StartupYard Podcast Episode 2: Thomas Patzko of ImpactHub Zurich

This week I visited Warsaw, for Google Campus’s exlusive “CEE Allstars” event, matching investors and startups at a 1:1 ratio for 2 days of pitches and discussions. During the event, I sat down for an episode of the StartupYard podcast with Thomas Patzko, to talk about Impact Hub Zurich, growing startups in one of the world’s richest and most conservative countries, and fundraising for Central European startups.

 


Key Takeaways: 

  • Switzerland, with its high cost of living and conservative society, stigmatizes startups and entrepreneurialism
  • Risk aversion in Switzerland goes back in history to its political neutrality
  • The social safety net is built around employment, not self-employment
  • In Switzerland, salary levels are guaranteed according to a person’s level of education, offering graduates attractive salaries
  • Small traditional businesses are respected, and are in fact the backbone of Swiss society 
  • ImpactHub mentors its members on investor relationships – Thomas focuses on helping startups understand investor motivations
  • Swiss startups can suffer from “over-investment,” causing them to defocus in order to match investor benchmarks
  • Communities like ImpactHub are growing in their importance as a defense against predatory investors or wild speculation. 
  • ImpactHub encourages its members to tackle problems that are outside of their experience

About Tomas:

For Thomas work is more than just making money. That is one of the reasons why he has worked in multiple fields, including a private home for the aged, building and leading various country presences of an insurance corporation, and for nine years as an independent business consultant and coach. His journey of finding possibilities to facilitate real change and encouraging individuals to experience happiness in their professional lives, has led Thomas to the Impact Hub where he curates the relationship with corporate partners and conducts business development. He holds an M.Sc. in economy and business administration and has completed advanced degrees in coaching and sociology.

About ImpactHub:

ImpactHub is built around the belief that the world’s greatest challenges will never be solved by one person or organization alone. We need to work together.

ImpactHub has set out to build a thriving innovation ecosystem where people collaborate across organizations, cultures and generations to solve the grand challenges of our time. ImpactHub Zurich, among the largest of ImpactHub’s locations, has nearly 1000 members, and reaches 10s of thousands of people in Zurich and across Europe. It was founded in 2010, and has 3 locations in Zurich.

Krakow Tech

Tomasz Wesolowski: Krakow Breaks Out as High Tech Capital in Poland

Tomek Wesolowski is Founder and CEO of the high tech startup 2040.io. Based in Krakow, he also organizes one of Poland’s biggest meetup groups for AI specialists and enthusiasts: AIMeetup.

StartupYard will partner with AIMeetup in Krakow on June 8th, for an event full of AI speakers, workshops, and a presentation from StartupYard for potential startup founders.

 

 

I caught up with Tomek recently to talk about his company, AI initiatives in Krakow, and the Polish tech ecosystem generally. Tomek also contributed to our in-depth analysis of the Polish tech investment landscape last month. You can read it here.

Here is what he had to say:

Hi Tomek, first, tell us a bit about yourself, and your journey towards becoming a tech founder.

Tomasz Weselowski, Krakow Tech

I’ve spent the last 16 years in the internet-industry as an entrepreneur, advisor, and board member of several companies. My main scope of activities was connected with the software house Empathy, which I founded in 2000. It started from 2 people, and then, with my business partner Bartek, we managed to grow the company to 60 employees. From 2012, after M&A process of three companies I was the Managing Partner of Unity Group (over 200 employees).

Meanwhile I was also a co-founder and board member of PROFEO – the community for professionals (Polish Linkedin competitor), founder of Techcamp –  biggest Polish technological barcamp meetings and co-founder of Ecommerce director’s club.

In 2015 I decided to leave my position at Unity Group to build something new from scratch. Now I am fully focused on the new project, creating an intelligent assistant Edward, as a co-founder and CEO of 2040.io.

Tell us more about your latest startup: 2040.io. How are you hoping to change the way the sales process happens in the mobile connected world?

During all these years we’ve managed to complete hundreds of projects for different types of customers: from small to medium and big players. My main knowledge gained from this period concerned the observation of how end-users use their software. I found out that people are very reluctant to use programs that are too complicated. On the other hand, the constantly increasing number of data and processes somehow enforces this complication and makes it difficult to control the business without using modern software.

When we created 2040.io we decided to make it simpler. We wanted to create an intelligent assistant that will communicate with the users in the form of a “chat” interface, and at the same time will be smart enough to automatically learn the behaviour of the users. We also wanted to take advantage of the dynamic growth of the machine learning segment and combine these algorithms with a natural conversational interface.

What kinds of industries do you think 2040.io could disrupt, and how?

Starting from the name of our company: We believe that by 2040 artificial intelligence will be as smart as humans. Now, let’s imagine a world, where artificial intelligence will help you with most of your daily activities. A world, where machines and humans will cooperate to provide better products and services.  The fact is that in the future every user will have his own A.I. assistant that will learn from his data and help him to draw proper conclusions.

Using these types of intelligent assistants will revolutionize the way we use business software. We like to think of this segment comparing its early stage of development to early websites. The capabilities of such typse of assistants may soon become unlimited, just like it was with the web-application industry. This is why we created Edward – an artificial intelligence powered assistant for sales teams.

What can Edward to right now?

We managed to create our own software for creating intelligent assistants for various industries. It consists of a multi-language platform for building interactive conversations, a system for efficient processing of large data sets (big data), and models for automatic classification of data based on machine learning. Edward was created on top of this platform.

