20VC The Future For Autonomous Vehicles & How Software Is Eating Cars with Nikhil Basu Trivedi, Investor @ Shasta Ventures



In this episode of the 20 minutes VC, host Harry Stebings interviews Nikhil Basu Trivedi, an investor at Shasta Ventures with a focus on consumer, mobile, and SaaS. Nikhil shares his unconventional journey from Reading, England, to the venture capital world in San Francisco, highlighting his early exposure to technology and entrepreneurship. He discusses his operational experience as a co-founder of Artsy and how it informs his empathy for founders seeking product-market fit. The conversation delves into autonomous vehicles, exploring the nuances between level three and level four automation, and the impact of such technologies on urban living, car ownership, and various industries. Nikhil emphasizes the role of software in driving innovation in the auto industry and the potential challenges and opportunities for startups in building massive data sets amidst well-capitalized incumbents. The episode also touches on the influence of big tech investments, like Apple's in Didi Chuxing, on the sharing economy and the future of urban layouts. Lastly, Nikhil shares his recent investment in Tally, a consumer finance technology company aiming to alleviate credit card debt.

Summary Notes

Introduction to the 20 Minutes VC Podcast

  • Harry Stebings is the host of the 20 Minutes VC podcast.
  • The podcast provides a backstage look at the venture capital industry.
  • Harry Stebings can be followed on Snapchat at h stepbings.

I am your host, Harry Stebings, and you're listening to the 20 minutes VC.

This quote introduces Harry Stebings as the host of the podcast, setting the stage for the episode's discussion.

Nikhil Basu Trivedi's Background

  • Nikhil Basu Trivedi is an investor at Shasta Ventures.
  • He focuses on consumer, mobile, and SaaS investments.
  • Previously worked at Insight Venture Partners in New York.
  • Co-founded Artsy during his sophomore year at Princeton University.
  • Artsy employs over 100 people and has raised over $50 million in venture financing.

Well, today I'm delighted to be joined by Nikhil Basu, Trevetti, investor at Shasta, where he focuses on consumer, mobile and SaaS.

This quote introduces Nikhil Basu Trivedi as the guest, highlighting his professional focus and entrepreneurial background.

Lisa Mattress Sponsorship

  • Lisa Mattress sponsors the podcast episode.
  • They offer a 100-night trial and have a charitable aspect to their business model.
  • They plant a tree for every mattress sold in partnership with the Arbor Day Foundation.
  • The podcast provides a promo code for a discount on Lisa mattresses.

Well, that is a sign that you need a Lisa mattress, which allow you to sleep with ease.

This quote discusses the sponsorship and benefits of Lisa Mattress, emphasizing the podcast's partnership with the brand.

Acknowledgment of Tiffany Zhang

  • Tiffany Zhang from Binary Capital is thanked for introducing Harry Stebings to Nikhil Basu Trivedi.

I'd also like to say a huge thank you to Tiffany Zhang at Binary Capital for making the introduction between me and Nikhil.

This quote expresses gratitude to Tiffany Zhang for facilitating the connection between the podcast host and the guest.

Nikhil Basu Trivedi's Journey to Venture Capital

  • Nikhil grew up in Reading, England, and moved to the Bay Area at age 13.
  • The move exposed him to technology, entrepreneurship, and venture capital.
  • He started a company during college and worked in New York before returning to San Francisco.

Yeah, it's definitely not the typical journey. I don't know how many people in venture capital grew up in Reading and were born in Oxford, but the journey for me is really about my parents moving my sister and I and our family to the Bay Area when I was 13.

This quote details Nikhil's unique path to venture capital, emphasizing the significance of his move to the Bay Area in shaping his career.

The Importance of Operational Experience for Venture Capitalists

  • Nikhil believes his experience as a founder at Artsy was pivotal in shaping his venture capital approach.
  • Empathy for founders struggling to find product-market fit is a result of his operational experience.
  • Venture experience eventually becomes more influential than operational experience in venture capital.

