The AI, the output from AI to solve a business problem, to write code, to do these concrete things, that continues in a different trajectory than the delight trajectory. The delight trajectory is surprise me. And I'm a very difficult person to surprise, and I'm sure you are too. But really, surprise me. Yeah. You could go anywhere with this. Yeah. Try it. I think that's how to do it and what kind of company or product that looks like is actually not that easy to imagine.
But that's where I get more excited if we can recruit artists and creative types to just get in there and experiment. They're going to be sooner to the idea than I think an engineer might be. Michael, we're so honored to have you in our presence today. You are my inspiration and icon for myself. And when I started this podcast, I wanted to have a chance to sit down and interview you and hear a little bit more about your story of the behind the scenes, of the behind the glamorous deals and the hard work.
And your investment philosophy that is so public and your stage presence, of course, is learning about the person and the challenges along the way. So I would love for you to tell us in your own words about who you are and what's most important to you. Oh, okay. Yeah, simple one. Yeah, I guess I'm still a work in progress. I'm still figuring things out in a lot of ways. But I'm also more grounded than ever now that I'm a father.
And I kind of more settled down as a person. But work-wise, I was always the person that was just drawn to whatever is super sci-fi, far-out, cutting-edge, but actually really happening, happening in the real world. And for my career, too, you know, it's like not a path I think I could do twice. But it's just a person that like read far-out books or something that's like beyond my trained level. And then wonder, how can we jump to that in reality?
How can we be part of that happening in reality? And everything from my educational background to my work trajectory has been around reading the neatest, far-out, most far-out stuff, and then increasingly go meet those people in real life, either in the investing context or just get to know them socially and see what kind of activities could commence. Investing is, for me, my day job. But also I love coffee and tequila discussion sessions.
Beyond that, I love traveling. Before I had kids, I did adventure biking. I was even sponsored. I did a couple of trips into places that were really exciting and kind of undeveloped that I enjoyed quite a lot. And also equestrians and cycling. So anything with a saddle, you could say, where you're exposed to the elements and able to experience the outside world. That, to me, connects quite well with thinking of the far-out and thinking of things that are out there that we haven't experienced
or out there that we don't know about yet because they exist in some kind of future reality. It's about us getting outside of our comfort zone and going to find it. So my ethos has been one where research is still central to my life and my thinking. When I think of, like, in my inner voice, like, what do I do for a job? I'm still a scientist, I guess. I just can't stop being one. But also, how do I make a living doing that?
Because being a scientist is not the easiest job or career for anyone, as I found out firsthand. And so, yeah, in a way, I'm kind of, like, faking it as a VC, but inside I'm still a researcher. No, I think you're far too humble. I think that your legacy from your PhD background, 40 patents, so many papers, is very much one of an inventor. And then now I almost see you as a VC, as a discoverer and a pioneer. Sort of the worlds that you imagined in sci-fi and fantasy and the way that the world could look.
You're true architect and pioneer of that. I would like to be able to say that someday, but yeah, at this point, it's more finding who is really doing that, who's really building that. And if the right investment equation can be put together, how do I join forces and support that and be more than someone sitting from the sidelines and cheering it on, but being close to where the action is developing and influencing it.
Because we're just, like, in this time when love of deep tech and curiosity about the possible change so fast, another thing I'm really buoyed by in the job is I know a lot of this content, a lot of these ideas are interesting to a much larger group of people than you could have said just a few years ago. And being part of that myself is I'm living out the character I always wished existed.
But I'm doing it for a job that's, again, investing on behalf of a large corporation. So it's a very grounded job. I have to need that to bring myself back to reality at times. But I think going back to the sense of being a discoverer, I think even though you are very grounded and you are connected, you are in a sense also equipped with this task of building the reality that you would love to live in and really finding companies that will enable that future vision, which is, I think, so exciting than being behind the scenes as an inventor.
But how has that informed you of being a PhD working in chemistry to then this deep tech AI investor lens? What do you take with you from being an inventor to an investor? Yeah. And I should clarify, my tour through grad school through chemistry too came surprisingly impulsively. You know, because when I was in undergrad, I felt like this world had been unlocked for me. I was a biochemist, actually, biochemistry major.
I felt that the world had been unlocked to me to be like, well, you can understand all of the bodies, mechanisms, and how life works. And I kept just looking for like, well, but where's the real science fiction thing going on here? And the story for me developed from wanting to be, I don't know, an inventor. It came more about like, can I find something that's really new? Can I make a contribution that advances the state of the art?
And in biochemistry, doing that as a career is very, very difficult. As an undergraduate, you're sitting there and you're meeting teaching assistants and graduate students who are on sometimes year seven of their PhD. They're going to do multiple postdocs to qualify themselves for an industry or even academic job. And to get to that point at, you know, like you'd be in your mid to late 30s by the time that's all done.
And that's someone in a normal trajectory. I just felt like that was waiting too long to work in an area like synthetic drug development or drug discovery. Or there are some other things that, again, at that time, that was my preconceived idea of what biochemistry was like. This was at the time of nanotechnology, care, Drexler, nanosystems. And again, those who are listening or watching who remember that time, it was a little bit like now.
It was like there's this disruption in what we consider to be the substrate of like the materials we have to use to build things. The advancement of chips from mainframes to desktops to your everyday life. That was all happening at that time. It wasn't as established as now. So I wanted to be part of like how to make that better and better. And the idea that I had to stay as a biochemist was to work on this problem around prions.
And I don't know if you are familiar with this. This is like mad cow disease and Creutzfeldt-Jakob syndrome. And what it was is a protein acting on its own to like reproduce itself and create more infectious agents. You know, it's a little bit scary. But what's exceptional about it is that prions violate the central dogma of biology. They're able to, a protein's able to make more proteins without any nucleic acids or the normal rules being present.
And that to me was like, that's almost like alien life or something. That's like nanomachines. That's like little robots. At the time, it just was not accepted that that was the true mechanism of the disease. Prisoner had not gotten the Nobel Prize at that time. And I felt like I wasn't up to tackling the career of working on prions and getting to the bottom of that myself. So to make money, I started working in a material science lab that was on campus.
I did synthetic organometallic chemistry. I found it was very easy. Like I just picked it up like that. And within a very short time, I was doing work alongside the graduate students. And I thought, well, hey, this is kind of easy. Maybe I could kind of do a PhD in chemistry to subsidize my interest in prions. So I was like, I would just do the PhD kind of on the side. And that led to me getting sucked more and more into nanomachines.
And the discipline grew during the time that I was in the PhD in the postdoc. And it led to me working with the DARPA program and then being hired by Intel Research. And I thought that's about the ultimate that ever could have possibly come from just that inkling of I should work on advanced computers. It just kind of all worked that way. The way I like to do it, too, is every time I'd find like a problem that the industry was facing, go read as many research papers and backtrack those references as far back as you can go to figure out where people are stuck.
