Intuition Robotics

Overview

Intuition Robotics is a startup that does machine learning and robotics focused on interacting with humans and their emotions. They are developing what they call cognitive computing to emotionally connect people and devices.  

Their first product, ElliQ, is a social companion robot for the elderly that also makes use of an included tablet to help communicate with its owner.  There have been over a decade of studies showing loneliness has extremely negative influences on health and leads to premature death in the elderly.  The ElliQ simplifies the elderly's interaction with technology as well as proactively engages with them, acting as a companion.

The team is based in Tel Aviv, Israel with 23 employees.

Why I like Them

I like that they are serving the needs of the growing elderly demographic.  I have long thought that this is a drastically underserved market with low competition and a large customer base whose needs are being unmet.  As the world's demographics grow older, there is a ton of opportunity to automate all aspects of care.

Intuition Robotics is in their earliest stages as a company and have yet to ship even their beta product or find product/market fit.  If the ElliQ itself doesn't work out, the software, patents, data, and learnings the team has developed around natural, emotive robotic communications will be invaluable as every digital device becomes smarter in the coming years.

However, they are headed in the right direction with a lot of work to be done in making humans interaction with our devices natural and intuitive.  Hardware startups statistically have even steeper odds than most startups, but I look forward to following Intuition Robotics progress in the coming years.

Disclosure:  I have spoken to members of the executive team.

INTUITION ROBOTICS FIRST PRODUCT, THE ELLIQ

Emerging Trends: The Coming Massive Disruption of Transportation and Energy

Fred Wilson recently shared one of the best talks I've seen this year.  It is by Stanford lecturer,  author, and entrepreneur Tony Seba about the future of transportation and energy and was given in June 2017.  If Tony is even half right there is a huge breadth of change coming much, much faster than people imagine.  His arguments and forecasts are based around cost curves and the exponential improvement we see in technology.  

Some points that drew my attention:

• His key message is that a 10x improvement in a cost basis from new technologies leads to industry changing disruption and mass adoption via an S-Curve with exponential growth - linear models are the wrong way to go about forecasting any type of significant change.
• The accelerating cost curve of Lithium Ion batteries and how they are dropping 20%+ a year is a fulcrum technology that will completely change transportation and energy in the next 10 years.  Batteries and energy storage will be ubiquitous since they will be so cheap.
• These cheap batteries are catalyzing electric vehicles over internal combustion engine (ICE) vehicles due to a 10x improvement in fuel costs and a 10x+ improvement in maintenance costs ( ICE vehicles have ~2,000 moving parts while electric vehicles have ~20 moving parts).  All of this means by 2025 every new vehicle in developed markets will be electric since an ICE vehicle will make no economic sense.
• By 2030: Electric Vehicles + Autonomous Driving + Transportation as a Service = Cost of Transportation will be 10x+ cheaper. New car and ICE industry demand will collapse as there will be 80% fewer cars on the road.  The auto insurance industry, parking garage ownership, etc will collapse.   70% of oil demand will collapse meaning all expensive oil sources (deepwater, tar sands, etc.) will be stranded along with oil pipelines, refineries, etc.  
• Solar cost curve has dropped in half every 2 years so by 2030 solar will be close to 100% of world power generation.  In 80% of the world solar energy today is at parity with grid power and continues to get cheaper.
• The disruption of the energy grid is already well underway with energy storage as a service leading to monthly cancellations of new power plants around the world.  By 2020 solar + self storage batteries at your house will be cheaper than power transmitted by the traditional electric grid.  It already is in some locations such as Dubai.

Overall, we all knew these changes were coming, but not how quickly they would be here, driven by cost curves and economic self interest.

NPM

Overview

NPM is a startup that does package management and acts as a registry for JavaScript.  Basically it allows software engineers to share code they've developed to solve particular problems in what are called packages.  Any website or software application today uses dozens to hundreds of packages.  NPM has a good explanation here.  

The company offers a paid SaaS version and an on premise versions of its software with the revenue split being roughly equal between the two.  NPM started as an open source effort by its founder and CEO, Isaac Schlueter, but due to strong customer demand for features, took venture backing to more quickly develop the product for the community.

