Mar
27
2019
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Proxy raises $13.6M to unlock anything with Bluetooth identity

You know how kings used to have trumpeters heralding their arrival wherever they went? Proxy wants to do that with Bluetooth. The startup lets you instantly unlock office doors and reserve meeting rooms using Bluetooth Low Energy signal. You never even have to pull out your phone or open an app. But Proxy is gearing up to build an entire Bluetooth identity layer for the world that could invisibly hover around its users. That could allow devices around the workplace and beyond to instantly recognize your credentials and preferences to sign you into teleconferences, pay for public transit or ask the barista for your usual.

Today, Proxy emerges from stealth after piloting its keyless, badgeless office entry tech with 50 companies. It’s raised a $13.6 million Series A round led by Kleiner Perkins to turn your phone into your skeleton key. “The door is a forcing function to solve all the hard problems — everything from safety to reliability to the experience to privacy,” says Proxy co-founder and CEO Denis Mars. “If you’re gonna do this, it’s gonna have to work right, and especially if you’re going to do this in the workplace with enterprises where there’s no room to fix it.”

But rather than creepily trying to capitalize on your data, Proxy believes you should own and control it. Each interaction is powered by an encrypted one-time token so you’re not just beaming your unprotected information out into the universe. “I’ve been really worried about how the internet world spills over to the physical world. Cookies are everywhere with no control. What’s the future going to be like? Are we going to be tracked everywhere or is there a better way?” He figured the best path to the destiny he wanted was to build it himself.

Mars and his co-founder Simon Ratner, both Australian, have been best buddies for 10 years. Ratner co-founded a video annotation startup called Omnisio that was acquired by YouTube, while Mars co-founded teleconferencing company Bitplay, which was bought by Jive Software. Ratner ended up joining Jive where the pair began plotting a new startup. “We asked ourselves what we wanted to do with the next 10 or 20 years of our lives. We both had kids and it changed our perspective. What’s meaningful that’s worth working on for a long time?”

They decided to fix a real problem while also addressing their privacy concerns. As he experimented with Internet of Things devices, Mars found every fridge and light bulb wanted you to download an app, set up a profile, enter your password and then hit a button to make something happen. He became convinced this couldn’t scale and we’d need a hands-free way to tell computers who we are. The idea for Proxy emerged. Mars wanted to know, “Can we create this universal signal that anything can pick up?”

Most offices already have infrastructure for badge-based RFID entry. The problem is that employees often forget their badges, waste time fumbling to scan them and don’t get additional value from the system elsewhere.

So rather than re-invent the wheel, Proxy integrates with existing access control systems at offices. It just replaces your cards with an app authorized to constantly emit a Bluetooth Low Energy signal with an encrypted identifier of your identity. The signal is picked up by readers that fit onto the existing fixtures. Employees can then just walk up to a door with their phone within about six feet of the sensor and the door pops open. Meanwhile, their bosses can define who can go where using the same software as before, but the user still owns their credentials.

“Data is valuable, but how does the end user benefit? How do we change all that value being stuck with these big tech companies and instead give it to the user?” Mars asks. “We need to make privacy a thing that’s not exploited.”

Mars believes now’s the time for Proxy because phone battery life is finally getting good enough that people aren’t constantly worried about running out of juice. Proxy’s Bluetooth Low Energy signal doesn’t suck up much, and geofencing can wake up the app in case it shuts down while on a long stint away from the office. Proxy has even considered putting inductive charging into its sensors so you could top up until your phone turns back on and you can unlock the door.

Opening office doors isn’t super exciting, though. What comes next is. Proxy is polishing its features that auto-reserve conference rooms when you walk inside, that sign you into your teleconferencing system when you approach the screen and that personalize workstations when you arrive. It’s also working on better office guest check-in to eliminate the annoying iPad sign-in process in the lobby. Next, Mars is eyeing “Your car, your home, all your devices. All these things are going to ask ‘can I sense you and do something useful for you?’ ”

After demoing at Y Combinator, thousands of companies reached out to Proxy, from hotel chains to corporate conglomerates to theme parks. Proxy charges for its hardware, plus a monthly subscription fee per reader. Employees are eager to ditch their keycards, so Proxy sees 90 percent adoption across all its deployments. Customers only churn if something breaks, and it hasn’t lost a customer in two years, Mars claims.

