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 typically of the hustle he sees in founders around the globe.
Felicis can 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 an alternative, Senkut and crew 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 accomplice. Fortunately, they’re the very best sort of accomplice to have, provided 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 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 you could see at web page backside, and excerpts from which have been edited flippantly 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 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 a variety of these persons 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 specific 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 proper ones. I’m simply actually completely happy there’s a variety 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 selections simply on social proof. There are a variety of AI researchers, however a few 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 vital than others. After we had been working with Runway, they really co-authored [the deep learning model] Secure Diffusion and had been arguably one [set] of possibly 20 individuals in that space.
[Even still] constructing an organization is just not a simple 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 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 function and cost $1 a month than for a brand new firm to give you a superb product. In order that’s the place you need to 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 a lot 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 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 struggle for expertise is totally brutal. It’s a board degree dialog when you have got 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 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 discovered by working at Google with [Google’s chief scientist] Jeff Dean, is that the world’s greatest and smartest individuals wish to work with the world’s different greatest and smartest individuals. So should you 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 manner they do their analysis on us. So should you don’t have 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 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 so much [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 corporations launch new options every day, and people are all the time the best-performing options. We speak so much about group, too. Firms 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 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 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 good 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 client is. However the very best merchandise don’t win [automatically]. It’s very straightforward to repeat. So corporations 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 kind 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 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 night time of drinks, bites, and nice dialog, you possibly can nonetheless nab a seat right here. Notice that our current San Francisco occasion was bought out, and we count on our L.A. occasion to promote out as nicely.)
