Top AI Investor Predicts How The AI Wave Will Play Out
EP 92 of The Logan Bartlett Show: Untold stories from tech's inner circle
Mike Volpi is a top AI investor and GP at Index Ventures, where he’s invested in companies such as Confluent, Scale AI, Sonos, and many others. In our discussion, Mike reveals the frameworks he uses for making investment decisions and his predictions on the trajectory of the AI wave.
Click here to view the episode transcript | Watch on Youtube | Listen on Spotify or Apple Podcasts
✉️ Episode Memo
Who will win the AI wave?
Mike predicts the largest share of equity value generated by AI will flow to existing players (Microsoft, Google, Amazon, etc.), thanks to three advantages incumbents have…
Competence moat: Unlike in the internet boom, the current competitors in AI are in tune with the AI plot and highly capable of making waves.
Capital moat: Also unlike the internet boom, AI infrastructure is extremely capital intensive to build.
Data moat: The quality of incumbent data is debatable, but they certainly have a ton.
Right now, strong judgment matters more than velocity.
Mike’s surfing analogy for making investments
A winning investment requires…
the wave: a favorable market trend
the board: the right product/technology to ride the wave
the surfer: skilled management to exploit the conditions effectively
No one company can control a wave, they can only time it correctly. Mike argues the surfer is the most important element - a great entrepreneur who leverages their technology and team to navigate a big wave perfectly.
If you have all three pieces, then you have a winning investment. If you have only two, you need to think hard about it.
Dealing with investment mistakes
We all hate making mistakes, and it’s natural. When people made mistakes 10,000 years ago, they’d get eaten by lions. Now, it’s usually not that big of a deal to make a professional mistake, and you’ll probably have thousands of second chances.
The key is to forgive yourself and move on, especially if your decisions were made using rational processes and sound frameworks. Focus on the decision-making process, not just the outcomes. Understand that not every choice will be perfect, and it’s the approach that matters most.
The biggest problem operators make as investors
Mike notes that operators tend to think too much in the first person, as they believe, “if I had this product and this market, I could lead this company to win.” The problem? It’s not you. It’s someone else running the company.
Operating-minded investors must embrace the founder’s ability to execute against an idea. Over the last 15 years of investing, Mike’s learned that “it's more about the people and a lot less about the technology.”
Also hear about Mike’s mindset as a board member, more practical frameworks, and stories from his days at Cisco and Index Ventures in the full episode.
⭐ Trailer
📱 Follow The Show!
If this was helpful to you, please consider forwarding!