The status quo of keycards, competitors like Openpath and long-standing incumbents all typically only handle doors, while Proxy wants to build an omni-device identity system. Now Proxy has the cash to challenge them, thanks to the $13.6 million from Kleiner, Y Combinator, Coatue Management and strategic investor WeWork. In fact, Proxy now counts WeWork’s headquarters and Dropbox as clients. “With Proxywe can give our employees, contractors and visitors a seamless smartphone-enabled access experience they love, while actually bolstering security,” says Christopher Bauer, Dropbox’s physical security systems architect.

The cash will help answer the question of “How do we turn this into a protocol so we don’t have to build the other side for everyone?,” Mars explains. Proxy will build out SDKs that can be integrated into any device, like a smoke detector that could recognize which people are in the vicinity and report that to first responders. Mars thinks hotel rooms that learn your climate, wake-up call and housekeeping preferences would be a no-brainer. Amazon Go-style autonomous retail could also benefit from the tech.

When asked what keeps him up at night, Mars concludes that “the biggest thing that scares me is that this requires us to be the most trustworthy company on the planet. There is no ‘move fast, break things’ here. It’s ‘move fast, do it right, don’t screw it up.’ “

Mar
27
2019
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Goodly replaces lame office perks with student loan repayment

There are better employee perks than a ping-pong table. Seventy percent of Americans graduate college with student loan debt. That’s 45 million people who owe $1.6 trillion. So when employers use Goodly to offer $100 per month in student loan payback for a $6 fee, talent sticks around. The startup found 86 percent of employees said they’d stay with a company for at least five years if their employer helped pay down their student loans. Yet employers break even if workers stay just two extra months, and get a 5X return if they stay an extra year because it costs so much to hire and train replacement staff.

Now, Y Combinator-backed Goodly has raised a $1.3 million seed round led by Norwest. The startup hopes to capitalize on corporate America waking up to student loan payback as a benefit, which is expected to grow from being offered by 4 percent of companies today to 32 percent by 2021.

Goodly co-founder and CEO Greg Poulin knows the student loan crisis personally. “When I was in school, my father passed away very unexpectedly due to a heart attack. I had to borrow $80,000 for college at Dartmouth,” he tells me. His monthly payment is now $900. The stress that debt creates can poison the rest of your life. He says 21 percent of employees with student loan debt have delayed marriage, 28 percent have put off starting a family and 1 out of 8 divorces is now directly attributed to student loan debt. “I’ve seen first-hand how challenging it is for employees to save for retirement or start a family” when they’re strapped with debt, Poulin says.

He met his co-founder and CTO Hemant Verma when they started working at Zenefits’ founder Parker Conrad’s new employee onboarding startup, Rippling, in 2017. That taught them how simplifying the benefits sign-up process could become its own business. Typically it requires that benefits be integrated with a company’s financial software, like payroll, and be set up with proper provisioning access. It’s enough of a chore that companies don’t go to the trouble of offering student loan repayment.

Poulin and Verma started Goodly to create a “set it and forget it” system that automates everything. They charge $6 per month per participating employee and typically see adoption by 30 percent to 40 percent of employees. Rather than help with their monthly payment that includes interest, Goodly clients pay down their employees’ core debt so they can escape more quickly. Employees get a dashboard where they can track their debt and all of the contributions their company has made. Goodly hasn’t had a single customer churn since launch, demonstrating how badly employers want to keep job-hopping talent in their roles.

“We found that our people put off contributing to their 401ks and buying a house because of their student loan debt. We thought that offering a Student Loan Repayment Benefit would be a great low-cost and high-impact benefit to attract and retain talent while alleviating some of the stress and the financial burden on our employees,” says Kim Alessi, an HR generalist.

Goodly’s founders and first employees

The business opportunity here is relatively young, but there are a few competitors. Boston-based Gratify was acquired by First Republic, which Santa Monica’s Tuition.io pivoted to offering student loan benefits. But Goodly’s connection to so many potential clients plus its new funding could help it make student loan repayment a ubiquitous perk. Along with Norwest and YC, the funding comes from ACE & Company, Arab Angel, Zeno Ventures and angel investors, including Optimizely’s Pete Koomen, DreamHost’s Josh Jones, ShipStation’s Jason Hodges, Fairy’s Avlok Kohli and Telly’s Mo Al Adham.

