00:17:22 · Molly O'Shea, Shardul Shah
[00:17:22] S1: What's a typical partner meeting like? [00:17:25] S0: We Do you have do have partner meetings. I think you're referring to investment committees, but we have partner meetings as well. What entrepreneurs should expect is they present to our group for thirty, forty five minutes, and then we deliberate for thirty, forty five minutes, and we make a decision. Those tend to be conversational. They're highly engaging. We're trying to create an environment that demonstrates to an entrepreneur the intimacy and the relationship they'll have with our entire group. We manage those committees to have high quality but fast decision making. And so, for smaller investments, we might have a smaller quorum for larger investments, we might have a larger quorum. For example, for a million dollar investment that we'd make, it might be three people, for a $100,000,000 plus investment, it might be six plus people, and the objective is, again, to create the best experience for the entrepreneur. [00:18:25] S1: What are the biggest challenges that most of your portfolio companies are facing right now? Is it compute? Is it marketing? Is it just testing? Is it getting their product out? What are they facing the most?
00:18:25 · Molly O'Shea, Shardul Shah
[00:18:25] S1: What are the biggest challenges that most of your portfolio companies are facing right now? Is it compute? Is it marketing? Is it just testing? Is it getting their product out? What are they facing the most? [00:18:38] S0: If you don't mind, just to go back to your prior question, there's another stakeholder that I just want to highlight, because some folks that listen may want to join Index and be mentored as an investor in their careers. So, we also think about how to create a learning environment for individuals. That's actually pretty tricky when you're trying to create intimacy for a founder. And so, not everyone at Index gets to participate in an investment committee, but we make great effort to pre brief, post brief, and collect perspectives for the entire group. And that spirit of mentorship we can come back to is, again, part and parcel of why we've had so much participation as investors in outcomes. Your question that I evaded, I apologize. Could you repeat? [00:19:24] S1: What are the biggest challenges or the biggest problems that you're seeing founders face in your portfolio right now? Is it meeting the expectations of this high growth period? Is it compute? Is it access to that? Is it whether or not they want to decide to become a neo cloud or a coding agent or a personal agent and become like Instinct? Like, What do you find as the biggest problems that they're facing right now in this market?
00:19:50 · Shardul Shah, Molly O'Shea
[00:19:50] S0: Yeah, I think it's expressing oneself. So, I'll give you an example. Karin at Cartesia, Cartesia is building a voice AI business. I joined Karn's board about a year, year and a half ago. Initially, I gave him conventional wisdom, which is like, do very few things and do them with excellence. Then I got to know Karn. And Karin is an explorer. He's an adventurer, and the way for him to express himself is to explore and adventure. Initially, I told him, You shouldn't run this part of your business. In fact, you should shut it down, it's successful, but burn the boats and focus on this. He ignored me. Actually, I think my perspective lit a fire inside him. He got upset with me and wanted to prove me wrong, and he was completely right. In some ways, it was really easy with Karin to disagree, to give him perspective, but then have total belief in him to support any decision that he wanted to make. And I think when entrepreneurs get supported and seen for who they are, all of the other things take care of themselves, whether it's compute, for example, where to focus their business, who to hire when and where, or how to scale with what level of aggression into a crowded or difficult or confusing market. [00:21:13] S1: So, over thirty years, I can imagine that Index has seen a few things. And the place where founders, people, entrepreneurs looking to build businesses learn the most is through mistakes and these really challenging moments. What have been some of those defining ones that you've seen that are really good lessons over and over again?
