In this episode of the 20 minutes VC, host Harry Stebbings interviews James Wise, partner at Balderton Capital, about the viability and future of venture capital. Wise, who became the youngest partner at a Series A fund in Europe at age 29, shares his insights on the industry's size, the importance of geography in VC, and the varied backgrounds of successful VCs. They discuss the changing landscape of European venture funds, the significance of personal networks, and the potential for Europe to compete with Silicon Valley. Wise emphasizes the need for VCs to have good judgment, passion, and a focus on process over outcomes. The conversation also touches on the rise of narrow AI, the importance of talent acquisition, and Wise's recent investment in Magic Pony Technologies. Throughout, Wise offers advice for those looking to enter the VC world, advocating for public advocacy of one's investment picks and demonstrating genuine enthusiasm for the sector.
Welcome to the 20 minutes VC with your host, Harry Stebings. And joining me today is a very special guest for me, a true friend and mentor in the industry who really showed me what it takes to be a great VC when I was his intern not so long ago, the man in question, James Wise, partner at Bulldog Capital, one of Europe's leading early-stage venture funds with two and a half billion in funds.
This quote introduces Harry Stebings as the host and James Wise as the guest, highlighting James's credentials and their personal connection.
Is it a viable career? Well, first of all, do you really want a career in such a small industry, and especially one which is so variable?
James Wise expresses skepticism about the desirability of pursuing a career in a small and inconsistent industry like venture capital.
Look, I think that's an outdated model and I think the only people who are still following that model are people who haven't realised that the venture game has changed considerably.
James Wise criticizes the traditional European VC hiring model as outdated and emphasizes the need for a shift in the industry.
So if you want to be successful, I mean, it's an interesting one. I was once told by a friend of mine who works in a valley fund, when I said, look, I'm thinking about working in venture in Europe, he said, well, that's great, but why would you want to be the top goal scorer in division two?
James Wise recalls advice from a colleague, using it as a springboard to discuss the decision between building a VC career in Europe versus the US.
We're now in what I think of as the third wave of our ecosystem. And the first wave was sort of software companies, which are running pretty well.
James Wise outlines the progression of the European tech ecosystem, suggesting that it is maturing and offering greater opportunities for venture capitalists.
"They're going to go and build the third wave, which is the ten 5100 billion the companies, and they're obviously not going to be competitive with the types of companies built in San Francisco in the same fields, not in sort of the information, the search. They're not going to compete directly with Google, not in the social graph, not compete directly with Facebook, but in other areas where actually Europe does have the lead."
This quote highlights the ambition and direction of the upcoming third wave of European tech companies, emphasizing their focus on sectors where Europe has a competitive advantage rather than directly challenging established tech giants.
"The GDP of the European Union is larger than America and China. If we were a country, we would have, I think, the highest GDP per capita of any."
This statement refutes the notion that Europe's market size is a disadvantage by highlighting the European Union's collective economic strength compared to other global powers.
"I'm thinking about hiring the best person in the world to do this. And I'm going to take them out of Google, and I'm going to take them out of Wechat, and I'm going to take them out of Flipkart, whatever it is."
This quote underlines the importance of a global approach to hiring, where the goal is to recruit the best talent from around the world, regardless of their current affiliation with leading tech companies.
"I thought to myself, well, what do I want to be doing in five to ten years time? Like, how am I going to improve my myself personally? Who are the people I want to be around and supported by?"
This quote reflects the speaker's thoughtful approach to selecting a venture fund, focusing on long-term personal and professional growth and the importance of a supportive and skilled team.
"We do one to $20 million. I'm excited about that region for a couple of reasons. One is, as much as any of us like to think we're the perfect judge of people, we're kind of slightly geeky as well and we like to feel and touch product, and we like to see some data."
This quote explains the speaker's enthusiasm for early-stage investments and the hands-on approach they prefer, which allows them to engage directly with the products and data of the companies they invest in.
"I'm really excited about that." "I think that's the really exciting thing about being in Europe now at our stage is that this wave of opportunity is coming now..."
The quotes reflect James Wise's enthusiasm for the influx of new companies in Europe and the investment opportunities they present. His excitement is based on the potential for growth and success in this market.
"And also there just aren't many people who do pan european investment at our stage." "Venture is a very personal game and we make decisions which other people will think are crazy and vice versa."
James Wise points out the scarcity of pan-European investors at their stage and the personalized nature of venture capital decision-making. He expresses confidence in his team's strategic position within the market.
"I think there will always be the ability of individuals, the need for venture capital to come in and provide high risk capital at situations where you just can't yet fully apply a data, rigorous data model to a sector..." "It's looking at artificial intelligence, it's self driving vehicles, it's uavs, broad range of use cases for the blockchain, and on and on and on."
James Wise discusses the constant evolution of venture capital and the need for high-risk capital in sectors where data models are not fully applicable. He highlights the emergence of new technologies that are reshaping the landscape of investment opportunities.
"I'm far more in favor of funds having people attempt to be experts or specialists or... But to share that breadth of expertise with a broader base of skills..."
James Wise expresses his preference for a balanced approach in venture capital, where funds have both specialists and generalists to support companies in various aspects of their growth.
"So one know we want to see people who've got good judgment. We want to see people who are very passionate." "But you all have the ability to get in touch with ceos or companies you really are excited by and provide support to them because you want to learn from them..."
James Wise advises aspiring venture capitalists to build a reputation for good judgment and to demonstrate passion for the industry. He suggests ways to engage with companies and the community to build a track record and showcase enthusiasm for venture capital.
"The best one I've ever been given, which sits up in the Bolton library actually, is the score takes care of itself by Bill Walsh."
This quote highlights "The Score Takes Care of Itself" as the most impactful book James has received, which resides in the Bolton library.
"One is Bill's focus on process. So he's more interested in building the best team, building the right processes, and then the outcomes will look after themselves."
This quote explains the core philosophy of Bill Walsh's book, where the process is prioritized over the outcomes.
"It's about raising the right round for you. It's about making sure that the public understand your message. It isn't comparing yourself against the competition."
James stresses the importance of personal excellence and appropriate goals over competition-focused benchmarks, which he takes from Walsh's book.
"I think narrow AI and the applications of it, and I actually don't think it's the technology that really excites me."
James expresses his interest in the practical applications of narrow AI rather than the technology itself.
"I feel that stateful narrow used in the conversational way may be a solution to that."
This quote indicates James's belief that conversational AI could improve processes where maintaining the state of information is crucial.
"I think that the breadth of general intelligence is far beyond."
James acknowledges the vast complexity of general intelligence compared to narrow AI.
"I instead will recommend another book by Nick Bostrom, superintelligence."
James suggests reading Bostrom's book for a comprehensive argument on general intelligence.
"I have one which really pushes me, which is the morning paper by Adrian Collier."
James regards "The Morning Paper" as intellectually stimulating and challenging.
"He summarizes them and he sends out a fortnightly, I think it is newsletter, summarizing ten brilliant articles and giving you his tips on it."
James highlights the value of Nathan Benaich's newsletter in summarizing key articles on AI and machine learning.
"Harry Briggs is a role model in that aspect and I'm very lucky to have worked with him."
James expresses gratitude for Harry Briggs's mentorship and the positive impact it has had on his career.
"Magic Pony Technologies is a former entrepreneur, first company, and it's a machine learning approach to working video compression."
This quote describes Magic Pony Technologies' core business and its innovative approach to video compression.
"They are building a very smart solution to improve that through software rather than hardware."
James emphasizes the software-based solution provided by Magic Pony Technologies to address video streaming issues.