Ajay Agarwal of Bain Capital Ventures joins Nick to discuss The $1T+ Opportunity Investing in the Physical World, Why Automation is Just Getting Started, and Raising a $1.9B Despite Macroeconomic Headwinds. In this episode we cover:
Boston, Palo Alto, Austin, Pittsburgh, What Makes Certain Cities Great Startup Ecosystems
Deploying $1.9B of New Funds
Robotics, AI & Automation, How Technology Impacts The Physical World
Why has the US Fallen Further Behind in Regards to Automation
The Impact of the Lack of Capital Flowing into Robotics & Automation
The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter.
Want to keep up to date with The Full Ratchet? Subscribe to our podcast and follow us on LinkedIn and Twitter.
Are you a founder looking for your next investor? Visit our free tool VC-Rank and we’ll send a list of potential investors right to your inbox!
Transcribed with AI: 0:03 Today we’re joined by Ajay Agarwal. Ajay is the managing partner at Bain Capital Ventures. Over the past 2 decades at Bain, Ajay has invested in Gainsight, SendGrid and Kiva Systems to name just a few. Prior to joining Bain, Ajay was an operator at Trilogy software, helping scale the company to more than $300M in revenue and 2000 employees. Ajay Welcome to the show. 0:29 I think a good place to start is with your background in your journey to startups prior to becoming an investor. I’m curious if there was anything in your childhood that you feel was especially formative for your career in tech? 0:51 Yeah, you know, I think from a childhood standpoint, my parents were immigrants, and they came here via the UK, ultimate from India by the UK, ultimately to Pittsburgh, Pennsylvania, where I grew up, I was born in the UK, but essentially, you know, spent the bulk of my childhood in Pittsburgh. And you know, I think the important part about that history is just this, your feeling that I think my parents inculcated in us at a very young age that we have this golden opportunity, we’re here in this amazing country, a land of opportunity, and take advantage of it, you know, take risks go after things don’t seize this moment. And so I think that that was for me the backdrop in addition to education being really important. And, you know, my journey into the world of tech and startups really began my sophomore year at in college, I was an undergrad at Stanford, and a professor of mine called me up one day and said, Hey, I want to introduce you to somebody, he’s starting a company. And I’m going to join him and you should join us too. And so I met this classmate of mind, who is your enemy? His name was Joe Lima. He was a junior at Stanford, and he said, Let’s start a company together. Do you want to want to do it? And he described a little bit of the concept. And to be honest, I didn’t really care. He was compelling. 2:21 What was the concept? 2:22 The concept, this is a long time ago. But the concept was that your tech companies up and down Silicon Valley at that time did not have an easy system to manage all their quotes and proposals and contacts, what today you would call CRM or customer relationship management. And so funny world where people manage this in a spreadsheet or in a Word doc or on a piece of paper. And we went in, and we created a simple user interface on top of a database where you had one place to look at all your proposals, your contacts, your quotes, search them, find them, you know, delete the ones that you ended up losing, and all the things you would imagine in a CRM today. And so we built that system for the small tech companies, we went up and down El Camino rial in Menlo Park and Mountain View and knock on doors. And in God orders, we ended up hiring about 1213 of our classmates who coded up the software and it was incredible. And and, you know, the thing that, you know, Joe was wise beyond his years. And he said to me, the first time I met him for a cup of coffee on campus was he said, you know, what the, the greatest business on the planet is, and I said, I had no idea, you know, about I was 18. And I didn’t know anything. And he said, enterprise software. And I said, why is that? And he said, Because you write the software, once you sell it over and over, and each time you sell it, you’re effectively getting 100% gross margin. He said, There’s no other business. Like he said, biotech comes closes, because you can sell the same drug over and over for essentially 100% gross margin. But that takes 10 years to develop. And it’s regulated. But enterprise software, you can build in a year or two and keep selling it forever, for lots and lots of money. And so that that really began my journey in the world of software. And it’s been great. Ben and I agree with him. 30 years later, it’s the greatest business very pression on the planet. 4:42 So what ended up happening happening to that startup prior to joining trilogy? 