When it comes to the interface, we focused on the user’s convenience, and not on the necessity of understanding a natural language. This is why Edward is not a typical chatbot. It uses a conversational interface, but we are not forcing the users to enter data, questions or messages. We must remember, that if we will try to fake a real conversation, the user will expect human behavior and intelligent conversations from the assistant. At the moment, we are not ready for it, so we decided to use a “hybrid” interface that combines conversation, suggesting action on the keys and other multimedia elements facilitating system use.

Searching for an analogy to other projects, we can say that Edward works in a similar way as Siri, Cortana or Google Assistant. However, he focuses on one particular area which he knows the best. That means we keep our focus on vertical AI instead of building a general, horizontal AI assistant, which is very hard to create. Sometimes we call Edward “Siri for sales”.

We are currently still in the beta phase, although we already have over a dozen customers using Edward. We are now working with them to decide about the future roadmap of development to make Edward even more friendly and useful, not only for sales reps but also the managers. This is why, for example we created beautiful dashboards that are giving the sales manager an opportunity to compare sales reps performance and draw conclusions about the whole sales process (eg. how much time spent on customer leads to particular effect in sales numbers).

You’re also the leader of a major tech meetup in Krakow. Can you tell us how this got started, and what has happened in the community over the past few years?

Krakow Tech

Building a tech community related to our work was always very important to me. In my previous company, in 2011 we started our first tech meeting, called Techcamp. It took us two years to became one of the biggest Polish technological barcamp meetings. We covered many topics starting from cloud computing to technological “fights” between PHP and Java.

And in 2016 when we founded 2040.io, we noticed that the AI community is not well integrated. There are some events devoted to technical issues, but there is still a need for a meeting where people can gather and hear some presentations covering both business and technical aspects. This is how we started our A.I. Meetup under the motto “Let’s meet to talk about AI.” Looking at the number of participants currently reaching 200 people it seems that we have achieved our goal. That is why we decided to extend the formula to other cities in 2017.

Is Krakow a good place to start a tech company? What are some of the advantages?

Krakow is a special city on the Polish tech-map. Thanks to many years of history and amazing climate, it attracts creative and open-minded people. Very often they choose to study at technical universities such as AGH, or Polytechnic. This means that despite the presence of many foreign corporations, Krakow has a very strong startup community, and the spirit of entrepreneurship leads a lot of people to open their businesses here. We also have access to amazing people who want to develop and learn new things while they are studying. I was born in Krakow, so I may not be objective, but despite our limitations in terms of infrastructure, having the option of starting a business anywhere in Poland, I would choose Krakow again.

Poland has a reputation in Central Europe as being somewhat isolated and self-sufficient. Do you think this reputation is earned? Does it present a problem for Polish startups?

It seems to me that the approach Polish businesses on target the internal market is a kind of myth that we must face when talking to people from other countries. It is true that Poland has a very large internal market and for many years it was enough to run a business here to be successful.

However, over the past 10 years that changed a lot. First of all, our entry into the European Union and opening of the borders made so many young people leave the country. Some of them came back with the intention of building their business in Poland, but already with an appetite for the global market.

Secondly, the development of technology has made us start competing with our colleagues who are working on similar projects worldwide. So now, almost everyone is thinking about the market in a global way, and some businesses do not even open their sales in Poland but direct themselves from the beginning to the USA.

Our big Polish market has its advantages. We are able to get some customers and financial base here, which will allow us to scale more freely into foreign markets. Whenever possible, it is sometimes a good idea to start a business on the Polish market, test some hypotheses, and then scale the solution abroad. It is also unmatched by the lower labor costs of engineers coupled with their high competences. This is why sometimes companies cutting their core business from Poland are leaving their R & D centers here, which makes their projects better, faster and cheaper than their counterparts in other countries.

Polish startups also have open access to a lot of government backed up programs dedicated to startups, and as you’ve noticed in your blog post related to this topic this may cause a problem in terms of building real innovations in our country. On the other hand, due to lack of private capital, young entrepreneurs sometimes have no other choice to start their business, so they choose to do it by taking some public funding.

What are your plans for the future of 2040.io?

We started only with our private money, and the company was also backed up by two business angels. We are currently raising our first early seed round, as we need some money to grow sales and expand our development team. We are talking with both government backed funds, and private ones, so after we finish this stage I hope I will be able to share with you some thoughts regarding the process.

In terms of product, as I mentioned we are now testing our first version of Edward with customers, getting feedback and tuning it to their needs. The plan is to stay on Polish market till the end of 2017, as the product will be technically finished and ready to scale abroad. That means we are now looking for B2B companies from all over the world, that are willing to try the beta version and share their feedback with us. If you are interested in testing Edward, feel free to register on our webpage http://edward.ai/ or contact me directly.

StartupYard Alumni

SY Alumni Talk about the Value of StartupYard for Them

This week, the popular podcaster Florian Kandler, of Startup Milestones, published another video with a pair of StartupYard Alumni from 2015: Jakub Ladra, of Claimair, and Ondrej Sedlacek, of Satismeter. Through the course of the talk, the two founders focus on the core value of acceleration at StartupYard, what their personal experiences were during acceleration, and what advice they would give to other founders thinking about joining.

The pair also jump into a discussion of what to look for in a good accelerator, and other tips for pre-accelerator startups.

