YouSaid · the spoken record

Ash Fontana

lines on the record: 81
first: 2018-06-05
most recent: 2018-06-05
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah, like you see amazing parents, and when the kid gets a little bit interested in something, they're like really let them pull that thread. You see amazing bosses where they just give you enough rope, so to speak. Go out and take a risk and maybe fail, but like, it's not a, they make sure it's not a catastrophic failure. And, you know, Navalda did this. He gave me so much autonomy at AngelList, and my current partner has just given me such a gift in terms of giving me autonomy. And I've tried to do that for others. Just letting people be who they want to be is, I think a really kind thing to do. And that economics teacher let me do that. And that allowed me to have two years of self-study, which sent me in all sorts of wonderful directions.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“This teacher, he just let me run with it. He let me like run with my interest because he could tell I was really interested in economics and I was not moving at the same pace and he just let me go with it. And I think that is the kindest thing that you can sort of do for anyone is just let them be who they want to be.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“But really, I think the kindest thing anyone's ever done for me, I'll pick the earliest example of this, but subsequent people have also done this, is my economics teacher in my family year of high school. He realized pretty quickly, sorry, my penultimate year of high school, he realized pretty quickly that I sort of got it and I'd read ahead a bit and I understood all the concepts and whatever. And so he said, look, I'm going to test you, I'm going to give you the final exam in a month. So this is a two-year course. In a month, I'll give you the final exam. Basically, if you pass it, you can just never turn up to class again and do your thing. And I did. And so I had two years of semi-guided self-study where I could read Adam Smith's book in the original text or I could go and play. Crosswords or I could learn about genetics from my really smart biology friend or I could go back and do some economic stuff and like sit and trade for an hour or whatever. But the thing is.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is a hard one, I guess, because you have your parents, you have my partners, and both my current business and also Naval in the last company I worked for was just an amazing thought partner and going to coffee with that guy every day was like a master course in sociology and anthropology and economics and whatever.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Chased by a warthog through a Macadamia plantation in South Africa. I was in South Africa. We're there. We're running around the farms and whatever and like seeing how they work with my cousin and my brother. And I wanted to go for a run one afternoon. And yeah, South Africa's pretty wild. There are black mumbers. There are lions. There are all sorts of things. And you wouldn't think a warthog is fast because they have really short legs. But I'm not a slow runner. This thing was so fast. And you wouldn't think a warthog can do much to you because they're not very big. It's like a little dog. But once they get their horns into you, you're in big trouble. And so I knew this and I basically had to climb a tree to get out of its way. Because that's one thing it's not very good at.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“For sort of moving up the ranks is learning how to build a farm from scratch. And my grandfather's sort of making him do that.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“All the way down to my brother. So, this is the other thing that's really cool about it that I forgot to mention in the last answer, which is that it's an example of a family business where everyone's involved and no one fights. And that's really hard. I mean, McKinsey has a whole practice around preventing this, right? Around how to manage family businesses. And I haven't really distilled why no one fights. I mean, maybe it's just the Italian thing where everyone expects a bit of yelling, but not too much. And so it's okay. Or maybe it's just that everyone has different skills. My mom's a lawyer. My uncle's a computer scientist and other uncle's an architect. And my brother's a horticulturalist and an architect. And so they all have different skills. And so there's no stepping on toes. So there's many, many things about that business which sort of make it a particularly peaceful one and hopefully will be for a lot longer. But it's gone all the way down right to my brother right now who lives in the middle of nowhere Australia and is learning how to his project.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's the story of vertical integration, and that's something I apply to my thinking every day. I think vertically integrating around a customer need is absolutely crucial to really own a customer. And I saw that in action there. I can talk about macadamia nuts all day long.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. Yeah, it's so fascinating and inspirational to me in so many ways because the reason it was started was my grandfather.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“A company called Top Guests, and so we helped huge travel companies, our clients were United, Hilton, Virgin, companies like that, grab a bunch of this newly created social data. So this was back in 2009, 10, 11, all this data about what people are liking, where they're going, all this geodata, and combine it with all the data they already had, you know, United at the time had 100 million mileage plus members, and then figure out, okay, build a better profile of that customer and figure out where they wanted to go next and then send them a deal, send them a flight, hotel, whatever. So it was in a sense marketing technology, in a sense, big data technology.