4:48 Yeah, so so that startup, you know, it was primarily a services company, we had a base of product, but we were essentially customizing it for each client that we sold to so 4:59 Was it was not a very scalable business. I think Joe realized that. And at the end of sophomore year, my sophomore year, he said, Let’s drop out, and let’s go work on something else. And I decided not to, he did drop out, I felt like, 5:17 why didn’t you decide to drop out with him? 5:19 You know, part of it was, I think being the child of immigrants and education being important and getting my degree. Part of it was this feeling that, you know, I’m gonna have my entire life to work. And I have two more years of this one experience of being columns that you can’t replicate ever again, you know, Stanford has this idea that you stop out, you can always come back, you don’t really drop out ever. You can come back whenever you want to complete your degree. But for me, it was less about the degree it was more about that experience. So I didn’t drop out. He did every few years, you know, we would catch up for dinner and he’d say, are you done? Are you done screwing around, and you’re going to come join me. And that ultimately happened a few years later, where I joined trilogy as employee 18. And trilogy was the second company that Joe had started also loosely in the front office space sales software for salespeople. And trilogy was a pioneer in a space that today, people refer to as CPQ. Configure price quote, that was great. Yeah, very, very successful company. For those that haven’t heard of it. But what was what was the impetus? I mean, you were at McKinsey, right, for a couple of years after undergrad and eventually made the switch to run go to market product. Was it a trilogy? Like what ultimately was that final domino that fell and made you jump back into startups in tech? Yeah, I mean, look, I love McKenzie, it was a great job coming out of college, the people are amazing. The work was incredibly stimulating this chance, at a young age to be inside, you know, these large corporate boardrooms of fortune 500 companies. I mean, it was, it was an amazing experience premium for someone like me, who, whose undergrad was technical, I was an electrical engineer, and I didn’t have a ton of exposure to business. And so I loved it. But I realized pretty quickly that I didn’t want to be just providing advice, I wanted to be in the trenches. And I remembered how much I loved the startup, we did, you know, sophomore year. And so, you know, when Joe and I caught up at the end of my couple years at McKinsey, I jumped at the chance to be part of the part of trilogy and be there early and helped build the company. And Joe had this philosophy that you really stay true with the throughout the history of the company, was that he only wanted to hire quote unquote, kids folks coming right out of college, and he didn’t believe in experienced hires, you know, the person who’s done it for 15 years or 20 years that comes in the, you know, adult, the gray hair, etc, etc. And so that was the other piece of the culture there that at a very young age, I joined when I was 25. Joe’s attitude was, whatever you want to do, do it. You know, we’re not, we’re not going to hire somebody over be over you. We’re not bringing in, you know, the legions of experts. And so it was a it was an incredible culture. And I think it not only me, but we attracted, you know, 1000s of incredible employees that jumped at the chance for this kind of opportunity. So it was great. Yeah. I mean, it’s so energizing to be in the foundational days of an early stage company where it’s truly zero to one. And at some point, just an idea, and to go from just an idea to actually seeing it in the world and people using it. It’s an incredibly visceral feeling. That’s it’s difficult to put into words, but I don’t blame you for making the leap and going back. What was ultimately the leap, though, to becoming an investor. So we got trilogy for I think, you were there until a million? Yeah, we went from zero to 300 million in revenue. 18 employees when I got there, 2000 employees. I had our unique and it was awesome. And I would say even we had 2000 employees, the average age of the company was probably 26 really stuck to it to it and we were hiring 300 undergrads a year. We put them through a four month program called trilogy University before they were allowed to quote unquote, graduate and join the company. It was a blast. I loved it. And so I had really no intention of 10:00 Becoming an investor I’d, you know, decided it was time to move on from trilogy, I’d seen that journey through and want to do it again. And so I was looking for, you know, a young company, ideally in b2b software that had some kind of product market fit, that was looking for somebody to come in and help take it to the next level. And so I was networking on the east coast and the west coast with friends I had in the venture capital community, trying to find interesting companies that they’d funded that they put money in, or founders that you might have been more technical that needed a counterpart to go to market side. And it was a, it was a crazy time in the world of startups and venture capital. I mean, what your resume is, this was 2002. Okay. And in many ways, it felt like the back half of 2022, last year, where not a whole lot was happening, you know, the venture folks were licking their wounds with a lot of companies that funded in 1999. And 2000. Had valuations that were extreme, you had a lot of businesses, I think, unlike today, you a lot of businesses back then that just made no sense at all, they had to be wound