What were your biggest learnings at Deloitte, Barclays Ventures, and Augmentum Fintech?
Across my past roles I’ve come to appreciate some things that are constant across all stages of investing. For me, one of those is the team. In times of rapid flux like the current platform shift, what I am looking for in teams is their learning rate – how quickly do they incorporate developments above and below them in the AI stack to their product and GTM strategy. No matter how young or mature a company is, this is the one constant throughout a company’s life.
How do you encourage your startup founders to stay relevant when so many competitors do not?
In my view, founders ought to be very focused on value creation for their customers at the early stages and not pay heed to competitors. Their focus should be on product velocity, speed of iteration, and customer obsession. Competitors may make more noise, but in the end its the traction with you customers that is the loudest signal. Events can be a good way to generate leads, especially in some industries, but it shouldn’t come at the expense of precious time iterating your product and channel-market fit.
How critical are TAM and SAM as against ARR when you are approached for funding?
Market sizing is indeed one of the most important criteria we assess. ARR is important and tell us if you have product-market fit (especially if you look at the revenue coming from expansion and gross retention more generally). Even if you have product-market fit, if the market isn’t big enough then it’s not going to be the right fit for larger venture funds that need outsized exists to move the needle for the fund’s performance. That being said, market sizing is easy to overengineer – in particular, one bias is to base market sizing on current consumption of products, not on the latent demand that exists if the right product emerged. Many companies have succeeded by creating markets where spend didn’t exist before.
‘AI will widen inequality, IMF warns’(FT 18.06.24)….’The IMF said it has “profound” concerns about massive labour disruptions and rising inequality as societies move towards artificial intelligence, and urge their governments to do more to protect their economies…’ Do you agree?
AI’s impact on workforces will be profound but will take much longer to play out than people are expecting. Enterprises won’t overhaul their labour forces over night, but there are clearly already many teams affected by the automation potential of this technology. If we fast forward to ten, fifteen years from now, we will have to grapple with large swathes of the labour force having different jobs to the ones they have today. I still believe that AI’s potential is in creating much more value and upside, rather than just replacing the value humans create today. Labour forces will learn to use the technology and there will be amazing new frontiers unlocked by human-machine collaboration.
More than 80 countries are voting in elections in 2024. How do see the tech landscape looking in December (funding, regulation, IPO’s etc)?
The capital markets might become more hospitable to listings towards the end of this year, but it’d be hard to say that with too much confidence given that Q1 has already been pretty sobering for earnings results so far. I do think some companies will be much bigger beneficiaries of increased AI workloads, i.e. the hyperscalers. The funding environment will be robust despite a tougher fundraising climate for venture funds as a whole, as many firms raised their funds in the peak of the Covid bubble and some of that capital is still to be deployed.
