Strictly VC San Francisco with Aydin Senkut and Viviana Faga

I want to feel like a teenage VC but you Know kannie and us go way back I think It's been now many years and it's been Amazing and like we are very grateful For all the incredible stuff that you do And we're very happy to be supporters And thank you all for coming great to See you all thank you so much so guys I Thought you know um vivana you're Relatively new to fleis although I guess Not so know joined in 2021 uh after Spending several years at emergence Capital um I know that you're you seem Like you're involved in a lot of Companies already including the app Development company subase uh the Database startup mother duck and the Very Buzzy content creation company Runway that's right can it's been busy It's been a busy two years only the best Ones um so I thought we would start I Think a lot of people here are tonight Are very interested in AI they're trying To figure out how people are you know Thinking about investing in these things One thing I I thought I would ask you About is you know I think it was maybe Yesterday I saw yet another story of Google researchers peeling off and Starting a company I think maybe it's Called Uncharted Labs um and they've Already got funding and it just seems Like I see that headline every other day Researchers leave Mega company funding

You know boom so how do you Differentiate yourselves as a as a team How do you get in front of these deals Because they do seem like they're coming Together so quickly It's a great question Iden is probably More well equipped as the founder of the Firm I think my background is go to Market I spent 17 years building Enterprise SAS software companies and so When I partner with Founders they are Incredibly excited to have a different Point of view on their board they look At me and they say Okay I want I want to Go to market partner I already have ai Someone who's deep in finance someone Who's deep in product um and that's Really how I differentiate and then from A firm perspective I and of course you Can talk about our 1% pledge and by all Means take it away yeah absolutely I Think there was kind of the firm Differentiation and we are trying to Make a brand that's built on the Foundation of trust and that's why we uh Have launched initiatives like founder Pledge which is the mental support for The founders but coming back to the Google question it's funny like you know I was at Google I wasn't there like much Later after Jeff de and you know it was Only 30 people now it's like 200,000 People so a lot of these people are like Family we know them so that's one like

Huge advantage and even the Facebook Meta people I joke that the day I left Google I did a account and 1500 people That were at Facebook came from Google I Joke that if it wasn't from Google like Facebook meta wouldn't exist today um And a lot of these people like the Reality is like AI was like a very small Group and there were not a lot of people So there was very small concentrated Group of people that did amazing Research so it's not a surprise that With the hotness of AI like almost Everybody's trying to get a piece of That pie and so I think the key thing to Be successful here is I hope all of Their projects really work out but I Think we are thesis driven as well so in Addition to firm differentiation we try To really do a good job of like Hey Listen there are certain areas that we Have confidence in terms of hey this is Really going to pick up and we're Educated about it we're informed already We have conviction so we try to go after That and like the reality is you don't Have to be in every AI company to do Well you just have to be in the right Ones and that's what matters but in it Overall I'm just really happy there was A lot of activity so people in AI it's Like picking up the you know startup Ecosystem again for all of you like Aspiring Founders like I hope like all

Of you find success in some way and it's Nice that it's kind of like bringing Some positivity back into our ecosystem Absolutely you know one thing so you so You show up prepared essentially but um I wonder too when I see these people Spinning out I mean obviously not Everybody's cut out to be a Founder no Matter how smart you are so how do you Sort of distinguish from you know how do You decide who is going to be a you know The successful team team here is it kind Of social Proof I mean I I hope that we're not Making our decisions just on social Proof I mean there are some like really Important things for instance like you Know in terms of their background like There are a lot of AI researchers but Some of the top ones have the highest Number of citations then there is Research people worked on and some Research is much more broad-reaching Much more critical than others um for Instance when we were like working with Runway you know they actually co-author Stable diffusion and it was really Important and you know they were Arguably one of like maybe 20 people in That area so I think part of it is look Just because you're very smart you're an Expert in an area like building a Company is not an easy thing like you Mentioned these companies I always say

That like if there was Newtonian law of Gravity the kind of like similar law and Venture is that when you go against the Markets the markets will always win so What Market you pick is very important And we need to separate exciting Research and Brilliant ideas from what Could actually transform into a company In terms of like how critical is that And then you know how busy is it like I Think one of the other like brutal laws That I learned since I left Google is That you have to really pick your area Because if you're going against Incumbents that have amazing Distribution for instance like if I Could like mention like you mentioned Canva we're also investors in notion Like canva has 170 million users Google Has several billion and notion has 80 Million users I think what people are Now appreciating is that it's much Easier for somebody that has 100 million Users to put an AI fature charge $1 a Month then for a new company to come up With a brilliant product and as much as It's like even 10x better it's so Difficult to get that extra distribution So that's where you have to really make A judgment call in terms of Hey listen Like how critical is this and is this Really gonna fight against the Incumbents or is this truly have a Chance of carving a niche of his own and

