Aydin Senkut on How Robotics Could Reshape the Economy

[00:00:00] We might have as many robots as people, maybe even more. There are a lot of things that humans are unwilling to or incapable of doing, and robots can do that. So I'm super excited about the implications of that. One of the things that fascinates me, I don't think people are appreciating the potential of commercializing the agents because the agents don't know the world the way we do. Apple had to call its apps Maps so that people confuse it. Do you know that? Like, I asked my wife and I'm like, do you realize, like, you think you're using Google Maps, but it's actually Apple Maps.

[00:00:29] Anyway, I probably shouldn't go there, but I can't help myself. Aydin Senkut, welcome to the Newcomer Podcast. Thanks for joining me. Thanks, Eric. Thank you for having me. I'm really excited about this. We have a ton to talk about. Excited to work together on this emergent list. We have a set of roughly 30 seed or early startup founders who are recommended and endorsed by former speakers of the Cerebral Valley AI Summit.

[00:00:58] We love it. Just the sense that have people at our summits that we think are on the cusp and then taking off and then to have the founder endorsement is so exciting. So excited to dig through that list. And then Felicis, the firm you founded, 20 years old, has such a legacy. So already young, I guess, for some venture firms, old for others. You've been on the Midas list consecutively for 13 years, so have a great perspective on venture.

[00:01:28] So we'll talk about Felicis, maybe some advice for emerging managers, and then we'll talk some of the hot topics in venture today. I guess just to jump off on this emergent list, like what excited you about it and what sort of is standing out in terms of the companies that are getting nominated? First of all, kudos to you. Anything that's unconventional and unorthodox always draws us. We're drawn to outliers. I feel like I'm an outsider and I'm an outsider myself.

[00:01:59] I love the idea and I think there is kind of like an analogy and adage in the restaurant industry that if you want to find a true hidden gem, ask a chef, not food guides. So I feel it's a great implementation and execution here. I also feel it's a great honor. If you want a great restaurant, ask a chef. If you want a great founder, ask a founder, you know, not the pundit class. I think it's true because look, at the end of the day, I think what people miss is you've got to be able to see a version of the future that is not yet obvious.

[00:02:29] And I feel like founders are the real heroes. So they have a way of like seeing the future like nobody else can. And so they have a different lens. And what I'm really excited about this is that they actually get a chance to show that lens to the world. And what are some of the themes that you're seeing emerging? I mean, it's like almost this post-ChatGPT world or people are building a world, obviously, agents, robotics. Like what stood out to you from the companies that people are paying attention to? Well, there are three areas that stood out to me.

[00:02:58] But before I tackle those areas, I feel like this business, we're always talking about like the valuations or what companies are worth. And people sometimes got to remember that the foundation of that is incredible business traction and growth. And the precursor of that is hyper demand. And so the right way to find companies in our business, you have to be right in non-consensus.

[00:03:22] And so I feel founders of this special lens and not surprisingly, like three of the areas that they chose like really resonate with me and with my team, especially AI infrastructure. Like one thing that we talk about is kind of like the hot companies or the most valuable companies. But then the thing is like every kind of one of these tech cycles and hype cycles have leading companies.

[00:03:48] We have succeeded in finding like the foundational layer of each one of those waves. Like in the mobile wave, it was gaming and we were investors in Rovio and e-commerce. It was Shopify. In payments, it was AdYad. And now like in AI, we have a lot of interesting companies like Superbase and all of that. So one of the cool things is like looking at these three areas and say, I'm excited about them particularly because I think for the next decade in the world, these are the areas that are going to face hyper demand.

[00:04:16] And hyper demand would result in stellar business traction. Not surprisingly, AI infrastructure is one of them. So obviously, there are some companies that are already positioning to go public or not. I'm more interested about the foundational companies that power this wave. Like what's the glue for AI agents? Who's going to keep the AI agents secure and like keep them in check? There were so many aspects of AI infrastructure. The next thing, AI and biology. We sometimes are so focused on technology.

[00:04:43] We forget that some of the biggest products in the world are in pharmaceuticals. I have this like running joke. So one of my close friends was employee number eight of Google and we were dreaming about starting a company. We didn't know what we were going to do. And we're like, what do you think could be the most important company in the world? And we decided like if we were to do it, we would call it You Don't Die. Because every human being like cares about it. What would you definitely buy? You Don't Die. You Don't Die is something that you would definitely buy.

[00:05:08] And joking aside, this is why biology is so important because even or despite all of the amazing changes we had, we're still like having people come to cast, even though we're about to like get close to curing and all of that. So this next wave, much more so than this chat-based interface and intelligence, I'm super excited because we can actually have an impact on our physical lives. And then the last thing is just physical world and robotics.

[00:05:36] First of all, if you're a sci-fi nerd and fan like me, like, you know, like every sci-fi movie has some aspect of robotics. But I think one of the things people do not realize or think about is that if you ever studied economics in college, like, oh, like what are the major like inputs into like wealth creation and economies like labor? And labor was limited by people. And now all of a sudden we can have unlimited labor because of robotics. And I think or I can imagine a world and it might take 10 years, maybe a lot less,

[00:06:05] but we might have as many robots as people, maybe even more. And I don't think it's like a zero-sum game. There are a lot of things that humans are unwilling to or incapable of doing and robots can do that. So this kind of idea of abundance, we have now real underpinnings of that with labor now, like being completely like infinitely scalable and many other aspects with AI. Now like intelligence is like super scalable. So I'm super excited about the implications of that.

[00:06:35] I want to dig into each of the categories for a little bit. AI infrastructure in particular, I mean, there's clearly a wave right now of these inference companies, whether it's Base 10, Fireworks, Modal, and then a lot of companies around the inference layer. I guess the argument against them is just like lots of revenue growth, but then people wonder about the revenue quality. That's one piece of the infrastructure question.

