US-based General Catalyst is one of the world’s largest venture capital companies and has a diverse portfolio of companies from a variety of industries, including healthcare.
Alexandre Momeni, a General Catalyst partner focused on AI infrastructure and health/bio, is MobiHealthNews To discuss investors’ perspectives on funding emerging technologies, we discuss the risks associated with these investments and the possibilities that technology can change society as a whole.
MobiHealthNews: What do you think when investing in emerging technologies?
Alexandre Momeni: First and foremost, in a general Catalyst, when we invest in the early stages, and I know you hear this from all investors, but that’s true, we really focus on the founders. In many cases, the founder has a PhD, especially when focusing on Frontier Tech. In that field, you spend many years at the best institutions building technology into that field and have great unfair advantages to any knowledge you can make up for.
I think the most important thing is that they really focus on the founders, understand what they actually achieved, and the kind of intuition they have about where they were and what their learning pace is and the direction in which the world is moving.
What we’re all investing in technology, especially when we’re investing in frontiers, is the fact that when technology suddenly starts to become like science, engineering, or something like that cusp, most of the time, we start to see a change in the world’s rather important platforms. And you start to face all these exciting additional questions. So, what products can you build in addition to this? And how does the business model work to bring this technology to the world?
Our role as venture capitalists is more relevant, if you do, as we can draw lessons from history and lessons from how today’s markets work.
Brain computer interfaces are obviously very popular, but have been around for many years. We recently invested in a company in that area. And clearly, it is invasive and not invasive in the BCI space. These are very different levels of risk and therefore serve different populations at least from the start.
But whether it’s on the healthcare side or on the consumer side, we have a firm belief that technology is evolving enough today. It’s been less than a decade since at least like a read-only BCI and potentially something like a read-write. It is exciting when you think about all the different product experiences and equalizers that can be created for society.
At the same time, we have responsible innovation papers. When investing in this area, you need to make sure that what they are trying to achieve is principled and fits in our values. Because, as with the technology that is especially effective in the brain, we want to make sure we are supporting the companies that use it.
MHN: What are you most excited about these technologies? And what makes you nervous as an investor? Is there a type of technology that interests you to always consider investing?
Momeni: I’m currently looking at most BCI and surgical robotics, including autonomous robotics. We spend a considerable amount of time examining the fields of drug development and drug design. So, it is mostly the companies that are developing that excite us. It’s mostly software, but we also look at hardware that brings meaningful step-changes to society in its current way.
The important question to ask is, “So what?” If there is this breakthrough, what? And does the answer to “So what?” have a big impact on the world? We get excited.
If it works, like BCI, it will have a major impact not only on patients currently suffering from disabilities, but also on the entire computing world in practice. Because if you can stream and control your thoughts and minds and communicate, does it really make sense to put your phone as a form factor? Or a computer? Or something else?
So the whole stack could be rethinked around this new experience, which removes the friction of human experiences. For example, today you need to use the remote to control your TV. We had to write letters to each other through the interface to work effectively together and function as a family and society as a whole. As you know, if you understand whether a brain computer interface works and how to reconstruct and redesign the entire experience around it, the entire premise may be questionable.
What makes us nervous is from an appearance, obviously risk perspective. These are once again very dangerous businesses. The quality of success is quite low. They are sometimes very capital-intensive, so they need to invest more money while taking more risks.
And the way we try to think about these things is fortunately, we have a lot of money. And we try to adopt a portfolio approach that we believe is important in every fund. And we’re going to balance it with something we think is something that we think is very good, but perhaps the least risky. So, from a portfolio building perspective, you need to be considerate about it.
And the other thing that obviously makes us nervous is making sure these companies have unintended consequences through some of these technologies and are really thoughtful about them. And that’s what we try to deal directly with in our hardworking process.
As for how we do due diligence and see these things, what we’re trying to do is basically spend a lot of time on the academic institutions and businesses that are building on that frontier. There is a small community of people who have been in the space for so long and through the lack of a better word, they have really learned by burning hundreds of millions of dollars in some of these labs. They saw it.
Part of the joy of being an investor is that we spend our time talking to people who are 100 times smarter than us.
I think that’s the interesting part. We can learn from them and become part of their stories. Most of the time you can find something really good. You have to be good at three things. It needs to be strategic, it needs to work at the right altitude and be able to simplify things.
This is a very complicated space. It’s very easy to get lost in the details. It’s very easy to follow low value issues that seem to shine. These three things make you a great founder in this field.
