Where We Are Investing in AI

Dear Think + friends,

The first half of 2023 has been off to a strong start for Think+  as we have seen a flurry of strong entrepreneurs, leading to three new investments in Fund II (including Synthpop and Passage) despite the dramatic decline in early stage investment by VCs.  We try to stay above the noise and hype and only focus on visionary entrepreneurs.

The tech landscape has been buzzing with excitement about Generative AI, and while we recognize its potential, we remain committed to our guiding principles. As thesis-based investors, we believe in the importance of deeply understanding a sector before making any investment decisions. This ensures that we back founders with truly transformational ideas that can change the structure of an industry.

We are particularly excited for entrepreneurs who are building in the app layer. We encourage creativity and the pursuit of novel product experiences. Instead of merely adding AI as an enhancement to existing platforms, we are on the lookout for startups that redefine product paradigms with AI at their core. Think companies like Stability.AICharacter.AI, and Synthesia, which are pushing boundaries and setting new industry standards.

Additionally, we strongly believe in the power of verticalization. While startups can gain initial traction by moving fast and catering to a broad audience, long-term success and defensibility lie in going vertical and solving problems for a particular sector. By offering verticalized solutions and leveraging a deep understanding of a specific target persona, workflow, and pain points, these startups can create strong moats around their businesses that big tech companies cannot easily breach. This is one of the reason we invested in Synthpop.ai.

Lastly, we understand the importance of data in this AI-driven world. Startups that have access to and can effectively leverage unique data sets hold a significant advantage. By leveraging such data to craft exceptional customer experiences, these entrepreneurs can forge strong and lasting bonds with their user base and solve problems that weren’t possible before.

We look forward to meeting founders and investors who are also taking a bottom up approach to this sector.

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