Post COVID-19 World: The Bullish Case for (early stage) VCs & Founders [Part 3]

RETURN TO PART 2 HERE

Applied AI Investment Thesis

The case for rapid adoption of Applied Artificial Intelligence across every sector remains valid, and if anything, the roadmap for adoption is being shortened considerably.

AI is part of the solution to fight COVID-19

Every day, we read about ways AI is helping fight COVID-19:

  • World’s Fastest Supercomputer Used To Stop COVID-19 (link here)
  • Autonomous robots use light beams to zap hospital viruses (link here)
  • A neural network that can detect coughing (link here)
  • Researchers use machine learning to discover coronavirus treatments (link here)

The Case for AI and Healthcare is Huge

Global venture capital funding in the digital health sector reached $8.9B in 2019, fuelled by the needs of an aging population, outdated infrastructure, and unsustainable business models and cost structures. According to Mercom Capital Group, $58B has been invested in the sector since 2010.

AI is driving major advances in diagnostics, drug discovery, trial efficiencies, mental health & wellness, quantified self, preventive medicine, continuous remote patient monitoring, intelligent prioritization. AI is also creating new models that will help redesign our healthcare systems of tomorrow, bringing instant diagnosis/testing at home or the nearest point of care, remote consultations, delivery of drugs, compliance, and providing doctors and drug companies with real time feedback loops. Last year, $4B was invested into AI and Healthcare companies, up from $2.7B the year before. We expect this number to stay flat or increase in the next 12-18 months as investors see the opportunity to benefit from an acceleration of digital health technology adoption as the world tries to better prepare for future health care crises like the one we are now experiencing.

Swift Legislative & Privacy Protection Changes

Governments are taking swift action to authorize or channel the delivery of new technologies and services to the people and organizations that need them the most. These changes in policies should help shorten the path to market for startups and their innovations. (e.g., EU Privacy Guidance for COVID-19 Data Processing, FDA Guidance on COVID-19 drug trials, etc.) 

Governments, like every corporation,  will need to digitalize their services and adopt new technology much faster in order to streamline their services and make them more efficient, scalable, and resilient. According to McKinsey research, this is a $1T annual market opportunity worldwide.

At the same time, western governments will need to find their (and their citizens’) own comfort levels with respect to monitoring policies and privacy protection. As Yuval Noah Harari said in his recent article in The Financial Times, “this storm will pass, but the choices we make now could change our lives for years to come. […] we face two particularly important choices. The first is between totalitarian surveillance and citizen empowerment. The second is between nationalist isolation and global solidarity.”

Several Other Sectors are Set to Thrive

Other sectors benefiting from Applied AI technologies are also expected to see an accelerated adoption curve, including industrial automation/autonomy, autonomous vehicles, cybersecurity/privacy protection, enterprise software collaboration/productivity, education, entertainment, foods, etc. With global experiments such as “Working from Home” and “Remote Tutoring/Schooling” involving millions of people, along with manufacturing site closures, transportation disruption, and people seeking new and interactive entertainment from home, it is hard not to be bullish on early stage venture investment leveraging Applied AI in any of these sectors.

The Digital Transformation can no longer wait

According to Wilshire Associates, $7.3 trillion in value has been removed from the total stock market since the February 19, 2020 high (which includes small and mid-sized companies). Corporations around the world moved from DEFCON 5 to DEFCON 1 levels in a matter of weeks. Boards around the world are asking their CEOs to implement immediate and far reaching digital transformation measures TODAY, and commit capital against it NOW, to ensure their survival. This transformation is no longer a “nice to have”, and “innovation theater” is no longer acceptable – time has run out.

On the bright side, 10 years of bull markets have provided significant cash reserves to corporations in the US and abroad. As of November 2019, the US cash reserves of US Corporations, excluding financial institutions, was expected to reach $1.5T by year end 2019, according to Moody’s

We expect corporations to use this accelerated capex/refresh cycle to “leapfrog” the traditional software vendors and adopt (and in some cases, acquire) startup developing AI-software/solutions.

A 2019 CIO survey from Sapphire Ventures stated that over 80% of CIOs are investing in AI and ML innovation today:

And that nearly 70% of them would rather trust a startup with AI/ML technology than an established player/vendor:

This will not only fuel revenue growth for AI startups, including those in BootstrapLabs’ portfolio, but it will accelerate the “build, partner, or buy” decision framework used by corporations as they rush to accelerate the digitalization of their day-to-day operations and seek to acquire talent and new products via strategic M&A deals.

Conclusion

Overall, I remain bullish on venture capital as an asset class, and especially early stage venture investing.

I am concerned about the failure risk of certain early stage companies that have strong long term value-creation potential, but may have gotten caught at the wrong time in their fundraising cycles, or have simply been overwhelmed by the sheer scale and speed at which this Pandemic has shut down the world economy.

Being an optimist though, I remind myself that most startup founders are used to operating under high levels of uncertainty, are capable of making quick decisions, are able to listen and adapt to the world around them, can manage remote teams in their sleep, and therefore, are much better prepared to survive this crisis than large corporations.

The worst stock market corrections may be behind us (since stock markets tend to already anticipate the future based on all known information today), but the health care crisis has not yet peaked.

The impact of this pandemic will be felt for months post contamination peak, and will likely act as a drag to any economic recovery until we find a cure or vaccine (which hopefully will take months, instead of years). The world is likely to plunge into a recession, but I trust the US will be able to recover faster than other economies, and bounce back first, as it often did in the past.

If you are the leader of a large corporation seeking to accelerate your digital transformation and believe that the adoption of AI technologies will be a key driver of your future success, or if you are an asset allocator seeking exposure to early stage Venture Capital returns in the Applied AI space, contact us, and we will be happy to discuss our views in greater depth.

Post COVID-19 World: The Bullish Case for (early stage) VCs & Founders [Part 2]

RETURN TO PART 1 HERE

Exits: IPOs and M&A Landscape

Initial Public Offerings – IPOs

According to the Renaissance Capital research note of March 27, 2020, “The 2020 IPO market began with optimism and ended with the worst crash since the global financial crisis. 24 IPOs raised $6.8 billion, with as many as 20 companies forced to shelve offerings when the IPO window slammed shut in early March, as the focus of investors and policy-makers shifted to a post-coronavirus paradigm….Healthcare was both the most active and best-performing sector, accounting for half of all IPOs and averaging a 24% return, with drug development platform Schrödinger and health clinic One Medical performing well.”

