The Co-Founders of Medwing, a healthcare recruitment marketplace, which recently raised $47M in a Series C.

Ignorance and Expertise

Angular Ventures Weekly
Angular Ventures
Published in
6 min readMar 21, 2023

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Angular Ventures Weekly Issue #178: For the week ended March 21, 2023

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Ignorance and expertise
David Peterson

I happened across this BBC interview of Orson Welles about the making of Citizen Kane. It’s a fascinating time capsule, and a must watch for every founder and investor out there.

If you don’t know the story of Orson Welles or Citizen Kane, here are the bullet points. Welles was an actor, director, producer and screenwriter. He got his start on the stage and radio (that infamous broadcast of The War of the Worlds was him). After some initial success, he was approached by RKO to make a movie. He had never made a film before. He had never been in a studio before. Still, after a year’s long negotiation, RKO agreed to give him complete creative control over a project of his devising. That project became Citizen Kane. Welles was just 25 years old. Citizen Kane has since been cited as the greatest film of all time, and topped “best of” lists from the American Film Institute and British Film Institute.

Okay. Fast forward to 5:50 minutes into the interview. Welles describes the negotiation with RKO. And then the interviewer asks, “where did you get the confidence to make a film with such…?”

“Ignorance! Sheer ignorance,” Welles butts in. “You know, there’s no confidence equal to it.”

That’s it. That’s the line that gets quoted. And for good reason. That’s a great line! But keep listening.

The interviewer asks Welles how that ignorance showed itself on set, and he immediately responds: “I thought you could do anything with a camera that the eye could do.”

That’s not true, of course. There were serious technical limitations back then. And those who were brought up in the business, Welles explains, were taught all the things the cameraman would never attempt to do for fear of failure.

But, thankfully, Welles had a cameraman of great talent who wasn’t afraid to fail. Welles continues:

“I had a cameraman who didn’t care if he was criticized if he failed and I didn’t know that there were things you couldn’t do, so anything I could think up in my dreams I attempted to photograph.”

“You got away with enormous technical advances, didn’t you?” the interviewer prompts.

“Simply by not knowing they were impossible,” Welles responds.

Phew. That’s a good line too.

Here’s my takeaway from all of this.

Whether as an investor or a founder, deep expertise in any area can be blinding. Investors can be blind to new companies in specific verticals, pattern matching from their own past failures. Founders can be blind to new opportunities within their industry, because a similar idea failed in the past.

But I don’t think this means we should throw expertise out all together.

The real secret to Welles’ success wasn’t his ignorance, as that first quote suggests, but the marrying of his ignorance with his cameraman’s deep technical expertise. That’s where the magic lies.

So, whether you’re an investor, a founder, or something else entirely…ask yourself: in the areas where you’re an expert, are you flexible enough to attempt the “impossible” like Welles’ cameraman? And in the areas where you’re ignorant (but confident), do you have someone you can rely on to provide technical expertise to guide you towards the limits of what’s possible.

David

EVENTS

Mar 22 / Cracking the Code: The Secrets of Peakon’s Success
Kasper Hulthin, Co-Founder, Peakon

FROM THE BLOG

Principles for AI Product Design
Or how we could all learn a little from Google’s conversion optimizer.

Has Everyone Gone Chatbot Crazy?
Large language models have taken the (tech) world by storm, and all of a sudden it’s 2016 again.

Why (and How) Investing in Billboard Advertising Sometimes Makes Sense
Part I of a series on non-standard growth experiments.

The Hierarchy Trap
Hierarchy is an important tool for providing structure and alignment, but it can easily grow like a weed if not managed.

EUROPE & ISRAEL FUNDING NEWS

Germany/Health. Medwing raised $47M for its on-demand hiring platform for the healthcare industry.
Israel/Health. Protai raised $12M for its AI-enabled drug discovery and development platform.
Austria/ML Tooling. Finmatics raised $6.5M to provide enterprises with AI-based accounting, tax, and account payable processing solutions.
Israel/SW Development. Ply raised $5M for its no-code platform that embeds features into existing applications rather than building applications to add to them.

WORTH READING

ENTERPRISE/TECH NEWS

Cloud Spending. Battery Ventures published their annual cloud spending report, and they report that the vast majority of companies are either increasing their IT spend, or holding it flat. “Contrary to what one might expect, the vast majority — 73% — of our survey respondents expect their enterprise tech budgets to stay flat or increase in 2023. Among respondents whose budgets are shrinking in the coming year, renewals are the main driver of those reductions. For founders, this means your sales teams should aggressively focus on understanding customer health, utilization and value entering the contract-renewal cycle. Having those insights early is key to maintaining customer relationships and ARR retention.” But as Daniel Dayan tweeted, not all the news is good. “Last week marked the end of CY22 earnings w/ GitLab reporting Q4 earnings. Cloud software companies saw growth decelerate by 26% on average in 2022, compared to just 9% the year before. The convergence to cloud provider growth %s and absolute decel are what spooked us most.”

Meta to divest Kustomer. According to the Wall Street Journal, Meta is looking to unwind one of its largest acquisitions by selling off Kustomer. “Kustomer provides software for customer-service operations that takes conversations from different channels and puts them on a single screen. Meta, then called Facebook, agreed to acquire it in 2020 in a deal that valued the company around $1 billion, saying that the acquisition tied into its efforts to enable businesses to use its WhatsApp and Messenger apps for customer service. The deal closed in 2022 after extensive regulatory scrutiny. Since the deal’s closing, the revenue of the customer-service platforms and chatbot company has flattened while it has burned through around $200 million between its operation and one-time expenses, according to the people familiar with the plans.”

GPT-4 picks up coding. GPT-4, which was announced by OpenAI recently, is apparently capable of increasingly complicated coding tasks.

HOW TO STARTUP

Growing in your valuation. Jason Lemkin wrote a sobering piece on how hard it can be to “grow into your valuation.“Acquisitions get tough when you are overvalued. Not impossible, things can be worked out, but tough. If you raised at $1B at the peak and are worth $200 today, you’d have to sell for $2B or more to make everyone truly happy. That could take 5+ more years, best case.”

HOW TO VENTURE

SVB reflections. In the wake of SVB’s failure, many began to reflect on the importance of the institution to the tech ecosystem, particularly in the US. Both The Economist and The Information reflected on its significance, with the Information writing: “Bankers at SVB recently proved forgiving when his startup ran into trouble, Herndon from The Guild noted. Venture capitalists backed out of a funding round last year while the company still owed money to SVB. “I don’t know if another bank would’ve shut us down in November when things were looking a little tight. They wanted to preserve the reputation as a startup founder–friendly bank.” The leeway gave The Guild time to pivot its business model from providing hospitality services to selling business software to other travel firms. Some founders and investors perceived institutional banks as historically less responsive or less willing to lend to riskier startups with smaller loans. “If things turned bad, you could reason with them,” said Oren Zeev, an investor in startups including Navan, Houzz and Tipalti. “You didn’t have the feeling you were talking with faceless, ruthless bankers. You felt like you were talking with humans who understood the situation.””

PORTFOLIO NEWS

Tensorleap’s explainability platform is being leveraged for effective transfer learning.

Reco is hosting a fireside chat on March 23rd with Sam Curry, CISO at Zscaler and Tal Shapira, Co Founder & CTO at Reco.ai, as they discuss strategies to manage sensitive SaaS data by mitigating insider threats and unmanaged 3rd party risks.

Forter has partnered with Wix to increase approval rates while minimizing fraud.

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