[00:07:02] The other is sort of the, I don't know, heartburn from like the crypto era, where it's like there was a lot of inference investment in something that didn't really take off. And I guess, do you worry with agents that if we build sort of the infrastructure layer for something that hasn't been built out yet, there's the risk that it never fully gets built or the world that you expect doesn't come exactly that way? So I'm curious for your perspective on both those points.

[00:07:29] Yeah, I mean, look, I think the way to look at inference is the moment AI became interesting is when it transcended from one token in one token out. When you think about how we think, like the way that brain works, there are some things like you take extreme shortcuts and some things where actually like spending literally all of your neurons are like focusing, getting it right. And the big difference to crypto in my mind and the reason why inference is really important

[00:07:55] is now all of a sudden you're getting real jobs done and like you're making real decisions. And that honestly, like if you think about what human beings like use their brain for, like we make decisions. And even when you're not realizing it, when you're like seeing something, hearing something, smelling something, each one of these things have like hundreds, if not thousands of processes that is now completely oblivious to you. And all of this stuff like includes like making some decision and like, oh, like I'm going to use this signal and not that signal.

[00:08:22] So in some essence, inference is like a key unit of how our brain work. And now we have like managed to scale it. And then you think about, well, human brain, even with its ingenuity, can do X. And now we can be in a world where that X can be 10X or 100X. And the reason why that's really important is that can produce uncapped value, right? There might be like a lot of things we do that previously we couldn't do, or we could do it, but we could not scale it. So unlike crypto, that's why I feel the whole inference thing is not a toy.

[00:08:53] And trust me, like I'm speaking, I was an early Google employee and I'm like, God, please let this be a $10 billion company. It became a $5 trillion company. And that's just given human beings information, access to information, equalize it, scale it. And now like what we can do is if we basically change it and say, now we can allow human beings like make better decisions or even do their work for them. It's just a new era.

[00:09:18] And so, but the reality is, if you also ask me, do you ever envision a world where Google is going to spend a hundred billion in CapEx a year? And I'm like, what are you talking about? Like that is never going to happen. You know, like this is a company that like- That's going to ruin the beauty of the business. This is a company that didn't even want to do advertising, you know? So, you know, there was real, I think the scary thing is you cannot not spend that money. I feel like we're in some kind of like survivor game and like the winner is going to take a

[00:09:48] lot of value, but like five, 10 people are spending the money. And at the end, I'm not sure if all five, 10 players will, the economic returns will be equally distributed. So there will definitely be some changes, but look, every time like we get afraid of momentary like stock market changes or whatever, like, oh, like we're going to see like some shock in the economy, whatever. What follows is like a 10X improvement, like 2008, 2009, people are like, oh my God, this is the worst thing.

[00:10:17] Stocks lost all the values, but then that became a great foundation and some of the most interesting invaluable companies got created. So I'm an eternal optimist and I do think there is some really exciting stuff to come there. Are you investing in agent infrastructure in particular companies to allow some sort of agent economy or are you waiting for more to build out there? I am. And the way that we're thinking about it, like, I think all you have to do is like, I don't even think you need to be like the most incredible expert.

[00:10:43] You just have to imagine a world where like instead of just humans, now you have like, you know, millions, billions of agents and millions, billions of robots. What changes in that world? And so a lot of it is around developer ecosystem and it used to be just people that can code, computer science degrees. Now you have citizen developers and the agents themselves. And it's awesome because, you know, these agents, like there are so many ways that. Citizen developer. I don't know if I've heard that phrase before. Citizen developers isn't like, look, think about like all the like replets and lovables

[00:11:13] of the world. No, I get it. People that didn't even like, can barely speak English or their language is now like coding and creating apps. Yeah. How cool is that? Right? Like it's democratization. Also, I feel like every great Felicis company is democratization of something. Canva's democratization of design. Shopify was like democratization and scaling of like entrepreneurship and commerce. Make it available to people like citizen, you know, entrepreneurs. And now we have citizen developers.

[00:11:38] But I think more importantly than that, like one of the things that fascinates me, like imagine, like, I don't think people are appreciating the potential of commercializing the agents because the agents don't know the world the way we do. Think about all the years that brought you to here. How many things you learned you don't even think about? Like, you know what a university is. You know what a country is, you know, like a location that's a city or any type of simple thing, like, you know, colors, whatever, versus the agents have to learn the context and everything from scratch.

[00:12:07] In a world where search was only consumed by humans. Now imagine a world where search is no longer consumed the way humans do it, but via an API by billions of agents that will do like a million more searches compared to like a single human. How exciting is that world? Then all of a sudden you're like, wow, like we created this amazing abundance in terms of AI, but now security is the biggest threat.

[00:12:33] Well, how do you manage a world where like even the smallest like bad actors have insane AI tools in their hands? Now this is going to be really important. And like, if you thought like identity management, whatever, like that was a big area, it's going to be like a thousand times more important, critical bottleneck with what's going on. And so every time you have this like chaos and unexpected situation, or we don't know how this is going to turn out. It is the best foundation for some of the biggest disruptions to happen and surprise us

[00:13:02] hopefully to the upside. I wanted to turn to the second bucket, which is the, I don't know, biology, health. Where, where do you see the most opportunity? You know, there are companies investing directly in drug discovery. That's obviously like a hard, slow business. Like where do you think there is opportunity in that sort of, I don't know you, the do not die business. Like if you were going to fund that today, what, what are the approaches that you're most bullish on?

[00:13:28] Well, part of the extension of the do not die businesses, I think some of the most durable and exciting businesses in the world is where people gave up and said, this is just too complex. Even think about like space. We couldn't scale space because the rockets were not usable. And then guess what happens now? We have reusable rockets that land themselves. We were joking about how we wanted flying cars. We didn't get anything. Now we have flying cars. And you know what I love about it is that that basically tells people nothing is impossible.

