That has to be a concern because SAP has been positioning S/4HANA, especially its Simple Finance capabilities as its next-gen product. However, Gartner based its evaluation on the other offering, Business ByDesign which has had its fits and starts over the last several years. About S/4, Gartner says “SAP’s new flagship cloud solution, is a candidate for possible inclusion in future iterations.”
Either Gartner could not validate SAP’s statement that over 5,800 customers have licensed S/4, or more likely (my speculation is) they are confirming what I wrote after SapphireNow : “What I would have liked to have seen is more public cloud use cases of S/4. Lots of on-premise/private cloud deployments which could potentially continue the bad habits from ECC world. With lots of exposure at the event to what they called the Big 3 “cloud infrastructure” vendors – Google, Microsoft and Amazon, we will see more interest in public cloud deployments of S/4.”
SAP has been pushing the benefits of in-memory computing for several years now. I have a feeling this will spur SAP to get much more serious about positioning itself also as a cloud computing behemoth (like it does in other process areas with SuccessFactors, Ariba, hybris and other products).
Finance is a strong suit for SAP. I doubt they like being considered a niche player.
SAP’s Nils Herzberg and I were on an ASUG webinar earler this year where he outlined some great use cases SAP’s customers have for the internet of Things.
Nils had some great examples, but the webcast was limited to ASUG members only, so I asked him to come on the IoT Heroes show to share the customers wins with everyone.
Being an American founder in the Valley is difficult enough, but as a European founder, what unique concerns do you have to think about while running a company and trying to scale it?
Teddie Wardi, Partner at Atomico, leads this session with Mathilde Collin, CEO of Front App; Jens Nylander, CEO of Automile.com; and Nicolas Dessaigne, CEO of Algolia, to discuss the challenges they went through in raising their first venture rounds in Europe, how they sought out Silicon Valley VCs when the time was right, the importance of pitch decks and the major difference between European and American pitching styles.
And if you haven’t heard: SaaStr Annual will be back in 2018, bigger and better than ever! Join 10,000 fellow founders, investors and execs for 3 days of unparalleled networking and epic learnings from SaaS legends like Jyoti Bansal, Aaron Levie, Josh James, and Dustin Moskovitz. If you don’t have tickets, lock in Early Bird pricing today and bring your team from just $549! (Prices go up July 1st.) Get tickets here.
TRANSCRIPT
David Appel: Good afternoon, everyone. My name is David Appel. I’m Head of the Software and SaaS Vertical at Intacct, where we’ve been very happy to be the sponsor of the tactical stage here at SaaStr. This is our last and final seminar. It’s going to be a great session. I got a question for the crowd. How many people here are European?
[laughs]
[audience reaction sounds]
David: Welcome! What timezone are you on?
[laughter]
David: Thank you for coming. You probably already know some of these people, all of these people, in the background. We were talking a little bit about what the session’s going to be about. This for you. This is their story. What did they go through? How have they made the decisions that they have on building their businesses? Particularly, on how they went about raising funding.
We’d love for you, in the time you’re spending with us, to walk away, that’s our investment back in you, to learn some of the lessons they went through, so you can avoid the bad, double down on the good. We’ve got four great speakers coming on right now. I’m going to let them introduce themselves as they come on up.
I don’t want take away from the moderator. Teddie, come on up.
Teddie Wardi: Thank you.
[applause]
Teddie: All right. I think, let us all get on stage. We have a great group of European founders today. We have two French founders, one Swedish founder…two of you guys have done YC. Jens has done the YC of life, as he told me a few days ago.
Jens Nylander: [laughs] That’s right. YC of life.
Teddie: The common theme is, all of you have raised money from Jason Lemkin in one way or another. [sarcastically] It’s a huge coincidence you ended up on stage here today.
Mathilde: [laughs]
Jens: [sarcastically] Big coincidence.
Teddie: We’re going to talk about the stories of fundraising…the good, bad, and ugly, of European SaaS founders fundraising for their businesses. Let’s start with you, Nicolas. You had US venture funders already in your seed stage. Then you end up raising a round in Europe. Can you tell us a little bit about that, how you’ve kind of been back and forth?
Nicolas Dessaigne: Sure. I’ll be honest, when we were fundraising for our series A, we mostly spoke to US investors. Then what happened is that the most bullish investor actually was the one who had known us for the longest, with whom we had a long relationship, and that’s how we ended up with Accel UK, and Philippe.
Philippe had known us for like three years before, so he saw the progress of the company along the years. I think that it really was a key part of having him being probably bolder on one side than the others. Then, it was a great brand, anyway…Accel, global brand. For us, it was a good one anyway.
The fact that it was from the UK was also in a way an advantage, given that we already had US investors. He knew what it took to go from Europe to US.
Teddie: Jens, for Automile, you ended up raising your A round from a very well known US VC called the SaaStr Fund.
Jens: That’s right. We were the first investment in the SaaStr Fund that was, I think it’s $75 million or something similar in that. I was still partially living in Europe at that stage. Something I learned with Jason Lemkin is that he spends a lot of time during the due diligence phase, with your customers. He’s learning what makes Automile so great.
What I learned during that phase is that he already made up his mind regarding me as a founder. He wanted to invest into me and wanted to know how good is this product really. He also were knowing that this is a big market, it’s a $30 billion market.
