Talking NEVYs (and AI + Blockchain) With First Star Ventures Founding Partner Millie Liu
On May 9, the New England Venture Capital Association (NEVCA) is holding their annual award show, the NEVY Awards at the House of Blues in Boston. As part of the lead-up to this year's Star Wars-themed event, we're going to be posting a number of bite-sized Q&As between now and the 9th—each offering a bit more insight into what attendees can expect (here's the last one we did with Ascent Venture Partners Senior Associate Baiyin Zhou).
For this installment, we spoke with First Star Ventures Founding Partner Millie Liu about the event, as well as trends across the artificial intelligence, machine learning, and Blockchain industries. This year, "Company of the Year in Artificial Intelligence, Machine Learning and Blockchain Technology" nominees include TellusLabs, Feature Labs, Inc., RapidMiner, Circle, Siacoin, and Kensho.
Alex Culafi (AC): AI, ML, and Blockchain are three emerging areas of technology. Why do you think Boston is poised to become a leader in these sectors of hard tech?
Millie Liu (ML): There is $4 billion in R&D funding spent every year in the Greater Boston area, and the collection of universities and research labs are second to none. Large players—from Amazon to GE—are creating large offices here to tap into the strong technical talent pool. In addition, many of the areas where these technologies will be most applicable are strengths of Boston: healthcare, biotech, digital, industrial… We see exciting things for Boston in this cycle as these technologies mature.
AC: Since some of these technologies are just emerging, it's important to find the right use cases that aren't too far ahead of the market. Can you share some examples of areas that are currently ripe for disruption?
ML: Opportunities are essentially everywhere, as almost every industry now generates large amounts of data and needs to make sense of it. Supply chain and logistics, for example, is an enormous, literally trillion dollar industry which is going through a digital transformation, leveraging modern machine learning to make it smarter, more predictable, and more agile. Financial industries benefit from AI for fraud detection and modeling. In life sciences, drug discoveries are accelerated by new kinds of datasets and novel machine learning techniques.
AC: When you are evaluating a company in these categories for a potential investment, what are the key elements that you are looking for?
ML: We love nerds. We look for deep technical expertise from the founding team. The founders that First Star has backed so far 100% come from a technical background, and 70% of them have Ph.D. degrees and research experience. Some are serial entrepreneurs that already have a deep understanding of the industries they work in. Others are fast learners in picking up the market landscape and being strategic about go-to-market. We also look at nature: Do they have a natural advantage that will prove hard to replicate? Is there an unfair competitive advantage that will empower them to grow fast and dominate the market? Overall, we look for teams with deep insights that can solve non-trivial technical problems.
AC: Outside of the NEVY nominees, what other companies in this category do you find interesting?
ML: GNS Healthcare is an interesting one. It delivers insights to biopharma and health systems and accelerates their discoveries process. By leveraging machine learning and transforming massive data, it precisely matches care and intervention to individual patients.
AC: The NEVYs are right around the corner! What are you looking forward to the most that night?
ML: Startups in our ecosystem are known to be hardworking and down-to-earth. I'm excited because this is the chance for us to celebrate and honor their achievements! I also look forward to seeing people dressed up in Star Wars costumes.
AC: What is one thing that excited the Academy about each NEVYs nominee in the AI/ML/Blockchain category?
ML: Circle/Poloniex - Circle is one of the world’s largest providers of crypto asset liquidity. Jeremy Allaire and the team saw the promise of crypto assets very early, and have executed phenomenally well. Their recent acquisition of Poloniex gives them an open, global token exchange, a missing piece in their platform, and shows how ambitious they are. They’re trying to build the dominant player in what will be a huge space.
Sia - Sia was one of the very first projects using Blockchain for something that wasn’t financial. Their cloud storage marketplace challenges Google and Amazon, and shows how disruptive Blockchain-based platforms can be. Since the beginning of the year, the usage of the Sia platform has doubled, and it’s up 8x from this time last year.
Kensho - Kensho’s acquisition by S&P Global marked the largest-ever acquisition of an AI startup. It also demonstrates that Wall Street is ready for a transformation at the scale of information processing using new technologies in machine learning and natural language processing.
RapidMiner - RapidMiner’s platform significantly accelerates the workflow of data science from data prep to deployment. It has a fast-growing community and has been very successful partnering with universities to push the education and adoption of data science forward .
TellusLabs - TellusLabs has a strong team of PhDs and scientists in satellite imaging, sensing, and environmental science. It delivers distinctively-high accuracy intelligence from satellite images, and has impressed its clients in both public and private sectors.
Feature Labs - Launched out of MIT CSAIL, Feature Labs is working on ML 2.0. Its technology uses machine learning to automate the machine learning modeling process itself. Companies that are not Facebook or Google can now easily spin up a junior software engineer team to benefit from the most cutting-edge algorithms.