EPISODE #22: A Prominent VC’s Advice for AI & Automation Entrepreneurs
Wayne Gretzky, the greatest player in the history of professional hockey, was once asked how he had such an uncanny ability during games to be at the right place at the right time. He responded, “I skate to where the puck is going to be, not to where it has been.” That quote more than any other defines the objective of every venture capitalist in Silicon Valley, many of whom are skating towards Automation, AI, and Machine Learning. It’s a pretty good bet then that in the years ahead, that’s where the puck is going to be, and also where the most goals are likely to be scored.
To get an insider’s perspective on how VC’s view the opportunities these advances represent, we turn to Anik Bose, General Partner of Benhamou Global Ventures. Anik reveals to us what he believes will be the biggest disruptions we’ll see in three, five, & 10 years from now. He also shares his advice to entrepreneurs on what VC’s look for when investing in startups, as well as what entrepreneurs should look for in a venture capital firm.
Guy Nadivi: Welcome everyone. My name is Guy Nadivi and I’m the host of Intelligent Automation Radio. Our guest on today’s episode is Anik Bose, General Partner of Benhamou Global Ventures, usually referred to simply as BGV. BGV is an early-stage technology investment fund headquartered in Silicon Valley. Their portfolio focuses on digital transformation software startups led by entrepreneurs seeking to disrupt traditional markets in cybersecurity, mobility and internet of things, and the cloud.
Guy Nadivi: There’s so much investment activity right now in these three sectors that we thought it would be interesting to speak with BGV’s leadership and get their insider perspective on how they see automation, in particular, disrupting these markets. A disclosure for our audience, BGV is an investor in Ayehu, the sponsor of this podcast. Anik, welcome to Intelligent Automation Radio.
Anik Bose: Thank you, Guy.
Guy Nadivi: Anik, given that BGV’s focus is on early-stage startups, you get to experience a glimpse of the future long before most of us. I’m curious, what do you think are going to be some of the biggest disruptions we’ll see in three, five, or 10 years from now with respect to automation, AI, machine learning, et cetera?
Anik Bose: Sure. I think the first few points. The first I believe is that we’re going to see ideas starting to become action. In our discussions with industry execs, C-level execs, we have heard that almost 80% of the folks indicate that intelligent automation is on the agenda for implementation. I believe there was a report by KPMG that stated that currently the spend on intelligent automation is about $12.4 billion dollars, and they expect this number to grow significantly almost 10x by 2025.
Anik Bose: The second thing we also believe that’s going to be coming is unstructured data is going to be one of the biggest challenges. What I mean by that is when you look at data that exists outside the confines of forms and fields, data such as multimedia, could be image, audio, video, could be text…Making the best use of this data is going to be critical task for companies and their technology partners. So we believe that startups that are able to really handle both structured and unstructured data will be the folks who are driving significant value creation. Obviously, machine learning and artificial intelligence plays a big, big role in this.
Anik Bose: The third thing is we believe that there’s also going to be a trend towards more and increasing M&A in the intelligent automation field. I think SAP in November announced the acquisition of a French machine-learning RPA company called Contextor SAS. I think one of the rationales that SAP gave was that this would really accelerate development of their Leonardo machine learning portfolio. I believe that we’re going to see more of these kind of deals over the coming five, ten years.
Anik Bose: Then, the last thing I would say about that is that we look at organizations that embrace intelligent automation to really transform their workforce. We believe that it will not only affect business processes but will also create new jobs and titles for automation experts. This is still to be determined, but we believe we will see formal tasks of RPA training and development and managers coming about. So those are some of the big trends that we see.
Guy Nadivi: So with all this activity, which industries do you think stand to be disrupted the most from some of the early-stage startups you’re investing in?
Anik Bose: I think if you think about adoption and where the disruption is going to come, I believe that the financial services sector is going to be an early adopter of intelligent automation. So I believe that that’s going to be one of the big, big areas. I also believe that the retail sector is already being disrupted by the shift to online and the makes of what’s called Omni-Channel, which is both online and brick-and-mortar. We believe that retail will also be another sector where this is going to have an impact. Lastly, but not least, I believe healthcare will be the third area that will see some disruption.
