Inc. magazine - Inc Feb 2017

VIRTUAL ASSISTANTS

PROVIDE INVISIBLE HELP Think Siri or Alexa: There’s a growing demand for digital assistants that can understand spoken requests and perform tasks, such as scheduling a meeting, calling a friend, or making a payment.

• WHO IS MAKING MONEY

Startups that develop machine
learning for existing digital
assistants stand to make the
William Tunstall-Pedoe
launched what became Evi
Technologies, a Cambridge,
England–based software maker
that eventually created its own
digital assistant. In 2012, he
sold the company to Amazon
for a reported $26 million; now,
the e-commerce giant uses
Evi’s technology to enhance
its own digital assistant,
Alexa. Tunstall-Pedoe, who
left Amazon a year ago, is
considering starting another
A.I. business. And he sees
plenty of room for new
A.I.-related startups to fnd
“massive” success: “It’s a
super exciting space.”

• THE RISKS

Big, big-name competition.

Since the tech giants are already making digital assistants, yours needs to signifcantly improve on what’s widely available. “It would be difcult to create a standard, Alexa-like product unless you have very unique technology,” Tunstall-Pedoe says.

and highly regulated fnancial markets, are best positioned to jump into the world of virtual money—or the related

“blockchain” technology that helps it move around the digital universe.

• HO W TO DO IT

Your biggest business opportunity is to start what’s known as a digital wallet or an exchange, where you generate revenue by charging fees to buy or sell these virtual assets. (Examples include the San Francisco–based startups Coinbase and Kraken, and the Omaha-based Exodus.) Some startups are looking to the blockchain, developing and selling applications for this new type of fnancial system.

$100,000

James Gatto, a partner specializing in virtual currency for law frm Sheppard Mullin, calls blockchain-related tech “the greatest value of the whole bitcoin ecosystem.”

• WHO’S SUCCEEDING

One of the leading digital currency startups is fve-year-old exchange Coinbase.

• THE RISKS

Regulation! Though the currencies themselves may not be government controlled, those that handle them must navigate U. S. fnancial rules.

Ehrsam estimates that his startup has spent $10 million on red tape, including getting registered by the U.S. Treasury and obtaining money transmitter licenses in dozens of states.

(Coinbase is also felding an IRS probe over users buying Bitcoin to avoid paying taxes.)

Another challenge was the
time-consuming process of
establishing banking relation-
ships to let users sync their
fnancial accounts. As Ehrsam
says, “The business is a really
hard one to build.”
most money, while some
newcomers are creating their
own app-based assistants.

• HOW TO DO IT

This new breed of artifcial
intelligence is built on
speech-recognition programs
and other quickly evolving
technologies. If you have a
smart group of programmers
eager to take on a sophisticated
topic, you could develop and
sell a standalone app, or license
it to third-party companies for
a fee. (Take NextIT, based in
Spokane, Washington, which
licenses its Alme platform
to businesses and also builds
custom digital assistants for
individual companies.) Or you
could sell your whole company:
Amazon, Apple, Google, and
Microsoft have all recently
acquired machine-learning
startups—some for hundreds
of millions of dollars—to power
their own digital assistants.

• WHO’S SUCCEEDING

A number of startups are making standalone digital assistants, including the Santa Clara, California–based SoundHound and the Mountain View, California–based EasilyDo.

And some entrepreneurs
are serial innovators: In 2005,
$13.7
BILLION
PROJECTED SIZE
OF THE GLOBAL
COGNITIVE COMPUTING
MARKET, WHICH
INCLUDES MACHINE
LEARNING AND
AUTOMATED
REASONING, BY 2020

SOURCE: ALLIED MARKE T RESEARCH

It counts 4. 5 million customers, who buy and sell currency on its website. The company has facilitated $5 billion worth of transactions for consumers and institutional investors. “The line between investing and use has been blurred with the advent of digital currencies,” says co-founder Fred Ehrsam.