Episode Transcript
[00:00:00] Speaker A: Welcome to Infinite Future. I'm Todd Thomas and today we're exploring the innovations shaping tomorrow's world. You're watching Now Media tv.
Welcome to Infinite Future where we explore the technologies, ideas and innovations shaping our world. From artificial intelligence and energy to business sustainability and human progress.
Today we are looking at one of the most important questions facing founders and investors right now.
In a world where AI can accelerate almost everything, what separates the companies that can truly change the market?
My guest today is SC Modi, Managing partner of Mighty Capital, a venture capital firm backing B2B technology companies and leveraging what it calls the product alpha effect to identify outliers. Early SC has invested in pioneering companies including Amplitude, Netscope and Grok. And she has built a career around one powerful idea. Great products change the world.
Before venture capital, SC built products used by billions during the cloud and mobile era at companies including Meta Siebel Systems. She also is an award winning author. She has a Stanford mba. She is an electrical engineer, a Kaufman Fellow, and a globally recognized voice on product, venture and innovation.
Sc, welcome to Infinite Future.
[00:01:25] Speaker B: Thank you so much for having me with this introduction. We can only go down from here, so be prepared.
[00:01:35] Speaker A: So sc, when you look at the innovation landscape today, what feels fundamentally different from previous technology waves?
[00:01:46] Speaker B: This is a great question and I assume you're saying what is AI changing?
And I want to start with what AI is not changing and then I'll explain why it's important to see what's changing.
Most technology innovation go in three steps. The first step is something that essentially is an intellectual problem that could not have been solved before with the previous technologies available.
So in the context of AI, you're looking at essentially IBM, Watson, which inside of doing Jeopardy. Was also solving a lot of really complex problems like Game of Go, things like that. That was about 15 years ago.
That first initial phase generally crashes.
When there's essentially a compute problem, it scales. But the capacity of servers of essentially computers is not there yet. If you look at the social era, Friendster was that Friendster grew very fast and then all these connections from one friend to the other didn't work out the second. So that does not change in the area we, we had what's done 15 years ago. The second wave is generally a user experience problem that gets solved. And so for AI it was the chatgpt moment where everybody went, wow, I can do this much this fast. I don't need engineers, I don't need, you know, coaches, like kind of this illusion of magic.
If you look at the social era that moment was MySpace. For those of you who remember, you could become your own creator. You didn't need TV channels, et cetera.
So that hasn't changed either. Except what changed is between Friendster and MySpace there's maybe five, six years.
Between Watson and ChatGPT, there's 12 years. So it took a lot longer, even though it feels a lot faster.
And then the third era is generally where a technology scales. So in the case of social, that's where you get Facebook and LinkedIn and Pinterest and Twitter or X etc. Etc. So kind of you found the use cases, you find the segments, whether it's horizontal or vertical integration or something else, and you go from there. And that hasn't yet happened. In the AI era, that third phase is generally centered around a segment, a particular personalization and the essence of that technology wave. And so for the AI era, we know that that second wave is going to crash. The second wave usually crashes around concerns around privacy, security.
We've seen that with MySpace, we see the innings of that. With OpenAI and Anthropic, we don't quite know what the third era will be. What we know is that we're in the second phase, that from the second to the third phase there's going to be probably a dozen years.
From the first to the second phase in social was five, six years as well, twice. And so in AI, we know that's what, what's different is it goes a lot faster on a day to day basis, but it goes a lot slower on a sort of a long term systemic impact basis. Which is why, for example, now you hear about concerns around lack of ROI with AI, because while it iterates really fast, it also generates a lot of waste.
And so it's still a little hard to see the roi.
[00:05:31] Speaker A: Do you think part of that also is around the over focus on just building AI for the sake of building AI?
[00:05:41] Speaker B: Oh, absolutely.
What happens right now in enterprises when we speak with chief product officers that are part of our kind of product alpha effect ecosystem is they have one of three pressure. You can tell I like things going in three, one in three pressures coming from their CEO.
