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UserTesting’s Human Insight Platform lets companies get feedback from customers on-demand so they can learn more about how to improve customer experiences. led the Series C round, with previous investors , and also participating.

UserTesting, which is based in San Francisco, now has more than $148 million in, according to Crunchbase. It last raised $45.5 million in a round led by Accel in January 2015.

“Customer centricity has evolved from being an aspiration to an expectation,” Insight Partners Vice President Rebecca Liu-Doyle said in a statement. “Companies across industries are now expected to absorb feedback—on a continuous basis—to deliver an ever-improving experience.”

The new money will be used to expand UserTesting’s presence in Europe and Asia and speed up product development.

Along with the new funding, UserTesting announced Thursday that it acquired, a European startup that provides multilingual experience testing for customer feedback, according to a statement. The acquisition of Teston will help with UserTesting’s push to expand in Europe. UserTesting opened a European headquarters in Edinburgh, Scotland last year.

“Teston fits nicely within our product portfolio and reinforces our ability to give customers the fastest access to the human perspective, globally,” UserTesting CEO Andy MacMillan said in a statement. “They have built a playbook for localization that will enable us to serve our customers who wish to get feedback in European languages and beyond.”

UserTesting also acquired two companies last year, according to Crunchbase. It purchased in January 2019 and in October 2019.

Teston, which is based in Oslo, Norway, had $2.8 million in seed funding, according to Crunchbase.

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and led the round.

The investment comes just seven months after OneTrust raised an also massive $200 million Series A at a $1.3 billion valuation. It brought the company’s to $410 million since its 2016 inception. (Insight Partners led that round as well.)

I hopped on the phone with OneTrust chairman , who said the company has been seeing explosive growth. By explosive we mean its headcount and customers surged from 600 and 2,000, respectively, in February 2019 to 1,500 employees and 5,000 customers today (including half the 500).

While he declined to provide growth metrics for 2019, the Atlanta Business Chronicle that OneTrust had seen a staggering 22,000 percent revenue growth from 2016 to 2018.

There’s no doubt that much of that growth is related to the fact that it helps organizations comply with global regulations like General Data Protection Regulation and now in California, the that went into effect on Jan. 1.

“Certainly, the concern for privacy is driving our business,” Dabbiere told me. “We’re seeing the transition from companies being fearful or scared of compliance issues to every CEO wanting to get closer to their customer.

“The challenge they have is wanting to get a lot more data about customers so they can serve them better,” he continued. “But every CEO is also scared of ending up on the front of because someone on their team overreached.”

Customers include , Akamai, , and .

So much, so soon

I was curious why OneTrust, if it was seeing such remarkable growth, felt the need to raise its Series B round so soon after its Series A financing. According to Dabbiere, the majority of the funds from OneTrust’s Series A are still available. But more capital gives the company “dry powder” to go after what it sees as “significant opportunities” for growth.

“We want to move fast on any organic and inorganic growth opportunities we may see in the market,” he told Crunchbase News.

Dabbiere said the doubling of the company’s valuation is indicative of OneTrust’s recent success.

“When a VC invests in a company, they have certain growth expectations built into the number they give you,” he said. “In the last seven months, our valuation went from $1.3 billion to $2.7 billion. That tells you that we knocked it out of the park even relative to some lofty expectations. We had a really fantastic back half of the year.”

Standing out in a crowded market

While there’s a slew of companies focused on the data privacy space, as our own Gene Teare reported yesterday, OneTrust does appear to have a strong foothold in the market. (In December I covered a new entrant to the market, Austin-based )

But despite all the competition, OneTrust stands out, according to a recent analysis of the privacy market by research giant .

In that report, IDC said: “OneTrust continues to dominate the privacy management market through exponential growth, organic growth as well as acquisitions. … They are growing horizontally into the governance, risk, and compliance space as well.”

Indeed, OneTrust has over its lifetime, and plans to continue buying more with its new capital, according to Dabbiere. This is a strategy that the company believes will make its offerings even more valuable to customers.

Dabbiere believes that part of what sets OneTrust apart from its competition is that it continues to develop new modules that are important to customers.

“As our existing 5,000 customers continue to buy more and more modules from us, we expect our growth to only continue,” Dabbiere told me. “In a fairly short amount of time, we have made the transition from a handful of products to a fully integrated platform with a broad suite of products that responds to the trust and risk needs of our customers.”

