Felicis, the 16-year-old Bay Space-based early-stage enterprise agency, has a popularity 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 identified for the very robust monitor document 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 staff usually seem at — and in addition typically 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 perfect sort of associate to have, on condition 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 firms that they’re assembly and typically competing aggressively to land as portfolio firms. (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 calmly under for size and readability.
We’re listening to each different day about this or that AI analysis staff that’s spinning out of Google or one other large firm. These are scorching tickets proper now. How do you compete with the numerous enterprise companies making an attempt to nab their consideration?
AS: It’s humorous, I used to be at Google when there have been solely 30 individuals now there are, like, 200,000 individuals. So loads of these persons are like household, we all know them. In order that’s one enormous 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 choose up, and we’re educated about [them]. [But] you don’t need to be in each AI firm to do properly. You simply need to be in the best ones. I’m simply actually joyful there’s loads of exercise [and that] individuals in AI [are] choosing 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 minimize 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 choices simply on social proof. There are loads of AI researchers, however a number of the prime ones have the best variety of citations. Then there are analysis individuals who’ve labored on analysis that’s far more broad reaching and far more vital than others. After 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 individuals in that space.
[Even still] constructing an organization just isn’t a simple factor, so what market you choose is essential. One of many brutal legal guidelines that I’ve realized since I left Google is that you must actually choose your space as a result of when you’re going in opposition to incumbents which have superb distribution, you’ll be able to provide you with [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 provide you with a superb product. In order that’s the place you must actually make a judgment name by way of, how vital is that this and does this actually 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 must 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 ponder if that”s impacting something.
VF: The battle for expertise is totally brutal. It’s a board stage dialog when you will have Google, Meta, etcetera providing $1 million-plus packages. So it actually comes right down to discovering these of us at an early stage, giving them a big fairness bundle, 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 finest and smartest individuals need to work with the world’s different finest and smartest individuals. So when you begin with an A or A+ staff [it matters]. There are solely so many people who find themselves actually well-respected within the trade, and all people does their analysis, the identical means they do their analysis on us. So when you don’t have 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 in relation to at this time’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 discuss so much [as a firm] is velocity 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 firms launch new options each day, and people are at all times the best-performing options. We discuss so much about group, too. Firms are launched on Discord now; that’s an efficient advertising channel. So sure, it’s fairly totally different, and I feel it’s actually thrilling. 
Picture Credit: Slava Blazer / TechCrunch
You’ve a advertising background and I’ve heard you say earlier than {that a} good advertising technique can change an organization’s trajectory. Out of curiosity, I ponder what you make of two very totally different AI system 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 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 need to do one thing that’s true to you. For Humane, it made excellent sense to construct up loads 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 firms that look totally different, act totally different, and discuss in another way to their customers are those which might be going to face out and win.
AS: Loads of 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 at all times there? The scary factor about advertising is that typically 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 totally different — it actually issues. Being first doesn’t win, however having probably the most differentiation makes a distinction, and advertising amplifies that positioning.
(Notice to readers: our subsequent StrictlyVC night is arising Thursday, February 29, in Hollywood, in partnership with Lightspeed Enterprise Companions. For those who’d like to affix us for one more night time of drinks, bites, and nice dialog, you’ll be able to nonetheless nab a seat right here. Notice that our current San Francisco occasion was bought out, and we anticipate our L.A. occasion to promote out as properly.)