down or pivoted, you had an extreme collapse of valuations, perhaps even more extreme than what we’ve dealt with over the last 12 months. And so it was a period of retrenchment, it was a period of not a lot of new stuff getting done. We, at that moment in time, there wasn’t something like AI to kind of re energize the innovation economy. So there wasn’t a lot happening, you know, long story short. And you know, at the same time, you know, one of the firm’s I’ve met with Bain Capital ventures, had just launched their debut fund, it was a b2b focused early stage fund $250 million. And they were just building out the team. And they said, Hey, why don’t you come here for a couple of years, and see if you like venture capital. So in the end, that’s what I did 20 years later, still here. So how long you do your career, would you say, as an investor until you knew this is where I want to spend the rest of my career, and here’s where I want to grow and lay roots? I think it was probably seven, eight years, and that 12:27 longer than I was expecting? Yeah, I mean, I think two years in, I was pretty mixed about it, to be honest, because I missed the daily action of the operating world, I miss being in the trenches, I didn’t love being, you know, you know, half step or one step removed. And that, you know, I think you get to a point where you start building this other set of skills, and you build a, I think, a, you know, a number of relationships with founders and a portfolio of companies, where I think the mindset shifts, and it does take some time. And I think it also takes time to see the whole cycle through to invest in a company at the earliest stages that you know, at at inception, or idea stage, and then go through the ups and downs and be part of that journey. And so, I found it took me a number of years to kind of see that play out before feeling like, Okay, this is what I want to go to move for a large chunk of time, and I don’t think I’ve ever said, I’m going to do for 20 years of the rest of my life. I think there are multiple points along the way where I felt like, okay, you know, someday I want to go back to the operating world. But it’s been great. You know, I think the opportunity to partner with founders, the relationships I have with the founders and companies that I’ve worked with just fulfilling in different ways, then that is the operating world. It’s a difficult job, especially earlier in one’s career. You know, I’m three years in now, but I can imagine it seven or eight years, you have the relationship capital gets a little bit easier. I’ve always thought, though, is difficult it is as it is to get in. I take the viewpoint that it’s much more difficult to stay in ahead and build a career and venture like drive real returns. But you’ve clearly done it. I’m curious, though, 20 years later, like this is especially salient as of late as we’ve seen an exodus of prior generations of investors. For whatever reason, you know, maybe they made enough money and they were ready to be done. There’s also this element of like competition that is going around where today venture is more competitive than it used to be and those that have been in it a while like BAFTA keep hustling for deals, I’m sure. Even being the managing partner at PCV it’s no different and 20 years in I’m curious what, what gets you up every day. How 15:00 Like, how have you kept up? And what motivates you each day when you’re going to work? Yeah, it’s a great question. I think what motivates me day in and day out are our founders. I mean, it really is incredible to meet a founder, just starting out hearing a vision. That’s all and sounds impossible. And the prospect of a partner with that founder. And beyond that journey, I find energizing, I’ve been fortunate to be part of a number of companies have gone from zero to 100 million in revenue, and 100% of them have had incredibly dark days, periods of time, where we didn’t think we’re going to make it, we didn’t think we’re going to build a big company, or we hit a wall, or we had some existential issue. And, you know, that’s part of what makes this journey with each founder, so, so much fun, because it’s not easy. And it has its ups and downs. And, you know, I think that forges not only incredible company cultures, but it forges these relationships that I feel very lucky to have my partners feel lucky to have with the founders we work with, I think the other piece that I feel very grateful for is BCV, you know, is an incredibly team oriented culture. I mean, you know, I heard somebody wants to tell me that venture capital is like tennis, it’s not like basketball, it’s really a collection of individuals. It’s not a team. And that’s how we work at Bain Capital ventures, it really feels like a team, we’re all in it together, we collaborate on investment decisions, we help each other out, our founders know, all of us, not just one of us, and feel a sense of connection to multiple partners at the firm. And that, for me is something I value as well, you know, 20 years in that it’s not a solo job, I’m not out there, by myself a part of a team. And that team, you know, helps me grow and makes me better. So, but the end of the day, I think like all things in life, it’s comes down to people, and the