Pitch Iteration: 01
Wednesday, 18 November 2015
“Synthetic Intelligence Agency.”
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Hello!
This is an old pitch.
Read the latest pitch.
Invisible Technologies Inc. is a human-powered synthetic intelligence agency that provides world-changing CEOs with 24/7 support from a “Chief of Staff” and “Office of the CEO” that has access to all of their personal and business accounts. We abstract you from the noise of operations, manage communications, frame decisions, facilitate introductions, enable high-level delegation, handle administration, take proactive action in support of your key objectives, and generally make magic happen. Our elite team of operators, engineers, designers, coaches, lawyers, recruiters, marketers, business developers, writers, and other specialists are building technologies and systems that create extreme leverage for our clients, allowing one individual to accomplish more than was previously thought to be possible. For $10,000 a month, we allow our CEOs to be all-strategic, all-the-time.
10–100X Cheaper Than? The $10M/yr A-Team.
The most powerful executives — Presidents, Fortune 500 CEOs, etc. — not only have a Chief of Staff, they have a whole team of specialists that represent “The Office of the CEO”. At the scale with which these organizations operate, suboptimal performance by the CEO is extremely expensive, and even small mistakes can be dangerous. So no expense is spared on creating an operating environment for them in which they can succeed. Depending on how large such a team is, and how diverse and rare the skills and skill-levels are that are represented, it can cost between $1M and $10M a year to run, or more.
Invisible provides the $10M/yr A-Team that you otherwise can’t afford. The CEO of a Series A company can easily afford a Chief of Staff, but can’t afford the $10M/yr “Office of the CEO” A-Team. From a civilizational perspective, this is dangerous, because they need it more than anyone — these are the people that are building the future, solving the hard problems, and we need them to succeed.
Except in rare circumstances, the CEO is almost, by definition, their organization’s biggest bottleneck and limiting factor. An executive might have a full day of meetings from morning till night, and return home, exhausted, to an inbox full of opportunities, and a huge follow-up burden. Most of the ideas, opportunities, and next steps discussed during the day are lost. Knowledge transfer — to yourself (via notes), to your team, and to the strategic relationships that you were meeting with — is a hard problem. Without the right team, technologies, and systems in place to make sure that balls aren’t dropped, and to make sure that information is flowing to the right people at the right time, there’s a massive cost to your organization. You either have to move slower, or you have to staff up — but you can’t afford your very own $10M/yr A-Team just yet. Until now.
It has been observed that the venture industry follows a power law, such that one company in a thousand solves a hard problem worth $10B or more. To CEOs who aspire to lead that company — what is, say, a 1% improvement in thinking or a 1% improvement inorganization worth? In yet-to-be-realized options value, a 1% improvement for a $10B company is worth $100M. A 10% improvement is worth $1B; a 100% improvement is worth $10B, etc. Or, more realistically, perhaps a 100% improvement in the quality of thinking or organization is the binary difference between success and failure, as opposed to the linear difference in outcome between success and greater success. Either way — such is the value of investing in the right CEOs…
Capabilities & Magic Moments
We start with a multi-hour long in-person onboarding session, where clients meet their A.I. and the broader Invisible team. During these sessions, we learn about their vision, priorities, and strategy. We invite them to share intimately about their personal and professional desires and challenges. We receive access to your inbox, calendar, and documents, and go from there. As our clients learn to trust their A.I.s, they hand over more keys. We take security, privacy, and discretion very seriously. Our client list is confidential.
With unprecedented access, we can deliver reactive “Capabilities” and proactive “Magic Moments” like:
C (reactive) — “Pepper, can you remind me to write a performance review for Karen every month?”
C (reactive) — “Pepper, can you put this in our feedback bucket?”
C (reactive) — “Pepper, who else should I meet in New York next week?” “Given your upcoming launch, you should meet Matt Thompson and Sheri Gilbert. Would you like me to set up meetings?”MM (proactive) — “Tony, we’ve set up a dinner for you with Andrew from The NYTimes on Thursday night and you’ll be appearing on Bloomberg at 11am the next morning.”
MM (proactive) — “Tony, your personal website is out of date, so we commissioned an artist to do a take on it. What do you think? A photographer is coming by this afternoon to take your profile photo.”
MM (proactive) — “Tony, you were (way) behind on emails. We’ve gone ahead and starred the ones that seemed most important, written draft responses for others, and delegated or archived items that didn’t require your direct involvement.”
And much, much, much, much more. But there’s only so much space here for examples. Basically, we flexibly respond to our client’s needs, requests, and priorities, and build capabilities accordingly. We introduce a new always-on Capability every Monday and the range of Magic Moments we can deliver grows with every new type of specialist we hire.