And yeah, it led to me, again, working with silicon materials and getting exposure to industrial problems, which I kept getting signals. The industrial problem people are doing today is much more mundane than the science fiction thing. That was a little bit of this whisper in my ear that I didn't listen to. I just kept insisting, no, no, the science fiction reality is possible. But the everyday job is like that. And as I got closer and closer to being a real industry practitioner, again, after my postdoc working at Intel, I came in with dreams about how, again, the most far out technology could possibly be used to advance Intel's state of the art to the next process node.
And what you see firsthand is, it doesn't really work like that. Maybe it could. Maybe it plausibly could. But practically, no. And that stuck with me for a long, long time. Just it wasn't so much the smack of reality in my face. I'm used to that. It was more like, I'm sure there are other people who can see this disjunction. Who else is kept awake at night about it? And what kinds of jobs exist to work in the gap, let's say?
And if there's one central thing bug in me or central insight to it all, it was really that. It was going from being in the DARPA program where I'm surrounded by every far out idea possible. Everything from quantum computing to neuromorphic computing, self-assembly, everything. Everything from quantum computing to neuromorphic computing, self-assembly, everything from quantum computing to the next day. And you had been an investor prior to your time at Microsoft.
But that switch from working on tangible problems as an inventor to then thinking there is a sci-fi world out there. This voice that I've been trying to squash but have been unsuccessful, that there's a world that I can create that things move a little bit faster. When did that opportunity come? Yeah, so that happened during COVID when a recruiter just reached out to me. I was on paternity leave. Actually, maybe the reach out happened just before I went on leave when my son was born.
And many things were changing fundamentally about my life. I had been in VC for seven years, which itself was a little bit of a culture shock. Then more and more I like this and I can make a difference.
And then my kid being born, it was just like a moment to, I thought to pause, but taking care of the baby was like, you're under so much stress and you're under so much life change itself. I wouldn't say I had a moment to just pause and reflect. But it's this moment of everything being in flux. And when they gave me the offer, it was actually the day we brought my son home. Again, it was just at a time when like a lot of things are changing.
I thought, I need to do this because I enjoy investing in material science and machines. And as you said, grounded, concrete, knowable systems to trying something very, very different. And it was with people I knew. I knew a number of the team members prior to joining. But I felt like also it was a moment in time when Microsoft's position was changing. It had changed from like, I wouldn't say not that, it would change from being not that well embraced in Silicon Valley, maybe even the enemy to some degree, to being a valuable part of the cloud infrastructure Azure had established itself.
And with that, I thought, what I want to work on at Microsoft is, again, their new market problems. Take the mindset of approaching the boundary pushing things that I've been doing at Applied Ventures and trying it there. And so I got hired under Tamara Steffens, who was part of a team. A lot of things were changing at M12 too. And the team's direction had been shifting toward something more strategically aligned to Microsoft, which I felt was a perfect fit because that was what I'd been doing for a number of years prior to that.
It involves the thinking of how can I bring in Microsoft as a partner when I'm thinking the investing construct. If Microsoft were an irrelevant, hardly known company, that would be a much, much harder job because it would mean squeezing Microsoft's name into places where it's like, well, does it really add anything? And you can't usually participate in high competition deals, highly desired deals, unless you have something behind your check that is actually more than money.
That's what I learned investing at a fund that was less known, but in their area of competition, they were very powerful. They were very useful. They had a lot of value add that you could bring post-investment. So I got to M12 and I thought, well, first thing I want to do is try some far out wild things like Web3 and the metaverse and nothing related to semiconductors and material science. And ironically, it wound up coming back.
But there were a few insights that I made at that time about either or all of those investing areas that were key to me growing intellectually. It's expanding outside of the area that I would say I almost knew totally to something that is unknowable. There's no investor that can know everything that's going on in software. So, yeah, that to me was an even further humbling of the inventor's mindset of, like, I have the idea and I want to patent it to something that's completely unbounded.
And you're always picking your best move amongst could be hundreds or thousands of those possible ways to go. And I think the transition from the type of investing that you did, that the world was so much bigger now at Microsoft, must have been both exhilarating and the paradox of choice of all these, I'm sure, investments that are coming to you. How do you differentiate the types of deals that really stand out to you?
I know that you're aligned with specific categories, but just broadly speaking. So, when I'm in over my head in areas like security or developer, like anything too deep into computer languages or something like that, communities, I happily defer to other partners, which I'm grateful for. It's more the stuff where I see, I've never heard of this and I've never heard of anybody doing it, that it's both good and bad. It's one, I cannot get my mind off of it once I've seen it.
But two, I do need to stop myself and make sure, is this going to result in deals that are, again, relevant to our thesis? Because things, once you see a number of deals in a certain category, and that happens when you're like, you're thinking, oh, I want to make a deal. I want to add an asset and say agents, agentic AI that's related to say like an industry like finance or legal or something. You may know there's a number of deals like that announced the last year or so.
You get to some degree what I call snow blindness, seeing more or less the same problem statement restated dozens of times. And in the software world, you often lack an easy way to compare these things side by side. In the physical world, it's not always possible to do that, but there's usually something different physically about the companies. You can make a bingo chart, you know, or some helpful way to say like, okay, this one stands out for a certain number of reasons.
Because in software, yes, you can invest like that. You can look for what is the differentiating secret sauce that no one else can take. Yeah, you can try to look for that. You may or may not always find it. You're looking sometimes for the founder that exhibits this energy of just like unbelievable velocity, confidence, knowledge of how partnerships and partners work to accelerate you. And also love by other investors.
As shallow as that may seem, that's a key ingredient for success today is how well you can recruit other money, other investors to join you on the journey. Those are completely and so utterly distinct from what I was investing in before that I find investors who actually specialize in some of these dimensions. And we kind of need to come together as syndicates at times to see if our views agree on a company being fit to advance.
Because there oftentimes is no entitlement, as Satya likes to say, there's no intrinsic value here. It's really the team, the technology, and the timing of putting the company together. So those are all factors I look for. And what stands out is a very complex thing to ever diagram out or delineate. We do our best with some of the investing principles. But it's oftentimes you're looking for something that you don't see.
And that's a hard thing to describe, but you'll know it when it appears. It's just like something will just stand out in an incredible way. I think that's so fascinating. A couple of things really stood out from what you said. And this is a common question I ask the investors is like those differentiating qualities, especially when the TAM is the same. AR is pretty much the same, all impressive backgrounds. And what you said about their ability to almost galvanize other investors.
And that it's a whole movement of people that you also know that they carry validity in the advisors and the investors that they bring. And that it's going to be almost co-signed by other people. I think that's so fascinating. Yeah. Think of it less as a committee. And co-signing is a great way to put it because we're all underwriting. We're underwriting a deal, but also putting our own funds money at risk. It's not good if we all have the exact same viewpoint repeated over and over again.
Sure, sure. And that too is, well, it's actually a nice to have. Even the top investors in the space will say at times, there's more diligence I wish I could have done, but we have to move fast. Where we sit at M12, to some degree, we're less able to do that to just like say, here's a check. I think you're going to make it. Let's see where it goes. It's like an overnight kind of thing that doesn't happen. It doesn't happen with our fund, but we do move much, much faster than a normal corporate-backed fund.
