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 all over the world.
Felicis can be recognized for the very robust 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 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 accomplice. Fortunately, they’re the perfect form of accomplice to have, on condition that each Senkut and accomplice Viviana Faga, who joined the agency in 2021 from Emergence Capital, occurred to have a variety of attention-grabbing insights to share in regards to 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 growth firm Supabase and the content material creation firm Runway AI.)
We talked with the 2 in fast chat you can see at web page backside, and excerpts from which have been edited evenly under 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 huge 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 a variety of these individuals are like household, we all know them. In order that’s one large benefit. . . We’re additionally thesis pushed, as effectively, so we attempt to do a extremely good job of [conveying that] there are particular areas that now we have confidence [and that we think are] actually gonna decide up, and we’re educated about [them]. [But] you don’t need to be in each AI firm to do effectively. You simply need to be in the best ones. I’m simply actually joyful there’s a variety 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 ultimately. It’s bringing some positivity again into our ecosystem.
Clearly not everyone seems to be lower out to be a founder. How are you aware who has what it takes? Social proof?
AS: I hope that we’re not making our selections simply on social proof. There are a variety of AI researchers, however among the prime ones have the 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. Once we had been working with Runway, they really co-authored [the deep learning model] Steady Diffusion and had been arguably one [set] of possibly 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 realized since I left Google is that it’s important to actually decide your space as a result of for those who’re going in opposition to incumbents which have superb distribution, you possibly can give you [something] that’s even 10x higher, nevertheless 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 give you an excellent product. In order that’s the place it’s important to actually make a judgment name when it comes to, how essential is that this and does this really have an opportunity of carving a distinct segment of its personal? That’s why there are a lot of fewer corporations that may rise above that noise.
VF: Again to that time, does a founder know the best 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 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 warfare 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 all the way down to discovering these of us 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 onerous proper now.
AS: Who you’re employed with additionally issues. One of many issues I realized 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 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 trade, and everyone does their analysis, the identical method 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 totally different with regards to at present’s AI corporations versus “conventional” enterprise corporations?
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 discuss loads [as a firm] is pace of iteration. It was once that you may 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 all the time the best-performing options. We discuss loads about group, too. Corporations are launched on Discord now; that’s an efficient advertising and marketing channel. So sure, it’s fairly totally different, and I believe 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 totally 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 . . .You must do one thing that’s true to you. For Humane, it made excellent sense to construct up a variety 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 perfect merchandise don’t win [automatically]. It’s very straightforward to repeat. So corporations that look totally different, act totally different, and discuss in a different way to their customers are those which are going to face out and win.
AS: Numerous nice merchandise observe science fiction. [Humane’s rollout] was a type of issues. Like, are we gonna have one thing that’s omnipresent and could 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 the whole lot proper, and it’d nonetheless take some time for the product to take off. However being authentic, 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.
(Word to readers: our subsequent StrictlyVC night is arising Thursday, February 29, in Hollywood, in partnership with Lightspeed Enterprise Companions. When you’d like to hitch us for an additional evening of drinks, bites, and nice dialog, you possibly can nonetheless nab a seat right here. Word that our latest San Francisco occasion was offered out, and we count on our L.A. occasion to promote out as effectively.)