NPM is not profitable yet but sees a very clear path to getting there with its paid product offerings seeing exponential growth. The team is based in Oakland, California and is currently 25 employees.

Why I like Them

The importance of JavaScript to the modern day web is undeniable and you can't use JavaScript today without running into NPM. Every company writing software is likely utilizing NPM to some degree.  With its centrality to package management and private libraries it is easy to see how network effects are kicking in, expanding NPM's moat and making their product even more attractive to users.

Further getting me excited about their prospects is that Facebook built upon NPM to release React and Yarn which works with the NPM registry, thus cementing NPM at the heart of JavaScript.  One other potential avenue for growth the team pointed out to me when I spoke with them is the wealth of data they've collected. The team believes with the application of some artificial intelligence they will be able to produce meaningful analytics from their data.

It is not a far leap to see NPM becoming the next GitHub.

Disclosure:  I have spoken to members of the executive team.

Slantrange

Overview

Slantrange is a big data and analytics company focused on the agriculture sector that describes itself as an agricultural intelligence company.  They offer a SaaS analytical product for agriculture and advanced multi-spectral sensor systems meant to be mounted on drones.  Applications of their systems include detecting crop infections, vegetation stress, automatic crop counts, etc. 

Slantrange products are mostly sold to drone services companies who are then contracted by farmers for data analysis of their fields.  They make revenue through their SaaS software subscriptions and through selling the hardware sensors.

The team is based in San Diego, California and currently has approximately a dozen employees.

Why I like Them

There is a large opportunity ahead in digitizing agriculture and Slantrange is the premium provider of data analytics for the industry with best in class sensors.  Satellite systems cannot provide the resolution or yield of information on crop fields that drone based sensors systems do.  Slantrange takes advantage of this much richer data set using advanced data mining and analytics to offer detailed, actionable insights to farmers.  I like that the team's focus is on continuously extracting higher value data from sensor systems that no other offering can match.

Even with such a small team they already have a huge amount of traction selling in 20+ countries via 15+ distributors.  They also have a large amount of intellectual property around technology.

Disclosure:  I have spoken to members of the executive team.

Affirm

Overview

Affirm is a fintech startup looking to modernize finance.  They correctly note the core of modern financial technology infrastructure was built in the 1970s and is horribly outdated - Affirm wants to change that.  Their initial set of products is a modern consumer lending facility that merchants integrate onto their eCommerce site.  Affirm has two sets of customers, businesses who install their product on their eCommerce site and consumers who need to understand and use the product.  Once they have created an account with Affirm, consumers just click the Affirm button at checkout with a partnered eCommerce site to take out an immediate fixed rate loan for the online purchase.  The loans are originated by Affirm's partner Cross River Bank.  

Merchants are big fans of the technology as they are paid by Affirm instantly for the purchase, seeing an average of a 10% increase in revenue per customer and more people buying due to the increase in spending power.  Unlike with credit cards Affirm does not take any sort of transaction fees, making their money purely on the loan interest.  The merchant is immediately paid the full amount of the purchase whereas credit cards take an average of 2% of the total transaction value from the merchant as a surcharge.

The company has strong traction to date having  issued 1 millions loans with 300% growth  year over year for the past four years. They are used by more than 1,000 businesses including the ones listed here.

Affirm is based in San Francisco with 250 employees and plans to grow to over 300 in the next year.

Why I like Them

The product offering is extremely innovative since the team has their own internal credit scoring models that heavily outperform FICO.  They are able to measure and control loan risk far more accurately than standard mainstream (and outdated) methods of credit scoring consumers.  This allows credit to be given to those the mainstream FICO system misses or is unable to score accurately.  The chart below does an excellent job of summarizing the huge difference modern credit scoring systems like Affirms can have.  Consumers love the product having given them the highest Net Promoter Score in the industry at 82.

I also like their broader mission and the opportunity set in front of them.  The core of modern financing (lending and payment transfers) has been extremely slow to modernize and it is very frustrating to users of the system (myself included).  This is an industry begging to be disrupted and Affirm is attacking the issue head on.  You just have to look at how slow it is to transfer money between banks using ACH or the horror stories and inaccuracies of the three credit bureaus to see it.

Disclosure:  I have spoken to members of the executive team.

Affirm credit scoring methodology compared to FICO