StartupYard Alumni Talk Acceleration:

 

Key Takeaways:

  • Ondrej Sedlacek (Satismeter)
    • You need to find an accelerator that has the appropriate focus for you.
    • Mentorship is about recognizing patterns between different conversations, but also about learning how to communicate your ideas more clearly.
    • The biggest single value is simple: great advice. The impact of that advice from mentors, investors and the SY team is increased because of the compressed timescale of acceleration. You are forced to make decisions quickly.
    • Setting clear goals for yourself also helps you to use the advice of mentors and advisors better: focusing them on what you need.
    • Good accelerators attract investors who look at every startup in the program. Your chances for investment rise thanks to your participation.
    • The StartupYard program helped to narrow the focus on the product, and think in terms of execution and milestones.
  • Jakub Ladra (ClaimAir)
    • Mentoring is uniquely intense and important for building your network. Connections made there can last and change your business over time.
    • You talk all day about your value proposition, and this is a big challenge. We had no idea how intensive this repetition and iteration can be.
    • Management team meetings at StartupYard reinforce learnings from mentors, and bring up new unexplored ideas.
    • The act of prioritizing between ideas during “mentoring madness,” was deeply valuable. The ongoing discussions were a big challenge, but worth the time to go through.
    • The accelerator is especially important in helping a startup scale: laying the legal, technical, and strategic groundwork for sustainable growth.

 

You can now apply for StartupYard Batch #8.

  • Robots
  • Artificial Intelligence
  • VR/AR
  • IoT
  • Cryptography
  • Blockchain
Applications Open: Now
Applications Close: June 30th, 2017
Program starts: September 4th, 2017
Program ends: December 1st, 2017

Polish AI/ML Geeks: Let’s Meetup in Krakow, June 8, 2017

We’re very pleased to announce that StartupYard will partner with Krakow’s largest Artificial Intelligence meetup, for a June 8th event, where AI founders will have the opportunity to pitch StartupYard, and learn more about how StartupYard can change the course of a deep tech company.

The Krakow Artificial Intelligence Meetup

For this event, StartupYard partners with the Krakow Artificial Intelligence Meetup. Run by AI entrepreneur and friend of StartupYard Tomasz Weselowski, the meetup was founded in August 2016, and has attracted over 700 members since then, running 3 events so far.

About The Meetup:

StartupYard’s management team will give a presentation on workshop aimed at AI specialists and ML geeks, on the benefits of acceleration, and building a global business, among other topics. There will be a list of other speakers announced shortly via the meetup group’s meetup page.

Here are the presentation and workshop:

Presentation: From Genius Idea to a Global Business: Creating AI Startups from Scratch

Cedric Maloux has been an internet entrepreneur almost since there has been an internet. He started his first major online venture in 1996, and sold it in 2000. He’s been starting new ones ever since. StartupYard, which Maloux runs as Managing Director, helps technically sophisticated developers and makers turn their ideas into real, growing businesses. In recent years, we have helped launch a series of high tech startups including TeskaLabs, Neuron Soundware, Cryptelo, and Rossum.ai. Find out how these startups went from a brilliant idea, to companies serving clients all over the world with cutting edge technologies. –Hosted by StartupYard MD Cedric Maloux. 18:00-19:00, Tuesday June 6th at TechHub Bucharest.

 

Making it Real: Storytelling and Positioning for Deep Tech.

In this spellbinding workshop, Lloyd Waldo, creative marketing veteran of dozens of startups, will show entrepreneurs how early stage companies can apply practical storytelling skills to convince their earliest stakeholders (including cofounders, investors, customers, and employees), of the power of a new idea. Learn to instinctively transform ideas from dry descriptions and speculation into compelling narratives, that put you in control of the conversation. Learn how simple positioning and framing devices can help you to achieve greater clarity in your ideas, and persuade others to believe in what you do.
Hosted by StartupYard Community Manager Lloyd Waldo , 14:00-15:30, Tuesday June 6th at TechHub Bucharest.

 

Ada Jonuse, Startupyard, Lithuanian startups

Ada Jonuse: Lithuanian Startups Need to Think Bigger

 

I will be heading to Lithuania for the first time on May 25th to mentor startups and host a workshop at LOGIN Startup Fair, in Vilnius. As you may know, StartupYard has only ever accelerated one startup from Lithuania, the Slovak/Lithuanian team behind Feedpresso, the AI enabled news collection and curation app (which I also use myself).

Ahead of my trip, I caught up with Ada Jonuse, a well known figure in the Lithuanian tech community, and an advocate of women professionals in the technology sector. Ada has been an event organizer in Lithuania for many years, and has worked in the European Parliament, including as the head of the office of MEP Antanas Guoga from 2012-2014, where she organized #SWICTH!: international event on ICT and entrepreneurship in Vilnius. September 2016: with 10.000 participants, the event garnered the Guinness World Record of the biggest programming lesson in the world.

Here’s what she has to say about Lithuania, the tech scene there, and more:

Hi Ada, you’ve worked in the European Parliament, founded several IT education initiatives in Lithuania, and you “gather talented women in tech.: Tell us a bit about yourself, and why do you what you do.

Right now my main occupation and passion is being CEO and co-founder of Lympo.lt. Lympo is a platform which helps to find the best personal trainers near you and I have a vision that it will gradually evolve to a general global talent sharing platform. We want to make money-free exchanges possible with Lympo points underpinned by blockchain technology.Lithuanian Startups, StartupYard, Ada Jonuse

Actually, I always wanted to become a politician and this is why I returned to Lithuania after 10 years abroad. It did not quite work out as expected as the party I was running with for parliamentary elections got involved in a massive corruption scandal. During my years in the European Parliament I had an opportunity to work with a talented entrepreneur turned politician (and a poker star!) Antanas Guoga. He inspired me to join Lympo and this is how I found myself in a world full of new discoveries.

When I recruited first team members for Lympo in December, I had no idea what the difference between back-end and front-end is. 🙂 For me, leading a startup is a big responsibility and a commitment to never stop learning.

StartupYard is headed to Vilnius for the first time this year, for the startup fair at LOGIN. What should we expect from Lithuanian startups? What are their key strengths?

