Member Profile: Ullas Naik

Founder and General Partner at Streamlined Ventures

Ullas began his career as a Wall Street Research Analyst and then transitioned into venture capital, building two venture firms before founding Streamlined Ventures as a solo General Partner 11 years ago.  At Streamlined, he leads or co-leads seed rounds, working with visionary founders to help them create exceptional business- or consumer-focused software companies that use AI, data science and software automation to transform the dynamics of their respective markets.

In Journal, Ullas shares how investment outlooks are positive and why San Francisco is the place to be.

Tell us a little about the types of companies you fund.

We’ve been investing in the various iterations of AI for a long time.  The building blocks of the AI revolution can be traced back to the days when business intelligence technologies started to get deployed in enterprises.  Over time, as data volumes continued to grow, new technology such as data warehousing and data lakes arose to store and analyze these large volumes of data.

At the same time, companies in certain industries started to experiment with neural networks to get more intelligence out of their vast volumes of data.  The current generative AI technologies stand on the shoulders of all of the prior iterations of data science and AI technologies that were developed over the last 20-30 years.  We invest in companies that apply modern AI technologies, data science and software automation in any industry as long as there’s the potential to use these technologies to change the dynamics of those markets.

How has the seed stage investment landscape changed over the last decade?

The seed stage ecosystem has exploded in the last 10 years.  Not unlike other parts of the venture capital stack, seed stage has become a large and mature category in itself.  In the last 18 months, it has been challenging for many newer seed stage VCs to raise capital.  That said, signs are now emerging that the environment for raising seed stage funds might be getting better.  In the last couple of years, venture capitalists have become a lot more judicious about where they’re deploying their remaining capital because there is still uncertainty about downstream capital raising and exits.  That said, seed stage activity has certainly begun to pick up despite that.

Looking ahead, what do you think will happen in the world of finance and investment, primarily through the lens of the San Francisco Bay Area economic makeup?

We need to see stabilization in the broader markets, and that’s already starting to occur.  The sell-off that happened dramatically last year is beginning to reverse.  Slowly and steadily, risk capital is returning to the public and private markets and as a result, investments are increasing.  This summer we saw a meaningful increase in follow-on investment activity across our portfolio, albeit in proven companies with clear traction.  By next year, I expect we’ll start seeing investments in companies that are more speculative or ambitious in their mandates.

Are there any companies you think are particularly exciting and worth paying attention to?

One of the fastest-growing companies we’ve ever backed, which we invested in two and a half years ago, is called Fl!p, which is in the social commerce space and thriving in a recessionary environment.  We have companies applying AI in the context of the airline industry: FLYR is building a revenue management system for the entire airline industry using AI to predict what fares should be, making airlines a lot more profitable.  We have a company called Medable doing distributed clinical trials in healthcare, leveraging data science and AI. Other very promising companies include Rappi, EasyPost, Rescale, all of which have reached pre-IPO scale.  In addition we have a lot of younger companies that have immense promise.  You can find them at our website – www.streamlined.vc.

There’s been a lot of talk about SF’s Doom Spiral. After Mayor London Breed’s attempts to encourage tech workers to return to the city failed, the city is looking at incentivizing more diverse sectors, such as biotech, to locate here. Will city policies impact which companies succeed here?

It’ll help on the margin.  The primary driver for the SF Bay area is AI, which could spawn thousands of companies in various vertical markets. This type of fundamental technology breakthrough drives innovation and draws entrepreneurs towards innovation hubs. In biotech, a lot is happening computationally, so while you certainly need a wet lab infrastructure, you can do a lot through software, which the Bay Area is well set up for.  We’ll get more entrepreneurial activity and biotech, maybe clean tech, coming into the Bay Area, but the bread and butter will still be software, especially focused on AI.

I’ve never believed in government incentives to drive innovation, although they can provide structures and can provide the initial impetus for some emerging industries.

Will the Bay Area continue to be the top destination for entrepreneurs in the coming years, or will they establish ventures elsewhere?

Between Stanford, the University of California, and other university systems, the feeder system of talent is significant in the Bay Area and is entrepreneurship oriented. Structurally, that’s not going away.  There used to be a time when I only invested in companies in the SF Bay area before I expanded my mandate and started to look at entrepreneurship in New York and LA.  That said, we’ve found that companies find it hard to hire high-caliber technical talent in those markets.  There is a limited supply of 10x engineers that are needed to drive big breakthroughs, in those geographies, while that talent is still abundant in the Bay Area. These top engineers have gone through the ranks at Google, Meta and other prominent Bay area incumbents and experienced a tremendous amount of training that we can leverage and repurpose into new companies.  For instance, we have an incredible company in LA for which we’re hiring on the business operations side locally in the LA market, but we set up a San Francisco office where we’re building our technical and AI talent because we couldn’t find the right engineers in LA.

What types of businesses in New York and Los Angeles appealed to you from an investment perspective?