Beyond improving talent retention, Goodly may also help erase some of the systematic discrimination against minorities in our country. Women hold 66 percent of all student loan debt, black and Latinx Americans have 31 percent more student debt than their peers and LGBTQ borrowers owe $16,000 more than an average member of the population. Convincing employers to address student loan debt could give everyone more freedom of choice when it comes to what they work on and how they live their lives.

Mar
19
2019
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The top 10 startups from Y Combinator W19 Demo Day 1

Electric-vehicle chargers, heads-up displays for soldiers and the Costco of weed were some of our favorites from prestigious startup accelerator Y Combinator’s Winter 2019 Demo Day 1. If you want to take the pulse of Silicon Valley, YC is the place to be. But with more than 200 startups presenting across two stages and two days, it’s tough to keep track.

You can check out our write-ups of all 85 startups that launched on Demo Day 1, and come back later for our full index and picks from Day 2. But now, based on feedback from top investors and TechCrunch’s team, here’s our selection of the top 10 companies from the first half of this Y Combinator batch, and why we picked each.

Ravn

Looking around corners is one of the most dangerous parts of war for infantry. Ravn builds heads-up displays that let soldiers and law enforcement see around corners thanks to cameras on their gun, drones or elsewhere. The ability to see the enemy while still being behind cover saves lives, and Ravn already has $490,000 in Navy and Air Force contracts. With a CEO who was a Navy Seal who went on to study computer science, plus experts in augmented reality and selling hardware to the Department of Defense, Ravn could deliver the inevitable future of soldier heads-up displays.

Why we picked Ravn: The AR battlefield is inevitable, but right now Microsoft’s HoloLens team is focused on providing mid-fight information, like how many bullets a soldier has in their clip and where their squad mates are. Ravn’s tech was built by a guy who watched the tragic consequences of getting into those shootouts. He wants to help soldiers avoid or win these battles before they get dangerous, and his team includes an expert in selling hardened tech to the U.S. government.

Middesk

It’s difficult to know if a business’ partners have paid their taxes, filed for bankruptcy or are involved in lawsuits. That leads businesses to write off $120 billion a year in uncollectable bad debt. Middesk does due diligence to sort out good businesses from the bad to provide assurance for B2B deals, loans, investments, acquisitions and more. By giving clients the confidence that they’ll be paid, Middesk could insert itself into a wide array of transactions.

Why we picked Middesk: It’s building the trust layer for the business world that could weave its way into practically every deal. More data means making fewer stupid decisions, and Middesk could put an end to putting faith in questionable partners.

Convictional

Convictional helps direct-to-consumer companies approach larger retailers more simply. It takes a lot of time for a supplier to build a relationship with a retailer and start selling their products. Convictional wants to speed things up by building a B2B self-service commerce platform that allows retailers to easily approach brands and make orders.

Why we picked Convictional: There’s been an explosion of D2C businesses selling everything from suitcases to shaving kits. But to drive exposure and scale, they need retail partners who’re eager not to be cut out of this growing commerce segment. Playing middleman could put Convictional in a lucrative position, while also making it a nexus of valuable shopping data.

Dyneti Technologies

Dyneti has invented a credit card scanner SDK that uses a smartphone’s camera to help prevent fraud by more than 50 percent and improve conversion for businesses by 5 percent. The business was started by a pair of former Uber employees, including CEO Julia Zheng, who launched the fraud analytics teams for Account Security and UberEATS. Dyneti’s service is powered by deep learning and works on any card format. In the two months since it launched, the company has signed contracts with Rappi, Gametime and others.

Why we picked Dyneti: Cybersecurity threats are growing and evolving, yet underequipped businesses are eager to do more business online. Dyneti is one of those fundamental B2B businesses that feels like Stripe — capable of bringing simplicity and trust to a complex problem so companies can focus on their product.

AmpUp

The “Airbnb for electric-vehicle chargers,” ampUp is preparing for a world in which the majority of us drive EVs — it operates a mobile app that connects a network of thousands of EV chargers and drivers. Using the app, an electric-vehicle owner can quickly identify an available and compatible charger, and EV charger owners can earn cash sharing their charger at their own price and their own schedule. The service is currently live in the Bay Area.

