E481 | Etienne, Intuition: Going Deep on Consumer, and What Founders Can Learn from Pro Athletes

0:00What does it take to build billion dollar companies from nothing? Like the zero to one is just so hard. I think you want to find people with, you know, extremely high pain tolerance that can move fast. Etienne Boutin learned that lesson the hard way. First, as a professional basketball player chasing an impossible dream. Unless I was making it to the biggest league, which was the NBA, I don't think I was interested. Yeah, 20 years old, I decided I wanted to do something else with my life. That all or nothing mindset led him to a contrarian realization that's reshaping European venture capital.

0:29All the biggest companies in the world are consumer. So at some point, we need that. While others fled consumer investing, Etienne doubled down, launching Intuition, a 10M euro fund betting on the next platform shift. And we strongly believe AI is that wave that everybody has been waiting for. Half of the companies we were backing were in that space. But here's his urgent warning for founders and investors alike. Because if you start getting left behind, you're going to feel like your parents when the mobile came. How does an athlete's pain tolerance unlock a winning playbook for consumer tech in the AI era?

1:01Join us for this episode of the European VC Podcast as we dive deep into ETN's contrarian thesis and discover why now might be the perfect time to bet on consumer, if you have the grit to see it through.

1:18This would have finally found. Tear down this wall. It's more than just an ally. This is a union of values. Let's start acting. This show is not investment advice, and the hosts of this episode may be invested in the funds and companies featured. Welcome back, everyone, to the European VC Podcast. I have a channel with me today. Maybe, Jan, we should start where all good things start, which is a background on yourself and intuition. Sure. Thanks so much for having me, Andrea. Super happy to be on the podcast. And yeah, quick background. My name is Etienne. I'm a founder and GP of an early stage fund called Intuition.

2:03We invest in pre-seed seed in European companies in the US along the consumer stack. And yeah, I used to be a professional basketball player, turned into a founder first with a startup and second with a VC fund. I got to ask you, you're kind of like to me, for some reason, intuition and yourself has been on my radar for what feels like a long time. Can you tell me, and you have invested in the likes of SoWare and Odyssey and Scoreplay, Delphi, Argyle, Airbots. So, you know, those are good investments. Tell me a bit about your investment track record so far, what you've done in the ecosystem. Yeah, I mean, I started as an angel when I was a founder.

2:52I think I wanted to speed track everything I was learning. And I was getting interested into certain verticals and areas more than others. And yeah, putting a small check as an angel was a way for me to connect to founders, getting closer to topics I really cared about. A few investments, I ended up building a small investment club. And from that investment club, I decided I wanted to do this full time, decided how to build the intuition. But it really started out of, OK, I'm doing a few checks. Usually my checks were pretty small. I wanted to also have a rationale behind diversifying my investments.

3:31And so knowing how risky startups were, I think I wanted to do, you know, more than 10. I ended up doing with my investment club about 15. and then I think I wanted to go from, okay, I'm doing this on the side to I actually want to do this full-time and be a professional about those. And yeah, with the fund right now, we invested in 10 companies already and hopefully a lot more. I think the goal for us is to do 40 plus right now. So yeah, I think every investment brings you a different set of expertise and even the experience that you get as an investor. So it's been super interesting. I got to ask you, Are you friends with Anthony Dannon?

4:11We've met each other. I think he's closer to my coach, Ego. But what are you asking? I just asked because I love the guy. He's a great guy. I mean, a very friendly conversation. Good, good, good. I want to ask you, professional basketball player, how do you end up becoming that? Kind of what did that do informing you? I mean, when I grew up, I was a very overactive kid. And I think my parents wanted to find a way for me to be tired at the end of the day. So they launched me into trying a bunch of sports. And I literally, I think I tried everything. And basketball ended up maybe the sport where I was the best at of my abilities.

4:52And second, I grew like a lot of inspiration out of professional athletes. For me, they felt like real life superheroes. I was not really into like, you know, playing around with toys and cartoons and stuff like that. and I was a big Mike Jordan fan. So I was like, okay, I'm going to go full on or train to become a basketball player. I was dreaming about going to the NBA and yeah, I started playing in my little town that kind of became like a local superstar. And then I got into, okay, this is getting serious. At 14, 15, I got into basically the pro teams where they train young players to come up.

