Venture Capital: The Start of Something New

[Music] thank you Sarah for the wonderful introduction as always thank you to my panelists and the audience for taking the time to be here um just to dive in because I'm conscious that we have a short session Professor Ilia I would like to start with you as our academic expert in Venture Capital corporate Venture Capital you are the co-author of a best selling novel uh a bestselling uh book about the Venture mindset um I just wanted to understand from you what do you think Abu Dhabi can do to develop a robust VC ecosystem and Achieve Global growth thank you asman first of all great to be here it is a$ 100 trillion doll question what is going to happen in the next 10 to 20 years here's the question to the audience have you ever heard of the French Google Japanese Nvidia British meta or uh Italian Google and there's a reason why you haven't that's because of the venge Capital the United States have developed an amazing VCH Capital industry Innovation ecosystem in the last 50 years and uh are the G7 developed countries have not and as a result of this the Gap in productivity and the Gap in the GDP between the US in all the other countries doubled in the last 40 years and that is an amazing statistics and so the the the whole point for Abu Dhabi is that to follow the US and to become much more productive and do not follow the stagnation of a number of other countries so the question is how to develop this V Capital Innovation ecosystem and there are a number of factors and I have been studying these factors for quite a bit and the the first important factor is to ensure that people who are sitting here uh with me the VCH capitalists are really interested to come here really to invest to bring their knowhow but also that they are represent from early stage to late stage to those that help companies exit second to invite and create the critical mass of talent so that is the Innovation Hub for the talent that is the single most important challenge for many scenarios where the Innovation Hub has not happened in many other destinations so that is the the critical point is if Abu Dhabi wants to become a leader number one Regional leader in the top five top 10 Innovation hubs in the next 20 years which means that it will create not just thousands of startups and will be managing billions of dollars under of capital under management in Innovation and startups and Venture and be the lead in technology but also that it will have the companies that will become the next Google next Nvidia uh my research shows that especially right now because of the dramatic change in the AI and Technology the next 10 to 15 years will produce at least 10 trillion dollar companies so with the right attitude one of those companies or at least one will be in Abu Dhabi let's hope so let's hope so well Bel you represent one of the leading VCS in the region in the UAE what's your perspective on this and how can we strengthen the ecosystem for a homegrown fund like yourself so I think Professor Ilia hit the nail on the head I think the deepening of The Venture Capital uh ecosystem here uh and for the availability of risk Capital therein is going to be important but I think a corollary to that is also bringing here the best talent that can both affect the Venture Capital ecosystem but also tech companies as well I think we're right now in the midst of what I would call the Emirates dream in the same way that the American dream Drew Talent from around the world to be able to come in at right at the beginning of the Venture Capital Growth in that country to build companies to invest in companies uh to execute on some of these fantastic business models that we've seen grow we're seeing the same here now where Talent is not just coming here from the Region's best markets and the best and brightest therein but also from around the world and we can't undervalue or discount that both in terms of the companies that we will invariably see grow here and we do this on a daily basis but also the Investments and the the investors that are going to come here and bringing in fresh Capital that brings new ideas so there's no dir of capital in the region yes but you want to be able to diversify that Capital bring in more risk Capital bring in those ideas from other markets and we are right in the midst of seeing that right now and that's what will allow us to execute on what Professor Ilia mentioned there and and not fall into that sort of dreamlike uh uh environment that sort of Europe seems to have fallen into I mean if I if I may add to a couple of the comments here uh when I started my first company you know I was 22 and Innovation was just purely coming from the US you know people used to see what are the business models that work in the US and how can I make them and take them somewhere else and build them somewhere else successfully I'm not saying that that's not happening anymore but at this time when you have other focuses of venture developed in other geographical regions you start to see Innovation to come from a lot of other places now there's business models that are build in India that are build in the Middle East that are build in Latin America that people in the US look at and say maybe we should be building that for the US no and I think that's part of you know the role that can be played here because the ecosystem here is amazing from the perspective of having Capital at different stages and being able to attract the right talent and the right pool of people no so that's something that the region