people I work with BCV, and the founders I work with, in our portfolio. That’s what, what gets me up every morning. It’s an incredible group. How do you guys cultivate that within the firm, because a number of firms are very individualistic, where everyone is sort of a one man, Army, one woman army. And at the end of the day, there’s attribution. And it ultimately breeds a culture where sometimes investors are stepping over one another to get ahead in the eyes of the partners. And obviously, it sounds like that’s not the case. But where, and how do you manifest that in the culture to be collaborative, to get those the lookout for one another for the good of the group, rather than for the good of one individual investor? Well, I think it starts with a culture that I think is true across not just Bain Capital ventures, but all of Bain Capital where we are, first and foremost, centered on company building. We are we think of ourselves, as yes, we are investors, we have to deliver return to our limited partners, but we’re really focused on building great companies. And that’s our mindset. I think. Secondly, culturally, we very much believe that the best ideas should when we have a culture where people are expected to speak their minds, people are expected to be direct in their commentary whether the other person will like it or not. We have a culture where you don’t take things personally, if somebody who doesn’t like an investment, they should feel free to speak about whether they’re an associate on the team, or a partner that’s been here a long time. There’s there should be zero hierarchy. When it comes to ideas, again, the best ideas should when an investment I bring forward comes under the same scrutiny as an investment brought forward by a young partner at the firm. And and so I think that intellectual rigor, dynamic where we’re trying to get the best answer, and a culture that is focused on risk taking and being willing to buck conventional wisdom. I think those are all aspects that allow us to foster that team oriented culture because I think without that, it becomes you know, places very quickly can become political places can become where folks are pumping up their own investments and so forth. That’s just not how we operate and 20:00 Extending the, you know, lots of things we’ve tried to do. You know, culturally, there’s a level of trust, and transparency. We certainly all try and spend time together one on one and and in groups, but the foundation is the transparency, the intellectual rigor, which I think leads to more risks, better investments, that collaboration that thinks required to build a firm, you know, in this day and age, as you mentioned, given how competitive is how do you think about consensus, because, you know, from what I’ve heard of some of the best investments that are non consensus that are very contrarian. So hypothetically, if at the partnership or at the firm level, you guys are driving to an investment decision. But there’s one partner that feels very strongly This is a deal that needs to be done. And the rest of the partnership, or maybe some of the partnership feels strongly against it, as is we’ve heard the canonical cases right with like Airbnb, Uber, etcetera. Like some of the biggest misses are the most contrarian bets. How do you guys account for that? It’s a great question. So we think about a lot, we have an investment committee, that investment committee ultimately approves investments. And I think there’s respect for the committee and the process, and how it’s structured. But I think we also have a culture where any partner, again, independent of hierarchy, or seniority can make their case, even if a deal gets voted down to argue for, we do have a culture where partners can push forward something they feel strongly about, even if the committee, you know, doesn’t approve it. Now, you can’t do that every month, or every week or every year. But I think we have a number of cases throughout our history where, you know, we’ve gotten forward with an investment, even if the committee initially didn’t approve it. So that safety valve is there. I think if a partner sleeps on an investment, and the next day, despite probably a lot of good arguments made by the committee as to why we shouldn’t do it, they still want to do it. And that’s something we take seriously, for all the reasons you mentioned, you know, our business of business about outliers. And so we don’t want to, you know, it can be easy for firms to get trapped in the patterns of old or, you know, the playbooks that work before and lose sight of the imagination takes to see the outlier. And so we’re very conscious of that. I do want to talk about the firm a bit, and we’ll talk about the new fund in a moment. But first, you mentioned Bain Capital, obviously, there’s been consulting, what is the relationship between the three Bain consulting Bain Capital and Bain Capital ventures? Yeah, that’s a great question. First and foremost, there’s no formal relationship today between Bain consulting, and Bain Capital. The original founders of Bain Capital had been at Bain consulting, and the partners of Bain consulting had been an early source of dollars as limited partners to Bain Capital. But the two firms while having a lot