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Welcome to issue #23 of our ongoing newsletter series, From the First Row.
Thanks to Cameron Borumand and Josh Carter for sending some startups our way this month. That said, no intros are required - any startup can share their pitch here.
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<aside> 🛠️ Our portfolio companies are hiring! Please let us know if you you or anyone in your network is interested in these opportunities:
<aside> 📚 Thank you to Alex Reents and Spencer Rowley from Flok for presenting at Deals & Drinks this month! Alex has been a regular participant in Deals & Drinks (as a entrepreneurial college student!), and we’re thrilled that we got to see him on the other side of the table. Thanks to our participants for bringing their energetic and thoughtful engagement to the discussion. Sign up here to be included on the invite list moving forward, and access our Deals & Drinks info page **here.**
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<aside> ♠️ The startup social calendar has been full of fun this fall! A couple events Yoko attended this month: the first Seattle founders & funders poker night organized by Grin Lord (CEO of mpathic), Martina Welkhoff (WXR Fund) and Jen Haller (Ascend VC); and a happy hour to meet the founders behind the companies in Find Venture’s Equitable Innovations Accelerator. Check out a few photos from the poker event here.
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<aside> 🏎️ Minda attended the Demo Day for Santa Clara University’s Bronco Accelerator & Bend Venture Conference. Links here are to the event brochures that list each presenting company.
In Santa Clara, the demo day was held in a courtyard under sunny skies with palm trees and sparkling wine to accompany the 21 pitches. It started with pitches about flying electric cars and ended with new carbon sequestration technology.
In Bend, the 22 pitches took place in a theater in downtown Bend where Fall weather was finally arriving. First Row LP and SAC Fund Manager Tessie Decker attended, too! Sponsored local vendors supplied the food, drinks, and lunches for hundreds of us that attended. We found several prospective customer connections for portfolio companies and met lots of great founders and regional investors.
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<aside> 🗺️ We hosted a workshop on Milestone Development to demystify what we mean by “fundraising milestones”. We covered how to map out milestones synced with fundraising goals, how to identify the right milestones and ways to manage them. We’ll share dates for upcoming workshops in our newsletter and the Events page on our website.
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<aside> 💬 Our next workshop, Investor Conversation Guide, will be on Dec 6 from 2 - 3:15pm PT. Have you ever wondered why investors ask certain questions? We’ll take the “common questions investors ask” lists a step further by providing some insight into what investors are listening for in your conversations. Register here and share with others!
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<aside> 🤖 Generative Tech Begins – In an inspiring call-to-action for founders, NFX lays out the landscape for Generative technologies and outlines areas that are ripe for adoption. NFX goes as far as defining Generative Tech as the true “web3” if crypto hadn’t happened. As content junkies, NFX’s idea around how generative tech will replace curation by “scaling creation at the edge” was particularly eye popping. Their theory is that instead of relying on someone else curating existing content for others, generative tech can create what you need, when you need it (for example, new music for a roadtrip). While it’s incredibly exciting right now, founders should also think carefully about building in the space. For the questions to keep in mind, jump to the next read (but don’t be thrown off by the title!)
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<aside> 🤖 Starting a business around GPT-3 is a bad idea – A rigorous outline of how to think through startups being built around Generative Tech APIs like GPT-3. While these companies will be buzzy, they’ll tend to be squeezed as competition and market dynamics unfold. The low lift of using GPT-3, which would be the source of the product’s “magic”, is exactly why you must be deliberate on where you implement it. APIs are fantastic when they enable table-stake features (Ex. Infrastructure, messaging). But if your product’s magic comes purely from an API, it’s easily copied. If it’s easily copied, you’ll have dozens of competitors overnight, which drives your prices and long-term profits sharply down. This isn’t a critique on the technology itself, but rather a lens to apply when using or investing in generative AI. How can you leverage the power of generative AI, but keep yourself defensible through your nuanced customer insights?
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<aside> 🧵 The VC mistake in Generative AI – A great thread to read after you’ve gotten the Generative Tech landscape from NFX and dug into the fragile areas from the Allen Cheng article. Will Manidis is a founder in the space and explains why the initial value of generative tech lies predominantly in narrow, knowledge worker based tasks as opposed to art/creation. It’s hard to know what direction the space will evolve in, but exploring these alternative perspectives will certainly sharpen the questions you ask!
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<aside> 🛣️ State of AI Report 2022 – Amidst the generative tech buzz in AI, Nathan Benaich and Ian Hogarth dropped their famed annual State of AI report. It’s the best path to getting a holistic yet thorough understanding of where we are in AI and the breadth of questions we should be asking. AI Safety is finally taking off with its number of researchers tripling from <100 last year to >300 this year. Interestingly, while AI research is increasingly democratized (smaller labs are outsourcing what major players have kept closed for years), AI infrastructure remains in the control of NVIDIA, who’s GPUs are used 23x more than the next alternative. Safety, hardware democratization, and research adjustments are just a tiny preview of the report, tap through it for other emerging observations!
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Trends:
We’ve framed our funding news to match our evolved pillars: Digital Brain (applied data science) and Human Collaboration (the Digital Brain won’t replace everything/us!). This month we’re exploring distributed computing, web3 node operations, and an open-source AI startup.