Yeah. Because trust is placed into us to have made the determination that a company would be an awesome complement to a Microsoft strategy at some point or another. That's really all of the accountability that they put on us is invest in things that will be relevant. They know it won't all get there. But when we do the construct in the right way, it has tremendous results for both the startup and Microsoft. Are there any stories that you can tell us or companies, maybe even founders, where you sat there in the room and you said, I feel this.
I know that this is something that we want to get behind. Yeah. Most recently, I mean, there's many times like that. But most recently, and the closest I've come to that kind of like write a check came when we invested in Fastino, who I met at Preseed, which is just like crazily early for us. And that's yet not crazy in terms of they had the right message and they had something working a full year before I saw anybody else do it.
And it's the kind of, and I'll describe the approach in just a second. But the investment came right at the time when there was starting to be real competition between the big AI labs and corporations. The performance of these large models were beginning to resemble each other. They're different by percentage, but also not by 10 times as much. So to play in that game perpetually as a startup could be quite difficult.
I was just wondering, when will we see these small task specific model companies pop up to single-mindedly and determinately attack a certain opportunity? And that's where Ash and George appeared in the office. They had something like a small model that could generate like a bedtime story, could generate React code. It could generate a couple of these common uses of the large models nearly instantly running on the laptop.
The model had almost no overhead. And they just exhibited this ability to recognize a problem, jump straight to it, and ship super quickly. And that was just sold. That was sold. We were co-investing with George from Insight. So it was also like, okay, well, back to the point of, do other minds agree from different places and backgrounds? And the answer was yes. And then they just got a great, they had a round led by Kozala and Fastino is doing very well.
But that's as close as I've ever come to the do something on an impulse, even though we did follow the full IC process to do the investment. Because I was that sure that I could see the concrete need for those types of models in the place where Microsoft competes. I guess that's, in some degree, that's to some degree the arbitrage you want to get as an investor is, do you know more? Well, does it come down to my intellectual ability?
I just am the massive brainiac. I just know everything and others don't. Probably not. It oftentimes comes down to, I can see where Microsoft is like struggling with something. A startup can't just like solve a problem for a $4 trillion company. It's not that simple. But you know there's a gap. Back to that metaphor of like, there's a disconnect in where people are working and what industry thinks it can do. Startups thrive inside that gap.
And when I see the team that has, again, a couple of those bases covered, investor love, they have the solution made, they just get the problem earlier. Very little fear of investing there. And is that typical for you to join that early stage? Pretty much never. And it came down to and will continue to come down to where I can see a large industry activity. No one has gotten there yet. And the deal needs to make sense, too.
That's a little bit more nitty gritty. You could say you do meet teams like that from time to time. Other investors embrace the team, the solution, everything else. Well, guess what? That deal oftentimes is out of reach for our price range. So it's having all those things as well as the timing to back them when just enough investors have joined to make it safe, but they haven't blown up valuation-wise. That's not something that happens every day.
And that's what makes it even more exciting. And when you knew that you had to go for it. And I'm lucky to have a platform that can react that way. A lot of other investors who could easily have figured out the same thing I did may not have a fund construct that's able to act that way. A lot of follow-up questions there. Super interesting about the gaps that you're seeing. And it also takes a specific kind of mindset that you have that you can identify the gaps in both what Microsoft is going through and the broader industry.
And then to be able to then find source and develop that relationship with a company that is working on that immediate problem. Are there any other major gaps that, and I don't know if you're willing to share, but that you're thinking these are the major gaps that I've seen that I haven't found companies addressing them? Yeah, there's a couple of perpetual opens. Some are directly related to AI, some not. But they do, they cohere into this blob of like a great experience with a computer.
Okay, let's call it that. Certainly conversational AI is like, it seems to be top of mind for investors, and yet it's not there yet. There's no AI that you can have a conversation like this with anywhere. And that's the other thing that still baffles me. So many of my investments have been geared toward really getting to the very, very best conversational AI you can, and then attacking all of the latency on device need.
And there's assets in our portfolio that represent each one of these kind of problems addressed. But I have the best company. So like InWorld is, in my mind, the best company working in that conversational AI, the expressive AI space. They also came to these realizations the same way I did, which is experiencing AI through, again, a computer call center context, video gaming context, other contexts, and seeing you could definitely get there to something that's really fun to use, rewarding, expressive, like not leaving anything on the table.
And I believe that that too, it will be solved, yet I just haven't seen it. And I keep getting people coming to me who are like, no, I've solved it, I've solved it. And they haven't. I think this is such a big catalyst for igniting the market in ways we barely can appreciate.
I just wonder why it hasn't happened yet. But I'm working on, again, every single facet of both the infrastructure and the application side is interesting to me. Another one that's a flip side of it that no one is investing in or very few people are investing in is the visual experience. The visual experience for AI right now means things like cutting edge generating videos with voice. I mean, I think VO3 would be a beautiful example of where everyone's expectations are reset when they see that.
But the display device itself is quite a crusty industry. Again, much more related to my prior investing area, like this iPad display that you're using. I don't know if that's an OLED or an LCD. Very little has happened, right? 10 years, yeah. Yeah. And we've all been through this whole thing of immersive experiences. It still kind of means like a near-eye display, like goggles, glasses, XR. I'm one of the biggest stands in the industry, if not in the world, for 3D display, for glasses-free, auto stereoscopic, light field, you name it.
I've met every company I think. I've seen every demo. I've seen every company I think, like, a mirror, for the company I think, like, a mirror, for the company I think, like, I'm going to be doing. I think I'm going to be doing something, too, that I think needs to be...you need to spend time thinking about what this experience would be like for it to really resonate. But it isn't here yet. And what I mean by it is a display that's almost like a window to real reality.
Yeah. Right? Just like we, you know, unfair to the people watching, but, like, looking outside behind you here, right? I have no doubt whatsoever that that's real. And I have no doubt that there's very little you could put on an LCD or any kind of display of today's state-of-the-art that would fool me, that would truly fool me. But it's possible. And there are so many ways that content could be enhanced through, again, adding that to display.
And I know the reasons why it hasn't quite gotten there yet, too. But what we're experiencing, again, is that gap, is that it could be like this. There's nothing physical reality. There's nothing physics-wise blocking it from happening. And industry's problems are here. What people in industry are focused on is down here. And micro-LED displays, which pretty much are the...that's as far as we've gotten, are being retasked to AI because that's where the market is.
