Dressed in a sports jacket and sneakers, Darren Herman exudes an air of relaxed confidence as he settles in to share his insights at Hunt Club Chicago HQ with CEO, Nick Cromydas, for a casual fireside chat. Beyond this unassuming exterior lies a storied executive, savvy investor, and unrivaled entrepreneur who navigates the complex world of venture capital day in and day out with a focus on innovation and value creation.
Known for his expertise at the intersection of marketing, advertising, content, and technology, Herman has been an entrepreneur and intrapreneur throughout his career prior to joining Bain Capital. Today, Herman is a Managing Director at Bain Capital, Chairman of Silicon Alley Sports, and a member of the Board of Trustees at Tremont School in Concord, MA.
As Managing Director at Bain Capital, one of the world's leading private investment firms with over $160 billion under management, Herman has learned a thing or two about what makes a company successful and more valuable. Chief among the strategies is digitalization.
“Digital is important because it allows the business to become more effective and efficient, and the by-product often results in multiple expansion,” Herman shares. “Digital is no longer a 'maybe' but a 'let's go' conversation.”
For businesses of different sizes, industries, and stages, the concept of digitalization may vary. To provide clarity and a starting point for businesses to use right now, Herman emphasizes the transformative potential and effective use of artificial intelligence.
AI, 3 Ways, Right Now
Use cases for AI seem to double by the day. No matter the industry, companies are looking for ways to apply AI across processes. But too quickly, “AI” can become a nebulous buzzword that loses its meaning without implementation. So how does one even start to learn and leverage AI when the curve appears to grow with every passing day?
“There are some early wins that you can have that create efficiencies and effectiveness using artificial intelligence today,” says Herman. “Pick a place to start. Think of the nodes of your businesses. Go out to the endpoints, then start to look at processes. Pick some processes that can benefit from using some artificial intelligence. Where we've seen the low-hanging fruit of that is in three places.”
1. Marketing and Content Generation
When it comes to content generation, especially text or imagery, AI can be a game-changer. It also helps with sentiment and social media analysis by taking large data sets and understanding them quicker than we can process them.
2. Customer Service
An easy way AI can enhance customer service is by employing chatbots and virtual assistants that provide instant responses and support. To illustrate, Herman shares an example from a Bain Capital portco.
After implementing an AI-enabled chatbot on the website for general inquiries (pertaining to reservations, dietary questions, room changes, etc.) the portfolio company saw a double-digit percentage decrease in daily inquiries to the call center and double-digit percentage fewer escalations to managers.
AI is helping engineers do work in half the amount of time it usually takes. AI-powered coding tools like Copilot are becoming increasingly indispensable for engineers and can serve as an accessible entry point for companies to harness the power of AI.
“Talent. Full Stop. Period.”
Before any of the above can reach its full potential, Herman asserts the undeniable importance of human talent to drive any and all digitization efforts.
“Ahead of digitalization, the biggest fundamental thing that we can do to create value at any single portfolio company is talent. Full stop. Period. That's it. Before any workstreams, the first topic we focus on is talent. We at Bain Capital believe that by having the right talent in the right seats, it'll give us exponential leverage.”