Specific industries were attractive.  There’s high-quality work being done in FinTech in New York, for instance, and in media and media-related companies in LA.  The caliber of entrepreneurship in hubs outside the Bay Area has increased dramatically in the last few years, which is another reason that we began to look at companies in New York and LA.  We looked at Austin and Miami, too, but haven’t found as much organic entrepreneurship that is worth pursuing in those markets as yet.

As more companies allow remote work, will the lack of in-person collaboration dampen the quality of career training and the evolution of top talent?

Yes, it’s a factor. When making new investment decisions, I actively consider whether to back a fully remote or hybrid company.  Compared to companies where staff work at their location in person, I’ve noticed that remote companies are slower in terms of fostering company culture and speed of communications and innovation.  The case of a first-time founder building an utterly remote company is a complex equation for me – I will likely not invest in that company anymore.

What is the optimal office space setup for a startup, in your opinion?

Generally, I prefer that companies have centers of gravity—perhaps two offices, one in the Bay Area and one elsewhere.  We’d want the team to come into the workplace at least three days a week because there’s so much value in serendipitous interaction when people meet—people working from home are always a little isolated and are not in the flow enough.  We’ve noticed this in many of our companies: even bringing teams together every quarter is too episodic and inconsistent.  You can hire remotely for some functions and have an engineering base in another city, but leadership needs to be close to each other.  Compared with early this year, we’re seeing more and more companies creating mandates requiring staff to work at the office. I think we’re going back to the model of tighter integration, and while going back into the office full-time might be unrealistic, three to four days a week in person and then working from home is a good setup.

How is the Streamlined Venture office culture organized?

We have a six-person Private Office at CANOPY FiDi, where we spend two or three days a week.  The rest of the time, we work from home.  During the pandemic, we made it a point to meet as a team on Zoom daily to avoid the negative impact of distance.  Since we’ve been back in person, I’ve noticed an elevated level of interaction and camaraderie.

Why did you decide to lease an office at CANOPY?

At my prior venture firms, we had a traditional office.  Once I formed Streamlined, as I was the only person initially, I didn’t see the need for an office and worked from coffee shops. Once we started building a team, we worked out of WeWork, but I found that unwieldy.  We decided we needed a more formal space that was more high-end, with better amenities, and that wasn’t so crowded; as we’re meeting a couple of days a week, a co-working setup is better than maintaining a dedicated office space that sits empty much of the time.  We signed up for CANOPY’s FiDi location three years ago as I’m coming from Palo Alto, and it’s convenient for the freeway and Caltrain and for our team members coming from the Marina District in SF.

What will the next five to ten years hold for Streamlined Ventures?

We’ll keep doing what we do: raise funds and deploy them into exciting companies that change industries.  Our team comprises myself and a principal; we’ll add an analyst to the team soon. After our next seed and opportunity rounds, we’ll have 10 funds; those two new funds will take us two to three years to deploy.  I have a lot of pattern recognition—I’ve been doing this for a long time—and we have a big brand in the seed space, so we’ll continue to leverage that to invest in great companies and great founders.

What are your long-term benchmarks for success?

We want to generate a minimum 5x return when we raise our seed funds. Our earlier seed funds are trending closer to 10x’s.  I want to optimize getting as many of our seed funds towards 10x and our opportunity funds towards at least 5x. If we can do that consistently, we’ll be a very successful asset manager for our investors.

What’s the best piece of advice you’ve ever received?

We live in a high-velocity world. Having a sense that this situation, too, shall pass is essential to hold on to because we can get caught up in the moment and overreact to things. Putting things in perspective is important.

Is there a fact everyone should know?

India has crossed China in terms of overall population and will exceed China this year. The United Nations Population Fund (UNFPA) “State of World Population Report” estimated India’s population at 1.4286 billion by mid-year, compared to 1.4257 billion for China—that’s 2.9 million more people.

Have you read any compelling books recently?

How To Change Your Mind, Michael Pollan’s book on psychedelics, was excellent.

Do you have a favorite source of inspiration?

I meditate, and I’ve developed a personal practice anchored in gratitude from which I have received a lot of wonderful insights about life.

How do you spend your free time in the Bay Area?

I love to hike Windy Hill in Portola Valley. Depending on my free time, my goal this year is to hike Half Dome in Yosemite.

I also love to eat out. In San Francisco, Kokkari, State Bird, and Cotogna, sister to three-Michelin-star restaurant Quince and close to CANOPY Jackson Square, are staples. In Palo Alto, I like to eat at Asian-Fusion Tamarine and Evvia.

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Bio

Ullas is the founder and General Partner of Streamlined Ventures. Previously, he was the co-founder of Cota Capital and a senior member of the investment team at Globespan Capital. Ullas is a seasoned venture capitalist, angel investor, and entrepreneur with over 25 years of early-stage investment experience across more than 500 companies. A large number of those companies have gone on to become significant publicly traded companies or were acquired in large outcomes.

Since the inception of Streamlined Ventures, Ullas has been investing in various iterations of what is now broadly referred to as ‘AI.’ His knowledge of the ecosystem is vast. He believes that the next 5-10 years will see the emergence of increasingly powerful AI technologies for consumer applications and every business vertical market, meaningfully transforming the dynamics of those markets.