Why we picked ampUp: Electric vehicles are inevitable, but reliable charging is one of the leading fears dissuading people from buying. Rather than build out some massive owned network of chargers that will never match the distributed gas station network, ampUp could put an EV charger anywhere there’s someone looking to make a few bucks.

Flockjay

Flockjay operates an online sales academy that teaches job seekers from underrepresented backgrounds the skills and training they need to pursue a career in tech sales. The 12-week bootcamp offers trainees coaching and mentorship. The company has launched its debut cohort with 17 students, 100 percent of whom are already in job interviews and 40 percent of whom have already secured new careers in the tech industry.

Why we picked Flockjay: Unlike coding bootcamps that can require intense prerequisites, killer salespeople can be molded from anyone with hustle. Those from underrepresented backgrounds already know how to expertly sell themselves to attain opportunities others take for granted. Flockjay could provide economic mobility at a crucial juncture when job security is shaky.

Deel

Twenty million international contractors work with U.S. companies, but it’s difficult to onboard and train them. Deel handles the contracts, payments and taxes in one interface to eliminate paperwork and wasted time. Deel charges businesses $10 per contractor per month and a 1 percent fee on payouts, which earns it an average of $560 per contractor per year.

Why we picked Deel: The destigmatization of remote work is opening new recruiting opportunities abroad for U.S. businesses. But unless teams can properly integrate these distant staffers, the cost savings of hiring overseas are negated. As the globalization megatrend continues, businesses will need better HR tools.

Glide

There has been a pretty major trend toward services that make it easier to build web pages or mobile apps. Glide lets customers easily create well-designed mobile apps from Google Sheets pages. This not only makes it easy to build the pages, but simplifies the skills needed to keep information updated on the site.

Why we picked Glide: While desktop website makers is a brutally competitive market, it’s still not easy to make a mobile site if you’re not a coder. Rather than starting from a visual layout tool with which many people would still be unfamiliar, Glide starts with a spreadsheet that almost everyone has used. And as the web begins to feel less personal with all the brands and influencers, Glide could help people make bespoke apps that put intimacy and personality first.

Docucharm

The platform, co-founded by former Uber product manager Minh Tri Pham, turns documents into structured data a computer can understand to accurately automate document processing workflows and take away the need for human data entry. Docucharm’s API can understand various forms of documents (like paystubs, for example) and will extract the necessary information without error. Its customers include tax prep company Tributi and lending business Aspire.

Why we picked Docucharm: Paying high-priced, high-skilled workers to do data entry is a huge waste. And optical character recognition like Docucharm’s will unlock new types of businesses based on data extraction. This startup could be the AI layer underneath it all.

Flower Co

Flower Co provides memberships for cheaper weed sales and delivery. Most dispensaries cater to high-end customers and newbies that want expensive products and tons of hand-holding. In contrast, Flower Co caters to long-time marijuana enthusiasts who want huge quantities at low prices. They’re currently selling $200.000 in marijuana per month to 700 members. They charge $100 a year for membership, and take 10 percent on product sales.

Why we picked Flower Co: Marijuana is the next gold rush, a once-in-a-generation land-grab opportunity. Yet most marijuana merchants have focused on hyper-discerning high-end customers despite the long-standing popularity of smoking big blunts of cheap weed with a bunch of friends. For those who want to make cannabis consumption a lifestyle, and there will be plenty, Flower Co could become their wholesaler.

Honorable Mentions

Atomic Alchemy – Filling the shortage of nuclear medicine

Yourchoice – Omni-gender non-hormonal birth control

Prometheus – Turning CO2 into gas

Lumos – Medical search engine for doctors

Heart Aerospace – Regional electric planes

Boundary Layer Technologies – Super-fast container ships

Additional reporting by Kate Clark, Greg Kumparak and Lucas Matney

Mar
18
2019
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WorkClout brings SaaS to factory floor to increase operational efficiency

Factory software tools are often out of reach of small manufacturers, forcing them to operate with inefficient manual systems. WorkClout, a member of the Y Combinator Winter 2019 class, wants to change that by offering a more affordable SaaS alternative to traditional manufacturing software solutions.

Company co-founder and CEO Arjun Patel grew up helping out in his Dad’s factory and saw first-hand how difficult it is for small factory owners to automate. He says that traditional floor-management tools are expensive and challenging to implement.

