Navigating AI Ventures: Insights from Techstars Director Tricia Martínez

0:28Welcome to the AI Chat Podcast. committed to leveraging technology and AI to tackle some of the most pressing challenges today. Welcome to the AI Chat Podcast, Tricia. Oh my gosh, what a nice intro. Thank you so much. I'm so happy to be here. Great to have you on. For those that don't know, I actually met Tricia a little while back at the AI4 conference. She was speaking on a panel about AI and venture capital, and she had some amazing points. I was like, oh my gosh, we got to get around the podcast to to talk about your perspective and what you're seeing. I would love to kick it over to you and maybe you can tell everyone a little bit about, first off, I'm sure people are a little bit curious about kind of your journey into the world of technology and innovation and kind of what like at the very beginning kind of sparked your interest to get into this in the beginning.

1:14Yes. Yeah, I have. It's a very crazy long career path journey that I've been on. So in short, I am on a mission to bring what I call far out ideas that can change the world to life. So I started my life as a founder. I defined myself founder first and then investor. I built and scaled the first digital bank in Africa for about a decade across a number of markets in sub-Saharan Africa. Grew it to hundreds of thousands of users. Ended up having a failed exit with a Chinese bank. Oh no. Because then the whole other conversation. Oh, my gosh. Fascinating story that needs to be trimmed into a book.

1:57But I started my journey in the tech world mainly because I started out in economics. I knew that I wanted to study data and understand at a deeper level why problems existed. I'm fascinated by big problems. I wanted to invest my career in helping solve those big problems. I originally thought going to the public sector as a policymaker, as an elected official, was the best way to do that. As I had a short stint in politics, I quickly was like, if this is not for me, it's so slow moving, very bureaucratic, lacks innovation, a lot of chaos and garbage, I'll say, which was very discouraging for me.

2:43and I decided, I guess I maybe discovered the path of entrepreneurship while I was doing my master's. I was building a company and quickly discovered new business classes that like, hey, you can build things that solve real problems and create impact while also generating revenue and profit. And that's when I went on this journey. And so I had spent so much time specifically in the poverty alleviation area around microfinance. And I said, I'm going to just go and start building something because nobody else is building it. And I just kind of jumped in. And it was really scary, but I never looked back ever since.

3:22I'm addicted to building things. It's an invigorating feeling when you discover a problem and you get traction and you start solving it. And after I spent a decade building my baby called Walla, a lot of sweat, blood and tears into that, I knew I wanted to build something, but I wasn't sure what. And I didn't have the energy to go invest in building again. And that's why I decided to go become a fellow with the White House. I wanted to position myself in the climate battle. I love AI. I love climate. I wanted to figure out what I could build to help move the needle on this very massive challenge we are up against.

4:04And so I guess serendipitously, I ended up falling back into Techstars because while I was a fellow at the Department of Energy working across our 17 national laboratories, the largest national lab was launching a Techstars. And they said, hey, come and build this for us and go invest in these awesome AI deep tech companies. So I kind of went full circle, public to private, back to public, back to private. Was a founder. I'm still a founder, but now I'm an investor. And I really made a commitment to the startup community because I hated working with VCs and investors because I really felt they lacked empathy for founders.

4:46If you haven't built something, it's hard to really understand what a founder goes through. And so I wanted to be that investor that truly understood problems at Bakra Zewa and specifically was backing technologies like artificial intelligence that could change our world. That's incredible. Well, what an amazing career path and journey. That's hilarious going in and out of the public side to the company side and back and forth. So that's amazing. Talk to us a little bit about right now, right? You're a managing director at Techstars and you talked a little bit about how you got into that. When you're right now, you're kind of looking at these accelerator programs.

5:23You're looking at investing into these AI companies or other companies that have big impact. What are the things that you are currently looking for, right? Like people that are applying for Techstars or other programs. What is it that you are specifically looking for in these companies? So a number of things, but let's talk about, I guess, the AI companies I invested. since this is a podcast focused on AI. Yes. For over a decade, I've been very bullish on AI. I've always seen it as a tool. It's not a silver bullet. It's a tool that will enable us to solve some really big problems. And when I look at companies, I first begin by defining a thesis.

