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Calling the american dream

Jan Koum came to the U.S. with nothing. Twenty years later Mark Zuckerberg is giving him $6.8 billion. The inside story of the greatest tech deal of the century.

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“Get together?”

The subject line of the e-mail was like every other come-on that hit Jan Koum’s in-box in the spring of 2012. He was pounded daily by investors who wanted a piece of his company, Whats­App. Hatched on his birthday, February 24, 2009, WhatsApp was emerging as a global phenomenon. Some 90 million people were using it to text and send photos for free. No social utility had ever grown as fast. Facebook had only 60 million by its third birthday. And at the time close to half of WhatsApp users were returning daily.

Koum looked at the e-mail sender: Mark Zuckerberg. Now, that was a first. The Facebook founder had been using WhatsApp and wanted him over for dinner. Koum stalled, then ­finally wrote back saying he was traveling soon and dealing with ­server ­issues. Zuckerberg suggested they meet before Koum left. Koum forwarded the reply to his cofounder, Brian Acton, and his sole venture backer, Jim Goetz, a partner at Sequoia Capital, adding the word: ­“Persistent!”

Take the meeting, Acton said: “When someone of Mark’s status ­contacts you directly, you answer the phone.” Koum had lunch with ­Zuckerberg later that month at Esther’s German Bakery, chosen for its discreet back patio and location 20 miles away from Facebook’s campus. Over their meal Zuckerberg said he admired what Koum had built and hinted at his interest in combining their two firms.

So began the most lucrative two-year courtship in technology history, one in which admiration led to friendship and then, in a last-minute hurry, to an unprecedented transfer of wealth, all signed and sealed on the door of the welfare office Koum, 38, once haunted. Last month Facebook bought WhatsApp for $4 billion in cash, $12 billion in stock (8.5% of the company) plus $3 billion in restricted shares. The deal cements Zuckerberg as tech’s new billionaire-­maker. Koum, a shy but brilliant engineer who moved from Ukraine to the U.S. with nothing, will join the Facebook board and, after taxes, pocket $6.8 billion. His cofounder, Brian Acton, a mild-mannered 42-year-old ex-Yahoo engineer who got turned down for jobs at Twitter and Facebook, will come away with $3 billion after tax. The deal, he says, has left him “astonished.” Sequoia Capital, the only venture firm to taste a part of this deal, walks away with $3.5 billion—a 60-fold return on its $58 million investment.

The numbers are crazy for a company with only 56 employees and roughly $20 million in revenue, but it made sense for Facebook. WhatsApp is one of the world’s most commonly used utilities after e-mail and the telephone, and will introduce voice calling later this year. Its 470 million users have already erased $33 billion in SMS revenue from wireless carriers that got rich and fat charging per text. Whats­App charges nothing for the first year and then asks you to pay $1 a year thereafter. No ads, no stickers, no premium upgrades. In later discussions Zuckerberg promised the WhatsApp founders “zero pressure” to make money, saying, “I would love for you guys to connect 4 to 5 billion people in the next five years.”

WhatsApp could eventually make Zuck a lot of money. It costs Whats­App five cents to support each user, and it’s charging customers in only a handful of countries, like the U.S. and Britain, where mobile payments are relatively mature. WhatsApp believes $1 billion in annual revenue is within reach by 2017 as the service grows and billing falls into place. Insiders say the app could also start charging airlines or companies like Uber for the right to send messages into Whats­App with user permission.

The big risk, as always, is a mass exodus of users to the next new thing. That doesn’t seem likely right now. WhatsApp, Acton confirms, has been signing up a million new users per day since Dec. 1, 2013. Everyone in Hong Kong with a smartphone uses Whats­App. In United Arab Emirates you can watch WhatsApp Academy on TV. In the Netherlands, where 9.5 million people (more than half the population) actively use it, “Whats­ap­pen” is now a verb in the Dutch dictionary, meaning to send a WhatsApp message. Brazil’s professional soccer players use its group-chat feature to organize labor strikes during games. “Sometime in the not too distant future,” says Sequoia’s Goetz, “Whats­App is likely to eclipse all SMS traffic across the globe.”

