We back the purposeful.
In today’s episode, we’ll be spotlighting Otto, Framework’s AI-powered platform for investment matching and optimization. Joining us is Framework’s CTO and the visionary behind Otto, Jim Texier. We’ll kick off with a brief introduction to Jim, followed by an exploration of Otto’s origin story. Jim shares insights into how the platform was developed and the impact it’s had on both investors and startups. The conversation concludes the exciting future of Otto and how the platform will continue to add value within the startup ecosystem.
Listen to the podcast: Spotify
Olivia: Today we will be diving into Otto - FRAMEWORK’s AI assisted investing, matching and optimizing platform with FRAMEWORK’s Partner & CTO Jim Texier to discuss the building process and his future vision for the platform. Welcome Jim, could you tell us about yourself and your background?
Jim: I am a former entrepreneur and seasoned executive in Product and Technology. I have graduated with a Master in Computer Science and Applied Mathematics. My entrepreneurial journey began in the last century (1996!) in the field of digital transformation and natural language processing. It lasted for about 12 years. After a successful exit in 2009, I then transitioned to the role of CTO/CPO in large organizations and high-growth startups where I was lucky to go through 3 IPOs. This path led me to FRAMEWORK in mid 2021, initially as Entrepreneur In Residence. The opportunity and the cultural fit were so compelling that I chose to join the team as General Partner and CTO when we launched our Fund II in December 2021.
Jim: So, as you know, FRAMEWORK is a VC firm specializing in Series-A investments in North America and we are well known for our data-driven decision-making. Interestingly, we have collected a wealth of metrics over the past 10 years, which we leverage to enhance our investment choices.
During my initial 6 months at the firm, as I worked more closely with the investment team, I realized that we possessed not only strong investment acumen but also a consistent method for assessing company performance through a formal analysis of "unit economics".
That’s when my software engineering background naturally kicked in. It led me to the idea of encoding this knowledge into a set of algorithms, creating a software platform to consistently support our decisions. Thus, Otto was born.
Jim: The design phase for Otto began in the summer of 2022, with development spanning the subsequent 2 years. In fact, we are still actively improving our platform, adding new features and refining the underlying technology.
Olivia: What has the process been like building Otto?
Jim: First and foremost, it has been an incredibly fun and engaging experience, albeit with many dedicated weekends of coding (so, please, don’t ask my wife ;)). Thanks to the collaboration of a talented friend and a brilliant intern, the three of us were able to build a complete new platform that replaced our existing information system.
Essentially, we replaced our deal flow engine, scoring mechanism and CRM with this unique platform. This formed the initial foundation upon which we built solutions for startups (the ScoreCard) and investors (the Network), all while continuously improving our internal workflows through increasing automation.
Otto is an ongoing product, rather than a finite project, and thus has no true end date; we are still actively working on it.
Jim: Otto offers startups a free and objective assessment of their company's performance, including comparisons to industry benchmarks and recommendations to improve their valuation. Additionally, based on their stage and category, startups can opt into our matchmaking program, which leverages our understanding of their company profile to automatically connect them with a curated list of investors whose investment thesis aligns with their business. It's important to emphasize that this service is entirely free and based on the startup's willingness to participate (full opt-in).
Jim: Similarly, current investors (around 140 to date, spread across the US and Canada) can detail their investment thesis within Otto and receive automated recommendations from companies we have vetted and interacted with. This streamlines the process of building a curated and qualified funnel of opportunities, saving valuable time for investors. And again, this service is completely free of charge.
Jim: Otto has already demonstrated promising outcomes, and we believe this is just the beginning. To illustrate, imagine a typical Venn diagram with Otto at the intersection of three circles.
We have created a synergistic engine that benefits all parties involved: startups gain real-time insights into their company's performance and access to curated investors, investors receive a qualified pipeline of opportunities with automated introductions, and FRAMEWORK leverages this synergy to make better investment decisions, analyze industry trends, and enhance our brand recognition.
As we are a data-driven firm, I'm pleased to share some key metrics too. So, as of October 2024 what we has been achieved so far is the following:
That's a good start!
Jim: Our vision is for Otto to become one of the premier matchmakers in the industry, with a focus on quality over quantity. We understand that time is an invaluable resource, and we believe Otto is a powerful tool to support the digital transformation of capital-risk.
However, it's important to maintain a realistic perspective. Otto is still in its early stages, and we have a lot to do. Naturally we plan to improve our scoring algorithms and provide more actionable insights over time for both founders and investors. But, as you know, it’s also linked to the quality and the quantity of data we can collect. We are a very small team and are doing our best to improve the experience. It will take some time and support from the community to do so.
Hopefully this podcast will encourage them to try the platform and be benevolent enough to understand that it’s not perfect yet but that it can dramatically improve thanks to their constructive feedback.
To know more about Otto:
- For founders, visit startups.framework.vc
- For investors, visit investors.framework.vc