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some degree of leverage. And the reason I started investing in this AI stuff was I had a great network from Angelist and I had some experience working with data from the company that I had started. And then I obviously had a fantastic partner with a heap of experience in that industry. And so you just, you know, where do I have some leverage? I had a bit of leverage there. If I go to something else, I'd probably just pick that and I'd probably make the next great bar company, even though that's a bit crowded.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we have the scale is not necessarily the most interesting thing about that, and I won't talk about that here, but the vertical integration is interesting. So we do everything from the genetic testing. We invented the harvesters, we build the harvesters and manufacture the plastics for the harvesters in Italy. We actually grow stuff, of course. We do all the food processing. But we also build all our own software. And so we build our own mapping software. We build our own optimization software. My uncles who have a computer science background built this software where you can pick a tree anywhere on the planet that we own and dig into its entire life and you can know when it had this bug in 1974 or like what was its yield in 1983 and so that's a that's an amazing asset but we're not making the most of that asset because we don't really do consumer we sell to supermarkets and confectionery companies and stuff like that so i think it just comes back to like where do you have”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“A really good question. It's hard because I think that that's like saying you can't invest in anything that uses computers. And for us, and maybe I've just completely deluded myself at this point, but we just think the whole computing has changed forever. Computers are really a lever for human capacity. They allow us to calculate things really quickly. We think that the ability for computers to make decisions gives us more leverage and there's no going back there, more leverage over everything else in our world. And so it's like sort of saying you can't use computers. So that doesn't make it a bad question. It's just like makes it a hard question given my frame of reference. So what would I invest in? I would play to my strengths and this is going to be a really surprising answer for you, but I'd be investing in food. And the reason I said play to my strengths is because sort of unknown, my family is really big in the nut industry.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“On the podcast, investing in debt that no one wants to touch, or that just hasn't existed before. Like that debt product didn't exist. I put out a tweet yesterday about bail bonds. No one wants to touch that stuff. So he's going to have no competition. He's just got this beautiful green field ahead of him. It's people in really innovating on the modality of funding. So they fund companies in a completely different way. Like what a lot of people and angelists do, which is they fund people with smaller checks, with higher velocity checks, or their process is so different. Or it's just people doing something that no one else is willing to do.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“You sort of get this feeling, you get this somatic response to these investors where you know at any given time they are out there hunting, breakfast, lunch, dinner. They are hunting. And I'm just completely convinced that to be a world class investor, that's what you have to be. You have to know when to go really hard and know when to rest. And so some of my friends who've worked at Tiger, they're all like relatively unknown people, guys like Ferrodes Derwan, who ran Global Equities for Tiger. People like that. And they just know, and Jeff, again, at Insight is like this. They just know when to really go into something. And Warren Buffett obviously is amazing at that in the financial crisis and many other times in his career. Who would I invest in? Who would I put my own money in? So it's people doing something that's just so far off the track. Basically people that have no competition is who I'd put my money in. So it's the angel fund in Estonia. It's, you know, your friend Ali who was”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Me to keep going down that path because it's pretty hard to just keep doing things differently to others over time. So I looked to him a lot. I looked at people that are just completely process driven and people that are absolutely obsessed with process. And so a lot of those people aren't in the venture world. They're in the latest stage investing world. So it's people like Jeff Hooring at Insight or people in the growth stage that really look at numbers and break down markets very, very carefully. And we have less data than them when we're investing, but it doesn't mean we can apply less process. We can still build that uncertainty into our models. So look to people like that. And then I guess the other people I look to for sort of behavioral inspiration, people that are just really know when to be aggressive. Investors, I think, are great investor has to be incredibly aggressive whilst also maintaining their integrity. And to put it in sort of the Wall Street, in Wall Street terms, they have to know when to be a pig.