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Battling Giants

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In the summer of 2013, as Matthew Zeiler was close to finishing a Ph.D. in artificial intelligence at New York University, he seemed to have every tech giant in the palm of his hand. Zeiler had left an internship with a Google AI group a few weeks earlier when he got a call from an unknown number while he was running along the Hudson River. It was Alan Eustace, then a senior vice president of engineering at Google, who had heard about Zeiler’s AI chops. Eustace wanted Zeiler to join permanently. To entice him, Eustace told him he would make an offer that was among the highest Google had ever made to a new graduate, Zeiler recalls. Zeiler won’t say how much he was offered, and Google declined to comment. But offers for top recruits with specific expertise can add up to several millions of dollars over four years, according to people with knowledge of the matter. Regardless, Google’s offer kicked off a bidding war for Zeiler and his know-how in deep learning, the vaunted branch of AI that’s driving major breakthroughs in computing.

Within days, Zeiler received a bigger offer from Microsoft, which Google promptly matched. Apple also wanted to chat, and when Zeiler flew out to Silicon Valley, Mark Zuckerberg personally sought to persuade him to join a new AI research group at Facebook. Zeiler respectfully turned them all down, deciding instead to start a company with an audacious goal: to compete with the giants that were courting him. “It was a crazy period,” Zeiler remembers. “I had this low-risk opportunity of joining a tech giant versus doing my own startup.”

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Zeiler says he knew that some of his algorithms worked better than Google’s on certain AI problems. “I knew I had to follow my gut,” he says.

Four years later, Zeiler’s New York City-based startup, Clarifai, is widely seen as one of the most promising in the crowded, buzzy field of machine learning. Clarifai offers image- and video-recognition tools for developers that rival those from Google, Microsoft and others. Much as Stripe and Twilio make it easy for programmers to tap into payments and communications capabilities, Clarifai gives its customers access to cutting-edge AI techniques that would cost millions to replicate. Companies like Unilever, BuzzFeed, Ubisoft and Staples U.K., as well as makers of medical devices and drones, use Clarifai to automatically analyze millions of images and videos. One of the company’s 100 or so customers, i-Nside, makes a smartphone accessory for imaging the inside of an eardrum and diagnosing ear diseases. Revenue, while still small, is expected to reach $10 million as early as next year, according to people close to the company.

That Clarifai has made it this far is, in and of itself, remarkable. In the past few years, AI – in particular a form of it called deep learning or deep neural networks – has emerged as the Next Big Thing in tech. Deep-learning techniques work loosely like the brain, with layers of “neurons” connected with “synapses.” The techniques are leading to substantial breakthroughs in areas like image and speech recognition, which in turn are ushering in advances in everything from medicine to self-driving cars to robotics.

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But there’s a problem: Amid the scramble for talent, the richest companies in tech have consumed entire university departments and acquired just about every AI startup they could get their hands on. Google has been the hungriest, with at least 11 AI-related acquisitions, spending upwards of $1 billion for just two of those, DeepMind and api.ai. Nearly all the upstarts that competed with Clarifai have been bought: Amazon acquired Orbeus; Salesforce got MetaMind; IBM snapped up AlchemyAPI. When it comes to image recognition, Clarifai is perhaps the only one left that can compete with Amazon, Google, IBM and Microsoft, all of which offer AI image-recognition tools to their cloud-computing customers. Clarifai has already rebuffed several multi-million-dollar acquisition offers, according to an early employee. Zeiler says he is determined to keep the company independent.

Clarifai has none of the might or reach of its rivals, but Zeiler insists, convincingly, that playing Switzerland in a global AI war is a valuable asset. Many large companies that want to incorporate AI into their products are fearful of handing over their data to giants like Google and Amazon. Photobucket is a case in point. After assessing competing tools from Amazon, Google and IBM, the image- and video-hosting service became one of Clarifai’s largest customers in terms of image volume. “Any time you’re dealing with Google, you have to wonder if they’re taking your data and training their own system,” says Mike Knowles, senior infrastructure developer at Photobucket. With its Photos app, Google competes with Photobucket. Zeiler says many other potential customers are at risk of colliding with the ever-expanding ambitions of tech’s biggest companies. “They open new divisions that compete with their customers,” Zeiler says. “That’s what we don’t do.”