of close personal ties, and a lot of collaboration, there’s no formal relationship there. Within Bain Capital, you can think of Bain Capital, as an organization with a series of businesses that are all focused on different parts of, you know, alternative asset investing and company building in a variety of spheres. And so in addition to the ventures business, we have a life sciences business where we invest in both private and public, biotech and pharmaceutical companies. We have a real estate business. We have a private equity business in North America, Europe and Asia. We have a tech Opportunities Fund that’s investing in a later stage technology companies, including buyouts of smaller software companies, and a number of other divisions. And, and the reason why that’s relevant to your audience and to founders and entrepreneurs, is that I think we’re seeing this wave of technology that is really not only impacting the tech industry, but impacting all industries. I mean, AI is great example. And, you know, all the innovation that’s that and possibility around AI and large language models. There’s so many parts of the economy where this technology can be used. And when you look at a tech is such a small percentage of the overall US GDP or global GDP. And this is where, through the sister funds of Bain Capital, we have an 25:00 Access to companies in healthcare, and industrials in manufacturing, and logistics. These are relationships and companies where we can get founders, even at the early stages directly to senior decision makers. And so we certainly have a portfolio of 300 tech companies, you know, that are based in Silicon Valley in New York, and that we can introduce our founders to you, but I think most firms of our size have the same thing. The part that’s unique is that if you want to sell software into a manufacturing company, or to a large consumer brand, or to a healthcare company, we have those relationships also. And it’s very powerful. I mean, one of my earliest investments was Kiva systems, which was robots for ecommerce fulfillment. And I still remember meeting Mick, you know, in the summer of 2040, just had a prototype, you didn’t have any customers. And I asked him who would be your ideal customer, he said, it would be staples. And it turned out Bain Capital through our private equity business, at one point, was a large investor in Staples. And so through that network, I was able to get back in front of the executive who ran all the North American fulfillment for staples, and that executive met with mech through my introduction and veins introduction, and called me the next day and said, you have to invest. I’ve never seen anything this revolutionary, in my 30 years in fulfillment, and and staples, became the first customer and became the flagship customer for Kiva, that those connections, those relationships, I think, are a huge value add that we try and bring to bear to our founders. Yeah, great to kill two birds with one stone, on one hand, you’re able to do the diligence, and on the other hand, you’re able to provide value even ahead of making the investment. So I know that the ECB recently launched, is it fun? 10? Right, fun. Yes, fun times Exactly. 1.9 billion in new funds, which first congratulations on not being out there fundraising anymore? I’m sure that feels great. But jokes aside, and what is the thesis for the current fund? And how do you plan on deploying the capital? Well, the thesis for the current Fund, and the way we’re going to deploy it is, first of all, we are multistage firms, multistage firms. So half of our investments are early stage, we think of that as seed and Series A. And so it gives us the capital to allow us to continue funding both our seeds and A’s across a range of sectors in b2b software. And then the other half is for growth stage investments. And so it allows us to continue the efforts in four or five the key sectors that we focus on today. And if you think about where do we focus, one is infrastructure software, we have deep expertise and security in the modern data stack, in core software, infrastructure, Developer Tools, and so forth. And that’s an area with just an extreme amount of activity in the world of AI and supporting AI and supporting both the opportunities posed by large language models and AI, but also the threats, as you can imagine, from a security and data privacy standpoint, from these large language models. The second sector for us is application software, b2b, classic b2b software that that includes both things like departmental SAS, you know, things that are being sold into helping sales or marketing over or the CFOs office, but also vertical SAS. And this is where again, as I mentioned before, with the Bain Capital network, we just think we have a lot of access into these verticals, like logistics, like manufacturing that been underserved and need technology. We have a third group focus on commerce, and commerce enablement, you think about maybe b2c, the world of, you know, selling online selling digitally greater, a greater percentage of the economy’s is being sold through some kind of digital means. And so there’s a whole array of opportunity in supporting that. And then finally, we have a real focus around fintech. And we’ve been one of the pioneers in that space early to that space for the last decade. In both in the US and Europe and globally. The world of FinTech and fintech infrastructure continues to be huge opportunity. Now, separately from being capital ventures. We also have a capital crypto, which is our dedicated crypto fund and that fund raised a year and a half ago, but we’re all part of the same larger family. 