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Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

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Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#51

Post by streetcat1 »

jvalencia wrote: post #30
ChuckMcM wrote: post #4

I really dislike this sort of journalism. Theranos was founded by a 19 year old too. That one didn't work out so well. Was it because the founder was so young? The board so oblivious? (a bit of both if you read the book) What does it really matter how "old" the founder is, does the business have a workable business plan? Can it be profitable? Do people pay enough money for its goods and services to return a net incom…

I think it depends. If the age is being used to promote ageism, then this is not good. If however, the age is used to encourage young people to start businesses, that's positive. So... context and tone?

The age is actually testament to how easy it is to get to 1B$ valuation with no need for deep software experience.

This is in general not a good sign for the company or for the VC.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#52

Post by ignoramous »

ayw wrote: post #3

Hey everyone! I'm Alex, CEO/founder of Scale! I just wanted to chime in that we're a YC company as well (S16), and I'm thankful to the HN community for having been supportive through our whole journey.

Astounding. Congratulations, Alex.

If I may, can you please tell us:

As your business has grown, what has changed the most in terms of how you run it?

What were some of the biggest challenges you've overcome and any major obstacles you see in the near future for the business?

Who are your mentors?

Thanks.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#53

Post by DoreenMichele »

sindergirl wrote: post #32

In essence, the company pays third worlders a pittance to transfer humanity's skills to the machine. The skill transfer is limited to what can be done with a mouse and screen, but since that's where most human ability is currently manifested, it's hardly a limitation. What happens to the serfs once the transfer is complete? Do they realize they are exchanging temporary wages for eternal futility? I like how the inves…

I'm an American who began doing online gig work (for a different company, not Scale) while homeless. It allowed me to pay down debt and get back into housing under circumstances where a normal job was out of the question.

This worked in part because my income was portable, so I was able to take a train to a more affordable area to get a place within my limited budget. This ability to move at will and take my income with me was historically largely limited to the Jet Set and comfortably well-off retirees.

For many people, doing gig work is a tremendous opportunity with a very big upside. It can be a huge improvement in both their standard of living and quality of life.

Most people decrying such labor arrangements aren't doing anything whatsoever to offer a better alternative. Color me unimpressed.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#54

Post by ayw »

ignoramous wrote: post #52
ayw wrote: post #3

Hey everyone! I'm Alex, CEO/founder of Scale! I just wanted to chime in that we're a YC company as well (S16), and I'm thankful to the HN community for having been supportive through our whole journey.

Astounding. Congratulations, Alex. If I may, can you please tell us: As your business has grown, what has changed the most in terms of how you run it? What were some of the biggest challenges you've overcome and any major obstacles you see in the near future for the business? Who are your mentors? Thanks.

The biggest change is your jobs goes from doing things (which makes sense) to building an incredible team that can do things (which is a more unintuitive job). In the limit, it’s always a people business.

Overcome many challenges, but per my last answer, building a team of the best people has been the most important and most challenging. That, and learning how to do sales ;)

Too many mentors. People in Silicon Valley are incredibly helpful. To name a few: Dan Levine, Mike Volpi, Nat Friedman, Adam D’Angelo, Ilya Sukhar, Jonathan Swanson, Albert Ni, Jeff Arnold, Charlie Cheever, and Drew Houston to name a few. I’m very very lucky.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#55

Post by ayw »

barakados wrote: post #22
ayw wrote: post #3

Hey everyone! I'm Alex, CEO/founder of Scale! I just wanted to chime in that we're a YC company as well (S16), and I'm thankful to the HN community for having been supportive through our whole journey.

Hi Alex! Congrats on your success so far! What principles/rules did you stick to when growing your company that you thought helped improve the culture/profits? Thanks again for acknowledging the Hacker Network community!

We have a rule when hiring people—we look for people with an internal locus of control. Roughly speaking, this means people who believe they have control over outcomes in their life, as opposed to external forces beyond their control.

It’s a small thing, but it’s surprising easy to spot once you look for it. And it really matters—startups are the business of building something from nothing. You need people who believe they can bend the earth.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#56

Post by ayw »

swampthinker wrote: post #16

Hey @ajw, congrats on the growth. Quick question for you: How does Scale's labeling speed and quality compare to Hive?

We have many clients who have switched from Hive. There’s usually a step change improvement in quality and scalability—up to 10x improvement in error rates.

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#57

Post by Areading314 »

pkaye wrote: post #9

> It’s built a set of software tools that take a first pass at marking up pictures before handing them off to a network of some 30,000 contract workers, who then perform the finishing touches. Machine learning indeed.

More like machine teaching!

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#58

Post by vadym909 »

plinkplonk wrote: post #49
kareemsabri wrote: post #25

Bit of an AI novice here, I did Norvig's course a few years ago and never worked in the field, but how can a machine take a "first pass" at labelling without being trained? What information is it using to apply labels to the first set of data? How does this approach differ from a conventional classifier? Would the initial guesses essentially be random?

The business model is, initially, selling human labeling services to owners of data (like Uber or Google), using third world cheap labor to keep costs low. This is very much like a call center service. Once a sufficiently large corpus of human labeled data is available (across clients and datasets probably), that labeled data is used to train a 'first pass' labeling system. It then becomes a virtuous cycle. Now the l…

like Google Search using human raters to verify their updated algorithms improve results

Re: Scale (YC S16) Raises $100M from Accel and Founders Fund at $1B Valuation

#60

Post by vadym909 »

I don't understand startup valuations well, so would appreciate someone more knowledgeable throwing some light on how these valuations are made. Would I be in the ballpark in assuming that they have a Sales ARR of $125M. At a sales multiple of 8x (for SaaS cos) makes them worth $1B.

The $125M is around 12 large customers with contracts of $10M each, which buys them services of 2500 labeling contractors for 2000 hrs/year at $2/hr ($4K/yr).

At some point they will stop being a services company which carry a low multiple and switch to automated labeling without contractors (ala self driving cars) or develop some unique IP that they sell as a service?

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