The first one is what we say are the problems of good CEOs challenges. Give me 20% efficiency.
You're thinking of ROI as in a cost optimization.
You're thinking of it as, you know, kind of a task by task or process by process. Well, if I, instead of typing up my notes from a meeting, I use granola or something like that, then I'll save Some time typing them up.
It's a 20% improvement. And why it used to be great. It's actually really, really low.
The second type of problems that we hear about is chief product officers who are tasked with getting 3 to 5x returns.
And what they do instead of looking task by tab is they look at the end to end workflow. So they're saying, well, maybe this meeting now doesn't need to happen because an agent can talk to an agent, the integration can happen automatically, and it can be managed by exception. That's just a very simple example. So instead of having a meeting to coordinate and then optimizing the note taking, you stop the meeting altogether and you do an agent to agent coordination.
That's a kind of a 3 to 5x optimization. So we go from good CPO who often face a lot of political backlash, to great CPO who are trying to be market leaders, but they're not quite there yet. The third category, the most innovative category, that's really embracing AI. They're transforming the way they look at innovation from a product development like an engineering problem. How much can I do with the resources that I'm given to an investor problem? What's the ROI of putting a dollar, a token, a person on that problem versus on the one next to next to it?
So that shift from engineer operator to investor is where we see the highest ROI for innovation. And it's measured with an investor mindset, as opposed to measured with sort of a budget operational mindset.
[00:08:21] Speaker A: I love that perspective. That's really insightful.
You've built and invested around products people love.
What does that phrase mean to you in a world increasingly shaped by AI?
[00:08:36] Speaker B: Yes. So the nonprofit that I started 10 years ago is called Products that Count, and there's a double intender to it. Products that Count is exactly what you said. Product that captures the heart and minds.
And I'll tell you kind of why I think it's so important. And then of course, products that count, they count, right?
They are scaled, they matter, they're big enough and they count as in they're measurable. So there's a kind of a right brain, left brain side to it. So the metrics and the counting, we see enough of that everywhere on the web is fair. I don't think I need to rehash that.
But the part that is what people love is the part that I centered my book about. My book was about what makes a great product.
And the point I had was that technology has become an extension of ourselves. And so when we think about a great technology product, we have to think about a great person.
Surprisingly, Todd, there aren't a lot of frameworks to describe a great person.
Being from California, I use the Mind, Body, Spirit framework, which means mind. Everybody wants to grow, to be challenged. That's why you're doing this show. That's why your listeners are listening to the show Body. Everybody wants to look good and we expect that our technology is also going to be beautiful and beauty. I actually researched, you know, what is beauty in the world in history is not about pretty pictures, it's about efficiency. It's about wow factor.
And I think that's absolutely critical in the technology we build today. And then the third piece, which is spirit, all has to do with meaning. This is especially true after Covid, where everybody wants to have meaningful impact, meaningful lives.
But in technology, it translates into personalization, which with AI is so exciting, but also protection of privacy. On the flip side,
[00:10:42] Speaker A: I think it's interesting that you talk about beauty in product design and I think a lot of times when people think about that, they really do a disservice to beauty and to design and they kind of minimalize that.
But I think a really beautiful, intuitive product can be more elegant, more engaging and drive a better user experience.
So I, I appreciate that you used those words and I, I wish more people building products would consider that as they're building, how, how do you make it simple, beautiful, intuitive and really drive a user experience that people want to have so they will take the time and invest in your product.
SC, thank you so much for your comments. We're going to take a quick break and we'll be right back.
See you in a moment.
We'll be right back with more conversations at the edge of technology and transformation. Stay tuned.
Every week on Infinite Future, we explore breakthrough innovation across every major frontier.
We talk to AI architects, biotech pioneers, space entrepreneurs, clean energy disruptors, and the thinkers redesigning global systems. We don't just talk trends. We examine scalability, ethics, economic impact and real world implementation.