29:45 You personally spend a time in a market that is near and dear to me, having been a robotics founder. And that’s automation and how technology impacts the physical world in a broader sense. I mean, you mentioned Kiva systems, which is I know that a great exit to me 30:00 Zhan I’m curious, why is this an area that intrigues you? I find that very few investors spend time in it, you know, most are focused on other areas that we’ve already mentioned. But I’m curious, specifically within this domain, what gets you excited about it? Well, I think the what gets me excited about the physical world is just the enormity of the opportunity. We were talking about Chicago and shipbob. And when you think about fulfillment, you’re moving goods from point A to point B, around the world and the size of that industry. I mean, we’re talking about trillions of dollars, not, is it a billion dollar market or a $5 billion market, we’re literally talking about trillions. And when you go through the list of different industries, and the size of the opportunity, when you include things that are that are physical, it’s just massive. I think that that part, I think, is really exciting. I think the second part is that in order to tackle some of these opportunities, it requires some deep domain expertise, you cannot go and build wouldn’t make build it at Kiva without having a depth of understanding of the problem. And so I think, as a result of much fewer, there are far fewer companies that are going after these opportunities. When I think about Kiva, throughout its time, ultimately, to the sale of Amazon, it had no competitors. There was no one else doing what what Cubot was doing, I think about a incredible company that we funded at the series A in Montreal called pension, that think of it as almost a industrial Lego set for automation inside midsize factories. There’s no one else doing what Benjamin was doing. It’s a unique company. And so I think what you find with companies like that, is you’re not dealing with 10 other venture backed companies that have same amount of funding that have strong teams, where everyone’s fighting for the same market. Instead, you’re really in a situation where you’re trying to instill change, you’re evangelizing a market, but you’re not competing with, you know, other tech startups, you’re really competing against an inertia or status quo. And I think that creates enormous opportunities. And then I think that the power is that once you connect the physical world with the cloud, the kinds of things you can do, are absolutely incredible. I mean, MC used to say the Kiva is turning atoms into bits. And when you think about the key, the system, and the fact the inventory could literally sit anywhere inside a warehouse, he was effectively virtualizing physical storage the way we think about. And we’ve all gotten used to the fact that our data has been virtualized. Now for decades, I had no idea where my data is, I don’t know where it is, I don’t care where it is. But you know, folks, like AWS, and others, and Apple have figured out to make sure when I need my data, I can get it as quickly as possible as low cost as possible. That’s what make effectively did with Kiva, that the Easter candy would be very close to the workers in March. But by May, that Easter candy was the very back of the warehouse, the system dynamically figure that out, you know, based on order volume, and I think the power of instrumenting, the physical world, and the things you can do are really mind blowing, when you get your arms around me. We all just went through the pandemic, where nobody knew where the toilet paper was, where the hand was, you know, and this problem another Chicago company of ours trying to solve for Cates is a leader in supply chain visibility. Now, every truck, every warehouse, every ocean carrier has sensors of some kind as GPS has cameras. And so you know, now where that inventory is you can track it, you can link it back to enterprise systems. That’s something that couldn’t be done before. When you think about SAP and all these enterprise systems Oracle, that companies have spent hundreds of millions implementing those systems only tell you what’s inside your four walls, but they don’t tell you what’s outside your four walls. Well, now for the first time, you can turn those atoms into bits, you know, where that truck is, where that inventory is what’s going to be late. That’s visibility and power that hasn’t existed before. So I think it’s really transformative. And I think we’re gonna see just so much change happening in the world of automation, robotics, manufacturing, and I think AI is only going to accelerate that opportunity so I couldn’t be more excited about it. 35:00 Do you think enough capital is flowing into those types of opportunities? Or do you feel that VCs may be over index on software, which