Mountain View, CA, May 31, 2018. Silicon Valley Open Doors Technology Investment Conference (SVOD) made it home this week for a variety of ventures in the areas of Machine Learning, BigData, VR, Enterprise Software, SaaS, Consumer Internet, EdTech, FinTech, and Social Impact. 35 startups presented their business ideas in front of over 300 venture capitalists, individual angels, and corporate investing funds. Start-ups represented 16 countries: USA, Israel, Russia, Ukraine, Belarus, South Africa, South Korea, Japan, China, Hong Kong, France, Germany, United Kingdom, India, Estonia, Latvia, and Canada.
The winner of the pitch competition was Aromix: sensing and artificial intelligence to digitize the sense of smell. Helios Wire, a satellite powered Internet of Things network with a focus on remote industrial devices worldwide, was a runner-up. The Audience Awards went to Cubios, the world’s first portable twisty game console WOW Cube. The Social Impact award was given to BeeHero, which increases crop yields by empowering bees – the single most important pollinator of nature – using AI technology.
For the 14th year in a row SVOD brought together famous VCs (Alex Rosen, Mike Maples, Matthew Davie, Dmitry Grishin), successful entrepreneurs (Han Jin, Mike Sandler), extraordinary thought leaders (Susan Athey, Stanford GSB, Lara Boyd, UBC, Center for Brain Health), industry legends (Tim Draper, Steve Jurvetson, Greg Kidd) and startup founders from around the world. Notable this year was the panel with visionary government officials from such countries as Israel (Shlomi Kofman), Estonia (Kaspar Korjus, e-government), and Mexico (Dr. Gemi José González López). Celebrity presenters and keynote speakers passionately shared their wisdom and experience with startups.
• Changing the World Order: One Bitcoin at a Time
Tim Draper kicked off the conference and he was magnificent: bold, bullish, visionary! He sees a huge disruption coming: “Geographic borders are slowly dissolving”, “governments of the World now have to compete for us: the VCs, the entrepreneurs, the citizens”. “Governments used to be monopiles that control the land and set the rules for these lands”, but invent of technologies, such as blockchain and bitcoin, changed the situation in two ways. “First, people started to participate in the virtual world. Second, currencies transformed from fiat to virtual as well”. As the result, people are now becoming the consumers of virtual government services. “We can now choose what to do: to invest into social security and virtual pension fund in Chile, to receive the medical insurance services in Canada, to get the virtual technical education in Russia”. Of course, the change is not immediate, we have to move one bitcoin at a time. However, all of this creates “a huge opportunity to transform governments and make them much much better”!! That’s an exciting world to live in!
• Governments and States: Will High-Tech Transform or Eliminate You?
After Tim Draper’s vertical take-off, it was even more interesting to hear the government’s side of the story. How do the governments adapt? According to Kaspar Korjus, managing director for e-Residency in Estonia, his country responded by “moving the nation to the cloud”, where “everyone can become a digital citizen”, “have a virtual bank account” and “do taxes virtually”. Estonia will soon have more virtual residents than physical citizens and is already working on the next step to create “AI-based government”. Dr. Gemi Jose Gonzales Lopez, Consul General, Mexico believes “in not competing, but collaborating with other nations”. Mexico has put together solid programs to attract talent and educate people on crypto technologies. It developed important technology hubs in Guadalajara and Puerto Vallarta, where cost and quality of living are very attractive. In addition, Mexico introduced funds matching program to connect investors in Mexico with those in Silicon Valley. Traditionally tech-savvy Israel, according to Shlomi Kofman, Consul General, already “has a booming industry where innovation goes into every corner”. The sources of such a success are “listening to the industry and responding accordingly”. Shlomi also challenges the cryptocurrencies from moral hazard standpoint: “Who carries the responsibility and who carries the risk?”, “It’s not only investment question, it is an ethical question”, “Government exists to take responsibilities for the citizens”.
• Forging the Future: What’s Next?
What’s next? Another mind-blowing visionary journey, this time with legendary Steve Jurvetson. Building on the premises of the Moore’s Law and the Carlson’s Curve, Steve introduces us to a brave new World that has everything: from Mars colonization to high-quality low-cost satellite surveillance, from broadband space Internet to beef meat grown using stem cells, from ubiquitous autonomous vehicles to rocket travel across Pacific Ocean in 20 minutes. These ideas are so fictional, yet so tangible. They are real products developed by real companies. Steve draws the line very eloquently “There has been an incredible renaissance for innovation. It’s great to be a new entrant, it’s great to be small, small countries, small companies, small teams will drive the future!”
• Blockchain Beyond Crypto
Susan Athey shared with the audience some of her academic research on cryptocurrency valuation: “if there are demand and supply to transfer money across the borders, then we can derive the value of cryptocurrency through its utility”. Susan presented a quite optimistic view on blockchain technology as the catalyst for innovation yet admitting that the recent trend was still about developing “various foundational infrastructure projects” before we see the next big thing. As an analogy to explain her thesis she used Uber “that didn’t appear in the first 15 years of the Internet because there were so many pieces of infrastructure needed before it could really work at scale”. Susan concluded the cryptocurrencies discussion by expressing the opinion that governments would not adopt bitcoin, but instead issue the electronic forms of fiat currencies. This way governments would still have the way to define monetary policy like they do today, but also gain the ability to stimulate the economy through taxing savings accounts and encouraging people to spend more.
