StartupVic’s Machine Learning / AI pitch night

Machine Learning and AI are such hot topics, that I was really intrigued by the prospect of this particular StartupVic pitch night. First, this was a chance to visit inspire9‘s recently established Dream Factory – a tech co-working facility, maker space, and VR lab in Melbourne’s western suburb of Footscray. Second, the Dream Factory, housed in a landmark building owned by Impact Investment Group, was a major beneficiary of LaunchVic funding, and this event could be seen as a showcase for Melbourne’s tech startup sector. Third, with so many buzzwords circling AI, it offered a great opportunity to help demystify some of the jargon and provide some practical insights.

Image sourced from StartupVic

Instead, the pitches felt underdone – probably not helped by the building’s acoustics, the poor PA system, and the inability of many of the audience to be able to read the presenters’ slides. I wasn’t expecting the founders to reveal the “secret sauce” of their algorithms, or to explain in detail how they program or train their “smart” applications. But I had hoped to hear some concrete evidence of how these emerging platforms actually work and how the resulting data is specifically analyzed and applied to client solutions.

Amelie.ai

With a tag line of “powering the future of mental health” the team at Amelie.ai are hoping to have a positive impact in helping to reduce suicide rates. Unfortunately, judging by the way some key statistics are presented on their home page, the data (and the methodology) are not as clear as the core message.

Using technology to help scale the provision of mental health and well-being services, combined with mixed delivery methods, the solution aims to offer continuity of care. Picking up on user dialogue and providing some semi-automated and curated intervention, the presentation was big on phrases like “triage packages”, “customer journey”, “technical architecture”, “chatbots” and of course, “AI” itself, but I would have like a bit more explanation on how it worked.

I understand that the platform is designed to integrate with third-party providers, but how does this happen in practice?

Only when asked by the judges about their competitive advantage (as there are similar tools out there – see Limbr from a previous pitch night) did the presenters refer to their proprietary language models, developed with and based on user trials. This provides  a structured taxonomy, which is currently English-only, but it can be translated.

There were also questions about data privacy (not fully explained?) and sales channels – which may include workplace EAPs and health insurers.

Businest

According to the founder, “dashboards and KPIs only diagnose pain, Businest fixes it“. In short, this is intelligence business analysis for SMEs.

With a focus on tracking working capital and cashflow, as far as I can tell, Businest applies some AI on top of existing third-party accounting software. It identifies key metrics for a specific business, then provides coaching and videos to change business behaviour and improve financial performance. There is a patent pending in the US for the underlying algorithm, which prioritizes the KPIs.

Again, I was not totally clear how the desired results are achieved. For example, are SMEs benchmarked against their peers (e.g., by size/industry/geography/maturity/risk profile)? Do clients know what incremental benefits they should be able to generate over a given time period? How does the financial spreadsheet analysis assist with improving structural or operational efficiencies that are outside the realm of financial accounting?

Available under a freemium SaaS model, Businest is sold direct and via accountants and bookkeepers. A key to success will be how fast the product can scale – via partnering and its integration with Xero, MYOB and QuickBooks.

AiHello

I must admit, I was initially curious, and then totally bemused, by this pitch. It started by asking some major philosophical and existentialist questions:

Q: How do we define “intelligence”?
Q: Are we alone? Or not alone?

No, this is not IBM’s Watson trained on the works of John-Paul Sartre (cf. Dark Star and the struggle with Cartesian Logic). Instead, it is an analytical and predictive app for Amazon sellers. It claims to know what products will sell, where and when. And with trading volumes worth $2.5m of goods per month, it must be doing something right. Serving Amazon sellers in the US and India (and Australia, once Amazon goes live here), AiHello charges fees based on fixed licences and transaction values. The apparent benefits to retailers are speed and savings.

Asked where the trading data is coming from, the presenter referred to existing trading platform APIs, and “big data and deep learning”. It also uses Amazon product IDs to make specific predictions – currently delivering 60% accuracy, but aiming for 90%. According to the founder, “Amazon focuses on buyers, we focus on sellers”. (Compare this, perhaps, to the approach by Etsy.)

C-SIGHT

A new service from the team at Pax Republic, this latest iteration is designed to avoid some of the policy and reputation issues involved with managing, supporting and protecting whistleblowers. Understanding that whistleblowers can pose an internal threat to brand value, and present a significant human risk, C-SIGHT provides a psychologically safe environment for the Board, C-suite and workforce alike, and can act as an early warning system before problems get out of hand.

Sold under a SaaS model, C-SIGHT analyses text-based and anonymous dialogue, with “real-time data sent to different AI apps”. I understood that C-SIGHT combines human and robot facilitation, while preserving anonymity, and also deploys natural language processing – but I didn’t fully understand how.

