Yash Hemaraj is General Partner at BGV, and Founding Partner at Arka Venture Labs. This is a very interesting discussion that goes into the nuances of high velocity Positioning and Go To Market strategies.
>>>Sramana Mitra: Just know, I have a slightly different question on capitalization of these companies. So you talk about these two kids from MIT who are commercializing their PhD thesis, I guess. You have this CalTech professor who’s commercializing his work in the domain of drug discovery using AI. Talk to me a little bit about how you structure these deals. You’re getting in at almost an R&D level.
>>>Sramana Mitra: Other than H2O.ai, have you invested in any other open source AI companies since?
Jishnu Bhattacharjee: We have invested in over twenty AI companies.
Sramana Mitra: Talk about some of them. How are you thinking about what to invest in? Do some case studies.
>>>Sramana Mitra: I think it depends on what timescale we are talking about because inside the enterprise, whatever application that you bring in, whether it’s non AI or AI, now everything is kind of in the AI domain. There are three things to consider – domain-specific understanding of what’s happening in that enterprise which includes domain-specific vocabulary, domain-specific workflow, and then domain-specific API integration.
>>>Sramana Mitra: Since the hype cycle has been so rapid, enterprise and business buyers have made AI a priority now, which was not the case, right? When you started doing H2O, it was not that case. It was much more niche, much more selective, and much more difficult to get the buyer attention, and that has completely changed. AI has become one of the top budget items in the enterprise IT expenditure.
>>>Sramana Mitra: Let me synthesize this point for our audience. In startups that are going the open source route, including non-AI startups, what is great is that developers with insights put something out there in the open source realm and start getting usage. Then, by the time they go out for investment, often there’s a lot of history of usage that has built up and some of that has started to monetize. There’s a little bit of a monetization model that is starting to emerge. Even if it hadn’t emerged yet, if there is substantial usage and value creation, there is a tried-and-true path of monetizing commercial open source in a freemium mode, where basically people start with free and then become premium.
>>>Jishnu Bhattacharjee, Managing Partner at Nexus Venture Partners, has been investing in AI startups for over a decade. This is an excellent and insightful discussion about his AI investment thesis.
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