Ultimately, I think what really killed it is that he basically talked a lot with the customer before making up his final mind and giving me a term sheet. Even having multiple term sheets, you always want somebody that has traction, that has a record, can support you as a founder, can help you with all difficult decisions.
I think that is Mr. Lemkin. He helps you with these difficult decisions.
Teddie: [laughs] All right. The sales and marketing pitch is done…?
[laughter]
Teddie: Mathilde, you’re like an expert in this topic. You even wrote a long form blog post about the difference of when you’re raising a seed round in US and Europe. Then, you’ve gone on to raise series A and so forth. Do you feel that same dynamics apply to series A? What have been your key learnings when you talked to investors at both sides of the Atlantic?
Mathilde Collin: For me, I think the reason we raised a seed in the US is mainly because we couldn’t raise in Europe. Which I think, was not true for our series A, I think we could have raised, but I just enjoy my experience working with American VCs. As a European founder, I have a lot of European roots. I think I needed a bit more American touch in this company, and that’s why we chose Social Capital for our series A.
Teddie: A lot of people in Europe say that, “Oh, you can’t raise money from US VCs if you don’t completely relocate your business to the US.” Let’s try to debunk that myth a little bit. How did you guys go about it? What functions did you move before you raised your round? Maybe Jens can…
[crosstalk]
Jens: I only move myself.
[laughter]
Jens: I left my team in Sweden. I left them with one of my strong co founders and I decided that I would drop myself in the US only with my family, three kids. It isn’t super easy to take care of everything, but ultimately that was the best decision ever. Basically, I was forced to build a new team, and that excites me.
On top of that, it’s freaking hard. Every day I woke up like, “I need to find these great people I need to hire.” Ultimately I did it. We have 20 people today. I believe that it depends on what you’re looking for. Some founders bring their full team with them. They lose a few ones on the way, but ultimately, it depends on what you’re looking for.
I was looking for really coming to US, really showing and demonstrating that I’m capable of recruiting. That was my ultimate goal from the beginning…and leaving the Swedish team still working on the European market.
Teddie: Nicolas, how did you go about it?
Nicolas: Actually, when we raised our series A, we didn’t have really anyone in the US yet. We were already headquartered here, we already had most of our customers here. It was a lot of back and forth, and a lot of hustling.
I was committed to moving. It was not a question of, “Am I going to move or not?” The team would stay in Paris anyway. All the tech teams stayed in Paris. It has never been a problem actually, never been a question from investors.
Teddie: You think about the US, there’s this, again this meme in Europe that, “Oh, if you are recruiting in the US all the resumes are super inflated, and you need this culture of like, everything is pitched really hard. You have to be almost overselling, and forget all the modesty.”
Does this also apply to when you were pitching US investors? Or would you tell the story in the same way as you would have told it in Europe? Mathilde, how do you…?
Mathilde: I think it’s true. I think as European founders you’re really bad at pitching and overselling your company. I have this funny story where when I applied to YC, one of the questions was, “How big could this idea be?” I had to rehearse at least 30 times…It could be a billion dollar company, to feel like it was natural.
Then, I went to YC and I asked someone that was American, “How big do you think this company could be?” He was like, “Obviously, a billion dollar company.” It was so natural. I think we have a slight disadvantage on that. For hiring, pitching customers, I do think that we need to improve on that, and I worked on that.
But for fundraising, I think it’s one of the only times where if you have good numbers, it doesn’t really matter to oversell anything. I think you need to be patient and have good traction. For us, at least, it worked out, for seed and series A.
Teddie: What about the rest of you? Did you notice that change of pitch somehow?
Jens: Well, I’m a salesperson from the beginning. I always try to sell. That means that you always try to do your best pitch. I believe that coming to US, you have to be clear about your goals and your visions. You should be bold about it. You should not be afraid of telling the VCs that, “This is my vision, this is what I want to achieve.”
Even if you are yourself, only one person sitting in a garage, you can still be bold and tell them that vision. It doesn’t matter that you’re not there today. You’ll be coming in that direction in the future. I think that matters when you come to US, that you have to be clear on that.
Overselling, I would say that we Europeans, we are pushing ourselves down a little bit. Sometimes I think we should just put ourselves up a little bit. That’s what I have learned.
Mathilde: I think coming here in the US is a good way to push you up. When you’re in Europe, and you’re just watching social media, or looking or watching SaaStr, etc., it seems like American founders are far better than you are, and you have this shitty company that no one wants to use.
[laughter]
Mathilde: The truth is, the first time I came three years ago and I was showing the product, everyone was telling me, “Whoa, this is amazing.” Then I was looking at the products of our competitors that had such great websites and marketing assets. That’s when I think I built my confidence.
Then you can see, like for real, how potential customers ranked your product versus other products.
Nicolas: I think that’s exactly the right point. Ambition is more important, actually, than overselling. I don’t think I ever oversold like the company or metrics or anything However, our ambitions definitely changed a lot when we joined the YC, and when we came in the US. Being at the contact of local founders kind of showed us the way to free our mind.
In Europe you think small. Here, you think big. It helped us to think big. Then it was not overselling anymore, it’s just like, selling the vision.
Teddie: It’s more about painting the really big vision and being bold enough to think big…?
Nicolas: You still need to believe in your own vision.
Teddie: Yeah.