Investor POV

, managing director at Insight Partners, which led the deal, said the OneTrust team has exemplified the saying: “Skate to where the puck is going to be, not to where it has been.”

“ and team founded the business at such an opportune time, recognizing the looming privacy regulations globally,” he wrote via email. “When GDPR went into effect in May 2018, the product was market proven and the team, which we had previously backed at , was ready to hit the ground running.”

As mentioned above, GDPR’s U.S.-based successor, CCPA, went into effect last month and OneTrust is already seeing massive demand from the market, Wells added.

“The pace at which OneTrust has been able to release new modules and partner integrations is a testament to their innovative technology,” he said. “They are building a true platform that we believe will be embedded in the privacy officer’s workflow for businesses of all sizes.”

For more on the surprisingly robust Atlanta startup scene, check out my in-depth look at the market here.

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The company now has raised $430 million in known venture capital funding to date, .

led the latest round, with participation from , , , and more. The cash will be used to meet customer demand, .

Tomer Weingarten, Almog Cohen and Ehud Shamir founded the Mountain View startup in 2013 to tackle cybersecurity woes through automation. The idea, and differentiator, of SentinelOne is that the company uses artificial intelligence to fight endpoint attacks on security in real time.

Let’s pause here and unpack what endpoint means. In the cybersecurity context, endpoint security “refers to a methodology of protecting the corporate network when accessed via remote devices such as laptops or other wireless and mobile devices. Each device with a remote connecting to the network creates a potential entry point for security threats,” according to . Think of SentinelOne as a wave of protection that covers all the external ways you log into your company: whether it’s your company laptop or phone, or personal laptop or phone. Each is a separate endpoint, and from a security angle, a separate way to hack into sensitive information.

When we last caught up with co-founder and CEO Weingarten, he explained the upside of trusting automation.

“It allows [companies] to really, in some cases, automate away the tier-one analyst role and really focus on high-level investigation,” Weingarten said back in June.

In terms of growth statistics, the company did not share net or adjusted revenue, but said it has more than 3,500 customers to date.

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This is less than the 2018 all time high of 158 companies, and above 2017 (102 companies), 2016 (87 companies) and 2015 (106 companies). To qualify for this distinction, venture-backed privately held companies were valued in a funding round at $1 billion or more.

In the US, 78 new unicorns emerged in 2019, 11 more than in 2018. China unicorn creation slowed down substantially in 2019 with 22 new unicorns from a high of 58 in 2018. The next highest count of new unicorns is Germany and Brazil with five, a record for both countries. Israel, India, and the UK all report four new unicorns this year.

Unicorn Funding By Year

To understand 2019 through a different lens, let’s switch gears from the 2019 new unicorn cohort to funding to all unicorn companies. In 2019 unicorn companies raised $85.1 billion — down from 2018 at $139 billion, and 2017 at $93.8 billion.

Despite concerns about a changed venture funding market after WeWork pulled their IPO on Sept. 30 2019, funding to unicorns was up quarter over quarter by 11 percent, but the quarter was down year over year by 54 percent. It is worth noting that 2018 included two of the largest rounds ever to unicorn companies with $14 billion invested in Ant Financial, and $12.8 billion in Juul. However, these two rounds alone do not account for all the increased funding to unicorns in 2018. We fully expect 2019 invested dollars to increase at a greater rate than prior years as new unicorns are minted in 2020.

2019 Unicorn Cohort

2019 new unicorn companies collectively added , and $50.5 billion in equity funding in total over time. The leading sectors for 2019 unicorns were in Financial Services, Commerce and Shopping, Data and Analytics, Transportation, SaaS, and Health Care.

The five most highly valued new unicorns include:

• ($7.3 billion) the autonomous vehicles subsidiary from Uber
• ($7 billion) an e-commerce platform for pharmaceutical products
• ($6.2 billion) unifying customer analytics
• ($5 billion) Travis Kalanick’s smart kitchens for food delivery
• ($5 billion) a sustainable automotive technology company

Six companies that became unicorns in 2019 and also went public in the same year, listed in order of IPO valuation, are:

• ($3.7 billion) a genomics platform
• ($1.7 billion) targeted at treating infectious diseases
• ($1.7 billion) a marketplace for luxury goods
• ($1.6 billion) which automates back office financial operations
• ($1.4 billion) a producer of Blockchain servers
• ($1.3 billion) to manage healthcare data

All of these companies had an increased valuation at their IPO over their last private funding round in 2019, ranging from 25 percent for Health Catalyst to 189 percent for 10X Genomics.