So I think that gap will remain until someone shows something that's kind of, like, in the middle of the gap. Everybody else just has to imagine it. And there's a few people walking around who could expound it better than me. Yet I'm very high conviction that that's...it's like the genie you unlock. You just uncork the thing. So conversational AI, the visual experience. And I think with the deep research trend that are coming out of the AI labs,
you can do more deep thinking and research through AI. But it's not at the level of experience of hearing a great speaker at a scientific lecture. This is also, again, not for everybody. But it's one of my favorite things of all. Now that I have kids, it's tougher to do. But I used to love it when I was commuting home from work or if I was in the Berkeley campus to just drop in on a scientific lecture. Someone who's describing their life's work and has had decades or an extended period of time to add in the color of why it's exciting and intriguing to explore this corner of reality
will bring to it something that's quite, I think, artistically moving. I've never seen it captured in any kind of entertainment medium. And AI is miles away from that. But there's this feeling that it could absolutely get there. Totally could get there. Right? That is something I'm very, very excited to see happen someday. I'm excited just imagining that world where it becomes almost like an emotional, spiritual experience where you're interacting with something that feels so real.
And I hope that maybe at CES next year. CES are the places to go, right? You just kind of walk around and you have to have a, it's similar to the investing lens. It's a defocused lens, right? You're kind of defocusing because you can't take in all this detail. You're defocusing a bit and things that jump out, things that are in sharp focus are that much more potent.
But yes, that's what the environment is like right now for those of us investing in startups is the numbers and the repetition of the theme makes it harder to set out certain rules over just like getting the bingo chart. But those moments when you do see that different thing, it's the moment of discovery. It's the exact same euphoric feeling as a scientific discovery was for me in my prior job. It still scratches that same itch of getting to fuel that sort of new innovation.
And it's also a contact with the unknown. It's like you're kind of getting to this moment of like, I could really spending time with this thing or idea. I'd advance. I would be better for it. While a lot of the time you feel like some of the distractions facing me are probably net and at a waste of time. Hmm. We had a sort of interesting controversial figure on the podcast, Robert Scoble. Okay. Who has a very interesting view on what you just mentioned about the reality of screens and Gaussian splat and what it will look like.
And the really interesting companies that he's seen come through his house. Nothing quite close enough that it would replicate that kind of experience, but he's also very bullish about that. Yeah. Yeah. And maybe the, you know, the spiciest view I would offer in a podcast is still about XR because I have so many friends that like have put their careers into it. I was also temporarily a believer, but I became kind of like a bear, bearish actually on it.
And it doesn't mean that I'll eventually not be proven wrong because the glasses format and that experience could continue to just like get massively better. But it comes down to this factor that led me to think I'm more interested in big 3D display, like lifelike 3D display. And that was the founder of Lea, Dave Fatale, and I were talking one time. It's just alienating, right? There are ways to get around it. And I think the Vision Pro, you know, they had some ideas for how to do that.
But it's not as good as really striving to replicate reality or another way to put it, because it's not a fake reality. It could be real reality anywhere you want it. You could frame it a number of different ways, but the technology just isn't there, full stop. And I think that your angle and your perspective is being more bullish on these sort of experiences where it is more almost immersive and less solitary. If you didn't get anything out of an IMAX theater experience of the movie or the sphere or whatever, if you'd gotten really nothing out of it,
they couldn't fake it for that long. There's a reason you do pay more, and there's a reason people will go way out of their way. It's because it just ignites more of your senses at once. And in the beginning, or with Microsoft's technology, and then there's things where it's neither a traditional Microsoft channel, but a lot of people are using it, and it could be. And that's where this connected TV and experiences like that are very, very important to me.
I think you could experience AI in ways that aren't your phone, your laptop, your iPad. It could be as natural and easy to you as the window right here on the wall or the TV sitting over there. That could be a live, interactive AI device just like that. And I think that I really view, especially this AI founders and emerging AI as an art. And I really think that the founders and scientists are creatives and creators themselves.
So I'm really interested to see this world come together in this way. They are, and by the way, I'm not one of those people. I like to a certain degree creative things. But the truly creative people in technology are not honored the way creative people are in other arts. Will we get around to recognizing them in the same way or at the same level? That feels like that could happen soon. But the fact is that that type of person we're waiting to appear might feel a little lonely right now because, again, their talents are not appreciated for the creative instinct that's actually driving them.
They may be looked at as proficiency in code or proficiency in technical frameworks, which actually have a completely different value matrix than something that is truly revolutionarily creative. That too, when it pops up, it might hit us in the face with a great surprise, but you're already well ahead of the curve in thinking that way. I'm thinking of it as a collaboration and as something that the two worlds are not diametrically opposed, especially not just in our phones or tablets, screens we look at where we get to experience AI, but in a truly communal.
Experience. Experience. Experience. Experience. And I think too, one thing, and I have felt this objection myself, is one thing about being influenced by watching Carl Sagan Cosmos was a little boy is feel, why aren't there 20 times the number of people speaking like this? Yeah. It does seem like for technical or scientific areas that the number of people who are popularly known and their work is distributed and kind of recognized like that.
It's very small compared to the number of people who could be, and that's too, it's that community lacking a casual try and then like ranking system to see like who is really reaching more and more viewers, getting the message across. Although it does seem like that's changing. Although it does seem like that's changing. You know, there's like a lot more popular viewership and popular reading of topics I would have considered of no interest to anybody until just very recently.
So that might be something, the Justin Bieber moment, you know, for scientific authors could be really something incredible. I love that you talk about the formative moments of your childhood also bleeding into the way that you see the world now. I think for me, it's very much informed growing up in Japan where growing up in the intersection of all of this art and culture and technology being so like all in one sort of format and then moving to the US.
And San Francisco feels very technologically advanced, but devoid of the same sort of artistic world sort of coming together. It feels almost in opposition. Yeah. And look, someday we'll also get to this as a culture, but you'd be totally remiss to not credit Japan and anime for having a gigantic influence on where today's AI is headed. As silly as that sounds. That's interesting. The thing about those of us who are super into reading manga or creating the models or watching the cartoons was as kids is the weird combination of incredible technical detail and veracity.
It wasn't just like, I don't know about space fold and lasers and robots flying out of space, you know what I mean? But there's always some plausibility to it that grounded Japanese animation versus maybe what you'd find elsewhere. That we will, I think we'll someday look back on that and say that was very important to helping people who are thinking about the future connect a futuristic idea to how would it really look if it was real.
Yeah. That sounds very superficial, but that's a key part of actually, you know, constraining where these ideas can go. Culturally, too, this relates to investing in video games and things like that. Culturally, we are changing who participates in that type of culture and its connection to the work world. That's changing fast.
Well, it influenced me quite a lot and I know I'm not alone in this town. No, absolutely. And I hope that you have a chance to bring your kids to Japan and get a sense to live in that world. And it's very much still a part of the fabric of Tokyo and the culture of like everything from Studio Ghibli to manga to how fast and how seamless everything is with the way of life there. So, yeah, my way of connecting to that as I work today and people, I'm going to reveal why I do this, but I like to collect anime cells.
And, you know, like I think of them as fine art because they did make a big impact on me personally. And when I saw them, I don't know if I was that focused on thinking about like my career or the impact on my life as much as they just reflected a thought of the possible that was surprising to me. And I like to be reminded of that at all times. I'd like to be reminded that it's both bounded and unbounded thinking together that create practical advances.
