Don’t Get Burned
Chasing the Hottest
Get in too early and your
product will be DOA
and distracting to our team. It’s a bit embarrass
ing to admit this, but I’m hardly alone. In Silicon
Valley, swooning startups are about as common
as Teslas. Here, if you’re not in a swoon, you’re
not really trying.
Everyone is talking about virtual reality and
augmented reality and artifcial intelligence
and deep learning (not using those actual words,
but rather “VR” and “AR” and “AI” and “DL”).
One accounting puts the number of AI startups in
health care, where I compete, at more than 100.
AI is everywhere else, too. It seems if you don’t
have a chatbot strategy in 2017, you’re so fip phone.
Why are so many startups in an AI swoon?
Timing. It’s exceptionally hard to get the timing
right, especially for a small company with a ticking
clock and shrinking capital. A couple of years ago,
all the cool kids were chasing VR—raising money,
building prototypes, waiting for the billions to roll
in. Today, many of those startups have gone into
“cockroach mode” as they wait for some bona fde
consumer demand for their toys.
Tech progress usually moves along a path
from science to technology to industry to culture.
It typically starts with a lab discovery: the semi
conductor, an algorithm. From there, it gets
turned into a technology—a tool that can be tested
and developed. Next, it moves to industrial appli
cations, and fnally, once it has consumer utility,
it reaches the culture at large. Computers took
40 years to move from lab to home; robotics,
though, have so far had only industrial impact. (No, Roomba doesn’t count.)
In theory, it’s possible for a startup to capitalize on an innovation at any point along this arc,
so long as you know what you’re gunning for. But for startups chasing this dragon, it’s just so
easy to be outfanked and outmatched. In our case, we so loved the idea of ofering photo iden
tifcation that we didn’t really think through the consequences. Given our size, we could either
build a consumer website or a deeplearning company, but not both. And if we wanted to do the
latter, we should’ve not only started with a diferent team but also chosen diferent investors,
a diferent business model, and so on. Thankfully, we put the computervision project on hold—
and then we shelved it altogether.
Shaking of the swoon, we focused on a proven technology called a website. Much less
sexy, but it turns out that’s where our market is: millions of people who just want better
information about their medications, at the right time. A superintelligent, computervision
technology with machinelearning capabilities? Sounds like a great idea. It’s all yours.
IMAGINE YOU’RE 60 YEARS OLD and take several prescrip tions every day. Blue pill, red pill, a couple of white pills, each at a diferent hour. Patients, particularly older ones, often fail to take their meds—it’s a serious health issue. Wouldn’t it be amazing to just snap a picture and have each pill automagically identifed (to make sure you’re taking the right one) and logged (to make sure you’re taking it at the right time)? This is an idea we had at my startup, Iodine. More than an idea, in fact. We actually hired a computer vision PhD and recruited a couple of other engineers to make this a reality. We spent about a year trying to
work this out. But we committed the mistake of being too early.
Though we made some progress—it’s a really hard challenge—we
couldn’t get more than 80 percent of the way there. And in software,
that last 20 percent takes 80 percent of your efort.
We’d been caught in a swoon—enraptured by a shiny new tech
nology without understanding that, for our frm of just eight or
nine people, it was beyond our capacity, tangential to our mission,
Thomas Goetz is a co-founder
of Iodine, a digital health startup
based in San Francisco. Follow him
on Twitter: @tgoetz.
LAUNCH 28 - INC. - OC TOBER 2017