Jens: For some reason, US companies, at least startups in the Valley, has more respect from bigger enterprises. I don’t say it’s easy to sell to enterprises when you’re small, but it’s easier to be in the Bay Area. You have a lot of respect just because you’re innovating stuff, you’re disrupting stuff…
They believe in you, so it’s easier to get people to visit you here, actually. Specifically from the enterprise sector.
Teddie: When you were looking for investors, what were you really looking for? In terms of…Were you looking for somebody who has vertical experience in what you were doing? Or you were just looking for overall good quality of investor, or access to customers?
Was there a specific angle when you were choosing who was going to be the lucky one to fund your company?
Mathilde: For me, really, it came down to who I enjoy having dinner with. For our series A, we had term sheets from amazing investors. The reason I chose Mamoon from Social Capital was just because I’ve had known him for two years, I trusted him.
I think the main thing about the way I think about it is I think building a company is super hard, even if you’re doing well. If you’re not feeling good when you’re going to your board meeting, I think it’s just like adding a lot of pressure. Whereas I trust Mamoon, so whenever I go to a board meeting, I know that I’ll do my best.
He will help me, and I’m not scared at all. That’s how I choose.
Jens: Mathilde is telling us a great story here that I have to repeat. Basically I think the same way, that it’s all about that trust and engagement from the investor. It’s a little bit like dating. You are meeting, meeting…and then, you may get excited yourself about this investor…and the investor gets excited about you.
Then it’s the time to try to move to a term sheet, of course.
[laughter]
Jens: Independently, not spend too much time in the due diligence phase. I think that engagement that the investor believes in you truly, and also in some way wants to support you, and it’s really difficult. It’s hard. It could be stressful. It could be hard to go to a board meeting without having a full deck or a bad deck, or whatever…a bad day.
That’s when it matters to have great investors that really believes in you, and wants to support you. It goes like that, and it goes like that…Even if you’re a great company, sometimes it will go like that. It’s just fundamentally in all companies.
Teddie: Talking about the process which you mentioned, the dating phase, I’m not going to get too much in that analogy, but, how long did it take you guys to raise your series A from the first serious conversations with investors?
Nicolas: It was a bit special, because in a way we got pushed towards…with a lot of external interests. We were like, “Oh, that’s the right time.” Between the time, we thought it was the right time to sign the term sheet, maybe six weeks. It worked really well. We had built a lot of relationships with the key investors we wanted to speak to before that.
That helped a lot. They didn’t have to discover the company, they already knew a lot. They had never seen a pitch deck, yet. It was only conversations. That helped to create that engagement, that understanding, that trust, that helped them to go faster.
Mathilde: For our series A, it took literally six days. It’s pretty unusual. What happened is I had built a relationship with a few SaaS investors. Byron Deeter who is speaking at the moment, was one of them. He gave us a term sheet, whereas we’re not raising, it was expiring six days after.
He was a great investor, so I called a few investors that I knew, and told them I will make a decision by the end of the week. I think it can seem easy, too easy. The truth is, I had worked a lot with them before, always telling them about our progress and explaining what our vision was. It was six days, but a lot of time was invested before.
Jens: There’s no general answer. It could take one day to raise money, it could take four weeks, it could take three months, and you should not feel a pressure if it takes three months. It depends on that kind of relationship you have been building with investors.
If the investor is not ready to commit, it will likely take longer time to build that commitment and consensus in the partner team, if there’s multiple partners involved. I think in our series A, actually our seed round also, most of the things were closed within, I would say, four weeks.
Seed round went really fast. Series A took a little bit longer because we have multiple options…they wanted to review them.
Ultimately, I think it doesn’t really matter. If it’s three months, or four weeks, or whatever, you’re still a good founder if you manage to do it in under a year, I would say.
Teddie: It all sounds really, really, easy. Like six days Series A or whatever. Let’s talk about that other side. What were the biggest mistakes you guys did when you were doing your fundraising, at whatever stage you want to talk about?
Nicolas: Raising before YC, if I can simplify?
Mathilde: [laughs]
Nicolas: No…in the end, it turned out OK. If I had one mistake, maybe that was our very first seed round that we did in Europe before joining YC. In hindsight, of course that was a mistake. It would have been better to come here first, but you need to learn.
Jens: For me personally, since I’m a guy that believes strongly in customer relationships, I’m always giving my customer relationships to the investors that are willing to invest into us. The mistake I’ve been doing, maybe more than once, is that I’m giving them too early. That’s bad and good.
The bad thing is that these customers are getting a few calls [laughs] . The pressure that we are putting on the customers doesn’t equate to really the interest of the investor. I would say that in the future I will be more restrictive of giving out my references before I really know that this investor really wants to invest and wants to work with me and my team.
Mathilde: I think the biggest mistake that I did is not being aggressive enough. For our series A, now that I look back, I knew that we could have had better terms. I think it’s like this European thing. I was probably not confident enough when I raised money. I thought, “OK, if I can do it in six days, I’ll do it in six days, and I will not look at what other options are.”
I think it was a mistake.
Teddie: To end, we’re going to do a quick fire round that I’ve adopted from my colleague Harry Stebbings, “The Twenty Minute VC” podcast. We’ll be going a bit faster. I’ll be giving you two options, and you pick the one that feels right and comes to mind quickly. Nicolas, let’s start with you.
