The head of Bloomberg's $150M VC fund explains formula for finding an AI startup • Hacker News Board

Post by nostrademons » Mon, Aug 08, 2016, 7:43 PM UTC

tlb wrote: post #8

erdevs wrote: post #4

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 yo…

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.

They still have (2), right? An image classification startup that provides services to other companies will see more images than competing firms, which lets them train their models on more data, which gives them better quality models than competitors. Ditto fraud detection, ad targeting, or product recommendation (within a specific vertical, at least).

It seems like it'd be hard to build a durable competitive advantage without either owning the user relationships or owning the data, correct? Such a company would be just an algorithm and some tools around it, which are relatively easy for a competitor to copy.