Investors In The 2019 Unicorn Cohort

With $50 billion invested in this new unicorn cohort, it is interesting to look at the investors fueling the growth of these companies. The most active investors in companies that became unicorns in 2019 by portfolio count include the following:

with 13 portfolio companies, and with 11, , , , and at 10. This list of investors includes a mix of early and late stage venture, corporate venture, and private equity/alternative investors all actively seeking stakes in highly valued venture backed companies.

The most active investors by deal count, which showcases investors who are in multiple rounds for companies who joined the unicorn ranks in 2019 include the following: New Enterprise Associates in 30 rounds, Insight Partners (26), and GV (25), and Spark Capital (24).

2019 Unicorns By Founders

While there is no shortage in funding for these high-value companies, there remains a discrepancy between the number of male and female founders that reach the coveted unicorn status. Five (4 percent) of new unicorns in 2019 had female-only founders and 16 (12 percent) were co-founded by a female-male team. Overall, 114 (84 percent) unicorns in 2019 had male-only founders.

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Gené: I want to welcome you both. This is new for us to have two partners. Why the name “Homebrew”?

Hunter: Homebrew was named after the Homebrew Computer Club. As a history major, there’s a certain respect for the shoulders we stand upon. It harkens back to the spirit of you do it for the love and passion, not just the disruption and economics. You’ve benefited from what came before you. So there’s a certain mentality as you continue to pay it forward.

With Homebrew we’ve taken a concentrated involved approach, as opposed to a more passive lottery ticket style, to be able to share some of those learnings across the founders in the portfolio.

Gené: How did you both meet?

Hunter: I ended up at , relatively quickly, but not necessarily intentionally. Google was still a private company, but was well known. One of the things that caused me to leave is that I wanted to touch millions, hundreds of millions of people. That very much matched Google’s ambitions. And that’s where Satya and I met. I joined late 2003 and he joined earlier in 2003. And we are on the same team. First literally on the same team, and then working under the same VP. We spent 2003 to the end of 2006 working on AdSense. The first project we worked on together is how do you bring AdSense from smaller self service websites into the larger publishers.

Satya then left to go to in 2007. And I moved over to just as it had been acquired. Google had moved from 1,000 to 12,000 people over the three years. It was just starting to change. Things were becoming institutionalized. YouTube was very much again the intersection of community and creativity.

Gené: YouTube was a bold acquisition by Google. It felt at the time as if the acquisition came out of nowhere.

Hunter: People were not congratulating YouTube. It was called Google’s folly. They’re spending a billion and a half dollars, for dogs on skateboards. Is this even legal? The hosting and streaming costs were high. At one of the internal TGIF versions, announced the acquisition. Somebody asked Eric, you paid a lot of money. How do you know that was the right amount? Eric paused for a second and said it’s definitely not the right amount. It’s either way too high or way too low. And we will know in 10 years.

Google was the perfect late stage venture capitalist to invest in YouTube.

Gené: At the time the big issues were how does YouTube make money and copyright?

Hunter: Copyright was the large one. YouTube did safe harbor and was DMCA compliant. They built copyright rights management into the licensing tool to help creators manage their content. When it came to terms of service and community standards, our big concerns back then had to do with spam, with people trying to crawl up the leaderboards. And making sure that ahead of some of the sophisticated systems that we were later able to build, that there was no pornography.

YouTube was starting to internationalize, and we realized what a dramatic world wide impact it would have. We were trying to understand and respect local laws, and sometimes local norms in countries where maybe we didn’t have a presence to operate, but we had users. During my first few years it was not taking Silicon Valley assumptions and layering them across the world. At the same time knowing you stood for access to information. This rolled right into the Arab Spring. A protestor who got shot was one of the first tests. This is violent. This is blood. This is somebody dying. This is historically important.

If you pull those strings hard enough, do you get to where we are today. It’s a challenge of a global company, global audience. We were dealing with year two through year six problems, not year fifteen problems.