“What motivated me is when my dad was trying to implement a similar system,” Patel said, noting that his father’s system had cost more than $240,000, took over a year to get going and wasn’t really doing what he wanted it to do. That’s when he decided to help.

He teamed up with Bryan Trang, who became the CPO, and Richard Girges, who became the CTO, to build the system that his dad (and others in a similar situation) needed. Specifically, the company developed a cloud software solution that helps manufacturers increase their operational efficiency. “Two things that we do really well is track every action on the factory floor and use that data to make suggestions on how to increase efficiency. We also determine how much work can be done in a given time period, taking finite resources into consideration,” Patel explained.

He said that one of the main problems that small-to-medium sized manufacturers face is a lack of visibility into their businesses. WorkClout looks at orders, activities, labor and resources to determine the best course of action to complete an order in the most cost-effective way.

“WorkClout gives our customers a better way to allocate resources and greater visibility of what’s actually happening on the factory floor. The more data that they have, the more accurate picture they have of what’s going on,” Patel said.

Production Schedule view. Screenshot: WorkClout

The company is still working on the pricing model, but today it charges administrative users like plant management, accounting and sales. Machine operators get access to the data for free. The current rate for paid users starts at $99 per user per month. There is an additional one-time charge for implementation and training.

As for the Y Combinator experience, Patel says that it has helped him focus on what’s important. “It really makes you hone in on building the product and getting customers, then making sure those two things are leading to customer happiness,” he said.

While the company does have to help customers get going today, the goal is to make the product more self-serve over time as they begin to understand the different verticals for which they are developing solutions. The startup launched in December and already has 13 customers, generating $100,000 in annual recurring revenue (ARR), according to Patel.

Feb
12
2019
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Glide helps you build mobile apps from a spreadsheet without coding

The founders of Glide, a member of the Y Combinator Winter 2019 class, had a notion that building mobile apps in the enterprise was too hard. They decided to simplify the process by starting with a spreadsheet, and automatically turning the contents into a slick mobile app.

David Siegel, CEO and co-founder at Glide, was working with his co-founders Jason Smith, Mark Probst and Antonio Garcia Aprea at Xamarin, a cross-platform mobile development company that Microsoft acquired for $500 million in 2016. There, they witnessed first-hand the difficulty that companies were having building mobile apps. When their two-year stint at Microsoft was over, the four founders decided to build a startup to solve the problem.

“We saw how desperate some of the world’s largest companies were to have a mobile strategy, and also how painful and expensive it is to develop mobile apps. And we haven’t seen significant progress on that 10 years after the smartphone debuted,” Siegel told TechCrunch.

The founders began with research, looking at almost 100 no-code tools and were not really satisfied with any of them. They chose the venerable spreadsheet, a business tool many people use to track information, as the source for their mobile app builder, starting with Google Sheets.

“There’s a saying that spreadsheets are the most the most successful programming model of all time, and smartphones are the most successful computers of all time. So when we started exploring Glide we asked ourselves, can these two forces be combined to create something very valuable to let individuals and businesses build the type of apps that we saw Xamarin customers needed to build, but much more quickly,” Siegel said.

Photo: Glide

The company developed Glide, a service that lets you add information to a Google Sheet spreadsheet, and then very quickly create an app from the contents without coding. “You can easily assemble a polished, data-driven app that you can customize and share as a progressive web app, meaning you can get a link that you can share with anybody, and they can load it in a browser without downloading an app, or you can publish Glide apps as native apps to app stores,” Siegel explained. What’s more, there is a two-way connection between app and spreadsheet, so that when you add information in either place, the other element is updated.

The founders decided to apply at Y Combinator after consulting with former Xamarin CEO, and current GitHub chief executive, Nat Friedman. He and other advisors told them YC would be a great place for first-time founders to get guidance on building a company, taking advantage of the vast YC network.

One of the primary lessons he says that they have learned is the importance of getting out in the field and talking to customers, and not falling into the trap of falling in love with the act of building the tool. The company has actually helped fellow YC companies build mobile apps using the Glide tool.

Glide is live today and people can create apps using their own spreadsheet data, or using the templates available on the site as a starting point. There is a free tier available to try it without obligation.