Back in 2012, before all the craziness, Koum had time to mull over his lunch with Zuckerberg. He and Acton had $8 million from Sequoia and wanted nothing more than their independence, so Facebook’s overtures from then on never turned into bids on paper. Zuckerberg and Koum instead became friends, meeting once a month or so for dinner.

For the next year WhatsApp focused on its march past 300 million users. In June mid-2013 the founders happened to meet Sundar Pichai, who oversees Android and Chrome at Google. They talked about their love of clean and simple digital products. At some point around early 2014 Pichai decided it would be good for Koum and Acton to meet his CEO, Larry Page. They met on Tuesday, February 11.

On the Friday before that meeting a WhatsApp staffer ran into Facebook’s head of business development, Amin Zoufonoun, and told him that Koum was meeting with Page imminently. Zoufonoun raced back to Facebook and set the wheels in motion to accelerate an acquisition offer that had already been in the works for some time. Zuckerberg got Koum over to his house Monday night and finally floated the idea of an acquisition that would leave WhatsApp independent and, crucially, make Koum a board member of Facebook. “It was a partnership, where I would help him make decisions about the company,” Koum recalls. “The combination of everything that was discussed is what made it very interesting for us.”

The next day Koum and Acton drove to Google’s Mountain View headquarters and met with Page and Pichai in one of the company’s gleaming white conference rooms. They talked for an hour about the world of mobile and WhatsApp’s goals. “It was a pleasant conversation,” says Koum. Page, he adds, is “a smart guy.”

When asked if he got the impression Page was interested in buying WhatsApp, Koum pauses. “No,” he says. Maybe there was a hint? “Maybe I’m not good at reading him.”

If Page had been interested in buying WhatsApp, as some reports now indicate, his meeting may have been too little, too late. Things had already been set in motion at Menlo Park, and at WhatsApp the founders and their advisors were calculating how much they could conceivably ask for in deal talks. One source close to the company says WhatsApp’s founders were more interested in independence than money, but another says they also believed themselves to be worth at least $20 billion, a number calculated by looking at the market capitalization of Twitter (currently $30 billion), Whats­App’s global user base and the company’s future plans for monetization.

On Thursday Koum and Acton went to Zuckerberg’s house for dinner at 7 p.m., where Acton met Zuckerberg for the first time. “One day I want you to become bigger than us in number of users,” Zuckerberg told them. “What you guys do is a much more common-use case.” Zuckerberg said he wanted them to keep doing what they were doing but with the might of Facebook’s legal, financial and engineering resources.

At 9 p.m. Acton went home to tend to his young family. Koum and Zuckerberg played high-stakes poker. One source says that Zuckerberg offered a range of $15 billion and higher, and that Koum said he was looking for something closer to $20 billion. Facebook’s founder asked for some time.

The following day, Friday, February 14, Koum and Acton posed for a photo shoot with FORBES at their office. When the photographer left at 6:30 p.m., Koum got in his Porsche and stopped at Zuckerberg’s house for another meeting. Koum denies a report that he interrupted the Zuckerbergs’ Valentine’s Day meal. “It wasn’t like there was dinner and candlelight and I barged in through the door.” Until then he had tended to leave the Zuckerbergs’ house when Mark’s wife, Priscilla Chan, came home from work. Over snacks Koum and Zuckerberg hammered out the final details of the partnership and Whats­App’s all-important independence under Facebook, but the two weren’t yet in agreement.

Finally, on Saturday night Koum and Zuckerberg went from talking in the kitchen to the living room couch, before Zuckerberg offered $19 billion as well as deal terms that Koum liked. It was “something we can probably do on our end,” Koum replied.

Koum waited for Zuckerberg to leave the room and got on the phone to Acton, who was at home. It was 9 p.m. “I just want to check if you’ve made a decision either way,” Koum said, giving his friend the finalized details. “Do you want to move forward?”

