The Future Creators: Pioneering the Next Generation of AI Companies

Earlier this month, Oxx, a venture capital firm, published a white paper titled ‘Who will build the next wave of breakout companies’. This white paper takes a data-driven approach to analyze the backgrounds of successful founders during the SaaS era and the initial AI and machine learning era. The main question it tackles is: who will be the future winners?

The study examines the profiles of founders of thriving companies across two significant innovation waves: the B2B software as a service (SaaS) wave and the artificial intelligence/machine learning (AI/ML) wave. The research is based on a dataset of 645 founders from 270 successful companies, including 150 B2B SaaS companies with exits or IPOs valued at $500 million or more and 120 AI/ML companies achieving similar success.

Founder Profiles

• The proportion of founders with PhDs tripled to 18% between the SaaS wave and the AI/ML wave. The most notable finding from the study is the increase in the number of successful company founders holding PhDs, rising from 6% in the SaaS wave to 18% in the AI/ML wave. On the other hand, the percentage of founders with MBAs decreased from 14% in the SaaS wave to just 4% in the AI/ML wave.

Richard Anton, Co-Founder and General Partner at Oxx and the author of the white paper, remarked, “The rise in the prevalence of PhDs between the SaaS era and the onset of the AI/ML era is logical. In the SaaS era, business skills were crucial for scaling companies. In the early AI era, technical skills posed a bottleneck to B2B success—building these products and technologies was genuinely challenging.”

Anton explained that the B2B SaaS wave was characterized by subscription-based, sales-driven software, giving rise to companies like Salesforce, Netsuite, Xero, and Wix. On the other hand, companies in the AI/ML wave are those with AI and machine learning as the core of their products, including agentic AI.

Top-Flight Educational Credentials

• The percentage of founders from the world’s top universities surged from 37% to 61% between the SaaS wave and the AI/ML wave. The white paper also highlighted a significant increase in the number of founders who attended the world’s leading research institutions such as MIT, Stanford, Oxford, and Cambridge. In the AI/ML wave, 61% of founders hailed from these top universities, marking a 24-percentage point jump from the SaaS wave.

Anton added: “While not all founders completed their degrees, attending these universities enabled them to build valuable networks, establish co-founder relationships, and attract investor interest.”

Regarding the evolving profile of founders, Anton noted, “Venture capital heavily relies on pattern recognition, which remains crucial. However, investors must acknowledge that the patterns worth recognizing are changing, along with the key signals to observe, especially in evaluating founder capabilities.”

Software Focus

• Software leadership has shifted towards the UK and continental Europe. The research identified a significant geographical transition, with the UK’s share of successful companies rising from 1% in the SaaS wave to 12% in the AI/ML wave. Anton remarked, “The UK’s success can be attributed to its exceptional AI teaching and research at universities.” In continental Europe, the share of companies increased from 5% to 10% between the SaaS and AI/ML waves.

Anton expressed, “I’ve been investing in software for three decades across various innovation cycles. I always recognized the immense talent in the UK and Europe, but back then, the role models and capital were predominantly American. This has changed, showcasing that the UK and continental Europe possess the talent, institutions, and market complexity to nurture global champions.”

Technologists as Founders

• Amidst evolving credentials, technical co-founders remain essential and consistent. The shift in credentials sheds light on the current era’s most significant practical finding in the data. With technological advancements making technology more accessible, the critical credential is changing once more. The present era may value attributes harder to credential than MBAs or PhDs: the capacity to identify intersections of AI capabilities with real-world issues, swiftly translate insights into products, and pinpoint defensible positions. One constant factor is the presence of a technical co-founder: even as specific competencies evolve. 85% of successful SaaS companies had a technical co-founder, while 95% of AI/ML companies did.

Anton emphasized: “A technical expert connects both eras. A technical co-founder was part of 85% of SaaS teams and 95% of AI/ML teams. One element remains constant: while the nature of technical skills may change, having a technical expert in the founding team is crucial.”

Summary:

• The Oxx whitepaper, ‘Who will build the next wave of breakout companies’, utilizes a data-driven approach to scrutinize the backgrounds of successful founders in the SaaS era and the initial AI and machine learning era, exploring the question of future winners.
• Between the SaaS wave and the first AI wave, the percentage of founders with PhDs tripled from 6% to 18%, while the proportion of founders from top universities increased from 37% to 61%. Concurrently, the MBA presence declined from 14% in the SaaS wave to 4% in AI/ML.
• However, in the latest generation of AI founders—particularly of agentic AI companies—indicative data suggests a decline in PhD rates, from 18% to 12%.
• Throughout both broad waves, companies with a technical co-founder have a higher likelihood of success. While the technical competencies evolve, the presence of a technical co-founder remains pivotal, with 85% of successful SaaS companies and 95% of AI/ML companies having one.
• Globally, the UK and continental Europe have seen an uptick in their share of successful companies, with the UK’s portion escalating from 1% of successful SaaS companies to 12% of AI/ML-based companies, and continental Europe from 5% to 10%.