Welcome to issue #68 of next big thing.
We started Footwork five years ago, and have written annual posts about the journey: at inception, year 1, year 2, year 3, year 4, and now this one to mark year 5.
Year 5 felt like Footwork’s most important year yet, by a wide margin.
We made more investments than in any other year – seven (compared to four in each of the past two years) – taking our total portfolio to 24 active companies. We made our final two investments out of our first fund, bringing the initial investment period to a close after over four years, and activated our second fund. Our increased pace was downstream from the highest quality set of potential investments we’ve seen in any year — many more companies that we went deep on as a result of our excitement for the founders, market opportunities, and business momentum.
What are we getting excited to invest in? The themes we outlined at the start of the year still feel relevant. There are really two classes of companies we’re spending time:
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AI-native small teams building products that leverage the frontier of the models’ capabilities, or are enabling the model companies to be successful, and hopefully aren’t in the kill zones of the model companies themselves 😏 – for example, Anything, Confido, Fuse, Protege, and Waldo
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Teams that are leveraging AI but don’t have AI as the key “why now” for their business – instead, there’s another market or secular tailwind that has to chance to drive extraordinary growth – for example, Benable, Honeydew, Snout, and a few unannounced investments from the past year in areas like consumer healthcare and marketplaces
When we started Footwork in 2021, we were thinking about AI given our involvement prior in companies like Canva and Stitch Fix that were early pioneers in leveraging ML to improve their product experiences. But we weren’t all-in on AI by any means. Five years in, every portfolio company we work with touches AI in a meaningful way. Some are leveraging AI to automate the entire company. Others are playing in markets that didn’t exist until the past couple of years of AI progress. Morphing ourselves to be a more AI-native investment firm has been a creative and generative experience, and something we are very excited about for the year ahead as we automate Footwork.
What gets us most excited as we reflect on the past year is the fundamental progress and revenue momentum we’re seeing across our portfolio. Some examples:
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Elicit and Power won some of the biggest pharmaceutical companies in the world as customers
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Felt and Heard infused AI deeper into their products and organizations, increasing growth and capital efficiency
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GPTZero continues to build the category-leading product and brand in AI detection, and publicly disclosed that it has grown quickly and profitably to tens of millions in ARR
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Organic shoutouts from customers like Sam Altman was increasingly the norm for Cradlewise as it delighted parents and babies with its products
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ReflexAI and Table22 compounded their businesses while refreshing their brands
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Tracksuit publicly disclosed more than 1000 customers and 240% annual growth as it announced its Series B
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WindBorne is growing very quickly in revenue while building such a unique, N of 1 company — collecting its own proprietary data through its weather balloons, building its own increasingly accurate weather forecasting models, and rewiring their organization with AI (founder/CEO John Dean’s Substack is worth following)
We want Footwork’s brand to be built based on the success of our portfolio, not in advance of it. This takes time, especially when you invest like we do at the early-stage with just a handful of new investments every year. If year 5 is any indication, we are now well on our way. We were also grateful this year for recognition such as Nikhil’s naming to the Forbes Midas Seed List and Mike’s to the Forbes BLK Masters 50 list. We both did a rare joint podcast recently, with Turner Novak on The Peel, in case of interest to hear more from us. We won’t rest until Footwork is a firm that many of the best founders think about going to as they raise their Seed and Series A rounds.
Onward to Year 6!
I started next big thing to share unfiltered thoughts. I’d love your feedback, questions, and comments!
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