LOGIN is a great event and I am very glad you will be visiting Vilnius. You will be surprised that Lithuanian startups don’t actually have to be Lithuanian: their founders, CTOs and key developers might be coming from Ukraine, Belarus or Russia. This talent influx made the startup ecosystem in Vilnius much more interesting. You should expect tech-heavy companies focussing on providing various niche B2B solutions: it could be, for example, VR, big data, medtech, fintech. The key strengths are very talented engineers, hard working teams and drive towards perfection. On the other hand, they might lack business development or global strategy elements.

When people think about the Baltics and tech, it’s usually Estonia front and center. Would you say Lithuania is following in Estonia’s footsteps, or making its own path forward? What does Lithuania lack that Estonia has, and where are Lithuania’s advantages?

Lithuania is on its own path. In recent years, we concentrated on enabling fintech companies to thrive in Lithuania. The Bank of Lithuania did a great job and now the country has one of the most innovation friendly regulation systems in Europe. Another big topic is gaming industry. Lithuania attracts a lot of IT talent from Russia, Belarus and Ukraine. Great gaming talents could make Vilnius a strong gaming hub. What Lithuania lacks in comparison to Estonia is obviously a big success story like Skype and all the experience and connections that came with it. So far, we also lacked a proactive government that makes digital innovation its top priority.

Lithuania is a small country, and sadly many Europeans don’t know much about it. What do you wish more of the European community knew about the character of the country, the people, and life in Lithuania?

It is natural that a country of 3 million people is difficult to remember. I wish Lithuania was known more for its amazing nature. We have superb quality air, water, lots of space and fresh and healthy natural food. I love gathering wild berries in the endless forests of Lithuania. It is such an exceptional experience. Most people in the world are deprived of these crucial elements of good life. I started appreciating this a lot after my traineeship with the UN in Kathmandu, Nepal, which is one of the most polluted Asian cities.

Estonia has cultivated a strong reputation for an innovative government, in addition to the private tech industry. Has this had a big influence Lithuania as well? How does the government relate to the tech ecosystem?

Lithuanian government is very innovative in the fields of e-government and digital services for citizens. This works great. Much better than in the majority of EU countries. However, on the larger scale I miss more strategic government actions. Let’s take education: IT education in schools is old fashioned and starts way too late. At the same time, there is a huge lack of developers in the country. I personally constantly struggle to find people. Therefore, I co-founded an initiative to provide every Lithuanian fifth-grader with a BBC micro:bit microcomputer in 2017. Lithuania is celebrating 100th anniversary of modern statehood next year and this will be our gift for the upcoming 100 years!

On the same theme, how does Lithuania compare with the rest of Europe in terms of conditions for entrepreneurs, in things like taxation, bureaucracy, and legal complexity? 

Within Europe I had a chance to live in Germany, Belgium,  the UK and Italy. I dealt with bureaucracy in all these countries. Now, back to Lithuania ten years later I realize how simple our bureaucratic system is. It took us less than 2 days to establish a company and we didn’t use any paper at all! When it comes to taxation, as an entrepreneur I have one single wish for the Lithuanian government: tech companies must have tax exemptions for the first year. In order to pay an employee 1500 EUR I have to spend 2600 EUR. This is killing startups.

As mentioned, you founded W@Tech, a platform for professional women in tech. Would you say the Lithuania and the Baltic states generally are doing better, or worse than the rest of Europe when it comes to being inclusive?

I am right now part of an amazing project – Women Go Tech mentorship program which connected me to a wonderful mentor Darius Montvila. The very fact though that this program exists shows that we lack women talents in Lithuania as well as in the rest of the world. Having in mind that women are top users of many tech products, from social media networks to e-commerce platforms, it is staggering that only 17% of startups have female founders.

W@Tech aims to make these names known and show more role models to inspire younger generation. Together with W@Tech, I plan to organize a conference on VC startup financing in Berlin this autumn. It will be almost impossible to find female VC speakers, but we will do all it takes to at least uncover some names.

What would you say are two or three of the top challenges for Vilnius as a tech ecosystem today, and what are local entrepreneurs, investors, or the government doing about them?

Number 1 challenge is a lack of global mindset and network. There are so many startups that aim to operate in the Lithuanian market. It is simply too small. Entrepreneurs don’t have connections to big tech hubs like Silicon Valley, London or even Berlin. Number 2 challenge is related to that. It is a lack of big ambitions. As access to finance is difficult, startups must make money as soon as possible, but they need to find a business model and grow first. Big ideas have to find markets for their expansion. Government played an important role in securing more IT talent by making visas for non-EU citizens easier. We even have a startup visa now, so the whole startup can migrate to Vilnius with the assistance of the city and the government.

Big ideas have to find markets for their expansion: @adajonuse on #Lithuania #startups Click To Tweet

You can now apply for StartupYard Batch #8.

  • Robots
  • Artificial Intelligence
  • VR/AR
  • IoT
  • Cryptography
  • Blockchain
Applications Open: Now
Applications Close: June 30th, 2017
Program starts: September 4th, 2017
Program ends: December 1st, 2017

For you, what are the two or three biggest successes in tech to come out of Lithuania in the last few years? What parts of the tech ecosystem show the most promise going forward?

 

One of our great successes is  a mobile social marketplace for secondhand clothing with more than 11 million users and its top market Germany. Actually, the co-founder and CEO of Vinted, Justas Janauskas, is advisor to my company Lympo. We learn so much from Justas. I believe that more successful companies should mentor young startups in Lithuania. [Vinted secured 27M Euros in VC funding in 2015]

I also admire Trafi – a public transport app based on machine learning, data from the crowd and self-learning. It was the official public transport app for Olympic games in Rio. Last year, Trafi launched a partnership with Uber for connecting public transport with Uber services.