5:30I signed my first contract. I was 16. I became professional at 18. played a couple of years professional in spain but then you also get caught up by reality being a professional athlete is actually insanely hard uh you have to sacrifice a lot many few actually very few athletes get to i think enjoy the type of stability where you make enough money to you know have like uh your life taken care of and even if you do make a lot of money so very complicated it's very complicated to have family you can get injured i personally tore my acl when i was 18. My parents went to med school. So I got like this whole perspective of, okay, do you actually really want to do this?

6:09And for me, unless I was making it to the biggest league, which was the NBA, I don't think I was interested. Yeah, 20 years old, I decided I wanted to do something else with my life. I often think that like my first stunt as trying to be a professional basketball player was my first startup. Like I really had to push myself. I'm no agent. I had to go out there and, you know, try to find opportunities. And I think the resilience and the pain tolerance that you build. And I think you see it a lot of times with a lot of former athletes going to early stage. Like the zero to one is just so hard. I think you want to find people with, you know, extremely high pain tolerance that can move fast, care about the group that are aligned with doing some like a mission that's bigger than themselves.

6:52And that resonated a lot. So I do admit that when I had to transition after, entrepreneurship was kind of like the logical path for me. Basketball definitely made a lot of the person I am today. Starting 12, 13, I knew I wanted to be really serious about it. And I stopped really playing when I was in my 20s. So it's almost like a 10-year little career, you know? How would you compare being a basketball player and the drive that you had there with the drive that you now have as a VC and had as a founder before and the drive that you see in founders building today? yeah it's uh it's it's core like i think you know like uh when i was a player i was completely consumed by what i was doing i admired players like you know jordan co-brand and i tried to mimic what they were doing which was trained like a madman so i would wake up at 4 a.m try to get like three practices per day uh i wasn't the most talented so i had to work at work harder than anybody else at least and i carried that over but when i i uh started you know in entrepreneurship or being a founder i think there's a lot of similarities in there because because i was so driven before and i was completely passionate and obsessed with what i was doing it's really hard to do anything else after that unless it wasn't for you but at least for me it was the case and so i i did double around like having like regular jobs it just wasn't for me like i needed to have something where it's fully aligned with who I am, where I can spend 15 hours per day doing it.

8:31And this is actually the thing I prefer doing over anything else. This is playtime and also work for me. This is all in one. And so I figure there's a lot of alignment, at least in my life, doing that. And even the VC I'm doing right now, we are building that business and it feels like being a founder again. So yeah, that's the only thing I know. It's a blessing and a curse because it feels so good to have that. But when you don't, you just don't want to do anything else. Do you have kids, Etienne? No, I don't. I often joke about it saying like, yeah, like my startup is my girlfriend, my life.

9:11I think as I'm growing older, you realize that when you have a family with you or like the right person on your side, it's actually something that's so valuable that gets you to the next level, I think, as a person, as a human, and also by extension as a founder. But no, I'm making the most of what I have right now, which is a lot of time and building my companies. But I'm totally open to the idea. Totally open to the idea. You're with me, man. I have two kids. I have a seven and a four-year-old. The biggest blessing, what I can tell you is I very much had your profile in terms of how I live life.

9:51Also, mine was a different sport. no way you could ever get pro in that or at least so i bodybuild it right which is a super weird thing um i ended up like now i'm 74 or five kilos or so i ended up at 105 you know the things that require um yeah yeah but my my point is that this this one-sidedness to life definitely allows you to do supernatural things, so to say. But then you hit a point in life where, you know, life actually requires something else from you. Given my family situation, so my son has a bit of autism and ADHD, which makes him like super smart, super fun, but also definitely a handful and something we have to manage as a family.

10:44And for that reason, I've completely reset my life and had to reorient. And I'm saying I've spent three years trying to get out of this performative mindset to, you know, for me to be able to really enjoy spending as much time with my family as I should. Because if I am to be successful with this, with this mission in life, I got to reset and how I think about things. This is a very interesting conversation, actually. So I'm 33 right now. And when I started my first company, I was 26. and I started the company. When I started my company, obviously I was surrounded by other founders, same age, going to their first business.