Otherwise, you're more like Ray Kurzweil. You're like predicting something that will happen 30 years from now. If you're right, great. Yeah. But also it's not as it's not the same thing as those intermediate steps of, again, what does it look like? What does it feel like? What is the experience like? And I don't want to trigger like an asset appreciation boom for anime, but it's one of the closest places you can get to like the moment that you felt that feeling.
But it was painted, sketched and painted by the cell artists. And it's a physical thing. And, you know, we also do some investing here at Icons where we're enabling a lot of AI driven art, whether it be, you know, 3D animation or production studios using AI to be able to develop pre-production, post-production things a lot faster. But it's definitely been really interesting to see how to preserve that artistic integrity and use it as a tool for more enhancement and acceleration, if that is possible long term.
I think next generation studios, right, could go different ways. Signals that I see like the reality you're talking about is definitely starting to happen. I think Fable Studios, you know, got announced a new financing that's Ed Sachi. And what was the guy, Prem, the ex-WEDA guy leading Stability AI. You know, like these are signals of the union is going to happen. Now, exactly how it comes about and what kinds of collisions happen between traditional artists or the fans.
Yeah. That will be a bumpy road. And that was the same way for computer graphics or synthesizers. It's not the first time.
But as investors, you can't look at that as like something that will never happen. It is absolutely going to happen in an unknown way and with unknown persona. You know, like we don't know exactly what kinds of creators do it, how it happens. Is it an event? Is it a period of time? You know, like that kind of thing. That will look like. In terms of M12, how does the fund look at the intersection of AI and creativity, whether through the portfolio companies or the current thesis?
Well, I'm saying something that everybody knows, but the accuracy of AI is a major problem for its practical use. Right. So if there's one area in general, you could say, no surprise, everyone is focused on is bumping up accuracy, you know, for models that either answer general questions, specific questions, thoughts, tasks, what have you. And the costs of increasing accuracy tend to be exponential. Exponential progress is logarithmic, you know, until there's like these big breakthroughs.
So with that in mind, applying AI to just every use case from clinical use to financial models to like legal decisions. Those those are a bumpy road because there's a lot of safety factors that you have to think about. And we think about that a lot investing for M12 because we have Microsoft's reputation behind us. Now, take entertainment and video games, for example. I believe that's one of the one of the most underappreciated areas to advance AI because the expectation is for one.
It's something you don't expect to be true. It's already a virtual environment. All the firepower of the special effects industry, graphics designers, the graphics card makers, everything is aligned with you to make the experience better and better. And yet it's it's still a nascent space, you know, like an AI game or an AI interactive game is still like on its way to appearing. And it involves controversies that are related to people feeling a bit concerned for safety of their jobs.
I think personally, my view is everybody will be welcome under the tent. It's just going to be different in ways that are hard to predict. But importantly, growing AI as a permanent part of the business world, which is a huge goal. It's where any company that's ahead in that race is funded 10 times, if not 100 times more than the ones behind it. Entertainment has no bar. If I'm entertained, I'm entertained. Going back to that question of surprise me, but really, like really surprise me and delight me.
It's a hard target to put out in front of you because it's not like there's no benchmark for like surprising Melanie or Michael or people. It's more of a matter of taste. But it's a completely wide open place to excite people about AI, to energize and activate new potential customers. And this is coming along with distribution channels, technology that's already there and yours for the taking. So my view of AI and gaming is one, aim toward the potential for interactivity, delight and a rewarding experience.
How do I, if I'm talking about video games, how do I get out of grinding in a video game and get into enjoying? How can I get as much out of a 20 minute session in a video game as I would hours or hundreds of hours? Or if you want to go that long, it's even more rewarding during that time. But that's an opportunity that's here now. It could use today's AI. And as the AI gets better, that bit will get better and better.
But investing in games is much, much harder than it looks like. It's just not as easy of a fit for the venture capital model. The companies that are built aren't the same kinds of things as technology companies. And I'm friends with the gaming VCs that lead in the market. It's just not as simple as saying video games plus AI, done.
But back to the question, it's an underappreciated way to deliver a completely new experience with cutting edge AI. Yeah. In channels that already exist and talking about billions of people, not 20 million people. Absolutely. A problem for the 99%. And finding the right company that can address that. I can't imagine. Yeah. But it's like, it will happen. Yeah. Guaranteed. That's something you could put money on. It's where to put the money.
That's the investor's dilemma. Is it a studio? Is it a technology? Is it a person? No fund is equipped to just say, I have just the money. I'll put it on that thing. But I think you'll see, and it sounds like your community is already like that. There are people that have this money and could invest in a sense. They don't have to be from a venture fund. We just need to be able to react when that's going to scale. Right, right.
When the spark happens, we can't be just happy to say, I told you so because I said it in a podcast or in a blog or something like that. That's not enough. We need to act and invest and underwrite those companies. Then more broadly speaking, where Microsoft's thesis is at right now and in the areas that you're most excited about? Then let me caveat that as M12's thesis because I don't speak for the company's strategy.
In fact, we don't want M12 to be just a duplicate of the corporate strategy. It's aligned. It's a subtle but important difference. Yes, M12. And gaming for sure. I have stakeholders and counterparts in the gaming organization who are tremendously forward-thinking and have embraced AI and are themselves far more competent in AI than I could be. But the gap is there. The opening is there. And I think that's... It would be one thing to say the priority or the thesis for us is invest in AI gaming.
No. The thesis is really about where are the underappreciated or accessible ways for investment to reach the 5 billion people. The number of people using AI every day in the way we consider business applications, it's nowhere near that 5 billion. But the only things getting in the way are distribution and cost. That's it. Every other tailwind will make it better and better and get it closer and closer to those people.
So there's the cost of AI. There's the ways you distribute it. There are the ways you bring in relevant data to improve the AI. And then there's the data centers and devices themselves. All of those are our current investment theses. On the surface, venture capitalists look like they're just backing a hot company. Those VCs that don't have a bigger picture about what you're trying to do, again, they'll be under a lot of stress because it's just like, wait, where'd this other company come from when they got to invest?
Sure, sure. It's about thinking about longer term. We are going to reach the 5 billion people. We're going to drive costs down to nearly zero. And that AI that's driven to nearly zero cost will be far more sophisticated than today's cutting edge high cost AI. Those are convictions we can hold. And then that underlies the thesis is more about attacking different parts of the cost availability. Delight, this is the four Ds all over again.
But just like every little piece will trace back to some aspect of the problem that are all investable. Yeah, absolutely. And regarding developing your own investment thesis, it's a question I love to ask of what Jeremy Liu from Lightspeed calls your home ground advantage. He was telling us on the podcast that how he developed his thesis was watching the trends of young women. What are the young women doing? And that's what led him to really interesting investments like SNAP.
Seeing almost from an anthropological lens of the first movers in these kinds of consumer areas. For you, is there a particular maybe anthropological perspective or way that you view the world that's informed your pieces? Okay, I'm on a board with Jeremy and a company that serves exactly what you're talking about, which is Volley, you know, delivering AI games to the TV. I think that's that too. When it catches on, it'll be like, oh, of course, this is obvious.