Guy Nadivi: BGV’s website states that you “seek entrepreneurs digitizing assets disrupting traditional markets in line with our thesis.” Can you please elaborate a bit for our audience on what BGV’s thesis is?
Anik Bose: Sure. We’re 100% focused on B2B, investing in enterprise software startups. Our thesis is looking for companies that we call our enterprise 4.0 companies. These companies will share several common traits. First, they’ll be powered by AI on the inside. It could be voice, could be computer vision, could be robotics. Second, we believe that they will be business-outcome driven, which is either driving productivity, agility, or customer centricity, and the buyers will tend to be line-of-business people in enterprises. We believe that a lot of the use cases are going to be around intelligent automation, which is what we’re talking about in this podcast. And we also see that some of these companies will leverage a novel data set. Really, a business model that utilizes data as an asset to drive High ROI decisions in near real-time.
Anik Bose: Sometimes you’ll probably see that some of these use cases will be vertical use cases that are unique to certain industry segments. We talked about finance. We talked about retail. We believe that we will see increasingly those type of use cases that are vertical rather than horizontal showing up.
Anik Bose: A few examples of early-stage enterprise 4.0 companies from the BVG portfolio is a company by the name of Drishti. They basically combine computer vision with near real-time manufacturing cycle time data to address use cases such as manufacturing process visibility, quality, and line-balancing. We also have another portfolio company called Totango that utilizes AI and combining that with customer interaction and product user’s data to really accelerate customer success. So those are some examples of our international thesis.
Guy Nadivi: Okay, so let’s say I’m a Silicon Valley startup with a disruptive technology that employs automation, AI, machine learning, et cetera, and I can check all the boxes that make a startup technically compelling to an investor like BGV. What are the non-technology characteristics about my startup that you would want to see in order to make me appealing as a potential portfolio investment?
Anik Bose: I would say a strong team is the first thing. As a startup, one thing that’s for sure is whatever your plan is. You’re going to not make it, you’re going need to either beat it, or you’re going to miss it. We found that in our experience, strong entrepreneurs who can navigate a level of ambiguity, pivot and make changes, is absolutely critical to be successful. So we look for founders who not only have a compelling vision but they have some track record of execution.
Anik Bose: The second thing we look for also is some type of early customer validation. It can be PoC’s. It could be pilots, and sometimes if it’s Series A, customer orders. So those are two things we look for that are non-technology oriented to get us excited about an option, I think.
Guy Nadivi: Automation, AI, machine learning. These are buzz words that are getting a lot of press, a lot of interest, but are still not being universally embraced out there by organizations. What do you think are the likely long-term outcomes for organizations that don’t deploy those technologies?
Anik Bose: I believe that if you look at companies that have been leaders and look at, for example, the S&P 500, for example, and you look at 1990. You look at 2000. You look at 2010. You look at 2019. What you’ll see is there’s a very strong shift in who those companies are in the S&P Index. Folks like large, retail customers like Walmart used to be there in the early 2000. Now you’ve got Amazon. You had large, established industrial players like GE, and now you’ve got completely different players.
Anik Bose: So we believe that there’s going to be a lot of value erosion for organizations that don’t embrace intelligent automation and advanced technologies. It’s kind of been proven out with time. Whether it’s a loss of market share or customers or shareholder value, we believe those are things that have happened in the past, and those are things that will continue to happen. It’s just that in the past, the big technology shifts were on cloud, and they were on basically shifting to different business models, especially in retail. Looking and going from brick and mortar to online. We believe similar things are going to be driven with intelligent automation.
Guy Nadivi: So clearly there’s a lot of momentum for these technologies, but I’m curious if you see any economic, legal, or political headwinds that could slow the adoption of these technologies? Or at this point, are they basically runaway trains that can’t be stopped?