A Limited Everything
Every service has limits. This is not an unlimited subscription to everything.
- We ARE the $10M/yr A-Team “Office of the CEO”, but we are not a dedicated team. We split our time across our clients. If you over-delegate to us, we will ask you to clarify which tasks are priorities, and put the rest in a backlog.
- We are part-human. So there are human limits to the human parts of our service. We are not infallible or omniscient or omnipotent. We occasionally make mistakes (and address them by writing post-mortems). We don’t know everything… yet. We can’t force people to do things. We can figure out how to invite George Lucas to your VIP event, but we can’t control whether he will say “yes”.
- We are a startup — we are building technology as we go, hiring as we go, building playbooks as we go (building the plane as we fly) — so we are still figuring things out.
- We do have a discretionary budget to spend on our clients or on behalf of our clients, but recurring expenses or expenses above a certain size must be paid for by the client.
- We will be physically present with you sometimes (we sometimes send agents into the field to support or interact with our clients), but we can’t be physically present all the time. So we can project power into space and time, but most of the time we are in the cloud.
Besides that, everything that you’d expect that $10M/yr A-Team “Office of the CEO” to do, we can do.
So we’re not an Unlimited Everything. More like a “Limited Everything”.
Story — The Past, The Present & The Near Future
Invisible began in spring 2015 as a series of experiments inside of a think-tank called Cheeky. Our thesis was that “technology is at its best when it is Invisible” — when there is no app to install, or website to figure out — when it just works. We developed some capabilities around introduction tracking, network path discovery, group management, relationship management, thread parsing, and document creation — inside of your inbox, with no client-side software.Our early prototypes quickly became indispensable to us, so we started an R&D lab, grew the team, and raised money in October 2015 on the basis of this progress.
It became clear to us that real innovation is expensive. Our most useful capabilities aren’t ready for mass production yet. They are still in prototype stage. They may not be ready for years. But they are already extremely valuable, if you have humans to “stand in the gap”, to force them to work — even if the ultimate solution is 80% humans, and only 20% technology. So we decided that the best go-to-market strategy would be to NOT develop these technologies as separate stand-alone products, but as capabilities of a single high-end service for CEOs. As soon as we decided to look to extremes for inspiration, we realized how vast the “opportunity space” for capabilities like these is. We already have a very long roadmap, and it is getting longer every day, as we discover new needs that our clients have.
Which brings us to today. We have three clients and a growing waitlist, we have an incredible team of 10 specialists, we’re hiring more specialists aggressively and learning fast, we deploy a new capability every week, and we deliver “magic moments” for our clients throughout the week. By the end of January, we’ll have 10 clients with 30 specialists on the team, and then we’ll raise our Series Seed round.
Business Model, Fundraising Strategy, and Organizational Design
For the forseable future, we will abide by the Law of One Price. At $10,000 a month, our model is laid out for us quite clearly. By the end of January, we will have 10 clients paying us $10,000 per month, which means we will have $100,000 per month in recurring revenue, or $1.2M in annualized recurring revenue. With 30 agents getting paid $4K per month, we will only be burning $50K/m (20 agents is break-even). At this point, we will raise a Series Seed round. At a conservative multiple, we might raise $3M on $12M post, although we can imagine more aggressive scenarios. That capital would give us 24 months to reach 100 clients. The first 12 months to commit to long term engineering projects, operational efficiencies, hiring, training and culture investments — while over-delivering on a small set of clients (not growing very fast); and then the next 12 months to ramp growth and hit the target. At 100 clients by February 2018, we could raise a similarly conservative round but with another zero ($30M on $120M post), which would buy another 24 months to accomplish a similar feat: go from 100 clients to 1,000 clients. If we achieve that, then the 24 month cycle would repeat. If we reach 10,000 clients (say, by February 2022) that would represent $1.2B in ARR.
So the bet that investors are making in the company is that there are three economies of scale in this model, which will unfold over the next 6 years:
1 — Software and technology (Use software to fully-automate or semi-automate workflows or parts of workflows. Use hardware / other tech to enable data capture.)
2 — Process, playbooks, and operational efficiencies (Don’t solve the same problem twice. Write a playbook. Turn it into a Capability.)
3 — Specialists (Once you have, say, 2 or 3 of the best recruiters in the world, there are diminishing returns to hiring recruiters, and it mostly becomes important to hire competent juniors.)