[00:13:57] And so in biology, it's like, oh, like why would I go into healthcare? It's regulated. There is this thing, that thing. I'm like, well, how about if you just reimagine everything? And what I love is like, we are going through this amazing moment now where the toughest problems in the world, nobody wanted to step in and solve them. And now that we have seen like maybe 0.1% on 1% getting solved, now everybody's asking, well, what about the other 99%? And the other 99%, I can't imagine something more personal and important to humanity than

[00:14:27] biology. Because think about how many of us have lost a relative or loved one that succumbed to a disease or just died too early. Or even if it's not in the family, it's somebody you respected. Like think about amazing people like Steve Jobs. Like why did we lose him to like liver cancer? Like why can't we identify it early? Why do people have to like pass this life so early? And like, we have like kids getting sick around the world, whatever. Like why can't we help them? Like why can't we instead like focus all the human energy on innovation versus fighting

[00:14:54] to keep people alive or, you know, like still struggling to cure the sick? So what I love about it is not like one thing, but how all of that could be reinvented with AI, every single aspect like regulation, the way that the practices run themselves, the way we do clinical trials. Why does it take 10 years to bring a drug to market? Imagine if you have, God forbid, life critical condition and somebody is telling you, well, it's going to take 10 years. We have a miracle drug. And the only way to make it is if you make it to one of the clinical trials, like to even have a prayer.

[00:15:24] So I feel like all of that is going to change. And the change is going to force also like regulators and governments to think differently because I feel like maybe they don't care about AI as much. But when we talk biology, I guarantee you like all the people that are making power decisions, either they themselves probably have like some kind of clinical condition or somebody in their family. So it's going to be personal for all the people in power.

[00:15:50] And I feel we're going to go through this amazing wave of AI crossing biology. And I think just, I can't even imagine. This is actually slowing down the gap between, we have a pretty strong hunch that we could help people to allowing it to be sort of deployed and testing it in real humans. Is that part of what you want? I think a lot of it, and even the lab part of it, like for instance, like we have a company that is not biology in the hard science part called periodic labs. We keep talking about these AI models that they can do amazing things.

[00:16:19] But you know, one thing that we found out is that when it comes to the physical world, one of the things that is missing is how do you even test if this works? Let's say that the AI model came up with a new element, like we have a new superconductor or we have a new chip material, like you can do things a hundred times cheaper, like how much of an impact it would have? Great. Well, AI models can come up with it. And the same thing can happen in biology. The problem is you don't know if it works.

[00:16:49] What we love and what we learned with periodic is they basically spend years building an infrastructure where they can do more than a thousand experiments a day. And so they took over a biotech space. And so what I'm excited about biology is there are a lot of things right now we cannot scale because the real world verification and testing does not scale. And all we can still do is test things on animal, which by the way, doesn't even reflect to people. So to me, like one of the very interesting examples, my wife and I support this professor

[00:17:17] at Stanford that basically took advantage of that you can use, you know, grow brain cells from skin cells, basically make like replica human brains and actually test on them for different things. They were able to cure like one of the first diseases. So there is like this new era of biology coming that people don't even imagine how cool it's going to be in terms of just like we're going to cure so much disease. And like one of the only ways it's going to be possible though, is that AI is also going

[00:17:44] to change the testing environment and how we basically verify that these things actually work. On our third bucket. I mean, at Newcomer, we surveyed venture capitalists a couple of weeks ago and asked, you know, the hottest category we weren't paying attention to. And overwhelmingly they said robotics. So there's clearly this emergent list, that survey. There's a lot of points that robotics is hot. You know, you're in the venture capital business. We're going to talk in a second about building a fund. You need to make returns off these investments.

[00:18:12] Like even if you say, okay, robotics, clearly there's something there. What's your analysis of what part of robotics is going to actually generate a huge return to investors? So the one thing that I will say, we've been investing in robotics for almost 15 years. Up until a year and a half ago or two years ago, everything we invested in robotics was an absolute abject failure, like not even partial failure, like abject failure.

[00:18:38] Because what happened is we never had a moment where robots learn things the way humans do. You know, like you can't just basically program a robot only to take a step or to lift the glass and all of that. And more importantly, like we, you know, learn things by looking, observing, whatever. There is some way that our brain has evolved to essentially pick things up really fast. And you see like the babies, like it's amazing how they learn. For the first time, we have a way of making that happen in robotics. So it's infinitely scalable.

[00:19:06] So this is a very important moment. The reason why I'm calling that out is it's easy to say something is hyped or exciting, but the more interesting question is why. Why and why now? And so that's a really important reason. And then the next thing is when you think about, I just did this simple calculation that just U.S., Western Europe, Japan alone, 190 million low-skilled jobs. By the way, these are only jobs humans are willing to do. And there might be like another billion jobs that we didn't even imagine because humans

[00:19:35] would never do something like that. And so when you basically think about that as like, I don't know, like to pick your number, 10,000 a year, 20,000 a year, we're talking the market is so gigantic that for one of our robotics investments, I made this calculation that even 0.2% of that market would be 10 billion a year. Right? So like 10 billion a year at 10X multiple, that's a hundred billion dollar company. So this is not a VC pipe dream of I'm optimistic. This company is going to do great.

[00:20:01] And to me, the other big thing was the validation of some of the worst, most critical companies. The question is, can you have robots in the field in the toughest environments? And if those companies say, these are good enough that I'm going to deploy them. And we are just starting to see that. That to me is a very important validation. We're not talking about household robots. We're talking mission critical, the biggest, most critical companies in the world. So the combination of all these things, I'm super excited.

[00:20:28] By the way, this doesn't even get to the bottom of like, hey, if we're going to build that many robots, where are all the parts going to come from? Manufacturing industry is going to go through a hundred exchange. All of these robots will need actuators and energy and other stuff. We're going to need, if you thought inference market is big enough, just wait until like these robots like come along and with agents, it's going to be like an incredible explosion of demand. So that's why I'm super excited.