Gené: Do you feel like YouTube spiraled out of control?

Hunter: I haven’t been there for seven years now. I feel like each phase has its set of challenges. The team is dealing with challenges that are often the byproduct of what worked, incredible growth, building algorithm around attention, and what the unintended consequences of that are. Google has always been a place where people have been willing to advocate for the right long term decision, no matter what the short term resources or business impact is. I hope the complexity of some of this decision making and the implementation of policy doesn’t get in the way of doing the right things. I have a lot of confidence in the people over there.

Gené: Hunter and Satya, you both have a product background. How did you come together to decide it’s the two of you that should start Homebrew in 2013?

Hunter: Satya left Google early 2007 to go back to venture. People we knew called him back into duty and he went to run product at Twitter for the better part of two years pre-IPO, building what is today. When he left late summer 2012, and unbeknownst to him, I was also thinking about leaving Google at the end of the year.

Gené: What is different about Homebrew?

Satya: Coming from product backgrounds, we thought about Homebrew as a product. So we tried to identify the white space in the market, and for us that was at the seed stage. While there are lots of sources of capital, there were very few investors who were willing to be the investor of record. As angel investors and advisors to lots of companies, we were often the first call when founders were having some operational issues like hiring somebody, a product question, even though there were larger checks on the cap table. We saw this gap where the early stages of company building are incredibly difficult. Most of the time founders don’t have all the skills needed to scale a company for year zero through three. And they were asking for help, and there was no one willing to give it to them. And so the thesis behind Homebrew was to be that investor of record, come to that conversation with empathy having been on the operator side. And to do that for a small number of companies each year, where our focus was not going to be looking for the next investment, but really spending time with the founders.

Hunter: So much capital is coming into the seed stage. There’s no capital gap structurally at the seed stage. Maybe there was 15 years ago. That doesn’t mean that fundraising is equitable or easy. That’s a whole other discussion. But there’s lots of capital.

That capital has come to market in forms that sometimes have more to do with the needs of the investors, than the needs of the entrepreneurs. Increasingly large funds that are multi-stage, and or the size of the fund predetermine what success looks like. It’s just math. We co-invest with those people all the time They’re wonderful. Especially as companies get bigger and know what to do with $20 million, what to do with $27 million. You can’t grow a company without that.

Similarly, there are more and more people who like writing here either institutionally or individually 20, 30, 40, 50 smaller checks, a year. I sometimes joke, they have a general partner name Darwin, because what they do is see who survives. It’s often not in investors’ short term interest to take the model we do. Which is to keep your fund size constrained, concentrate on early investments, and spend more time servicing the deal, than trying to win it. We get involved at the seed and then stay operationally supportive into the Series B. We commit to a three to five year runway with these companies. There’s not many people willing or able to take on that model.

Satya: And this stems from why we created Homebrew in the first place. It was not to become venture capitalists. We would not naturally enjoying being venture capitalists. We really enjoyed building Homebrew, because it’s focused on what we thought for us was the most interesting thing to do was work side by side with founders to help them build businesses.

Gené: What is a Homebrew company?

Satya: A Homebrew company is one in which there is a mission-driven founder who has a firm belief about how the world should operate and a strong set of hypotheses for how to help get there. He or she has experienced the pain being addressed firsthand, has empathy for the customer and a deep appreciation for the target industry, disrupting it with love rather than contempt. The founders want to build a cap table that acts as extensions of the team, helping them increase the scale, velocity or probability of the company’s success. The company is building something that democratizes access to products, services, data or customers for constituencies and industries that haven’t had access previously. When we come across like-minded founders operating in industries in which we feel we have expertise, relationships or know-how, we think of those as Homebrew companies.

Gené: Are you wanting to be the Andreessen Horowitz services model at seed?

Satya: We’re trying to practice venture capital, the way it was originally practiced, when it wasn’t just capital. It was this notion that your investors are part of your team. They’re not your managers. While they’re on your cap table and you’re responsible to them to some degree, you’re not reporting to them.

Hunter: I was surprised to find that the market gap at venture was returning emails, showing up for meetings, spending more than 51 percent of your calendar with the companies that you funded versus that next company, that next fund to raise, that next conference to speak at. We took a model that basically says we would pick up the phone, we will answer the email, we will be on the whiteboard with you.