If you're building, investing in or leading the future, join me on Infinite Future only on NOW Media tv. Because the future isn't predicted. It's engineered.
And we're back. I'm Todd Thomas and this is Infinite Future on NOW Media tv. Let's look ahead.
Welcome back to Infinite Future. Stay connected to this show and every NOW Media favorite live or on demand, anytime you like. Download the free Now Media TV app on Roku or iOS, or unlock non stop bilingual programming in English and Spanish on the move. You can catch your favorite podcast on Spotify, iHeartRadio or whatever platform you prefer.
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My new book, Starving for Innovation, will be out on October 1st and if you'd like to pre order that, it is available right now on Amazon.com just search for Starving for Innovation. You can put your pre order in. And we dive deep into innovation and how to build a culture of continuous learning and to put processes in place to drive continual innovation within your company.
So check it out now. We are here with SC and we are talking. At the end of the last segment, we touched on beauty and I know sc, you have some more thoughts on beauty beyond simply product design and technology.
Can you tell us more?
[00:13:41] Speaker B: Yes, absolutely. And Todd, I think, you know, beauty is something that drives so much in our world. It drives war, it drives peace, it drives growth, innovation.
When I researched what, you know, some of the brightest minds in our civilization thought about when they think about beauty, I came up with really two camps. And I know I'm simplifying, but there was a rational camp where you'll find people like Pythagoras who says, I take a string and I divide it into regular intervals, and when I play that string, I have beautiful music. Or the Golden Mean, which says, if my building has these proportions, therefore it's going to be beautiful. So a very rational way to define what beauty means.
In the 20th century, a guy called Berkov, a mathematician, said beauty actually is a formula. It's O over C, order over chaos. It's bringing order out of chaos. And so you think of beauty in technology then as that efficiency that we've seen so much in this mobile era, with the iPhone in particular.
And then on the other side, there was a more creative way to look at beauty, which is that beauty is not something that you set out to do. It's in the eyes of the beholder.
And so in a situation like that, there's essentially when you look at something beautiful, a wow factor. Like if you go to a museum or you go and you see somebody beautiful at a restaurant, just coming into the restaurant, boom, there's this. Everybody looks at them, a wow factor that doesn't go through the brain. It's a completely sort of intuitive effect. And in technology, the most popular, most beautiful products, they have that wow factor. You go back three years, your first chatgpt moment is an absolute wow. You go back 15 years, your first iPhone moment is also a wow factor. And so great technology products, they combine both of the efficiency parts, that formula of bringing order out of chaos and that wow factor that just keep the consciousness.
[00:16:08] Speaker A: That's really interesting. I've thought about this subject as well and talked about it at length as well. And I think you're right. I think both approaches are true.
And I think you can see that really on a macro level, when you look kind of across history and the different cultures and different societies that have risen and fallen, the exact definition of beauty may be different from one culture to the next. The music that you hear that's produced from one culture, one society to the next may be different, but each society has an appreciation of beauty. Each society has a music that they love.
If you're a human being and you're sitting on the beach at sunset, that wow comes in and that is beautiful. And that's, and that's universal. So I, I think that's a really striking.
I think that's part of the humanity, that's part of who we are as human beings. And it's, it's beautiful that you then pull that in and pull those ideas and those concepts into technology and product design. Because I think you're right. A really beautiful product is kind of a microcosm of both of those sides. You have the efficiency as well as the wow moment. And yeah, I mean, it's like for me, I was a PC guy my whole life and at some point someone gave me an Apple device and I resisted. I didn't want it. I'm like, no, I'm a PC guy and just try it out for a week.
And I was absolutely in love with, changed my whole approach to technology and now I'm all Apple hardware all the time. I diffuse Google software, but I'm all Apple hardware. And they really just, they define such an incredible user experience.
And it's the products themselves are so beautiful that you want to interact with them.
[00:17:50] Speaker B: Absolutely.