That taste of building a product, struggling to find product market fit does inform me today in venture capital, because it helps me empathize with founders who are going through that same struggle.

This quote explains how Nikhil's founding experience at Artsy informs his empathetic approach to venture capital.

Autonomous Cars and Levels of Automation

  • The National Highway Traffic Safety Administration has a classification system for autonomous vehicles from level 0 to level 4.
  • Level 3 allows the driver to cede control of safety functions but must be present.
  • Level 4 allows the vehicle to drive autonomously without any driver.
  • Nikhil finds level 3 and level 4 automation most interesting in the context of autonomous transportation.

The ones that are most interesting, the ones that I think about are level three and level four automation. And level three is where you have a driver at the steering wheel, but the driver can fully seed control of all safety critical functions in the car to the car itself, but the driver still needs to be present.

This quote provides a definition of level 3 automation, highlighting its relevance to the future of autonomous transportation.

The Current State of Autonomous Cars

  • Nikhil asserts that we are currently at level 2 automation, which includes adaptive cruise control and lane-keeping.
  • He anticipates a move towards level 3 automation soon.

I think that we are at level two because that's where it's adaptive cruise control and the ability for a car to stay in a lane and change lanes.

This quote describes the current level of automation in cars and anticipates advancements toward higher levels of autonomy.

Nikhil's Excitement for Autonomous Cars

  • Nikhil is excited about autonomous transportation because of its potential to disrupt consumer spending.
  • He believes autonomous cars will significantly impact housing, healthcare, consumer finance, and transportation.

But if you had to push me to focus on one, I would go with autonomous transportation and self-driving cars, because I think that disruption in how we move.

This quote conveys Nikhil's belief that autonomous transportation, especially self-driving cars, will be a major disruptive force in the economy.## Level 3 Vehicle Automation

  • We are approaching Level 3 automation where cars can drive themselves with a driver present as a safety backup.
  • Venture investors see the current period as the right time for opportunities in vehicle automation.
  • Elon Musk predicted in December 2015 that Tesla would achieve a self-driving car by late 2017.

"we're almost at level three, where cars can drive themselves, albeit with a driver at the steering wheel to ensure safety and as a backup."

This quote highlights the current stage in vehicle automation technology, emphasizing the proximity to Level 3 automation which requires driver oversight for safety.

Impact on the Auto Industry

  • Legacy auto companies must adapt to the shift toward autonomous transportation to survive.
  • Software updates are becoming a key component of vehicle maintenance and improvement.
  • Companies like GM are acquiring startups like Cruise to integrate software capabilities for machine learning and deep learning.

"The legacy auto companies are going to have to adapt to the changes precipitated by autonomous transportation."

This quote emphasizes the need for traditional car manufacturers to evolve in response to advancements in autonomous vehicle technology.

Corporate Innovation vs. M&A

  • Mergers and acquisitions (M&A) are not the only solution for legacy auto companies to adapt to new industry standards.
  • Companies like GM and BMW have been proactively developing in-house teams for autonomous transportation.
  • The success of these in-house efforts compared to new entrants like Uber, Lyft, Google, or Tesla remains uncertain.

"I think many of them have expected this to happen for a while and have built teams in house working on this stuff."

The quote suggests that traditional auto manufacturers anticipated the rise of autonomous vehicles and have been preparing internally, rather than relying solely on acquiring new companies.

Market Dynamics

  • The autonomous transportation market is not seen as winner-take-all.
  • Multiple successful approaches and companies are expected, with fast followers emulating the leader's successful strategies.
  • Software's role in self-driving cars could lead to a 'winner takes most' situation due to network effects and data advantages.

"I don't view it as winner take all. That's my current thinking now."

This quote reflects the speaker's belief that the autonomous vehicle market will be competitive with multiple successful entities, rather than dominated by a single company.