Anik Bose: I believe there is a significant amount of market education that needs to happen because there are some headwinds. You know, people seek to write articles that are very extreme-scenario oriented where there’s fears that automation will completely displace humans and eliminate most jobs. I’ll give an example. People believe that robots will eliminate all manufacturing jobs. Here’s a data point for you. Today there’s roughly about 330 million folks all over the world, people involved in manufacturing jobs, and there’s only half a million robots. So it’s a long, long time before anything that can even happen in theory.
Anik Bose: But more importantly, we believe this will simply not be the case as these technologies will really increase the need for human augmentation and new jobs with humans to be in the loop and leverage this type of data to make better decisions. So that is something where a lot of market education will need to be done by startups or technology vendors who are playing in the specific markets that are going to drive the disruption. To let the key constituents and ecosystem partners know how this is going to be a net-positive for the whole, as opposed to just completely displacing jobs and making it a very dystopian future.
Guy Nadivi: You mentioned market education, so let’s shift a bit to educational issues. With the direction you’re seeing technology going, what skills should people focus on acquiring in order to maximize their future success in this rapidly changing world we’re living in so that they won’t be put out on the streets by robots?
Anik Bose: I think there’s a very strong demand…I believe there’s a Gartner Report that came out where they projected that roughly 2.3 million jobs will be created by 2020 around AI-positional skills. I believe job titles like Machine Learning Engineer, Computer Vision Engineer, Data Scientist, we know today are among the most in demand AI jobs. I think technical skills around machine learning, around Python, Hadoop, data science. These are things that will continue to increase in importance and demand over time.
Guy Nadivi: For the entrepreneurs out there listening in, Anik, what is the one big must-have piece of advice you’d like them to take away from our discussion with regards to landing that investment that would accelerate their success?
Anik Bose: Sure. What I would say Guy, is that building a business and a company, A) it’s a marathon, it’s not a sprint. It’s a lot of hard work and it’s very difficult. I think what’s really important for entrepreneurs is they should really focus on finding a VC partner who not only understands what it takes to build a business, means they have operating experience, but they can partner with an entrepreneur along a journey where there’ll be lots of ups and downs. It’s not all smooth sailing.
Anik Bose: My personal belief is operating expertise can help founders avoid making mistakes. That makes a big difference between success and failure. You will make mistakes, but hopefully you don’t make 10 big mistakes. Hopefully, you can get it with two or three mistakes. That would be my advice to entrepreneurs, to make sure that as they go through the process of raising money, that they really do their diligence on the VC firms and the partners who will be on the board, and really get a feel for are those the right people who can not only give them the money but also help them build a business and be their partner in crime, so to speak.
Guy Nadivi: Great insight from a true Silicon Valley insider. All right. Looks like that’s all the time we have for on this episode of Intelligent Automation Radio. Anik, thank you very much for being the first venture capitalist general partner we’ve ever had on the show. You’ve given us a lot to think about, and we’ve really enjoyed having you as our guest.
Anik Bose: All right. Thank you for taking the time and happy to contribute.
Guy Nadivi: Anik Bose, General Partner of Benhamou Global Ventures. Thank you for listening everyone, and remember, don’t hesitate. Automate.
General Partner of Benhamou Global Ventures (BGV).
Anik Bose has 15 years of active venture capital and corporate development experience, with particular emphasis on transaction structuring and strategic planning, including 7 years as SVP, Corporate Development at 3Com Corporation, and 10 years as General Partner at Benhamou Global Ventures.
In his role as SVP, Corporate Development at 3Com he played a significant role in company strategy, managed a $250MM corporate venture fund and a team of 20 investment and business development professionals, spearheaded 20 venture capital investments and executed numerous spin out transactions as well as several large M&A transactions totaling over $1.4Bn in value. His venture investments on behalf of 3Com Ventures (3CV) include — Mesh Networks, Parthus, Cicada Semiconductor, Microtune, ADMTek, Atrica, Intransa, Sheer Networks, Air Prime, Yipes, Silicon Wave and Healthetec.
In his role at BGV, Anik Bose is currently a General Partner and works closely with Eric Benhamou. He is very active in every portfolio company where he spearheaded the investment, and serves as board member of Cyberinc, WebScale and Blue Cedar Networks.
Anik Bose can be found at: