Felixthe 16 year old The Bay Area-based early-stage venture capital firm has a reputation for investing globally. Indeed, the company’s founder Aydin Senkut — who spent a few years at Google as a product manager in its earlier days — was born in Turkey and often talks about the hustle he sees in founders around the world.
Felicis is also known for the very strong track record it has built over time, with early bets on a number of companies including Notion, Canva, Adyen, Cruise, Flexport and Shopify, to name just one. handful. However, the company isn’t content to rest on its laurels, apparently. Instead, Senkut and the team often appear at — and sometimes sponsor — industry events that founders flock to, and that was the case last week at a StrictlyVC event, which the company volunteered to host as a partner. Fortunately, he is the best partner since both Senkut and partner Viviana Faga, who joined the company in 2021 from Emergence Capital, happened to share a lot of interesting information about the AI companies they meet and sometimes aggressively compete for. to land as holding companies. (Among Felicis’ related bets: It has funded app developer Supabase and content creator Runway AI.)
We caught up with the two in a quick chat that you can see at the bottom of this post, excerpts of which have been lightly edited below for length and clarity.
Every day we hear about this or that AI research group coming out of Google or another big company. These are hot tickets right now. How do you compete with the many venture firms trying to get their attention?
AS: It’s funny, I was at Google when there were only 30 people, now there are, like, 200,000 people. So a lot of these people are like family, we know them. So this is a huge plus. . . Also, we are thesis driven, so we try to do a really good job [conveying that] there are certain areas in which we have confidence [and that we think are] we really will raise, and we are informed about it [them]. [But] you don’t have to be at every AI company to do well. You just have to be in the right place. I am very happy that there is a lot of activity [and that] people in AI [are] reclaiming the startup ecosystem. For you aspiring founders [in the audience], I hope you succeed somehow. It brings some positivity back into our ecosystem.
Obviously not everyone is cut out to be a founder. How do you know who has what it takes? Social proof;
AS: I hope we don’t make our decisions based on social proof alone. There are many AI researchers, but some of the top ones have the most citations. Then there are researchers who have worked on research that is much broader and much more critical than others. When we were working with Runway, it was actually collaborative [the deep learning model] Stable Diffusion and it was undeniably one [set] maybe 20 people in that area.
[Even still] Building a company is not an easy task, so which market you choose is very important. One of the brutal laws I’ve learned since leaving Google is that you have to really pick your territory, because if you come up against incumbents who have amazing distribution, you can find [something] this is even 10x better, but it’s much easier [that outfit] that has 100 million users to offer an AI feature and charge $1 a month than for a new company to come up with a great product. That’s where you really have to make a judgment call as to how critical is this and does it really have a chance to carve out a niche of its own? That’s why there are far fewer companies that can cut through that noise.
VF: Back to that point, does a founder know how to leverage that distribution? [Runway CEO and co-founder] Chris [Valenzuela] he was very methodical and now has a partnership with Canva and with Getty. These are some of the things to look for when supporting these AI researchers — do they have that commercial mind that goes to market?
Image Credits: Slava Blazer / TechCrunch
How can these teams compete for talent? Google just laid off a lot of people. I wonder if that affects anything.
VF: The war for talent is absolutely brutal. It’s a table level conversation when you have Google, Meta, etc. that offer packages worth $1 million and more. So it’s a matter of finding these people at an early stage, giving them a big block of equity, and hopefully they believe in the mission of building a category-defining flagship company, right? This is what has worked for us, but it’s incredibly difficult right now.
AS: Who you work with also matters. One of the things I learned working at Google [Google’s chief scientist] Jeff Dean, is that the world’s best and brightest people want to work with the world’s other best and brightest people. So if you start with group A or A+ [it matters]. There are only so many people who are really highly regarded in the industry and they all do their research, the same way they do their research for us. So if you don’t have a good story, no quest, and no A+, I don’t think you’ll be very successful.
Viviana, you mentioned marketing strategies. Are these very different when it comes to today’s AI companies versus “traditional” businesses?
VF: It’s quite different, going to market in the age of AI versus what it’s been in the last 10 to 20 years with SaaS. Two things we talk about a lot [as a firm] is the repetition rate. It used to be that you could launch a website and launch a few features over the course of a few months and that was enough. Now, AI companies launch new features on a daily basis and these are always the best performing features. We also talk a lot about the community. Companies are now starting on Discord. this is an effective marketing channel. So yeah, it’s quite different and I think it’s really exciting. 
Image Credits: Slava Blazer / TechCrunch
You have a marketing background and I’ve heard you say in the past that a good marketing strategy can change the course of a company. Out of curiosity, I’m wondering what you make of two very different versions of AI devices that have caught everyone’s attention recently: the Humane Ai Pin, which the company teased for months before debuting in front of a small group of journalists, and the Rabbit R1 device, which rolled out without fanfare in a casino boardroom during CES.
VF: I saw the Humane release and would love to buy one. . .You have to do something that is true to you. For Humane, it made perfect sense to create a lot of quiet buzz and anticipation. It depends on the market and who a founder is selling to and who the buyer is. But the best products don’t win [automatically]. It is very easy to copy. So companies that look different, act different and talk to their users differently are the ones that will stand out and win.
AS: A lot of great products follow science fiction. [Humane’s rollout] it was one of those things. For example, are we going to have something that is so ubiquitous and so easy to use that you don’t even think about using it and it’s always there? The scary thing about marketing is that sometimes you can do everything right and it can take a while for the product to take off. But being original, being different — it really matters. Being first doesn’t win, but having the most differentiation makes all the difference, and marketing reinforces that positioning.
(Note to readers: Our next StrictlyVC night is coming up on Thursday, February 29th in Hollywood, in partnership with Lightspeed Venture Partners. If you’d like to join us for another night of drinks, nibbles and great conversation, you can still (Please note that our recent event in San Francisco was sold out and we expect our event in LA to sell out as well.)