[00:20:54] And one of the other like interesting approaches we have at Felice is people look at a wave and like, it's this company. And we're like, wait, no, like this wave has like six, seven different ways it's going to play out. The robots themselves will be great. There's going to be data providers for the robots. There's going to be like AI and inference for it. There's going to be manufacturing wave. All these robots will need parts. There's energy that needs to come. There was robot deployment. There were like maybe 10 areas, not just the robots themselves, but like between the models

[00:21:22] and all of that, I just think like we are not even like top of the tip of the iceberg of how far this is going to go. Will you invest in multiple robot builders? Like if they're sort of competitors, but you think the market is large enough, can you invest in multiple companies? So what we try to do is we are not a fan of investing in competing companies, at least at the moment of investment. So this is the reason why I've articulated what I just did. So instead what we do is look, we know that this wave is going to big. How many different ways can we play it, right?

[00:21:51] Like I do not have the crystal ball of what company is going to be the eventual winner. I think we have a pretty good inkling, but what we want to do is play it. Can you say which one? I mean, I think like obviously the main robotics company, I mean, look at what happened with OpenAI and Entropic. So if you're doing like that, that's going to be a great place. And there is going to be, I think an OpenAI and Entropic version in robotics. But I think like the data of that business could be equally big because OpenAI and Entropic use publicly available data for the most part. But for robotics, that data doesn't exist.

[00:22:21] I mean, even though now we are looking at videos and trying to learn from it, but still I think that's going to be a humongous stellar business. So our philosophy is identify the big wave, identify hyper demand, and then try to play it in every possible different perspective that you can. If you were giving advice to these emergent founders, I mean, there's such different categories, seeds, some not even seed, like now we're throwing the spotlight on them.

[00:22:50] I know it's hard to give advice across sort of a bunch of different types of companies, but what would be a piece of advice you'd give those founders? I mean, I think the advice that I give is probably as valuable as yours. I mean, you took a bet on yourself. You were brave. You did something that wasn't done before in media. I mean, all I can tell them is I am very lucky to be where I am today because I was brave enough to take a chance. I was brave enough to do something that people told me couldn't be done.

[00:23:17] And more importantly, I was brave enough to do something where people said, you can't do it. And yet almost every great innovation in human history has been done by someone who took that impossible and made it possible by sheer belief and sheer grit. But I think these founders are the same. They're tackling some crazy problems and it looks insurmountable. It does not look inevitable. They're going to need a lot of support. But all I can say is just be courageous. Like, what's the worst thing that can happen?

[00:23:46] I think we sometimes worry too much about failure and the risk of something not working. I think like I'm trying to remember, there was an example, Curie who discovered the vaccine for tuberculosis. I think she spent 30 years of her life. Imagine how many times you had to get up every morning saying, I failed like 5,000 times, but I'm willing to wake up again, try 5,001, like for 30 years in a row every day. How many days is that?

[00:24:15] At 300, like, it's almost like, you know, 9,000 days, like whatever. Crazy amount of days. But part of it is like, just don't give up and be consistent. Like, you can't just hit a wall and say, okay, I changed my mind. This is too difficult. You have to constantly go to it. I'm imagining that Michael Jordan ad where he talks about all the shots, you know, that he missed. And it's like to get a certain number of shots, you have to, you know, you have to miss a lot. Well, that's a great entry point to the decision to start Felice's some 20 years ago.

[00:24:45] You were one of what? You were like the original product manager at Google, right? I was the first product manager at Google. And you know why? It's so funny. I was the only non-engineer they interviewed. And I'm like, God, how am I going to impress Larry and Sergey? Then I realized I was the only one who spoke languages. None of them spoke any language other than English. And Google was only available in English. And so I told them like, I can do a great job for you. I'll take Google and I'll launch it in the first international languages. I'm a language guy. I lived in all these places. I can do it. And so that was my first job.

[00:25:14] I created my first job. And what was the first language you did besides English? We did 11 languages. So it was basically the Western languages plus Japanese, Chinese, I think simplified traditional. And I did a great job. And Larry is like, thank you for doing this. But it was not nearly fast enough. It didn't need it. He basically took what I did and just shut it down to pieces. And in fact, his takeaway was like, I feel like this should be done by machines and not humans.

[00:25:43] And so I joke with people that my first PM job being imperfect and falling short of Larry's bar actually is the kind of accidental godfather of Google Translate. Because he's like, let's not use humans anymore. Let's have machine learning take care of all of that. So I'm very proud how far that came. And what was more interesting is to then switch into sales. And then nobody wanted to touch international.

[00:26:08] The reason why that's important is because I think most underappreciated business aspect of venture capital is that it's about people. It's about finding people, understanding them, what makes them outlier and relating to them. Because if you just find them, but they don't have trust in you, it's not going to work. And so to me, like that was the perfect underpinning of going to 40 countries for Google. Some of the languages I spoke and some of them I didn't.

[00:26:33] But the only way I could succeed was to relate to those people and put myself in their shoes. And that was the perfect training sitting across from founders. And they saw something different. I wasn't doing it for ego. I wasn't doing it for fame or money. I genuinely cared about what they were building. And they could see why I got excited just like they are. Like kind of like how an eight-year-old gets excited. This like exuberance and like giggling like, oh my God, this is going to be the most amazing thing. And so that's sometimes the biggest difference.

[00:27:02] And they're like, you know, we can get excited about that and we can trust that. And that basically like opened a door for me because I think until then, especially like in my era 20 years ago, the VCs were used to founders coming in and like pitching to the authorities, kind of the royalty. And like, oh, we don't know if we're going to give you money. Thumbs up, thumbs down. Like the Roman gladiator. And I'm like, no, like it's all about the founders. But, you know, luckily the world ended up moving to our side of things. How long did you stay at Google? I stayed at Google for six years.

[00:27:30] And I left, I joined when it was about 30 people, left when it was 3,000 people. I left about a year after the IPO. I thought 3,000 people was already too large. And I'm a parent of two entrepreneurs. And I think my dream was at some point always to start a company. And I don't know how you thought about media, but I'm like, look, the great thing about venture capital, even though I know nothing about it, is that all you need is some brains, a good strategy and a little bit of capital. Like you don't need much to get started. Like you don't need like to put a whatever.