Software's Role in Autonomous Vehicles

  • Tesla's small team is rapidly improving their autopilot system through data collected from their vehicles.
  • The data from Tesla's vehicles is used to enhance their software, leading to hardware and capability improvements in future models.
  • Software is becoming a crucial element in the advancement of autonomous transportation.

"Tesla has over 100,000 cars with autopilot that are out there on the road driving and collecting data and automating highway driving to the tune of millions of miles per week."

The quote illustrates how Tesla is leveraging a large fleet of cars to collect data that informs and improves their autonomous driving technology.

Data Advantages for Startups

  • Startups like Cruise need to build up massive data sets to compete with established players like Uber, Google, and Tesla.
  • Venture capitalists are seeking to invest in companies that can become independent and stand the test of time.
  • The path for startups to build a sustainable competitive advantage in data is still unclear.

"It's something we've been thinking a lot about, which are the teams, which are the companies with an approach that can do that?"

This quote conveys the venture capital perspective on evaluating startups' potential to compete in the autonomous vehicle market through novel approaches and data acquisition strategies.

Autonomous Vehicles and Car Ownership

  • The future of car ownership and its relationship with autonomous vehicles is uncertain.
  • The impact of autonomous vehicles on the sharing economy may vary by geography.
  • In regions with prevalent public transport, a fleet-based approach to autonomous vehicles could be more likely.

"My current view is that I don't know that there's one."

The quote reflects the speaker's uncertainty about a single company dominating the market for autonomous vehicles and indicates a belief that the outcome may differ based on regional factors.## Autonomous Vehicles and Cultural Integration

  • Autonomous vehicles will be expensive and not accessible to the mass market initially, similar to luxury cars today.
  • In the United States, there is a cultural importance placed on car ownership, which may lead to a blend of personal car ownership and fleet-based autonomous systems.
  • Europe and Asia may favor a fleet-based system more due to cultural norms around shared transportation.

"In the United States, car ownership is a big deal, and it's something that's again, bred into the culture here." This quote highlights the cultural significance of car ownership in the United States, suggesting that this may influence how autonomous vehicles are adopted there.

Apple's Investment in Didi Chuxing

  • Apple's investment in Didi Chuxing is seen as a strategic move to keep RMB within China and align with big tech's interest in autonomous transportation.
  • Apple's investment could suggest their interest in having a presence in the autonomous transport sector, potentially in a fleet-based manner.

"Apple does have a business in China. They have money in the bank in RMB to invest that money into China." The quote suggests that Apple's investment in Didi Chuxing was a strategic financial decision to utilize their RMB reserves in China effectively.

Impact on Urban Layouts

  • Autonomous vehicles could alleviate parking issues in cities.
  • There is a possibility that autonomous transportation could encourage people to move out of cities due to more efficient commuting options.
  • Alternatively, the presence of autonomous vehicle fleets might make city living more attractive.
  • The trend of urbanization may be impacted by the advent of self-driving cars.

"I think autonomous transportation is definitely going to affect where people live." This quote emphasizes the potential influence of autonomous vehicles on residential patterns and urban planning.

Pricing Model for Autonomous Vehicles

  • Initially, autonomous cars are likely to be sold at a high price point due to the expensive production and R&D costs.
  • Over time, the costs may decrease, making autonomous vehicles more accessible to the mass market.

"It's in the incentive of auto manufacturers to produce these cars and to sell them at a high price point at first because they're going to be costly to produce." The quote explains the economic rationale behind the initial high pricing of autonomous vehicles by manufacturers.

Regulation and Cultural Barriers

  • Transitioning from level 3 to level 4 autonomy, where no driver is needed, will be a significant shift.
  • Regulation and safety concerns are major barriers to the widespread adoption of autonomous vehicles.
  • Cultural resistance to change and the unfamiliarity of seeing vehicles operate without visible control may slow acceptance.

"Governments, I don't think, will allow it until they know that it's safe." This quote identifies government regulation and safety validation as critical hurdles for the adoption of fully autonomous vehicles.