Overall, Q1-2020 was a strong quarter, with half of the deals being Healthcare related, and biotechs driving activity and outperformance. It was significantly higher than Q1-2019, but lower than expected due to the Coronavius affecting the second half of March. As a result of the window shutdown, as many as 20 IPOs are delayed and await re-opening.

We can certainly expect the IPO window to remain shut until after the summer, which will exacerbate the issues for late stage private companies burning a lot of cash. They may need to seek another late stage private round, with significant downward valuation pressure. The window will eventually re-open, as it always does, with high quality companies leading the way, while others may seek an M&A alternative.

We can expect healthcare companies to continue leading the way in the IPO segment over the next few quarters, as the world starts to massively invest in healthcare solutions and infrastructure (see more below on the case for AI and Healthcare). Additionally, we can expect Enterprise Software to do well as corporations around the world seek to increase productivity by empowering their employees, irrespective of their locations (office or home), or reduce their dependence on employees all together. As Aaron Levie, the CEO of Box, said in a tweet on March 28, 2020:

As is always the case after a major market crisis, the bar will be raised and further scrutiny will be applied to companies going public. Investors will likely take a much closer look at supply chain resilience/risks and the capabilities of these businesses to cope with future pandemic-like disruption, remote working capacity, etc.

If the bar gets too high, it will further delay high growth companies from going public, and if Wall Street short-term investor views do not fit the companies focus on customer lifetime value (LTV) and acquisition costs (CAC), then it is likely that innovative, VC-backed, high-growth companies may seek alternative listing on Silicon Valley’s Long Term Stock Exchange.

Mergers and Acquisitions – M&As

Like the IPO market, we can expect M&A to pause as buyers start to look inward and evaluate the immediate and longer term implications of COVID-19 on their business. Deals in progress may also be delayed, as transaction value gets renegotiated, and synergies get re-evaluated.

Speaking with a former head of Global M&A deal at Google during the 2007-2008 Global Financial Crisis, he said “the company, despite being one most active acquirers at the time, did a complete halt of its M&A activity for a period of 6-9 months, but that was immediately followed by one of the most active M&A periods in the history of the company, with more than a deal per week for a sustained period of 12 months”.

We can probably expect a similar “wait and see” period from most corporations, but the smart one should start acquiring smaller tech companies and their teams that will be seeking safe-harbor. Beside the digital leaders of today (most of which were born-digital), most corporations from the prior industrial era have been failing to “digitalize” fast enough, or at all. These companies will be facing significant pressure from their boards and shareholders to “aggressively” invest in their digital transformation, and M&A will become a very valuable tool for them to acquire valuable technology and talent they have not been able to develop and nurture in-house.

With $1.5T on the balance sheet of US Corporations at the end of 2019, I fully expect an acceleration of Tech M&A deals, especially in the $50-500M range.

Additionally, buy-out funds were sitting on $760B of dry powder at the end of 2019 (a historic high) and debt financing rates are likely to go down as well.

Historically PE firms have shied-away from what they consider the highly priced technology (and mostly venture-backed) sector. But as technology (and especially AI/ML) companies start to  be perceived as potential proprietary margin enablers to transform their portfolio companies, PE firms may reconsider how they measure the ROI of such acquisition. What if such an acquisition could lift each of their portfolio company’s profitability by 10-40% – in addition to their financial engineering and management strategies? This would be a total game changer for the fund that could master this strategy.

However, buy-out firms will first need to manage the fact that many of their portfolio companies are burdened with debt, a model that significantly reduces a company’s operational margin of error. Many PE-backed companies could soon default on their debt covenants, sending most PE firms scrambling and slowing down their ability to engage in new investments or acquisitions for months to come.

According to research firm The 415 Group, 2019 saw more tech M&A deals than 2018 (3,640 vs. 3,617), but the total transaction volume fell by 20% to $461B as historical key acquirers such Oracle, Microsoft, IBM and SAP did not ink a single deals over $1Bn. These acquirers could come back with a vengeance in 2020, or new tech firms born in the past two decades could continue to take over as leading acquirers and displace older, more-established buyers.

The US should continue to attract the majority of M&A deals, as per the chart below, and it bodes well for the  Venture Capitalists that are backing these companies.

Not all M&A themes are created equal, and when it come to AI and ML technology, which is BootstrapLabs’ core investment focus, that theme has been ranking #1 in terms of priority for acquirers, and the volume has been growing exponentially (see charts below).

CONTINUE READING PART 3 HERE

Post COVID-19 World: The Bullish Case for (early stage) VCs & Founders [Part 1]

Early-stage venture capitalists are in the business of hitting targets most people cannot see. Our focal point is usually set 3 to 5 years into the future. We often discover a future that is already available today but is not yet evenly distributed.

This is why founders, like early-stage VCs, need to be visionaries and look beyond the horizon. Many people are struggling to think past tomorrow, especially when the present is uncertain, and the specter of recession looms with skyrocketing unemployment claims as shown in The New York Times recently.

Being born in the mid 70’s during the first oil price shock, I am old enough to remember working my way through several major crises including the Asian Financial Crisis (1997), the Dot-Com Bubble Burst (2000), 9/11 (2001), the Global Financial Crisis (2007), and now, the COVID-19 Pandemic. Today, I find myself managing and investing venture capital on behalf of financial institutions, corporations, and wealthy families (most of whom became wealthy as a result of entrepreneurial endeavors). Below is a chart that puts these crises, and their impact on the S&P 500 in perspective.

And here is a close-up of the 10+ year bull market we experienced, and the recent drop caused by the COVID-19 pandemic: 

While things always seem worse when you are in the midst of it and the lives of you and your loved ones get impacted, you need to remember  that humanity, and our economies, are more resilient than we tend to believe. Through innovation, solidarity, and leadership, things do get better, and often even better than they were before the crisis hit. These crises tend to reveal quickly and dramatically everything that is wrong, broken, or plain backwards in our society, and give us the opportunity to learn, and spring forward to rebuild a better world.