[00:28:01] And I'm just really lucky how everything turned out. Yeah. How was fundraising for that first fund? I think the fundraising for that first fund was very difficult because there were a lot of good things for them to look at. Like I basically did angel investing four years on my own and had 100 investments and 12 exits. But people still looked at it and say, oh, you know what? Like Aiden, we like you, but you don't have an engineering degree. You're not technical enough. You're not an expert enough. Like you didn't really get promoted at Google. You weren't a director or VP.

[00:28:31] I mean, pick your favorite excuse. And none of that is untrue. But I think what they underestimated is I saw the world differently than all the other venture investors because I was an insider. And I said, you know, the world, when we look at it, the talent could be more global. There are going to be companies in areas you don't expect. And if you're like an expert and you see the world in a very narrow way, you're never going to look at something crazy and say, oh, wow, that could work. You're going to find 10 things why it can't work. And so you're never going to take those chances.

[00:29:00] But I'm willing to take those chances. And so what was really great is even though rejection was extremely painful, it became my rocket fuel. Like we always talk about rocket ships, but we don't talk about the fuel. And I'm so grateful the first few LPs that took a chance on me, one of them sent me their memo. It was really interesting. Like later did I realize that most of them were also like startup LPs. Like I was full outsider going into venture capital. And a lot of them were like, hey, like we're just getting like new into the LP arena.

[00:29:29] The biggest funds are not going to give us allocation, but there's new breed of super angels. And, you know, they're starting funds. Let's go like back these managers, the new managers. So I'm really grateful for them because obviously the capital put us in business. But more importantly, they've been a great mentor to me. They kind of told me like, hey, like this is how the greatest into venture capital do things.

[00:29:51] Like they basically questioned all my thesis and like how I wanted to run things without quashing the original idea of like talent could be global and you can invest in them from just with a small team from Silicon Valley. But then there are other things about the venture business like, hey, like I didn't I wasn't like inside for decades and decades. So that was really great in terms of like holding me to great excellence, maybe kind of similar to your experience and information. Right. Like in other newspapers that you kind of showed you the ropes, but you still like went your own path.

[00:30:21] Exactly. How big was that first fund? The first fund was 41 million. And how large is the firm today? We have now four billion under management. But to me, honestly, like you can talk about something. I can say, oh, I'm excited about it. And somebody is like, well, you know, there is a venture fund that's 100 times your size, right? That's not a big deal. But I feel like sometimes what I am really proud of is like we need to compare ourselves to ourselves. Like can you be the best version of yourself rather than trying to compare yourself to everyone else?

[00:30:51] I was really inspired by this. I looked up the first fundraising deck from 2009 and it was really cute. It's like, hey, like I already had like six exits. The aggregate value is like 377 million, whatever, not what we captured, but the value of those companies. I think I might have a shot at like one or two billion dollar companies. And then I'm like, wow, like it's not about the AUM we have, but now like the collective aggregate value of companies, you know, it's like literally like 325 billion is almost like 1,000x bigger.

[00:31:21] And I thought maybe I'll have a billion or two, like one or two billion dollar companies. We actually have 65, 27 of which have exited 20 IPOs. And by the way, not just 20 IPOs, like we had an IPO in Finland. We had an IPO in Canada. We had an IPO in Netherlands. Maybe one day we'll have an IPO in Australia. I don't know. So I'm really proud of that because we did this with a tiny little team out of Silicon Valley. And people said, there's no way this is going to work. You don't have offices in these places. You don't know any of these founders.

[00:31:51] And to see that what those founders have been able to do. And today, like we have companies like Chip Company in UK, Fractal, N8N in Germany, like for and Superbase, which is global, but headquarters in Singapore. The trend continues. Like we're still able to find companies in brand new sectors that I didn't even think. Like I couldn't even imagine that we could even be talking to those kind of founders. And it's the same thing. Like a crazy outlier founder that works, looks at the world differently.

[00:32:18] And next thing we know, they're building a great foundational layer for what's exciting today. How do you stay on top when other people come to your strategy? Obviously, founders being king, you know, is consensus now at this point. You're certainly way ahead on that. But the rest of the Valley has come to it. And I mean, literally, I think today, Sequoia gave up their London office. It's like they're saying, oh, yeah, we could invest anywhere from California. So it sounds like what you were just saying.

[00:32:43] Like how do you stay differentiated when people, you know, respond to competition and try to match what people like you are doing? I think the most important thing is the number one value. It's so important that we actually put in all our conference rooms is learning and adapting rapidly. So reinvention is the biggest thing. In fact, one of the things that I saw, especially when human beings are most successful, is when they're most vulnerable. Because that fools our brain to think something works so great, don't change anything.

[00:33:13] Like something like we had a dog in the room, right? Like you were wearing the cerebral Valley hat and you were wearing these, you know, great glasses and you had a beard. Like don't change anything. Like don't shave. Like you should stay exactly the way you are. And in some ways, the things that makes technology really interesting has this kind of like backside of like, wow, like, you know, like the reason why these things happen is because they're going to get disrupted again.

[00:33:37] And the only way to get ahead of it and not be surprised or shocked by it is to reinvent yourself and preempt the disruption before the disruption hits you and you're surprised. Right? So that's why I'm like religiously obsessed with, I mean, I read 24-7. I literally like try to go out of my way to talk to very interesting people. And that goes back to the emergent list. Don't always ask the obvious people. Ask different people. Like ask experts. Ask the demand. Where is demand going to come from?

[00:34:06] And that informs where the growth is going to come from, which then informs where the value is going to come from. So I think the most important thing is like go around and wonder. Like do the not obvious thing and pick the unconventional way because with the right amount of bravery and a little bit of consistency, it can take you to great places. The weird point is that I'm only really going to change if I'm in sort of a high pressure situation where I have to like, oh, I'm not comfortable. It's like when you're comfortable, you sort of stay static.

[00:34:36] And when you're not, that's when you change. That's when you sort of create a great startup. Is that that was the sort of point? I don't know. I think that's the founder journey. I just don't know how to do it except being absolutely relentless. Right. Relentless is another one of our core values. And all the founders that I met, I mean, there is this intrinsic thing about them that just drives them. It's like a nuclear engine. You know, like the reason why we like nuclear is because the energy is so abundant, like just keeps going for like years and years.

[00:35:02] And like I remember like this, like I didn't realize this in the beginning, but later I found out like CEO of Adyen was a cancer survivor and climbed Everest. Like Toby at Shopify was like a savant programmer at age 15 at Siemens. And I think like the person who mentored them taught him a lot about like programming and like also like just what matters in the world. So each one of these founders had this very quirky way of getting to excellence.

[00:35:29] And other people look at that as like, oh, that doesn't fit my standard formula. And having worked for Larry and Sergey, who were PhD students that never in a single day in their life worked for corporate and made better decisions and created a company that was 10 times more valuable than any like in corporate America. What I basically learned is like greatness never comes if you're copying others.

[00:35:51] Greatness comes if you're original, if you're unconventional and more importantly, if you relentlessly move forward, even if you're like hitting like wall after wall or like, you know, increasingly like taller mountains. And like all you can say is I'm going to conquer the next mountain and then the next one and the next one after that and never stop. And I think only that like keeps you going. And in the beginning of our conversation, you like mentioned, like it's not enough to do something great.

[00:36:20] Like I think Bezos said this, but maybe if you repeatedly done it a hundred or thousand times, now we can start talking that maybe you're starting to get on the edge of greatness. Not once, but at least a hundred or thousand times. So it's an inspiration for me, even though I never worked for him. It's just one of the dogmas that drives me forward. The mood in the venture business right now is it's, you know, for the multi-stage funds, right? It's like the bigger, getting bigger, raising huge amounts of money. It's sort of a two part question.

[00:36:49] Like, do you feel the pressure, I guess, to get bigger and bigger to match this sense that, you know, the lightspeed, general catalyst of the world, multi-strategy, huge, or you don't want to do that? And then on the other end, what do you feel for the emerging managers, the people who are much earlier than you that feel like totally squeezed out of the business even by, you know, 4 billion funds? So I guess the first part of the question is like, what's your approach to the situation where mega funds get bigger and bigger?

[00:37:18] And then what advice and thought do you have for the emerging managers? Let me look, in every situation, people only see one side of things and you need to look at it from multiple sides. Like you can say, well, these four largest firms are doing something very interesting, but you also have to realize that comes at a cost. Do you want to manage like 600 people? Do you want to manage like dozens of funds? Like how many like LPs do you want to manage? Will the capital raising continue?

[00:37:44] Now you're so giant that that giant entity basically drives what you do. And it's no longer about the pureness of, I just want to back founders like Eric, or I want to back founders like Walter at Fractal or Couple at Superbase. It's basically what the machine dictates. You just look at the numbers and like, well, the way these numbers are, I need to basically write even $100 million checks is not going to move it. I need to write billion dollar checks. And how many companies in the world can absorb billion dollar checks and produce businesses that are worth trillion dollars?

[00:38:14] Now it's exciting, but there are no like 100 or 1000 of them yet. I ran the numbers like in 2006, there were no trillion dollar companies. Now we have $15 trillion companies, but I'm not sure if 15 is going to be 1500. So look, the way that I think about it is the most important thing that everybody has to ask, whether they're giant or they're micro, is that you got to be authentic to yourself.

[00:38:39] I think in Silicon Valley, there is one thing that I observed that a lot of people, even managers, they want to be something what people tell them to be. You know what, you're this, you should do this. Or like, this is your background, this is what you should be doing. And to me, like the thing that I've done all my life is to never, ever go into a box people tell me. I always make my own box, like transcend what people tell you. And so look, I don't know what the right answer is yet.

[00:39:05] I think it's really important to have enough capital, because especially in this world, the three areas we talked about biology, physical world and robotics and AI infrastructure. Unlike 20 years ago, when I started where software companies like didn't need a lot of capital. We're in a new world where there was a lot of capital spent and CapEx spent, because you're building something durable and deep modes. The dark side of it is it requires a lot of CapEx. And if you cannot write a minimum check, it's going to be very difficult to be part of those companies.

[00:39:32] And I never want to be at the table and say, well, we can only do this small little portion here in terms of companies we back. I always want to have full purview of all the great companies we can invest. But then it's also a fine balance of once you become too large, I also don't want to be happy with like whatever, like 11% IRR or like the size is so much that even when everything goes into the right, you just look at it as like, well, physically, like where this is going to go, like because physics and math is physics and math.

[00:40:01] So I think it's just finding the right balance is really important. And we're just going to like keep blazing our own paths. And the most important thing for us is also to stay true to our founders. Like, can we do enough to support them? And, you know, we were also talking about that even in this world when everybody is like seemingly founder friendly, what people don't talk about is the founders trust. Like, what do you do actually to earn that trust? You know, like the fact that we wrote our shares with the founders and all the things we do.

[00:40:29] Even if they defraud you or what do you have limits to that? You know, like it's so funny. I mean, this is something that people ask. I think in the history of Felices, nobody has defrauded us. But let's say out of the 500 plus bets, let's say that there were only two situations where things have gone sideways and unexpected in negative ways. But the reality is like you can only lose 1x your money. But if you don't get into the very best companies, you're just never going to be great.

[00:40:54] So I think one of the biggest misconceptions about this business is all we're like risk managers or I'm avoiding failure. I'm awaiting failure. Actually, the biggest failure for me was not to be brave enough. You know, like I can go on and on about like Brian Chesky from Airbnb emailing me before YC. I didn't really like you. Sure, you don't want to write an angel check at $2.5 million valuation that became a 60 billion plus company. Same thing happened with Pinterest. Like my founder Sandeep was in the wedding of the founder.