Education and Consumer Onboarding

  • Education will be crucial for consumers to understand and trust the benefits of self-driving cars.
  • Future generations may grow up without learning to drive, indicating a cultural shift towards acceptance of autonomous technology.

"I think education will be a big part of it." The quote stresses the importance of educating the public to facilitate the transition to autonomous vehicle technology.

(Note: The transcript ended abruptly without a conclusion to the conversation or further details on the quickfire round mentioned by Speaker B. As such, the notes end with the last provided complete idea.)## Leadership and Team Building

  • Sir Alex Ferguson and Sir Michael Moritz co-authored a book titled "Leading."
  • Harry Stebings considers Sir Alex Ferguson a lifelong role model.
  • The book discusses parallels between sports team management and venture capital.
  • It emphasizes the role of a coach in building a team and inspiring individuals.

It's called leading by Sir Alex Ferguson and Sir Michael Moritz, two of my. Yeah, yeah. And I'm a massive fan.

This quote shows Harry Stebings's admiration for Sir Alex Ferguson and the influence the book "Leading" has had on him, particularly in the context of leadership and team building.

The Importance of Sleep

  • People spend about a third of their life sleeping.
  • There is a disparity between the importance of sleep and the money spent on sleep-related products.
  • Technology has often disrupted rather than improved sleep quality.
  • Nikhil Basu Trivedi is searching for tech companies that can enhance sleep.

So, look, consumers spend, people spend about a third of their life sleeping, and we definitely do not spend a third of our money on sleep.

This quote from Nikhil Basu Trivedi highlights the significant portion of life spent sleeping and the lack of proportional spending on sleep, indicating an area with potential for investment and improvement.

Developing Pattern Recognition in Venture Capital

  • Nikhil Basu Trivedi learns from listening to "20 minutes VC" and its guests.
  • He relies on his partners at Shasta and previous colleagues at Insight Venture Partners to improve his judgment.
  • Developing pattern recognition takes time, and he is focused on the long-term improvement of his investment decisions.

Apart from listening to the 20 minutes VC and learning from all the great guests that you've had on the show and how they've thought about this question.

Nikhil Basu Trivedi credits the "20 minutes VC" podcast and its guests as valuable resources for learning and developing his skills in pattern recognition within venture capital.

Venture Capital Investment Reading

  • Nikhil Basu Trivedi reads several daily newsletters and blogs to stay informed.
  • He mentions "Term Sheet" by Dan Primack, "Madamark Daily," and "Strictly VC."
  • He appreciates CB Insights' innovative approach to subject lines and A/B testing.

I have a bunch that I read every day, like term sheet by Dan Primack and Madamark Daily and Strictly VC.

Nikhil Basu Trivedi lists his must-read newsletters and blogs, which are integral to his daily routine and provide him with up-to-date information on venture capital investments.

Tally's Series A Investment

  • Tally is a consumer finance technology company.
  • The company's focus is on solving credit card debt issues.
  • The Tally team is experienced, driven, and passionate.
  • Tally's product automates credit card management and helps users save money.
  • The market opportunity for Tally is significant.

Tally is a consumer finance technology company. We got really excited about Tally because of the team.

This quote explains Nikhil Basu Trivedi's rationale for investing in Tally, highlighting the team's background and their solution to credit card debt management as key factors.

The 20 Minute VC Podcast and Lisa Mattress Promotion

  • Harry Stebings encourages listeners to follow him on Snapchat and sign up for the newsletter.
  • Lisa mattress is promoted as an online mattress company with a social mission.
  • For every ten mattresses sold, one is donated to a shelter.
  • Promo code "vc75" is offered for a discount.

Get a Lisa mattress and avoid the hassle of traipsing round a showroom and instead buy it online at forward slash VC.

Harry Stebings promotes Lisa mattress as a convenient and socially responsible option for listeners, emphasizing the ease of online purchase and the company's charitable contributions.

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