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 observe file 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 staff usually seem at — and in addition generally 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 one of the best form 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 loads of fascinating 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 flippantly 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 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 loads 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’ve 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 suitable ones. I’m simply actually completely satisfied there’s loads 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 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 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 loads of AI researchers, however a few of the prime ones have the very best variety of citations. Then there are analysis individuals who’ve labored on analysis that’s far more broad reaching and far more crucial 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 perhaps 20 folks 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 should you’re going towards incumbents which have wonderful distribution, you may 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 must actually make a judgment name by way of, how crucial is that this and does this actually 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 find out 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 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 in a position to compete for expertise? Google simply laid off lots of people; I ponder if that”s impacting something.
VF: The warfare for expertise is completely brutal. It’s a board degree dialog when you could 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 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 laborious 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 wish to work with the world’s different greatest and smartest folks. So should you begin with an A or A+ staff [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 should you don’t have a very good 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 the case of as we speak’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 lots [as a firm] is pace of iteration. It was once 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 at all times the best-performing options. We speak lots about neighborhood, 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 could 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 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 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 . . .It’s important 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 available on the market and who a founder is promoting to and who the customer is. However one of the best merchandise don’t win [automatically]. It’s very straightforward to repeat. So corporations that look totally different, act totally different, and speak otherwise 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 type of issues. Like, are we gonna have one thing that’s omnipresent and could be very straightforward 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 generally you are able to do all the pieces 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 and marketing amplifies that positioning.
(Be aware to readers: our subsequent StrictlyVC night is developing 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 may nonetheless nab a seat right here. Be aware that our current San Francisco occasion was bought out, and we anticipate our L.A. occasion to promote out as nicely.)