The scale and speed of this pandemic is unprecedented in modern history, but we also have the technology and knowledge to solve for it in unprecedented ways.

Impact on the Venture Funding Environment

Limited Partners

I recently spoke with the head of venture investment of a large public pension fund and the conversation went something like this: “Putting public markets and other asset classes aside, we are pretty comfortable with our seed fund allocations and believe they are in a strong position to take advantage of this market turn-around. This is something we saw in 2000-2001, and again in 2007-2008…we are more concerned with our later stage/growth fund allocations, as recent years have seen very high valuations, the IPO window is likely to remain shut for a prolonged period of time, and some companies have considerable operational loses, which they justified with fast growth…but that may no longer be sustainable.”

As illustrated by the chart below, the US seed stage market will remain the most attractive risk/return segment of the market.

This white paper  from Invesco explains why limited partners should consistently invest in the venture capital asset class, in up and down cycles, while this blog post does a pretty good job of explaining  that we are not in a recession following a global financial meltdown like the one we witnessed in 2007-08, nor are we in a recession caused by a war triggered by a shocking act of terrorism like 9/11, but that we are in a sudden global economic recession due to the consequences of a global health crisis.

While some of the indicators may have pointed to the end of the bull market for the past few months, the economy, job market, and other key indicators were not in the red before this health crisis. Once uncertainty (and fear-driven, irrational exuberance) are removed from the market, people will regain confidence in our ability to get this virus under control, and the path to a recovery will emerge.

I will focus my thoughts on the Seed and Series A stage in this post, since this is where we invest.

Seed Stage

Early stage funding is likely to suffer most in the short term as high-net-worth individuals and angel investors who flooded the market in boom years will retract from the market. Because of the level of noise pre-COVID 19, and the lack of traditional metrics to assess opportunities at that stage, we expect many companies that were funded (and probably should not have been) will not be able to secure additional capital and will fail (or find safe harbor in the hands of a strategic, or negotiate an acquihire), effectively purging the market. After the initial shock, we may see angel investors returning to the market like we saw in 2007-2008 as valuations get lower and they see a “good deal” for their money. Experienced investors, able to perform institutional level due diligence at velocity, will be able to secure great deals/value. A similar flight to quality will happen, and institutional seed fund managers like BootstrapLabs are well positioned to benefit from this “buy-side” driven environment.

Series A Stage

Several Series A stage venture firms raised a lot of “dry powder” in the last 18 months (e.g, Sequoia, Andressen Horowitz, Lightspeed, NEA, etc.), resulting in over $276B available for the best startups reaching that stage and beyond. We expect a similar flight to quality and only top teams and companies with demonstrated traction will receive follow-on funding. But this is not much different from pre-COVID-19 criteria (and BootstrapLabs’ portfolio companies have fared better than most in that area, as demonstrated by our current 48% conversion rate from Seed to Series A within a short 3 year period).

Here is a chart of the venture capital industry since the last Global Financial Crisis. The market has grown significantly since 2008, mostly driven by a bull market, lower returns in the public sector, delayed IPOs, and late-stage mega-rounds, which really  should be considered “Growth Financing” rather than Venture Capital as Mark Suster said in his presentation here.

Back in 2015-2016, BootstrapLabs was among the first seed VC firms to recognize the opportunity to invest in Applied AI technology startups that were solving large and valuable problems by leveraging recent advances in computing power, broadband, and the data explosion. 3-4 years later, Applied AI adoption is still in its infancy and continues to attract a growing portion of the venture capital deals, especially around enterprise/industrial automation, cybersecurity, healthcare, mobility, etc.

What about Corporate Venture Capital (CVC)?

CVCs have been increasingly active over the past decade of bull markets, and last year were involved in approximately 30% of all venture financing rounds.

During the Dot-Com Bubble Burst, CVC seriously retracted from venture investments, and most did not return until after the Global Financial Crisis. Since a large number of CVC still invest from their balance sheet, one of the first things corporations may do to preserve cash is to reduce their CVC budget or allocation. I would not be surprised to see a 25-30% pull back in the market, but the wiser corporations will learn from the past and stay active in this coming market.

Corporations  that did not have CVC programs in place before this crisis will likely need to jumpstart their efforts by setting up shop sooner rather than later, partnering with groups like Silicon Foundry, or finding (earlier stage focused) VC funds to work with via Limited Partnership Investments (usually a much faster – and often more successful – way to tap into specific sector of the startup innovation ecosystem).

CVC arms are a key component to accelerate knowledge and access to outside innovation, and will need to go hand in hand with M&A to accelerate a corporation’s transformation. For more information on how and why to set up a CVC, I would recommend my friend Evangelos Simoundis’ blog posts here

As a VC firm focused on Applied AI, we are working closely with our Corporate Limited Partners, as well as families that own large corporations, to ensure they stay at the forefront of the 4th Industrial Revolution.

CONTINUE READING PART 2 HERE

Announcing BootstrapLabs Applied AI Insiders Series: Applied AI and Intelligent Communities – Webcast

Applied AI and Intelligent Communities

Today, startups are able to use AI to more efficiently and successfully engage, manage, and empower communities to deliver next-generation services and create new business models. From virtual hospitals managing thousands of lives in real time, to community-centric networks powering the internet of things at the edge, or more sustainable energy production and smarter consumption. Intelligent communities will no doubt be at the heart of our new digital society and AI will play a major role in accelerating this transformation.

BootstrapLabs Applied AI Insiders Series are quarterly, invite-only, networking events with thought leaders from our community sharing their latest insights and real-world applications of Artificial Intelligence across industries in which we invest. The fourth Industrial Revolution is already creating billions of dollars in opportunities and will impact people, corporations, and society in profound ways; the question is, what are you doing about it today?

Come join us to learn more about how Artificial Intelligence will revolutionize the very fabric of our society, and influence economic models by establishing the digital infrastructure to intelligently create, engage, and manage communities.