Satya: All companies at this stage really have to do three things well. They have to build a product, distribute that product, and build a team. So that’s where we spent a lot of time.

Gené: What do you mean by investing in the bottom-up economy?

Satya: The notion of bottom-up economy is based on this overarching arc that we see within the technology industry. As technology is getting cheaper and more flexible, more accessible, it’s finally being leveraged by constituencies, and industries that haven’t yet leveraged it. That means everything from enabling the business of one, to empowering teams within larger organizations. It’s about democratizing access to products, services, data, marketplaces, and revenue streams. That’s what the bottom-up economy encompasses. We tend to say we like to invest in sexy software for unsexy industries. So it’s a lot of financial services, healthcare, manufacturing, logistics, retail, everything from kids clothing to autonomous cars.

Hunter: You don’t see a lot of stuff in the portfolio that’s meant to sell into the top 50 CMOs or the top one percent of consumers. was an early fund one investment, also an early fund one exit. But we came to that with the prepared mind, given some of our experiences at Google and beyond, with AI and computer vision. All of a sudden you’re given some credibility and through [Vogt] the CEO there, you’re given a set of founder relationships and you start pulling the strings and it leads to a few companies in the second portfolio.

Some things are evergreen. We just have incredible domain expertise in fintech, . I don’t think there is anybody who has a better seed portfolio in financial services over the last six years. But then there’s other things where your own personal interest, or meeting the right founder at the right time, you start to build a market presence, build the capability and then you just have to decide how far you want to follow that down or not. So now the stuff we’re doing in automation, and computer vision is less to do with autonomous cars, and more to do with manufacturing.

Gené: How did the investment in Cruise happen?

Hunter: There’s been two investments in our first six, seven years that started with a password protected video. Both of those turned out to be very good investments. Kyle sent us a password protected video of him driving down the 101 Highway to demo day with periods of the drive, having no hands or feet on the wheel. Ok, we are in. At the time people thought if this was going to happen, it was going to be Google, there’s going to be an Apple car. People were not talking about componentry, what do you do with LIDAR? This is why GM bought them. That acquisition was 18 months after the seed round. And people say, how did they come up with this number for that acquisition. The GM board decided what percentage of the market cap they wanted to spend to de-risk the rest of it.

Gené: Your most recent fund in 2018 was $90 million. How are you planning to invest that fund?

Hunter: So we’ve stayed very much the same since the first fund. Each fund is a byproduct of how many companies we think we’re going to invest in doing six to eight a year. And what’s the check size needed to get to 10 to 15 percent ownership in a seed round.

Our first fund was about 20 companies over two and a half years. Our second fund was 27 companies over three and a half years. And when we went to set up fund three, we decided to do it even a little bit longer. So it’s targeting to be about 32 companies over four and a half years. If you are going to live up to the expectation that you set for founders, that cascades through fund size and fund strategy.

Gené: How much do you need to invest in this market to get your 10 to 15 percent? And are you co-investing?

Satya: We always co-invest. We’re big believers that syndicates add real value at the seed stage to get various skills, experiences, and relationships. Our average investment is probably a million dollars now, but anywhere between half a million to two million as a range. The average investment has had to tick up a little bit from when we started as round size and valuations have gone up.

Gené: How large is a typical seed round?

Satya: $3 million on an average but anywhere between $2 and $4 million is pretty established as a Bay Area seed round.

Hunter: We had a geographic collar on ourselves for the first few years. We didn’t want to stray too far out of California or New York because we really want to make sure we could deploy our model without spreading ourselves too thin. As we gain confidence, we’ve been willing to make investments in Portland, Boston, Salt Lake, San Diego, and Toronto.

In the 1990s software was a vertical. Now, every business has a software component, and sometimes the best companies being built in some of these verticals have an academic background or domain expertise that’s not necessarily native to Silicon Valley. And so we look at each geo as — is it neutral to positive for this company to be located here. Are we going to invest in a Spotify competitor in Kansas City? Probably not. Is there a lot of really compelling vertical AI work being done out of Toronto because of the university footprint there? Absolutely.

