Stan Boland, CEO of U.K.-based FiveAI, has spent his career innovating in the communication sector, mainly in the semiconductor and telecom space, and is acutely focused on how artificial intelligence (AI) has the potential to revolutionize many industries. Academia is a primary source of innovation in AI; for example, the science to improve autonomous driving is evolving in top universities around the world. Boland says that the current technology cannot assure safe driving despite the hype, and experts are working to solve the problem of reconstructing the world dynamically with predictive capabilities. A key ingredient, he says, may be a more extensive sensor set on vehicles; today this could add as much as $40,000 to the cost of the car, but Boland believes this could be amortised over the duration of ownership, at least in the developed world.
Mellie Price, a serial entrepreneur, who is the Executive Director of Commercialization at The Dell Medical Center at The University of Texas at Austin, now focuses on the health care sector and mentioned that AI is playing a game-changing role in radiology. Universities such as hers are newer players in the innovation ecosystem, particularly in the realm of early-stage ventures. She believes that people working in communities that nurture startups are more collaborative than those working in environments populated by larger, more traditional companies.
Speaking about Silicon Valley, Price noted that term sheets for deals based there are, in her view, too optimistic, which contributes to higher failure rates. Further, she feels that entrepreneurship in the San Francisco Bay Area is being commoditised—and she values startups that have taken the time to work with accelerator programs.
David Blumberg, Founder and Managing Director of Blumberg Capital, has a global perspective on innovation, supported by the presence of his firm in San Francisco and Tel Aviv. From this perspective, he finds a range of investment opportunities. For example, he talked about the role of technology in changing transportation from a product to a service, and cited a German company looking at ways in which people in the developing world who require cost-effective transportation can share seats in cars.
Against that backdrop, he sees his firm as not just an investor in startups but also an intermediary between startups and larger corporations. Venture firms are often able to offer a solution to corporations seeking a certain capability or an entrée into a particular niche; he also looks to share opportunities that may not be ideal for venture backing but could be a good strategic fit for a larger business.
Blumberg added that regulatory and structural changes on Wall Street have led to less frequent IPOs for venture-backed firms, and that those IPOs now only occur when companies are more mature. As a result, a larger proportion of value accrues to entrepreneurs and venture backers.
When asked about macro risks for new companies, the panellists tended to minimise such factors and emphasise a greater focus on selecting the right opportunities. For Blumberg, one area of focus is financial technology, which tends to be heavily regulated for large institutions but offers more opportunity in the small and medium enterprise segment. Price noted that the time frame to invest in health care is often incompatible with the investment horizon of most funds, with the exception of health care information technology.
Overall, the discussion demonstrated the breadth of opportunities available across a number of disparate industries, regions and technology realms, and highlighted the fact that investors who ignore innovation outside of Silicon Valley do so at their peril.
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