EVENT LOGISTICS UPDATE

Following precautionary measures surrounding the COVID-19 (Coronavirus), BootstrapLabs, together with its event space partner, Wilson Sonsini Goodrich & Rosati, has decided to cancel the physical gathering of this event, and instead would like to invite everyone to join this Applied AI Insiders Series via a webcast starting at 5:00pm PDT Wednesday, March 11, 2020.

The event will start a bit earlier than initially planned so people can join at the end of their workday, and will end shortly after 6:15pm PDT.

In an effort to facilitate present and future networking opportunities for webcast attendees, BootstrapLabs will share contact list information of all attendees with fellow live attendees who have opted-in.

Or contact: events@bootstraplabs.com.

AGENDA

  • 5:00 pm – 5:05 pm | Greetings
  • 5:05 pm – 6:05 pm | Guest Keynotes + Q&A
  • 6:05 pm – 6:15 pm | Recap and Closing

SPEAKERS

Ben Levy, Co-Founder and General Partner, BootstrapLabs

Ben has been actively investing in technology startups and supporting BootstrapLabs’ portfolio companies. Born in France and living in Silicon Valley for the past 20 years, Ben is a repeat entrepreneur who launched, built and exited two startups in the financial technology space.

Earlier in his career, Ben was an Investment Banker who advised CxOs of Fortune 500 companies and startup founders on corporate strategy, financing, and M&A. His banking experience spans across firms like Lazard, SG Cowen, Houlihan Lokey, Wedbush Securities, and QuantumWave Capital.

Ben is also a member of AAAI (Association for the Advancement of AI), and a frequent keynote speaker on innovation, technology investing, entrepreneurship, and artificial intelligence in the US, Europe, and Asia.

Natalia Olson-Urtecho, Chief Strategy,  Innovation Officer and Co-Founder, The Disruptive Factory

Natalia Olson-Urtecho is a serial entrepreneur with more than 20 years of experience working with international, regional and local entities in Latin America, Central Europe, Asia and the U.S. She is an expert in smart cities, finance, government, international diplomacy, commercialization of technologies, Blockchain, Artificial Intelligence, mobility, public engagement and infrastructure. She is the Co-Founder of the Disruptive Factory and the COO of the RadicalxChange Foundation. She was appointed by President Obama as the SBA Regional Administrator managing yearly 35 billion dollars in government contracts and 8 billion in loans for SMEs. She was responsible for delivery and management of small business programs, development initiatives and financial assistance, overseeing 180 SBA offices. Natalia was appointed to Philadelphia’s Planning Commission and served as the Vice Chair of the Zoning Code Commission. She was appointed to the U.S. Innovation Advisory Board to advise Congress and the White House on competitiveness and innovation. She has been honored with numerous prestigious awards such as Woman of Distinction for her work in sustainable infrastructure & the green economy.

Simon MacGibbon, CEO and Co-Founder, Myia Health

Simon MacGibbon is the CEO and co-founder of Myia Health, a predictive and personalized health monitoring platform for virtual patient care. Myia uses machine learning to transform streams of real-world health data into timely and actionable clinical insights.Simon has 25 years of experience using technology to create data driven products and transform enterprise capabilities. Prior to co-founding and leading Myia Health, Simon co-founded the Boston Consulting Group’sDigital Ventures global team. At BCGDV, Simon led teams responsible for imagining, building, and commercializing new technology platforms to help some of the world’s most influential companies innovate like startups. Simon was formerly an Associate Partner at McKinsey & Co.and led CRM and analytics implementations with IBM. Simon’s belief in the applied benefits of physiological measurement surfaced in the 1990s, while studying neuro psychology and as an exercise physiology researcher and subject at Otago University. Simon has a BSc from Otago University in New Zealand and a BA (Hons) in Applied andIndustrial Psychology from the University of Canterbury.

Micha Benoliel, CEO and Co-Founder, Nodle

Micha is a visionary and serial entrepreneur focused on building Nodle, a global and decentralized wireless network for connecting IoT devices to the internet. Prior to founding Nodle, he enabled Skype to launch Skype In and Skype Out and built several ventures and products in the space of telecommunications, networking and the Internet: Open Garden, FireChat, and PiperChain (Sold to RightMesh).


BootstrapLabs To Speak at The SuperReturn US East Private Equity Venture Capital Conference

BootstrapLabs Co-Founder, Benjamin Levy, will be speaking at the SuperReturn US East Private Equity Venture Capital Conference in Boston, on June 11th, 2019.

The conference will bring together over 450 of the leading players in Private Equity and Venture Capital from the West Coast, for an unparalleled opportunity to meet, learn, and create new business ventures.

Ben, along with other leading industry experts, will share their strategies and discuss key issues during a session called: A.I. will radicalize VC and PE.

More about Ben Levy:

Ben Levy is the Co-Founder and Managing Partner of BootstrapLabs, a leading Venture Capital firm based in Silicon Valley and focused on Applied Artificial Intelligence. Ben is a repeat entrepreneur who launched, built, and exited two startups in the financial technology space. Praedea Solutions, a data mining and machine learning startup acquired by Mergent in 2006, and InsideVenture, an information portal for venture-backed pre-IPO companies and institutional investors, acquired by Second Market/NASDAQ in 2009.

Early in his career, Ben was an Investment Banker who advised CxOs of Fortune 500 companies. Over a period of 10 years, Ben helped his clients raise over $300M and close over $5B in M&A transactions. Ben worked at Lazard, SG Cowen, Houlihan Lokey, Wedbush Securities, and QuantumWave Capital.

Ben is a member of the AAAI (Association for the Advancement of AI), and a frequent keynote speaker on innovation, technology investing, entrepreneurship, and artificial intelligence in the US, Europe, and Asia.

 

innogy, Thomas Birr, Nicolai Wadstrom, BootdtrapLabs

innogy Innovation Hub and BootstrapLabs to form a Partnership for Investments in AI and Energy

innogy, Thomas Birr, Nicolai Wadstrom, BootdtrapLabs

We are proud to announce our partnership with innogy New Ventures LLC, part of the innogy Innovation Hub and an affiliate of innogy SE, a leading German energy company and the third largest utility in Europe with annual revenues of €43 billion (2017).

