In this episode of the EUVC podcast, Andreas discusses with Hannah Seal, Partner at Index Ventures.
Andreas and Hannah explore the dynamics of founder relationships, the European venture landscape, and more with insights from the recently launched book - Scaling Through Chaos.
As a Partner at Index, Hannah focuses on B2B software and enterprise AI applications. She works with founders, reshaping every sector of the economy by digitizing workflows, automating manual processes, and transforming the services sector at large.
In close to a decade at Index, she has built a track record of helping visionary entrepreneurs from day one and supporting them as their companies scale. She is particularly energized by founders who leverage technology to tackle daunting problems in large and traditional sectors previously deemed too hard to tackle.
Her investments at Index include DataSnipper, who supercharge auditors; Remote, a platform to hire, manage and pay global teams; Multiverse, the company bringing apprenticeships into the digital age; and Fonoa, tax technology for global businesses.
Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.
✍️ Show notes
We believe in giving you our guests' thinking directly and unaltered. Therefore, no changes, no AI, no nothing has been done to the following sections.
Latest fund announcement by Index Ventures & Index’ European Roots
3 decades with a team across 10 time zones, 3 offices, and 3 funds — from seed to venture to growth, from SF to NY, London to Tel Aviv
To date, 108 billion+ companies, 23 $10bn+, 57 IPOs. Portfolio today includes Figma, Wiz, Revolut, Dream Games, Remote, Service Titan
Momentum. NY expansion. 20 people in 2 years, this includes Vlad as a new partner in SF. H1 busy: One of the busiest investment periods across all stages of investment. Portfolio raising significant rounds including Scale, Wiz, DeepL, DataSnipper.
Now — historical inflection point for startups. Convergence of multiple factors has a compounding effect.
AI — Technological advancements, including AI. New waves driven by AI: manufacturing, drug discovery, legal, services, etc. Sectors accelerating due to AI: productivity, design, healthcare, fintech, ecommerce
Talent — Deeper talent pool unlike ever before (Scaling Through Chaos)
Geo — Global nature of entrepreneurship
There is a new era that favours founders, talent, and VCs with a long-term view. The era of the quick buck mentality is over, and that's a good thing.
It’s all about the people: We see venture is a craft and a relationship business. We see ourselves as scaled artisans. Index invests in people who are obsessed with their idea. We’re looking for people who would do what they were doing whether anyone invested in them or not.
Scaling Through Chaos - What does it mean for European founders?
Scaling Through Chaos — The most extensive research ever performed into the growth of VC-backed businesses – analysis of 200,000 career profiles at 200 companies including Airbnb, Datadog, Figma, Stripe and Wiz.
For high growth companies, a degree of chaos is a feature, not a bug. It would be futile to try and stamp that out; what you want is to find a temporary equilibrium that lets you surf the edge of chaos, with just enough structure to stay upright.
Building an outlier business is all about people. The most successful founders spend 50% of their time on people-related matters.
Many tell us that this has been the biggest "culture shock" running a startup. The 50% of time spent on people stays fairly steady with scale, although the mix of people tasks evolves significantly (i.e. less hiring & onboarding, but more leadership alignment & internal comms).
Scaling through chaos means running a different company every year, with different leadership and different teams.
Founders need to constantly ask themselves whether their existing team can take them to the next stage whilst also identifying, leveraging, and developing HiPo’s (high-potential employees).
The ‘messy middle' stage demands a choice between expertise and loyalty.
Your early team won’t take you to your destination, and it’s common for the founding CTO to step back. 5-6 of 10 initial hires to remain by 50 headcount, dropping to 3 by 250, and just 2-3 at 1,000
Regardless of sector, technical talent and AI specialisms are more important than ever.
How you start shapes the trajectory of your technical team, even hundreds of employees later.
Experienced founders recognize & can tap into this, with 61% ‘highly-experienced’ tech hires compared to 48% for less experienced founder.
Here is a Scaling Through Chaos we produced recently with cofounders and leaders of Notion, Revolut, and Wiz.
Are professional services investable as a VC?
**Services has always been the dirty word in venture - not scalable, low margin, operationally complex. But, with AI, this is all changing.
Legal, audit, tax, accounting, compliance… All the fun ones! But, AI is opening up a huge opportunity for founders to breath life into workflows that haven’t been touched since the 1980s and 1990s.
The 2020s spell huge change for these industries! From Vidya Peters at DataSnipper empowering a new generation of auditors to Ross McNairn at Wordsmith and James Ding at Draftwise helping lawyers focus on what matters, technologists are seizing a revolutionary moment for professional services. Leaders like Sam Ross at Remote and Andy Cooke at TravelPerk are setting new precedents for working with AI to help their teams do more with less.
At Index, we’ve spent a lot of time exploring the opportunity in this sector, with thanks to folks like Randy Johnston and Vedika Mehera who have helped us scope out the real-world impact on jobs and workflows.
Head to our blog for a deep dive into the real change happening today and get inspired to shake things up in these industries ripe for disruption.
A new wave of AI tools is emerging, not only promising to transform back-office workflows but marking a shift towards “services as software.” Major opportunity in how AI is applied to unstructured data to automate the back office and transform the job market.
The 2020s spell huge change for these industries. From Vidya Peters at DataSnipper empowering a new generation of auditors to Ross McNairn at Wordsmith helping lawyers focus on what matters, technologists are seizing a revolutionary moment for professional services.
When looking at founding teams – it needs to be a mix of sector and tech expertise – not one or the other.
Significance of AI fitting into existing workflows. Instead of requiring large firms to fundamentally change the way they work, professionals should be able to use AI tools directly within the software they’re used to (DataSnipper-Excel and Draftwise-Word).
Founders have an opportunity to tap into existing services budgets rather than ask customers to carve out new software budgets. Many companies, especially in legal and accounting, already have significant spend allocated to services.
Check out my recent blog to learn more about this space.
The person behind - Who is Hannah Seal?
Grew up in London. Studied economics. I thought I would be a politician.
Tried the consultancy route initially.
Then, I worked at Ocado and eBay.
After that, I tried my hand at venture — joined Index.
Given my background was consumer, thought I’d invest in consumer tech companies. But I’ve ended up focussing on B2B SaaS and working with founders digitizing workflows.
Strongly held belief you’ve recently had to change your mind on.
Not to have strongly held beliefs. A blueprint is counterproductive.
Clarity about how to build. People, values, etc. No blueprint for building a company.
Consider how Antoine Le Nel at Revolut has so many back-to-back 1:1s at the start of the week. But Roy Reznik at Wiz does no meetings. I recently spoke to Roy about trust in the founding team, check out the video.
The best companies will make their own benchmarks. Consider how Revolut is building a bank for first time, no precedent, no benchmarks, check out the video.
Some will say hire generalist. Antoine says only hire specialists.
You need to hire people who fit within these cultures.
Remote vs in-person — Remote is obviously a great example of doing remote right with a strong culture.
Top tips for founders fundraising?
Research your VC — focus on the people.
Don’t go for yes, people. VCs should be guests, not concierges. Expect candor from investors in the pitch meeting and for them to push you.
It’s more productive to get to know potential investors over time, rather than just meeting during fundraise. It’s not transactional.
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Index Ventures' Hannah Seal on latest fund announcement and building your team from 0 to 1000