Who Can Commercialize New Technologies?

When a new technology becomes consensus but is still somewhat novel or hard to parse, investors often try to distill companies into clear-cut and easily “findable” metrics in order to make decisions.

In many cases, this challenge pushes investors to focus on a consistent factor in startups—founders. And as they search for founder-company fit, they anchor on the next clearest signal—founder pedigree.

This framework can feel valid in technologies that are pre-breakthrough or -Cambrian explosion. Investors are looking for those capable of changing the world and doing something that has never been done before. In order to commercialize these breakthroughs, it’s a commonly held view that the “original” inventors—the scientists who’ve pioneered the breakthroughs—will be necessary to push technology to a production-ready state.

As an industry shifts from pre-breakthrough to post-breakthrough, you might see high-pedigree founders raising staggering amounts of money and capitalizing on investor narrative distillation and hype cycles. 

As the first investor in companies like RunwayML, Wayve, and Deepgram, and the managing partner at venture capital firm Compound, this phenomenon is something I’ve seen often—especially in AI over the past 24 months. We live in a post-transformers and post-GPT world. At first, most of the well-funded AI labs and companies were founded by the original authors of the paper “Attention Is All You Need” (Vaswani, Ashish & Shazeer, Noam & Parmar, Niki & Uszkoreit, Jakob & Jones, Llion & Gomez, Aidan & Kaiser, Lukasz & Polosukhin, Illia, 2017), which introduced the groundbreaking transformer model—a neural network that can track relationships in sequential data to learn context and meaning. For example, Vaswani and Parmar went on to found Adept AI Labs, and Shazeer founded Character.AI. There’s now a second wave of stealth companies coming from those early on at these larger labs (or those who were senior hires for short periods of time).

This dynamic is not a rare one. Generally, in the 1-2 years following a breakthrough, incumbent entities rise massively in value, creating golden handcuffs for some and parachutes for others. At that point, early employees often look at the nuanced disagreements they have with the incumbent approaches and gather the confidence to leap into the founder pool. This results in the second-wave dynamic described above.

However, as a given space’s breakthroughs become better understood, those responsible for research breakthroughs might not be the right founders to innovate and capture its value—although it is likely they will be incredible team members. And investors tend to overrate how well these individuals can take a given technology toward a scalable product or down a cost curve while navigating commercialization and GTM. 

Understanding how knowledge spreads post-breakthrough