The Energy sector is often overlooked by technology-focused investors that deem it too complex, slow, and concentrated. At BootstrapLabs, we understand that Energy, and its supply-chain infrastructure, is powering our modern way of life, including all the technology that we have come to love and rely upon each and every day. Not having a safe, secure and always available source of electricity is not an option and we need to put our best minds on the problems facing utilities, if we are to solve some of their major challenges in time.

innogy Innovation Hub and BootstrapLabs share a common vision that AI will be a key pillar to ensure that utilities successfully transition into the future. As part of our long-term strategic relationship, innogy New Ventures will invest an initial sum of $5 million in BootstrapLabs’ Applied AI Funds, and together we will coordinate globally to build the largest artificial intelligence community for energy ecosystems, and provide a combination of capital and support to Applied AI startups that reimagine the future of energy production, distribution and management across decentralized and interconnected energy services for consumers, machines, enterprises, and public sector agencies.

“As a venture capital firm focused on Applied AI, we believe that the advances made from deep learning and machine learning algorithms will revolutionize both the demand and supply side of the energy economy. With about 22 million customers and activities in 15 countries, innogy is the perfect partner to help us validate use cases quickly and scale our venture investments globally,” said Nicolai Wadstrom, Founder and Managing Partner of BootstrapLabs.

To read the full press release visit the full press release.

Announcing the BootstrapLabs Applied AI Insiders Series: Human and Computer Interaction – Moving Beyond Touch

BootstrapLabs Applied AI Insiders Human Computer Interaction

BootstrapLabs is thrilled to announce the Applied AI Insiders Series: Human and Computer Interaction – Moving Beyond Touch.

Event Summary:

  • Date and Time: Thur, May 31, 2018| 5:30 pm to 8:30 pm
  • Location: The Google Launchpad Space, 345 Spear St 5th Floor, San Francisco, California 94105
  • Registration:this event is INVITE ONLY. If you did not receive an invitation you can request one below.

 

 

Event Description

Topic: Human and Computer Interaction – Moving Beyond Touch

We stand in front of the 4th and largest wave of the industrial revolution, powered by Artificial Intelligence and Data. This is the biggest opportunity so far for innovation and entrepreneurship, and every single industry will be disrupted and redefined by companies that are not yet even born.

With the AI economic impact projected to reach $15 Trillion by 2030, we believe Applied Artificial Intelligence represents one of the major wealth creation opportunities of this century.

The interaction between Humans and Computers has been in constant evolution. Until the invention of touch screens, our connection with these devices was indirect and relied on additional equipment like a keyboard, screen, stylus, and mouse. It was only a matter of time until AI would be leveraged to radically change that connection, and move us closer to what Dr. J.C.R. Licklider, the pioneering psychologist and computer scientist, forecasted in 1963, a human-computer partnership.

During our May Applied AI Insiders Series event, we will explore practical ways AI is being applied to different Human/Computer interfaces, moving us beyond touch and closer to how we interact with other humans – using speech, gestures and even body language. Sensors that can understand our unique appearance, gestures, emotions or vital signs, voice-enabled interfaces that can hear and “understand” what we say, and even prosthetics that can interact with the electrical impulses our brains uses to control our body, are just some examples of where we’re heading.

We will explore the added benefits of these interfaces, but also share thoughts on some of the biggest challenges facing broader adoption of this technology. To get us to the next phase in human-computer collaboration, these systems must gather and analyze countless information on users, but how do we ensure privacy and secure that sensitive data?

As a VC focused on Applied AI, BootstrapLabs looks beyond the hype and has assembled an extraordinary panel of speakers to take you through the current state of AI and Human Computer Interaction. Read more.

Speakers

Ben Levy, Co-Founder, BootstrapLabs

Ben spent the last 20 years in Silicon Valley building and exiting two FinTech startups to Mergent and NASDAQ, investing in disruptive software technologies, and advising CxOs of Fortune 500 Telecom, Media and Technology companies on corporate strategy, financing and M&A.
Ben is a member of the Association for the Advancement of Artificial Intelligence (AAAI), an Ambassador of La FrenchTech, as well as a frequent keynote speaker at industry conferences on innovation, technology investing, entrepreneurship, artificial intelligence, and globalization in the US, Europe, and Asia.

Igor Jablokov, Founder, Pryon

Igor is founder and CEO of Pryon, a stealth startup in the field of artificial intelligence. He also serves as an EIR for Blackstone NC, an initiative to accelerate the commercialization of academic research. He was awarded the Eisenhower and Truman National Security Fellowships to research the connection between government and venture capital in fostering innovation.

Previously, Igor was founder and CEO of Yap, a VC-backed startup that pioneered cloud-based speech recognition. It was acquired by Amazon to act as the nucleus of AI-related products such as Alexa, Echo, and Fire TV. He holds over two dozen patents issued and pending and was named an industry luminary by Speech Technology Magazine. Igor holds a BS in Computer Engineering from The Pennsylvania State University and an MBA from The University of North Carolina.

Mark Nitzberg, Executive Director, Center for Human Compatible AI – UC Berkeley

Dr. Mark J. Nitzberg is currently Executive Director of the Center for Human Compatible Artificial Intelligence as well as head of strategic outreach for the Berkeley AI Research Lab at the University of California, Berkeley. Founded in late 2016, the UC Berkeley Center for Human-Compatible Artificial Intelligence (CHAI) aims to reorient the field of AI towards creating systems that are provably safe and beneficial to humans.

Dr. Nitzberg is also the co-author of “Solomon’s Code” and also serves as Principal & Chief Scientist at Cambrian.ai, as well as advisor to a number of startups. Most recently he was Director of Computer Vision Products at A9/Amazon following their acquisition of The Blindsight Corporation, where he was founding CEO. An entrepreneur, scientist, and seasoned organizational leader, Dr. Nitzberg has built companies and products in the areas of computer vision, machine learning, financial portfolio optimization, workflow efficiencies, online commerce, development aid, data capture, analytics, film, and theatre.

Dr. Nitzberg began studying AI with Marvin Minsky as a stowaway student at MIT in the “expert systems” wave of the early 1980’s, and wrote his Ph.D. on Computer Vision and Human Perception in 1991 under David Mumford at Harvard University.