[00:17:54] Speaker A: All right, so now I want to move into one of the ideas at the center of mighty capital, the product alpha effect. In venture capital, everyone is trying to find the next outlier.
But your work points to a deeper question. Can product leadership, customer love, and product market signals help investors and founders understand which companies are built to outperform?
So Sc, how do you define the product alpha effect in practical terms?
[00:18:25] Speaker B: Yes. And this is something that is essentially a brand new category. And so I realized that there's a fair amount of education and often, as with everything new, skepticism. So let me explain. First of all, it's. Why did, why did we trademark product alpha effect? Because it Essentially means product, like product innovation drives alpha, which is outperformance, and that's the effect. So that's the simplest expression of it.
Now what does that mean in practice? It means that we all know this for entrepreneurs, operators, product managers, product builders are usually the first ones to find innovation because they are the ones in the trenches solving problem problems and bringing innovation to scale. You work for JP Morgan solving some compliance situations that has been triggered by AI cybersecurity attacks. You're talking to your peers saying, I have this issue, could you help me? Is there a tool that can do it or should I? Or do I have to build it in house? Oh, I tried this new tool, it seems to be working pretty well. Great. I'm going to buy it, I'm going to give it a shot. That is the bare bone manifestation of the product alpha effect. Except investors are usually the last ones to know about it. So what we're saying is when, well, let's fix that, right? Let's listen to these brilliant, innovative product people, listen to all the challenges they have, the roadmaps they are building, the problems they're faced with their customers and their own companies listen to that, get signals from these conversations and based on those signals, find the right company to back because it addresses the signal.
And so instead of the traditional sort of thesis driven pattern recognition approach that most investors take, we're saying let's do it completely differently, let's do it from first principles based on the problems we're seeing as opposed to try and define a problem.
What we get as a result of being able to listen to these conversations, and we can only do that at scale, otherwise it doesn't work. So we have a massive ecosystem of 600,000 product builders and chief product officers across industry, across geography, we listen to these conversations. As you can imagine, there's millions of signals.
So we've developed our own machine learning stack, stack to kind of translate the conversations into signals. And then we use our own, you know, sort of LLM customizations to turn those signals into, you know, things that humans can digest.
But, but the point of it is we're not looking at a snapshot, right? That thesis or that pattern. We're looking at a movie of innovation conversations constantly. So that's really the product alpha effect when it comes to finding opportunities for investments.
And then it also gets put into a closed loop because once we invest in a company, we turn around to these 600,000 product managers and we say, here's a great product, you should buy it, you should Try it. You should give it feedback.
And so in some very tiny capacity, we are supporting these companies and helping them become king makers and category builders.
And we've generated $1 billion of value for our portfolio in just a few years by just doing more and more and more of that.
And that's really been exciting and fun.
[00:22:34] Speaker A: Do you have a favorite example of a product that was a clear winner for you that you, that you think of finally?
[00:22:43] Speaker B: Well, I can share with you because by now we've had many.
We've been in business for eight years. We've had six IPOs.
The first one, of course, is going to be dear to my heart because it was the first one. It's Amplitude, where we found them. Because all these product builders, they were looking for ways to measure the impact of their work.
And they were using Google Analytics, which is a free product with infinite distribution.
And then all of a sudden, they started switching to Amplitude, which was a paid product with zero distribution because it was a startup. We looked at this saying, what's going on here?
Something's not adding up. And we invested in Amplitude and we helped Spencer, the founding CEO, who's, who's brilliant, with some of his go to market. And there were some great successes there.
And it went public on NASDAQ in 2021 for $5 billion market cap. So that's a great first example. It's really exciting. But even just recently, a few months ago, Nvidia signed a $20 billion deal with a company called Grok, which is building a very innovative AI chip. And that's the largest deal Nvidia ever signed. Nvidia being itself the largest AI company and of course the giant we know. And we invested in Gro six years ago, so five years before, Nvidia bought them at a valuation that was 60 times less than that $20 billion figure.
