Foundation Capital

A provocative piece in the Harvard Business Review from my friend Bobby Yerramilli-Rao (Microsoft CSO) charts how AI will reshape enterprise expertise and strategy. What resonates deeply with me is their insight into AI's "triple product" return. I’ve seen firsthand how AI drives operational efficiency, elevates workforce performance, and enables sharper strategic focus by automating non-core activities. Another fascinating insight: the conventional wisdom that AI mainly benefits top performers is wrong. Studies show AI assistants boost lower-skilled workers' performance by 43% versus 17% for high performers. AI is raising the floor for everyone. This has major implications for how enterprises should think about talent and org structure. Bobby and his co-authors John Corwin, Yang Li and Karim Lakhani deliver a clear-eyed view of what it means to compete when AI puts expertise at everyone's fingertips. Well worth the read: https://lnkd.in/gy9TsVVU

The digital banking paradox: high volume, low value. Central Bank's data shows customers check their app 20-26 times monthly yet spend less than a minute per session. Digital customers bring just 1/15th of deposits compared to branch-acquired ones. Our Fintech team's latest analysis examines how banks can use generative AI to transform these transactional touchpoints into deeper relationships. Based on conversations with 20 banking executives, we identify specific opportunities for incumbents and startups. ?? Read the full analysis: https://lnkd.in/er4DBMA3

Over 112 million Americans struggle to pay for healthcare. Over 240 million feel what they pay isn't worth the cost. We can't let this continue. Here’s how AI will help level the playing field in healthcare:

The Open Data Lakes(ide) gathering at Foundation Capital this week brought together an exceptional group of technical builders tackling massive-scale data challenges. Foundation Capital General Partner Steve Vassallo and our friends at dltHub curated an evening focused on practical solutions for solving 16B+ data problems (we counted!), with powerful demonstrations from Alexander Butler (Harness), Josh Wills (DatologyAI), and Marcin Rudolf (dltHub). Special shout out to the hardcore data enthusiasts who stayed deep in technical discussions until the cleaning crew had to kick us out! Thank you to Matthaus Krzykowski and the dltHub team, and to all who joined us!

OpenAI just hit a $157B valuation. But the companies that will define AI's future aren't yet built, according to General Partner Ashu Garg. In his latest B2BaCEO Newsletter, Ashu breaks down: → Why OpenAI's core economics don't work like traditional software → The challenges of being a research lab, platform, enterprise solution, and consumer product simultaneously → Where the most valuable AI companies (which don't exist yet) will emerge ?? Read why startups targeting specific, costly problems in engineering, healthcare, legal, and sales will create more value than foundation model companies: https://lnkd.in/eKnSQvCE

Software is undergoing its most profound transformation yet—evolving from a tool that helps humans complete tasks to an autonomous worker that handles complex services. General Partner Joanne Chen and Partner Jaya Gupta explain how AI is ushering in a new System of Agents that mirrors human teams, with specialized agents collaborating, competing, and continuously learning from each other. They map out: → The three phases of software's evolution → How builders can tap into the $4.6T service-as-software opportunity → The top 50 startups making progress in this space ?? Read more about why multiple agents working together achieve better results than one, and how this shift will fundamentally change enterprise software: https://lnkd.in/eKgawCrt

Cal Students and Alumni—Applications are now open for our 3rd cohort of Cal Build! Our goal is to help more Cal students and alumni?start, build, and scale companies. If you're a current Cal student or Cal grad who has started an Enterprise company in the last 6 months or is thinking of starting a company in the next 3 months, please apply! ??? Applications are due by?November 29. Each cohort has 8 Cal builders. We have intimate in-person & virtual events, access to me and the rest of the Foundation Capital investment team, free office space, demo days with our broader VC & angel network, AWS/Azure/Open AI/Anthropic free credits, and a lot more. Learn more and apply here:?https://lnkd.in/guyAagiu

Banks have struggled with two realities that seem at odds: low customer satisfaction and high service costs. Despite massive tech investments, these challenges persist. We're excited to share a new series by General Partner Charles Moldow and Partner Nico Stainfeld exploring how generative AI can reshape banking, starting with customer acquisition and onboarding: Part 1: Banking Reimagined An overview of how generative AI plugs into every phase of the consumer banking lifecycle—from acquisition through collections—and the strategic opportunities for both incumbents and startups. https://lnkd.in/ec_aH34T Part 2: Winning the First Impression A deep dive into how generative AI transforms those crucial first interactions between banks and customers, reducing costs and increasing conversion while fundamentally reimagining how financial relationships begin. https://lnkd.in/edDMN6zb Key findings:? → 80% of banking data is unstructured and largely untapped → 68% of customers abandon financial applications due to poor onboarding → Only 30% of bank customers receive personalized financial advice Stay tuned for more insights as we explore customer engagement and collections in the coming weeks.

While traditional AI has been valuable for banks in areas like credit scoring, fraud detection, and risk management—it struggles handling unstructured and less predictable scenarios. Essentially, the human elements of banking. Generative AI has the potential to make banking more efficient, more personalized, and ultimately, more human. It can process unstructured data, engage with customers in real time, and deliver personalized experiences that traditional AI cannot. Having invested in fintech for almost two decades, it’s easy to see the technological moment we’re in. Seizing it is far more difficult. Based on our research and conversations with 20 banking executives across business, compliance, product and AI research, we’re writing a series of essays that examines how generative AI can plug into every phase of the customer journey. Today, we’re releasing the high-level overview: https://lnkd.in/gMhU-nRv Soon, we’ll be analyzing everything from customer acquisition to onboarding, engagement, and collections. Stay tuned for more.

Last night we welcomed 150+ fintech leaders to our Fintech Funhouse at Money20/20. Between the magic tricks and fortune telling, our future’s looking bright (our fortune teller confirmed) ?? Thanks to all who joined us!