When it comes to fintech, I have to mention the Bitcoin wallet SpectroCoin. It has achieved great results last year.

Top 3 #startups in Lithuania to watch via @adajonuse: @trafiapp, @vinted and @spectrocoin Click To Tweet

It is a bit unfair, but I must mention two exciting companies I work with myself: PM Screen producing 3D holograms and interactive screen apps with amazing projects in the US and Dubai; and a.lot parking – a parking technology company that aims to transform parking industry in the US. With license plate recognition technology so common in Lithuania, we want to ensure seamless parking experiences and even enable everyone to rent out their private parking space in a garage.

So, you see, the variety of companies is huge: from marketplaces to machine learning and fintech. And then there is a big lot of niche B2B tech startups working with big data, sensor technologies, 3D printing and much more.

What would be your 3 top reasons for visiting Vilnius (or other parts of Lithuania), and what are a few things a visitor simply has to do there?  

 

I love Vilnius. It is my home town and honestly one of the best places in the world. Vilnius has a charming medieval old town, a great bar scene and vibrant cultural life. People here might not smile a lot, but they are very helpful and sincere once you get to know them a bit better. I would propose to discover some great street art and the atmosphere in the upcoming part of the town, Naujamiestis, close to the train station; to take a balloon flight during one of the fantastic summer sunsets and to simply try to get lost in the narrow streets of Vilnius. You will discover so much.

SY Podcast: Mergim Cahani, Founder and CEO of the Fastest Growing Tech Company in the Balkans

Friday Funnies: Corporate Vs. Machine Learning Startup

In this Friday Funny, we explore the hate/love relationship that corporations have with innovative and disruptive young startups.

Corporate Vs. StartupClick to Play the Video

You can now apply for StartupYard Batch #8.

  • Robots
  • Artificial Intelligence
  • VR/AR
  • IoT
  • Cryptography
  • Blockchain
Applications Open: Now
Applications Close: June 30th, 2017
Program starts: September 4th, 2017
Program ends: December 1st, 2017

Tomas Tunys, StartupYard

This Machine Learning Geek Thinks You Need StartupYard

Tomas Tunys: Machine Learning Geek

Tom Tunys is the “silent one,” of the Rossum.ai team. He is a prototypical machine learning geek, which is to say: quiet, thoughtful, and rigorous in his thinking. He joined StartupYard along with co-founders Tomas Gogar and Petr Baudis, two also geeky, but comparatively outspoken AI/ML geeks in their own right.

As StartupYard focuses on AI/Machine Learning startups and founders for our upcoming round of acceleration (applications close June 30th), I reached out to Tomas to talk about his experience at StartupYard. Tomas is, as he would say, not a business minded person. This is the story of how he came to appreciate his experience at StartupYard despite initially doubting its value.

Here is what he had to say:

Hi Tomas, you have always been the quiet member of the Rossum.ai team. Can you tell our readers how you joined Rossum, and your background in Machine Learning and AI?

Tomas Tunys, StartupYard

It’s almost a year since the moment Tomas, Petr, and I were discussing the possibility of creating our own startup, but our history together is much longer than that, so let me briefly tell you my story, and how we met.

In late 2012 I started my PhD studies at the Czech Technical University, under the Cloud Computing Center research group led by Jan Sedivy. It was there where the team behind Rossum first met (albeit not all at the same time). We all together worked on a dozen different machine learning applications, supervised students, and helped to build up what is now known as eClub Prague. To sum it up we have known each other for more than 3 years now.

When I think about it I started my PhD back then out of love for mathematics, optimization and machine learning that had built up in me doing my master’s thesis. I should say that prior to that I had no background in machine learning whatsoever but I could always appreciate the beauty and elegance of mathematics and optimization.

Since I had no clear idea what to work on I laid my hands on many different machine learning topics such as document classification, topic modeling, information retrieval, and learning to rank. The last mentioned has become the main focus of my research and it is about developing algorithms for sorting “things” in a particular order such that the final list has the desired property. One example for all would be a web search where you might try to order the list of documents for a query in a way optimized for user satisfaction.

To me this has always been about the act of accomplishing new things in a very intellectual way. What’s strange about my journey to Rossum and StartupYard is that I am really, really not a business guy. Not at all. I just love math.

You’ve described yourself as someone who finds the business aspect of technology unappealing. You’re very critical of business culture. What motivates you to do the work you do, and what do you hope will come from it?

Quite simple to answer: I do what I do because I love it, and moreover I work with amazing, smart, and genuine people which I see as an endless source of inspiration and motivation.

What am I working on right now? I am part of the research and development team in Rossum which is currently building a machine learning engine capable of reading and understanding the content of textual documents on a human level.

This is of course a far-fetched goal (yes, even now with the current level of technology) and we wanted to make a business case out of it right now, not really building a business on empty-handed promises.

We know that we need to take small steps, like the saying “you need to learn how to walk before you can run” (I can imagine a business person would use fly instead of run without hesitation here), so we decided to focus on understanding a particular instance of documents, which are invoices. I’ll leave what we do in Rossum at that, you can find out more at rossum.ai.

What I hope will come out of our work? My only hope is that in the end we built something amazing that everyone can benefit from.

I am of course looking far into the future, but just imagine what can be done with a technology that can go through gazillions of documents accumulated throughout our history, such as research articles, medical reports, legal documents, books, newspapers, internet -take your pick- and provide access to knowledge, not only information, hidden inside them.