may make entrepreneurs less likely to go start those types of businesses? Given that there is less capital available to them? I guess how do you think about the capital constraints for those types of innovations? And where do we fall in the spectrum of having enough or having too little? Well, I think the good news about capital is that, you know, it ends up I think, being pretty efficient. And ultimately, capital flows to where the opportunity is. And I do think we’re in a world where software feels increasingly commoditized, it’s easier to build, it’s with AI. Now co-pilot, you can write code faster, the building blocks through open source and so forth, have gotten more powerful. So I think we are entering in many ways, a deflationary period and software. And so I think the capital will continue to flow where the opportunities are, I think the most exciting thing about logistics and supply chain and the physical world is, over the last 10 years, you’ve had a new generation of entrepreneurs get exposed to the physical world, you’ve had marquee companies get built like Uber freight, or shipbob, that are focused on or DoorDash, that are focused on logistics, and the physical world, and those founders are now going off. And starting companies, because they’ve seen the opportunity they’ve been exposed to, if you spent your whole life, you know, working it at meta, you’ve never, you don’t even you probably can’t spell supply chain, you have incredible company, but you’re not exposed to the physical world, you know, if you’re working at 36:50 most Silicon Valley companies, but I think we’ve seen a number of unicorn companies get filled in the physical world, like Kiva and others. And I think that’s resulted in a new generation of entrepreneurs that have bought into, you know, the opportunity to physical worlds. We’re incredibly bullish on it, and sort of this next 10 years. Yeah. Where would you says that the United States is positioned relative to other countries regarding automation? Like, specifically those in Asia feel like they’re further ahead? And generally curious, as you think about it, from a more meta perspective, how, how much opportunity is there in the United States relative to other countries that have embraced automation faster? Well, I think the United States, you know, just empirically on pure adoption of automation, inside your things like manufacturing and so forth is behind Europe and Japan, some of that’s largely driven by the fact that those countries have both labor and space constraints that are more acute than what we have in this country. But I think there’s some enormous tailwinds happening that are that are going to create even more opportunity for automation in your in this country. I mean, you know, there is a lot of volatility as it relates to the geopolitical environment right now. And that’s forcing a reassessment of supply chains and a move towards onshore ensuring of manufacturing. I mean, I think, even independent of geopolitical issues, you’ll be at the pandemic. And I think people realize, man, I have such a dependency on this complex chain of that stretches all over the world to get my stuff to my customers, and how do I create a more resilient supply chain? How do I reduce that dependency? And so I think all those things are going to lead to more opportunity here. I mean, there was just an article in the Times over the weekend about how the incentives around the inflation Reduction Act in clean energy, in particular, are creating this boom of investment in the United States for various kinds of green manufacturing. And again, I think that’s all going to fuel innovation and opportunity. So I think it’s an exciting time for sure. Yeah, it feels like there are many forces, exogenous factors that are aiding in market adoption right now, whether it’s labor shortages, supply chain, etc. So it does feel like now is the right time to be investing in those spaces. So it’s an exciting time for sure. But what effect do you think the adoption of these technologies will have on the broader economy? Jobs? You know, humanity? I think there’s, I was reading an article in the Wall Street Journal the other day talking about is AI and Chechi Beatty, those sorts of applications, are they going to replace jobs? And what does that mean for those people whose jobs have been displaced? I’m curious, what is your viewpoint on that? Yeah, it’s a great question. It’s a complicated question that you know, I’m, I’m certainly, you know, a believer in tech. 40:00 Knology as a force for good and a force for change, but I’m not naive to the impacts that can be negative. Certainly, oftentimes, when you have disruptive technology, there is going to be a dislocation that is going to impact jobs and impact folks in the economy negatively. And I think it’s incumbent on our country to make sure we’re doing everything we can to invest in education, job retraining, etc. I mean, there are many categories of jobs that are where we have massive shortages, health care, and nursing is a great example. Massive, massive shortages, and those shortages are only going to grow as our population ages. But that requires education requires retraining, it requires bringing folks that may have grown up in a different profession