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“I hope so. So, I guess they fall in two categories. One, who do I look to as being a good example of someone who is really refined the craft and someone that I can really learn from? Like a real master of the game. So there are people in that category that I'll talk about. But then there's, who would I give my money to? And they're very different. Very different groups of people. So who do I look to that has refined the craft? You know, the first person that comes to mind and the first book I buy anyone who starts working with us is the most important thing for Howard Marks. And the reason is like a pretty self-centered reason in that I am someone who just really has an aversion to doing things other people are doing and he does too. And he has just put language around what it means to invest in things that other people aren't interested in and like why that is the most important thing. And so I really look to him as someone who inspires”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Our base rate of success is just going to be higher. There's a secular trend there. So there's that. A really interesting conversation I had with someone yesterday was around why do it? Why translate? Because as in why let latest stage investors come in and invest in your companies and why put all this effort into helping them understand these companies so that they can invest some money into it. Because what you're really doing there is you're solving for a market inefficiency, which is that the market doesn't understand why this company is so valuable. But you're letting someone else profit from like resolving that inefficiency. It's sort of silly. The reason we do it is because, one, you know, we don't necessarily have funds that are big enough to fund a company ad infinitum. And we also would like some other investors to get involved in the company because they bring to bear some experience sometimes. And it's a good test for the entrepreneur to see if they can present, articulate their company's vision and strategy and whatever else at the market and get feedback on that.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“In Fund Wine, it was 16, and then Fund two, we will invest in about two dozen. So I think two things are happening there. So to answer your question, it is a big part of our job is to help companies stay alive and they stay alive by they're being really profitable or getting more funding. And most of the time that means getting more funding at our stage. So it's a huge part of our job. And it's a real role of translator that we play, which is translating how the company's gone and just the context around the results and how the team has changed and whatever to later stage investors to give them some comfort. And in a sense, I think we've had a good experience there because we know one area pretty well. So when we say something about technology in this area, it's afforded a little bit more weight. In another sense, the trend is just in our favor. A lot of latest age investors now are really excited about the potential for this technology. And so if all we're delivering them is companies with this sort of technology.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And so I'm in a particularly interesting place to answer this like right now, today because as of about a couple of days from now, 100% of the companies we funded in our first fund will have been acquired or raised a follow-on round of funding. And to put that in context, the industry average is, I don't know exactly what it is, but it's closer to like 20%.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of fitted into their model stack, and if a startup slots in really nicely into their model stack, then they go, all right, well, to get this autonomous vehicle working is going to require that thing. And then once we have this whole autonomous vehicle working, it's a bazillion dollar industry or bazillion-dollar market. And, you know, so we can describe some value to that. I haven't seen BuyersBeast to particularly sophisticated, but we're early. We're really. We'll get there. We'll have metrics. The sophisticated, we will. We absolutely will.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Make a prediction that would help them do that. So bring it to an example, autonomous vehicles. To build an autonomous vehicle, you have to get so much right. There are so many different machine learning models and non-machine learning models that you have to build to make all the predictions about whether or not a car will hit this or how fast it should go there or when it should slow down and whatever. These are all different models. And most of the companies building these autonomous vehicles don't have all of those models. And so a startup will come in and be working on one part of that really, really well, like object identification of people or predicting a movement of someone or gesture recognition so they can, they're really good at looking at drivers and what's happening on their face and figuring out if they're falling asleep. That is something that maybe if you're BMW you have built a lot of cool things to like make your autonomous vehicle work but if you can't wake up the driver when they do need to intervene it's sort of useless and you're going to have a really terrible result. And so they'll try to”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“As in just because this talent is scarce, most of these companies are valued by the talent. We're talking 5, 10, sometimes 20 million dollars more per PhD. So that is someone with a PhD in a field of machine learning that from a legitimate research institution that is just