[00:41:21] We're like, God, like if they build a mobile app, it would be so great. We pass and six months later, guess what they do? They launch a mobile app. And all we had to do is like have faith and invest in the company. So every time we got like Airbnb, I got afraid of legal risk. Every time we thought about the risk versus if the world can go widely, if the things can go widely right, that was like the much bigger failure than actually we manage the risk. So that's all I'm going to say.

[00:41:51] And honestly, like the other thing that's inspiring to me is this whole idea of like voting our shares with the founders was something that came from the founders. Kind of like what you did with the emergence list. You're like, you know what? If we're going to pick the best founders, why don't we ask the founders themselves? What I realize is a lot of VCs do things that they think are the right thing to do for the founders. I'm like, how about I do something really radical? Let me ask the founders what they want. And they said, look, we want to know that you're never going to vote against us so we can trust you.

[00:42:20] Not like you're on the board, but we can actually trust you so we can talk about the hard things. And the second thing is like, look, being a founder is really tough. Like it breaks people's marriages. It breaks people. And we're like, how can we make you unbreakable? So let us spend our own money. Like, you know, whether it's coaching, mentorship, we had 100 plus founders take advantage of this great founder pledge we have that we put 1% of every check we write they can use for self-development or anything that can help them.

[00:42:46] So what I love about that is just like something that no other VC does. What the founders want to see is like, don't tell me something that every other VC offers or puts on the table. Tell me something that only you people do. So what is your, I don't know, put your finger in the air, read on the bubble moment or like how much do you feel like this is a, we used to have to talk about like.com, but 2021 was such a crazy period. Now I think we just look back at 2021.

[00:43:14] Does 2026 feel like 2021 to you? You know, I spent like not even a second thinking about bubbles. Like all I care about is the underlying business value. Like a great example is we've invested Superbase. It was right after the COVID like bubble, like valuations crash. And for three years, nothing happened to that company. And people are like, you guys are idiots. You pay too high of a price. Like what's going to happen to that company?

[00:43:40] And I think what happens is if you basically let the market affect your decisions, you're never going to like have the bravery to find the right things. Underlying Superbase had like insane growth. They grew revenues thousand X since we invested. What really mattered to me is that the underlying business performance was growing thousand X. And more importantly, we had a thesis that that was going to follow hyper demand for a backend platform that takes advantage of like crypto needed backend.

[00:44:10] Then all the AI apps needed backend. And people look around and there was no like friendly backend and Superbase became that. It's become key to a lot of these like vibe coded apps. Where I'm going with this is you can now look at it and say like, just make a generalist comment and say, oh my God, there's a bubble. Like, what does that even mean? Like the only thing that matters is we have a job. And that is, are you picking the best companies as in not the best companies?

[00:44:33] Like whether there is a bubble or not, you just look at the underlying performance and all that's changed with the bubble is that you have performance. And like, I can tell you that's worth one X the revenue or 10 X the revenue or a hundred X the revenue. The multiple can change, but the underlying value of the company doesn't change. And the way that I think about it is if you can find companies where the underlying value grows a thousand X, whether the market moves like 20% or 30%, we're going to do okay. You know what I mean?

[00:45:02] Even if the market takes a 50% hit, which I don't want for anyone. Our job is to say, you know what? There is something in our book that has grown so much that even with that hit, you know, at some point, like we're going to be able to monetize it. And even with the biggest setbacks and crashes in the market and bubble bursting, guess what happened a couple of years later? The market comes back roaring even stronger. You know what I mean? So like, we're not just going to say, oh my God, it's a bubble. We're like slowing down.

[00:45:35] You cannot stop. You cannot look at the market and say, oh my God, like this is just crazy. Our job is to find the very best companies, even in that environment. How do you price with that philosophy? It's sort of like, what do I think sort of other investors are going to pay you? What tends to be sort of your valuation philosophy? I mean, I don't really think as much as what the other investors are going to pay is that I basically think about what will be the terminal value of the company.

[00:46:02] And more than the investors themselves, the question that we ask is, how can this company be so important that it is an independent company? And today, like that lens is like, you have to be at a billion to 10 billion revenues. And by the way, you can't wait eight to 10 years to get there. You got to get there in three to five years. But the other thing is, if you find the right zip codes, like let me give you an example. If you find anything in like the overall like AI infrastructure and chip industry, like you have multiple trillion dollar companies.

[00:46:32] And we have this like interesting like theorem that any company will easily spend up to one to two percent of their market cap to acquire a company. The question is, for a five trillion dollar company, that's 100 billion. For a five billion dollar company, that's like 100 million. So if you're in the right zip code and even when things don't go right, but you build something so critical, there is going to be an acquire for a very large amount.

[00:46:56] Well, that's a theme in venture capital recently has been these acquisitions where deals were, you know, it's like poolside hugging face companies where people didn't even necessarily think they were going to go the distance. And they've had these amazing acquisitions. So the acquisitions is a sort of defense of some of these companies. And I think this is a really good eye opener because we talk about business traction. And you can argue like, hey, these companies maybe didn't have a significant of a business traction.

[00:47:24] But we were in poolside like, but what they have done is they built a critical asset, strategic asset. It's like we're in New York. There are certain like areas of New York, like even if you wanted office or home, like you just can't get it. You know what I mean? Like something that is very rare, strategic asset, or you become a gatekeeper. Like Shopify was a gatekeeper in commerce. Adyen was a gatekeeper in payments. Superbay is the gatekeeper for like infrastructure for all the AI apps. So if you have like a strategic role and you become the home of a very important community, right?

