Tara Tan is founder and general partner at Strange Ventures, an early-stage fund investing in inventor-CEOs building the future of computing.
What led you to venture capital and Strange Ventures?
I took a nonconventional path into venture. I didn’t come from a banking background but rather from the engineering and product side. I’ve been investing for about 10 years and in deep tech for over 15. For the last 10 years, I was an investor at IDEO, the global design and innovation firm. I was there from 2015, helped build the venture practice and run two institutional funds. We were part of a skunkworks crew working with frontier technologies like AI, distributed web, robotics. In 2015, we were the only place in the world that really brought design to deep tech. We had that perspective as investors and co-builders, which really resonated with founders.
Before that, I ran design and go-to-market for a deep tech manufacturing startup. I did my master’s degree in computational design from Harvard. And before that, I had a different career doing large-scale interactive installations, which included touring the world doing these crazy intersections of technology, art and culture.
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What is Strange Ventures’ investment thesis?
We invest in what I call inventor-CEOs. These are deeply technical founders who have spent the last decade investigating a certain area. We tend to invest in research scientists and second-time entrepreneurs who have that ethos at their core. Currently, we’re focused on the future of computing, looking across the stack from interfaces and tools to infrastructure.
How did your time at IDEO shape your approach to investing?
IDEO has a storied background in computing. They designed the first consumer Apple mouse, and founder Bill Moggridge designed the original laptop, inspired by a traveling businessman’s briefcase. This is why it looks like it does. You take it off, put it down with all the files and folders, and look through your documents. That informed the design for the first graphical user interface with files and folders and drag-and-drop functionality.
In designing the first laptop, Moggridge realized that active design had transferred from objects in the physical world to objects on screen. That’s where user interface, user experience and digital product design were born. IDEO really had that heritage in bringing design to computing. What’s missing in the market is bridging deep research with deep design. We’re one of the unique places in the world that does that.
Design isn’t a word you hear much in deep tech conversations. What role does it play?
Design is strategy. A lot of what strategic storytelling firms do, I would classify as design. There are many flavors of design. User interface and branding are one aspect. But beyond that, design is strategy. If you look beyond what a brand is and what a website stands for, it bleeds into market positioning, customer positioning, capturing capital, mindshare and attention. That’s what design does.
We work with deeply technical researchers to understand how to position their product and technology when bringing their invention to market. How do you build that North Star for your company? That’s really important. The reason this gets left out of deep tech conversations is that founders aren’t surrounded by enough creatives who can think that way. Deep tech founders are often surrounded by more technical people. They don’t need another super technical VC. Rather, they need a partner who can complement them on the creative side. When I talk to inventors, there’s a very similar DNA between creativity and invention, and they often get it straight away.
Who are these inventor-CEOs you’re backing?
It’s a mix. We back people spinning out of labs and research labs exist in many forms. Academic labs, yes, but enterprise labs are honestly a huge treasure trove. We also invest in folks who are tinkering and building with a unique point of view. There’s a mission or North Star that they’ve been stuck on or haven’t been able to let go of. Those are the people we look for.
Most researchers should stay researchers since they’re happiest being researchers. We back those who want to become entrepreneurs. We look for folks who are hungry to commercialize their research. It shouldn’t be a forced step change for people who are happy in research.
How do you conduct diligence as a first-check investor?
We take first-check underwriting quite seriously. We have a really strong hit rate and follow-on rate, which is testament to our extremely rigorous underwriting. We do two phases. First is technical diligence like going through their body of work and doing reference calls with industry-adjacent companies. Then we do commercial diligence, which involves early customer calls between potential customers in our enterprise network and the startups, seeing where the delta is between what they’re building and what companies need.
One of my first jobs out of college was as a journalist at a local newspaper for two years, and I apply those skills daily. It’s harder work than just going off patterns like which school they went to or which lab they came from. We take the work to understand when something sounds strange but might be worth digging into. Going that extra layer deeper has been all alpha.
What areas within the future of computing are you focused on?
I’m very focused on the infrastructure layer right now. On the model ecosystem side, there are interesting things going under the radar like how models are aggregating ecosystems around them. I think that’s going to be the major platform shift in the next decade.
We’re also looking a layer down at the semiconductor and chip space. Our latest investment was in a company building the fastest inference hardware on earth—making inferences at a billionth of a second, the speed of light. I’m really excited about that company. And we’re digging into the noise and interesting data around energy and compute, which is huge for us.
What’s your most contrarian take that everyone will eventually agree with?
We wrote about voice AI in 2023 when it was very early and now people are coming around to it. We wrote about multimodal AI about 18 months ago. My contrarian take right now is that 75 percent of what’s being funded shouldn’t be venture funded. There need to be different financing models beyond venture. There will be 100-times more software startups that should be funded at a different scale. The idea of pure hype and marketing as a moat is not interesting. Most companies right now are throwing spaghetti against the wall to see what sticks.
How do you view the current AI landscape and potential regulatory changes?
This era of the intelligence revolution is probably the biggest opportunity for any country to leapfrog in the next 5 to 10 years. I saw a report yesterday showing China has caught up in AI researchers. They have about 30,000, the U.S. has 10,000, and the EU has 20,000. Google is rolling out Gemini to every student in India. China has a massive policy to roll out AI in every elementary school.
My fear is that the U.S. market gets too consolidated in a few major players, making it less interesting for smaller players to thrive. That’s not where our strength lies. Our strength is in our decentralization and distributed entrepreneurial energy.
Looking at historical patterns, we’re about 75 years from the start of the information age and birth of the internet. The Industrial Revolution lasted 75 years across Europe, followed by 30 to 40 years of massive political, social and economic unrest. Then came another 45 years of the second Industrial Revolution when it came to the U.S. If we follow these patterns, we’re in that 30-to-40-year period of unrest before we hit the second intelligence age. It’s an interesting time to see who will leapfrog or maintain the lead.
Who should reach out to Strange Ventures?
If you’re building something that feels a little strange, a little misunderstood, and you’re certain it’s going to be an undeniable, inevitable part of the future, then come talk to us. We’ll take the work to understand what you’re building and share all our feedback.
How do you define deep tech?
We technically do deep software more than deep tech. But in essence, the founders we back are typically one of fewer than 100 people in the world who can do what they do. It’s software or technology that is differentiated, has a different point of view, and hasn’t been commoditized. That’s how we define it.