And so this is another. And at the time, of course, nobody was thinking that this would ever become important except for a few random product innovators who were like, I have a problem. And inference is something that I need to pay attention to. And so we're really just looking for these signals to find interesting companies to invest. And as a result of that, one in five of our portfolio companies is an outlier, and one in three of our exits is an ipo, which is for any venture investor, it's like four or five times better than, you know, the industry average.
[00:25:13] Speaker A: That's incredible success. Congratulations. That's. That's kind of mind blowing, actually. How fantastic.
[00:25:19] Speaker B: Well, we're going to Take a lot of fun to.
Sorry.
[00:25:22] Speaker A: I'm sorry.
[00:25:23] Speaker B: Sorry.
[00:25:24] Speaker A: We're going to take a short break and we'll be right back with more. Thanks so much.
We'll be right back with one conversation.
[00:25:31] Speaker B: You can cut that off, right?
[00:25:32] Speaker A: Technology and transformation. Stay tuned.
They can clean that up. Every week on Infinite Future, we explore breakthrough innovation across every major frontier. We talk to AI architects, biotech pioneers, space entrepreneurs, clean energy disruptors, and the thinkers redesigning global systems. We don't just talk trends. We examine scalability, ethics, economic impact and real world implementation.
If you're building, investing in or leading the future, join me on Infinite Future only on NOW Media tv because the future isn't predicted and it's engineered.
And we're back. I'm Todd Thomas and this is Infinite Future on NOW Media tv. Let's look ahead.
Welcome back to Infinite Future. We're continuing our conversation with SC Modi of Mighty Capital.
AI is reshaping how companies are built, how customers make decisions, how teams operate, and how investors evaluate opportunity.
But speed alone does not create resilience. The founders who win may be the ones who can move fast while staying deeply disciplined about product, market, talent, capital and trust.
In this segment, we're asking what kind of leadership the future requires.
So SC what do you believe AI is genuinely changing about company building right now?
[00:27:06] Speaker B: Yeah. So I look mostly at emerging companies and so I'll start there.
What we're seeing is obviously that AI is lowering the barrier to entry dramatically, pretty much everywhere.
And so the key is really to understand how to build a defensible product or a defensible business.
Now what we did is we looked at is this a problem that gets solved by money?
The short answer is no. And let me tell you what we learned. We mapped about 550 companies based on like on a kind of a, you know, on a two by two.
So on the, the y axis, the vertical axis, we said how much money have they raised? Right. The higher, the more money raised.
And then on the X axis we said how differentiable are they? As in the multiple, the revenue multiple on their valuation as a proxy for their defensibility.
And you think that you have sort of a linear equation like the more money they raise, the more defensible they are. Not at all. What you find is that there's the kind of upper right quadrant, right? So up and up where you only have just kind of two players. You have OpenAI and Anthropic have raised so much and reached so much scale. Scale that they are defensible.
Short of that, you actually are have a number of companies that are in the upper left. Has raised a ton of money to build something not defensible at all because is relying on mechanisms like, oh, I have switching costs. Well, switching costs with AI doesn't work as a mode anymore, or I have cornered resources, as in I have a data set, etc. Doesn't work anymore in AI. It worked like maybe 5 years ago, but today the data set can be synthesized, can be augmented, it doesn't work and so raise a ton of money. Not defensible. You don't want to be there. Whether you're an investor or an entrepreneur, you don't want to be there.
And then we have another kind of cluster of companies that have raised very little and is quite defensible. Defensibility comes from two modes.
One, counter positioning. I'm going to do something contrarian.