[00:47:53] Like that was hugging face. And for poolside, they took their model, open sourced it, and have like some other really great assets. And they found great talent. Even that has value. So even if the business performance has not ensued yet, there is still great value in the company. And I'm glad that it is being monetized. You said earlier in the conversation that, you know, a lot of your investments have this sort of democratization flavor. Yes. I'm curious what you're seeing now. I mean, obviously there's this vibe coding moment.

[00:48:22] I mean, I'm asking partially as self-interested like, oh, where's the creator economy going? Or I think there was a subthread in some of our emerging companies where they were like creator adjacent. Like are you – I don't know how bullish you were or weren't on sort of the creator economy. Like what's your read on where that stands and where do you see sort of like democratization of entrepreneurs today? I mean, look, we have – I feel like both Notion and Canva like come at this from different angles.

[00:48:48] Like Canva in terms of like creativity and then Notion from just like, hey, like we want to be the underlying, you know, foundation of knowledge for every company. Or even like, you know, one of our great New York companies, Runway, like people said, hey, like the big models are going to do everything. You can't be, you know, an independent company or like a very strong company doing just AI for video models. And Runway is doing just fine. I mean, it went against OpenAI. It went against Google. And it's still doing really well.

[00:49:18] So I think I'm also like tracking platforms like Substack. What I love about it is whether it's like a platform we invested in or not, anything that's democratization of talent or democratization of access to information or using knowledge, overall is net positive for humanity. So whether it was like Patreon, whatever, some of these we weren't in. But I love the fact that these platforms basically made people say, you know what, like instead of being an employee, I actually want to start something.

[00:49:48] I want to create value by myself. I want to bet on myself. And before maybe like without these platforms existing, there was a lot of friction. But now like between Shopify and Commerce and Substack and Patreon and like some of our other companies like Canva and all of that, I just love the fact. Like for instance, like one of the like untold stories of Canva. I don't know if you know this, but in the beginning, they wanted to like include all the images in Clipart and they were not available on the web.

[00:50:14] So the founders went around the world and came back with like literally hundreds, if not thousands of disk drives full of images. And they went to the creators and said, look, right now you're selling it and you have to charge a very high price because your distribution is tiny, micro. How about you give them to us? We're going to give you a lot smaller piece, but we can give you access to everyone in the world that they will then use your art and your, you know, the things that you created. Like what an incredible idea until then, like nobody like has dared to do it.

[00:50:43] So even Canva in his own way has done such a great job of like not just democratizing design, but also give away to creators, you know, like to do a lot more than, you know, what they've been able to do before. I know you've been gone for a long time, far longer than you were there, but what I'm sure you've invested out of Google since and maintain some relationships and are a closer observer of it. Like, you know, you know, there's been some crumbling of the deep mind team.

[00:51:10] I'm curious what your read of like their strengths and weaknesses are right now. I mean, I'm extremely bullish on Google. Like, let me, let me present the following framework. We talk a lot about AI, but one thing people don't talk enough about is what is the raw material of AI? The raw material of AI is data. Well, who has the most unique and most scalable data in the world? Let's think about it.

[00:51:32] The whole, like the whole map, the whole organization, like the whole information, YouTube, like all the videos, like, wow, like Google also runs one of the two most important mobile operating systems. They have Chrome, the browser, like anything that you touch. There is Google payments, like email. Let's talk about Gmail. You know why it's fascinating? When I was at Google, there was this crazy decision whether we're going to do email or not. And the biggest thing was until we do email, there was a reason for people to get out of the Google platform.

[00:52:02] Because even though we're great at search, the only thing people do more than search is email. So unless we figured out email in a way that nobody does, like we're always going to be exposed. And it wasn't like, oh, we need to make money of email. I don't think people even correctly understood that. It was just that with email, there was no reason for people to leave the Google umbrella. Same thing with YouTube. Like I remember like people asked me when Facebook went public, what do you think Google was going to do? I'm like, are you kidding me? Have you looked at YouTube? Like this is going to be the largest platform in the world.

[00:52:30] And somebody was talking about how like Netflix growth is like stalling. And YouTube is absolutely going off to charts. After Google put like tens of billions of dollars into it. And like a billion and a half acquisition is probably going to be like, you know, hundreds of billions of dollars business within Google. So I'm super bullish on them. And I didn't even get a chance to talk about Waymo. I mean, we talk about self-driving cars and I know Elon and Tesla get the light.

[00:52:58] But like guess who has the highest number of miles in self-driving cars? It's Google. And safe. And safe, right? And the reason why it's safe is because their cars have 100 times or 1000 times more miles in more places in the world than anybody else. And you know what made that possible is because they use the cars for the mapping business. And as a result, they have the most like unbelievable mapping business. Even Apple with all its resources can come close. And my favorite story is Apple had to call its apps Maps so that people confuse it.

[00:53:28] Do you know that? Like I asked my wife and I'm like, do you realize like you think you're using Google Maps, but it's actually Apple Maps. Anyway, I probably shouldn't go there, but I can't help myself. It's been a blast to talk to you. Everyone should go check out our emergent list. It'll be on newcomer.co. You guys have a write-up on Felice's website, which we'll also link to. And yeah, super excited to highlight this group of founders. And I'm sure we'll both, I'm sure you'll try to invest in some of them. We'll both be watching where they'll go.

[00:53:56] And it'll be exciting to meet a cool crew of founders. Thanks, Eric. Thanks for making it possible. I'm so excited about those companies. And I would be remiss if I didn't say thank you also like Brandon at Merkur, On at Tynes, Chris at Runway, and then Naveen at Unconventional. And some of the other great founders that have picked those. I really appreciate what they do because they are going to inspire some amazing founders for the next generation to follow in their footsteps. 100%. Thank you so much. Thanks, Eric.

[00:54:25] That's our episode. This is the Newcomer Podcast. Thanks for listening. Please like, comment, subscribe. Go find us on our sub stack at newcomer.co. If you're hungry for more podcasting, I also have a talk show called The Cerebral Valley Show. We love your comments. Thanks for all your support. And see you next week. Bye. Bye.