How much can research be sped up? How many lives could be saved? How many hours could be spared at court (sounds stupid unless you know how the Czech judiciary system works)? The list may go on. And I know I chose words that make this sound totally abstract and unspecific and I made it deliberately, because it would be really hard for me to formulate concretely what I mean by “access” (interface specification) and “knowledge” (data store and inference engine).

This is something we will be more than happy to contemplate at Rossum.

We had a discussion recently about the impact that AI/ML is having and will have on humanity and society. Can you talk a bit about your perspective on the role AI will play in our lives going forward?

I think that ML already plays an important and maybe irreplaceable role in the everyday life of a modern person and it is going to be more so in the future.

So far ML (Machine Learning) is mostly prominent (and this is solely how I see it, and might be wrong) in the realm of the internet. Web search, social networks, e-commerce, all these services are intertwined with ML algorithms which are programmed to make a user more satisfied, more engaged, click more, purchase more, etc. But ML is going to have a big voice in “the real world” pretty soon (Do not ask what soon means!), for example, Tesla with its self-driving cars.

This big shift is going to make Machine Learning something that more people can directly benefit from. ML works best wherever there is the most data to leverage. That has meant the internet, and advertising, and so forth, but soon it will mean anywhere there is a sensor and a stream of data coming in. It is hard to imagine the range of applications that will propagate from the Internet of Things.

Let’s play for a bit on a more futuristic and philosophical note, because such a question always deserves it.

In my opinion, it is just a matter of time before AI reaches and supersedes the human level of performance in every aspect. There is nothing that would suggest otherwise, on the contrary, and that makes me think what would be there left for humans?

Everyone kind of says, there will always be something left, without having any clue what that something might be, which does not give me a lot of comfort. I fear that in the end AI will rob us of our curiosity, which I reckon is the main driving force of human progress (definitely of mine). Just think about it, there is no way anyone would wait for you to find answers which are already there (definitely not in a business)  – the only person that would need to resist going for the shortcut and get the answer from your pal HAL, is you.

Sadly, I do not see people nowadays willing to ponder over even the simplest of problems, stackoverflow-copy-paste simply wins (if you are a programmer you know what I am talking about). Now imagine there is an omniscient stackoverflow — disaster is in our way! Is there a solution or is it even a problem that needs solving? I do not know what it is for you, but I’d rather stay curious.

We also talked about the nature of intelligence, our assumptions about our own intelligence, and the capabilities and benefits/drawbacks of AI. What do you think most people are getting wrong in our understanding of these topics?

Let me share with you some of my thoughts on how some of us may see their own intelligence and relate it to the idea of (general) AI.

I think that people tend to think about themselves and their intelligence as something superior, and (so far) unmatched, yet I do not think there is an agreed upon concept of AI. There is definitely more than one, hence, for me there is not a firm ground to base a comparison on. How do we define general AI if we don’t understand what makes us intelligent to begin with?

But this sort of an egoistic self-regard, a proclaimed superiority in terms of intelligence that should definitely not become part of the AI we are trying to build. Because if you stop for a second to think about how we treat the runner ups in this ridiculous game you would not want to become a runner up.

Machines can replace humans, like machines have replaced humans throughout history. But there is an important distinction: the machines do not replace humans by doing exactly what humans used to do. Hand-sewing was replaced by the loom. Hand crafting of parts has been replaced by machine tools and moldings, and now 3D printing. The machines that replace humans don’t function the way we do, or produce exactly the same results we would.

So when we consider machines replacing humans, a mistake we can make is to imagine that the process or the product carries on as it did before. But that doesn’t happen. The process and the product are changed, and we as a society and different industries adapt to those changes out of necessity or convenience. If something used to be handmade out of wood, but is now made of plastic, we accept this change because of the cost savings, or because of the superior qualities of the plastic.

We don’t think much about the kaleidoscopic effects of those changes. Industrialization helped create products that couldn’t be imagined before. A car or a plane are just a machine, but now they shape the way that all of society functions.

That same process happens also in services. We had bank-tellers, but people accepted a less personal approach in order for the convenience of cash machines. Bank-tellers became fewer and more specialized. Call centers and phone operators are another case of this. Soon it will apply to more professions. The outcomes will be different, but it will be about what people are willing to accept- not about exactly reproducing the same results using AI.

Today we do not understand what those results will actually be. We cannot know, just like we couldn’t know what the results of the industrial revolution were going to look like. Some huge positives, for sure, but also some big, big negatives.

A big mistake I have heard from people, some of whom invested a lot of money into the research of general AI, is that they can make sure to build AI that obeys certain rules of conduct.

Nothing can be further from the truth and we, humans, are the best example. When you are a parent, you may try your best to control for all the factors that can influence your child’s growth (external factors could make this a false analogy, but I do not think so), but there is no way of saying for a 100% certainty that a child will become a nobel prize winner or a serial killer. The problem when it comes to AI is the latter.

You cannot predict how something will evolve when it is inherently as complex or more complex than you are. No simulation or set of rules can account for all variables when you don’t know what all the variables will be.

By this I am not implying we should drop the idea of developing general AI. I am saying that we should become really careful parents for the AI we want to raise. In the end we need to hope for the best (or just roll the dice) when we decide to let it go into the world.

I guess most people also see AI as something that is bound to become evil. But this also begs the question: what is meant by evil? This is a favourite theme recurring in literature and movies and I am talking about it mainly to mention a particular one — R.U.R. by Karel Capek — where Rossum gets its name from, which also kind of gives away what we plan for the future (just kidding?).

You’ve said that you initially were very skeptical about StartupYard, but that now you would recommend the program to others like yourself. What changed?

