Felicis, the 16-year-old Bay Space-based early-stage enterprise agency, has a repute 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 around the globe.
Felicis can also be identified for the very robust monitor file it has established over time, with early bets on some breakout firms 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 workforce typically seem at — and likewise 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 companion. Fortunately, they’re the very best type of companion to have, on condition that each Senkut and companion Viviana Faga, who joined the agency in 2021 from Emergence Capital, occurred to have a whole lot of fascinating insights to share in regards to the AI firms that they’re assembly and generally competing aggressively to land as portfolio firms. (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 that you would be able to see at web page backside, and excerpts from which have been edited calmly under for size and readability.
We’re listening to each different day about this or that AI analysis workforce that’s spinning out of Google or one other massive firm. These are scorching tickets proper now. How do you compete with the various enterprise corporations making an attempt 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 a whole lot of these individuals are like household, we all know them. In order that’s one enormous benefit. . . We’re additionally thesis pushed, as nicely, so we attempt to do a extremely good job of [conveying that] there are particular areas that we now have confidence [and that we think are] actually gonna decide up, and we’re educated about [them]. [But] you don’t should be in each AI firm to do nicely. You simply should be in the suitable ones. I’m simply actually comfortable there’s a whole lot 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 indirectly. 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 a whole lot of AI researchers, however among the prime 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 crucial than others. Once we have been working with Runway, they really co-authored [the deep learning model] Steady Diffusion and have been arguably one [set] of perhaps 20 folks in that space.
[Even still] constructing an organization just 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 should you’re going in opposition to incumbents which have superb distribution, you’ll be able to give you [something] that’s even 10x higher, but it surely’s a lot simpler for [that outfit] that has 100 million customers to supply an AI characteristic and cost $1 a month than for a brand new firm to give you an excellent product. In order that’s the place you need to actually make a judgment name when it comes to, how crucial is that this and does this really have an opportunity of carving a distinct segment of its personal? That’s why there are numerous fewer firms that may rise above that noise.
VF: Again to that time, does a founder know tips on how to 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 whenever you’re backing these AI researchers — have they got that business go-to-market thoughts?
Picture Credit: Slava Blazer / TechCrunch
How are these groups capable of compete for expertise? Google simply laid off lots of people; I ponder if that”s impacting something.
VF: The battle for expertise is totally brutal. It’s a board degree dialog when you will have 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 consider 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 need to work with the world’s different greatest and smartest folks. So should you begin with an A or A+ workforce [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 should you don’t have a superb story, you don’t have a mission and also you don’t have an A+, I don’t suppose you’re going to have nice success.
Viviana, you talked about go-to-market methods. Are these a lot totally different in the case of at the moment’s AI firms versus “conventional” enterprise firms?
VF: It’s fairly totally 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 quite a bit [as a firm] is pace of iteration. It was that you possibly can launch an internet web page and launch a few options over a few months and that was sufficient. Now, AI firms launch new options every day, and people are all the time the best-performing options. We speak quite a bit about neighborhood, too. Corporations are launched on Discord now; that’s an efficient advertising and marketing channel. So sure, it’s fairly totally different, and I feel it’s actually thrilling. 
Picture Credit: Slava Blazer / TechCrunch
You’ve 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 totally different AI gadget rollouts that 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 gadget, 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 . . .You need to do one thing that’s true to you. For Humane, it made excellent sense to construct up a whole lot of quiet buzz and anticipation. It relies upon available on the market and who a founder is promoting to and who the client is. However the very best merchandise don’t win [automatically]. It’s very straightforward to repeat. So firms that look totally different, act totally different, and speak in a different way to their customers are those which might be going to face out and win.
AS: Lots of nice merchandise comply with science fiction. [Humane’s rollout] was a type of issues. Like, are we gonna have one thing that’s omnipresent and may be very straightforward to make use of that you just 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 all the pieces proper, and it’d nonetheless take some time for the product to take off. However being unique, being totally 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.
(Notice to readers: our subsequent StrictlyVC night is arising Thursday, February 29, in Hollywood, in partnership with Lightspeed Enterprise Companions. If you happen to’d like to hitch us for an additional evening of drinks, bites, and nice dialog, you’ll be able to nonetheless nab a seat right here. Notice that our latest San Francisco occasion was bought out, and we anticipate our L.A. occasion to promote out as nicely.)