Our product alpha effect is a good example of that. But so many smart entrepreneurs are coming up with contrarian counter positioning in the age of AI. And true network effect, as in a network effect that requires someone else to do something which, which creates some, some form of virality. And generally these companies are driven, led, started by serial entrepreneurs who have worked with investors and did not have necessarily a great experience and now are seeing AI as a technology that they can use to build faster, build more, build cheaper. And so their approach is I'm going to be as capital efficient as I can so that I can go as fast as I can on lean dollars and therefore that's how I'm going to get my differentiation with sort of that creativity that comes from not having raised as much money.
[00:30:32] Speaker A: It's really interesting. That's a great analysis of the space.
What does disciplined innovation look like in a market that is moving so fast that leadership teams have trouble keeping up?
[00:30:48] Speaker B: Yeah, so that's a really good question. It goes back to our conversation earlier about what we see with these chief product officers, right? You can say all three of them, the person who's optimizing tasks and getting 20%, the person that's optimizing workflow and getting 3.5x even, the person who switches their mindset to think like an investor as opposed to an operator, you can say, well, all of them are disciplined.
But at the same time, it's so tempting with AI to see everything as an exception to the rule.
You fall in love with a new product, you just do something that you couldn't do before. I mean, even in personal lives, I find myself talking to AI late at night, not Going to sleep. It's just that fascination that we have. And so the discipline is really, I think, coming from working as a team, like a team of humans, to hold yourself accountable to what is it that you're trying to do, right? And so you can take that in a direction of saying, I want to hold myself accountable to, you know, getting as much ROI as possible.
But most of the time what you'll find is it's going to come down to team performance and leadership. And so you're going to look at, I'm going to hold myself accountable to some grounding principles like ethical AI and things like that so that we can go farther, faster.
Because the biggest concern that you need to address in those larger organizations is customer trust. Like if I'm a vendor and I give all your data, Mr. Mrs. Customer to my AI, like what happens is that going to my competitor, like it is one of the biggest concerns that, that you know, scaled companies have. And so that that idea of, you know, you know, human leadership, ethical AI, high performance coming from, from teamwork, I think is a huge driver of the, the discipline that we need in order to, to get some ROI from AI.
[00:33:06] Speaker A: How should founders think about or how should founders decide what to automate, what to augment and what must remain deeply human?
[00:33:18] Speaker B: Yeah. So the continuum you outline is brilliant.
I love that.
Definitely. Anything that has to do with judgment is 100% human.
And anything that has to do with repetitive tasks is AI. And then everything else is on a continuum.
For example, in our investment process, I mentioned this product alpha effect that we've used AI to scale.
We use AI because that's the only way to read millions of signals every single day. No human team could ever read that.
That level of automation could never have been done before.
Therefore it has to come from an AI. But as we translate the millions of moments of conversations into product signals, into possible investments, the role of humans become increasingly important.
And in the kind of the diligence stage, we still use a little bit of AI, but it's mostly for workflow optimization.
And then the investment decision moment.
There's no AI in the room, obviously. It's really just my, my partner and I making the investment decision.
[00:34:47] Speaker A: So how can founders build companies that are not just AI enabled, but truly future ready and defensible?
[00:34:55] Speaker B: So a lot of it has to do really with that discussion we had earlier about moat. Right.
Build a mode leveraging counter positioning network effect on lean dollars so that you maximize optionality. There's going to be over the next several years Massive demand for M and A, which means that large corporations, some of them are going to want to be first movers, some of them are going to eventually become laggards. And their survival is going to depend on your brilliance, your innovation capability.
And that's going to be where most of the exits are going to be coming from. Which, by the way, for all entrepreneurs, right, exit is where you are an entrepreneur as opposed to an employee of your own business. So exit is absolutely critical to, to your, to your business planning. So I would say capital, efficient business, very defensible. So in a way, good old business principles.
[00:36:03] Speaker A: Thank you so much.
We'll be back for one more segment and when we return, we'll look closely at the future of abundance. How capital, product sustainability and innovation can create companies that do more than grow. They can help shape the world we want to live in. We'll be right back. We'll be right back with more conversations at the edge of technology and transformation.
Stay tuned.