In one client use case, with the College of Surgeons, there were 1,000 “contributions” – again, it was not clear to me how this input was generated, captured, processed or analysed. Client pricing is based on the number of invitations sent and the number of these “contributions” – what the presenter referred to as an “instance” model (presumably he meant instance-based learning?).

Asked about privacy, C-SIGHT de-identifies contributions (to what degree was not clear), and operates outside the firewall. There was also a question from the judges about the use and analysis of idiom and the vernacular – I don’t believe this addressed in much detail, although the presenter did suggest that the platform could be used as a way to drive “citizen engagement”.

Overall, I was rather underwhelmed by these presentations, although each of them revealed a kernel of a good idea – while in the case of AiHello (which was the winner on the night), sales traction is very promising; and in the case of Businest, industry recognition, especially in the US, has opened up some key opportunities.

Next week: Bitcoin – to fork or not to fork?

Law and Technology – when AI meets Smart Contracts…

Among the various ‘X’-Tech start-up themes (e.g., FinTech, EdTech, MedTech, InsurTech) one of the really interesting areas is LegTech (aka LawTech), and its close cousin, RegTech. While it’s probably some time before we see a fully automated justice system, where cases are decided by AI and judgments are delivered by robots, there are signs that legal technology is finally coming into its own. Here’s a very personal perspective on law and technology:

Photo by Lonpicman via Wikimedia Commons

1. Why are lawyers often seen as technophobes or laggards, yet in the 1980s and 1990s, they were at the vanguard of new technology adoption?

In the 1970s, law firms invested in Telex and document exchange (remember DX?) to communicate and to share information peer-to-peer. Then came the first online legal research databases (Lexis and Westlaw) which later gave rise to “public access” platforms such as AustLII and its international counterparts.

Lawyers were also among the first professional service firms to invest in Word Processing (for managing and drafting precedents) and e-mail (for productivity). Digitization meant that huge print libraries of reference materials (statutes and case-law) could be reduced to a single CD-ROM. Law firms were early adopters of case, practise, document and knowledge management tools – e.g., virtual document discovery rooms, precedent banks, drafting tools.

2. But, conversely, why did the legal profession seem to adopt less-optimal technology?

The trouble with being early adopters can mean you don’t make the right choices. For example, law firms in the 80s and 90s seemed to demonstrate a preference for Lotus Notes (not Outlook), Wang Computers and WordStar (not IBM machines or MS Office Word), and DOS-based interfaces (rather than GUIs).

Some of the first CD-ROM publications for lawyers were hampered by the need to render bound volumes as exact facsimiles of the printed texts (partly so lawyers and judges could refer to the same page/paragraph in open court). There was a missed opportunity to use the technology to its full potential.

3. On the plus side, legal technology is having a significant a role to play…

…in law creation (e.g., parliamentary drafting and statute consolidation), the administration of law (delivery of justice, court room evidence platforms, live transcripts, etc.), legal practice (practice management tools) and legal education (research, teaching, assessment, accreditation). Plus, decision support systems combining rules-based logic, precedent and machine learning, especially in the application of alternative dispute resolution.

4. Where next?

In recent years, we have seen a growing number of “virtual” law firms, that use low-cost operating models to deliver custom legal advice through a mix of freelance, part-time and remote lawyers who mainly engage with their clients online.

Blockchain solutions are being designed to register and track assets for the purposes of wills and trusts, linked to crypto-currency tokens and ID management for streamlining the transfer of title. Governments and local authorities are exploring the use of distributed ledger technology to manage land title registration, vehicle and driver registration, fishing permits and the notion of “digital citizenship”.

We are seeing the use of smart contracts powered by oracles on the Ethereum blockchain to run a range of decision-making, transactional, financial, and micro-payment applications. (Although as one of my colleagues likes to quip, “smart contracts are neither smart nor legal”.)

Artificial Intelligence (AI) is being explored to “test” legal cases before they come to trial, and more knowledge management and collaboration tools will continue to lower the cost of legal advice (although I doubt we will see lawyers being totally disintermediated by robots, but their role will certainly change).

There is further opportunity to take some of the friction and costs out of the legal system to improve access to justice.

Finally, and this feels both exciting and scary, is the notion of “crowd-sourcing policy“; some governments are already experimenting with hackathons to develop policy-making models, and even the policies themselves. But this does sound like we would be moving closer and closer to government by mini-plebiscites, rather than by parliamentary democracy.

Next week: Digital currencies are the new portals

 

What might we expect in 2017?

