Podcast Summary: Your Next Move – “How Invisible Technologies Competes to Win in AI”

Podcast: Your Next Move
Host: Inc. Magazine
Episode: How Invisible Technologies Competes to Win in AI
Date: November 4, 2025
Guests: Mike Hoffman (Inc. Editor in Chief, interviewer), Francis Pedraza (Founder & Executive Chairman, Invisible Technologies & Infinity Constellation)
Recording Location: Inc. 5000 Conference, Phoenix, AZ

Episode Overview

This episode offers an in-depth conversation with Francis Pedraza, Founder and Executive Chairman of Invisible Technologies and Infinity Constellation, discussing how to build a high-growth company in the AI services space. Hosted by Mike Hoffman at the Inc. 5000 conference, the conversation unpacks lessons learned from early failure, the evolution of Invisible’s business model, challenges of capital allocation, the decision to raise (or decline) major investment, and Francis’s next move with Infinity Constellation. The discussion is both candid and practical, with Francis sharing actionable insights on entrepreneurship, customer focus, and competing in a rapidly evolving AI landscape.

Key Discussion Points & Insights

1. Lessons from Failure and Starting Over

[02:09] Francis Pedraza recounts his first company's failure:

• Founded Everest, an early iPhone app for achieving personal goals, but lacked a business model.
• Raised $2.6 million (notable investors included Peter Thiel and Bono) but failed to monetize and scale.
• On failure:

  "The humility of the failure is one of the great teachers... You look back on them all these years later and you realize it was a gift." ([02:47], Francis Pedraza)

Applied Lesson:
Started Invisible with a clear focus on a viable and evolving business model.

2. Invisible Technologies’ Origin, Business Model & Market Opportunity

[03:18] The Founding Question:
“If there's an app for everything, why isn't everything perfect yet?”

• Observed limitations in SaaS: companies sold enterprise customers “tools, not cakes”, forcing customers to assemble their own solutions.
• Traditional systems integrators like Accenture delivered “cakes” (end-to-end solutions) but were not tech-forward and often overpriced.

Francis’s vision:

• Disrupt both traditional services and pure SaaS through the “AI services” model, delivering integrated, bespoke solutions rather than just software.
• Early comparison to Palantir:

  "Invisible was kind of like an ugly duckling... we weren't a SaaS company." ([05:05], Francis Pedraza)

3. Selling Customers vs. Investors

[06:14] Eager Customers, Skeptical Investors:

• Customers appreciated Invisible’s willingness to solve their “weird, messy complexity.”
• Investors disfavored services (preferred software, recurring subscriptions, and high margins).
• Francis notes investing dogma created an opportunity for contrarian entrepreneurs.

Memorable Quote:

“It was actually always easy to sell the customers and hard to sell the investors, which is a good sign. If you're in a predicament like that, lean into it.” ([06:14], Francis Pedraza)

4. Scaling the Product and Team

[07:44] Evolution of the Product:

• Started with a “digital assembly line” vision: break processes into small “Lego” steps, automate where possible, and insert human agents as needed.
• Built a global network of 20,000 agents in over 100 countries.
• Growth path: small business → medium business → major enterprise (breakthrough during COVID digitizing restaurant menus for food delivery apps).

On Moving Upmarket:

“When we had our first customer pay a million dollars a year, after that you only want to sell million dollar a year deals… you end up re-engineering your whole company to do that bigger sell.” ([09:13], Francis Pedraza)

5. Revenue Concentration and Diversification

[10:13] Managing Revenue Risk:

• Acknowledges that high revenue concentration is “uncomfortable” but not necessarily a red flag if major clients drive company transformations.
• Invisible scaled to $134 million in revenue with “almost no sales and marketing motion”—most growth came via referrals and operational excellence, not outbound sales.

Francis on Focus:

“Quality is the best business model. Basically serving that one big customer that make a big bet on us. And then the second and the third and the fourth...” ([11:23], Francis Pedraza)

6. Intentional Capital Allocation & Fundraising Strategy

[12:03] Turning Down $100M:

• Francis once tore up a $100 million term sheet in front of his company, emphasizing the importance of raising capital “for the right reasons at the right time.”
• Danger of misallocating capital:
  • Overspending on engineering with no customer impact.
  • Hiring a sales team without product-market fit.
  • Acute pressure and risk post-fundraising from racing to costly decisions.