6:02And there are a number of areas that I care a lot about because I see them as being instrumental to solving problems, but it's also because the market is moving in this direction. So for this Techstars Chicago AI accelerator that I run, I wanted to find great companies across climate tech, across health tech, across biotech, fintech, human resources, education. I wanted to find founders that were using AI on this tool to address some of the big problems that exist within those industries. and so that's first and foremost identifying the pieces and then going hunting down the ecosystem to find great founders building in those domains and then when i'm looking at companies so to give you a sense we identified over 3 000 companies for this accelerator well we met with hundreds of them through zoom calls conferences in person webinars all those things and narrowed it down to 12 that we invest in and we're about to announce those 12 ai companies come september but the the number one driver of wanting to invest in a company is is the founder is the founding team right i want to see that this team has what it takes to build this and is super gritty and passionate and is willing to do whatever it takes to build that technology get it to market and solve a big problem because as we all know being a founder is insanely hard you're going to be thrown a billion things your way that you have to manage you're wearing every single hat you need to know how to navigate complex markets deal with ups and downs and chaos and it's not for everyone and so if you are super perseverant and ready i have more faith in you as a founder and i say that in large part because i built a a financial technology company a blockchain company in sub-saharan in africa which um you know like so like all these crazy things emerging markets you know uh financial inclusion block a technology all everything was working against us yeah um and so like i i want to find founders that are prepared to go take that out uh and are ready to lead the charge so team is super super important and probably the most important thing in my mind followed by market is now the right time right and no one can ever say timing is so difficult to determine i thought what i was building was the right time now i would say isn't the right time to build what we were building so like you can never get it right you're lucky it's always about what time um but maybe we can try to get a sense of whether the now is the right time based on macro and micro economic factors and then And lastly is traction.

8:48So prove to me, show me the data. I want to see you hustle, talk to your customers. What problems are they dealing with? Put the product in front of them. How are they reacting to it? Are you using customers? That's a good thing because you're learning. You're iterating. So I want to see traction. And as every investor does, we want to see that you've discovered something that others have not discovered. Yeah, that sounds super critical. Cole. I know that you have you kind of went back and forth between, you know, government and private companies and back and forth in that play. And this is an interesting topic in an area because right now I think there is a definite trend in the market today where, you know, you have companies like OpenAI pushing for more regulation in AI.

9:31Some people saying there should be less. Where do you kind of where do you kind of see this playing out with, you know, based on your experience in government and in the private side? What do you think OpenAI's play is here and where do you kind of see this going yeah that's funny because this is what we talked about at the the event you know i regulation is absolutely coming i i'm actually comparing it a lot to the i think i said this at the event the ico craze like we did not regulate cryptocurrency and things got ugly a lot of companies people raised money and took advantage of investors and then things were never actually built.

10:11And so it was a really shitty situation and the government should have stepped in and put in some boundaries, but there's a lot of complexity with that. You don't want to put too many boundaries because that cycles innovation and then it deters people from wanting to build. My fear right now is that we have the biggest companies, Google, OpenAI, Amazon, nvidia some of these other groups that are leaders and already owning a huge market share and are kind of building a moat with regulation um mainly open ai you know based on the things that they're saying and how they're leading this cause or the charge forward but they want regulation because it enables them how to vote and to protect their market share that's really shitty for founders and for other innovators who want to build and so like playing into that is open source we want to create open ecosystems so more companies founders can build we can learn we can solve big problems regulation is definitely coming but the big concern is the government doesn't know how to regulate this and then the technology is moving too fast that it's really hard to regulate or um i don't have the answer i don't know what the right regulation is or what that looks like i do know we do need to the government does need to step into an extent and um i do like i said before i call bullshit on open ai they are not doing this to benefit the ai community they're doing it to benefit themselves yes yep and i think that's uh i think that is a perspective that is shared by some although there's a lot of people that you know have some pushback on that because like you said it is a difficult balance right people are like yes we need regulation how much and so right now if opening eyes pushing it for for it one of the few then everyone kind of that is in that camp jumps on that bandwagon so it will be interesting to see where it goes um you know you kind of talked about comparing this a little bit to um what happened with crypto and i know you have a very deep understanding of this right you built a blockchain company for 10 years talk to me a little bit about comparing kind of like the last hype cycle which was this crypto idea and then what's happening with ai today do you see this as like an ai bubble where do you how do you see this compared to previous cycles we've seen oh there's so much garbage right now it's crypto bros turned ai bros i'm not kidding it's it makes me sad because um so when i was building my company you know at the start we were looking at ai before ai was a buzzword we built blockchain not because it was a buzz but because it was our only alternative we couldn't get our financial product to market without a bank And so we said, screw the banks, we will be the bank ourselves by operating on blockchain.