“I like Mark,” Acton replied. “We can work together. Let’s make this deal.” Koum walked out of the room and found Zuckerberg. “I just talked to Brian,” Koum said. “He thinks we should work together and that you’re a good guy and we should do it.”

The two of them shook hands and then hugged. Zuckerberg remarked it was “f–king exciting,” and whipped out a bottle of Johnnie Walker Blue Label, which he knew was Koum’s favorite Scotch. They each called their business-development directors to come over and finalize the process. About an hour later Koum drove home in his Porsche and went to bed.

Lawyers and bankers raced through the weekend to get deal papers to sign by Wednesday morning before everyone broke for the annual Mobile World Congress in Barcelona. Rather than signing them at Whats­App’s headquarters, they drove two blocks, at Jim Goetz’s suggestion, to 101 Moffett Boulevard, the abandoned building where Koum once collected food stamps as a teenager. Koum signed them on the main door.

When they got back to the office, Koum sent a WhatsApp message to “WhatsApp All,” the chat group for all employees, saying there would be an all-hands meeting in the conference room at 2 p.m.

“Look, here’s what’s happening,” he said after everyone had piled into the room. “We’re merging with Facebook.” Koum and Acton told their shocked employees they would be okay and still operate on their own. At 2.30 p.m. the conference-room door opened again and in walked Mark Zuckerberg. He spoke briefly with WhatsApp’s small staff and shook hands. After a conference call with investors, Koum got back to work.

“We still have a company to run,” he says matter-of-factly.

To understand why Whats­App got where it is today, you only have to walk a couple of blocks from its unmarked headquarters in Mountain View to a disused white building across the railroad tracks, the former location of North County Social Services, where Koum once stood in line to collect food stamps.

Koum was born and raised in the small town of Fastiv, outside of Kiev, Ukraine, the only child of a housewife and a construction manager who built hospitals and schools. Electricity and hot water were limited. His parents rarely talked on the phone, in case it was tapped by the state. It sounds bad, but Koum still pines for the rural life he once lived, and it’s one of the main reasons he’s so vehemently against the hurly-burly of advertising.

At 16, in 1992, Koum and his mother immigrated to Mountain View to flee a troubling political and anti-­Semitic environment, and got a small two-bedroom apartment through government assistance. His dad, who died in 1997, never made it over. Koum’s mother had stuffed their suitcases with pens and a stack of 20 Soviet-issued notebooks to avoid paying for school supplies in the U.S. She took up babysitting, and Koum swept the floor of a grocery store to help make ends meet. When his mother was diagnosed with cancer, they lived off her disability allowance. Koum spoke English well enough but disliked the casual, flighty nature of American high school friendships; in Ukraine you went through ten years with the same, small group of friends. There, he says, “you really learn about a person.”

Koum was kicked out of high school and had to attend an alternative program but by 18 had taught himself computer networking by purchasing manuals from a used-book store and returning them when he was done. He joined a hacker group called w00w00 on the Efnet Internet relay chat network, squirreled into the servers of ­Silicon Graphics and chatted with Napster cofounder Shawn Fanning.

He enrolled at San Jose State University and moonlighted at Ernst & Young as a security tester. In 1997 Koum found himself sitting across a desk from Acton, Yahoo employee No. 44, to inspect the company’s advertising system. “You could tell he was a bit different,” recalls Acton. “He was very no-nonsense, like ‘What are your policies here? What are you doing here?’ ” Other Ernst & Young people were using touchy-feely tactics like gifting bottles of wine. “Whatever,” says Acton.

It turned out Koum liked Acton’s no-nonsense style, too: “Neither of us has an ability to bulls–t,” says Koum. Six months later Koum interviewed at Yahoo and got a job as an infrastructure engineer. He was still at San Jose State University when, two weeks into his job at Yahoo, one of the company’s servers broke. Yahoo cofounder David Filo called his cellphone for help. “I’m in class,” Koum answered discreetly. “What the f–k are you doing in class?” Filo said. “Get your ass into the office.” Filo had a small team of server engineers and needed all the help he could get. “I hated school anyway,” Koum says. He dropped out.