Every week on Infinite Future, we explore breakthrough innovation across every major frontier. We talk to AI architects, biotech pioneers, space entrepreneurs, clean energy disruptors, and the thinkers redesigning global systems.
We don't just talk trends. We examine scalability, ethics, economic impact and real world implementation.
If you're building, investing in or leading the future, join me on Infinite Future only on NOW Media tv. Because the future isn't predicted, it's engineered.
And we're back. I'm Todd Thomas and this is Infinite Future on NOW Media tv. Let's look ahead.
We're back for our final segment with SC Modi, the managing partner of Mighty Capital.
In this final part of the conversation, I want to bring everything back to the future.
Venture capital is not just about returns. Product innovation is not just about adoption. AI is not about productivity. At their best, these forces help build the infrastructure, companies and opportunities that shape how people live and work. The question becomes what kind of future are we funding, building and leading towards?
SC when you think about the future of technology and venture capital, what gives you the most optimism?
[00:37:55] Speaker B: This is such a great question, Todd, and I'm glad that you're prioritizing it because right now I feel that AI is so much big minds on small problems, so much sort of trying to press for roi, but really what we're trying to do is understand what massive disruptive change this technology is going to have for our civilization. And so when I think about that, I think about a few possibilities like problems that could never have been solved before.
The first one is loneliness.
The problem of loneliness is massive People being single, rising trend. People not having children, rising trend. People aging, therefore being quite isolated, rising trend.
And so AI I think just simplifying based like the movie her is I think a possible solution to loneliness robotic applications, I mean it's not just the surface level. So that's the first one.
The second one is illnesses like research in medication therapeutics. Just because the scale of how AI can experiment is so much bigger and so much cheaper than what any pharma company today can deliver. And the impact on chronic illnesses like diabetes, obesity, etc. Etc.
Can be so, so positive and tremendous.
So I think that's a kind of a second huge category of human problems. And then the third one, we're just starting to see it in San Francisco now in L A is transportation, self driving cars.
The prior era of self driving cars is using AI already slightly different variation of it. But when you think about, you know, many cars, self driving cars interacting together. Sorry, can we cut that segment? Sorry, yeah. When you think about many cars interacting together, AI is a problem that is a technology that can solve that and that could not be solved necessarily before. So you can imagine the impact that this can have on going places, on traffic, on parking, on how our streets look like, even how our cars look like. Our cars could be like living rooms or meeting rooms or offices moving around, right? So there's a massive amount of innovation that's coming and that's why, you know, earlier in the show I was saying right now we're not really in the phase where we see AI as a technology that really is transforming our society. We're still in that phase of this is so beautiful. I have to find a way, right? Like the MySpace era of social.
And in a few years brilliant entrepreneurs are going to come up with the Facebook and the Pinterest and the LinkedIn which maybe will be like a different kind of self driving car, a different kind of robotic application, a different kind of research, like therapeutic research company. And then the business model will be invented out of that.
[00:41:31] Speaker A: So how can investors be more responsible stewards of the future they are helping to finance?
[00:41:39] Speaker B: That's a great question. And you know, entrepreneurs often come to me and say, you know, my investor wants me to do X. Like they want me to have a co founder, they want me to hire this type of person, they want me to charge this much, etc. Etc.
And my answer, which sometimes they love and sometimes they not as much, is there's only one thing your investor cares about, which is to make money and that is literally by definition, an investor's job is making money. It's not good or bad, it's the job. And so an investor, as long as you make them money more than they give you money or invest money in you, that is all they care about. They don't care about whether you have another co founder. They don't care about how large your team is, how high your costs are, as long as you make them money and the more the better.
So it's a curse and a blessing, right? It's, it's a curse if you say, well, therefore, you could have people funding weapons, you could have people funding drugs and all the vices, and that's not good. But it's also a blessing if you think that markets are efficient and therefore that overall human progress will be moving in the right direction. And I tend to be an optimist and so I'm on that latter camp.