• The SaaS of tomorrow
Alex Rosen presented an interesting view on the SaaS of tomorrow. The overarching theme was the focus on AI and ML that can be applied to a variety of SaaS use cases: image recognition, predictive analytics and automated business analysis (Outlier.AI), enterprise-grade voice recognition systems (MindMeld), customer segmentation (Krux) etc. Bottom line: “It’s a great time to be an entrepreneur, great time to raise money, great time to be building a SaaS business”.
• Exploring VR/AR Potential
Han Jin eagerly shared the story Lucid VR’s ascend. One of the hottest startups in AR/VR space started with the aspiration to create the product that would “allow people to travel back in time and relive magical moments”. However, Lucid VR faced many challenges along the way. First, seeking funding for the hardware startup was difficult: “as soon as hardware was mentioned, the investors were shutting their doors”. Lucid VR differentiated themselves by betting on the software and focusing on the data most relevant to the users. Han sees the key attributes of success as “being extremely lean and knowing how to execute”. The second challenge was and still is the “chicken and egg” problem in the VR space. “VR headsets require content, but nobody wants to create content until you have VR headsets”. Han’s hypothesis is that user-generated content will solve this dilemma and that is why Han’s startup is so relevant. Finally, Han is confident that in the long-term AR/VR will be very different, delivered not through “huge headsets, but with contact lenses”. Hence, the potential is huge!
• Abundance… Not Disruption
If in the Silicon Valley there is one person who goes against the mainstream and yet wins – that is Mike Maples. Mike proved the point by starting with the contrarian opinion that entrepreneurs should not be striving to become disruptors. Instead, they should focus on creating abundance: “Our job as business people is to bring abundance to all men, women, and children as quickly as we can”. Mike focused on the network effects as a legit way to speed up this process: “Networks expand the efficient frontier of abundance. They allow the innovation to occur exponentially”. Moreover, network effects can be pre-meditated and are not accidental: “Network effects are the most durable mote that a startup can build over time”. Hence, every entrepreneur to think about how they can put network effects into place.
• Your Plastic Brain
How do we learn? Why are some of us better at learning than the others? Amazing Lara Boyd revealed the top secrets that neuroscience was hiding from us over the past 20 years. It’s both exciting and scary, but “our brain is constantly reorganizing itself in response to every activity that we engage”, the phenomenon best known as “neuroplasticity”. These changes can be both positive and negative. For example, “struggle during learning leads to better neuroplasticity”, while “stress and anxiety can make the brain less neuroplastic”. What should we do then? Meditation, moderate physical exercises, 8-hour sleep are all good ways to improve one’s learning ability. Devil is as usual in the details and Lara articulately and patiently coached the audience on all nuances known to-date.
• Social Impact: Portable Identity and Financial Inclusion
Conversation with Greg Kidd was on the interesting and important topic of portable identity. Portable identity means that instead of checking who the person is using top-down approach through certain authority, identification can be done bottom-up. Portable identity is critical from several viewpoints. First, according to Greg, the current centralized systems are not effective: “trusting Equifax, Facebook or big authorities with large honeypots of data hasn’t worked out so well”. Second, identity has to be something working at a horizontal level because “we don’t live in a tribe on an island, we live in a global world and identity needs to be able to cut across”. Finally, designing identity in the portable fashion can eliminate the trade-offs between security and privacy. The key piece of advice from Greg: “Don’t worry about getting the right answer, just make sure you are asking the right question and then you might learn something interesting”.
• Banking for the Unbanked: Financial Services for the last 2.5B of the World’s Population
Dreams are universal, opportunity is not. Matthew Davie and his company KIVA are on a noble mission to help “those who are severely underbanked all over the World” by enabling them with the money lending services. Matthew’s story was fascinating on all fronts. First of all, it was his challenge to overcome 30-year technology gap and lack of the Internet connectivity in the rural underdeveloped areas. Second, it was a surprisingly high 97% repayment rate for unsecured loans, largely explained by the vital loan intent and lack of optionality. Finally, it was the scale of impact that his company could have: “A small $400-$500 loan can change somebody’s life”. For example, in Sierra Leone, this loan amount could mean up to 50% increase in the family balance sheet. Financial inclusion has never been more important!
• Terminator X: Rise of the Robots!
The concluding session covered key trends, recent successes and shortcomings in robotics industry. Dmitry Grishin, founder of Grishin Robotics fund, ironized: “There are two types of entrepreneurs launching robotic companies today – hardware guys who don’t know software and software guys who don’t know hardware.” In Dmitry’s opinion, successful robotics business would require the best of both worlds: “Combining software and hardware together is the next evolution”. According to Dmitry: “in some markets it is cheaper to build hardware than to buy Ads, so hardware can be thought of as a new channel to reach customers. Robots are not rising yet, but Dmitry definitely raised the bar high during this final conversation with lots of energy, humor and strategic insights, making it a perfect way to wrap-up SVOD conference.
Silicon Valley Open Doors is an international startup investment conference where early startup founders meet successful founders, investors, and industry legends, who are shaping our lives today and influencing our future.
In SVOD’s 14-year history, every 3nd participating startup has been funded and about $1B has been raised to date from funds such as Draper Associates, Founders Fund, Salesforce, Yuri Milner, Y Combinator etc.
Video recordings of the event are available on Youtube – day 1, day 2.
Complete transcriptions of keynotes and fireside chats could be provided upon request. Please, pick anything you need from the agenda.