Growth or retention?
Nicolas: Retention.
Teddie: Jens, outbound or inbound?
Jens: You know that I have my sales team listening here?
[laughter]
Jens: It’s inbound. I love you guys, but inbound is very important.
Teddie: Mathilde, on pricing. Modular or all inclusive?
Mathilde: All inclusive.
Teddie: Let’s do another round. Nicolas, Paris or San Francisco?
[laughter]
Nicolas: I got my team, too. [laughs] San Francisco.
Teddie: Jens, Mr. Robot or Westworld?
Jens: It’s Westworld. All, all in. [laughs]
Teddie: Mathilde, Slack or email?
Mathilde: Email, of course.
[laughter]
Teddie: I’m going to ask the same one for all of you…Mathilde, hard work or lucky break?
Mathilde: Lucky break. I’m French.
[laughter]
Teddie: Jens.
Jens: I don’t know. I have no good answer on that question.
Teddie: OK, next one.
Nicolas: Can I say both?
[laughter]
Teddie: OK.
[crosstalk]
Teddie: …both. This wasn’t a very impressive last round.
[laughter]
Teddie: Just for the ending, one key tip for someone, a European founder who’s raising their series A or think of raising it, what’s the one piece of advice you would give them? Nicolas?
Nicolas: Nurture your investors…the investors you think are going to be the good one for your series A. When I say nurture, don’t spend too much time, but a call here and there. It’s always useful to keep them up to date.
Jens: Would you like market the automation software for that? [laughs]
Nicolas: I don’t, but I should. It’s really getting them excited about the next round, and making sure they are excited all along and not discovering you are raising two weeks before.
Jens: I would say the deck. Mathilde has shared her deck. Now it’s super simple for everybody to raise $10 million. I haven’t shared mine yet. Have you shared yours?
Mathilde: [laughs]
Jens: Independently, I think working through the deck, in iterations, presenting it to potential investors, receiving the feedback and going back, and redoing your homework…it’s super crucial. That deck has to be perfect. Otherwise, you are lost. That’s my key advice.
Mathilde: I think if it’s for European founders, specifically, I would say two things. One is, you should come here. I know that some people will watch that talk. I think the best thing that happened to Front was when I decided for the first time, three years ago, to come here and actually pitch to American VCs.
I had never been outside Europe before. It was a big deal for me to come here. I think that’s one thing that I did really well. The second thing, I forget about it. [laughs]
Teddie: You only need one, so it’s good.
Mathilde: Ok, cool.
Teddie: That’s it for our panel. Thanks so much, everyone, for coming. I’m sure you can grab these guys afterwards, for any more tips on fundraising. Thank you.
“We’re going GraphQL, we’re replacing everything with GraphQL”
Sid Sijbrandij, GitLab founder and CEO
GraphQL is an open source technology created by Facebook that is getting a fair bit of attention of late. It is set to make a major impact on how APIs are designed.
As is so often the case with these things, it’s not terribly well named. It sounds like a general purpose query language for graph traversal, am I right? Something like Cypher.
It isn’t. The name is a little deceptive. GraphQL is about graphs if you see everything as graphs, but reading the the excellent, crisp docs GraphQL is primarily about designing your APIs more effectively, and being more specific about access to your data sources.
“GraphQL is a query language for your API, and a server-side runtime for executing queries by using a type system you define for your data. GraphQL isn’t tied to any specific database or storage engine and is instead backed by your existing code and data.”
With REST you can only pass a single set of arguments, but with GraphQL you can access a particular field or nested object without making multiple API fetches. You can call many resources in a single request. That in itself is a win. GraphQL has a set of standard types but you can also set custom types. A GraphQL query is a string sent to the runtime that returns JSON to the client.
Ah… I remember having a really similar feeling when I first came across jQuery, which is for adding flare to Javascript apps.
A few weeks back Chris Wanstrath, GitHub’s CEO, said all GitHub APIs would be developed GraphQL-first from here on in. This announcement came during a section labeled The Future of APIs at GitHub’s Satellite conference in London. Wanstrath said GitHub needs to engineer differently because its site gets more API calls than UI visits. Now when we GitHub builds a new feature first it builds a GraphQL API, which it then uses internally before roll out. One suggested graph use case was suggested reviewers for code. GitHub’s project boards are also now backed by GraphQL – and the service is seeing 125m queries per day.
More and more companies are seeing APIs as their primary access mechanism. Twilio, for example, one of the few successful IPOs in tech of recent times. REST, which has got us through the last few years of Web engineering, is looking a little creaky.
Github is not alone. The NY Times has just gone through a major back end redesign.
So what about Facebook? It built GraphQL because it needed something powerful enough to describe Facebook’s API structure, but easy to learn by mobile developers. It is seeing billions of API calls a day now, so we know it scales. As Facebook points out, the shape of the query mirrors the shape of the response, which is cool.
The tree-based shape of the queries is one thing that attracted Neo4J to GraphQL. As a native Graph database it’s interested in the possibilities of extending GraphQL, with Cypher, but not modifying it so it can’t be used by other tools. The sandbox and integration are well worth checking out.
So does GraphQL replace REST? Phil Sturgeon has a very useful post summarising the philosophies of the two approaches, which he sees as complementary.
