How to invest in booming tech markets like AI and cloud computing, according to an expert
As AI surges in popularity, investors are swooping in to the back data processing and cloud companies that will power the new technological revolution.
Georgie Turner , a partner at Australia and US-based venture capital firm Tidal Ventures , is one of those investors.
Tidal backs early-stage startups that have the potential to revolutionise industries, even if their prototype or concept is still in its infancy.
In this interview with LinkedIn News Australia, Turner explains the potential of AI and cloud computing, how to win her over in a pitch, and the emerging technologies she's watching closely as an investor.
Georgie, investment in AI and cloud startups is going gangbusters at the moment. What's it like being a VC in this space at the moment?
Luckily we’ve been playing in this space for a while with our investments in the likes of PredictHQ from our first fund and Search.io from our second. But with the recent buzz I have to keep checking in on all the recent apps being built to make sure we’re sizing up the AI opportunity appropriately. If someone could please build a GeorgieGPT to do my research, I’d personally fund that.
Is a bubble forming in the AI sector?
Like the rest of the world, I’ve been excitedly watching the number of AI-centric companies flooding the market. It’s undoubtedly a once-in-a-generation opportunity that every investor should take seriously. But I fear the hype will result in investors getting FOMO, straying from their core diligence processes, and overlooking some critical indicators they wouldn’t usually miss. The last thing a founder and an investor wants is a market full of overvalued assets. So as an investor, I’m cautiously optimistic about the time we find ourselves in. Every technology investment I look at should have a view of how AI can make their product substantially better and an eye on how they can build with an AI-first mentality. But what remains steadfast in the era of AI—founders still need to hustle to create game-changing products and compelling business models in markets with tailwinds.
What is your current focus as an investor, and why?
Recognising the profound impact of technology on human behaviour and its potential to spark transformative shifts within society and reshape value chains, we find ourselves amidst a technology cycle of global significance.
While 75% of computing remains on-premise, the rise of AI is driving a surge in worldwide investment in data centre processing capacity. Projections indicate that cloud spending will reach $592 billion by the end of 2023. In light of these developments, our investments align with the following three broad areas, reflecting our investment thesis:
By framing our investments within these areas, we aim to maximise their impact and leverage the profound shifts in the technology landscape.
What emerging tech or industries excite you the most?
I am a firm believer in the transformative power of AI, which is why it forms a core part of our Cognitive Cloud thesis. To understand the potential implications of AI, our team has been debating and considering various aspects of its potential impact:
We’re constantly thinking about the concept of primary data as a core element of our investment approach. Businesses that can produce and manage significant pools of primary data have an advantage in enabling their own applications and those of other organisations.
Primary data and its application have become the new differentiators in cloud, and developing contextual learning models for applications is proving to be very advantageous.
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How did you get into venture capital?
There isn’t a clear-cut path to venture capital. It seems to be one of those industries that people stumble upon for different reasons. In my case, I was part of an early team at Rackspace Technology Australia when we were selling the early version of cloud computing infrastructure to Australian corporates and startups at the same time as Amazon Web Services was launching in Australia. I got direct exposure to selling in a rapidly growing market, where competition was fierce for every deal. I had first-hand experience with the challenges of unlocking rapid growth and accelerating in a new market.
When I began searching for my next challenge, I knew I wanted to continue to drive rapid growth for Australian tech companies — but at scale. This is precisely what an operator-led venture capital firm offers: the opportunity to tackle significant growth problems alongside exceptional founders.
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For me, the most thrilling aspect of my role is building global companies that have the potential to steal market share, outpace incumbents, and revolutionise entire industries. There’s nothing better than supporting visionary founders to bring their cutting-edge product vision to life and establish truly disruptive companies.
What do you look for in a founder?
In a nutshell, I’m looking for an inspirational leader who is in love with their problem space, a swift decision-maker, and someone who shows signs of rational optimism. Here are some of the key qualities I look for:
What local or international startups are on your portfolio ‘Dream Team’, and why?
We live by the mantra that game-changing companies begin and end with the best product in the market. So I’d say that my dream would be to go back in time and work with the founding teams at Figma , Stripe , or Notion when they were at seed stage. To have been an investor working with their teams to build out their GTM and product strategy would have been a partnership unlike anything seen before.
What are your top listening or reading recommendations on investing?
I might be old school, but I’m all about listening tours. If I need to develop an in-depth understanding of something, I’ll try to go to the source and hear it from them. For example, I wanted to get a good hold on the state of the US market, so a few weeks back, I went on a San Francisco listening tour where I met with 15 US-based VC funds. I believe the insights I’ve gleaned from those 15 in-person, live conversations will provide more insight into the US market than any podcast or book could provide. In terms of newsletters, I’m signed up for Lenny’s newsletter for the latest in product and growth and Tomasz Tunguz for his commentary on startups, data, web3, and public markets.
What is your top advice to founders dealing with a downturn?
It’s no secret that a longer path to liquidity requires a strong commitment and determination, but great multi-generational companies are made in economic downturns. These types of market conditions call for a return to basics — centre yourself in your problem space and focus on doing more with less.
Want to learn more about cloud computing, AI and venture capital? Follow? Georgie Turner , partner at Tidal Ventures , on LinkedIn. You can also check out?previous Venture Chats interviews below.
???Tom Dawkins?from StartSomeGood —?read his interview here.
??? Trent Bagnall ?and? Steph Hinds ?from?Melt Ventures?— read their full interview?here.
?? Tom Humphrey ?from?Blackbird?—?read his interview?here.
?? Amanda Hjorring ?from?Square Peg?—?read her interview?here.
?? Dan Krasnostein ?from?Square Peg?—?read his interview?here.
?? Piruze Sabuncu ?from?Square Peg?—?read her interview?here.
?? Phil Morle ?from?Main Sequence?—?read his interview?here.
?? Raaj Rayat, CFA ?from?AirTree?—?read his interview?here.
?? Michael Tolo ?from?Blackbird?—?read his interview?here.
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?? Helping Improve Profits & Productivity through Digitalisation | Process Digital Twins | Trainer | Keynote Speaker
1 年Great insightful interview Marty. Thanks for being a sane voice on this important topic amidst all the FOMO and buzz. Georgie Turner has put it very well by stressing on how founders stray from the 'core diligence processes, overlooking some critical indicators they wouldn’t usually miss'. The risk of overvalued AI assets is real and can very well result in an inflated market without commercially viable product backing. A holistic platform offering, its ability to disrupt, and access to primary data is what sets apart a successful AI start-up from an unsuccessful one.