That's why there are like much fewer Companies that can rise about that noise Like runways a good example and we try To look at companies that can be a Platform that can be a standard but also Have like deep modes which means that You know it has to have very original Ip And multiple elements that make them Different and back to that quick Point Connie I mean does the founder know how To leverage that distribution so Chris Was very methodical now as a partnership Runway has a partnership with canva has A partnership with Getty and so these Are some of the things that you have to Look for when you're backing some of These AI researchers which is do they Have that commercial go to market mind And I certainly spent a lot of time with Them on that and that's part of what we Look for as well that's great I thought That deal with Getty was really Interesting Runway plus Getty to sort of Make sure that uh you know Getty wants To make sure that it's sort of um its uh Content is I don't know ethically you Know presented that's not the right Wording but um you know I do wonder About Runway I mean Runway is very Conscientious about that would would That make a difference to if it if it Was not was that sort of part of the Pitch I mean I think one of the things That really important for us is that we

Also really care about our LPS and we Care about the founders one of the Reasons we are not the biggest VC is Because we're also parents and I want to Be able to go back home to my family and Say today we made a difference because The company we backed is doing something Good that's why we have companies that Cure trying to cure cancer have cured Cancer diagnosed cancer like Runway like Canva like make sure that creativity Pervades in the world and not just for People that can afford thousand dollar But people that can only afford $2 and Still can like unleash creativity and Shopify I mean there are millions more Entrepreneurs in the world and people That would never be able to be a founder And have a business because of Shopify So I think the the mission really Matters to us and we are like all Immigrants and an immigrant like hustle And a lot of our companies is like Democratizing something really critical For a lot of people that really need That and that's like a really good Formula for finding successful company So that absolutely matters what the Company does what the funders care about What the culture and Mission is um and We really pay close attention to it I Also wanted to um back up a minute you Were talking about you know these Companies with hundreds of millions of

Users and also lots of resources that's Another concern obviously when you're Talking about a small team how are they Able to compete for talent compete you Know economically for talent um I mean I See Google's laying off a lot of people I don't know if that's you know Impacting anything but VI did you want to I mean we we can tag Team this one I think it's hard right I Mean you're right I think we were just Having this conversation with several of Our AI companies on just the war for Talent is absolutely brutal it's a board Level conversation when you have Google Meta Etc offering over a million dollar Packages and so it really comes down to Finding these folks at an early stage Giving them a large Equity package and Hopefully they believe in the mission of Building an iconic category defining Company right and so it really to me That's what has worked for us but it is Incredibly hard right now I think just To add to wh so you just asked um one of The things that might or might not be Obvious the way that we care about the Mission future employees also care about It people that are very smart and like There is a lot of you know resources and Wealth and like people want to make a Decision for the right reasons so the Mission matters but also like who you Work with also matters so one of the

Things that I learned from from being at Google like having work with like Jeff And others the world's smart and best People want to work with other world's Smart best people so if you start with An a team an A+ team you're much more Likely you know everything else being Equal the details that you know Viv Mentioned but if you're starting with Like a BB minus team and look you can Have amazing research you can have Amazing degrees but when it you know Like there is only so few people that Are really well respected in the Industry everybody does their research The same way they do their homework work On us if we didn't do a good job and we Didn't have a reputation we wouldn't Even be able to stand in front of you Tonight it's literally 16 years of like Every day of hustle trying to make a Difference for Founders and that's what Basically earned us the right to talk With them and I think it's similar for The companies that if you don't have a Good story if you don't have a mission And you don't have a plus team I don't Think you're going to have a great Success in getting the very best people Um what about go to market is that much Different when you're dealing with some Of the companies that you're dealing With Now versus is sort of more Traditional Enterprise companies I mean