At 30, Zeiler, who grew up in Beausejour, a small town in Canada some 40 miles northeast of Winnipeg, seems an unlikely challenger to tech’s powerhouses. With slicked-back hair that he cuts only a couple of times a year, he retains the disheveled air of a college student.

But Zeiler’s obsession with AI put him on a path to be mentored by some of the field’s biggest luminaries. Oddly enough, his interest in the field started with a video of a flickering flame that he saw while an undergraduate at the University of Toronto. The video, shown to him by a grad student, looked startlingly real, yet it was generated by a computer using an AI technique. Zeiler had just learned the basics of computer programming but hadn’t taken to it. The flame represented something different. No human had explicitly programmed it to move around in predetermined ways. Instead, a computer had been fed video data, deduced a pattern and generated the video on its own. “I was completely blown away,” Zeiler says. “It was a whole new way to get computers to do what you wanted. I had to learn more.”

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Graham Taylor, the Ph.D. candidate who had shown him the video, brought Zeiler into a research lab that was run by Geoffrey Hinton, widely considered one of the godfathers of neural networks. Taylor liked the ambitious yet amiable Zeiler. “He was smart but wasn’t a jerk,” Taylor says. In Hinton’s lab Zeiler worked on using AI techniques to track pigeons’ mating rituals, resulting in his first paper, “Learning Pigeon Behaviour Using Binary Latent Variables.” He graduated at the top of his class.

Zeiler then headed to NYU for a Ph.D., following Taylor, who was a postdoctoral student there. Taylor worked under Yann LeCun, another pioneer in deep learning, who now heads Facebook’s AI efforts. Eventually, Zeiler did two internships at Google and worked for Jeff Dean, the head of a then-new deep-learning research group called Google Brain. Hinton, who now works at Google and retains a position at the university, was part of that 20-person AI skunkworks. (Google Brain has since grown into one of the most high-profile and vital groups within Google.)

Zeiler founded Clarifai in November 2013 after his second internship, just as he was finishing his Ph.D. The company got off to an auspicious start. Zeiler tested his image-recognition algorithms in a highly regarded contest called ImageNet. The 2012 ImageNet had shaken the AI world when a team from Hinton’s lab in Toronto, using deep-learning techniques, cracked a huge barrier in accuracy: Its error rate was 15%, far better than the 25% attained with earlier AI approaches. In 2013, Zeiler beat out the competition with an error rate of just 12%.

For the next few months, Zeiler worked alone, pushing the limits of his neural networks and rewriting the code to turn it into a commercially viable product. He installed four servers in his apartment to crawl the Web for images to train his algorithms. At one point, his apartment got so hot that he had to leave his windows open in the middle of winter. By April 2014, Zeiler hired a second employee, and the two moved the servers to a New Jersey data center, where Clarifai continues to expand. In October 2014, he made the service available to developers. His first customer was a wedding lifestyle website called Style Me Pretty, which uses Clarifai to identify and categorize thousands of user-uploaded pictures and serves ads based on what’s in an image.

In 2015, Clarifai landed its first sizable investment: a $10 million round led by Union Square Ventures. The corporate coinvestors, who clearly understood the potential of what Zeiler was building, included Qualcomm, AI chip specialist Nvidia and, interestingly, Google’s venture arm. The following year, in a round led by Menlo Ventures, Clarifai raised another $30 million, at a valuation of $120 million, according to PitchBook. “Tech giants are working on similar products, but they don’t wake up every day living and dying on building the best image-recognition service,” Menlo partner Matt Murphy says. Clarifai now has 55 employees, including 10 dedicated to digging through the latest AI research so the company can stay current. Last year, it hired a veteran sales executive from Google’s enterprise unit as its chief customer officer.

A recent study by the consulting firm CapTech shows Clarifai remains competitive with, and in some cases outperforms, tech giants like Amazon, Google and Microsoft in image recognition. But finding and keeping AI talent to maintain that position–let alone expand into new areas like audio recognition and beyond–won’t be easy. In February, Clarifai scored a longtime Google AI researcher, Andrea Frome, as its head of research, but she abruptly departed after only four months. Frome declined to speak about her departure, and Zeiler says it was the result of differing priorities. Access to data–lots of it–to “train” algorithms is also an area where Clarifai is likely to find itself at a permanent disadvantage compared to its much-larger rivals.