Omar Abdelwahed, Head of Studio, SoftBank Robotics America

Omar Abdelwahed is a producer, engineer and currently the Head of Studio at SoftBank Robotics America. Omar has more than 15 years experience leading teams for large video game publishers including Ubisoft and 2K; independent developers like Mighty Play and PLAYSTUDIOS; and retailers such as Best Buy. Omar’s work includes the free-to-play shooter, “Ghost Recon Phantoms,” and the NBA video game franchise, “NBA2K”. Omar founded the independent games developer, Agent Disco, where he published his first mobile game, “The Null Society”.

Thank You To Our Host and Partner

logo_google_launchpad_space

Applied Artificial Intelligence Newsletter

Applied-AI-Digest

BootstrapLabs at Mobile World Congress

Barcelona, Spain – March 5, 2018 – BootstrapLabs Co-Founder, Benjamin Levy, and Principal, Luigi Congedo had a busy week leading a few sessions at the Mobile World Congress last week in Barcelona, sharing AI’s latest implications for the business world.

mwc2018_picture1

mwc2018_picture3

Ben was a part of the Artificial Intelligence: Operator Use Cases and AI Everywhere: Innovation & Investment sessions. He discussed the rapid evolution of AI technology and how mobile operators and other providers are starting to leverage AI applications. Ben also provided context regarding the challenges mobile other industries run into when using Artificial Intelligence to change business processes and value.

luigi_panel_barcelona_bootstraplabs

Luigi was part of a panel discussion and led a workshop: Applied AI Investment Framework and Applied AI Changes Everything. He shared how Artificial Intelligence is transforming industries such as: Agriculture, Transportation, Manufacturing, Healthcare and many more. He also highlighted the latest investment trends in Artificial Intelligence and guidelines for those interested in leveraging AI’s transformative power.

 

 

Mobile World Congress is a combination of the world’s largest exhibition for the mobile industry and a conference featuring prominent executives representing mobile operators, device manufacturers, technology providers, vendors and content owners from across the world. It is organized by the GSMA and held in the Mobile World Capital, Barcelona.

WANT TO JOIN US TO THE NEXT AI EVENT?

Sign up for our newsletter list to receive updates, subscribe here.

BootstrapLabs at Accelerate AI

San Francisco, November 2, 2017 – BootstrapLabs Co-Founder, Benjamin Levy, led the “Applied AI: Investment Framework” session at the Accelerate AI last week in San Francisco, sharing AI’s latest implications for the business world.

Ben discussed the rapid evolution of AI technology and its impending impact on a wide range of business sectors. Ben provided some as to why AI is growing so quickly now, and what are some of the challenges and opportunities that lie ahead. His presentation highlighted some of the most current investment trends, data projections, and other industry guideposts to help the audience make the most of AI’s transformative power.

 

Accelerate AI, co-located with ODSC West 2017, brings together the top industry executives, managers and CxOs to help you understand how AI and data science can transform your business including: Healthcare, Insurance, Retail, Government, Education, Bio/Pharma, Media & Marketing, Transportation, Finance, Manufacturing, Energy & Utilities, E-commerce, and more.

WANT TO JOIN US TO THE NEXT AI EVENT?

Sign up for our newsletter list to receive updates, subscribe here.

BootstrapLabs Workshop: The Hard Things About Deploying and Scaling AI

There’s no question about it, Artificial Intelligence is booming, the market is expected to grow 20 fold in the next 10 years. What are some of the challenges companies face when building true enterprise grade AI systems? How will companies adopt this new wave of AI technologies? That’s what the experts and attendees we assembled on November 30th for the Applied AI Workshop discussed. Attendees included executives and C-level from Softbank, Forever 21, AT&T, World Bank Group, Capital One, Samsung, Booz Allen Hamilton, Syniverse and more.

A special thanks for supporting the Artificial Intelligence community to the host of the workshop Wilson Sonsini Goodrich & Rosati.

IMG_7246

Meet the BootstrapLabs Applied AI Workshop Speaker lineup:

Thomas Campbell, Founder & President, FutureGrasp, LLC

Thomas advises organizations on trends and implications of emerging technologies. As the first National Intelligence Officer for Technology, he served as the focal point for all activities related to emerging and disruptive civil technologies.

Jane McFarlane, Founder & CEO, Seurat Lab

Jane has over 30 years of experience in high performance computing, data analytics and geospatial mapping. She’s been responsible for directing industry research groups including: HERE (a leader in the geospatial mapping), Imara (a lithium ion battery company, and OnStar at General Motors (the first at-scale telematics solution).

Alex Holub, Co-founder & CEO, Vidora

Alex studied AI throughout his academic career at Cornell University and during his Ph.D at Caltech. He founded Vidora with Abhik Majumdar and Philip West in 2012, to put AI in the hands of everyone from marketers to data scientists to execs, providing them a simple platform to ask questions and use answers to automate and optimize their business.

 

One of the biggest challenges mentioned throughout the night was talent: attracting, retaining and growing the pipeline. The competition is fierce and startups and big companies alike have a hard time competing with the giants like Amazon, Facebook and Google.

It’s interesting to see that because of the talent gap, companies are heavily investing in code that can create code as Thomas Campbell mentioned and “when we get to that point when code creating the code is better than humans creating the code, that might start lifting AI to the next level”.

A big hurdle that Thomas Campbell sees in the near future is cybersecurity, a “tsunami of cybersecurity issues” to be exact.  Because cyberbots as opposed to humans will be “faster, more efficient, never resting, omnipresent” and they will be used both for offense and defense, so as he puts it: the future will be AI vs. AI.

 

Prof. Jane McFarlane at UC Berkeley, presented a different set of challenges that AI faces in terms of the data it requires. To power machine learning algorithms, you need tons of data. But, “when you’re in a giant bucket of data, how do you pick out the bad?”

She’s worked in the space for several years and the data used to feed the machine learning algorithms always comes with some bad nuggets you have to parse out. Because of the difficulty associated with weeding out bad data, Jane says autonomous transportation won’t happen in her lifetime, “I’m the Debbie Downer of autonomous transportation”.