“Having one GraphQL server act as a sort of data proxy, giving one entry point for mixed data, one Authentication scheme despite each REST API having its own “unique” approach to tokens, one HTTP call for clients – despite it hitting multiple actual REST APIs, etc., would be a damn powerful thing.”
“If you need a highly query-able API, expect an array of clients that need small and different data, and can restructure your data to be inexpensive to query, then GraphQL is likely to fit your needs.”
I strongly agree with Sturgeon on the docs and developer experience.
“An alternative that is well documented, with a full specification, with a lovely marketing page, with an official reference implementation in JavaScript, and which avoids some of the tricky design choices REST forces you to make.”
Some of this stuff is fashion of course. REST has had a really good run, but is definitely looking less shiny these days. Developers like to try new things, and GraphQL’s timing is good. The companies adopting it are those that people want to emulate. But there are of course some dragons out there. In a followup Sturgeon points out that current caching models don’t map to GraphQL.
“Due to the way GraphQL operates as a query language POSTing against a single endpoint, HTTP is demoted to the role of a dumb tunnel, making network caching tools like Varnish, Squid, Fastly, etc. entirely useless.”
A web where Fastly doesn’t work, where HTTP is a problem, sounds problematical.
“In the world of GraphQL, HTTP is an unfortunate transport mechanism rather than something to be embraced. Rather than using the standard semantics, we ignore them completely by treating HTTP like a dumb pipe. For companies with enough resources, treating HTTP like a dumb pipe is feasible. You can develop GraphQL-aware caching layers and deploy that logic to edge nodes around the globe. But most of us are not Facebook, so we need to stick with the standards we’ve got. This means using standards like HTTP to the fullest, so that we can be sure that our applications play nicely with vendors.”
But the benefits keep on twinkling. GraphQL introspection is interesting, as we grope towards self-documenting APIs with things like Swagger. Sashko Stubailo has some interesting ideas here. Check out GraphiQL – an inbrowser IDE for GraphQL.
There are some intriguing new services emerging to take advantage of GraphQL like graph.cool – which is effectively serverless or back end as a service GraphQL, which you’d use if you take the Joe Emison view of serverless not so much as Function as a Service (AWS Lambda) but as a model for building apps and services comprised of third party services such as Auth0, Algolia and Prerender.io. . Authory seems to be doing exactly that with its service for journalists wanting a single point of access for all their published content.Here we begin to edge into GraphQL not competing with REST so much as Firebase.
Scaphold is moving forward with a similar model – focusing on simplifying GraphQL-first apps deployment to Amazon Web Services (AWS) cloud. Early customers include Visa. These services are like Parse or Firebase for GraphQL.
In summary GraphQL maps pretty well to new API-driven models such as serverless. Michael Unger from Neo4j feels REST is worth retiring. That said, technologies don’t die overnight. REST is hardly going to disappear overnight. But for a class of problems for high scale sites it’s we’re going to see significant adoption of GraphQL. The Google Trends chart at the top of the page shows growing interest in GraphQL and gRPC – GraphQL is blue. GraphQL maps to external consumption of APIs, with gRPC for internal. They’re both clearly spiking in interest.
Let me know if you’re using or considering GraphQL. Certainly chatter is growing, and some very well respected engineers are choosing to run with it.
When an industry is enduring a secular shift that is literally redefining how we do work, it’s pretty important to get some real, unfettered dialog going among all the key stakeholders this impacts. We need to break free from the glitzy paid-for sales presentations, robot keyrings, stress balls, nasty logo-ed leather notepads and greedy events firms vying for a quick buck from vendors eager to part with cash to promote themselves to all their competitors.
That’s why we’re assembling 100 of the industry’s finest leaders in a single room for a whole afternoon to thrash out the mandate for the future of operations in the robotic age for our inaugural FORA council session in Chicago, 19th September. And promise no sponsors, stress balls or bad white papers to take away…
Here’s just a sample of the industry robo dignitaries who’ve already committed:
Alastair Bathgate, CEO, Blue Prism
Chetan Dube, CEO, IPsoft
Chip Wagner, President, Emerging Business Services, ISG
Cliff Justice, Partner, US Leader, Cognitive Automation and Digital Labor, KPMG
David Poole, CEO, Symphony Ventures
Daniel Dines, CEO and Founder at UiPath
Jesus Mantas, Managing Partner and General Manager, IBM Business Consulting, IBM US
Lee Coulter, Chair for the IEEE Working Group on Standards in Intelligent Process Automation
Dr. Mary C. Lacity, Curators’ Distinguished Professor of Information Systems, UMSL, and Visiting Scholar MIT
Max Yankelevich, CEO, WorkFusion
Mihir Shukla, CEO, Automation Anywhere
Peter Lowes, Partner, and Head of Robotics & Cognitive Automation, Deloitte US
Shantanu Ghosh, SVP, CFO Services and Consulting, Genpact
Thomas Torlone, U.S. Leader of Enterprise Business Services, PwC
Tijl Vuyk, CEO and Founder, Redwood Software
Weston Jones, Global RPA Leader, EY
We also have leaders of cognitive and automation initiatives from the following buyside firms already signed up to get stuck into the debate:
So let’s cut to the chase – it’s time to have the real, hard conversation about where we really are as an industry. Why aren’t those 40% cost savings happening, each time someone slams in some software and hope it somehow eliminates manual labor because they can access a bot library? In fact, why are a third of RPA pilots just left hanging with no result? Yes, people, it’s time to wake up and smell those robotic roses and have those really tough conversations about what is real, versus why so much of this stuff just isn’t working – and why we’re not putting together properly governed RPA rollout plans like we do with ERP software and SaaS platforms. Why are we making such a mess with this, when we could have so much to benefit from?