When Koum’s mother died of cancer in 2000 the young Ukrainian was suddenly alone. He credits Acton with reaching out and offering support. “He would invite me to his house,” Koum remembers. The two went skiing and played soccer and ultimate Frisbee.

Over the next nine years the pair watched Yahoo ride multiple ups and downs. Neither of them liked dealing with ads. “You don’t make anyone’s life better by making ads work better,” says Acton. In his Linked­In profile, Koum unenthusiastically describes his last three years at Yahoo with the words, “Did some work.”

In October 2007 they left for a year of decompression, traveling around South America and playing more Frisbee. Both got rejected for jobs at Facebook. Koum was eating into his $400,000 in savings from Yahoo and drifting. Then, in January 2009, he bought an iPhone and started using the App Store. Here was a new industry in the making. He visited the home of Alex Fishman, a Russian friend who would invite the Russian community to his place in West San Jose for weekly pizza and movie nights. Up to 40 people sometimes showed up. The two of them stood for hours talking about Koum’s idea for an app over tea at Fishman’s kitchen counter.

“Jan was showing me his address book,” recalls Fishman. “His thinking was it would be really cool to have statuses next to individual names of the people.” The statuses would show if you were on a call, your battery was low or you were at the gym. Koum could build the guts of the service, but he needed an iPhone developer. So Fishman introduced Koum to Igor Solomennikov, a developer in Russia whom he’d found on RentACoder.com.

Koum almost immediately chose the name WhatsApp because it sounded like “What’s up?” A week later on his birthday, Feb. 24, 2009, he incorporated WhatsApp in California. The app hadn’t even been written yet. Koum spent days writing the software to synch his app with any phone number in the world, poring over a Wikipedia entry that listed international dialing prefixes—he would spend many infuriating months updating it for the hundreds of regional nuances.

Early WhatsApp kept crashing or getting stuck, and when Fishman installed it on his phone, only a handful of people in his address book had downloaded it. Over ribs at Tony Roma’s in San Jose, Fishman went over the problems, and Koum took notes in one of the Soviet-era notebooks he’d saved for important projects. Koum almost gave up and muttered to Acton about the need to look for another job. “You’d be an idiot to quit now,” said Acton. “Give it a few more months.”

Help came from Apple when it launched push notifications in June 2009, letting app developers ping users when they weren’t using an app. Jan updated WhatsApp so that each time you changed your status—“Can’t talk, I’m at the gym”—it would ping everyone in your network. Fishman’s Russian friends started using it to ping each other with jokey custom statuses like “I woke up late” or “I’m on my way.”

“At some point it sort of became instant messaging,” says Fishman. “We started using it as ‘Hey how are you?’ And then someone would reply.” Jan watched the changing statuses on a Mac Mini at his town house in Santa Clara and realized he’d inadvertently created a messaging service. “Being able to reach somebody halfway across the world instantly, on a device that is always with you, was powerful,” says Koum.

The only other free texting service at the time was BlackBerry’s BBM, but that only worked among BlackBerrys. There was Google’s G-Talk and Skype, but WhatsApp was unique in that the login was your own phone number. In September 2009 Koum released a new version with a messaging component and watched his active users suddenly swell to 250,000.

He needed help and went to see Acton, who was still unemployed and dabbling in another startup idea that wasn’t going anywhere. In October Acton got five ex-Yahoo friends to invest $250,000 in seed funding and as a result was granted cofounder status and a stake. He officially joined on Nov. 1. They worked off cheap Ikea tables in a subleased space in Evernote’s converted warehouse in downtown Mountain View. They wore blankets for warmth. There was no sign for the office. “Their directions were ‘Find the Evernote building. Go round the back. Find an unmarked door. Knock,’ ” says Michael Donohue, one of WhatsApp’s first BlackBerry engineers, recalling his first interview.

