The verdict on how to avoid utterly indefensible AI start-ups

Posted in Rubikloud Perspectives
By Aaron Dauphinee on June 8, 2017

Last week tech entrepreneur and venture capitalist Bradford Cross announced he will be the new founder and CEO of Merlon Intelligence, a compliance risk management platform as its principal product offering.

ARCHITECHT founder Derek Harris interviewed Cross on the ARCHITECT show podcast where he spoke to how Merlon is applying machine learning against regulatory compliance and risk management technology. While the story of this new venture is interesting in and of itself, Rubikloud’s key takeaway from the podcast was when Cross begin to speak to a selection of other Artificial Intelligence (AI) topics.

Harris summarized the list of topics covered with “[Cross] also weighs in on a number of other big topics in AI, including increasing automation in investment banking; over-investment in general-purpose AI products and specialized APIs, by everyone from startups to Google; the current bot bubble and why people still like human interaction; the value and the hype of projects like AlphaGo; and the failed state of personalized news.”

“It’s all the same playbook, except instead of gathering all this data from consumers, you’re gathering it from business users. But in order to gather it, you’ve got to build the apps. You’ve got to own the apps, which means you have to go full-stack. This is why I’m really not into the horizontal AI startups and I think they’re basically utterly indefensible and will all collapse,” Cross noted to Harris.

Cross also shared his opinion on AI start-ups with, “[T]his is like the main thing that I think is going to happen in this stage of successful AI startups will be that … First of all, they’re full-stack, vertically oriented startups like this where they attack a business problem directly, that’s big enough to build a big business around.

And then second of all, they recognize the part that the human should be doing and the part that the machine learning should be doing. They don’t try to automate everything away because it freaks a lot of people out, particularly in a domain like this. Gradually, over time, you’ll be able to automate more and more stuff. But in the beginning, you absolutely want people to do it.”

RK’s Perspective:

This was a great interview and Cross’s view on the over-investment in AI products and specialized APIs showcased a classic moment for us of, “That’s what we’ve been saying all along.”

He’s outlined a philosophy, and is building his next company based on it, that echoes a founding point of view for Rubikloud. Our take on app ownership and the need be full-stack are early cornerstones of the conversations with leading retailers and select venture capitalists for the past three years.

The final verdict for us on this is that it’s nice to see Cross lay rise to our defense.

Early Rubikloud presentation slides from 2014 – 2017.