11:24It's kind of funny because I felt like once everybody hit 30 years old, whether it was with family or they ended up being like in very poor and terrible health, they decided to reset. And I just think like the first time you get completely consumed by what you do, either it is sports or like your first company, your first job, whatever it is, you're completely overwhelmed. And for founders, 10x, because you just, you suck at everything. You have so much on your plate. You have instability, whatever it is. At some point, things get better. And then you can like recenter your way of thinking around, okay, like this is going to be a sprint.

12:03I have to do this for long term. There's no way I'm putting like 100 hours per week for like, I don't know, decades. Okay, some people do, but I think it's a trade-off on potentially your health, your family life. And then it's asking you, like, what do you actually want? And so you ask that question for yourself and then you recalibrate. But I think it's very subjective at the end of the day. You have to design the life you want. As a founder, you get the opportunity to do that most of the time. Choose what you want to work on, the people you want to do it with, the pace at which you want to go.

12:35And that's the best part of the job. And I'm sure that resonates a lot with you as well. Tell me about then your founder experience and feel free to relate it back to this conversation of knowing where you want to be in life and so on. But I'd love to hear about Hex Technologies. Is that how you pronounce it? Hex Technologies? Yeah, a lot of domain names were already taken. So it's Hex Technologies, but we changed the spell. As I was telling you, as I was transitioning from basketball, I think the hardest thing for me is I just completely lost my identity when I was a professional basketball player.

13:09at the end of school for two years. And then I got to this realization to like, okay, I need to do something else with my life. So I leveraged basketball to go back to the US. I was on scholarship, first with sports, second with my grades. But during that process, I was like, okay, I want to go for something that I feel I'm really good at. And I think the intensity of competitive sports, I could only find it in entrepreneurship. I was in California. So you want to be an entrepreneur in tech. And I, yeah, I doubled around a few things. You know, I had like a bunch of projects that went nowhere.

13:46Back then it was 2013, 14, a golden age of consumer apps. So Instagram was becoming mainstream, Snapchat, Tinder, whatever. And I was working a lot around these ideas. I started in my 20s. I wanted to try other things. It was good in math and econ. So I wanted to try finance as well. So I became a VC and then I became an investment manager. But yeah, I felt like I didn't take the boxes for the corporate environment. And 2018, 19, I decided to finally take a leap of faith. I met my co-founder back then, and he had the first company before. He was convinced there was an opportunity to build something in the Optimus driving environment because you had all those car makers.

14:32You're now asking them to make software. And we thought, OK, they're going to fail. And there's got to be something we can do. We just got to find a good problem to solve. And we have a company there. And so we went to Silicon Valley, funny enough, in like 2018, looking for a problem to solve. But we had no idea what we were doing. And we got back to Europe, France, in Paris, moved there. I have no network, no nothing. I got there as a complete outsider. And yeah, I started to meet as many people we could to talk about the idea or the company we wanted to build. We got laughed out a bunch of times, to be honest.

15:07We just weren't the typical founders, went to the best business schools or engineering school. And I think at some point we even met a fund. They were trying to get rid of us, but they ended up making the intro to who would later become our CTO. He was the director of the robotics lab at Mean Pintech. And we just went there with a crazy energy, 15 ideas. All of them were terrible. And he did listen to us and ended up saying, hey, I don't think your ideas are good, but I have an idea. You have an energy I've never seen before. I'm willing to try it out. And he ended up taking some equity, putting some money in and testing us.

15:47And after a couple of years, we made a bunch of mistakes. COVID happened. We crashed the company 15 times. You know, we keep going at it. We got an MVP off the floor. We joined TechSource and Tel Aviv, the acceleration program, and moved to the US, starting having first customers. and at that point, you know, our CTO became full-time. We ended up having a lot of traction. We had an investment vehicle from Google which invested money into the company and maybe in the span of 12 months, yeah, we went from going live with clients to we had arguably now the biggest AI company in the world trying to acquire us.