With Koum and Acton working for free for the first few years, their biggest early cost was sending verification texts to users. The founders occasionally switched the app from free to “paid” so they wouldn’t grow faster than their subscriber income. In December they updated Whats­App for the iPhone to send photos and were shocked to see user growth increasing even with the $1 price tag on. “You know, I think we can actually stay paid,” Acton told Koum.

By early 2011 WhatsApp was squarely in the top 20 of most countries’ App Stores. (The U.S. was slow to catch on, with its proclivity for unlimited texting plans.) Koum and Acton were batting away all requests from investors. Acton saw VC funding as a bailout. But Sequoia partner Jim Goetz spent eight months working his contacts to get either founder to engage. He’d met with a dozen other messaging companies, such as Pinger, Tango and Baluga, but it was clear WhatsApp was the leader, and to Goetz’s surprise the startup was already paying corporate income taxes: “The only time I’ve seen that in my venture career.” He eventually got Koum and Acton to meet. They barraged him with questions and told him ads would be verboten. They eventually agreed to take $8 million from Sequoia in April 2011 at an $80 million valuation.

Two years later in February 2013, when WhatsApp’s user base had swelled to about 220 million active users and its staff to 30, Acton and Koum agreed it was time to raise some more money. “For insurance,” says Acton, who recalled that his mother, who ran her own freight-forwarding busi­nesses, used to lose sleep over paying the bills. “You never want to be in a position where you can’t make payroll.” They decided to hold a second funding round, in secret. Sequoia would invest another $50 million to up its stake to 25%, valuing WhatsApp at $1.5 billion. At the time Acton took a screenshot of WhatsApp’s bank balance and sent it to Goetz. It read $8.257 million, still in excess of all the money they’d received years before.

 

Now it’s down to Zuckerberg and Koum to figure out how to make WhatsApp worth the $19 billion Facebook just paid for it. The first move is to make sure the app keeps working. The Saturday after the deal was announced people around the world slammed WhatsApp’s servers with new sign-ups. The app suffered a four-hour outage. The founders say it was coincidental, but it was bad timing for a startup that prides itself on reliability. Koum and Acton are so fixated on uptime that no one is allowed to talk to WhatsApp’s server guys in the months before Christmas as they prepare for the message deluge. Visitors are rarely allowed into the office, lest they be a distraction. A whiteboard in the office shows the number of days since the last outage or incident, as a factory might show a tally for injuries or deaths. “A single message is like your firstborn child,” says Acton, a new parent. “We can never drop a message.” He pulls up a photo of his late stepfather, sent to his phone in April 2012. “This is why I hate Snapchat,” where photos and messages disappear after viewing.

The dollars will start coming in greater numbers once WhatsApp can iron out dead-simple billing arrangements with wireless carriers. Koum doesn’t want to risk putting users off with a complicated payment-request system and watch them run to free rivals. Right now it charges only in the handful of countries where credit card penetration is high and mobile payments are mature. Google is striking billing deals with carriers on behalf of all Android apps, but progress has been slow: Android carrier billing is available in just 21 countries, and to the ongoing chagrin of other developers, mobile payments still aren’t standardized. Koum thinks the real money will start flowing by 2017 and beyond, at which point he plans to have 1 billion users. “We are very early in our monetization efforts,” says Neeraj Arora, WhatsApp’s business-development manager. “Revenue is not important to us.” Arora has brokered partnerships with about 50 carriers to prebundle the app into text­ing plans. It has also struck a noncommercial partnership with Nokia to put a Whats­App button on the inexpensive Asha 210 phone.