Another interesting point that Jane brought up is how overvalued Big Data is, she says “there are some nuggets in Big Data that are valuable, but the rest of it is redundant and costs a lot of money to store.”

 

Alex Holub from Vidora presented another set of challenges that companies scaling up AI projects run into, how do you figure out which methods/techniques to use? With so many options, figuring out the best way to clean the data, which feature engineering and model to leverage is very challenging for teams with limited resources. That’s exactly what Vidora is solving with their product Cortex.

Cortex learns based on the raw data, which feature cleaning, feature engineering and model technique to use. You can think of it as putting probabilities on which is going to be more successful by looking at the raw data set, based on what has worked in past projects with similar input.

IMG_9618

The Artificial Intelligence industry is moving faster than ever before, but there are still big challenges such as: talent, cybersecurity and data veracity that we need to overcome to truly push the industry forward.

BootstrapLabs Keynote at the AI Summit San Francisco

San Francisco, September 28, 2017 – BootstrapLabs Co-Founder, Benjamin Levy, led a keynote session at the AI Summit last week in San Francisco, exploring AI’s latest implications for the business world and our society as a whole.

Ben Levy discussed the rapid evolution of AI technology

Ben discussed the rapid evolution of AI technology and its impending impact on a wide range of business sectors, including finance, healthcare, education, agriculture, and more. His presentation highlighted the most current investment trends, data projections, and other industry guideposts to help light the way forward for those hoping to make the most of AI’s transformative power.

 

 

The AI Summit brings together 2,000+ of the most senior business CxOs, AI visionaries, AI start-up innovators, press/media, and acclaimed researchers in the world. Ben spoke alongside executives from companies such as Google, Microsoft, Unity, Mercedes-Benz, IBM Watson, Netflix, Amazon Web Services, Facebook, Nvidia, and many other leaders in the space.

 

WANT TO JOIN US TO THE NEXT AI EVENT?

Sign up for our newsletter list to receive updates, subscribe here.

BootstrapLabs Presents at Lionbridge Global Innovation Symposium

San Jose, CA, September 21, 2017 – BootstrapLabs co-founder Ben Levy was one of five featured keynote speakers at the Lionbridge Global Innovation Symposium in September.

Lionbridge Ben Levy Presentation

Ben’s presentation was part of a series at the event focusing on “The Impact of AI on Global Customer Experience.” Ben spoke alongside speakers including Falon Fetami, CEO of Node, Peter Isaacson, CMO of Demandbase, and Katell Jantreau, Globalization Manager at Netflix.

The Symposium focused on connecting more effectively with customers using AI and deep learning, from product development to delivering personalized content and streamlining marketing reporting. You can find more information about the event here.

To sign up for our mailing list, click here.

Dear CEOs: Artificial Intelligence is your biggest threat, and your biggest opportunity

It is no secret that artificial intelligence (AI) is poised to take the world by storm. But what exactly does that mean if you are a business leader? It means you need a strategy, and you need to act fast.

Just ask Mark Fields, the former CEO of Ford who was replaced back in May by Jim Hackett, head of their future focused Ford Smart Mobility division. Though it will take time for any company’s internal AI capability to grow, the time to get started is now – and waiting might end up costing you at lot more.

What is Your Game Plan?

Beyond the dwindling profits motive for Ford, we are talking about entire industries and their supply chains being transformed at unprecedented speed. Amazon’s recent acquisition of Whole Foods suggests that even successful, profitable companies, in what most would consider a non-tech sector,  are not immune to changing times and technology disruption.

We have already seen early AI adopters like Facebook, Google, Uber, Microsoft and IBM establish new standards for data analysis and customer experience, and those standards will continue to sharpen as more companies take advantage of this technology. With $1.7 billion invested in AI startups in Q1 2017 alone, and the exponential efficiencies created by this sort of technology, this evolution will happen quicker than many business leaders are prepared for.

If you aren’t sure where to start, don’t worry – you’re not alone. The good news is that you still have options:

  1. You can acquire, or invest in, an innovative technology company applying AI/ML in your market, and gain access to new product and AI/ML talent.
  2. You can seek to invest as a limited partner in a few early stage AI focused VC firms like BootstrapLabs, gaining immediate access and exposure to vetted early stage innovation, a community of experts and market trends.
  3. You can set out to build an AI-focused division to optimize your internal processes using AI, and map out how AI can be integrated into your future products. But recruiting in the space is painful and you will need a strong vision and sense of purpose to attract and retain the best.
  4. You can use outside development-for-hire shops like new entrant Element.ai, who raised over $100M last June,  or more traditional consulting firms like Accenture, Capgemini, and others to fill the gaps or get the ball rolling.

What’s more, these options are by no means mutually exclusive. On the contrary, as an executive leader in the digital era, you need to adopt a lean and iterative philosophy around execution: build/partner/buy, measure, learn, and double down on what’s working for your company.

The best companies in the world are already doing this, and many more are preparing to do so soon. Are you?

Connect to the Community and Start Building

Since our second annual Applied AI Conference back in May, which gathered over 700 senior executives, we have been amazed at the level of enthusiasm surrounding the AI advancements and possibilities taking shape across all industries.

What was once but a body of research has given way to massive investment, adoption, and before long we will see large-scale market adaptation taking place well beyond the current use cases. The technology is there, ready for action, and an amazing community has formed around it, across many important industries.

Over the last several years, BootstrapLabs has lead the way in connecting this community. From the technologists and evangelists to the entrepreneurs and investors, we are much more knowledgeable and capable together than any one of us could be alone.

The same principle applies to your business. The talent war around AI is already raging, and as you build your strategy, you need a plan for attracting and retaining top personnel. This means that you have to do more than just “lip service” or “innovation theater” and execute in all aspect of your business to make AI part of your brand and core infrastructure. Your stakeholders will first ask for it, then quickly demand it.

Be Future-Ready

Okay, you’re sold on creating and executing your AI strategy – but how do you prepare for the unknown?

Not only must you focus on adapting for the near-term impact that AI will have on your market, but you must build out capabilities which will set you up for long-term success. This is where your leadership is so important.

Create and mobilize an ecosystem of human capital, venture capital, and technology that will help your organization sail through the seas of change. Empower your domain experts with a robust and agile business strategy, and the innovation will happen more organically.