So join us in Chicago this September 19th for FORA the inaugural council meeting that finally debates the true Future of Operations in the Robotic Age
FORA is the very first industry council is established to bring together buyside operations leaders, service providers leaders, expert advisers and technology developers to steer industry’s transition to the Digital OneOffice™.
FORA’s mission is to bring together the leadership from senior buyside operations leaders, service provider leadership, expert advisers, and technology developers to set the agenda for the transition to the Digital OneOffice™, and to develop an industry mandate for navigating and managing the creative destruction that looms. Supporting the FORA initiative is the IEEE’s Intelligent Process Automation Standards initiative that will encourage further research and investment, leading to powerful and attractive new service offerings. But the commercial frameworks needed to encourage and sustain wider deployment of these technologies are lagging because they fundamentally threaten established models.
In order to communicate the learnings from the FORA meetings, the group will produce a quarterly “FORA Mandate” that communicates core recommendations to the industry from the group meetings that will be held at quarterly HfS Summits.
So how can you get considered for Council Membership?
HfS will consider applications to the FORA Council based on seniority and relevance. Are you interested in participating? Just email us at [email protected].
This is a really important development as we consider the future of services and operations amidst all this creative disruption. I hope to greet many of you personally in Chicago this September.
I have been taking a look at the various chatbot platforms – and something struck me about how we’ve got away from some of the original beauty of chat as UI. The problem is the focus on artificial intelligence and machine learning, as if every bot had to pass a Turing Test. But they really don’t. Disambiguation is what humans are best. Sure – it’s a nice science experiment to make a chat UI we can’t distinguish from a human call center agent. But frankly, in my experience – call center agents aren’t what we actually want. If we did, why are so many of us choosing banking and financial services platforms that avoid the use of call center agents? We don’t want call center agents, we want self-service banking, and we’re prepared to learn user interfaces and hacks that make our use of services more efficient.
Chat platforms are command line interfaces, but you don’t need to be a developer or IT pro to understand how to use them. When we look back at the history of chat-based UIs Twitter plays a special role. Long before AI chatbots was a thing folks were using commands in Twitter to kick off actions. Andy Stanford-Clark could control things in his home, or be notified when the cheese in his mousetraps got dry. He could also talk to ferries between Southampton and the Isle of Wight. Chris Dalby built the chinposin platform, which had commands to kick off actions, for example, to store updated profile images. At Thingmonk 2016 one of the themes that both Matt Biddulph and Terry Eden talked to in detail was Twitter as a platform for conversational IoT.
Twitter was a wonderful playground for conversational command lines, until Twitter messed things up with too many API changes and restrictions. Few if any of these experimental services involved any significant AI elements- rather it was just about triggering commands from Twitter on listener services (in chinposin’s case at least driven by some proper hacky cronjobs). Today Biddulph is building Thington, a “chatty concierge” service for smart homes, and there is clearly some ML there, but also some command line thinking.
After Hubot IRC was full of non sentient, rule-driven bots. More latterly check Slack.com, where it has become normal to issue commands like
/giphy #caption “Who’s the GIF master now?” happy dance
Or more prosaically to check the weather
/giphy #weather <insert zip code here>
So let’s not forget humans and what we’re good at. Disambiguation is our a core competence. How hard is it to issue a command where the system understands when it’s a clear syntax? We can learn a new syntax much more easily than a chatbot can deal with every possible linguistic utterance and edge case. So while more easily consumable AI is certainly interesting, we shouldn’t be afraid to make defined commands accessible via chat interface – humans will pick that up. Customer service is not going to suffer if we ask people to use simple command lines. On the contrary – that’s the real beauty of chatbots.
Suggest you watch these great talks by @mattb and @edent for more on the subject.
I’ve been passing on a lot of conferences lately – just too many trips to Vegas for my liking, and insufficient value for my time – but tend to drop in on ones that happen in Toronto, where I live. This week, it’s Big Data Toronto, held in conjunction with Connected Plus and AI Toronto.
Paul Zikopoulos, VP of big data systems at IBM gave a keynote on what cognitive, AI and machine learning mean to big data. He pointed out that no one has a problem collecting data – all companies are pros at that – but the problem is knowing what to do with it in order to determine and act on competitive advantage, and how to value it. He talked about some of IBM’s offerings in this area, and discussed a number of fascinating uses of AI and natural language that are happening in business today. There are trendy chatbot applications, such as Sephora’s lipstick selection bot (upload your selfie and a picture of your outfit to match to get recommendations and purchase directly); and more mundane but useful cases of your insurance company recommending that you move your car into the garage since a hailstorm is on the way to your area. He gave us a quick lesson on supervised and unsupervised learning, and how pattern detection is a fundamental capability of machine learning. Cognitive visual inspection – the descendent of the image pattern analysis algorithms that I wrote in FORTRAN about a hundred years ago – now happens by training an algorithm with examples rather than writing code. Deep learning can be used to classify pictures of skin tumors, or learn to write like Ernest Hemingway, or auto-translate a sporting event. He finished with a live demo combining open source tools such as sentiment analysis, Watson for image classification, and a Twitter stream into a Bluemix application that classified pictures of cakes at Starbucks – maybe not much of a practical application, but you can imagine the insights that could be extracted and analyzed in the same fashion. All of this computation doesn’t come cheap, however, and IBM would love to sell you a few (thousand) servers or cloud infrastructure to make it happen.
