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 usually of the hustle he sees in founders world wide.
Felicis can also be identified for the very sturdy observe document 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 crew usually seem at — and likewise typically sponsor — business 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 sort of companion to have, provided that each Senkut and companion Viviana Faga, who joined the agency in 2021 from Emergence Capital, occurred to have quite a lot of attention-grabbing insights to share in regards to the AI corporations that they’re assembly and typically competing aggressively to land as portfolio corporations. (Amongst Felicis’s associated bets: it has funded the app growth 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 frivolously beneath for size and readability.
We’re listening to each different day about this or that AI analysis crew that’s spinning out of Google or one other massive firm. These are scorching tickets proper now. How do you compete with the numerous enterprise companies 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 quite a 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 have now confidence [and that we think are] actually gonna choose up, and we’re educated about [them]. [But] you don’t need to be in each AI firm to do nicely. You simply need to be in the appropriate ones. I’m simply actually glad there’s quite a lot of exercise [and that] folks in AI [are] choosing up the startup ecosystem once more. For you aspiring founders [in the audience], I hope you discover success in a roundabout way. It’s bringing some positivity again into our ecosystem.
Clearly not everyone seems to be reduce 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 quite a lot of AI researchers, however a few of the prime ones have the best variety of citations. Then there are analysis individuals who’ve labored on analysis that’s rather more broad reaching and rather more important than others. Once we have been working with Runway, they really co-authored [the deep learning model] Secure Diffusion and have been arguably one [set] of possibly 20 folks in that space.
[Even still] constructing an organization just isn’t a straightforward factor, so what market you choose is essential. One of many brutal legal guidelines that I’ve discovered since I left Google is that it’s important to actually choose your space as a result of for those who’re going towards incumbents which have superb distribution, you possibly can 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 characteristic and cost $1 a month than for a brand new firm to provide you with a superb product. In order that’s the place it’s important to actually make a judgment name by way of, how important is that this and does this really have an opportunity of carving a distinct segment of its personal? That’s why there are various fewer corporations that may rise above that noise.
VF: Again to that time, does a founder know the way 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 it’s important 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 capable of compete for expertise? Google simply laid off lots of people; I’m wondering if that”s impacting something.
VF: The warfare for expertise is completely brutal. It’s a board degree dialog when you’ve gotten Google, Meta, etcetera providing $1 million-plus packages. So it actually comes all the way 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 laborious 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 for those who begin with an A or A+ crew [it matters]. There are solely so many people who find themselves actually well-respected within the business, and everyone does their analysis, the identical manner they do their analysis on us. So for those who don’t have a great 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 relating to right this 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 loads [as a firm] is velocity of iteration. It was once that you would launch an online web page and launch a few options over a few months and that was sufficient. Now, AI corporations launch new options each day, and people are at all times the best-performing options. We speak loads about neighborhood, too. Firms 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 will have 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’m wondering what you make of two very completely different AI system rollouts that not too long ago 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 . . .You must do one thing that’s true to you. For Humane, it made excellent sense to construct up quite a lot of quiet buzz and anticipation. It relies upon in the marketplace 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 a different way to their customers are those which can be going to face out and win.
AS: Quite a lot of nice merchandise observe 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 at all times there? The scary factor about advertising and marketing is that typically 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 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.
(Notice to readers: our subsequent StrictlyVC night is arising Thursday, February 29, in Hollywood, in partnership with Lightspeed Enterprise Companions. In case you’d like to hitch us for one more night time of drinks, bites, and nice dialog, you possibly can nonetheless nab a seat right here. Notice that our latest San Francisco occasion was offered out, and we anticipate our L.A. occasion to promote out as nicely.)