Point72 Ventures: How Generative AI Raises the Investment Stakes
Tara Stokes talks about how her team identifies generative AI innovators and why data skills are critical for the most effective AI solutions.
Tara Stokes, principal at Point 72 Venture’s Deep Tech investment team, joined me for episode #4 of Data Humanized to discuss the intersection of technology and humanity in early-stage investing. Point72 is a top 20 hedge fund with $26 billion under management, and Tara’s role is to evaluate and select The Next Big Thing in “Deep Tech.”
I loved this conversation with Tara. Listen below and read on for my takes on our conversation, where we talked about Tara’s career journey into investing, how VCs think about investment decisions, and what’s hot and what’s not in Generative AI.
A Career Journey into Private Investing
Tara discussed her journey into a career in investing (5:10). It began at Duke with a degree in public policy and a deep love of current events. Her internships got her interested in investing, and her time at Morgan Stanley as a trader gave her first-hand exposure to the market. Eventually, Tara landed on the Point72 Ventures Deep Tech team.
She shared what she’s learned along the way: about how founders on the East Coast, West Coast, and EMEA differ, how current events inform her tech investment philosophy, and the most valuable skill she learned in school: writing! (A very Data Humanized answer!)
What’s Exciting Today to Deep Tech Investors?
At 7:31, we explore “Deep Tech” investing and how Point72 Ventures decides to deploy over a billion dollars to 120 companies in applied AI, natural language processing, and computer vision, and cross-pollinates investment “sleeves,” or concentration areas (like intelligence and manufacturing), to make better decisions.
For Generative AI, Tara’s take is that customer service is a great emerging market for generative AI, because,
It’s a big problem.
It’s a complicated problem.
It’s a problem where siloed data and human workflows are the issue. AI can “build a knowledge bridge” to help make human call center representatives more empathetic and effective.
We loved this example because elevating human work with data is what the Data Humanized Podcast is all about!
How Do Investors Decide to Write Checks?
At 11:30, Tara and I explored the importance of diverse opinions in the check-writing process. She explained that although women represent less than 15% of check writers and founders, she’s grateful that women are a big part of the Point 72 culture. She feels Point72’s diversity makes for a less sharp-elbowed, more collaborative, effective culture.
What role does diversity have in investing (13:30)? Tara’s take is that diversity is less about gender and more about life experience. For example, her interest in public policy, current events, and sports experience make her unique.
How Point72 Uses Data to Make Better Investments
We explore how Point72 uses data for early-stage investments (15:32) and how Tara thinks about market analysis, market sizing, and judges investments. Part of their process is “data imagination,” where teams use data to imagine what the world will look like in three or five years and then fit investments to that point of view.
“How do you assess companies and founders? (18:40).” Tara looks for:
Great problem solvers;
EQ, not just IQ;
Curious people;
Grit and hustle;
People that fit the problem they’re out to solve.
“What happens after the investment (19:49)?” Point72 starts by sharing best practices and working with founders to set OKRs, KPIs, and “North Star” objectives. Great goals make great companies possible. For more on OKRs, read Measure what Matters, and North Star Metrics by
.On hiring philosophy (21:50), Tara shared three tips:
Decide what GREAT looks like and build compelling job specs that get candidates energized.
Have each interviewer focus on an area they’re uniquely suited to assess.
Use project-based interviewing. Tara uses data-driven projects to align her problem-solving style with candidates.
The Primacy of Empathy
What elemental skills do all hires need (23:30)? There is no one-size-fits-all, says Tara, but she likes to think of the mantra she learned at Morgan Stanley: Traders should think like salespeople, and salespeople should think like traders.
“Think like that other,” says Tara—the primacy of empathy.
Point72’s favorite AI investments emphasize human augmentation over automation (25:11). Technology that empowers humans to be better, not replace them.
Empathy guides companies through the application of generative AI in the enterprise (28:25). Tara discussed how founders must be sensitive, patient, and thoughtful about how data is shared and ask themselves: Should all employees have access to information? How will it be secured and governed? Founders need patience to navigate these issues.
How is automation evolving? (29:00). When considering automation, Tara challenges founders to ponder what the world would look like without the internet or a mobile phone. One product strategy exercise she likes is picking a mundane daily task and using generative AI to solve it. (For an example of this, read The Joy of Generative AI Cocreation)
Team of Rivals?
What are the common pitfalls she sees startups make (33:00)? Is it poor North Star Objectives and OKRs? Trying to go too big too fast? Tara says the most fundamental mistake is not surrounding yourself with complementary voices. She advises founders to think deeply about what skills they lack. For example, if you’re a visionary, get a strong technical co-founder to help you stay grounded in what’s possible.
On diverse leadership teams, we discussed one of my favorites, Doris Kearns Goodwin’s Team of Rivals, which explores how Abraham Lincoln invited his fierce rivals into his cabinet to get that “other” point of view into day-to-day decision-making.
How Investors Stay Informed: A Reading List
We wrapped up with Tara’s take on how she stays informed about the market (36:00). Her “reading list” includes
The Wall Street Journal,
Bloomberg,
Forbes,
MIT Technology Review,
Read deep technical papers and patents,
Join and attend the Association for Computational Linguistics (ACL)
Join and attend the International Conference on Machine Learning (ICML).
We both love to geek out by using generative AI to process academic papers (and travel planning :)) (38:00)
More From Data Humanized Podcast
Subscribe to the Data Humanized Podcast wherever you listen to podcasts. Check out these episodes for more:
EPISODE 3: Bentley Motors Builds the Engine for Digital Transformation with Data
EPISODE 2: Dataiku on AI Readiness: Why Data Literacy Matters for Transformation
EPISODE 1: Best Buy Powers Digital Transformation With Data Literacy
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Polymathic Being byMichael Woudenberg
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Good to see you back in my Inbox Mark. Two immediate thoughts... a resounding YES to "diversity is less about gender and more about life experience." This is where our truly human colors shine... not what we look like or what our biology is coded for, but the way we think, what we've lived, and how we interact with others.
Secondly, another big and even more resounding YES to empathy in tech. Of course, woulda been nice to have had it in the first place, before some of these products were released, but the more investors, CEOs, and managers who actively express and integrate it into their company cultures, the healthier (and more productive) workplaces will be.