00:21:13 · Molly O'Shea, Shardul Shah
[00:21:13] S1: So, over thirty years, I can imagine that Index has seen a few things. And the place where founders, people, entrepreneurs looking to build businesses learn the most is through mistakes and these really challenging moments. What have been some of those defining ones that you've seen that are really good lessons over and over again? [00:21:41] S0: One of the hardest challenges you encounter is when do you say no. This can show up in small places and big places, but learning to say no is an incredible lesson. The first blog I ever wrote I know you say we've been under the cover and we haven't written anything The first blog I wrote was titled, I think, Learning to Say No. And it was pointed at Asaf, Roy, Yinon, and Ami when they were running a company called Adallom. Years later, they did say no once to an acquisition offer from Google. They didn't say no the second time. They knew exactly where I stood, but that two letter word created an enormous amount of value for themselves and for shareholders. So, learning to say no, I think, is incredibly important. Number two, at Index, for investors that may want to join us, we systematically underestimate the size and magnitude of category defining companies. That's really challenging. And to continue to dream, to believe in entrepreneurs, sometimes more than they believe in themselves, can unlock the ability to double down in businesses over time and grow influence and ownership.
00:21:41 · Shardul Shah, Molly O'Shea
[00:21:41] S0: One of the hardest challenges you encounter is when do you say no. This can show up in small places and big places, but learning to say no is an incredible lesson. The first blog I ever wrote I know you say we've been under the cover and we haven't written anything The first blog I wrote was titled, I think, Learning to Say No. And it was pointed at Asaf, Roy, Yinon, and Ami when they were running a company called Adallom. Years later, they did say no once to an acquisition offer from Google. They didn't say no the second time. They knew exactly where I stood, but that two letter word created an enormous amount of value for themselves and for shareholders. So, learning to say no, I think, is incredibly important. Number two, at Index, for investors that may want to join us, we systematically underestimate the size and magnitude of category defining companies. That's really challenging. And to continue to dream, to believe in entrepreneurs, sometimes more than they believe in themselves, can unlock the ability to double down in businesses over time and grow influence and ownership. [00:22:59] S1: A lot of people obviously know about Anthropic. That's one of your portfolio companies. Everyone knows about these huge trillion dollar companies that are really crushing it, but there is a next wave of AI that it might be humming around on X or in the news, but I want to hear from you, what makes this new wave of AI investments, and what are you guys working on? What's your thesis there?
00:23:24 · Shardul Shah
[00:23:24] S0: We have a lot of domain expertise within Index, whether Jan in FinTech or Marton in marketplaces, myself in infrastructure security, Nina in robotics, Danny in consumer there's a lot of domain expertise. And so, I can appreciate why you might ask about what's our thesis and thematic approach. But it's actually all about the people. And so, when I think about a more recent wave of entrepreneurs, we weren't targeting 26 and under founders when we decided to invest in Flapping Airplanes or Ben and Asher at Flapping Airplanes and Aidan, excuse me, or Joon, Michael and Percy at Simile, or Moore and Stefan, at Hone, or Karin at Cartesia. We don't have a 26 screen. But when all roads pointed to Ben as one of the most special entrepreneurs of his generation, we wanted to invest before we knew what he was working on. And in fact, before he knew what he was working on. And as a consequence, you actually see a variety of different themes. You talked about mind reading with I love science fiction, right? And so, simulation is super fun to think about as a core pillar in most science fiction. But I wasn't going into a meeting with Joon thinking about I want to invest in a simulation company. I saw him, I understood him, I felt him, and wanted to get behind him no matter what he was doing. Parag, at Parallel, again, he did not know the business he was creating, but we had belief in him that went beyond his celebrity, which is I think one of the reasons he asked me to join the board at this Heath stage because I didn't invest in him because of his celebrity, I invested in him because of my view of his character and his competence. There isn't really a thematic overlay. We don't think in terms of coverage. We don't think about these statistical measures. What we really aim for is are we the largest and most influential entrepreneur in category defining companies? To do that, we try to get involved as early as possible. Sometimes we make mistakes. We don't connect with the entrepreneur. Then, we try to get involved as quickly as we can. The idea of domain expertise, the idea of diverse perspectives gives us an apparatus to make those catch ups as quickly as possible, and then we have great diversity of funds from a seed fund, a venture fund, and a growth fund to then execute on the strategy.