The puzzle pieces are all there, it’s just up to you to start putting them together. You have much to gain. As Akli Adjaoute, President and CEO of AI company Brighterion suggests, we are talking about “10x ROI for enterprise: you could solve problems within a minute using this technology, instead of weeks.” This opens up space to solve bigger and better problems, increasing employee engagement and productivity and reducing the risk of inefficiencies eating away at your margins.

Don’t wait to be in Mark Fields’ position. Be remembered as the visionary leader that managed to plan, take action, and come out ahead of this challenging innovation curve. Just reflect back on the move that Mark Zuckerberg made with Instagram in 2012. He chose to spend $1 billion (10% of Facebook’s valuation at the time) to buy a revenue-less, two year old mobile photo sharing company – and invested several million dollars since to keep supporting its growth.

He knew that mobile was transforming everything, and Facebook had to stay relevant. Seeing how far we’ve come since this move, you would take that bet any day of the week. Now let me ask you: How much of your market cap are you investing in your AI transformation today?

If the answer is not enough, not fast enough, then refer back to the above section on game plan and reach out to the community!

Corporate investment in artificial intelligence “is predicted to triple in 2017, becoming a $100 billion market by 2025,” writes Ray Wang of Harvard Business Review. He and his colleagues agree that “the question now is not about whether managers should investigate adopting AI, but about how fast they can do so.”

Don’t be mistaken, though – you can’t do it overnight. Developing your AI capability will take some serious effort, commitment, and consultation from multiple invested parties in the space before it can really take flight.

Never forget that innovation and entrepreneurship is a team sport, so ask yourself, who is on my team?


BENJAMIN LEVY

Ben is the Co-Founder of BootstrapLabs, a leading venture capital firm, based in Silicon Valley and focused on Applied Artificial Intelligence.

Some of BootstrapLabs’ portfolio companies include Prezi, AngelList, Zerply, Trusted Insight, AEye, Qurious.io, Roger.ai, Vidora, and Sibly.

Born in France and living in Silicon Valley for the past 18 years, Ben is a repeat entrepreneur who launched, built, and exited two startups in the financial technology space. Read more.

Announcing the BootstrapLabs Applied AI Insiders Series: Autonomous Transportation

Autonomous Transportation- Rethinking Security, Infrastructure, and Experience

BootstrapLabs is thrilled to announce the BootstrapLabs Applied AI Insiders Series: Autonomous Transportation

Event Summary:

  • Date and Time: Tue, October 3, 2017 | 6:00 pm to 9:00 pm
  • Location: Google Launchpad Space, 301 Howard Street, San Francisco, California 94105
  • Registration: this event is INVITE ONLY. If you did not receive an invitation you can request one below.

 

 

Event Description

Topic: Autonomous Transportation: Rethinking Security, Infrastructure, and Experience

Autonomous transportation goes well beyond cars and includes all modes of powered transport such as motorcycles, buses, trucks, trains, ships, helicopters, planes, and even spacecraft. There are also various degrees of autonomy levels which need to be considered in the context of fluid and frictionless mobility.
Secure and intelligent communication networks, smart sensors, reliable and fast identification, fail safe and redundancy planning must all come together for the dream to become reality and to ensure safety and security. Read more.

Speakers

Ben Levy, Co-Founder, BootstrapLabs

Ben spent the last 20 years in Silicon Valley building and exiting two FinTech startups to Mergent and NASDAQ, investing in disruptive software technologies, and advising CxOs of Fortune 500 Telecom, Media and Technology companies on corporate strategy, financing and M&A.
Ben is a member of the Association for the Advancement of Artificial Intelligence (AAAI), an Ambassador of La FrenchTech, as well as a frequent keynote speaker at industry conferences on innovation, technology investing, entrepreneurship, artificial intelligence, and globalization in the US, Europe, and Asia.

Dr. Allan Steinhardt, Chief Engineer, AEye

Steinhardt was Chief Scientist for DARPA, Chief Scientist at Booz Allen, co-author of a book on adaptive radar, and assistant professor in Electrical Engineering and Applied Mathematics at Cornell University among other experiences.

Tilly Chang, Executive Director of the San Francisco County Transportation Authority

Ms. Chang has also held posts with the World Bank, Metropolitan Transportation Commission, and a
technology startup. She serves on the boards of the California Transportation Foundation, SPUR and
the UC Transportation Centers.

Chad Partridge, CEO of Metamoto, Inc.

Chad is an accomplished executive making his recent mark as an entrepreneur in enterprise software contributing mission critical video, geospatial metadata, and computer vision within unmanned systems markets. His company Metamoto is a startup specializing in scalable simulation for autonomous systems.
Thank You To Our Host and Partner

logo_lockup_google_developers_launchpad_space

Applied Artificial Intelligence Conference 2018 #AAI18

Applied-AI-Conference-2018-eventbrite

BootstrapLabs Speaks at GSMA Mobile World Congress Americas

San Francisco, CA, September 13, 2017 – BootstrapLabs co-founder Ben Levy participated in the GSMA Mobile World Congress Americas in San Francisco this past September, speaking on the Adventures in Applied AI: Practical Use Cases Panel, as well judging AI and IoT startup ideas in the 4YFN Americas Awards pitch competition.

Ben Levy - GSMA

Ben shared his expertise in Applied AI investment use cases, relevant across a range of industries, and global entrepreneurship and innovation strategies. He spoke on the panel alongside Kinuko Masaki, CEO & Founder of SmartEar (a BootstrapLabs portfolio company); Mark Sherman, Managing Director of Telstra Ventures, and Liesl Yearsley, a private researcher.

The panel was moderated by TechEmergence CEO Dan Faggella. The 4YFN Americas Awards jury was made up of other mobile entrepreneurship leaders from GE Digital, XSeed Capital, Verizon Ventures, and more.

The Mobile World Congress Americas focuses on the latest advancements in mobile technology products and business best practices. Participants in the event represented a wide range of disciplines and organizations across the Americas and the world, including executives from the largest and most influential mobile operators, software companies, device makers, equipment providers and internet companies, as well as government delegations.

To sign up for our mailing list, click here.