But Jeremy thought of this way ahead of me. You know, and my answer to that is a little bit, it's a little bit flipping on its head. I feel like there's a cohort that I understand well, and I'm part of that cohort, and I want to think about what doesn't necessarily serve that cohort. Because I feel like if you take super information-heavy engineers, VCs, fit into this category to some degree, our biases are very, very much toward, I need a lot of information to make a decision.
The more information I get, the more context I get, the larger the model in my brain is, the better my decision will be. Even though I may say in a podcast or an interview, oh, I just made a decision on the spot. No, guaranteed. There's a lot of information synthesis that went on. And actually, most people don't act that way, right? They're really just looking for an answer to a question. Or they're looking for problems solved to another level of extraction.
Not everybody that's facing a problem goes to, like, let me research the factors of the problem. Right, right. And for each factor, I'll read a lot. I'll read up a lot and get a nuanced, multi-point-of-view basis to, you know, to take all this information together. And I can have all those questions answered and then a human being makes the decision and then enacts the solution. For the five billion, they probably just want problems solved.
They don't even want the answer. I don't think they really want to spend a whole lot of time, like, all these questions and answers. Yeah. So, right now, there's not, like, it's not that simple. AI doesn't just, like, solve the problem, usually. But it's more thinking about where are there ways to activate the rest of the people that aren't following the minutia of these model advances, the never-ending frameworks, protocols, which are the bread and butter of investing and we need to do this.
But they're irrelevant to problem solved. That's kind of the, remember I said, I love to go deep into this technical stuff, but also a little grounding is good. We could debate all day about the merits of, like, large models, pre-trained, post-training mixtures, degrees of precision in the model. And technologists need to do that, as well as debate where the future of the research direction is headed to enable better and better models.
Doesn't change the fact that that's probably not going to be material to the five billion people if there's a way to just solve their problem. And that's the tug that brings me back out of these, like, rabbit holes at times. Yeah. Is when there's a founder that's really talking about, I'm on my way to solving the problem. I'm attaining trajectory. And Microsoft could help them get there faster. That's the beautiful kind of synthesis I'm looking for.
I don't, in those cases, I don't even care about the rest of the syndicate. I have the idea already in my mind. But, yeah, it will come back over and over to we could go nuts trying to mimic what information synthesizers think are the important problems. And we'd be right short term. But do you really think the future of this whole thing is typing into a box to get an answer that I later copy and paste into a report or I read and then do some human action?
If problem really can be solved to a high degree of accuracy, you're going to skip it. And it's already happened to you many times in your life. If, I'm sure, as for me, like, there's many examples of where I found I've skipped so many intermediate steps and gone straight to automation. Yep. On these things like figuring out the problem, the intellectual problem, if I don't stop myself, I'll think I'll never do that with AI.
But I actually know someday I will. It's just the bar is very, very high for the accuracy. To get straight to the problem solving. Straight to the problem solving is like trusting. For the 99%. Yeah. But that is what they all. Yeah. I guarantee you that's what, like, it's probably less than 1% of the world that really wants to chew on the information around the problem compared to just doing it, getting it out of my face.
I can get on with my health and relationships and things I really care about in life. Exactly. Such a good point. We touched on so many amazing topics. We'd love to get a little bit deeper into, you know, you've had all these successful wins with your investments and from your inventor background as a scientist. Then, you know, VC had applied and then at M12. I think a lot of aspiring investors and founders will look at you and think, oh, what Michael achieved is so unbelievable.
There's nothing. It just seems so impossible what he's achieved. Can you tell me a little bit about maybe the darker moments or the stressful moments or any, maybe it was, you know, when you were an inventor and a builder or maybe it was trying to win the best deal when a moment that it was like, this is so hard. Is it worth what I'm going to put? Yeah, I could go further back in time and then we could talk about the VC industry.
But I think as someone who just liked to chase after what is the hottest technical area, work as close into it as I could. If I have a flaw, it's I'm a very strong believer and I don't want to let go. And I think when I think about nanotechnology, which you kind of had to be there, but it's just a moment that's very similar to now. It was like there's this feeling of an obvious large market. The disruption is massive.
There's technical papers. There's presumably there'd be Nobel Prizes and there were there's legitimate advances underpinning a large fundraising and company forming moment that kind of seems like there's not all the pieces are present. And because I was I was both inventing the technology, working on it in an industry and then considering working at a startup. I didn't join a startup at that time. I was just like bought in, right?
Bought in.
It took me actually working in industry first and Intel and then applied where I was like, no, I'm just going to do this by sheer force of will. And then you get kind of at the point where, yes, you could do it. Go ahead. Go for it. And then you see the enormity of like what you'd have to do on your own hits you. Yeah. And that's where, again, I kind of just wouldn't say I gave up, but these things always tend to happen right at the exact moment that something else good has appeared.
And for me, that was solar energy. That was photovoltaics and clean, clean power where it was just something I always wanted to work on. But the nano boom actually fled into the clean tech boom. And I got to work in solar cells for a long time. There's a number of heartbreaking things that came along with that, including founding a startup that raised some money and then we realized that we're never going to make this work.
But it was that feeling of like everything I'm doing in my job could save the world, could make the future a better place. And I would happily work overnight and like sleep under the desk so I could do experiments like at 6 a.m. the next day during that time. But I kept noticing like I was successful. My friends are all dropping like flies. Everyone's getting laid off. All these companies are going bankrupt.
It's not exactly like imposter syndrome. It's more like, wait a minute, when am I, when is my turn? It's like a survivor's guilt. I just knew like it's back to that like through sheer force of will, I'm going to do it. And I kind of did. And then I just realized one day like everybody is giving up. It's time for me to give up. And that at that exact moment in time is when this offer to, you know, instead of like leaving my job, leaving the company, doing something completely different.
The venture team at Applied Ventures asked if I wanted to rotate in for a short period of time, try out VC. And I was like, I had no interest in this. But it was still something different. Yeah. Yeah, yeah. Again, I like, I was, I am still a very diehard, you know, like clean energy person. But it just helped me see first where I was wrong. Yeah. And second, I would meet founders who I would recognize every mistake I was making is in you.
And I would kind of, it was more like I would empathize with that and think, how can I help them? Not tell them that they're wrong, because that's no help at all. But help them in the fundraising journey, which is always very difficult for that kind of founder, pivot to where they can have something viable that could work. And again, the timing was just like, weirdly miraculous, but that was 10 years ago. Today, where I feel is the invest world is facing certain crises that this is going to sound familiar.
I see many venture funds closing down. I see partners or junior partners wondering, is this the right career for me? While I am able to still survive in the exact same way, right? Because again, in the solar context, the layoff rate must have been like 99%. I still had a good job with a good company. Here, it hasn't happened in venture capital to that degree yet. But many people say it is, it's going to. I'm very, very fortunate to be backed by the team and organization that I am.