Key Insight:

“The tendency is to make a huge amount of mistakes immediately after you raise capital. And so the forbearance… to know when you do not know and to respect your own not knowing… is very hard. But it was actually the right thing in 2023 and 2024...” ([14:24], Francis Pedraza)

• Case study: Competitor raised $1.8 billion and was acquired despite high revenue; Invisible, with just $7 million investment, matched product quality with greater agility.

7. Leadership Transition and Roles

[16:52] Handing Over the CEO Reins:

• Hired Matt Fitzpatrick (formerly of McKinsey's Quantum Black Labs) as CEO.

• Francis became Executive Chairman: “So, so happy not to be operating CEO because I respect what operating CEOs do.” ([17:07], Francis Pedraza)

• Breakdown of corporate roles:

  • Founder: Visionary and cultural leader.
  • President: Promoter and relationship builder.
  • Chairman: Strategy, governance, capital allocation.
  • CEO: Execution and daily operations.

• On organizational evolution:

  “Over time, as the company matures, you end up sort of splitting out the hats and so, or even sharing the hats.” ([19:03], Francis Pedraza)

8. The Science (and Art) of Capital Allocation

[21:01] Book Inspiration:

• Discusses The Outsiders by William Thorndike: Capital allocation as a key skill—how each incremental dollar is used can multiply company performance over time.
• Lists eight options for allocators (cash, debt, invest internally/externally, M&A, buybacks, dividends).

“If you make decisions about where to put each incremental dollar very intelligently over time, you can dramatically multiply the performance of your business.” ([22:00], Francis Pedraza)

9. Infinity Constellation: The AI Holding Company

[23:21] Launching a New Venture:

• With Invisible scaling rapidly (from $25M to $100M run rate in a year), took $5 million and started Infinity Constellation, an AI services holding company—a “goose to lay more golden eggs.”

• Vision: Disrupt the “Galactic Empire” of 20th century services consultancies (e.g., McKinsey, Bain, Deloitte) by seeding new AI-first verticals.

• Eight portfolio companies launched, all led by their own CEOs, backed by Holdco and incentivized via substantial option pools.

• On structure & alignment:

  “Invisible is the largest shareholder in Infiniti, so there is incredible alignment of incentives and network effects between the two. But there’s an arm’s length separation, so they’re making their own decisions.” ([25:52], Francis Pedraza)

Notable Quotes & Moments

• On learning from failure:
  “The humility of the failure is one of the great teachers... you realize it was a gift.” ([02:47])

• On investor skepticism:
  “It was always easy to sell the customers and hard to sell the investors, which is a good sign.” ([06:14])

• On product evolution:
  “We started building this global network of agents. Today we have 20,000 people in over 100 countries.” ([08:13])

• On capital efficiency:
  “We scaled to 134 million of revenue last year with almost no sales and marketing motion. It was entirely driven by great engineering, great operations, the supply side.” ([11:25])

• On turning down capital:
  “In front of the whole company, [I] ripped up $100 million term sheet from a tier one fund.” ([12:11])

• On corporate roles:
  “We actually say at Invisible that the founding moment is always now.” ([17:48])

• On capital allocation:
  “You can almost realize that over decades, creating success in a company is really two different games. One game is building a really, really great product service business... the second game... is how capital allocation over time is a multiplier on success.” ([22:23])

• On Infinity Constellation's model:
  “We give CEOs a path to 25% of their company, create 25% option pools for the team, and provide all the capital.” ([24:55])

Timestamps for Key Segments

• [02:09] — Francis discusses his first startup’s failure and early lessons.
• [03:18] — Invisible’s founding thesis and disruptive business model.
• [06:14] — Differences between selling to customers vs. investors.
• [07:44] — How Invisible built scalable, end-to-end AI service solutions.
• [10:13] — Navigating revenue concentration in early scaling stages.
• [12:03] — Fundraising strategy and capital allocation discipline.
• [16:52] — CEO transition, defining leadership roles.
• [21:01] — Capital allocation insights from The Outsiders.
• [23:21] — Creating Infinity Constellation as an AI holding company.

Final Thoughts

This episode is packed with practical wisdom for entrepreneurs in tech and AI, particularly on business model innovation, disciplined capital allocation, and the journey from founder-led startup to professionally managed enterprise and holding company. Francis Pedraza’s attitude toward failure, patience with capital, and long-term thinking on both organization and investment are standouts, offering a masterclass in how to “compete to win” in a rapidly changing industry.

Listen to the full episode for more on Invisible Technologies’ growth, the future of AI services, and the leadership mindsets shaping the next wave of innovation.