
The head of Bloomberg's $150M VC fund explains formula for finding an AI startup - jerryhuang100
http://www.businessinsider.com/bloomberg-beta-head-roy-bahat-on-the-formula-for-ai-2016-8
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erdevs
This is yet another clickbait-y title that overpromises and underdelivers.
Little value, no specificity, and hardly any real description of a "formula"
whatsoever. Here, though, is a tl;dr summary for one of the only concrete
pieces of the "formula" actually described:

Bloomberg's early-stage VC fund will only invest in Series A or earlier
companies. Then when looking at AI companies they ask two questions: "1) Do
you have access to your own user? 2) Do you have access to a data set that's
yours? If they have both those things, then they can create a virtuous cycle
where the user contributes the data, the data gets better, and it makes for a
better user experience."

Asking about access and usage rights to data and means of applying learnings
from the data is a very obvious qualifier, so there is little valuable insight
here.

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tlb
Many AI startups don't have (1) because they provide a service to someone else
who has the relationship with the user. For example, startups that provide
APIs for image classification, e-commerce fraud risk estimation, ad targeting,
or product recommendation. I believe there will be big winners in the API
space too, but they'll look different from consumer-facing companies.

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cocktailpeanuts
It's hard to become extremely successful (I'm talking Google/Facebook scale)
if you don't have access to your users. It's much easier to build a consumer
product that provides an experience 10 times better than what's on the market,
than building a technology that is 10 times better than what's on the market.
And even when you do come up with something like that, unless you actually
capture your own customer (which brings us back to "having access to your
users"), others will end up copying you or commoditize you.

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Animats
Summary: _" Bloomberg Beta tends to ask two questions of its potential
investments: 1) Do you have access to your own user? 2) Do you have access to
a data set that's yours?"_

Business today: can you cut off their air supply, or can they cut off your air
supply?

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danieltillett
I am pretty sure that is the way business has always been. JD Rockefeller
didn't get rich playing nice.

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pbiggar
Disappointed that the answer isn't "We use AI to do it."

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mtbomb
Just feed the data into an ML algorithm.

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appleflaxen
> and cofounder and chairman of gaming console OUYA

I can't imagine why this would be a good thing to draw attention to.

OUYA's execution was bad enough that it went out of business.

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Retra
Are you looking for white-washing or journalism?

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SwellJoe
As someone that has seen AI come and go through multiple "AI winters", I'm
amused to see it coming back around. Of course, it's totally gonna work this
time!

Actually, I believe we really are on the cusp of a very different world of
software, due to AI. But, it's been a long time coming, and a lot of great
minds have kinda gotten lost in the academic pursuit of AI.

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drdrey
_" A number of executives at Bloomberg realized technology was being developed
in the startup world they were only seeing once it was mature enough to be
ready for Bloomberg, but that was often too late to be able to fully
understand it."_

That's a peculiar way to think about new technology, to say the least. "Too
late to fully understand it", really?

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yalogin
They probably mean they could have used the tech early on to gain an advantage
over their competitors. But if they waited till it matured then they are no
different than anyone else.

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danieltillett
Having unique data is incredibly important if you are going to build a
business around better data analysis. You can live without direct access to
end customers, but without access to unique data you are just playing the game
of my people are smarter than your people.

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nxzero
Believing that only AI startups that will make it big are ones that don't own
the data or end user seems like an obviously flawed filter; for example,
imagine if someone demand AirBNB or Uber owned the property they ultimately
profited from.

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srtjstjsj
AirBNB or Uber both have access to their user and have a proprietary data set.