We could spend all day talking about This honestly and we don't have very Much time to have a piece coming out on This but um yes it is quite different a Go to market in the AI era versus what It was for the last 10 20 years with SAS I mean a couple of things that we talk About a lot is like speed of iteration Right it used to be like you could Launch a web page and launch a couple Features over a couple months and that Was enough but now I mean the AI Companies launch new features on a daily Basis right and those are always the Best performing features we talk a lot About Community um that being I mean Companies are launched on Discord now Like that is in effect a marketing Channel are you thinking about that so Yes it's it's I think it's quite Different um and it's really exciting Yeah and I think Viv really touched on Something important so I think one of The ways that you can make a very Complex investment decision and focus on A very few simple things and get it Right today we were having another Conversation with a very big entity that Literally Engineers this billion dollar Exits and they said even like they Mentioned a public company of like you Know 20 billion plus size they have Everything but it's very difficult for Them to be able to build a community and

They really want to find a company that Already has a fervent community so I'm Glad that Viv mentioned this because Often Community is not associated with Marketing we think of marketing and go To market is like Google ad dollars and PR and all of that but the real power Move today is to have a very loyal group Of users and in fact we mentioned you Know canva and noan when we've invested In noan noan didn't even have a single User and it took them five years of very Hard work to get the first Core group of Users but 10 years later now they can Leverage all that work so and it was all Because they started with a core group Of users that found something in that And then it scaled from that and today It's that it was the same for canva they Basically like started the the founders Were actually teaching people how to use Photoshop and they're like there has to Be a better solution so we're going to Start a company you know Shopify started Because they wanted to build a snow uh Snowboard store and they're like there Is no good tools to do this so maybe That's what we should really be doing Instead so a lot of our companies and Founders have felt the pain and we're Like wow there is so much pain that Maybe that's what we should do to solve And if that market is big enough it's Also very inspiring to people to come

Join that company so sometimes a product Is so good that it just it You know takes off like wildfire I feel Like notion I was hearing about notion Really soon after it was founded I mean Everybody like just loved it immediately Um Vivian I just want to ask you we've Got to wrap it up unfortunately but Because you I you know I know that in Your earlier career you were focused on Marketing and I'd seen you say something Really interesting to me um which was That you thought if a company has a you Know the right marketing strategy can Really change the trajectory of a Company because I think a lot of Companies do sort of underestimate Marketing um I was was curious we just Saw two products really take off or at Least capture everybody's imagination The Humane AI pin and then the rabbit R1 Device and they had such different Approaches I think the rabbit device was Rolled out in a conference room at a Casino during CES very low level Humane it was sort of Like this six-month buildup and then it Released it to a small number of Reporters um I think they both went well I just was wondering like what's more Your style and what did you think of Those different approaches if you Thought about them at all I don't know That I I've heard of the second launch I

Obviously saw the Humane launch and I Actually would love to buy one I haven't Bought one yet but it looks amazing and Incredibly interesting I don't know if You you've probably seen all the demos It it's it's it's great also like it's Interesting like I'm so curious what You're going to say but a lot of great Products follow science fiction and you Know like it was one of those things hey Like are we going to have something That's omnipresent and is very easy to Use that you don't even think of using It is always there I mean it you have to Do what's true to you there isn't like a One-size fits-all you have to do this it Is like look at your product for human It made it perfect sense to launch the Way that they did obviously build up all This quiet Buzz a lot of anticipation so It just depends and so this is some of The conversations that I have with Founders all the time it just depends on The market they're in who they're Selling to who their buyer is um but the Best products don't win right it's very Easy to copy I mean we're seeing that Today any product and so I think the Companies that are different look Different act different talk differently To their users are the ones that are Going to stand out and frankly win yeah The one thing I will add very briefly What we said we have a company value at

Felicis that we want to be an original a Lot of the things we try to do like we Try not to copy others and we also are Looking for companies that are original Especially early when it's not obvious Not everybody's saying this is great Product and so the scary thing about Marketing is sometimes you can do Everything right it might still take a While for the product to take off but Being original being different It really matters right because you look At some of the things and not everything That is traction that is taking off is Necessarily original and I do think that That originality and like being first of Something that always doesn't win but I Think being the most original and having The most differentiation definitely Makes a difference and I think marketing Amplifies that positioning so I think That's kind of the ingredient but you Also have to make sure the positioning Maps into that so that other people can Take advantage of it and be fast Followers and you know um basically Negate that advantage and one great Example which I think you should think About is we talk a lot about open Ai and They've launched and they use chat GPT And everyone is using it and but Anthropic launches and so they had to Launch the Constitution to be different And that is really a marketing tactic

Right sort of what we're talking about Absolutely guys such a pleasure talking To you truly and thank you again thank You thank you thanks everybody great to See you W


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