00:00Hey guys, welcome back to our interview Q&A session for premium subscribers of Startup
00:26Right.io together with Martin, an ultra marathon runner and now partner at VisionariesVC.
00:33I was wondering for this section, we talk a little bit more in that.
00:39I was wondering about a good behind the scenes founder story from your portfolio that challenged your thinking.
00:47Yes, I think this is a really interesting one.
00:49And I would love to take the example of Tactile, which is a pre-seed company that we bagged from three guys.
00:59And they were coming out of Technical University of Munich, CDTA, and they were ideating a lot about procurement
01:11because they had some experiences working at Palantir and some of these companies.
01:15And they correctly identified that procurement as a function at these massive industrial companies
01:22is one of the most outdated yet undigitized or undistrupted verticals.
01:26So the way that they went into solving that problem is that, okay, this is a really interesting vertical.
01:34It's completely outdated.
01:36Workflows are not also automated.
01:38So what should we do with it?
01:40Let's try to automate it, right?
01:41So the initial idea was let's build an RPA for procurement, right?
01:46It's very clear, right?
01:48Something is inefficient.
01:49Let's try to automate it.
01:51And this was really the vision.
01:52This was the very deep mission and vision that they had in their mind.
01:58And as they were talking to more and more customers and they started building the product,
02:03they realized that none of the heads of procurement want to automate anything because they don't have time for this at all, right?
02:11So what ended up happening is that the three founders pretty much walked up to these industrial companies
02:17and sat in the room of procurement leaders trying to observe what they are doing on a daily basis
02:23and really, really try to understand what are the most important features that would instantly drive value on the spot for them.
02:31And this is how they started building the product,
02:34which is something that has very little to do with the concept of RPA, the procurement.
02:40And this really challenged my thinking because as a VC investor, you always ask the question,
02:45what is more important, vision versus execution?
02:47Should the product be more vision-driven or should it be solving really the needs of the customer?
02:53And I would say this really needs to meet in the middle because if you are completely caught up in what the customer says,
03:01you may be overly built and sold for the very specific needs of one customer
03:07and you won't have a very solid product vision that can help you build a big company.
03:12If you're focusing too much on vision, you won't really be in the reality of what you actually need to build.
03:17And this is something that I think really came out in that story.
03:22I always hear from VCs to talk about red flags, what they don't like.
03:29But I was wondering, maybe you can share an unconventional red flag or a green flag you use in your founder evaluation.
03:40Yes, I would say I would go for the unconventional green flag, to be honest.
03:47And that is the why now.
03:52That's really the why now that is very, very interesting.
03:56And we always have this exercise where with the founder, we just close ourselves into a room for one hour
04:02and have a very honest conversation about a life journey, two-sided.
04:07So it's completely open because you have to put out your cards if you want to be on the cap table of someone for the next 10 years.
04:16And it has to work the other way around.
04:18But ultimately, we have this exercise where you plot your life in a chart where on the horizontal axis you have time
04:30and on the vertical axis you are indicating kind of the moments that were really pivotal in your life.
04:38Maybe meeting an entrepreneur that inspired you to pull the trigger and start a new company.
04:41Maybe meeting your co-founder at the university.
04:45And when you are describing that chart and what the pivotal moments in your life are,
04:51and you're sitting there and you're trying to articulate why you are starting a company now,
04:57you should have a very clear articulation of why that is happening right now.
05:03Why are you willing to take an 80% pay cut to start this new company?
05:07Why are you not taking a job at McKinsey or BCG, but actually venture on to raise money from BCs
05:15with complete high level of uncertainty?
05:17And usually the answers to that questions are very short and very clear.
05:23And I would say that's one very clear indication in really exceptional founders.
05:29What's one bold prediction you have for European venture capital in the next three years?
05:35One bold prediction is that European venture capital will have an absolutely amazing time in the next three years.
05:50Not an advertisement.
05:54Exactly.
05:54But I think this is something that we started discussing a little bit,
06:01but I think it goes very much back to what Europe has and what Europe doesn't have in many cases.
06:08And what Europe has is absolutely amazing talent from a technical perspective,
06:13but also execution perspective if you get the right triggers at the right time.
06:19And if you look at some of these ecosystems, what they don't have is maturity.
06:25Not from the perspective of talent, but the perspective of how much network effects you have across entrepreneurs, operators, investors, and everything.
06:34But if you look at some of these ecosystems that are in their own way so complementary to each other,
06:41not just from a talent perspective, but culturally, and what you can work with from Stockholm, Zurich, Munich, Berlin, Paris, London.
06:49And if you look at how much it has changed over the course of the last four years or five years,
06:56and how much we as investors see really, really exceptional young entrepreneurs wanting to start new companies,
07:03it's galaxies away.
07:06It's just incredible what has changed.
07:08And this change is just only accelerating.
07:10And this is something that I think a lot of us underestimate because we are always looking left and right to U.S. and Asia,
07:17obviously, for some interesting reasons.
07:20But if you look at really what we can work with from a talent perspective and how much these ecosystems,
07:26how little this ecosystem needs to ignite, I do think that, yeah, it's going to be very interesting in next years.
07:35Yeah, I hope so.
07:37Of course, that gives me a lot of interesting stories to tell.
07:40How do you vet AI startups promising platform-level disruption versus narrow features?
07:50Well, in the past, you had this saying, I think, in technology and venture that you either live long enough to be a platform
08:00or die as a point solution or as a feature.
08:03And I think that is something that is very strongly and radically changing.
08:13Because if you look at how some of the existing software companies, especially, for example, in the case of agentic AI,
08:23are monetizing and how they are selling to companies, they are not selling features.
08:30Often they are selling work, which is something that has never existed before.
08:33So, if you are able to sell a product that can do exactly what a human being would do,
08:39then the amount of lock-in that you can potentially achieve versus a product feature that you can migrate away from,
08:48in my view, is just very different.
08:49So, the whole concept of a feature, to some extent, in the most exceptional case of products and startups,
08:57will become somewhat irrelevant.
09:00How much value you can ultimately unlock, in the cases of these companies,
09:05is what's going to drive what, I would say, we can call a platform.
09:09And finally, the last question.
09:13What's a lesson from your time at Tear that you wish every founder knew?
09:20That lesson is that great hires will show excellence regardless of the environment that they work in.
09:29When we were doing references on people that we wanted to hire,
09:36and ultimately, we see them perform,
09:39it was very clear that if you look at some of these incredibly unpredictable environments
09:44where you have to juggle various different responsibilities
09:50and own various different outcomes,
09:52no matter how unconventional or unfamiliar the environment you might be in,
10:01an exceptional talent will find a way to really show excellence
10:07and find a way to pretty much be their own entrepreneur in that environment.
10:11And this is something that, especially in the very early stages of startups,
10:14so in this stage of zero to one,
10:16is probably, I would say,
10:18I wish many founders knew
10:20and could make more informed people decisions on.
10:25Hiring decisions, yeah, it always comes down.
10:29I've heard this quite frequently also from HR professionals.
10:33A lot of the success you'll have with your startup
10:38is tied to your first hires you do.
10:42Yeah.
10:43Yeah.
10:44Exactly.
10:45We can totally agree.
10:47Martin, thank you very much.
10:48It was a pleasure having you as a guest.
10:50Thank you so much for having me.
10:56That's all, folks.
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