After being unable to get into three breakout sessions in a row – see my more detailed comments on conference logistics below – I decided to head back to my office for a couple of hours. With luck, I’ll be able to get into a couple of other interesting sessions later today or tomorrow.
A huge thumbs down to the conference organizers (Corp Agency), by the way. The process to pick up badges for pre-registered attendees was a complete goat rodeo, and took me 20+ minutes to simply pick up a pre-printed badge from a kiosk; the person staffing the “I-L” line started at the beginning of the Ks and flipped his way through the entire stack of badge to find mine, so it was taking about 2 minutes per person in our line while the other lines were empty. The first keynote of the day, which was only 30 minutes long, ran 15 minutes late. The two main breakout rooms were woefully undersized, meaning that it was literally standing room in many of the sessions – which I declined to attend because I can’t type while standing – although there was a VIP section with open seats for those who bought the $300 VIP pass instead of getting the free general admission ticket. There was no conference wifi or charging stations for attendees. There was no free water/coffee service (and the paid food items didn’t look very appetizing); this is a mostly free conference but with sponsors such as IBM, Deloitte, Cloudera and SAS, it seems like they could have had a couple of coffee urns set up for free under a sponsor’s name. The website started giving me an error message about out of date content every time I viewed it on my phone; at least I think it was about out of date content, since it was inexplicably only in French. The EventMobi conference app was very laggy, and was missing huge swaths of functionality if you didn’t have a data connection (see above comments about no wifi or charging stations). I’ve been to a lot of conference, and the logistics can really make a big difference for the attendees and sponsors. In cases like this, where crappy logistics actually prevent attendees from going to sessions that feature vendor sponsor speakers (IBM, are you listening?), it’s inexcusable. Better to charge a small fee for everyone and actually have a workable conference.
81% of IT leaders are currently investing in or planning to invest in Artificial Intelligence (AI).
Cowen predicts AI will drive user productivity to materially higher levels, with Microsoft at the forefront.
Digital Marketing/Marketing Automation, Salesforce Automation (CRM) and Data Analytics are the top three areas ripe for AI/ML adoption.
According to angel.co, there are 2,200+ Artificial Intelligence start-ups, and well over 50% have emerged in just the last two years.
Cowen sees Salesforce ($CRM), Adobe ($ADBE) and ServiceNow ($NOW) as well-positioned to deliver and monetize new AI-based application services.
These and many other fascinating insights are from the Cowen and Company Multi-Sector Equity Research study, Artificial Intelligence: Entering A Golden Age For Data Science (142 pp., PDF, client access reqd). The study is based on interviews with 146 leading AI researchers, entrepreneurs and VC executives globally who are involved in the field of artificial intelligence and related technologies. Please see the Appendix of the study for a thorough overview of the methodology. This study isn’t representative of global AI, data engineering and machine learning (ML) adoption trends. It does, however, provide a glimpse into the current and future direction of AI, data engineering, and machine learning. Cowen finds the market is still nascent, with CIOs eager to invest in new AI-related initiatives. Time-to-market, customer messaging, product positioning and the value proposition of AI solutions will be critical factors for winning over new project investments.
Key takeaways from the study include the following:
Digital Marketing/Marketing Automation, Salesforce Automation (CRM) and Data Analytics are the top three areas ripe for AI/ML adoption. Customer self-service, Enterprise Resource Planning (ERP), Human Resource Management (HRM) and E-Commerce are additional areas that have upside potential for AI/ML adoption. The following graphic provides an overview of the areas in software that Cowen found the greater potential for AI/ML investment.
81% of IT leaders are currently investing in or planning to invest in Artificial Intelligence (AI). Based on the study, CIOs have a new mandate to integrate AI into IT technology stacks. The study found that 43% are evaluating and doing a Proof of Concept (POC) and 38% are already live and planning to invest more. The following graphic provides an overview of company readiness for machine learning and AI projects.
Market forecasts vary, but all consistently predict explosive growth. IDC predicts that the Cognitive Systems and AI market (including hardware & services) will grow from $8B in 2016 to $47B in 2020, attaining a Compound Annual Growth Rate (CAGR) of 55%. This forecast includes $18B in software applications, $5B in software platforms, and $24B in services and hardware. IBM claims that Cognitive Computing is a $2T market, including $200B in healthcare/life sciences alone. Tractica forecasts direct and indirect applications of AI software to grow from $1.4B in 2016 to $59.8B by 2025, a 52% CAGR.
According to CBInsights, the number of financing transactions to AI start-ups increased 10x over the last six years, from 67 in 2011 to 698 in 2016. Accenture states that the total number of AI start-ups has increased 20-fold since 2011. The top verticals include FinTech, Healthcare, Transportation and Retail/e-Commerce. The following graphic provides an overview of the AI annual funding history from 2011 to 2016.
