Sharks and Startups
This month I explore the relationships between corporates, startups and sharks inspired by a visit to Cape Town…
By Kajal Sanghrajka, @kajalnyclon
For new Readers, welcome to the 2019 Transatlantic Post a monthly editorial on innovation, startups and culture across cities. With occasional British satire by Kajal. The full version is published on email only, subscribe here.
Happy 2019! Bringing you the Post from the tip of South Africa in Cape Town. The neighbouring South Atlantic Ocean is home to 98 species of shark. The largest, curiously, are the most harmless. Then you have the bottom feeders such as shysharks. The most dangerous though are the pelagic sharks — torpedo shaped, fast swimmers and the top predators of the ocean. They feed on marine mammals and large fish.
What does this all have to do with startups?
For arguments sake lets call the marine mammal Blockbuster and the Pelagic, Netflix. Or Yahoo c.1998 and Google. You catch my drift?*
After researching more than 25 cities and innovation clusters over the past 2 years, and through my work at Growth Hub, as I have begun to work with larger companies and corporates on understanding the next wave of innovation in particular in Artificial Intelligence (AI) and Machine Learning (ML). It is those pelagic predatory unknowns that strike the most fear. And rightly so, when you consider that the lifespan of an S&P company has fallen from 67 years to just 15 years today.
Combined with this, the best talent in AI and ML rarely want to work for larger corporates outside of a handful A-Listers. And the numbers are staggering, an AI specialist/PhD with a few years experience can expect $300 to $500k a year according to the New York Times.
Unless you are Google, which is the largest employer of AI talent, developing this expertise in house for most large companies isn’t viable. I can validate this from a visit last year to London.AI. In a room full of postgraduates in the fields the preferences were: startups or Google.
The next big innovation will come from the left field. So you’ve got to be sourcing, partnering or acquiring those companies. In Europe — Here is a sampling of British AI start ups to watch in 2019 including Prowler.io which can help to reduce traffic jams and Phrasee which uses AI to create marketing copy for companies like the Times and has now grown Stateside. The Swiss are also gaining ground with the highest number of AI companies per citizen. The top two of which — Sophia Genetics and Starmind have a Transatlantic presence.
So what does this mean for all of us?
Well, the fancy folks at Davos warned of AI’s potential to worsen inequality. Although every country is producing an AI Plan (I reported on a few of these over the last two years from Toronto and Davos) it is not a level playing field. “Today, only a few countries and companies have access to the best AI in the world. And those who have it will be smarter, healthier, richer and of course, their warfare will be significantly more advanced” says Marc Benioff of Salesforce.
On a lighter note, back to sharks and startups. The keen observers amongst you will note that this month’s title photo has a ping pong table. The ultimate symbol of start-up culture. In a conversation with a friend recently, he alerted me of the correlation of sale of ping pong tables and venture capital deals. Otherwise known as the “Ping-Pong Index”. I kid you not folks.
Until next time….if you enjoyed reading, do share the Post via Twitter.
And beware of the sharks…
“Hey. You know what the shark said to the clown?”
“No.”
“You taste funny.”
Sincerely yours, Kajal
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THE AI INVESTOR VIEW: WHAT DOES 2019 HOLD FOR EUROPEAN AI STARTUPS?
A brief overview on European AI in 2019 on the back of a series of Forbes interviews on quantum computing, space and biotech. The interview with Azeem Azhar covers AI trends in light of Brexit, Europe’s lag behind the China and US, the secondary impacts of technology in context of ethics and social outcomes and more. One thing is very clear, to somehow prevent the “weaponization” of AI, the role of ethics communities will become increasingly important.
HOW TO IMPROVE DIVERSITY IN STARTUPS
I am generally not a fan of articles on diversity they inevitably focus on gender and racial diversity often discounting diversity in socio-economic background. However this article makes two salient points worth mentioning. First that 45% of the ImageNet Data commonly used to train computer vision algorithms, comes from the US and only 3% comes from China and India together. Second the importance of creating an inclusive community of mentors. Nearly 50% of female founders cite a lack of mentors as holding them back. I can attest to this from personal experience. Having recently won a place in the Santander Women in Business Mentoring programme — it makes a huge difference.
BARCLAYS RISE NEW YORK NEW FINTECH GROWTH FUND
On the topic of larger companies sourcing innovation from startups. A standout success story is Barclays off the back of its RISE Fintech ecosystem, Led by its London and New York accelerators and 200 companies in residence and a strong pipeline for its new Growth Investment Fund where it will invest up to £10 million per Accelerator Class. More importantly, it has allowed the company to transform the way it operates its core business.
ABOUT TRANSATLANTIC POST A monthly editorial on innovation, startups and culture across cities. With occasional British satire. Written and edited by Kajal Sanghrajka, Churchill Fellow and Founder of Growth Hub Global. For previous editions see the archive.
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