In a competitive market, how do you make sure that for the handful of verticals that we have the deepest expertise, how do we make sure we’re top choice, for founders in that area? Because there’s lots of wonderfully smart investors, lots of capital. It’s not just enough to be thought of as ‘they’re good people.’ You need to be preferenced. And so we’ve done a lot of work around some of the co-investor relationships, some of the founder relationships. In year seven, we’re finally starting to see our own proprietary deal flow from employees at the first companies. Either those companies got acquired and handcuffs are off, or people invested in doing things. We’re starting to see referrals from the companies that we back in fund one.

Satya: We really think of ourselves as seed phase investors. So while our average check is a million dollars. We’re happy to be the $200,000 check in the pre-seed, or the last $2 million that goes into the company right before the Series A. Our focus is in that early period where companies are largely pre-product market fit. Pre-product or post-product with some early customers.

Gené: You have around 20 exits with Cruise being the biggest. That is a high count of exits six years in.

Hunter: Because we’re investing in companies that are often innovating within traditional verticals, they’re quick to the customer, and quick to revenue. They are proving their worth. Why do companies choose to be acquired? Somebody is willing to pay into the future, to bring them in-house. Which means that they’ve done very well in their first few years, and developed something. Another reason is founders feel there’s a compelling offer on the table, and they’ve constructed a cap table that allows them to take that offer. We want teams to be able to play both offense, and maintain optionality until they decide that they know who they are, and raising several hundred millions of dollars of venture capital is what they need to get there.

I’ll give you an example of a company in our first fund that has provided a meaningful return. in the construction SaaS that Autodesk bought earlier this year for $265 million in cash. That company had some growth term sheets on the table, could have played forward, but decided based upon where they were in their own development that Autodesk would be a natural partner for them, the roles they would be given there, that it was something that founders wanted to do. Not controversial because they hadn’t made promises to the cap table, and raised at valuations that made only a $300 million exit a loss. Right? I would be really happy if each fund, produced one or two public companies, and a bunch of outcomes that were really great for the founders, really great for their teams, and really great for their investors, because they didn’t get so far out over their skis, that they closed too many doors prematurely.

Satya: Because we’re investing early, we’re investing in people, and our commitment is to those people. There are also situations in which things don’t work out as everybody had hoped. Maybe the offers that they’re getting aren’t of the nature that Buildingconnected got. Because our commitment is to those people, it’s our job to make sure that we help them find a home for them and their employees that ends up helping them move forward with their careers. Part of what you see reflected on the website are also acquisitions, where we’re just doing our job as good investors and good partners to these teams, and helping them land in places that are going to be positive.

Hunter: Do the early investors have not just conviction, but alignment? Some of these first time funds need to keep a company alive, so their LPs don’t ask, how come these companies are failing? Or in the face of a good offer, that wouldn’t move the needle for the fund, so they make it hard on the company and tell the companies to play on. Because it’s not a $5 billion company, it doesn’t matter to us.

Gené: Why do you do this? A lot of firms would step away.

Hunter: The best rationale is when there’s both self-interest, intersecting with it’s the right thing to do. So the self interest is those founders become incredible evangelists for us. More and more smart founders when they do diligence want to talk to founders in a portfolio where things didn’t work out, not just the ones that did. If you can get one, two, three times your money back on your dollars you get to recycle that back into the companies that are going to do that. For a sub $100 million dollar fund, we can turn that into something that actually does contribute back and we put that into a , into a , into a .

Satya: And it comes back to we didn’t start Homebrew to start a fund. We started Homebrew because we saw that there was a lack of service being provided to founders.

Hunter: I hope when we turn off the lights, years and years from now, one of the things we can say is we were the best version of who we wanted to be. We don’t want to be a junior version of Andreessen Horowitz, we don’t want to be First Round 2.0. We don’t want to be an incubator, accelerator, crypto, or whatever flavor of the month is.

We always say the way to get better fund over fund is just to make one better decision.

Gené: How many companies do you meet?

Satya: 3,000 intros, and we meet about 800.

Gené: Are a lot of the deals coming through other seed investors?

Satya: It’s about two thirds through founders, entrepreneurs, and executives in our network. It’s about one quarter from other investors, and the rest is some combination of inbound/outbound.

