In recent years, artificial intelligence has been gaining momentum, penetrating into all spheres of our lives. In light of this rapid development, it is important to understand how to adapt to the new realities and take advantage of the emerging opportunities. For this purpose, we have created a program in collaboration with Nikolay and Marina Davydov, founders of the Davidovs Venture Collective (DVC), a fund specializing in early-stage investments in AI startups. We conducted an interview with them where they shared their entrepreneurial journey, insights into the future of AI, and details about the program.
Could you tell us what you do? Who are you, and how did you reach the point you are at now? Nikolay: We are Marina and Kolya Davydov, a family of entrepreneurs who have been working together for 16 years. We started together at Cisco and quickly transitioned into the venture capital world. The first fund we worked with was called iTech Capital in Russia. We then established a second fund in the United States called Gagarin Capital, specializing exclusively in AI investments. We began in 2014. At that time, there was fierce competition for promising companies in Silicon Valley, so we decided to carve out a niche to build expertise. We declared ourselves to be the best fund investing in early-stage AI startups that didn’t necessarily aim to become unicorns. It worked out quite well, with 12 successful exits out of 20 companies. We no longer have exact numbers because our partner acquired the fund two years ago and went separate ways. Additionally, we built an AI startup called Cherry Labs, which we recently sold. We can’t go into too much detail, but overall, it was an interesting journey. The company existed for 5.5 years, with 4.5 of those years under our leadership. We’ve had experience in both corporate and startup environments, so when we interact with entrepreneurs and startup founders, we have a broad range of experiences to draw from. We understand them, and they understand us, which works well. Could you provide more details about your current fund? What sets you apart from others in this competitive venture capital landscape in Silicon Valley? Marina: We tried to learn from our previous experiences. Before starting this venture, we sat down and thought: if there were no constraints on us, what would we do differently? We realized that it was crucial to involve as many people as possible in the investment process and the fund, not just formally, but in a way that would allow their expertise to benefit founders. This led us to the concept of a rolling fund, something that was quite new at the time and hadn’t been done before. Nikolay: What Marina is talking about is an example of first principle thinking. It’s a methodology favored by Elon Musk, where an experienced entrepreneur reinvents something from scratch. We had 14 years of experience in venture capital at the time, and we decided to ask ourselves questions: why does this work the way it does? How would we do it differently if there were no constraints? We attempted to reinvent early-stage venture capital in this manner. The foundation of our fund is a community of people who help each other. When we were founders ourselves, the best assistance we received came from other founders who were at a similar stage. Why do masterminds work well? Because people in masterminds have roughly the same problems, or someone in the group has already solved the problem and is at the next level of it. This exchange of experience creates a cluster of minds. Initially, we assembled our friends as an experiment—people we had invested in and worked with before. Then people they invited started joining, and the community began to grow on its own. It eventually grew into a community of people with expertise and a desire to help startups. Out of 105 people, one-third are engineers in corporations, including several employees from OpenAI, Microsoft, Google Brain, Meta Platforms, and Snap. We also have a service hub. We assist founders with issues they can’t solve on their own. In the fund, we have people capable of solving problems that aren’t solved with money or require very large sums. That’s why the community works so well.
Please share your vision for the future. What is happening in the world of technology right now and how will it affect the future? Nikolay: I am a techno-optimist, and we believe that any problems of humanity can be solved with technology. Right now, perhaps the biggest technological revolution of our century is taking place. Yuval Harari put it very well: “Language is the operating system of humanity. Everything that humanity has created over tens of thousands of years of history is described by language, and there is no element that cannot be expressed in words.” Now AI has hacked the operating system of humanity, and because of this, we can place AI in any point of the human ecosystem. We can use algorithms anywhere to simplify people’s lives. The benefits of AI are reaped by all of humanity, as businesses and employees become more efficient, we lower prices and increase the value we produce. We optimize logistics better, burn fewer resources, and learn more easily. However, the business win will be distributed unevenly. AI allows you to reinvent your own business almost from scratch, working on the principle of first principal thinking, which I talked about earlier. And the speed at which changes occur now decides what your market share will be. This is one of the reasons why we wanted to create the program. I love to give the relative experiment as an example. Imagine we are looking at the lumberjack market in the 19th century, people are chopping wood with axes and selling it, making boards out of it. And suddenly 25% of the lumberjacks have chainsaws, and 5% of these chainsaw lumberjacks have made combines that automatically stack the boards. The price of wood will then plummet, people with combines will occupy 70% of the market, lumberjacks with chainsaws will have 20% of the market, and everyone else will be jostling in the remaining 10% of niche markets. Wood is a limited resource, so at some point the price will go back up. But at that moment you can completely rebuild the market, and those businesses that are now quicker to orient themselves and better reinvent themselves using new technologies will be able to seriously occupy the market. There is a belief that with the development of AI, people will be left without work, there will be no money, and violence will begin. I think that people will not be left without work, because the work will simply be redistributed. Some companies will lose market share and lay off people, while some will increase demand and they will hire people. I think structural unemployment is likely, which will be due to the transition from one industry to another. If there is something that public institutions really should do in the next 10-15 years, it is to engage in education. Our education system is not ready now, it continues to teach hard skills, while it is important to teach creating something new. Because now, when we look at the labor market, it is difficult to predict what will happen to it, because the volume of changes is huge. It is impossible to know everything here. Talking about the program, we build content in such a way as not to give people a playbook, a ready-made book with solutions, because no one knows what is right. We want to give a framework, a system of how to think, so that from this they can already assemble ready-made solutions. What do you think, who is this program primarily for? Who should come to Silicon Valley?Nikolay: I think it’s founders and business owners who have large enough companies that they have managed to catch this scale from these changes. This is roughly from two hundred to several thousand employees. And in general, any business owners, as well as people who want to start a startup in the field of AI or people who look at venture as a new area for themselves, in which they would like to understand, see what is happening. The other day on the way you told me about the practice when participants will be able to pitch their ideas, what they will be implementing in their companies, how they will automate. Can you tell us more about this? Nikolay: When I taught, I realized that learning by doing is just one side of the cornerstone. We learn by listening, learning by teaching, learning by doing, so we need to do three things: listen, try to teach someone, and try to do it. I want people to at least start visualizing how they will apply AI to their businesses. Or maybe they came up with a new product using what they learned, talked about it to others, got feedback from them. And through this process, we will increase the density of knowledge and the effectiveness of this study week many times over. Summarizing the program, it will take place in Silicon Valley from November 11-18. It will be beneficial for entrepreneurs, those who want to launch their startup in the field of artificial intelligence, and those who want to start investing and get involved in AI. The speakers will continue to engage with participants, answer questions, and provide support. As a result, many new contacts in the field of AI will emerge to address arising challenges.The program is organized so that each participant returns with a roadmap and understands what they want to do, considering the knowledge they have gained here. At the end of the program, participants will pitch their roadmaps to each other, sharing the insights they have gained from the program.