incredible. And this is not silly, to be clear. I don't think this is a silly thing. I think these people actually can walk into big companies and create way more value than that. So today, and again, I think this is a bit of a temporal thing. Mostly on talent. Secondarily, models. And so how do companies value that? Essentially what they try to do, what they can't do, unfortunately during a due diligence process, because it's sort of like giving away too much, is they try to apply that model to their own data, or they look at their own stack of what they're trying to do and see if it could”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so this is something that I am really trying to work on right now, which is very practically what was I doing last week? I was getting Michael Mobison's paper on measuring the moat and in conceptions of return on invested capital and other metrics that you use to try to understand the value of intangibles or intangible competitive advantages and applying it to data and AI. So that's what I was doing last week. So this question is I absolutely top of mind and I'm going to put the answer to this in my book that it was written last week. But getting to your question of like have I been in a situation where there was like a scrap value of the model and how did the buyer think about and whatever else? No, because none of our companies have failed yet. But have I witnessed such a situation or been around such a situation yet? And how do they value it? Honestly, today, for reasons that are not fundamental to this technology, but I think are a bit more temporary.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's in the realm of, I guess I call societal systems, and it's in the realm of these AI enabled systems that they're making decisions that, again, we just can't make because it's just so complex. And so I work with this company called Invenia, and they are optimizing the five biggest power grids in the US. And so what they're doing is they're improving our twenty-four hour ahead, our day ahead prediction of demand and supply. And if you think about it, if we get that wrong on the downside, if we don't supply enough power a day ahead, the blackouts, the blackouts everywhere. But if we supply too much, then that power has to go somewhere. The electrons are being created, they've got to move somewhere, and we sink it into the ocean. Throughout society.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're just going to be, if you think of it as like a decision hierarchy, all the easy decisions that annoy us every day have I run out of peanut butter and how do I order that thing and when is it going to be here and is it going to be in time, be here in time for when my kid has to go to school tomorrow and I have to make lunch in the morning for them? That's a boring decision to make and I don't want to make that decision and I don't have to make that decision. And so it's going to reduce a lot of those like little boring decisions we have to make. And we're going to get to make bigger and better decisions. What am I going to do with this two hours that just freed up because this machine is building my Excel model for me that I had to build for work? I'm going to go and read a book and I'm going to get paint a picture. I'm going to get for a run, whatever. So it's up to us.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“I really think it's going to make life better because at the end of the day, I guess the premise that I think it's important to start with is we're in control of these systems. We choose the features, we choose what they're going to predict, we choose what we're trying to optimize for, we choose what data we feed at, and we choose ultimately what to buy, so therefore what system keeps getting maintained. And so we have made a decision in society that some of those systems are really good and we keep paying for them. Simple examples, Netflix, Amazon, all the recommendations they give us, and they're making daily life a lot easier. It's saving us a lot of time. We're also choosing in certain industries to adopt certain systems, you know, manufacturing, we spend a lot of time in manufacturing, systems that, again, increase yield, reduce errors, and therefore ultimately reduce the cost of the products coming out of these things. So I think the premise is like it's up to us. It's really up to us what we want to improve and how to incentivize people to build the things that improve the things we want to improve. So it's going to make daily life a lot easier.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Does that with essentially a bite and can save you ten million dollars in your first month of using it? So we do work at every level of this stack, infrastructure data and application, mostly at the application level.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Already cleaned, this is how many employees they have. We've checked it, it's fresh, it's within 30 days old, you don't have to go and do all that data cleaning and like entity resolution is this company the same as that company It'll just give it to you. So that's like what we call data as a service It's like playing off software as a service So we do work with some companies there and then we're increasingly working at the infrastructure layer and that is It's all well and good that Amazon can go and compute all your things that you want to compute. However it's not necessarily in Amazon's interest to compute it in a cheap way for you. And so how do you build bots that essentially tune up and down how much of Amazon's computers you're using, what type of computers you're using, like the really expensive chips or the cheap