should leverage on you know Jose is abely abely right but there is an important uh Cally from that and that is that there's going to be a dramatic increase in competition among Innovation hubs so that Abu Dhabi will not be the only one and I've been to already many regions around the world that are now competing because the cost of Entry to become an innovation H is now lower so therefore there is this golden opportunity that might be gone in 3 to 5 to seven years so as one of those Venture capitalists who was lured here by the dream of Abu Dhabi I can tell you that part of my four-year journey and actually it started way before that but officially four years has now been fulfilled which is that we came here we've invested heavily and we've built an AI Development Center which is now morphed into a startup called integrated data intellig Ence who today is announcing a new product called Donna which is I understand an Abu Dhabi term for a rare Pearl which will actually identify Venture Capital winners by using AI for venture capital and this was achieved not just by the open support of AO and the ecosystem but the unique ability to recruit worldclass talent phds and Masters and leading researchers from around the world who came here to implement it in Abu Dhabi but the idea is not just to do work for higher not just to let someone else outside of the country do a wireframe and you fill in the dots or color the you know the borders but to start the research from the beginning and take it all the way through a full stack and if there's that kind of Courage and the willingness of investors to take the risk which I think there is then the future is very bright indeed um and before we dive into the AI John I've known you for a couple of years and you are definitely one of the organizations that put your money when where your mouth is uh when it comes to Abu Dhabi so when it comes to sourcing talent and retaining Talent do you think there's more that can be done by Abu Dhabi to ensure this continuous growth look I think that Abu Dhabi is doing a great job in terms of branding the capital of capital is pretty good brand okay uh it's something you can bet on um but the job is up to us right ultimately we have to create the exciting startup the management team that can take the talent that can sit in front of a PhD who today has the ability of getting jobs everywhere okay people are are are salivating for these AI researchers and so you've got to be competitive and I think you can but it's required not just more money from the government it's the continued building of the ecosystem for example the fact that Microsoft has just invested $1.5 billion dollar in g42 that's pretty cool that's a sign of of backing and I think that certainly in the area of uh AI Abu Dhabi can be a world player and uh and we've touched on AI in previous sessions we clearly keep circling back to AI so Jose I want to ask you you're a Serial entrepreneur you are also an investor what specific Trends would you be focusing on in the next 5 years well we we have the good or bad habit of being very contrarian in the type of things we do and you know we believe that AI is absolutely transformational in what we are seeing in the world different story is how do we think you can make money out of it no uh we believe that some of the large incumbents are going to be the big winners of what we call generative AI so we are not that bullish on investing on generative AI initiatives um as many other people do but we are big Believers in investing on AI as an enabler to do things in a more efficient way and in a better way I mean we are mostly Marketplace and network affect investors um and and what I can say is that utilizing AI you know to build supply and demand matching in a more efficient way uh how do you make you know attract demand in a more efficient way by utilizing AI you know all of those things are incredibly transformational and we are doing a lot of stuff on the investing side that is leveraging that and when we specifically look into it the pics and shovels of the industry that's where we believe that a lot of money is going to be made no uh and we continue to invest into a lot of that ER there's companies that have a lot of proprietary data and we think that for the those companies that can process that proprietary data in an effective way you know that can also build competitive advantage to existing ENC comment no uh but but but if if independent players new players come up with ideas of getting the source of data better than others you know and use AI That's also a very big S source of disruption um in Enterprise software there's incredible opportunities of disruption by utilizing Ai and if you ask ask me that's probably the area where I think there's going to be the most disruption now there's again a lot of co-pilot services in in and those are also very valuable that utilize AI to do things and in some cases those are just going to be functionalities and I'm not sure how many big businesses are going to be built out of that other than just being picked up and integrated into other companies um but there's going to be others that that you know that are going to be massively disruptive so those are some of the big high level trends that we are seeing on how we are playing AI just a just a very brief uh comment comment on that you know many top venge Capital funds in the Valley now invest only and only in AI businesses so in fact AI now is not is necessary but not sufficient but there are two types of AI Investments it's AI first or AI native