13:00There are now so many companies who are just trying to pull AI into their name because investors are wanting to invest. And so they know it'll give them an edge. And, you know, I think the at the end of the day, this is a bubble. And so I think the buzz and the chaos around it will end up quieting down and it'll start disappearing. um but a lot of companies will probably get funded that are not true ai companies but maybe they are just operating on top of chat gbt and they're not building like artificial intelligence infrastructure for example um but um i think buzz is good right like people say any pr is good pr and so i think um people are becoming aware of this truly revolutionary technology that is going to transform the way every single one of us lives and how our planet operates.

13:55And so it's positive in that we'll be exposed to it and learning about it. But I am worried that there will be bad actors and that will have a negative effect on the overall technology and the ecosystem. The funny thing is that, you know, we have 17 federally funded national laboratories, which are building the most advanced technologies in the world, right? We have the biggest supercomputers that are advancing quantum computing. Pacific Northwest National Lab in Washington, Oak Ridge National Lab in Tennessee, Argonne in Chicago. They are leaders in AI and have been building AI for decades and decades, yet no one was ever talking about it.

14:37And so it's funny that now this is like a buzz and it's a cool thing. Yeah, it's been happening for so long. and so i think most people who operate in the ai feel are like whatever this will disappear quiet now like i'm putting my heads on and we keep building but um it's unfortunate to see the buzz but it's also a pop so um it will disappear but who knows when okay yeah yeah i think that is definitely a sentiment right now we're seeing like virtually every company i swear has like a new ai product coming out which a lot of them it's like a wrapper on top of open ai they're just like they We have a little AI feature and they're like, we're an AI company now.

15:15It's like, no, you're just a regular guy. And it's like, the thing that I think is interesting is it's not bad. Like their AI features are super useful. They're super cool. Yeah, absolutely. But it's not what it is, right? Like you're an AI company or you're not. Yeah. And some companies are now, I guess the positive though is some companies are realizing, are being exposed to AI and that's like, oh, actually we should have always been building AI. And now we're going to build a massive company and scale to help you draw. So like there are positives to that. But I think most of the noise, those companies will probably end up dying out, especially because the market is so shitty right now.

15:51And investors are becoming more risk averse that you really need to prove to funders that you have a product market set, you have customers, traction, revenue, a lot of data to back everything up. So if you're just putting an AI sticker on your brand, they'll be able to call bullshit on you. Yeah. And I think it's completely warranted. So it honestly makes me a little bit happy seeing how the market is a lot tighter this time around than kind of the frothier 2021 cycles we've been. I like to see companies have to kind of fight and work harder. Yeah. It's like gross almost to see people with bad ideas get like a ton of money in a big frothy market.

16:33it i think oh absolutely yeah yeah this is the best part to time to build a company yeah there's only the good companies are going to survive and the rest will die so it's awesome i think this is a really good time for our tech industry yes a hundred percent and i mean you see like in the last downturns housing market crash companies coming out of that was like like uber and like airbnb and there's companies that went super huge and it's because they had to really fight for it I know you've seen this because you had a lot of grit working 10 years on your blockchain company. And you also mentioned this earlier, this kind of concept of you really look for founders and team that have grit.

17:10This is something really interesting you've talked about. And I'd love to kind of dive a little bit deeper on that. What are you looking for specifically? And how do you kind of identify? How can you tell if like a team or a founder has really that grit? I mean, obviously you've had it. You worked 10 years in there, but how do you identify that in others? so i love this i actually i tell my founders to read grit by angela duckworth um i think grit is like the most important characteristic and i think the positive is it's not something you're born with it's something you develop and hone over time and so you'll see found people so not even as founders people who have gone through significant hardship are super gritty because they have failed at things.

17:53They've learned that they need to bounce back. If you're from, you know, a low income background and you didn't have a great upbringing, generally those individuals are really gritty because they've had to figure out how to survive and bounce back. Those are the things that I look for. Like, I don't want to invest in the traditional, you know, trust fund baby that went to Stanford because I'm like, have you ever dealt with anything hard in your life? Like everything's been handed to you and things seem pretty easy. I look for the founders that generally have lived an experience and have identified that as a problem that they want to solve but um it is as a it's whoever is listening like this is a a trait that you can develop and you don't want to go out and try to force yourself to fail and go through like really hard things but like it's something that over time with practice you can develop and so recommend reading grit.