I experienced StartupYard! That’s what changed. I guess my skepticism about StartupYard stemmed from my ignorance and lack of a “business” gene.

When we joined StartupYard, I suspected that it would be a distraction and a waste of time. I want to work on AI/Machine Learning, and not talk about working on AI/Machine Learning. So for me that’s a struggle, and one I still experience.

The Rossum Team: Petr Baudis (left), and Tomas Gogar (middle), with Tomas Tunys (right)

But on the other hand, for the other members of our team, Petr Baudis and particularly Tomas Gogar, I saw incredible changes in their thinking, and really noticeable growth in their abilities outside of the technology we are working on. The other Tom definitely has the business gene, and StartupYard brought it out in him and made him much more confident, and much more wise about the business, and all the challenges we face.

Honestly, I would be lying to say that this was an experience that transformed me as a person, but as a team we were quite transformed. We began to work with much more focus, and so much more effect, on problems that are going to help us grow and keep climbing new mountains.

I can see the difference between our mentality at the beginning, and our mentality today, and it is remarkable.

What would you say to someone like yourself, who is deeply invested in advancing new technologies, but doesn’t believe that an accelerator StartupYard is what they really need?

Well, I don’t want to make a case out of myself, but I would say this:

If you are on your own and you want to do business for whatever reason, then you definitely need something like StartupYard.

I am not a sell out. I will not claim StartupYard is the best thing that can happen to you, but I will say that from my experience the whole team behind it does its best to shape your idea (or if you have none, it helps you to formulate an idea) into a real and viable business.

It does so by providing access to a vast network of mentors, which you certainly do not have and who are non-technical for the most part. In the end many of these mentors can become your potential customers, while others can come up directly/indirectly with an opinion or an idea that can really move you forward in your own thoughts. Moreover, StartupYard teaches you how to think about your business and prepares you on how to talk and present your ideas appropriately. That’s the most crucial part: getting others to understand clearly what are you bringing to the table.

I guess I read this on the StartupYard blog, but I grew fond of it: you and your ideas need to be the fire and StartupYard is the gasoline that makes it go big. I know it sounds like a cliche, but the people behind StartupYard really live up to that message.

And if you are a part you a bigger team, where the others are eager to take over the business part and you have the luxury to concentrate on what you love, then it would really depend on the others, but after seeing the personal growth of Petr and Tomas after going through StartupYard, I can only recommend taking that chance and joining.

You can now apply for StartupYard Batch #8.

  • Robots
  • Artificial Intelligence
  • VR/AR
  • IoT
  • Cryptography
  • Blockchain
Applications Open: Now
Applications Close: June 30th, 2017
Program starts: September 4th, 2017
Program ends: December 1st, 2017

Make User Projections That Mean Something

(Update: May 2017) This post originally appeared in 2014. We’ve updated it with what we’ve learned since then. 

Startups often join StartupYard right at the beginning of their journey. For B2C companies, having a few hundred or a few thousand MAU (Monthly Active Users), can provide a wealth of insights about what in the product works, what doesn’t, and what the users want from it.

But how does a startup with essentially zero confirmed users make decent User Projections based on little or no evidence?

Context

One of the key mistakes that B2C companies make is to see trends in their user growth that don’t actually hold up. Every B2C startup wants hockey-stick growth, but the less data you actually have, the less precise your projections based on that data will be.

If my user numbers doubled last week from 1 to 2, I can claim that my userbase is doubling on a weekly basis. Then I should reasonably predict that by week 26, I will have nearly 68 Million users!

Depending on your sense of what’s reasonable. Or I could as easily predict that I will have just 26 users. Regardless, I can be very sure that the real number will probably fall somewhere in the middle.

Startups need to be both ambitious, and realistic about their growth projections. This is essential to creating a plan that will actually achieve those results. In this post, we’re going to go through the process of establishing reasonable and falsifiable assumptions, that will help you achieve your user growth goals.

Working Backwards

Noah Kagan of Mint.com, discusses this process in his informative blog. He points out that the only workable approach to gaining users is to work backwards from a clearly defined goal, breaking down the channels and methods of user acquisition, their costs and their timescales, into one simple to follow spreadsheet. And while his own projections of how Mint.com would reach 100,000 users in 6 months seem wildly optimistic (including a 25% conversion rate from sponsored adds on Digg.com, with a CTR of 10%), this type of planning actually brought Mint a million users in that same period.

 

All-Your-Base-Are-Belong-To-Us

World domination comes one user at a time.

 

The Assumption Spreadsheet

Before launching, it’s important to relate your marketing goals to your assumptions. If your goal is, say, 30,000 users within the first six months after launch, you’ll have to justify that growth with something more than hope. You’ll have to show how you assume it can be done. Catalogue and quantify your methods of getting this growth, in ways that can be tested quickly and definitively, including the costs of acquisition per user.

Your assumptions for marketing costs might look something like this:

Source Traffic CTR      % Conversion CPC Users
Organic Search 100000 10% 25% $1 2500
Native Ads 500000 10% 20% $2 10000
Google Ads 1000000 2% 20% $0.50 4000
Media 500000 5% 25% $2 6250
Direct Marketing 1000000 1% 25% $1 2500

Cost Total:  $39,500       User Total: 25,250

Projections are Not a Plan

Your assumption spreadsheet is more than just a plan for user acquisition, or a marketing plan.

This is just a part of a much larger set of assumptions. Other factors include your churn rate, your pricing, your internal growth costs, etc. But everything should relate back to basic assumptions that can be challenged and adjusted before launch.

Ask yourself: what will happen in 30 days, when I find that the CTR for one source is half what I expected? Alternatively, what if my CPC for one source is much lower than I predicted?

