AI is a Hammer That Can Be Applied to Anything

At Lighstpeed, Adam Goldberg invests primarily in enterprise infrastructure, big data/analytics, datacenter technologies, IIoT, frontier technologies, and AI. At age 13, Adam enrolled as a full-time student at UC Berkeley, where he studied pure and applied mathematics and conducted research in number theory and machine learning.

Sam: Adam! It’s awesome to get the chance to speak with you. Can you quickly introduce yourself for the people unfamiliar with your work?

Adam: Hey, Sam. Sure. I’m a partner at Lightspeed, and I came here through Rubrik - a cloud data management company in our portfolio. Two of my current investments are in an analytics company called Dremio and a company called Serverless, which offers developers an open source framework that allows them to more easily write applications for platforms like AWS Lambda. I’ve also made investments in two AI companies. One is in the enterprise space. One is in the healthcare space. Both are currently in stealth. I’ve recently invested in Vector Space Systems too!

Sam: Thanks for the background, Adam. What do you make of the confusion and excitement around AI companies today?

Adam: If you organized a group of people in Silicon Valley and asked them to give you an example of an AI company, most would have a hard time.

Any team of founders who wanta to start an e-commerce or medtech company can leverage AI techniques out of the box. 

Most would even struggle to explain what artificial intelligence is. ‘Is it anything that a computer is better than a human at?’ In this context, truthfully, it’s really more of a marketing question then a business question. There are a lot of interesting things going on in terms of vertical (or “invisible”) AI at the moment.

Let’s take Nest for example. When you think of an AI company, you probably don’t think of Nest. In my eyes, that’s exactly what it is. It’s a thermostat that learns from way you use it, and automates many functions (like setting the temperature), so you don’t have to touch it. Some people may even think of deep tech tools like deeplearning4j and TensorFlow when they hear AI companies - but we are already far downstream of that.

As new technologies develop, the early value lies in the infrastructural layer first. Because of the speed at which machine learning has progressed, we are already seeing many examples of the technology creating value at the application layer.

Any team of founders that wants to start an e-commerce or medtech company can leverage AI techniques out of the box. 

Sam: Machine learning is all the rage these days. Are companies taking too many liberties with communications surrounding it?

Adam: It’s very much a function of enterprise marketing.

As consumers, we’re increasingly exposed to terms like AI, machine learning, and neural networks. Before long, it will become so mainstream, and the the buying audience will become so numb to it, that marketers will need to find new ways to make their products stand out from competition.

We’re currently at an inflection point and in a hype cycle where it makes sense for marketers to talk about it - but this isn’t the first time this has happened. Mobility used to be the differentiator that companies would tout.

Now it’s taken for granted. It’s no longer differentiation, it’s just table stakes. It’s only additive. You lose if you’re not using it, but don’t win if you do.

Sam: So then, what will be the truly unique characteristics of these vertical AI companies that set one apart from another?

Adam: Today’s founders are best off building a full stack company that is AI-based. But at the end of the day, the differentiating factor is the problem around which a company is built. The winners will be the companies that take a full stack approach from marketing to engineering.

While the rest of the ecosystem is caught up in AI hype, the real winners will be the ones developing the best understanding of market demands, and delivering the real business value that meets it.

In Nest’s case, it wasn’t building an AI system that you could integrate into an existing thermostat. It was about solving the energy management and temperature change problems. It’s not a matter of putting intelligent data into existing appliances - it’s about creating your own platforms where you can tip the scales and win.

If you’re setting out to create a robot that makes food, you’d be better off building a new restaurant chain than selling the technology to McDonald’s. While the rest of the ecosystem is caught up in AI hype, the real winners will be the ones developing the best understanding of market demands, and delivering the real business value that meets it. That is how founders should position their companies, because that is what will ultimately make them stand out.

Sam: What are the biggest changes to businesses that you envision happening as a result of these AI systems?

Adam: Let’s zoom out a little bit. What is happening around the economy and world at large? Many of the thematic discussions we have are revisionist - the sharing economy and the future of work are some examples that come to mind.

In reality, Uber and Lyft disrupted the taxi business. Airbnb disrupted the hotel business. So the question to ask is, what industries are most ripe for disruption?

To me it feels like AI is a hammer that can be applied to anything. I would advise founders to take an industry-centric approach.

It’s fathomable that the people curing cancer will be engineers with an AI and ML skillset. It will also be AI and ML that’s behind much of the technology that takes us to Mars and beyond.

Additive manufacturing, Space, Quantum computing - AI will play a role in all of these things. It’s the most exciting time ever to be an AI or machine learning engineer, because it’s a skillset that lets you do anything.

It’s fathomable that the people curing cancer will be engineers with an AI and ML skillset. It will also be AI and ML that’s behind much of the technology that takes us to Mars and beyond.

It’s one of the most exciting things in general to be involved in. AI is guaranteed a seat at the table no matter what happens. We’re at this really exciting inflection point in that AI is something that is pretty well understood by the public, entrepreneurs, and business users - and all of their expectations will drive a lot of innovation.

Sam: Adam, this was great. Thanks for your time!

Adam: My pleasure. Thanks, Sam.

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