chips, depending on if you're training a model versus just doing a calculation, what time of day you're doing it at the moment humans do this mostly, but we've invested in a company already that”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is our job basically go through every industry, find out what products there are, and just replace it with an intelligent product. So find a workflow product like a payroll system and just find a team building the smarter version of a payroll system, the version that is able to not necessarily pay you on two weeks but is able to automatically advance you four days because it's seen what you do with your money in other ways and it knows it's going to be fine and you're a low churn risk at the company. You're not going to leave in four days, so it's fine. Or find a CRM system and build a smart CRM system like inside sales that tells you what lead to call next. Doesn't just turn up to work in the morning, give you a list and you have to figure it out. So we just systematically go through all these industries and replace that application layer. Now we do work with some companies working at the data layer and also the infrastructure layer. So at the data layer, again, a company called Clebit, it'll just feed you clean data on companies.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a lot of power. It's a lot of power. But they're doing a particularly good job, so I'm okay with it. And look, what it has enabled is like net probably really positive, right? Anyone in any way can just spin up an amazing technology product and startups don't have to raise $10 million and rack their own servers. So everything about that has changed. And we mostly focus on the application part of this, and that is in every industry.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“About before and has a different interface, and then the data from that goes back through the whole system all over again. So I could go through each of these levels in a lot more detail, but essentially every layer of the stack is changing the way we compute stuff, where we compute stuff physically has changed. It's all in Amazon's facilities now. It's not in our offices.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we think that the whole stack is changing. And just to sort of paint the picture of what the stack is and what we're talking about here, we're talking about all the components of a technology product. So, you know, if you have a technology product, you have code and you have to put it somewhere. You have to put it on servers. And in the past, you put it on your own servers and now you put it in the cloud. If you have data, you had to store it somewhere and you had to collate it and clean it and do all that sort of stuff. In the past, you wrote a lot of custom scripts to do it, but today there are a lot of services that will just give you clean data through an API or you feed it data and I'll clean it for you and send it back. In the past, the layer above that, above the servers, the data cleaning was the application itself. So you built a workflow application to execute something, CRM or payroll system or whatever. Today, you're not just building a workflow system. You're building a system that helps people make decisions and has a loop built in as we talked.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“And this sort of brings me to something which has been one of the most surprising things about being an investor over the years in venture capital is that you often think that the hardest thing about building a technology company is the technology. It's supplying a product that is really hard to build. And really that's not what causes a lot of companies to fail. Mostly the engineering team is smart enough to build whatever they said they're going to build. They're going to do it. They'll figure it out. What's really hard is figuring out the demand. And that is the market. That's why most companies fail. And so”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“So two reasons why we only invest in B2B companies one general and one specific to machine learning based companies The general is we just believe it's more of a science than an art. So consumer investing at least we find really tough because you're trying to predict people's wants and trends and things like that. That's sort of hard. At least it's hard for us. We don't know how to do it very well. B2B investing on the other hand is a little bit more of a science because, you know, essentially we've got a company and it's building a product and then we can call up a big customer at GE or Pfizer or wherever and say, hey, this company's building this thing, would you use it? Yes, how much budget do you have for it this much? Who has to approve it? This person when six months? All right, we're investing. We just listen. It's very easy to be deductive about demand if you listen to customers really well, whereas it's very hard to deduce demand from amorphous mass of consumers.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“And also they got cash and they'll give it to you quickly because they don't have all these procurement systems and they don't have to integrate into anything, whatever. It's just give us the data. Let's get going. We've got to beat someone today. But they tend to churn really quickly. So they can be good early customers, but not necessarily good long-term customers.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so either, yeah, you can make the argument it's the new normal. Everyone has to have it. It's like the Bloomberg terminal and everyone has to pay for it. Or you can just make the argument that no one will pay for it anymore because they'll move on to the next idea. So it's tempting for startups to sell to this industry because buyers are really smart. They're really savvy. They know what to do with the product and you don't have to teach them how to use these machine learning systems.