Clarifai’s latest tool trains AI models on smartphones, not in the cloud, where most AI systems do the bulk of their computing. On a recent day, in a San Francisco hotel lobby, Zeiler pulls out his cracked iPhone 6. As he moves the camera, the phone identifies all the objects around it–chairs, a fireplace, people, cars, as well as a MacBook that Zeiler had just trained it to recognize. It’s a tantalizing demonstration of the potential for deep learning as it moves into the most important device in people’s lives. “We’re only seeing the tip of the iceberg of what these systems will be able to do,” Zeiler says. – Written by 

Entrepreneurs

Packing Light In School Bags

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Former South African rugby star John Mametsa provides alternative energy solutions for the state. With his wife Tumi, he says their future in the business is bright.


In his prime, former Blue Bulls winger John Mametsa had rugby fans screaming in delight at his try-scoring exploits at Loftus Versfeld Stadium. Between 2001 to when he retired in 2010, he had brought smiles on people’s faces.

Hidden beneath the rugby bravura on display on a weekly basis were Mametsa’s entrepreneurial exploits, which led him to co-found Soltech, a solar technology company he started with his wife Tumi.

Soltech has bridged the gap between solar technology and user-friendly consumer products by creating school backpacks, outdoor umbrellas and lifestyle bags custom-fitted with solar power.

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The smiles are back but Mametsa has brought them in a different form.

Soltech’s main aim is to help companies achieve their corporate social investment targets and make a real difference in the lives of school children who might not have electricity at home, or whose access to electricity is limited.

“Generally, I love giving back. Just to see the kids smile brings joy to me,” Mametsa says.

“It is the best space I could have asked for. Other than when I was involved in rugby, this is the best thing I could have ever been a part of.

John Mamemtsa. Picture: Supplied

Putting smiles on kids’ faces is the best thing. Because we are dealing with children, we have aligned ourselves with people that want to make a difference.

“We don’t stop at just giving them the bags where they can charge phones and study at night but we also educate them about the social ills that come with roaming on the internet and social media.”

During this period of Eskom blackouts, uncertainty about South Africa’s energy and a widening chasm between the haves and have-nots, he says Soltech’s products make a difference in the lives of ordinary citizens.

In a sense, they’ve taken the might of solar technology and put it right in people’s hands. The school bags come with a solar-powered battery, which has a night lamp and cellular phone battery charger installed.

“With everything that’s going on at Eskom now, they (citizens) are using millions of liters of diesel per month, just to keep the lights on,” Mametsa says.

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“Hence, it’s coming back to hit our pockets and they (Eskom – South Africa’s national energy provider) are raising the electricity prices again. Such things we have to read about so that, as we grow, we educate the people that we are selling the bags to.

“At some point, you need to convert [to reusable energy sources], you need to start using solar energy. We are still fortunate that there’s an Eskom in the first place. What about those countries that don’t even have electricity at all?

“Yes, we have power cuts but the people that really need the bags are people in the rural areas.”

Admittedly, Mametsa was the pretty face and Tumi conceptualized the idea when they started. But their partnership was perfect in more ways than one. Tumi, just like her husband, had a massive entrepreneurial drive.

While Mametsa was playing rugby, he would dabble in taxi and printing businesses – an uncommon trait among sportsmen and sportswomen who are at the peak of their powers. Tumi was no different. As a student, she would sell hair and cosmetics products, something that sharpened her business senses.

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And despite a successful 11-year career in corporate as an accountant and financial manager for companies such as Alexander Forbes and the Film and Publication Board, Tumi took a bet on herself and dedicated her time fully to building Soltech.

The result was that, in just the company’s second year, they have signed a memorandum of understanding with Finland solar technology company Tespack. Tespack founders Caritta Seppä and Yesika Robles were last year named in Forbes ’s 30 Under 30 Europe.