Keeping people from switching to another service is priority number two. The fear of losing eyeballs is what drove Zuckerberg to pay so dearly, and there’s not much stopping them from leaving WhatsApp. “For the last five years WhatsApp has been exclusively focused on delivering ‘SMS but free,’ and they have done a great job at that. But at some point the user is going to move on,” says Ted Livingston, a former BlackBerry engineer who founded the teen-­friendly mobile messenger Kik. “This is why Whats­App feels like BlackBerry to me. For years BlackBerry was exclusively focused on e-mail. But once the consumer understood this, they asked, ‘What comes next?’ The iPhone answered that question, and all of a sudden BlackBerry was left behind.”

Koum is staying focused on the two priorities: keeping Whats­App running and keeping users from going away. A couple of nights a month he pulls up to a nondescript cinder-block building in San Jose, grabs a gym bag and walks into a dimly lit gym for a private boxing lesson with a diminutive, gum-chewing coach standing next to a boom box blasting rap music. “He likes Kanye,” the coach says, smiling. He holds two mitts up high as 6-foot-2 Koum throws slow but powerful punches. Every few minutes Koum sits down for a break, slipping the gloves off and checking messages. Koum’s style is very focused, the coach says. He doesn’t want to get into kickboxing, like most other students, but just wants to get the punching right. You could say the same for a certain messaging service that wants to be as straightforward as possible.

It’s true, Koum says, ruddy-faced as he puts on his socks and shoes. “I want to do one thing and do it well.”

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How Virtual Therapy Apps Are Trying To Disrupt The Mental Health Industry

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Millions of Americans deal with mental illness each year, and more than half of them go untreated. As the mental health industry has grown in recent years, so has the number of tech startups offering virtual therapy, which range from online and app-based chatbots to video therapy sessions and messaging. 

Still a nascent industry, with most startups in the early seed-stage funding round, these companies say they aim to increase access to qualified mental health care providers and reduce the social stigma that comes with seeking help. 

While the efficacy of virtual therapy, compared with traditional in-person therapy, is still being hotly debated, its popularity is undeniable. Its most recognizable pioneers, BetterHelp and TalkSpace, have enrolled nearly 700,000 and more than 1 million users respectively. And investors are taking notice.

Funding for mental health tech startups has boomed in the past few years, jumping from roughly $100 million in 2014 to more than $500 million in 2018, according to Pitchbook. In May of this year, the subscription-based online therapy platform Talkspace raised an additional $50 million, bringing its total funding to just under $110 million since its 2012 inception.

The ubiquity of smartphones, coupled with the lessening of the stigma associated with mental health treatment have played a large role in the growing demand for virtual therapy. Of the various services offered on the Talkspace platform, “clients by far want asynchronous text messaging,” says Neil Leibowitz, the company’s chief medical officer.

Users seem to prefer back-and-forth messaging that isn’t restricted to a narrow window of time over face-to-face interactions. At BetterHelp, founder Alon Matas notes that older users are more likely to go for phone and video therapy sessions, whereas younger users favor text messaging.

“Each generation is getting progressively more mobile-native,” says John Prendergass, an associate director at Ben Franklin Technology Partners’ healthcare investment group, “so I think we’re going to see people become increasingly more accustomed, or predisposed, to a higher level of comfort in seeking care online.”

The ease and convenience of virtual therapy is another draw, particularly for busy people or those who live in rural areas with limited access to therapy and a range of care options.

Alison Darcy, founder and CEO of Woebot, a free automated chatbot that uses artificial intelligence to provide therapeutic services without the direct involvement of humans, says that with Woebot and other similar services, there is no need to schedule appointments weeks in advance and users can receive real-time coaching at the moment they need it, unlike traditional therapy. The sense of anonymity online can also lead to more openness and transparency and attracts people who normally wouldn’t seek therapy.

Along with stigma, the cost of therapy has historically acted as a barrier to accessing quality mental-health care. Health insurance is often unlikely to cover therapy sessions. In most cities, sessions run about $75 to $150 each, and can go as high as $200 or more in places like New York City. Web therapists don’t have to bear the expense of brick-and-mortar offices, filing paperwork or marketing their services, and these savings can be passed on to clients. 

