now; that’s an efficient advertising and marketing channel. So sure, it’s fairly completely different, and I feel it’s actually thrilling. 
Picture Credit: Slava Blazer / TechCrunch
You have got a advertising and marketing background and I’ve heard you say earlier than {that a} good advertising and marketing technique can change an organization’s trajectory. Out of curiosity, I ponder what you make of two very completely different AI system rollouts that just lately captured everybody’s consideration: the Humane AI pin, which the corporate teased for months earlier than debuting earlier than a small group of reporters, and the Rabbit R1 system, which rolled out with out fanfare in a convention room of a on line casino throughout CES.
VF: I noticed the Humane launch and I’d love to purchase one . . .It’s a must to do one thing that’s true to you. For Humane, it made good sense to construct up loads of quiet buzz and anticipation. It relies upon available on the market and who a founder is promoting to and who the customer is. However the very best merchandise don’t win [automatically]. It’s very simple to repeat. So corporations that look completely different, act completely different, and speak in another way to their customers are those which are going to face out and win.
AS: Loads of nice merchandise comply with science fiction. [Humane’s rollout] was a kind of issues. Like, are we gonna have one thing that’s omnipresent and may be very simple to make use of that you simply don’t even consider utilizing and is all the time there? The scary factor about advertising and marketing is that generally you are able to do every part proper, and it would nonetheless take some time for the product to take off. However being unique, being completely different — it actually issues. Being first doesn’t win, however having essentially the most differentiation makes a distinction, and advertising and marketing amplifies that positioning.
(Be aware to readers: our subsequent StrictlyVC night is arising Thursday, February 29, in Hollywood, in partnership with Lightspeed Enterprise Companions. When you’d like to affix us for an additional evening of drinks, bites, and nice dialog, you may nonetheless nab a seat right here. Be aware that our latest San Francisco occasion was bought out, and we anticipate our L.A. occasion to promote out as properly.)