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we see a lot. And obviously category one are people that have built predictive models that they want to just trade on, or new systems or new fun models or whatever else. So we've seen a lot there. We don't invest in that stuff. We're a fund we don't invest in other funds. We invest in companies. On the company side, we see a lot of companies that have collected a unique data set and want to either just sell that data set in bulk to companies, to financial industry players, the trading firms. And again, that's not really what we do because that has limited competitive advantage. Like once the data set's out there, you can't sort of resell it to the same customer and whatever else you kind of accrue more value over time. The reason that we've really, where we mostly fall down in companies selling data to traders is like, what's the endgame? What's the end state of this little system you're creating? The end state is that if you sell it to everyone in the market, no one has an edge thanks to your data.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess, but some of them are pretty grim. That's okay. Well, I guess it's my favorite because it's my favorite because of just how much suffering can be prevented by some of these things. And so a company over in Cambridge in the UK called Cambridge Cancer Genomics is working on this technology that will help you figure out mid treatment for chemo. So say you're getting a 12-week chemo course. It'll help you figure out in week one or two if it's working. And so not only does that prevent you from getting 10 weeks of unnecessary chemo, which is just horrible and a huge amount of human suffering, but it may give you an opportunity to try another treatment type 10 weeks earlier than you would have otherwise tried it. And therefore nipped cancer in the bud, so to speak. And so the objective function there is treatment efficacy, but on a super granular way, like week to week, instead of waiting a full 12 weeks, getting a solid biopsy and whatever else.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a company that we work for called Clearbit has built, has done the whole thing of building a consumer product is really useful to people. It's a Gmail extension that plugs in and it helps you find people at organizations and find their email addresses and whatever else. But then they use that data to make information about companies and title changes and things like that available through an API so you can build all sorts of systems to find candidates or whatever else. And so I like this idea of providing like a free consumer product with super high utility, but it's a give to get model. You're giving up a little bit of your time and a little bit of your data or whatever else, but you're getting a product for free. It's sort of like running two businesses, so they're really hard to pull off. But I sort of like that.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, okay, this is a good one. I guess I keep going back to this insurance one, but this is an easy one, but we will have a different example next time. It was basically that getting to human accuracy on that prediction problem took almost three years. But getting to superhuman accuracy took months. And then getting to that last 5% of accuracy, which is basically making it perfect, took weeks. And so that was loop identification, admittedly post-investment. But once I saw that, I just knew it was game over. And I just stopped looking at competitors.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Get another million data points, and are you going to get picked off by another firm, or is something another competitor going to enter in that time? And so that's a bit risky for us to wait that much longer. If the value is not there, as in if you haven't quite figured out how you can tie this prediction, you can make back to the bottom line, you can make a prediction about yield on a manufacturing line, but you haven't quite figured out how to deliver that prediction to the person on the production line and help them actually go and fix something and change it and then tie that back to a dollar amount, well, you're probably going to have to spend another 12 months with customers or building an integration into something or whatever. And so should we wait 12 months and see if that's going to play out? Because once we know that, it's obviously a more valuable company. But again, a competitor might have come in. And then finally, the stability point, should we wait two, three, four years to see if your model is going to”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and this goes back to loops and finding that virtuous loop. And as soon as we've identified that, that's when we invest because we see the runaway advantage. And so this is when we go back to those four factors before the minimum algorithmic performance, like the minimum accuracy you need to have a solution that's better than a human or is able to get to sufficient degree of automation, how much data you need to get there, and how much value it will provide and will it stay stable over time. And so the sort of art we're trying to work on being better at is picking the right time to do that. Because if the accuracy is a little bit low, well, you can probably iterate on the model in a couple of weeks and we can probably wait a couple of weeks to invest until that gets a bit better. The critical mass of data is not quite there, as in you don't have quite enough data or you know if you get another million data points, you'll be able to get the prediction to where it needs to be, well, that's a little bit longer for us to wait for you to.