16:23That was like a three-month process that was completely insane for us considering where we came from. And in the end, the deal didn't happen, But we did take the idea of the transaction and show it to a few VC funds and we raised money very quickly. But yeah, that was my first experience as a founder. It was brutal. It was intense. It was a lot of ups and downs. I absolutely loved it and really confirmed to me at least my intuition, which was, okay, I want to be a founder. I did that for five years. And I think the amount of hours I put in just to make sure I was on par to the type of companies I was building, I ended up realizing I also wanted to try my hand on new industries.

17:07And I think this is when I got to start as a business angel. I just wanted to have a fresh perspective on other topics, other industries. And yeah, I fell in love with things that could scale to millions of people. So I did a lot of angel consumer investments. And yeah, eventually last year, I decided I wanted to do this full time, sold most of the shares of the company I created to start Intuition, a new company. Then let's go to the Intuition chapter, because Intuition is a 10 million euro fund. You're focused on consumer and we're going to talk a bunch about consumer. Let me first ask you about, like, could you describe a little bit, like now I said 10 million of what you've also mentioned before, 40-ish investments is your aim.

17:54Tell me a bit about the whole origin of intuition, the things that you really, you know, looking back, wish you'd done differently or the core learnings from that process. So the idea of intuition, I had it for years. Even when I started my first startup, East Technologies, I wanted to do it because I had an edge on like the capital I could pull. I think I had like a thesis on making cultural leaders or athletes, artists and creators to invest in tech, which was very interesting to help with, you know, distribution or many other things. The thing is, I wanted to be a founder first. And so I became a founder.

18:32I think it gave me a lot of tools to have a lot more empathy, really understanding how you go from zero to one. And so that's all I knew. I wanted to be investing at the beginning in amazing founders and be a little bit the investor I wish I had when I was starting. Doing the angel investments brought me a lot of experience in terms of how I should invest or what's my style of investment. Also, I got to meet the co-GPM building intuition with Hugo, who at the time was introduced by one of the founders, One of the investors of the little club I built told me, like, you have to meet this guy. He's arguably the best investor on that vertical in Europe.

19:14And we met. We instantly clicked. We were investing into very similar stuff. And we kept wondering, okay, like, why isn't there, like, a fund that is heavily focusing on the consumer? And that is investing in the U.S. and in Europe with, like, this very ambitious and international approach. there are a few out there but for us it wasn't enough we felt like consumer was really overlooked especially over the past few years when you know you had like interest rates rising and and a lot of people wanting to take a lot less risk on these kind of companies that are more volatile and so at some point we looked at each other we're like okay let's build it and so i think and maybe just to to back you up on that i think yes there's one there's a lot that don't want to touch consumer, both on the LP side and the VC side, to even the firms that have kind of built their reputation in consumer, many of them have actually pivoted a bit away from consumer or doing less.

20:17We had Christian Meerman from Cherry on the podcast. He said it, like, you know, we're actually doing less in consumer now. And that story has repeated many, many places. So, So I think you're absolutely right in what you're saying, that consumer is not the hottest thing in European venture. It's definitely not the hottest thing. It's very polarizing. I think it's also a job, whether you're a founder or an investor, that it's meant for contrarians. So we felt very comfortable about that and that's totally fine. But at least when we started having the idea, we were like, okay, let's build it and figure out a way to make it work.

20:53because we're not going to deny that there were a lot of things that are super hard about building what we're building. And I think we also learned a bunch of things along the way. But for us, at least, it was like, okay, so to do a proper consumer fund, you need to do a few things. First of all, you need to create a fund that's going to be diversified enough to take on the volatility of consumer investments. In general, consumer investments, they will return you more money, but you will have less exits. And so for that model to happen, you want to take more shots and goals. To be able to do that, usually you want to go earlier to do more volume with smaller checks and be very a job.

21:40And so for us right away, it was like, okay, we see a template of that type of fund working for us, which is pre-seed seed, large volume, so 40 plus, but not too much volume so that we kill the brand of, oh, you're just the fund that gives money to everyone and move forward with this. Along the way, we realized the inflection point towards consumer was really big. And so we did extend our thesis to, okay, we're doing pure consumer plays, about like one third of our investments, but we're also going to do prosumer tools, tools that you use every day at work, selling, sold to businesses in B2B2C type companies.

