August DLT Monthly Meeting Summary - “VC Perspectives”
We had a terrific conversation with our invited speakers for the August DLT meeting. The focus of the conversation was to gain new insight into the innovation investment landscape from two esteemed investors:
1) Candace Widdoes - General Partner at ICONIQ Capital.
Candace shared a few key insights:
* Consumer-shift: There is a shift from enterprise-led to consumer-led AI Innovation (e.g., Meta's AI product aimed for 150 MAUs but reached 600M and it still fell behind OpenAI's reach). This shift is disrupting enterprise models, changing how users will access information (through generative engines vs. traditional websites).
* Outcome Pricing: There is a trend to move from seat-based SaaS to outcome pricing (e.g., Sierra only charges clients if AI agents resolve issues without human intervention).
* AI Outpacing Traditional SW Spend: AI alters the traditional total addressable market (moving from SW as a % of revenue to taking over full corporate functions)
* Vertical areas: Opportunities exist in both horizontal and vertical application areas.
* Core Operation Spend: Enterprise budgets seem to be shifting from experimental budgets to core operations, seemingly taking over headcount-related spend.
2) Gamiel Gran - Chief Commercial Officer at Mayfield.
Gamiel highlighted a few points:
* Cognitive plumbing: Enterprises are building the cognitive plumbing of their businesses.
* Three Innovation Horizons: 1) Infrastructure and tooling, 2) Operational and org-level transformation, and 3) Industry reinvention.
* AI Teammates: Not only is there a reinvention of the tech stack, but the emergence of agents as AI teammates to augment staff.
* Probabilistic workflow: Standard, well-defined processes may lose out to these probabilistic workflows. Agents might complete tasks in 3 steps instead of the traditional 12 that a human would do (but also needs to be able to explain these outcomes).
* Barriers to adoption: Adoption is often blocked by a lack of change management planning, skepticism from operations teams, and limited explainability in models. So a shift to services and onboarding is becoming key to successful deployments.
* Recommendations: 1) Engage with business lines, drive revenue, and elevate strategic credibility, 2) Understand financial impacts, not just technical capabilities, 3) Beware of shadow AI.
Additional Q&A occurred on topics such as vertical-specific AI solutions, applying AI to hands-on industries, applicability in financial services, navigating explainability, challenges of adopting probabilistic AI systems, shadow AI.
Thanks to our guest speakers and to all who participated! Please see the shared decks attached (as well as the ICONIQ report on AI), which includes many logos of emerging technology providers to review.