Jan
24
2019
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Microsoft acquires Citus Data

Microsoft today announced that it has acquired Citus Data, a company that focused on making PostgreSQL databases faster and more scalable. Citus’ open-source PostgreSQL extension essentially turns the application into a distributed database and, while there has been a lot of hype around the NoSQL movement and document stores, relational databases — and especially PostgreSQL — are still a growing market, in part because of tools from companies like Citus that overcome some of their earlier limitations.

Unsurprisingly, Microsoft plans to work with the Citus Data team to “accelerate the delivery of key, enterprise-ready features from Azure to PostgreSQL and enable critical PostgreSQL workloads to run on Azure with confidence.” The Citus co-founders echo this in their own statement, noting that “as part of Microsoft, we will stay focused on building an amazing database on top of PostgreSQL that gives our users the game-changing scale, performance, and resilience they need. We will continue to drive innovation in this space.”

PostgreSQL is obviously an open-source tool, and while the fact that Microsoft is now a major open-source contributor doesn’t come as a surprise anymore, it’s worth noting that the company stresses that it will continue to work with the PostgreSQL community. In an email, a Microsoft spokesperson also noted that “the acquisition is a proof point in the company’s commitment to open source and accelerating Azure PostgreSQL performance and scale.”

Current Citus customers include the likes of real-time analytics service Chartbeat, email security service Agari and PushOwl, though the company notes that it also counts a number of Fortune 100 companies among its users (they tend to stay anonymous). The company offers both a database as a service, an on-premises enterprise version and the free open-source edition. For the time being, it seems like that’s not changing, though over time I would suspect that Microsoft will transition users of the hosted service to Azure.

The price of the acquisition was not disclosed. Citus Data, which was founded in 2010 and graduated from the Y Combinator program, previously raised more than $13 million from the likes of Khosla Ventures, SV Angel and Data Collective.

Sep
19
2018
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Fresh out of Y Combinator, Leena AI scores $2M seed round

Leena AI, a recent Y Combinator graduate focusing on HR chatbots to help employees answer questions like how much vacation time they have left, announced a $2 million seed round today from a variety of investors including Elad Gil and Snapdeal co-founders Kunal Bahl and Rohit Bansal.

Company co-founder and CEO Adit Jain says the seed money is about scaling the company and gaining customers. They hope to have 50 enterprise customers within the next 12-18 months. They currently have 16.

We wrote about the company in June when it was part of the Y Combinator Summer 2018 class. At the time Jain explained that they began in 2015 in India as a company called Chatteron. The original idea was to help others build chatbots, but like many startups, they realized there was a need not being addressed, in this case around HR, and they started Leena AI last year to focus specifically on that.

As they delved deeper into the HR problem, they found most employees had trouble getting answers to basic questions like how much vacation time they had or how to get a new baby on their health insurance. This forced a call to a help desk when the information was available online, but not always easy to find.

Jain pointed out that most HR policies are defined in policy documents, but employees don’t always know where they are. They felt a chatbot would be a good way to solve this problem and save a lot of time searching or calling for answers that should be easily found. What’s more, they learned that the vast majority of questions are fairly common and therefore easier for a system to learn.

Employees can access the Leena chatbot in Slack, Workplace by Facebook, Outlook, Skype for Business, Microsoft Teams and Cisco Spark. They also offer Web and mobile access to their service independent of these other tools.

Photo: Leena AI

What’s more, since most companies use a common set of backend HR systems like those from Oracle, SAP and NetSuite (also owned by Oracle), they have been able to build a set of standard integrators that are available out of the box with their solution.

The customer provides Leena with a handbook or a set of policy documents and they put their machine learning to work on that. Jain says, armed with this information, they can convert these documents into a structured set of questions and answers and feed that to the chatbot. They apply Natural Language Processing (NLP) to understand the question being asked and provide the correct answer.

They see room to move beyond HR and expand into other departments such as IT, finance and vendor procurement that could also take advantage of bots to answer a set of common questions. For now, as a recent YC graduate, they have their first bit of significant funding and they will concentrate on building HR chatbots and see where that takes them.

Aug
17
2018
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Incentivai launches to simulate how hackers break blockchains

Cryptocurrency projects can crash and burn if developers don’t predict how humans will abuse their blockchains. Once a decentralized digital economy is released into the wild and the coins start to fly, it’s tough to implement fixes to the smart contracts that govern them. That’s why Incentivai is coming out of stealth today with its artificial intelligence simulations that test not just for security holes, but for how greedy or illogical humans can crater a blockchain community. Crypto developers can use Incentivai’s service to fix their systems before they go live.

