What Trends are you currently investing in, especially any that are more under the radar?
Currently, I am interested in the intersection of AI and SaaS. SaaS is just automating working flow in the cloud. If you combine that with vertically focused AI you get intelligent workflow where the user takes an action and the AI makes a recommendation – the user can decide to follow the recommendation or not. Through this the AI gets smarter. This combination improves SaaS applications dramatically. An example of a company I have invested in that follows this theme is BlueShift which is marketing automation with intelligence. SaaS built on top of the AI is the next major disruption in the Enterprise space.
Can you talk about your new book Survival to Thrival?
Survival to Thrival is an Enterprise startup guide. It will be split in two books, one that focuses on the company and one that focuses on the people. The major stages of an Enterprise company are:
1) Founding the Company
2) Getting Product Market Fit - at $1M in revenue
3) Go to Market Fit – adding $1M in revenue per quarter
4) Accelerating a Category Leader
5) Industry Leader - $500-$1B in sales
Each stage requires unique strategies and execution. The key stage for enterprise startups is finding go to market fit which is when you unlock growth
As a key distinction from enterprise firms, for consumer companies product market fit is key and it doesn’t matter if the company is losing money. In consumer companies product market fit isn’t correlated with money so the investing strategy is different. However, getting product market fit in Enterprise is not enough to be successful. B2B key inflection is go to market.
What do you think of AI these days - is it mostly hype with VCs crowded in and startups pitching to the hype?
AI is an extremely disruptive technology. It’s not so much AI itself but AI integrated with the application to make user’s better.
You have a lot of experience - how has the venture investing industry changed since you started it compared to today?
More startups are succeeding outside of silicon valley. In B2B specifically what’s changed is customers more willing to buy things over the internet without having a face to face relationship. You still need the sales team to close big deals but not early on.
Any advice to young venture capitalists and angel investors out there?
For Angel investing do at least 20 deals. Try to do same dollar amount per deal with no follow ons. Also be sure to follow someone you trust who is on the board. This could be the Founder, a VC, another angel investor, etc. They will act as your proxy.
Any predictions for 2018?
The biggest transformation in Enterprise is the rise of the three cloud companies with Amazon, Google, Microsoft and the migration to the cloud. The next compute platform is the cloud. With the cloud you get big data + AI for free.