C2V June Notes From The Trenches
C2V June Notes From The Trenches
Welcome friends! It’s not that often that Chris and Matt — native New Englanders and Boston sports fans — get to celebrate a title (well, a lot more often than say… New York… but still), especially one from a team built as patiently and skillfully as the 2024 Boston Celtics, so we thought we’d do a couple thousand words on startup lessons to be learned from the Celtics organization, from ownership on down….
… just kidding. We’ll just let a couple of pictures (of Matt’s dog) say those two thousand words for us…
and move on to…
Some Updated Thoughts on Generative AI
The mad scramble to build all manner of gen AI products continues (and seems to have spurred a burst of M&A activity in recent weeks, we seem to have a budding cloud/AI rivalry (always fun), and we’re seeing our portfolio companies make smart use of gen AI tools, using models up-trained on vertical-specific datasets that they are applying to discreet use cases within their broader SaaS platforms.
But on the consumer/small business side, is anyone else a bit… well…. underwhelmed with what the incredible power of gen AI has produced so far? Sure, it’s fun when your college buddy (who’s been playing around with Dall-E or whatever) sends you a series of mythical creatures with the face of David Hasselhoff, and we applaud the fact that purveyors of the major day-to-day software suites we all use are trying to integrate gen AI features, but (without naming names), most are pretty uninspiring thus far. Certainly, none that we’ve tried out have moved the needle much on daily productivity.
It actually feels a lot like the very early iPhone days when everyone had their email, voice, and texting, plus a couple of apps along the lines of that one where you tip the top corner of your phone toward your mouth and the beer mug on the screen slowly drain as if you were drinking it, but nothing of much actual use. In other words, we’re ready for the gen AI equivalents of when there were suddenly apps for every day-to-day activity (banking, news, calendars, travel, commuting, note taking, weather, etc.) and your smartphone was saving you hours (and hours and hours) of time each week.
To be fair, plenty of folks are taking a smarter, more measured approach to this craze (certainly relative to past crazes), but surely there’s some irrational, big-shiny-object money out there that will (over)fund a bunch of splashy startups that will mostly flame out in spectacular fashion, but from which a few great ones will emerge. To us, this is a far better use of huge amounts of money than, say, trying to recreate the Balboa family’s robot butler from Rocky IV (we’re not much closer to that being achievable than we were when Rocky was single-handedly ending the Cold War).
Well, if you’re out there, we have some ideas.
Hint Hint
A couple of things we’d love to see…
Something that makes email tolerable
All of the existing “smart inbox” products are basically just a slightly faster version of setting up your own filters. They require constant, active direction from the user, they’re always backward-looking, and they more or less take up as much of your time as they save.
More importantly, isn’t this exactly what gen AI is supposed to excel at? Read the subject lines, text, and senders/receivers of our email, watch how we file/respond/prioritize/filter/etc., start to do these things for us, take our feedback, improve the model, rinse, and repeat.
Something that does basic data entry
Raise your hand if you spend way too many hours each week manually moving information from one app to another. We suspect that every hand is up, even those of high-level/big-title folks, and younger, more entry-level folks are probably out of their seats, frantically waving both hands.
Again, isn’t this exactly what gen AI is supposed to be good at? Especially where (as we suspect is the case with most of us) we’re generally moving the same type of information from the same source app(s) to the same destination app(s) over and over. Shouldn’t this be a slam dunk for gen AI to learn where we’re looking, what we’re grabbing, and where we’re putting it, and then kick off that same learn/test/train cycle?
Something That Makes Calendar Management Easy
A virtual 1950s-style administrative assistant, if you will. Certainly there are some apps out there that have taken a big bite out of this problem (we use and love Calendly, for example), but they’re still relatively inflexible solutions and have holes that still require a fair bit of manual intervention.
Wouldn’t it be nice to have an app where you could type “find a time to meet with Chris for 30-minutes on Friday morning), and it would handle everything else, including any required back and forth with Chris? This is also something that (it seems to us anyway) should be squarely in gen AI’s wheelhouse.
We may not invest in any of these ideas (when our VC hats are on, we’re far too boring and practical for this sort of thing), but we’ll certainly buy subscriptions and post glowing reviews in this space and elsewhere. And if anyone knows of any existing apps we’ve overlooked for these or any other day-to-day tedium, please email us or drop suggestions in the comments.
Let’s go, VC/startup community, we can do this!
New Investment
We’re pleased to announce our latest investment from our main seed fund, C2V Capital Partners II, in construction SaaS company Digital Iron. Digital Iron checks two great boxes for us, not only being a perfect fit for our thesis (productivity solutions for dirty, dull, and/or dangerous old economy industries), but it’s also a great application for new generative AI functionality.