“There are many ways to check the code of a smart contract, but there’s no way to make sure the economy you’ve created works as expected,” says Incentivai’s solo founder Piotr Grudzie?. “I came up with the idea to build a simulation with machine learning agents that behave like humans so you can look into the future and see what your system is likely to behave like.”

Incentivai will graduate from Y Combinator next week and already has a few customers. They can either pay Incentivai to audit their project and produce a report, or they can host the AI simulation tool like a software-as-a-service. The first deployments of blockchains it’s checked will go out in a few months, and the startup has released some case studies to prove its worth.

“People do theoretical work or logic to prove that under certain conditions, this is the optimal strategy for the user. But users are not rational. There’s lots of unpredictable behavior that’s difficult to model,” Grudzie? explains. Incentivai explores those illogical trading strategies so developers don’t have to tear out their hair trying to imagine them.

Protecting crypto from the human x-factor

There’s no rewind button in the blockchain world. The immutable and irreversible qualities of this decentralized technology prevent inventors from meddling with it once in use, for better or worse. If developers don’t foresee how users could make false claims and bribe others to approve them, or take other actions to screw over the system, they might not be able to thwart the attack. But given the right open-ended incentives (hence the startup’s name), AI agents will try everything they can to earn the most money, exposing the conceptual flaws in the project’s architecture.

“The strategy is the same as what DeepMind does with AlphaGo, testing different strategies,” Grudzie? explains. He developed his AI chops earning a masters at Cambridge before working on natural language processing research for Microsoft.

Here’s how Incentivai works. First a developer writes the smart contracts they want to test for a product like selling insurance on the blockchain. Incentivai tells its AI agents what to optimize for and lays out all the possible actions they could take. The agents can have different identities, like a hacker trying to grab as much money as they can, a faker filing false claims or a speculator that cares about maximizing coin price while ignoring its functionality.

Incentivai then tweaks these agents to make them more or less risk averse, or care more or less about whether they disrupt the blockchain system in its totality. The startup monitors the agents and pulls out insights about how to change the system.

For example, Incentivai might learn that uneven token distribution leads to pump and dump schemes, so the developer should more evenly divide tokens and give fewer to early users. Or it might find that an insurance product where users vote on what claims should be approved needs to increase its bond price that voters pay for verifying a false claim so that it’s not profitable for voters to take bribes from fraudsters.

Grudzie? has done some predictions about his own startup too. He thinks that if the use of decentralized apps rises, there will be a lot of startups trying to copy his approach to security services. He says there are already some doing token engineering audits, incentive design and consultancy, but he hasn’t seen anyone else with a functional simulation product that’s produced case studies. “As the industry matures, I think we’ll see more and more complex economic systems that need this.”

Aug
17
2018
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Klarity uses AI to strip drudgery from contract review

Klarity, a member of the Y Combinator 2018 Summer class, wants to automate much of the contract review process by applying artificial intelligence, specifically natural language processing.

Company co-founder and CEO Andrew Antos has experienced the pain of contract reviews first hand. After graduating from Harvard Law, he landed a job spending 16 hours a day reviewing contract language, a process he called mind-numbing. He figured there had to be a way to put technology to bear on the problem and Klarity was born.

“A lot of companies are employing internal or external lawyers because their customers, vendors or suppliers are sending them a contract to sign,” Antos explained They have to get somebody to read it, understand it and figure out whether it’s something that they can sign or if it requires specific changes.

You may think that this kind of work would be difficult to automate, but Antos said that  contracts have fairly standard language and most companies use ‘playbooks.’ “Think of the playbook as a checklist for NDAs, sales agreements and vendor agreements — what they are looking for and specific preferences on what they agree to or what needs to be changed,” Antos explained.

Klarity is a subscription cloud service that checks contracts in Microsoft Word documents using NLP. It makes suggestions when it sees something that doesn’t match up with the playbook checklist. The product then generates a document, and a human lawyer reviews and signs off on the suggested changes, reducing the review time from an hour or more to 10 or 15 minutes.