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of opportunity there, and that could yield like a lot of benefits for us in terms of saving CO2 emissions and making people live longer and whatever else. But there's going to be a huge cost to let the AI run loose for a bit”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fed this bit of data at this point. So it'll probably follow it. Regulation will probably follow technology. It'll probably step one will probably be just understanding it. And then really after that, the third part of this answer is it really depends on what we want as a society. It becomes like this, I don't mean to introduce such a nebulous question, but it really depends on whether we want to understand complex systems or not. Do we really want to understand how the energy system works and whether and biological systems and humanity and ecological systems do we want to understand that? Because if we do, we're going to have to some degree, not a complete degree, let AIs run a bit loose in those domains. And that's going to be risky. But the payoff is huge because what we do know is that we absolutely don't understand those systems today. We're going to know hope. As human beings, we cannot throw that many variables into our head and compute them. So there's a lot of promise and a lot of...”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. You cannot possibly stay ahead of it. And two, the benefits of it are huge. So you're looking to take something away from people once they have it. So in a way, regulation is going to follow technology, I think. What does that specifically mean in AI? It means we're going to scramble to understand the AIs. That's step one. What are they even doing? How are they making these predictions? And that is a really interesting area of research and a really important area of research, not just for regulatory reasons, but also for business decisioning, which is making models decomposable. So it gives you this prediction, but what were the steps to get to that prediction? And in a really deep neural net, 800,000 layers, whatever, that's pretty hard to decompose all those steps. But in simpler methods, more regression-based methods and the basic optimization methods, you can actually break it down into the steps and go, oh, okay, there was a bias at this step in the credit decision or whatever else.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Firstly, it depends on your view of how regulation works. How do political systems evolve? Do they follow technology or do they lead technology? If you look backwards, you could probably generally say that regulation follows technology. We figure out something new and then we just quickly scramble to regulate it. So that may happen here. One, because AI is developing so quickly, so fast.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it was horrible. Absolutely horrible. But what you see there seems silly to bring up that example, but you see that in the industrial context all the time. Because when you first build a machine learning model, you put human knowledge into it. This is what we think is predictive. And then it'll learn and correct and reweight things like all the different features that you thought were predictive. It'll go, well, you were sort of wrong on that and you're actually more right on these. But over time, those original biases can play out in different ways. Yeah.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“About the shape of the payoff. And then finally, and this is a really hard one to determine, and that is stability. So every machine learning model is trained with a discrete data set. It's not trained with all the world's data about something or other that will ever exist because we're at this particular point in time. We're at T0. So over time, as you feed it more and more data, will some biases start coming out in that model and will it start doing crazy stuff? And we see this in a lot of like text generation models. Microsoft had this famous Twitter bot that as it started getting fed more and more data, it started saying really, really silly things.”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source
“The second is the critical mass of data, so let's just say you got to eighty percent human accuracy on recognizing what terms there were in a contract with some machine learning while some text processing model, if you only needed a hundred contracts to feed that model, well, the next person that comes along is going to get 100 contracts and catch up to you really quickly. And this is sort of deceiving because ostensibly that's great for a customer, right? I feed in 100 contracts and I start getting value out of this system. It starts recognizing stuff for me lease terms, whatever automatically, but as a startup, that's not a good position to be in. So second is what critical mass of data do you need here? The third is, what's the shape of the payoff? Is it convex or concave? So by convex, I mean, when you give me a prediction, is it great if you get right and doesn't really cost me anything if you get wrong? Or concave, which is catastrophic if you get this prediction wrong if you give someone the wrong diagnosis. And if you get it right, okay, cool. I'm already getting it right. So you think...”
2018-06-05 · Invest Like the Best · Ash Fontana – Investing in Artificial Intelligence - [Invest Like the Best, EP.90] · IDENTIFIED FROM THE TRANSCRIPT · source