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The AI market is growing, but how quickly is tough to pin down – TechCrunch


If you work in tech, you’ve heard about artificial intelligence: how it’s going to replace uswhether it’s over-hyped or not and which nations will leverage it to prevent, or instigate, war.

Our editorial bent is more clear-cut: How much money is going into startups? Who is putting that money in? And what trends can we suss out about the health of the market over time?

So let’s talk about the state of AI startups and how much capital is being raised. Here’s what I can tell you: funding totals for AI startups are growing year-over-year; I just don’t know precisely how quickly. Regardless, startups are certainly raising massive sums of money off the buzzword.

To make that point, here are just a few of the biggest rounds announced and recorded by Crunchbase in 2018:

  • SenseTime, a China-based startup that is quite good at tracking your face wherever it may be, raised a $1 billion Series D round. It was the largest round of the year in the AI category, according to Crunchbase. But what’s more mind-blowing is that the company raised a total of $2.2 billion in just one year across three rounds. A picture is worth a thousand words, but a face is worth billions of dollars.
  • UBTech Robotics, another China-based startup focusing on robotics, raised an $820 million Series C. Just a cursory look at its website, however, makes UBTech appear to be a high-end toy maker rather than an AI innovator.
  • And biotech startup Zymergen, which “manufactures microbes for Fortune 500 companies,” according to Crunchbase, raised a $400 million Series C.

Now, this is the part I normally include a chart and 400 words of copy to contextualize the AI market. But if you read the above descriptions closely, you’ll see our problem: What the hell does “AI” mean?

Take Zymergen as an example. Crunchbase tags it with the AI marker. Bloomberg, citing data from CB Insights, agrees. But if you were making the decision, would you demarcate it as an AI company?

Zymergen’s own website doesn’t employ the phrase. Rather, it uses buzzwords commonly associated with AI — machine learning, automation. Zymergen’s home page, technology page and careers page are devoid of the term.

Instead, the company focuses on molecular technology. Artificial intelligence is not, in fact, what Zymergen is selling. We also know that Zymergen uses some AI-related tools to help it understand its data sets (check its jobs page for more). But is that enough to call it an AI startup? I don’t think so. I would call it biotech.

That brings us back to the data. In the spirit of transparency, CB Insights reports a 72 percent boost in 2018 AI investment over 2017 funding totals. Crunchbase data pegs 2018’s AI funding totals at a more modest 38 percent increase over the preceding year.

So we know that AI fundraising for private companies is growing. The two numbers make that plain. But it’s increasingly clear to me after nearly two years of staring at AI funding rounds that there’s no market consensus over exactly what counts as an AI startup. Bloomberg in its coverage of CB Insights’ report doesn’t offer a definition. What would yours be?

If you don’t have one, don’t worry; you’re not alone. Professionals constantly debate what AI actually means, and who actually deserves the classification. There’s no taxonomy for startups like how we classify animals. It’s flexible, and with PR, you can bend perception past reality.

I have a suspicion there are startups that overstate their proximity to AI. For instance, is employing Amazon’s artificial intelligence services in your back end enough to call yourself an AI startup? I would say no. But after perusing Crunchbase data, you can see plenty of startups that classify themselves on such slippery grounds.

And the problem we’re encountering rhymes well with a broader definitional crisis: What exactly is a tech company? In the case of Blue Apron, public investors certainly differed with private investors over the definition, as Alex Wilhelm has touched on before.

So what I can tell you is that AI startup funding is up. By how much? A good amount. But the precise figure is hard to pin down until we all agree what counts as an AI startup.



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Entrepreneurship

3 Major Marketing Trends to Look Out for in 2019


Invest in social causes to stand out.


6 min read

Opinions expressed by Entrepreneur contributors are their own.


This year has been prophesied by many to be the best year yet for the internet and digital marketing. However, if we consider the trends, every year has been increasingly better than the other for the last few years, so these are more statements of the obvious than prophecies.

Over the last two years, we have seen some subtle shifts in customer reaction towards conventional digital marketing. For instance, the increasing use of ad blockers by many, especially millennials in the U.S., indicates that conventional ads are no longer as popular as they were in 2016.

With a little study of marketing in 2018 and of creative companies that did well for themselves last year, I have come up with a few trends that we should all expect more of in the new year. This is in no way exhaustive, but it’s worth the read.

Related: 6 Inspiring Women Changing Tech and Business This New Year

1. Return of offline marketing.

Why did digital marketing become as big as it did, as fast as it did? There are a number of reasons — the wide reach of the internet, for one, and the ability to tailor marketing efforts to specific audiences. However, it was also because it was new and everyone wanted a piece of this refreshing new innovation.  