18:45But it's basically me practicing empathy. I want to get to know every founder really, really well before I invest in them. I want to know who you are, your background, what excites you, what motivates you, what do you do for fun, what is your family like? Because that paints a picture of who you are and why you're even doing this. So motivators are really important. and we find that people who are super gritty are not ones who are like exceptionally good at let's say an athlete. They're not the best all-star athlete. They were born that way. They actually had to practice hundreds and hundreds or thousands of hours more than the other athletes.

19:26That's what turns them into better athletes and makes them grittier. So those are the things that I look for in founders. I want to try to assess that based on in-depth conversation with them. I love that. Yeah, that's incredible. And obviously, it's super critical. It really, I think what separates people that are successful a lot of the time versus not is just people that never gave up, right? If you keep pushing and pivoting, like inevitably you can achieve success, whereas you have a 0 % chance as soon as you quit. I have a very interesting question for you. I'd love to pick your brain around.

20:00you mentioned earlier that sometimes you feel like um there's going to be with the ai hype of the bubble whatever there's going to be like people that give ai perhaps a bad name that's going to happen with that we've seen this with crypto right there's the whole crypto thing and there's web3 has so many incredible technology use cases of course bunch of bad actors you have ftx and the whole debacle around that there's a lot of things that gave crypto and web3 a bad name we're kind of looking at ai and trying to avoid those same problems something that i feel like not a lot of people are talking about specifically is AI models or different AI technology that can be problematic in its ideologies, biases, and other areas embedded in the models.

20:42This is something that's really tricky because like you mentioned, if you're looking for a company from an investor perspective, you want traction, you want to, you know, like demand, but let's say you find that company that has traction demand. It seems awesome, but it has these other underlying issues. um and think about this from the perspective of like ftx right this was a company that had a lot of traction raised a lot of money it had some very glaring underlying issues that yeah other people overlooked essentially because of it was this shining star that could shiny out it could multiply your money so like so when you're looking at ai what do you think the responsibility of investors is specifically do you think we're going to actually get to a point where let's say there is an incredible AI that has raised a hundred million dollars, absolutely crushing it with demand, but it has very problematic ideologies or something.

21:31Do you think we're going to see those same things catapulted to number one AI space? And how do we use this? We will see that. And that's what's scary. So I don't think we can predict what's going to happen. We have no idea of the endless opportunities for AI. Like, I think that's, what's amazing about the technology is like, we're literally touching the 1 % of what this technology could actually do. And so we don't know what we don't know. And while I would say, yes, it's an investor's responsibility to invest in things that aren't going to cause harm to people or create deeper problems in the ecosystem, a lot of investors don't know right now, like what's going to happen to open AI in the future.

22:14They could become a horrible organization. Their AI could develop and maybe they're building adversarial AI, right? Like there are so many things that we just can't predict. And that's the point of regulation. And also having, you know, nonprofit organizations that are AI watchdogs that are trying to build more systems around how we build the ethics around AI, thinking about bias as well, who is, who are the people building these AIs, generally white males. And so it's leaving out a large, you know, part of our population and their representation, that's a bad thing. It doesn't mean it's turning into a horrible situation yet, but we need to get ahead of it and compare to those things.

22:55So I agree. I think that, like, yes, we're going to see some, wherever there is an opportunity to make a lot of money, you will have bad actors. I think the things we need to be more concerned about for AI are what our quote-unquote adversaries could be doing. other countries who are using ai to let's say manipulate our system so like you know we have autonomous vehicles they are you know coming in with adversarial ai to change stock signs um so that like our our vehicles actually don't stop and then it's creating chaos for pedestrians and what's happening like little things like that are the deeper problem i don't foresee it becoming on this big, scary company turning into an AI robot taking over the world.

23:44No, but there are small things that can start chipping away at our nation and our society and our systems that we need to be aware of and prepared for. Yeah, I appreciate that perspective on that for sure. Trisha, thank you so much for coming on the podcast today. You've had so many incredible insights. This has been amazing. We'll have to get you back on someday. And someday I'm going to pick your brain on the entire story of your blockchain company you worked with because that is incredibly interesting and everything that happened there. If people want to find you, contact you, or find out more about the programs, Techstars and everything else you're working on, what's the best place for people to connect?

24:21Yeah, absolutely. So reach out to me on LinkedIn. My name on LinkedIn is Trisha Martinez Saab and my Twitter is at Trisha Tita. I would love to connect with anyone happy to answer questions. If you're a founder and you want to build, you just need more guidance or you're interested in Techstars, please reach out. Always available. Thank you so much. Will do. And for all of the listeners, thank you so much for tuning into the AI Chat podcast. We will catch you next time and have a wonderful rest of your day.