The joint venture will see Soltech come out, among other things, with a solar-powered, fast-charging power bank, which should totally disrupt the smartphone accessories market.

Tumi Mametsa. Picture: Supplied

“There’s going to be skills and knowledge transfer,” Tumi says.

“The DTI (Department of Trade and Industry) is also backing us on the partnership because we need them and their funding to assist us. We will be hiring South Africans to work the machinery, which was something that was very attractive to the DTI.

“The Tespack partnership confirmed my belief that our company could grow from a small tree to a forest someday. Once we manufacture in-house we can streamline the process. And there are so many other ideas for products I have, such as ladies’ handbags and stuff.”

Here at home, Soltech has partnered in CSI projects with Liberty and Exxaro and they hope to grow their client base in the next couple of years. It is a huge endorsement of their products and should see them salve some of the hurt from the country’s electricity crisis, especially to those who need it the most.

-Sibusiso Mjikeliso

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‘Worth Millions And Billions’

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Terence Terenzo, the award-winning South African hairdresser and founder of hair salon group Terenzo Suites, on his biggest investment decisions and blunders.


What is your investment philosophy?

One of my philosophies is to really analyse ‘is this an investment or is it a money pit… Are you sure you got a good investment and not a liability?’… Over the last 10 years, I’ve tried to invest in things that don’t absorb all my time and energy.

So if someone were to say to me, ‘you can work your butt off seven days a week and we will give you a million rand a month, or you can take it super easy and do the absolute minimum but you can have R400,000 ($27,700) a month’, I would rather take the R400,000 because that would free me up so much more.

I would have time to do things that are important and other projects. So, for me, it is about setting up passive income businesses instead of creating businesses that need huge amounts of management.

What are some of the big investments you have made over the years?

Most of them were in property but this, Terenzo Suites, is one of the biggest investments I have ever made. It was many many millions. And then on the stock market, I’ve played around on the Johannesburg Stock Exchange where we have invested quite heavily. I would use it, then look at the market and sometimes pull the money out and move it. I have also invested in Naspers.

Have you had any regrets?

If any entrepreneur tells you that he hasn’t had that [an investment blunder], he is lying. So, what happened was I bought a property in 2008, just before the [recession]. I was stuck with it for years and even when I sold it, I sold it many years later at the same price I bought it.

I bought it in an absolute inflated stop end, and it was really at an all-time high and I had to sell it at an all-time low… But the main thing for me about those kind of things is that you learn from them and you must not beat yourself up for too long.

Try and see what you learned from them.

Why did you invest in the hair business?

I think the hair industry is going to explode in South Africa and the whole continent, if you just think of the possibilities of wigs, hair pieces, hair colors and relaxers. Millions of women before weren’t so worried about their hair but as the world has changed so much, all of them want to look amazing and they want to look current, fresh, sexy, and that is all a part of the hair industry.

What should you consider first before you invest in your hair?

I think the one thing is to have a professional conversation with someone instead of just doing your own thing and, usually, hairdressers are quite happy to consult with you without charging you before you make a serious investment in hair pieces or wigs.

How big do you think the hair industry is in Africa?

I think it is worth millions and billions… and I think it is an undiscovered industry that is still going to explode. I don’t think we have scratched the tip of the iceberg with this.

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A Germ Of An idea

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The microbiologist-turned-entrepreneur Babajide Ipaye started making good-looking shoes to fit his size 48 feet but decided to create them for others as well.


Selling shoes was probably the last thing Babajide Ipaye, a microbiology graduate, envisioned doing. But when by the age of 10, he was already wearing his father’s shoes, a size 44, he knew that some day that he would step in that world.

The only child of his parents, who passed away in a car accident when he was only 11, Ipaye was raised by his grandparents and extended family members who shaped the early years of his life.

“I had a lot of people who were trying to nurture me and they had different professions. So for example, one was an artist and I was endeared to him, another one was a medical doctor, so my granddad wanted me to study medicine and another uncle was a computer scientist, so I was kind of confused growing up. I wasn’t sure what I wanted to do, so I kind of lived the life of almost everyone that influenced me,” says Ipaye.