Fast forward many years later, and it is not so new anymore. In fact, it has grown so rapidly that Shopify predicts that by 2021, global retail ecommerce sales will reach $4.5 trillion. (This is a threefold jump from $1.3 trillion in 2014). The number of people buying goods and services online has also increased significantly and is predicted to climb from the 1.46 billion in 2015 to more than 2 billion in 2020.

While this growth is great, it has also caused a significant drop in offline marketing efforts, opening a tremendous door for smart businesses. Offline marketing suddenly has become “uncommon marketing” and hence, a great way to add a personal touch in a largely screen obsessed period for customers.

One company that exemplifies this is Mainstreet ROI, a digital marketing firm, that took an uncommon step in sending printed newsletters to their customers once a month and to great effect. Their reasons are sound too, as this is a highly unexpected marketing means in a digital world and yet so personal and relevant.

It also helps that a newsletter can’t be lost with one tap of the delete button. This is not a call to start sending in newsletters in 2019, but it is a call to get creative and to look back on the very mediums we left behind in the wake of the digital transformation. Such creativity will set businesses apart in 2019.

2. The rise of socially beneficial marketing.

I published an article about a year ago on the effects of impact investment on society. At the time, social impact investing was just at its infancy stage. In the time that has passed since then, the world has gotten worse. For example, climate change has since reached a boiling point. Dr. Ken Caldeira, a lead scientist, says “Our study indicates that if emissions follow a commonly used business-as-usual scenario, there is a 93 percent chance that global warming will exceed 4C by the end of this century.” 

This is exceedingly frightful and doesn’t get better when we look at the statistics for many other issues our world is faced with. The urgency for socially minded businesses is real, and in 2019 we would expect to see many more businesses enter valuable partnerships to address some of these social causes.

Related: The New Year Is Your New Opportunity

In an earlier article, I made the point that social responsibility doubles as marketing for businesses of all sizes, and in a world that needs help, businesses that are found investing more around social causes tend to be much more visible.  

Harper Wilde is one company that exemplifies this strategy well. They sell bras and have done a great bit of work with women empowerment globally with their hilarious message slogan, “lift up the ladies,” being both a reference to their socially conscious mindset and the function of their products.

Last year was a good year for social responsibility, but I believe 2019 will be the year where it totally takes center stage. In 2019, companies that are actually directly involved in socially responsible ventures will do better than companies who just partner with socially responsible businesses. The reason is simple. We are now more aware than ever that our world is in trouble.

3. Blockchain makes its stamp on marketing.

In the last couple of years, blockchain has gotten many excited and many more worried. The new technology has caused disruptive tendencies for many industries, and marketing was not spared. Blockchain digital marketing is a term that has been thrown around in marketing spheres but rarely understood. With optimism in blockchain rising, 2019 just may be the year where it is fully understood and utilized.  

Here are a few things blockchain brings to the table that makes it so desirable going forward.

  • Utilizing blockchain in Search Engine Marketing will eliminate digital middlemen, like Facebook and Google.
  • With blockchain, website owners wouldn’t have to go through the Google Display Network to find advertisers because each “user” would already be validated and verified. The advertiser would know that they’re paying for genuine clicks, and the site owner can trust that the amount they’re being paid is fair.  
  • Blockchain brings is the new level of transparency. Everything is documented and verified. Ideally, a customer could get a “behind-the-scenes” look of a retailer’s supply chain to ascertain if they can trust its ads or marketing efforts.
  • With blockchain, the consumer’s data is purely under their control, instead of having it vulnerable on servers.

One company that has chosen to lead the way in actually making these things happen is Bezop. Blaze Ubah, CEO of Bezop, while addressing how far the company had come in their innovative bid to use blockchain to become the world’s first Amazon-like ecommerce platform, repeatedly makes the point that is the hope of all blockchain enthusiasts — that block chain can make marketing truly about the two people involved, the advertiser and the customer.

Related: Become a Blockchain Expert for Less Than $20

Taking down big wigs like Facebook, Google and even ecommerce giants like Amazon in any sphere looks a really daunting task, but with blockchain, it is looking increasingly possible and Bezop is the first of many that are on that path. Its not going to all happen in one year, but I believe the first tangible steps will be seen in 2019.

The marketing sphere is not likely to experience any large scale sweeping changes in the near future. However, these trends are likely to significantly shift focus of marketers and businesses or at least their considerations and investments. 



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