Hunter: So there’s this interesting trend. There’s a bunch of wonderful funds that write these $100K to $250K checks. There’s certain pockets of entrepreneurs that they’re pretty well connected to, because it’s the ex-Airbnb guy. The challenge that some of those funds face is that there is a surplus of their dollars, and they can’t make a round come together by themselves. And they’re very interested in placing the lead, not just because they care about the company, but because if they place the lead, they’re less likely to get squeezed down. Oh, I know you want $250k but sorry you’re only getting $100k.

And so one of the interesting trends over the last seven years is the increase in volume and quality of introductions from that segment of the smaller supporting seed funds, who really need to protect their allocation. Why we play nicely with them is because we’re not trying to do 80 percent of a round. They’re hoping a founder protects their allocation, but you also really need the funds to protect their allocation. That’s definitely been one of the interesting structural changes in seed that has impacted where we see deals from. It’s definitely different than 2013.

Gené: Satya, you were at Twitter as the VP of Product when Twitter was making some crucial decisions about enabling an ecosystem through a platform or becoming a destination. And they went with destination. In retrospect, do you think Twitter made the right call?

Satya: I would argue in many ways we didn’t make a decision. We tried to play the middle. And I think it’s pretty clear, in retrospect, that was the wrong answer. And frankly, I think it was probably clear to a lot of people internally, it was the wrong answer then. There was a whole host of reasons why that played out the way that it did. They did both because they closed down the platform to a smaller set, but they still wanted to be a platform. And of course they’re driving towards being a destination. I think there was a little bit of wanting to be both, but doing neither well.

Gené: Was that the biggest question Twitter was trying to answer at the time?

Satya: It was everything from making sure the service stayed up, to monetization. It was pre-IPO. Platform was certainly a big component of it. You might recall a time when there were no photos or images on Twitter. That was a big decision to do even that. So there were lots and lots of decisions that played into what Twitter became. I do think that it would be a very different service if it had moved to the platform direction. I think potentially a much more broadly used service.

Gené: What are two companies in your portfolio that you’re excited by and why?

Satya: We’re investors in a company called . Shield AI was started by two brothers, one who was a Navy Seal and the other who was an engineer at MIT. And the brother who was a Navy Seal came back for his tour of duty in Iraq and Afghanistan, and he came to the realization that none of his colleagues, fellow soldiers died in battle. They died when they were doing reconnaissance into areas where there was no information about the building or the terrain that they were going into. And it seemedd crazy to him that that can’t be solved in some different way. And so he got together with his brother, and they decided to build a company called Shield AI, which is developing fully autonomous drones for the public sector. These drones can by themselves navigate into buildings and caves. Collect intelligence about what’s going on inside through thermal cameras, regular cameras and then communicate that back to people who can do analysis on it.

Gené: Is this product targeted at the military?

Satya: The public sector broadly, but DoD obviously is a big target of theirs. And so we seeded that company a few years back. Andreessen Horowitz did the Series A. The company is in the process of closing its Series B. And already the impact that companies are having in terms of keeping people out of harm’s way (both military personnel and citizens) is phenomenal. A company that nobody will probably ever hear about. It is based down in San Diego. But a company that has such a powerful mission around ensuring the safety of civilian and military lives. And started by founders for all the right reasons. One we’re super excited to be part of. And an example of a company that stems from the work that we did at Cruise. Because these fully autonomous drones are using computer vision and all the same types of technologies, that allowed us to have a point-of-view around that market.

The other company is called . They started based on the idea that every software company has become a payments company. They all want to be able to accept payments and disperse payment. And the norm for doing that is by signing up with a processor and paying that processor three percent or whatever that might be.

What Finix is doing is creating the software infrastructure for any software company to become a payments company itself. Instead of paying three percent you then turn that into a revenue center. It’s also software driven, it can be adopted and used by companies of any size. And so we think of it as democratizing access to a financial services infrastructure, helping a whole generation of software companies create more value for themselves and their employees and their customers.

Gené: Who do they sell to?

Satya: They are targeting marketplaces, software companies, and financial services companies.They work with companies like Lightspeed POS, they work with companies like Visa. Literally any company that wants to be able to accept payment of some kind, credit card or otherwise.

Gené: How do they charge?

Satya: It’s software based subscription plus transaction. We seeded that company. And , , and led the A recently. Incredible founding story where the founder is a self taught engineer, first generation college graduate, with a Latino American background and just the hardest working guy you could ever meet.

Gené: Thank you I think we have it.

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