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That confusion helped Ipaye cut his teeth in various industries early on in his career. His medical doctor uncle influenced his career as a microbiologist where he worked with Ideas International Bio Technology Services, spending his days cleaning up oil spills and bacteria.

Then followed a stint in Information Technology (IT), a move also inspired by another uncle, where he worked with Tranter IT Infrastructure Services and Computer Warehouse as an analyst deploying managed technology services for multinationals like Guinness, Total and KPMG.

“At this point in time, IT was very hip and we happened to be one of the early pioneers in the tech space which was a very exciting time and considering where I was coming from in microbiology, it was a new field for me, I was working with multinationals and the exposure was amazing, it gave me a very broad sense of how organizations function.”

But Ipaye soon became dissatisfied with being put in a silo. There was too much structure and rigor due to the size of these multinationals and he became bogged down with a lot of systems and processes, which ultimately stifled his creative juices. His solution was to start his own IT company, Torque Technologies.

The company began providing IT equipment and technology services in its early days to multinationals before quickly creating a niche for itself in the fiber optics space. In early 2003 to 2005, the Nigerian telecoms era had just started booming and Ipaye and his partner saw a first-mover advantage in fiber optics by providing training to firms in Nigeria, which they did for the next 10 years.

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By 2015, Ipaye decided he wanted a new challenge outside the IT world. After parting ways with his partner, he began to ponder about his life-long struggle with footwear.

“So I said to myself ‘why don’t I make my own shoes?’ So I went on the internet, did a bit of research and came across a school in the Netherlands called SLEM. I called them up and found out about the shoe-making course and I said since I was on holiday, why don’t I take some time off the business and explore how to make my own shoes and I went to the Netherlands.”

Keexs was born. The goal was to make shoes that fit Ipaye’s size 48 feet but also looked aesthetically pleasing. But making shoes for him alone would prove to be too costly.

Ipaye decided to make shoes for others as well. He would focus on the athleisure market, which is a portmanteau of ‘athletic’ and ‘leisure’, a market that has grown to the stage where it is no longer a trend but a mainstay in Nigerian fashion.

To stand out in the competitive footwear market, Ipaye decided to add some African elements to his innovative footwear brand and focused on outsourcing the production to a factory in the Netherlands while he focused on the product and design to save on cost.

The aim in the long run was to move production to Nigeria where he could fulfill the brand’s social mission of providing employment and skills training to unemployed youth. However, to make the business viable, he had to make a minimum of 1,000 pairs of shoes to achieve economies of scale. Next came the challenge of securing startup funding.

“From my previous experience of starting my technology business in Nigeria, I came to realize that the cost of funding in Nigeria is very high and also there are a lot of businesses chasing funding and the risk level of most potential investors in Nigeria is very conservative and they don’t want to invest in stuff they are not sure about.

“So I read about crowdfunding and consulted a company in the Netherlands and I came across a site called kick-starter which is a US-based platform that offers a global crowdfunding platform to innovative ideas and projects, hence we started the first innovative and social focused brand in Africa,” says Ipaye.

In just over two years Ipaye has managed to grow the business through leading e-commerce sites like Jumia and Konga as well as via its own website which receives orders from countries around the world. The shoes sell for anywhere from $40 to $60, with over 8,000 pairs of shoes sold till date.

Keexs has about 18 outlets in Nigeria with retail partners in Kenya, South Africa and Guadeloupe and Nairobi.

The company also sells through social media channels where they boast over 15,000 followers on Instagram. The long-term goal for Ipaye is to secure enough funding to set up a factory in Nigeria, which he is looking to raise through an amalgamation of funding sources including grants and loans.

“We realized very quickly that economies of scale is critical to drive the growth of this business therefore there is a need for a lot of capital. There are four sides to this chain; production, design, distribution and retail. The problem with a lot of businesses in Africa is that they are expected to do everything from start to finish along that entire value chain and what that does is, it stifles the growth of the business,” says Ipaye.

The big-time hit when CNN profiled Keexs on its African Voices show. Since then, they have managed to establish themselves as an innovative social brand focused on empowering unemployed youth in Nigeria. Next on the to-do list for Ipaye is establishing a production line in Nigeria, and then taking his brand global.

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