Among the many inefficiencies weighing on the heavy construction sector, equipment maintenance management is one of the more costly, particularly for heavy equipment dealers who bear the primary responsibility for managing the maintenance of the equipment they sell. Even in cases where manufacturer’s operating manuals have been digitized, the volume of information and complexity of the machinery, as well as the unpredictable (and generally slow) inquiry responses from manufacturers, make finding the right troubleshooting information incredibly time-consuming for dealers and costly for their customers (with each day of downtime generally causing thousands of dollars in losses).
In addition, equipment dealers have an aging labor force and are struggling to replace retiring employees with a dearth of younger workers with the training needed for these roles, and dealers are leaving material revenues on the table by being strictly reactive in their maintenance, rather than keeping up with useful life estimates for equipment components and proactively selling replacement parts. These replacement part revenues are substantial (generally around 55% of the initial cost over the useful life of each piece of equipment) and will typically go to whoever can solve a customer’s problem the fastest. To put this in perspective, Caterpillar alone estimates $9 billion per year in lost after-sale revenues due to dealer staffing inefficiencies.
Enter Digital Iron, which seamlessly integrates machinery manuals, CRM data, and customer ERP systems to create a centralized source of equipment specifications, maintenance parameters, and field usage data, and provides a natural language interface for researching these issues (the gen AI piece). Once dealers have established the cause of each issue, Digital Iron will automatically check dealer inventory and third-party suppliers for availability, lead time, and price of the necessary parts. This information can then be instantly shared with customers for approval and immediate order of needed parts.
In addition to saving hours (often days) identifying and sourcing replacement parts, Digital Iron’s AI models also compare equipment usage information to manufacturer useful life/replacement recommendations for each component and prompt dealers to proactively suggest parts replacements to customers, allowing them to monetize all of the additional (and substantial) post-sale revenue for each piece of equipment they sell.
C2V Watercooler
Chris had a fun couple of weeks catching up with some great people. C2V founders, LPs, and peers in the venture capital community.
He kicked things off at Lerer Ventures’ Spring/Summer event, a kick-ass gathering that brought together a diverse group of investors and founders.
Next was Uncork Capital Ventures’ 20th-anniversary celebration. Two decades of supporting groundbreaking startups is an incredible accomplishment, and it was inspiring to hear from some of the visionary founders Uncork has backed over the years.
The CTI community was up for a relaxing evening sail in the Long Island Sound, and finally, he capped off the week with a productive board meeting with Beam in Boston.
We’re excited to see the continued progress and big things happening soon, so stay tuned!
Joel Palathinkal from Sutton Capital invited Chris to chat about C2V on his podcast
Chris chatted about why Investors / LPs trust C2V because we have the following:
- Founder & Institutional Asset Manager experience.
- Unique Deal Flow: 98%+ from non-VC sources.
- Disciplined focus on stage, geography, and thesis
- Rigorous approach to business model analysis & valuations (i.e., we don’t chase)
Adtech M&A Is Up, But With Fewer Buyers and Lower Valuations
Chris was featured in this latest Adweek article about the rise in adtech mergers and acquisitions. “The market allowed itself to go a little bit too crazy,” said Chris Cunningham, founder of C2 Ventures. “A lot of companies were raising top-of-the-market valuations that didn’t make sense.”
Portfolio Highlights
Driver Technologies, Panthera Logistics, and All-Med Express Partner To Support Medical Delivery Drivers Across the United States
"We are proud to partner with Panthera Logistics and All-Med Express to enhance their delivery drivers experience by giving them access to our driving safety app as they complete thousands of important medical deliveries every day," said Rashid Galadanci, CEO and co-founder of Driver Technologies. "Through our convenient and user-centric driving safety app, delivery drivers can access our connected vehicle services on their existing smartphone, such as AI safety alerts, dash cam video synced to the cloud, telematics, driver coaching, and data sharing controls."
Discovering Disruptions in Technology with Chris Heard of Olive
COO Howard Holton meets with Olive CEO Chris Heard to discuss how platforms can enable democratization.
Tuomo Isokivijärvi, CEO & Co-Founder at StepOne Tech Ltd Attended the Climate First Cohort III Roadshow
Tuomo had an incredible time engaging with industry leaders, including Coca-Cola Europacific Partners, KIKO Ventures, Clean Energy Ventures, Braavos Investment Advisers, BP Ventures, and additional climate VCs, providing invaluable insights and opening doors to new possibilities.