Such that:
- When we have 10 clients, we will have 30 agents (1:3)
- When we have 100 clients, we will have 100 agents (1:1)
- When we have 1,000 clients, we will have 250 agents (4:1)
- When we have 10,000 clients, we will have 1,000 agents (10:1)
In the short term, we need to prove that this is an effective service (creates extreme value) not necessarily that it is an efficient service (is extremely profitable). It can become efficient over time.
In listening to this model, one of the things we have discerned is that, in the beginning, our success will mostly rely on incredible human talent. So despite being a raging capitalist myself, I have taken a radically communist approach to the cap table (which doesn’t affect investors, who so far have invested in SAFEs which float above the cap table). At this stage, all Director-level hires are getting the same size options grants (which represent the same % stock that I have), and all Specialist-level hires are getting options grants worth half that size (still very generous). Essentially this will be a company with 30 “co-founders”. I dislike the term co-founders, especially in our organization, for many reasons, but one of which is that implies some link between ownership and control. There are strong economic reasons why the most rational hiring strategy for this company is to broadly distribute incentives — but this is possible because of a tightly-held and aggressive Board of Directors that is willing to use its power to make sure talent and capital are aligned in the pursuit of the company’s interests.
At present, all agents are getting paid the same cash grants ($4K/m). After our institutional round, we plan on paying Agents $4K/m, Specialists $6K/m, and Directors $8K/m. The dollar values of equity grants may go up as the valuation of the company increases, but the percentage values will, of course, go down. Getting the culture right is of paramount importance, and much of that is about getting the “soft” things right — setting the tone with values (humility, passion, hard-work, creativity) and expectations — but it is also largely determined by the “hard” investments being made (who are we hiring, how much we are incentivizing them). A great part of what will make that company attractive to clients is an absurd density of talent and an incredible culture.
Vision — The Far Future & The Far Far Future
In one way, my “Vision” for this company is identical to my last company (Everest) in that it is about human potential — how might we inspire and empower our clients to live up to their full potential as human beings? But the Theory of Change is literally the opposite. Instead of building a consumer application designed for large audiences, this is a high-end service for the 0.000001%. As stated above, real innovation is expensive. In 18th century London, people would throw their refuse out the window, until the 0.000001% started paying for plumbing in their streets and in their homes and creating special bathrooms with porcelain thrones. At the time it must have seemed pretentious and elitist. In retrospect, the toilet revolutionized sanitation, and is right up there with soap & hand washing in saving more lives than any public health invention in history. For a similar, but more recent example, both Tesla and Tata set out to reduce consumption of fossil fuels with electric cars. Tata built the car for the masses. Tesla built a car for the 0.000001%. But by approaching innovation in a capital-unconstrained way, was able to establish a durable technical advantage, push the limits of what was possible, build a huge business, IPO, and continue to invest in cutting edge R&D. They continue to introduce higher and higher quality vehicles and gradually more affordable price points.
With Invisible, we want to take a similar approach to human potential. How can we use technology and our A-Team to deliver magic and empower our clients to thrive? 10,000 clients represents a small fraction of public and private companies that are eligible for this service, but it is enough for us to IPO. 10,000 clients / 7B people on the planet = 0.000001%. The Far Future & The Far Far Future — are arguably a distraction for a startup at this stage, in that there is so much to accomplish between now and IPO, and the question of “What will this company do post-IPO?” may seem so far off as to be irrelevant. But we feel that it is relevant.
Over time, some of the capabilities we develop will go from 80% humans / 20% software to 50% humans / 50% software, or 20% humans / 80% software, or even 0% humans / 100% software. Each of these scenarios represents a huge leap in technical progress, and an opportunity to “spin-out” a capability at a lower price point. So post-IPO (or maybe even pre-IPO), I can imagine the company spinning out multiple capabilities at $1000/m, $100/m, or even $10/m price points — fullfilling our initial scope as an R&D lab — and more importantly, empowering people with the same tools that are now only available to the very elite.
The Clients — Heroic, World-Changing, Visionary CEOs
Despite all the vitriol directed at “the 1%”, some of the 1%, specifically the 0.000001% that we are targeting, are not only “not all bad”, they are vital to our survival as a civilization. There are people in the world that are not only solving problems, but they are solving incredibly difficult, even dangerous, problems. Companies are the best vehicles for solving problems like these, so these people become CEOs. These are not the “entitled assholes” that might fit common stereotypes about CEOs. These are heroic, world-changing, visionaries. True visionaries. Humble, but on a mission.
Our 4 clients so far fit that description. We are onboarding 2 more in early December, and 4 more in January. As we intend on making our clients the most powerful people in the world, we also intend on maintaining incredibly high standards for who becomes a client, so that we can, in turn, maintain the incredibly high levels of conviction necessary to provide incredibly high levels of service.
