We Are Building the Plane While Jumping Off the Cliff

If we treat founders like startups, supporting their learning, their networks, their capacity to grow, why don’t we treat early-stage investors the same way?

That’s the quiet argument at the heart of a Startup Genome piece I came across last week. The title was unassuming, The Forgotten Layer in Startup Ecosystems: Investor Capacity, but the argument hit close to home.

The core observation is simple: we spend enormous energy building founder capacity in startup ecosystems, but we largely neglect investor capacity. The assumption is that investors are already capable, that the presence of capital implies the presence of judgment. But that’s rarely true, especially at the early stage. Effective seed investing is a skill. It takes time to develop, networks to cultivate, and repeated cycles of investment to refine. And just like startups, early-stage investment firms fail at alarming rates: roughly half of VC firms never raise a second fund.

The framing I found most compelling is this: we should think of emerging investors as startups in their own right.

What I’m doing at Analog Ventures feels like we are building a startup. We are continuously generating and testing hypotheses. We are developing playbooks and capabilities while executing strategy and fundraising. We are learning and adapting in real time, sometimes without the benefit of past pattern recognition. There’s a saying that comes to mind: building the plane while flying it. But that doesn’t quite capture the urgency. It feels more like building the plane while jumping off a cliff.

This is particularly true in Southeast Asia, where the VC cohort itself is still emerging. Most seed investors here are in their first or second institutional fund, or maybe third, depending on how you count. The compounding advantage that comes from decade-long track records, dense referral networks, and hard-won judgment about which signals actually matter, that’s still being built. We are all, in some sense, learning in public.

And then AI arrived and changed the rules again.

The Startup Genome piece includes a paragraph I’ve been turning over in my head since I read it:

“In the AI-Native era, that skill set is changing. Investors are increasingly evaluating companies whose products can be built faster, with smaller teams, and at far lower cost than in previous technology waves. That can widen the top of the funnel, but it also makes speed more critical and discernment harder: when technical barriers become easier to overcome, investors must place greater weight on founder learning speed, distribution capability, trust, and whether early revenue reflects durable demand rather than short-lived experimentation. Early traction might be a misleading signal if there are few barriers to users moving between models.”

In an AI-native world, those signals get noisier. Products can be built and shipped in days. Demos look polished before the underlying product is real. Revenue can appear before there’s true demand. The top of the funnel widens, but so does the margin for error.

What this means, practically, is that the craft of seed investing needs to evolve, and fast. The questions that matter most are shifting. It’s less about “can they build it?” and more about “can they learn faster than everyone else?” Less about early revenue as a proxy for product-market fit, and more about whether that revenue reflects genuine, recurring demand or a moment of novelty. Less about technical moats, which compress with better tooling, and more about distribution, trust, and compounding relationships with customers.

In Southeast Asia, this is compounded by the structural immaturity of our ecosystem. We don’t yet have deep networks of experienced repeat founders feeding deal flow to experienced repeat investors. The institutions that make ecosystems compounding, successful exits, recycled capital, operator-turned-angels, investor track records, are still being assembled. We’re building that base at the same time as the macro environment shifts underneath us. This demands that founders and investors think more globally, and be much sharper about building solutions to real, tangible problems that the world actually has.

The good news? There are real reasons for optimism, and I don’t think they’re wishful. Founders from here are getting more ambitious and globally minded. I see it in our own portfolio.

Mito Health started in a Singapore clinic and is now serving customers across all 50 states in the US. Prefer uses Singapore as its R&D base while signing commercial deals with Ajinomoto in Thailand and manufacturers in Australia and New Zealand. Envisso built a payments risk and insurance platform that started in Asia and has since expanded to Europe and Latin America, with a team of around 15 people. Blue Whale Energy, barely a year old, is already partnering globally to deploy what could become Southeast Asia’s first full-stack virtual power plant.

The ambition of this generation of founders is genuinely different. They are not building for Singapore first and thinking about the world later. They are building for the world, from Singapore, on day one. That shift, more than any macro trend or policy initiative, is what gives me confidence that we’ll get there, in spades.