Investments so geni is a classical example and another one what I call AI enabled businesses and so Jose mentioned enterprise software most of those was AI enabled businesses and I think that the that type of businesses is where there's a lot of opportunities and a lot of potential and if we look at both the predictions but also where a lot of smart money is going right now in AI where for example my students at Stanford working on AI is AI enabled businesses and that is going to revolutionize Legacy Traditional Industries much more eventually and I think that is going to happen very soon including in the Middle East yeah but I would also say that just because of what Ilia said of all of the VCS investing only in AI I mean there's a huge opportunity to go back and look to traditional businesses you know and and make money out of that no so I wouldn't put out as an investor H you know I would not put myself blind and say the only way that we can make money if we ride the AA wave no I mean we are certainly doing that but we continue to see a lot of areas where you can really you know benefit from less competition and incredible opportunity Jose I gave I give Jose as a great example in my book The Venture mindset so Jose is a contrarian and his favorite saying is conviction bits consensus so if everybody goes AI he'll go back to traditional business I think that the you know what what you're calling AI enabled businesses is essential I look at it more as a vertical uh strategy where there are some industries that are going to be you know fundamentally changed from A to Z others less so but it's actually I think rather good bet to bet on breadth meaning you know agriculture you might say how is agriculture going to be changed well talk to Bal about uh protein folding you know talk to my company companies about preventing prescription you know errors talk about how to improve immunotherapy takeup by like 300% this stuff is coming and it's not 10 years or five years these are products they are getting FDA approved and FastTrack if you look at things like education the worst job prognosis in my opinion now in the world is teaching assistant all these useless Tas you are going to be freed from your jobs AI is coming and it's going to be a damn better tutor than the TA even at Harvard well I'm glad you haven't mentioned professors only only taas okay you you you look at things like uh small business today I think most people associate AI with big businesses with Google and meta and Amazon and big corporations but what's going to happen is the individual soulle practitioner sitting with his cool little double screen desk he's going to be the master of the universe he or she finally because these AI tools are going to be made to work and they are being made to work now for the small business so I see this as just an literally it's a second chance I mean I've Been Around The Venture industry for 40 years both as a serial entrepreneur and as a venture capitalist I come from a little country across the way here where there's a lot of venture capital uh but the reality is that I thought that the internet bubble and the internet excitement was like once in a lifetime it was pretty cool but it's nothing compared to this this is so much bigger and it makes a sort of an old guy like me feel young and the rest of you should be feeling pretty exciting because the cycle is changing and his cycle is headed for an upswing that you haven't seen anything like it B when you look at at portfolio companies that you might potentially invest in what is your take as a local VC local and Regional what is your take on companies that use AI for their companies advantage or challenge yeah look I think everything that's been said by my by my uh colleagues here is is absolutely spot on I think to to Circle this back to you know the Venture Capital the start of something new certainly as it pertains to Abu Dhabi what we look for is is Greenfield right uh we're seeing AI come into some of our companies that are in biotech we're seeing AI enabled B businesses AI first businesses um AI being leveraged by fintech companies AI being leveraged by agriculture tech companies and I think that's where Abu Dhabi has a real March it's really become the lab for Innovation especially when it comes to AI because that's just fundamentally the a reflection of the number of challenges that are left to be solved in our region as a whole so you know we don't just have Founders here solving for the Emirates we have Founders here that are solving for Egypt for Pakistan for Bangladesh for Morocco and that is what makes this region very exciting and AI but also you know hopefully one day in the future multimodal models hopefully beyond that um different types of Innovations in in in uh in Quantum Computing and and elsewhere are also going to be solving these challenges and and just one last point I think one thing that's worth emphasizing is what role Abu Dhabi can play as a leader in that and we're seeing it already when it comes to infrastructure so data centers incredibly important for this part of the world um and compute power incredibly important for this part of the world which ends up giving both economic might but also ecosystem heft to Abu Dhabi and that's one area where I think we can lead in the AI thank you I see that we're out of time although I would have preferred for this to go a lot longer thank you gentlemen thank you to the audience for attending I hope everybody enjoys the rest of ababi Finance week thank you everyone thank you pleasure [Music]