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10 Questions for an investor: IBM Watson

After Watson’s success at winning Jeopardy competitions, IBM created a whole new business unit entirely dedicated to taking advantage of its impressive capabilities. Using cloud computing and  cognitive A.I., the IBM Watson ecosystem can process language, text, image, speech or data as input for anyone at any scale. Realizing that the biggest promises reside in the uncharted startup world, it soon dedicated a $100 M investment fund. Ahead of his participation as a judge at the LDV Vision Summit startup competition,  we sat down with David Galvin, Investment lead at IBM Watson, to learn more :

A little about you, what is your path to your present role as a lead investor at IBM Watson ecosystem?
David Galvin, Venture Investment Lead | IBM Watson Ecosystem
David Galvin, Venture Investment Lead | IBM Watson Ecosystem

My career started in consulting, with IBM Consulting Services. On the side, I helped pair groups of investors with venture opportunities, which led to a partnership with my brother. From there I capitalized on an opportunity with the Watson group. Growth was strong, I was in the right place at the right time.

 You have a background as a professional cyclist. How does that help in your current role?

I used to sit on a bike for hours and get paid to suffer… Now I sit in a desk chair and it’s a piece of cake. All joking aside, an applicable cycling quote I carry with me is that “you’re only as good as your last race” – some races good, some bad, then it’s back to square one. In technology, you’re only as good as your latest offering, release, sale, etc. Getting and staying ahead is a constant process.

What is the specificity of your investment fund ? What type of companies do you focus on?

Originally, the focus was on specific companies that were developing on the Watson platform. Now, we are re-evaluating the thesis to be more strategic and opportunistic, along the lines of traditional corporate development.

Some apps using the IBM Watson ecosystem
Some of the apps using the IBM Watson ecosystem
 Are visual tech companies important for your portfolio or do you try and balance?

It’s balanced, we have a cross-industry investment thesis. The real focus is on technology, and vision is a core component of our platform. We constantly look to what’s out there in the vision space. Last year we acquired a company with a solid pre-trained vision solution called Alchemy API. We’ve integrated much of their technology into our new visual recognition offering, which will be released and generally available soon. We’re always looking.

 How do you interact with founders after investing?

On the IBM side there tend to be quarterly interactions from a financial standpoint, and because we don’t take board seats, we’re not as engaged in the day-to-day management of the company. We tend to give co-marketing assistance and access to the Watson brand. In addition, we help foster introductions on a go-to-market basis to IBM clients, by putting companies on stage at conferences, having combined and collaborative press releases, etc. In some cases, IBM has adopted the technology. Welltok, a personalized health app and one of our early investments, is available company-wide.

An IBM Watson-powered app that interacts with consumers to provide dynamic, personalized guidance for optimized health
Welltock, an early investment, built Cafewell Concierge, an IBM Watson-powered app  that interacts with consumers to provide dynamic, personalized guidance for optimized health.
 Looking around the visual tech space, what do you see that excites you?

The proliferation of large company platforms with pre-trained and trainable enterprise grade visual APIs are going to change the game by putting technology in the hands of a huge number of consumers and enterprise users via developers. This is exciting, and I think we’re still early. Many startups and businesses we see, are hyper focused on particular niches or industry problems because current classification and image technology still takes time to train. I believe this will change, and we’ll begin to see broader use case applications as domain adaptation improves with better tooling.

IBM Watson Services Overview in 2015
IBM Watson Services Overview in 2015
You are a  startup investor judge at the upcoming LDV summit, what do you hope to get from it?

I get a kick out of hearing the business problem and the thought rigor required to assess the true value of a particular solution. I am passionate about solving problems and enjoy the energy that comes from these competitions. Additionally, I’m always out making comparisons and benchmarking: did the company build it themselves? Did they use our API or a competitor’s? Is vision a core component? Is the solution a feature, a product, a business, etc? These questions are important.

One thing you would change about the venture capital world, if you could.

There are attractive qualities about the business, and things we know are suboptimal. I’d love to see less time being spent simply matching companies seeking capital to entities that have capital. Some platforms out there are starting to make this a little more transparent, but still a huge volume of time is spent raising capital. I just had dinner with a Founder the other night who spent the last 2 or 3 months raising money. Upon closing his round, his team almost did not recognize him when he came to the office. There are also a handful of firms attempting to remove bias from investment decision-making with analytics solutions. This is not easy with so many qualitative factors, though in general I am a big fan!

What would be the ideal company to invest in that technology does not yet allow to build?

I am a self-professed adrenaline junkie, helicopter pilot and physics guy at heart. Like many, I have had an obsession with personal flight since youth. We are starting to get closer…jet engine technology is improving, battery efficiency and discharge is getting better, and the compute and data processing + software to manage it all is right there. You are starting to see a new era of flight infrastructure businesses emerge as a result of growth in the drone space;telemetry processing, tracking, safety systems, collision avoidance, real-time sensing, etc. As the tech catches up with the physics, I would love to be able to order up, a single or duo, electric personal drone and hop over from Manhattan over to JFK in 10-12mins.

The Ehang 184 concept, an all electric autonomous quadcopter large enough to carry 4 passengers. is the future already here?
The Ehang 184 concept, an all electric autonomous quadcopter large enough to carry 4 passengers. is the future already here?

 

From the perspective of making the world a better place (always important to have balance,) what we are seeing in the population health, diagnostics, genetics, and health tech space in general are transformative. The trend will continue and the impact will be phenomenal. What we’re aiming to do on Watson Health side will contribute a lot here. It’s gonna be a great century for health!

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As in previous years, Kaptur is a proud media sponsor of the LDV Vision Summit. On top of advance previews of speakers and panels, we offer our readers 25% discount pricing. Act fast, there are only 10 available.

Go to: www.ldv.co/visionsummit/2016/tickets , enter KAPTUR25

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Photo by Patrick H~

Author: Paul Melcher

Paul Melcher is the founder of Kaptur. He is an entrepreneur, advisor, consultant with a strong background in licensing, copyright, sales, marketing and technology with more than 20 years experience in developing world-renowned photo based companies with two successful exits. Named one of the “100 most influential people in photography” by American Photo magazine.

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