We are able to access competitive deals due to not just the claim, but the proof that we can activate Microsoft as a partner and help a company, help a startup. But at some point or another, this model is under extreme pressure and it's going to change. I was going to say break. I don't know if it's going to break. You can't just have people following the same paradigm investing in companies when the technology underpinning it is so fundamentally going to change society.
We also have such an ease at creating new companies and such a difficulty in moving them beyond the private company phase, M&A, IPO, merging. The money that flows into those funds grows more startups to the point where, again, something must change. Also, being selective about where you invest and all these factors we talked about isn't a luxury some investors can afford. So I feel like today where we are taking the fund and where I'm enjoying investing, I'm looking and also wondering where is the rest of the industry going to go if not in the same direction?
Right. So I guess my first empathy is for the founders themselves who maybe years ago pursued the dream when the landscape was very, very different. We were just kind of like coming out of the financial crisis, moving through like software investing is in a new phase. Because the 10-year lifespan of a company is still kind of how things work. You know, like there are very few companies that can exit in just a few years.
So in this community and in this place, the place that gives us the prosperity, the right to have these interesting jobs, I do think we're going to be confronted with how sound are the companies? Do we have a plan when you invest? Do you have a plan to really steer business to the company or not? All of those proof points need to arrive or else we're, again, we're facing some grim conditions. Luckily, I don't think for myself, but certainly for people I co-invest with or founders who I've met who I know their lives will be impacted.
Absolutely. I think this inflection point that you're talking about, what will happen in the future and the sort of the thesis and how everything will change. What would you like that future to look like for a more sustainable path to investing? Yeah, certainly when people are pursuing a startup, you know, one is understanding like how difficult the journey is going to be and how many new partners you'll need to recruit.
Again, as great as your existing cap table is, you're going to have to add more investors, more team members. You're going to have to add more to it. I think making it possible for startups to partner with big companies to the extent that it steers the business is still, you know, as far as what we have present term, that's still the best way to help more of those companies survive to get product market fit. To make investing, you know, more sustainable, it's difficult because it's an unregulated industry that anyone can participate in.
You don't actually have to be part of an institutional fund. It would help a lot for the founders' stories, and I know there are people speaking on this, to talk about the kind of failures and difficulties and not jeopardize their own companies. It's a social sharing thing that when it's in action, I see it's always scary because it could be abused or misused or it could, you know, it could be fodder for like a lawsuit or something like that.
That type of activity at scale, though, is really beneficial to us, founding the right companies, joining the right teams, also knowing when it's too late for a startup to continue. Because, again, I can see where the companies are able to raise money but haven't achieved product market fit. They're still in the process of like, how do we recap or how do we, without signaling to stress, how do we change the story so that we can continue to get funded?
And the job can be quite difficult at times, working with companies in our portfolio or companies we're considering investing in, where we need, the founder actually wants to be transparent. The founder wants to share these things with you, but it's also a huge incentive to do it. You can't argue against that.
It's going to be something we're seeing over the next couple of years. For a founder with great traction and who has a lot of those tenacious qualities, who wants to get a meeting with M12 and with you, what is the best way that they should reach out and stand out to get a meeting? Well, the factors that we engage in the fastest, of course, are there's a fit to the themes that we think are important that are changing.
And that's difficult to, it's difficult to put that in a web page or just to post about that on LinkedIn or X. So there's some degree of intuition of just like knowing what is going on. It wouldn't be an exaggeration to say we're deeply embedded in the city and SF where the hottest part of AI is going on. And when people are connected to that, we know it and they know it. So there's not like, it's not a helpful answer, but it's kind of like be part of this and you'll see.
You'll just know what is the thing to talk about. But the factors that are not just related to like the SF ecosystem are knowing that we wish to partner with Microsoft, come with ideas about how Microsoft would transform the trajectory of the company, but not be a burden. Because we are never, we're not asking you to sign a business deal when we invest. Our trust is really in the founder to think of a big and new way Microsoft could be a partner that indicates a lean in, an attitude toward leaning in.
Because I can guarantee you that if it's a problem that Microsoft thinks is big, it's big. It's big for everyone. It will stop, right? It's big. So we will do our best to attract their attention and get them partnering with you. But if it's not, you're probably onto someone else's big problem. Yeah. So that's a safe place to be. And then to be a little bit more strategic with the advice for the founders, is there any way they could reach you?
Or how do you typically get the inbounded meetings? Would it be warm introductions or let's say meeting at the same conference or event? Is it submissions? Well, career-wise, things are different from when I was starting out on VC where I really did just want to see every lead. Now it's very, very difficult for me to do that. But then we have an awesome team of associates that do have an amazing network. And they have quite good brains in their head about knowing what is relevant and what isn't.
I'd say the best way to connect with me directly still is through LinkedIn. Or if you know my email, yeah, of course, reach out. But make it succinct and just understand we can't respond to every email. But at the same time, we get a lot of inbound for people that already have Microsoft problems that we can't solve. That I'm left unable to do anything about it. Yeah. Right? So I did want to stress, we really are looking for the future kind of like unanswered problems.
More so than today's present problems where our checks really don't make a difference in those things. We're also not necessarily a competitive arm of Microsoft. So we're not, our goal isn't to look to be played against the competitors of Microsoft in deals or in other interactions. We do have independence and we're expected to be thinking creatively about areas to invest that could compete directly with Microsoft. It's fine if we can find a strategy where there's a victory for the startup at the end.
That's great advice, I think, for any aspiring founders who want to have a chance to pitch to M12. And then for the investor side, I know you're talking about this potential shift in funds closing and the path of investing as of now is not necessarily one that is sustainable. But for someone who is an aspiring VC or who is in the investing ecosystem. Any particular ways that you see differentiate those who will make it?
Even the difference between, let's say, someone who is a partner who can get to a managing partner one day. We're still an industry where people look first at the deals you've done and will grade those against how awesome or interesting are they. I think the career is still a two-phase career. There's the phase of the career that's early career from analyst up to maybe principal where there's a disjoint. There's basically a step from that to partner.
I could speak with more authority for our fund. We have something a lot more like a normal career ladder because we have the Microsoft system to work with. But it doesn't mean there's a smooth path. It's not necessarily doing the job as expected doesn't get you to the top level. It does require breakthroughs and taking chances, seeing the future and acting on it and then making the right deals. And the deals need to be not just anyone's old deals.
They need to be in areas where other people aren't doing it because they don't expect or know there to be value there. So I get a lot of interest from people at different stages of their career wanting to get into venture capital. And I will go back to advice I heard from many people. I don't want to quote because I could misquote, but it's like it's a late stage career option. But if you do it early career, you get a tremendous advantage in knowing about innovation.
I do feel it and I worry it's starting to set in with me. If you do this job for too long, you start forgetting what regular work is like. Because you're really looking at problems at a very, very high level, but then many, many dozens or hundreds of them in a month that make it hard to think about the gamut of doing the job. So early stage VC today is still about get expertise and experience in something and have an awesome network.
