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.
DAILY REVENUE THAT SOME STARTUPS CAN MAKE
FROM DIGITAL CURRENCY AND RELATED TECH
As with stocks and other investments, big fnancial
customers may buy and sell tens or hundreds
of thousands of dollars’ worth of currency at a time.
SOURCE: PIERCE
MONEY 62 - INC. - FEBRUARY 2017