Screenshot: Klarity

They launched the first iteration of the product last year and have 14 companies using it with 4 paying customers so far including one of the world’s largest private equity funds. These companies signed on because they have to process huge numbers of contracts. Klarity is helping them save time and money, while applying their preferences in a consistent fashion, something that a human reviewer can have trouble doing.

He acknowledges the solution could be taking away work from human lawyers, something they think about quite a bit. Ultimately though, they believe that contract reviewing is so tedious, it is freeing up lawyers for work that requires a greater level of intellectual rigor and creativity.

Antos met his co-founder and CTO, Nischal Nadhamuni, at an MIT entrepreneurship class in 2016 and the two became fast friends. In fact, he says that they pretty much decided to start a company the first day. “We spent 3 hours walking around Cambridge and decided to work together to solve this real problem people are having.”

They applied to Y Combinator two other times before being accepted in this summer’s cohort. The third time was the charm. He says the primary value of being in YC is the community and friendships they have formed and the help they have had in refining their approach.

“It’s like having a constant mirror that helps you realize any mistakes or any suboptimal things in your business on a high speed basis,” he said.

Jul
25
2018
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Snark AI looks to help companies get on-demand access to idle GPUs

Riding on a wave of an explosion in the use of machine learning to power, well, just about everything is the emergence of GPUs as one of the go-to methods to handle all the processing for those operations.

But getting access to those GPUs — whether using the cards themselves or possibly through something like AWS — might still be too difficult or too expensive for some companies or research teams. So Davit Buniatyan and his co-founders decided to start Snark AI, which helps companies rent GPUs that aren’t in use across a distributed network of companies that just have them sitting there, rather than through a service like Amazon. While the larger cloud providers offer similar access to GPUs, Buniatyan’s hope is that it’ll be attractive enough to companies and developers to tap a different network if they can lower that barrier to entry. The company is launching out of Y Combinator’s Summer 2018 class.

“We bet on that there will always be a gap between mining and AWS or Google Cloud prices,” Buniatyan said. “If the mining will be [more profitable than the cost of running a GPU], anyone can get into AWS and do mining and be profitable. We’re building a distributed cloud computing platform for clients that can easily access the resources there but are not used.”

The startup works with companies with a lot of spare GPUs that aren’t in use, such as gaming cloud companies or crypto mining companies. Teams that need GPUs for training their machine learning models get access to the raw hardware, while teams that just need those GPUs to handle inference get access to them through a set of APIs. There’s a distinction between the two because they are two sides to machine learning — the former building the model that the latter uses to execute some task, like image or speech recognition. When the GPUs are idle, they run mining to pay the hardware providers, and Snark AI also offers the capability to both mine and run deep learning inference on a piece of hardware simultaneously, Buniatyan said.

Snark AI matches the proper amount of GPU power to whatever a team needs, and then deploys it across a network of distributed idle cards that companies have in various data centers. It’s one way to potentially reduce the cost of that GPU over time, which may be a substantial investment initially but get a return over time while it isn’t in use. If that’s the case, it may also encourage more companies to sign up with a network like this — Snark AI or otherwise — and deploy similar cards.

There’s also an emerging trend of specialized chips that focus on machine learning or inference, which look to reduce the cost, power consumption or space requirements of machine learning tasks. That ecosystem of startups, like Cerebras Systems, Mythic, Graphcore or any of the other well-funded startups, all potentially have a shot at unseating GPUs for machine learning tasks. There’s also the emergence of ASICs, customized chips that are better suited to tasks like crypto mining, which could fracture an ecosystem like this — especially if the larger cloud providers decide to build or deploy something similar (such as Google’s TPU). But this also means that there’s room to potentially create some new interface layer that can snap up all the leftovers for tasks that companies might need, but don’t necessarily need bleeding-edge technology like that from those startups.

There’s always going to be the same argument that was made for Dropbox prior to its significant focus on enterprises and collaboration: the price falls dramatically as it becomes more commoditized. That might be especially true for companies like Amazon and Google, which have already run that playbook, and could leverage their dominance in cloud computing to put a significant amount of pressure on a third-party network like Snark AI. Google also has the ability to build proprietary hardware like the TPU for specialized operations. But Buniatyan said the company’s focus on being able to juggle inference and mining, in addition to keeping that cost low for idle GPUs of companies that are just looking to deploy, should keep it viable, even amid a changing ecosystem that’s focusing on machine learning.

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