22:17So customer enablement and all those things. Was that a chance based on the realization that consumer was actually, you felt it was too small? There were too few opportunities of high quality that you wanted to back, at least in your deal flow, maybe not in all of Europe, but the portion of Europe that you're able to attract, you didn't see enough in pure consumer. No, no. I think there's the volume for like 10 plus per year, for sure. I just think as an investor, pitching your fund to LPs, you also need to bring more reassurance in terms of, okay, we also back business models with steadier cash flows and less volatility.

22:59So is that, let's unpack that because that can be driven by an LP profile reason, meaning some just don't like consumer or they don't have a background in consumer. So for that reason, they don't relate, which means it's not as much about strategy and potential returns as it's just about kind of what people get excited about. It can also be driven by a portfolio model perspective that you're saying, well, this hit and miss profile of consumer and all of them oftentimes take quite a long time before they IPO and exit. So for that reason, you also want to do something that has maybe a shorter exit horizon.

23:41You want to have a mix of a portfolio that's maybe with a little less risk than the pure consumer play. you know what's what drove that decision do you feel it was more that okay you need something to kind of satisfy yeah no it's it's obviously a little bit of everything i think as a fund manager like i said we're building a business you want to sell a product and today the product that we sell is an investment portfolio of 40 plus companies with whatever strategy that you have and so your customers or the lps you're selling the product to but then you need also to perform the capital allocation and there your customers are the founders and so is this dance that you have to do between founders and lps we're expecting different things because we also want it to be clear consumer and culture cultural type fund where we have a brand that's polarizing and that the founders know okay they know what they're going to get from us they're going to get creation on type of lps we bring in the types of events we throw the types of content we post the type of intros we can make.

24:46And we wanted to make sure that founders knew what we're bringing to the table. On the other side, like I was mentioning, there's also, you know, like when you're an angel, to be honest, you don't really realize what it takes to return a fund. When you plug it into a model, then you're like, okay, this is what it's going to take. Like I actually need to find this amount of outlier. And very interestingly enough, when we did our market research with Hugo, So we figured that over the past few years, you had a bunch of companies that went really quickly from consumer to B2B. You can, for example, there's an example that works really well is Skype in the 2000.

25:28And then we have Zoom in 2010. It took 10 years for that technology to really transition from consumer to enterprise. Today, you have companies that do it in the snap of a finger. If you think of, you know, ChatGPT for OpenAI, for example, they serve really properly both consumer and enterprise. And so we saw that trend coming and we're like, okay, we have a clear use case right now for companies that can return a lot of money targeting very different industries with less risk and more diversified business models. And so it's kind of like the injection of all those things as we move forward. But yeah, it ended up being, you know, the thesis that we have right now.

26:04And let's unpack the thesis and go into that part of this conversation. You boldly say that now is actually the right time for consumer and venture. Yes. And if we look at your first point in that, you have a beautiful manifesto. We'll put it with the show notes here as well. But you're saying, first and foremost, let's just hammer home the point. Consumer has been largely overlooked for years. I give my co-GPUgo a lot of credit for all the content he's been posting out there. And for anyone interested into what we're building, I highly suggest reading Everything is Writing because it is at the core of everything we believe in.

26:42But the very start was when we were angel, we will deploy capital into companies where we had little to no competition. We built brands personally as investors where we could get allocations very easily. and we thought that founders had less favorable terms from the investors or whatever it was, which meant that you could get into great teams at lower prices. And that's just a pure arbitrage opportunity of what you do as an investor. And I think that's very, I touched on it a little bit before, interest rates rose. So people's willingness to take risks decrease. And so kind of like irrationally, you want to do less startups as an asset class, you want to do less early stage, and you want to do less consumer.

27:31So a lot of people really became allergic to consumer. But if you think about it, all the biggest consumer companies in the world are consumer. So at some point, we need that. It's a huge part of our economy, and it needs to be finance. And a lot of people are talking trash about Europe right now, but Europe has consistently proved to be great in consumer, whether it is with startups or here, let's say in Paris, France, with companies like LVMH or in gaming, whatever it is, we have great taste if we are given the tools to do so. And so for us, it was like, this is the reason of intuition existing.