Last month, @baseten announced a $1.5B Series F at a $13B valuation. I've known co-founders @tuhinone and @saltyph for over a decade. I’ve learned a lot watching them build Baseten, but the biggest takeaway for me is the value of deep conviction–even if it means being dangerously early to a market.
I met Tuhin and Phil at their previous startup, where I angel invested in their pre-seed round. A few years later, I spent a lot of time helping them navigate the sales process after they got an offer from a strategic buyer.
Unlike the typical founder who dreads working for a buyer, Tuhin was excited to join their team. He realized it could be a great learning experience. This intense thirst for learning is one of those founder traits that’s hard to teach but incredibly valuable.
In 2019, they started a new company. I angel invested in their first round. That was Baseten.
Their thesis was built on a problem they'd lived firsthand: productionizing sophisticated ML models. The typical Series A-to-D startup then had a small data science team. These were smart, math-oriented people who could analyze data and build ML algorithms. But getting actual business value from said models required engineering resources.
Tuhin, Phil, and their other co-founders, @amiruci and @defpan, identified this gap and aimed their company directly at it. While this was years before the launch of ChatGPT and interest in ML models morphed into the AI tsunami, they presciently saw a market opportunity. That said, they were very early.
Over the next few years, SaaS mania ensued. Startups with very incremental SaaS products could fetch unicorn valuations off of a few million in ARR. Those products had little use for the sophisticated models Baseten’s product was anticipating.
So the Baseten team had to bide their time. (Easier said than done for a startup!) Crucially, they were 10/10 in 2 key areas:
Fundraising: Tuhin is a brilliant storyteller and has a knack for building high-trust relationships with VCs. He kept the company perpetually well-funded by raising multiple pre-traction rounds from top-tier VCs.
Conviction: It would have been easy for them to pivot. They were great builders and could have quickly hacked together a SaaS product that would’ve whet the appetite of SaaS-crazy VCs in 2021/22. But they didn’t. They had deep personal experience suffering through productionizing models and could see that momentum was about to build for products with sophisticated (read: AI) models.
After ChatGPT launched in late ‘22, the market rapidly coalesced. Startups began to see opportunities to build AI products that were essentially “productionizing sophisticated ML models,” just as the Baseten founders had originally envisioned.
By 2024, the AI tsunami was emergent, and Baseten couldn’t have been better positioned.
All told, Baseten is a great example of the dangers of being too early to a market. But also the incredible advantages. I’m very glad to have been along for the ride.