On a number of measures, 2016 was a watershed year. Unexpected election results, fractious geopolitics, numerous celebrity deaths, too many lacklustre blockbuster films, spectacular sporting upsets (and regular doping scandals), and sales of vinyl records are outpacing revenue from digital downloads and streaming services. What might we expect from 2017?

Detail from "The Passing Winter" by Yayoi Kusama (Photo by Rory Manchee)

Detail from “The Passing Winter” by Yayoi Kusama [Photo by Rory Manchee]

Rather than using a crystal ball to make specific predictions or forecasts, here are some of the key themes that I think will feature in 2017:

First, the nature of public discourse will come under increased scrutiny. In the era of “post-truth”, fake news and searing/scathing social commentary, the need for an objective, fact-based and balanced media will be paramount. In addition, the role of op-ed pieces to reflect our enlightened liberal traditions and the need for public forums to represent our pluralist society will be critical to maintaining a sense of fairness, openness, and just plain decency in public dialogue.

Second, a recurring topic of public conversation among economists, politicians, sociologists, HR managers, career advisors, bureaucrats, union leaders, technologists, educators and social commentators will be the future of work. From the impact of automation on jobs, to the notion of a universal basic income; from the growth of the gig economy, to finding purpose through the work we do. How we find, engage with and navigate lifelong employment is now as important as, say, choosing high school electives, making specific career choices or updating professional qualifications.

Third, the ongoing focus on digital technology will revolve around the following:

  • The Internet of Things – based on a current exhibit at London’s Design Museum, the main use cases for IoT will continue to be wearable devices (especially for personal health monitoring), agriculture, transport and household connectivity
  • Fintech – if a primary role of the internet has been for content dissemination, search and discovery, then the deployment of Blockchain solutions, the growth in crypto-currencies, the use of P2P platforms and the evolution of robo-advice are giving rise to the Internet of Money
  • Artificial Intelligence – we are seeing a broader range of AI applications, particularly around robotics, predictive analytics and sensory/environmental monitoring. The next phase of AI will learn to anticipate (and in some cases moderate) human behaviour, and provide more efficacious decision-making and support mechanisms for resource planning and management.
  • Virtual Reality/Augmented Reality – despite being increasingly visible in industries like gaming, industrial design, architecture and even tourism, it can feel like VR/AR is still looking for some dedicated use cases. One sector that is expected to benefit from these emerging technologies is education, so I would expect to see some interesting solutions for interactive learning, curriculum delivery and student assessment.

Fourth, and somewhat at odds with the above, the current enthusiasm for the maker culture is also leading to a growing interest in products that represent craft, artisan and hand-made fabrication techniques and traditions. Custom-made, bespoke, personalized and unique goods are in vogue – perhaps as a reaction to the “perfection” of digital replication and mass-production?

Fifth, with the importance of startups in driving innovation and providing sources of new economic growth, equity crowdfunding will certainly need to come of age. Thus far, this method of fund-raising has been more suited (and in many cases, is legally restricted) to physical products, entertainment assets, and creative projects. The delicate balance between retail investor protection and entrepreneurial access to funding means that this method of startup funding is constrained (by volume, amounts and investor participation), and contrary to stated intentions, can involve disproportionate set up costs and administration. But its time will come.

Finally, as shareholder activism and triple bottom line reporting become more prevalent (combined with greater regulatory and compliance obligations), I can see that corporate governance principles are increasingly placing company directors in the role of quasi-custodians of a company’s assets and quasi-trustees of stakeholder interests. It feels like boards are now expected to be the conscience of the company – something that will require directors to have greater regard to the impact of their decisions, not just whether those decisions are permitted, correct or good.

One thing I can predict for 2017, is that Content in Context will continue to comment on these topics, and explore their implications, especially as I encounter them through the projects I work on and the clients I consult to.

Next week: The FF17 Semi Finals in Melbourne

Final StartupVic Pitch Night of 2016

There was something of a festive mood in the room for StartupVic‘s final pitch night of 2016, hosted at inspire9. It certainly had an end of term feel, as a number of the long-term Startup Vic team members said their farewells before moving on to new ventures. So it will be interesting to see how these monthly events continue to evolve in 2017.

screen-shot-2016-12-10-at-4-01-47-pmContinuing the theme of recent pitch nights, diversity was the key – this month’s startup hopefuls came from the energy, AI, environmental and consumer sectors. As usual, I will comment on each pitch in the order that they presented:

BioFuel Innovations

With the simple aim of turning waste into fuel, BioFuel Innovations uses an enzyme, as opposed to a more caustic chemical catalyst, to convert used cooking oil from restaurant kitchens into biodiesel. Given this greener and more sustainable process, the company can use lower quality feedstock, consume less energy and reduce the amount of waste water.