[00:43:18] Speaker A: That's so interesting. I was, I couldn't help but smile as you're answering that question. I, I talked with a lot of young entrepreneurs that are just getting started and they, they, I review pitch decks for them and it seems like so often the pitch deck is just dominated by their product and all the features. And I try to tell them, hey, that's great and you love your product and you should love your product, but your investor really doesn't care that much. What they really want to know is how are you going to make the money? So show them the product. Right? They need to see it, they need to understand the concept. But then don't spend your time there, get into how are you going to make the money? Because that's what they care about.
[00:43:54] Speaker B: Yes. In fact, the fact that you mentioned that when I transitioned from being operator entrepreneur to being an investor, that was one of the most disappointing things, where in technology, every product is unique, every product is innovative. It changes all the time. You can sort of react to customer demand in days. And it's so exciting, that product world. And when you're an investor, your product is the green dollar, right? So it's like, is my dollar really green or is it super green? Well, it's just green. It's a very different type of industry.
[00:44:31] Speaker A: You have backed companies like Amplitude, Netscope and Grok. What do breakout companies often understand earlier than everyone else?
[00:44:42] Speaker B: What I've seen is really like the best entrepreneurs have a drive and a vision that they would describe to you on year one and then on year 20, you realize, oh, that's what they were building. So that's, that's the first thing is the, the depth of vision, the length of vision, like they play chess, like 10 moves ahead of anybody else.
That's the first thing. The second thing is they have a sense of ownership that is massive. So that vision is so consuming that they just have to make it happen, which makes it so that often they're not the easiest people to work with because they're just so consumed by this vision that they want it to come to life. And until and unless they find the people that are going to make it come to life, they're just going to keep moving, right? So sometimes you'll see in a lot of early stage companies, there's a high turnover, there's a, you know what people will say, a crazy founder or something like that, this is simply like somebody very visionary. But at the same time, that vision is not a technology vision. It's not kind of a, it can be very idealistic, but it gets translated into financial results. Which is why often like a researcher may have a lot of vision but may not be a great entrepreneur, because they don't translate, like they don't monetize their vision. And so I found that these entrepreneurs, they're incredibly versatile, incredibly self aware, despite maybe not appearing that way.
And they have that long range vision that they monetized, which by the way, coming back to, you know, this nonprofit that I started, products that count, they, they are essentially building products that count, right? Products that matter, that captures the heart and mind, that have a, you know, kind of a great disruptive capacity, but that also count, that monetize that scale and that's, that's the conundrum.
[00:46:53] Speaker A: So if there's a young founder, a young entrepreneur watching the show and they want to build a product that counts, what should they focus on first?
[00:47:04] Speaker B: I would say that if you're early in your career, by the way, whether you're an entrepreneur or not, if you're early in your career, you want to focus on segments that, or tasks or projects that are relatively black and white. Easy to see what works and what doesn't because it builds your confidence, it builds other people's confidence in you and it demonstrates sort of a momentum. So you start with something really kind of black and white, measurable. Did you sell or did you not sell? Did you win the deal or did you lose the deal? Did you deliver the feature or not? Did the feature make the customer happy or not really black and white. And as you mature, you tackle more and more ambiguous, complex creative problems that keep getting bigger and bigger.
[00:48:01] Speaker A: Thanks so much. Sc we're wrapping up the show. If people want to follow you, if they want to see your work, if they want to follow Mighty Capital or Products that Count, where can they find you? Where can they follow you?
[00:48:13] Speaker B: So I'm very easy to find. The place where I'm Most active is LinkedIn.
Scmoatti. And then you can also email me Scity Capital.
[00:48:29] Speaker A: Fantastic. Thanks so much. I really enjoyed today's discussion. Thanks so much for coming on the show.
[00:48:34] Speaker B: So did I. Thank you for having me.
[00:48:38] Speaker A: Thank you, everybody for watching. We'll see you next week.