BetterHelp offers a $200-a-month membership that includes weekly live sessions with a therapist and unlimited messaging in between, while Talkspace’s cheapest monthly subscription at $260-a-month, offers unlimited text, video and audio messaging.

But virtual therapy, particularly text-based therapy, is not suitable for everyone. Nor is it likely to make traditional therapy obsolete. “Online therapy isn’t good for people who have severe mental and relational health issues, or any kind of psychosis, deep depression or violence,” says Christiana Awosan, a licensed marriage and family therapist. 

At her New York and New Jersey offices, she works predominantly with black clients, a population that she says prefers face-to-face meetings. “This community is wary of mental health in general because of structural discrimination,” Awosan says. “They pay attention to nonverbal cues and so they need to first build trust in-person.”  

Virtual therapy apps can still be beneficial for people with low-level anxiety, stress or insomnia, and they can also help users become aware of harmful behaviors and obtain a higher sense of well-being. 

Sean Luo, a psychiatrist whose consultancy work focuses on machine learning techniques in mental health technology, says: “This why some of these companies are getting very high valuations. There are a lot of commercialization possibilities.” He adds that from a mental health treatment perspective, a virtual therapy app “isn’t going to solve your problems, because people who are truly ill will by definition require a lot more.”

Relying on digital therapy platforms might also provide a false sense of security for users who actually need more serious mental-health care, and many of these apps are ill-equipped to deal with emergencies like suicide, drug overdoses or the medical consequences of psychiatric illness. “The level of intervention simply isn’t strong enough,” says Luo, “and so these aspects still need to be evaluated by a trained professional.

Ruth Umoh, Diversity and Inclusion Writer, Forbes Staff.

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AI 50 Founders Say This Is What People Get Wrong About Artificial Intelligence

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Forbes’ new list of promising artificial intelligence companies highlights how the technology is creating real value across industries like transportation, healthcare, HR, insurance and finance.

Naturally, the founders of the honoree companies are excited about the technology’s benefits and, in their roles, spend a lot of time thinking and talking about its strengths and limitations. Here’s what they think people get wrong about artificial intelligence.

Affectiva CEO Rana el Kaliouby says she’s too often encountered the idea that AI is “evil.”

“AI—like any technology in history—is neutral,” she says. “It’s what we do with it that counts, so it’s our responsibility, as an AI ecosystem, to drive it in the right direction.” 

Companies need to be aware of how AI could widen bounds of inequality, she adds: “Any AI that is designed to interact with humans—Affectiva’s included—must be evaluated with regards to the ethical and privacy implications of these technologies.”

Sarjoun Skaff, CTO and cofounder of Bossa Nova Robotics, says that the biggest misconception he encounters is that artificial intelligence is actually, well, intelligent. 

“The truth is much more mundane,” he says. “AI is a very good pattern-matching tool. To make it work well, though, scientists need to understand the details of how it internally works and not treat it as an ‘intelligent’ black box. At the end of the day, making good use of great pattern matching still belongs to humans.”

Similarly, Aira cofounder Suman Kanuganti says that the public has “over-inflated expectations” for artificial intelligence.

“Garry Kasparov sums it up nicely: ‘We are in the beginning of MS-DOS and people think we are Windows 10,’” Kanuganti says. “AI realistically is still like a 3-year-old child at this stage. When it works, it feels magical. It does some things well, but there’s still a long way to go.”

So, no, we are nowhere close to “artificial general intelligence,” or AGI, where machines are actually as smart as humans.

“We’re still a long way from AI having the general intelligence of even a flea,” says David Gausebeck.

Despite the tendency to overestimate what artificial intelligence can do, the difficulty of building an effective system is often underestimated, some founders say.

“The systems you need to implement and manage machine learning in production are often much more complex than the algorithms themselves,” says Algorithmia CEO Diego Oppenheimer. “You can’t throw models at a complex business problem and expect returned value. You need to build an ecosystem to manage those models and connect their intelligence to your applications.” 