Be as social as possible or fearless or maybe fearless and effective at making connections with an arbitrary person. And when I say an arbitrary person, the founders who are like today's toast of the town were probably just students a couple of years ago. Right. On their way up, there's someone in a discord. There's someone on LinkedIn. There's someone that you meet at a party. To be a really, really good analyst, associate, senior associate principal is indexed on how well you can make a bond with that person and how much they like you.
Because they get harder and harder to pursue the further you go on. But their interests are not always totally mercenary. It's not just like, here's a check. That will come back to the comment I made about the future of industry in a second. The way to make a connection with the founder is a bit like dating. It's a bit about, do we really have an interesting connection that is worth spending more time on? The founder's time is very, very precious.
They're very busy building a company that's going to take over the world. They have no time to just talk to every investor, every analyst, every associate. So they'll make their own choices as to whether this conversation is interesting to you or not. It's on you also as the person at the party or messaging on discord to make it clear what you're really trying to do. And getting to a higher, higher level of the job, it is often gauged by, did you make those awesome connections quickly with someone you didn't know?
And did you turn it into a deal with financial return? Because the other side of that sentence is very, very different from, hey, we're great friends now. The second phase of it turning into a great investment involves years of pain that you're going to experience together. Know what you're getting into and have the experience of, you can get it in life. You don't have to only be an investor. Have that experience of like, relationships are difficult, treat them wisely, invest in them, nurture them, and don't get into one that you don't think is going to be a success.
And with that, the investors that aren't able to really produce that authentic connection, you're going to do it with what? More and more money, higher price deals, moving faster with less time to consider the deal. You can imagine where that's going to head. So I think that we're going to look at the industry in a couple of years and see the people that stuck with it, there's some degree of luck. But there's also people that spent a lot of time developing the depth of their relationships with founders that paid it back and enriched them.
It can go both ways. It's not just a transaction in the end of it. And I think that relationship angle is so important. The investment that you make in each other and this fostering and nurturing over years is not a way that you think of it, a common way that I think people think about investing. I think there's a huge social element, but nurturing, going through pains, this courtship. There's some kind of saying like VC investing is just social proof.
We look to see who the top funds are investing in, and I just want to end the deal. And actually, I think data would show that you could do okay that way. But to me, the secret of what I've done is not even a secret. It's I enjoy spending time with deeply technical founders. Someone who's willing to really reveal this is this world-changing thing I'm working on. It's midway through. It's part of the way through. If you can authentically vibe with them and jam with them and have a great conversation, that's the beginning of is this something that would be a long-term valuable relationship?
And you can't fake that. Yeah. It's just completely a separator between people who can do that, stick with it for a while, and who are going to be revealed as like, well, I was just, I used chat GPT to summarize this. So just before the call and kind of like winged it the whole way. You can see through that. A great founder will see through that because they're already living in a higher level of awareness of this future.
If you're not there in that future with them, you're going to get, you know, it's, and this applies more to early stage investors than late stage investors who, again, due to the fund construct, they need to be much more financially structured. Yeah. For good reasons. They're also investing far more money than we do. But it's like that. It's the secret to being a great VC isn't just sounding like a VC. Actually, the less you sound like a VC, the better.
The more you sound like somebody who has a genuine, inextinguishable interest in a subject, that founder is going to like you. If it's a competitive deal, they'll save room for you or they'll take your term sheet. It's something like that. It reminds me of the philosophy that you're talking about of relationships, almost the sort of service mentality that you're in as well. It's not transactional. Reminds me a lot of something Connie Chan said from Andreessen, which is that she views her role as an investor to be one as a service job.
She views her role as an investor to be one as a service. And it's a thing to aspire to, right? Because as a VC or a board member, sometimes you're just a board observer. Sometimes you are passive, although we don't do that at M12. But it's about being part of the journey and being helpful, but not getting in the way. Because the impulse you can see at times really is like, does a board member want to kind of live vicariously through the CEO, take control of the company?
And I think this is one of the downsides of a very concentrated industry is, well, try to have personalities gel well at the board and people do take that type of service. We're here to serve the company. You'd have to ignore a very large financial incentive to fully believe like that's the only philosophy at present. But that's what we all must do. Because it stands out when you're being self-serving or mercenary. It's easy to see, actually.
And we don't need to get into fights about it, but it's just like those boards where people work harmoniously are ones you treasure. You just think back about them all the time. Like this is exactly how it should work every time. But it's this lucky connection of how many times would this group of people come together, this exact composition, this way? If you ran this experiment 100 times, it's probably like three times out of 100 or something.
Definitely extremely low. And my last question to you is, what do you hope the world will look like because of your presence and your investments that you make? What will the future look like? Well, if there's any, you know, I dreamed of, if there's any character I could play out that would lead to more people acting a certain way, it would be to be a bit of that creative leaning. What do they call it? Like art damaged technical person who really my love is for Adams.
I'm making an impact in the world of bits. I love creativity and the delight that it brings to people, but it's also got to connect to a business's bottom line. It's balancing like too many things to put into one, you know, short description. But we'd love it if more people became aware of technology can be creative. It can scratch a creative itch. I don't need to be seen as a great artist to know and feel proud that I've invested in companies that are on a trajectory to change how we think of that question.
As well, in my field of chemistry, you know, I will get back to it at some point, but like chemistry and material science are areas where there really is very little venture activity. There's, it's, it's complicated, but you could say there's some funded companies, but I'd love to come back and say like what we did is a synthesis of that as we found a new way to commercialize science, scientific advances. Venture capital and venture-backed startups.
They're kind of in, in progress. There's not that much you can point to, to saying like it produced a new business model to say that the way that, that happened, say during the B2B SaaS era. We're still in it, but it like, if that was like, say 2012 to 2020, let's say we basically created a whole new playbook to grow companies and public companies copied it all. Right. Because it was so powerful.
AI could do that for science from, you know, lab to fab, lab to home, lab to products. That's, that's one of the central things I'd like to never get away from is, yes, it's great to raise venture capital for those companies, but what is the true flexible kind of player that can enable, again, these to thrive as businesses? Then it's no longer constrained to the world of venture capital. These are underwritable, backable businesses that, that operate like the companies we trade publicly do.
We're not there yet, but I would love to be part of that story. That's such an inspiring mindset that you have. And thank you for your remarkable work as an innovator. And then now as someone who is out there discovering and empowering the future, and not just one that we will live in immediately, but thinking way ahead as a true innovator and genius and icon. And I just wanted to thank you for all of your inspiration to me and so many founders and investors.
So I am so grateful to be able to sit here and share a little bit more of your story and perspective. Where can people find you and, and stay in touch? Connect with me on LinkedIn. I also have an X account. It's, I don't, I'm not that active there, but I also live here in the Bay Area. So I'm out and about as much as I can be. Love to have drinks with great founders, VCs, interested people. We'll have to catch Michael in San Francisco.
Thank you so much, everybody, for listening to this extremely special episode of the Icons Podcast with Michael from M12. Please feel free to leave some comments and questions and see you on the next episode. Thank you. Thank you for having me.