Algorithmic trading, image recognition/tagging, and patient data processing are predicted to the b top AI uses cases by 2025. Tractica forecasts predictive maintenance and content distribution on social media will be the fourth and fifth highest revenue producing AI uses cases over the next eight years. The following graphic compares the top 10 uses cases by projected global revenue.
Machine Learning is predicted to generate the most revenue and is attracting the most venture capital investment in all areas of AI. Venture Scanner found that ML raised $3.5B to date (from 400+ companies), far ahead of the next category, Natural Language Processing, which has seen just over $1Bn raised to date (from 200+ companies). Venture Scanner believes that Machine Learning Applications and Machine Learning Platforms are two relatively early stage markets that stand to have some of the greatest market disruptions.
Cowen predicts that an Intelligent App Stack will gain rapid adoption in enterprises as IT departments shift from system-of-record to system-of-intelligence apps, platforms, and priorities. The future of enterprise software is being defined by increasingly intelligent applications today, and this will accelerate in the future. Cowen predicts it will be commonplace for enterprise apps to have machine learning algorithms that can provide predictive insights across a broad base of scenarios encompassing a company’s entire value chain. The potential exists for enterprise apps to change selling and buying behavior, tailoring specific responses based on real-time data to optimize discounting, pricing, proposal and quoting decisions.
According to angel.co, there are 2,200+ Artificial Intelligence start-ups, and well over 50% have emerged in just the last two years. Machine Learning-based Applications and Deep Learning Neural Networks are experiencing the largest and widest amount of investment attention in the enterprise.
Accenture leverages machine learning in 40% of active Analytics engagements, and nearly 80% of proposed Analytics opportunities today. Cowen found that Accenture’s view is that they are in the early stages of AI technology adoption with their enterprise clients. Accenture sees the AI market growing exponentially, reaching $400B in spending by 2020. Their customers have moved on from piloting and testing AI to reinventing their business strategies and models.
UNIT4 had an analyst day last week. FinancialForce is hosting its user conference this week. I missed both due to other commitments but I see lots of tweets from fellow analysts. Good to see both vendors, focused on service sectors, get the attention.
The services sector has been on my mind for several gut-wrenching changes I describe below and I wonder if the use cases of these vendors and other PSA vendors are starting to reflect these new realities
a) Dynamic Changes to Global Delivery model
Just about every SI and outsourcer has moved to a global delivery model with a blend of on-site and offshore resources. This year we are seeing visa reviews, bans on devices on planes start to significantly affect labor mobility across countries, and therefore cause a need to rebalance staff resources across regions. Is your PSA allowing you to model this and drive your HR decisions?
b) Deflationary pricing in some services sectors
Amazon has cut prices of its infrastructure-as-a-service over 50 times in the last decade. If I am a CFO in the managed services sector which is even remotely affected by Amazon I want my ERP to help me re-price my proposals and contracts on a very regular basis. Hopefully I will not need to cut pricing that often but it would be foolish to be unprepared.
c) Smart products and impact on some services
Products with embedded software and services are the foundation of the Internet of Things. Field maintenance services need a complete overhaul in this world where maintenance is predictive and therefore very different from traditional scheduled maintenance. Is your ERP allowing you to keep up with that?
d) Automation pressure
While outsoucers try to convince their clients to try out automation in the form of AI and robotics, there is similar pressure on them to rebalance their own man-machine mix. Is your PSA able to load balance between FTEs (full time employees) and AFTEs (automated full time equivalents)?
I look forward to hearing from my fellow analysts if the functionality in these products is keeping up with a rapidly changing services economy.
Tim Ferriss has made Stoicism hip and accessible. That is a good thing. I came across Ryan Holiday via Tim’s podcast, and it rekindled a long lost interest in things Greek philosophy. I have quoted liberally from Ryan’s Daily Stoic. Thanks Ryan and Tim. Buy Ryan’s books and read them.
I reckon Epictetus would have been a brilliant product manager.
He understood prioritization.
“Don’t set your heart on so many things,” says Epictetus. Prioritize. Train your mind to ask: Do I need this thing? What will happen if I do not get it? What if it all happens all at once?
He figured out constraints and not stressing about what you can’t control.
“Some things are in our control and others not. Things in our control are opinion, pursuit, desire, aversion, and, in a word, whatever are our own actions. Things not in our control are body, property, reputation, command, and, in one word, whatever are not our own actions.”
He understood that you can’t build it in a day.
“No thing great is created suddenly, any more than a bunch of grapes or a fig. If you tell me that you desire a fig, I answer you that there must be time. Let it first blossom, then bear fruit, then ripen. “
but he also grokked minimal viable product.
Practice yourself, for heaven’s sake, in little things; and thence proceed to greater.
the power of the open mind.
What is the first business of one who practices philosophy? To get rid of self-conceit. For it is impossible for anyone to begin to learn that which he thinks he already knows.
The buck stops with you
It is the act of an ill-instructed man to blame others for his own bad condition; it is the act of one who has begun to be instructed, to lay the blame on himself; and of one whose instruction is completed, neither to blame another, nor himself.
And my favourites
And are all profited by what they hear, or only some among them? So that it seems that there is an art of hearing as well as one of speaking
Nature hath given men one tongue but two ears, that we may hear from others twice as much as we speak.
Tim Ferriss has made Stoicism hip and accessible. That is a good thing. I came across 