Going back to the table and adjusting the assumptions as data comes in, helps you to see where your time is best spent going forward. If CTR is low, maybe the message doesn’t match the medium, and you need to rethink your call to action. If conversion is super high somewhere, maybe you need to increase the spend there at the expense of other channels.

Be Reactive

Death to an early stage startup is a failure to react to data. I can’t count the number of times I’ve looked at early marketing data for a startup, and pointed out the above issues, only to be met with blank stares. You must incorporate changes in your data as often as possible, and iterate as often and as quickly as you can, in order to press advantages, and eliminate disadvantages.

“Wait and see” is death to a startup. You must react to every change in the data. Data must guide your planning.

Be Inquisitive

Sometimes you need to seek outside advice. Divorcing your assumptions from objective reality can be hard for anyone. That’s why mentors and advisors exist, so use them.

For example, my spreadsheet above has a few obvious problems. First, I’ve obviously fallen in love with the idea of “native advertising,” or the kinds of ads that fit in with the content of a given site. This makes sense, as I am personally a fan of this type of advertising. But by scrutinizing the spreadsheet, I can see that native advertising is predicted to cost me $40,000 out of a total marketing budget of $56,000, or 71% of my budget. Despite that, only 58% of my users will come from native ads. They will cost me a lot, and will not be as valuable as the users I gain from Google Ads, or even direct email marketing, according to my own assumptions.

Having your plan challenged can reveal your biases and hangups. Often, just sitting down and gaming out the plan for yourself can show you that you’re locked into the wrong thinking.

Have an Answer

It’s not necessarily wrong that I would spend 70% of my marketing budget on native ads, when they will only bring me 58% of my users. After all, users are not points of data in the end: they are people. Different kinds of users will behave in different ways. Maybe the CLV (Customer Lifetime Value), of a user acquired from a particular channel is higher than one from another. I can’t know that. The best I can do is assume, and test assumptions. 

These are the kinds of details that investors will pounce upon when they are shown your user projections. You need to have an answer for why you would pursue that avenue of user acquisition over another. The conversation has to be about your assumptions, not about what you don’t know. 

Perhaps these users are of a higher value (they buy more expensive products), or perhaps they are likely to stay with your product for longer. Perhaps the market for your product in Google ads won’t give you that same CPC if you spend twice as much on them. The size of the market may not justify a bigger focus on Google ads over native ads.

Don’t Fall in Love with Unknowns

Donald Rumsfeld, U.S. Secretary of Defense under George W. Bush, famously justified poor planning for the American occupation of Iraq in 2003 by saying: “There are known knowns, known unknowns, and unknown unknowns.” As many critics later pointed out, the Bush administration leaned heavily on the idea of “unknown unknowns,” to justify a lack of realistic long-term plans that matched their aims in the conflict. Anything that was inconvenient to think about or defend to the public became an “unknown unknown.”

The result was years of escalating conflict that have continued to plague the region to this day.

You can surely see the parallels between this kind of expensive, poorly planned and overly-optimistic strategy can be a cautionary tale in business as well. Refusal to undertake planning and spell out -and then recognize and react to- expected difficulties can lead you to do things that cannot be undone. You can undo a product change, but you can’t un-spend wasted advertising budget. You can’t un-launch a product that has failed to launch.

 

How Big is Your Mountain?

“How big is your mountain?” That’s the metaphor our StartupYard’s MD Cedric Maloux uses to describe this process of reconciling ambition with the need for some realism, even in the growth phase of a startup.

Ambitions to reach 1 billion users are great, if your product is the kind of thing 1 billion people can get some value from at the same time. Not many products are like that, which is why most don’t have the chance to grow that big.

But perhaps your mountain isn’t made of a massive user community. Perhaps it’s made of a smaller, quality user base, that pays a reasonable but significant amount to use your product, and gets a disproportionately large value out of it. In either case, your first six months or so should represent the first “summit” of your mountain.

Within that time, with the help of investors who understand and support your journey, you should reach a goal that is both ambitious and achievable, and you should gain valuable understanding of real users, and what it takes to make them happy.

Also no explanation for this man's success.

No fairy dust.

 

Justify the Impossible : Control the Conversation

While the assumption spreadsheet functions as a roadmap for growth, it also works as a roadmap of your thinking for investors and partners.

Blind ambition, particularly when you’re asking for money, is not an attractive quality. But qualified ambition, in which you set hard goals for yourself, but also show how achieving those goals can be possible, can be very enticing to investors.

To use the mountain analogy: you can ask investors to help get you to the first summit. A goal they can believe in. That moves the conversation about the ultimate goal to a more appropriate time; a time in which you have more data and more momentum.

Imagine two founders who have essentially identical products. Both will meet with investors. One does not prepare these predictions because, as he says, “you just can’t know what will happen.” The other makes predictions, each representing his ambitious plans to achieve benchmarks in user acquisition. One of these two has something real to talk about with the investors. The other doesn’t.

How do you think those two conversations differ? I can tell you from experience: the one who comes with predictions gets enormous value form investor feedback about those predictions. The one without them gets, at best, idle speculation. If you aren’t willing to do the mental heavy lifting of making predictions, investors aren’t going to do it for you.

To define the conversation and lead it, you have to make statements that you can back up. Instead of having investors question your ideas, have them question your predictions. They’ll be speaking in your terms, rather than theirs.

You can now apply for StartupYard Batch #8.

  • Robots
  • Artificial Intelligence
  • VR/AR
  • IoT
  • Cryptography
  • Blockchain
Applications Open: Now
Applications Close: June 30th, 2017
Program starts: September 4th, 2017
Program ends: December 1st, 2017