Put another way, you can’t just “sprinkle on some artificial intelligence like a magic sauce,” says Feedzai CEO Nuno Sebastiao.

One of the most common tropes that a handful of founders brought up was the idea that artificial intelligence is primarily a job killer.

People.ai founder Oleg Rogynskyy says that AI should be seen as a creator of new opportunities instead of a destroyer of jobs.

“In a nutshell, AI does two things: It automates repetitive low-value-add work for humans (which will indeed take low-complexity jobs away), which we think of as ‘Autopilot,’  and it guides people on how to do their work or other activities better (which makes humans more effective at what they do), which we call ‘Copilot,’” he says. “While Autopilot can take simple, repetitive and boring jobs away, Copilot is absolutely the best way to guide, train and educate humans on how to do new things.”

– By Jillian D’Onfro, Forbes

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‘AI Is A Powerful Tool’

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Research forecasts that by 2025, machines will perform more current work tasks than humans. Murat Sonmez, member of the managing board, and Head of the Centre for the WEF Fourth Industrial Revolution Network, expands on the role humans might play.


The Fourth Industrial Revolution (4IR) is at the center of the current economic frontier. In reality, is Africa prepared for such changes?

Moving quickly and being agile are key principles of success in the 4IR. Any country can succeed if they take on this mindset. A few years ago, Rwanda saw the opportunities drones, a 4IR technology, brought to their country.

They helped save over 800 lives by delivering blood to remote villages. To scale this, the government worked with the World Economic Forum’s (WEF) drones’ team to create the world’s first agile airspace regulation. Now, we see countries in Africa and around the world looking to the Rwandan model.

READ MORE | 5 Ways Tech Can Revolutionize Education

What feasible solutions can  artificial intelligence (AI) offer in terms of forecasting natural disasters, droughts food security on the African continent?

AI can help predict diseases, increase agriculture yields and help first responders. It is a powerful tool for governments and businesses, but it needs a lot of data to be effective.

For AI to be all that it can be, countries and companies need to work together to build frameworks for better management and protection of our data and ensure that it is shared and not stored in silos. Data is the oxygen of the (4IR). If countries do not leverage data and have their policies in place, they will be left behind.

There is a growing concern that the 4IR will strip people of jobs, of which there is already a shortage. How true is this?

The world is going through a workplace revolution that will bring a seismic shift in the way humans work alongside machines and algorithms.

Latest research from the WEF forecasts that by 2025, machines will perform more current work tasks than humans, compared to 71% being performed by humans today.

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The rapid evolution of machines and algorithms in the workplace could create 133 million new roles in place of 75 million that will be displaced between now and 2022.

Consumers have real concerns around the potential harm technology can cause in areas such as privacy, misinformation, surveillance, job loss, environmental damage and increased inequality. What ethical precautions are being considered in the robotics space?

Now more than ever, it is important to incorporate ethics into the design, deployment and use of emerging technology. Innovating in the 4IR requires addressing concerns around privacy and data ownership, while attracting the skills and forward-looking thinkers of the future.

There are big challenges and bigger opportunities ahead. We have seen many companies and countries create ethical and human rights-based frameworks. What’s important is they are co-designed with members of both communities along with academia, civil society and start-ups.

A multi-stakeholder approach will result in a more holistic set of guidelines and principles that can be adopted in many different industries and geographies.

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What changes need to take place for the African continent to be on par with global developments, and are there tangible goals set?

The 4IR provides governments the opportunity to be global leaders in shaping the next 20 to 30 years of science and technology. It is important they create an environment where companies can innovate.

The other tenet is to be open to working across borders and learning from each other. The global health industry has access to mountains of data on rare diseases, but it is trapped within countries and sometimes even within the hospital walls.

If we can build trust and find innovative ways to share the data while protecting privacy, we can employ tools like AI to help us cure disease faster. Countries and companies need to have the right governance frameworks and mechanisms in place for these breakthroughs to happen. It is possible to do these things now, but we need to work together to make it happen.

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