1Mby1M Virtual Accelerator Investor Forum: With Yanev Suissa, Managing Partner and Founder at SineWave Ventures (Part 5)

Sramana Mitra: Where are you looking right now? What verticals are underserved where you think such large opportunities exist? What kinds of verticals are you looking at?

Yanev Suissa: We have a bet in the AgTech space. We’ve done a few in the health insurance space and the HealthTech space. We are increasingly looking at the manufacturing and industrial spaces. We think that cyber-physical systems is an interesting place.

Sramana Mitra: IoT kind of stuff.

Yanev Suissa: Yes, but in specific spaces. Robotics elements can be interesting but more of the software play than the hardware play. I think that’s an interesting space as well. These are some examples of the different verticals. 60% to 70% of what we do is the platform plays. Understanding the vertical on top of the horizontal platform concept allows you to help those companies hone their business use cases to different places.

Even the big rocket ships like Databricks learn things over time and have bumps in the road. Databricks is a horizontal platform and applies to everything. They have customers across everything. About midway through their lifecycle, they realized that in order to be the most effective company, we need to streamline this and make sure we’re servicing a particular vertical really well without sacrificing the other ones.

They honed industrial, healthcare, and public sector. They continue to hone more and more. That is an effective strategy. You want to be a platform, but you want to focus. Focus on one element, do it well and then move to the next. If that didn’t work, then move to the next. You don’t want to boil the ocean all at once.

Sramana Mitra: The other trend that we are tracking quite closely is PaaS. In this category, it makes a lot of sense for a number of PaaS companies to emerge. As you said, it has to go to market as a vertical solution. It’s hard to go to market as a platform company to begin with. Since you have companies that are mature, at what point can a company that is doing vertical solutions switch to being a platform company?

Yanev Suissa: I think platform companies apply to verticals. I think you can have a PaaS within a vertical. In fact, I think that’s really important. One of the biggest challenges for innovators is how does this platform with all of its features and solutions actually work in your day to day business. This is something we train our entrepreneurs in when we bring the Valley to the public sector.

The Valley is all about what you could do. The actual enterprise customers want to know if this is reliable, usable, and deployable now. It’s going to solve this problem that I know I have now. The customer is not going to be creative with you. It’s very rare. It happens sometimes. That’s what design partners are for.

Sramana Mitra: They want to solve problems.

Yanev Suissa: Right. The ones built on a particular vertical are exciting because they understand the specific problems. The ones that are across verticals struggle until they can hone those vertical-specific applications of their platform. Once you land one of those, then you could say, “We can also do this.” That’s how it grows.

Sramana Mitra: In the early stages, we don’t recommend companies to go position as a platform company at all. They need to find a problem to solve. Let’s say a Series C company can look at a full-fledged developer ecosystem. There are two things we see. One is the system integrators have the domain knowledge and they take the platform and go build other solutions on top.

The one that excites me is platforms that work with startup ecosystems and startups that have domain knowledge-building solutions on top of that. There haven’t been that many companies that have succeeded in doing the classic examples like Veeva coming out of Salesforce. We haven’t seen a lot of vertical cloud startups building on other people’s platforms as well. I think that is a wide-open opportunity for the vertical cloud.

Yanev Suissa: It’s interesting how this space will evolve. We’ve had it in a different form. AWS is marketplace. Azure is marketplace.

Sramana Mitra: It’s a layer below.

Yanev Suissa: We’re seeing how that interim layer develops. I do know that there are several well-known startups that are a little later-stage that are starting to experiment with this.

Sramana Mitra: It was great talking to you. Thank you for your time.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Yanev Suissa, Managing Partner and Founder at SineWave Ventures
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