into this new profession, or politically. And as a country, we’ve got to, we’ve got to sort that out, we’ve got to figure it out. But it’s hard to try and put innovation in a box, it’s just not going to happen, you know, progress is going to happen. As a country, we have to find ways to embrace that innovation. And so I think they’re, as always been in periods of incredible innovation, they’re going to be they’re going to be certainly some some costs, and there’ll be difficult and walk the walk to work through them. As a society. I think as it relates to chat GPT. You know, I think that the vast majority of applications around it are making information workers more productive, they can do more with with less time as opposed to eliminating most categories of information work. And the question is, what will that mean? I found with technology, we can get a lot more done in a short amount of time, it just means we do more, work more. And so email is a great unlock to faster to email someone that traded voicemails with them. But it just means we all send more emails. And I feel like a lot of the unlocks the chat chat GPT just means we’re all going to do more at the competitive edge as companies embrace it will become as opposed to competitive advantage will become a competitive necessity just to compete and survive. So I don’t know if it’ll lead to jobs. It just may lead us feeling like man, I’m overloaded with emails. And now I’m overloaded with having to be the human assistant to all this AI technology. We’re turning into human routers. Yeah, exactly. That’s for sure. Jay, if we can feature anyone on the show, who should we interview on? What topic would you like to speak about? To me a really fascinating topic is based on this article. But you’ve all Harare that he wrote recently about AI. And he described language as being the operating system for humanity since the dawn of time. And if you read Sapiens, everything is a story. And it starts with a story and a myth. And all of human society, even constructs like corporations, and money are all based on some notion of a story and underlying trust that comes behind it. And articulated, as he always does, and very compelling, persuasive language. Why this is a scary moment when all of language is now you know, been ingested into a machine that can process that language. And we’ve seen with the elections and everything else, and fake news and bots and everything else that got unleashed in the last decade. But we haven’t seen anything yet, as it relates to AI and fakes, and people’s voices being imitated, and so forth. And so there’s a massive security issue. But it raises a lot of interesting questions about what does this mean for the future society? And, you know, I’d be interested to hear, what would you do about it? You can’t, you can’t close Pandora’s box, you can’t put the innovation back. And you also don’t want the United States to be at a disadvantage relative to other countries that are doing this technology. But what do you do about it? Because it is a real issue. It is a real concern. The picture he paints is one that was quite scary. I don’t know what to do about it. And I’d love to hear his take on that. So do you think greater forces prevail there? Well, I think it’s impossible to regulate. Technology have this kind of technology. I think regulation in general works in industries that you’re well understood, where the pace of change is a lot slower. And the challenge in the world of tech we’re in right now is the pace of change is too is just too fast. Any regulation you put in place is likely to be outdated within a matter of months, and it’s likely to have unintended consequences that 45:00 Are we can’t even imagine, at this point. So I’m not a complete libertarian that I believe in government. I think regulation is important in a lot of industries, we’re able to have a safe and hopefully more fair society, because of regulation. I just don’t know how you regulate this stuff. I don’t know how you do it. I don’t know where to start. I think that’s the challenge. Now. And then RJ, what is the best way for listeners to connect with either you or BCB? The two best ways for BCV the best way for b2b is just by our website, Bain Capital ventures.com. Or through our Twitter handle for me, DM me on Twitter, connect with me on LinkedIn, easy to find on both platforms. And worst case, they can call you and I’m sure you can connect them to me as well. Awesome. Well, thank you again for the time. Congrats on fun 10 And we look forward to having you on again in the future. Yeah, Nate, thank you so much. This is great, a ton of fun and appreciate you having me on. 46:03 All right, that’ll wrap up today’s interview. If you enjoyed the episode or a previous one, let the guests know about it. Share your thoughts on social or shoot him an email. Let them know what particularly resonated with you. I can’t tell you how much I appreciate that some of the smartest folks in venture are willing to take the time and share their insights with us. If you feel the same, a compliment goes a long way. Okay, that’s a wrap for today. Until next time, remember to over prepare, choose carefully and invest confidently thanks so much for listening Transcribed by https://otter.ai