Having built a pilot plant in Dandenong, the founders are currently developing a containerised “turnkey solution” comprising a pilot micro-refinery, which can be financed by 3rd party lenders (a bit like some solar energy schemes). However, they are seeking funding to gain access to a startup accelerator program.

With a number of existing service providers that collect used cooking oil from restaurants and food processing plants, BioFuel Innovations only plan to produce their own fuel on a small scale. Rather, their business model is to sell micro-refineries for biodiesel production.

Asked by the judges why they are focusing on biodiesel rather than other higher-yield fuels, the team pointed out that some of those products require high temperature processing, and therefore consume more energy. Also, in concentrating on this type of biodiesel production, the founders believe they are helping to solve the problem of disposing of waste oils. However, longer term, they may explore even more sustainable energy derivatives and regeneratives. And in Asia Pacific, for example, there is a need to re-process palm oil residues.

Finally, a key to their success will be streamlined manufacturing processes and logistics, such as building supply chain partnerships for the shipping containers that hold the micro-refineries.

Breathable

This is an environmental design concept that aims to use plants to replace air ventilation systems in offices and homes. Based on research from Maastricht University in the Netherlands, Breathable uses an algorithm based design solution. Taking into account the building dimensions, natural light, air flow, number of people, amount of mechanical and electrical equipment, etc., the team can design the right combination and layout of plants for each given location.

Established as a bootstrapped social enterprise, whose profits go to helping asthma sufferers and patients with respiratory complaints, Breathable is hoping to make a large and sustainable impact.

The first question from the judges was, why set up in Australia? The team explained that given certain plants are not allowed here, the underlying algorithm has to be reconfigured for native plants, by a local team.

This was a very timely comment, given the recent episode of “thunderstorm asthma” in Melbourne. However, the judges were a little concerned that while there was a clear connection between purpose and passion, they wondered whether it is more of a lifestyle business for the founders, especially as thus far, no IP has been registered or protected. (On this specific point, the team simply said, “we challenge people to do it better”.)

There is an expansion plan, to develop fully self-sustaining eco-systems – such as using plants to power lights that help generate photosynthesis. But big goals need big marketing budgets, and with an active waiting list of 20 corporate clients, the challenge for the business is in how to scale.

MagicPi

I should say upfront that based on what I had read in advance on their website, this pitch was not what I had expected. Instead of a presentation on artificial intelligence, we got a pitch about Australia’s Chinese tourism “problem”. Namely that, based on a 2016 report from Bloomberg, by 2020 Australia will host 5 million Chinese visitors a year, representing a $13bn market. (And as I know from having worked with the founders at China Digital, many tourist destinations in Australia are far from China ready.)

Using natural language AI (cognitive, cloud, machine learning – “Siri with a human touch”) MagicPi is targeting Destination Marketing Organisations (conventions, conferences, local tourism boards). They plan to create content and solutions for client websites, and then take a commission on bookings. With a presence on both WeChat (including a voice recognition bot) and AliPay, MagicPi has a long-term vision of being the “intelligent interface for everything”.

However, the judges questioned whether the solution works or even exists. They felt that there was currently no visibility for investors or consumers. Claiming to have built a demo app, the team stated that there is a lack of quality information for Chinese tourists, and people are willing to pay for premium content – and to distinguish mere “recommendations” from the visitor “reality”.

Despite adopting a deliberate enterprise solution, the judges felt that the pitch needed to stress the “why”, rather than focusing on the problem.

The Cider Link

I should mention that I first met the team from The Cider Link about a year ago, and was intrigued by their mission to build an online craft cider market that connects makers with customers. (So much so, that I connected them to local wine producer, Richard Stockman, who invited them to appear as guests on his weekly food and drink radio program.)

The Cider Link is challenging both the market duopoly for cider retailing, and the ubiquity of “commercial” cider, much of which is produced from bulk juice mixed with alcohol – rather than being fomented from freshly pressed fruit, as is the case with craft ciders.

Cider is currently enjoying 10% annual growth by volume (based on bottle shop sales alone). So, online, cider and craft are all “on trend”. The founders have built a commission-based market place, and with connections to producers who are members of industry body Cider Australia, The Cider Link is also appearing at festivals and related events.

In the Q&A with judges, the team explained that success for them would be sales of 1000 cases a month, making it a $1m business. They also plan to take the model to the UK, which has the largest cider market in the world.

In addition to attracting more customers, the founders are seeking investment to improve sales conversions and support some advertising.

Given the mix of pitches, and the range of business models and sectors, based on judging criteria and audience votes, the winner was Breathable.

Next week: End of Year Reflection