What is Element AI and why does it exist?
As investors in innovation, Real Ventures is always searching for the next exponential technology that will have a massive global impact. Artificial Intelligence is obviously one of these revolutionary platforms. AI has already started to transform many aspects of our lives, from how we find products and personalized content with recommendation systems on Amazon, Facebook or Netflix, to creating safer transportation networks with self driving cars. As such, AI presents one of the most significant opportunities for disruption since the advent of the Internet.
Over the past few years the most innovative and successful companies in the world, such as Apple, Google, Amazon, Microsoft, Baidu and Facebook, have all been making significant investments in AI talent and research and have all publicly stated the strategic importance of AI to both their short and long term success. In order to thrive, companies will increasingly need access to strong AI research combined with the right talent to effectively deploy commercial solutions. Unfortunately, the war for AI talent is fierce and startups as well as large companies struggle to compete with the recruiting power and deep pockets of these giants. The non-profit Open AI initiative potentially offers one alternative but has yet to be explicit about how it intends to work with non-YC startups and industry.
As investors in startups and activists in building communities, we believe it is essential to support the creation of a strong AI ecosystem in Canada to level the playing field and help companies leverage AI to succeed. In the same way that Google has Google Brain and DeepMind, Facebook has FAIR, Microsoft has Microsoft AI and Research and YC initiated OpenAI, Canadian companies need privileged access to their own world class, commercially focused AI research lab and AI solutions development partner if they too are to succeed over the long term. Unbeknownst to many, the current AI revolution, powered by Deep Learning, has its roots in Canada, specifically from the cutting edge research programs at the University of Montréal (Yoshua Bengio) and the University of Toronto (Geoff Hinton) where both institutions have over the last decade spawned some of the world’s top AI talent. While Geoff Hinton is now with Google, Yoshua is still in Montréal and runs the largest non-commercial AI lab in the world, the Montreal Institute for Learning Algorithms (MILA). AI runs deep in Canada.
So last fall, with this appreciation of the immense potential for AI, we reached out to a good friend of our firm, Jean-François Gagné. JF had co-founded Planora, a company that Real was fortunate to have invested in and was later acquired by JDA Software, where JF spent three years as Chief Innovation Officer. The timing was perfect, interests were aligned and JF agreed to join as an entrepreneur in residence, with a view to establishing what has since become Element AI. Element AI is a world-class commercially focused research center and incubator connected with academia and focused on developing AI-powered solutions and delivering those solutions to entrepreneurs, startups and large corporations. Together with JF, serial entrepreneur and researcher Nicolas Chapados and world renowned researcher Yoshua Bengio, we are proud to be co-founders of Element AI.
Another reason we are delighted is that Element AI and Real Ventures share similar values: believing in the power of innovation, entrepreneurs and collaborative communities to effect impactful and positive change.
There is no doubt AI will have profound consequences reshaping entire industries and influencing many aspects of society. Element AI will facilitate the transition to an AI-First world, and help build the companies that seek to leverage AI in order to become the global leaders of tomorrow. We are also extremely excited to have Element AI as a partner to help us better support our portfolio companies with their AI needs.
What we look for in the AI space?
Real Ventures is excited about the opportunities that AI offers for both creativity and disruption. We see these opportunities coming from the following three broad categories:
Applied AI companies use AI to optimize, personalize and/or automate existing processes, products and services to make people, businesses and organizations more productive. Every company should be applying AI to as many processes as possible to automate or optimize them. Companies should apply AI to their products and services to personalize the user experience. Today, most companies adopting AI would fit in this category.
AI First companies distinguish themselves in that they develop applications/services/products that are built from the ground up with AI at their core and use every interaction with customers or users to feed and train the AI algorithms and as a result improve the quality of the application/product/service with each and every interaction, enabling new experiences and business models and increasingly stronger competitive moats. Over time, AI First companies can dramatically improve the productivity/experience of their customers/users. For example, an AI First company offering a product that helps physicians better diagnose patients would learn from the physician’s diagnosis helping improve diagnosis over time. AI First solutions will change the way we interact with software/machines from a master-slave relationship (where we tell the machine what to do and the machine executes) to more of a peer-to-peer relationship (where the machine anticipates our needs and makes suggestions as we interact with it) and eventually to a slave-master relationship (where the machine tells us what/when/how to do — based on a series of inputs and desired outcomes). This evolution will undoubtedly result in radically different user experiences and interfaces. We can imagine one day an AI First CRM “agent” that would use dozens of data feeds (CRM, Linkedin, calendar, social media, time of day/week/year, weather, location, email, mood, etc.) to create an optimized target list with personalized message/strategy/communication channel for each target and interaction support in real-time. We believe most products such as CRM, HR, social networks and messaging, e-commerce, marketplaces, etc. that we use today will, in the coming years, be AI First and be dramatically more helpful as a result. We also believe that most of knowledge-based services that we use today such as as accounting, legal, auditing, research, investing, medicine, marketing, merchandising, writing, psychology, etc. will also one day be powered or amplified by AI First companies.
The AI Stack/Machine
As mentioned above, the world’s most dominant companies over the past five years, including Google, Facebook, Amazon, Microsoft, Apple and Baidu, are making massive investments in AI with the ambition of becoming the platform (the Machine) that gets used to run our lives, our businesses and our societies. Companies that are building the different components of the Machine and understand how to best interact with it to create value for themselves and their customers are also of great interest. This includes AI technology such as new frameworks, software infrastructure (distributed, centralized, local/edge, hybrid) required to run AI powered solutions, hardware platforms specialized for AI (distributed, centralized, local/edge, hybrid), connected devices, etc.
If you are building a company that fits into one of these categories, please reach to me at email@example.com.
Who is Real Ventures?
Real Ventures is a venture capital firm that believe in the power of innovation, entrepreneurs and collaborative communities to effect impactful and positive change. We invest in passionate, resourceful, tenacious and mission driven entrepreneurs who seek to change the world by building great companies. These companies use software, connectivity and artificial intelligence (“AI”) to disrupt massive industries or create new experiences for people and organizations.
The firm was founded on two core principles: to serve entrepreneurs and to nurture the communities in which they will thrive. Over the past 9 years, we have backed close to 400 entrepreneurs and 200 companies. We have also invested significantly into projects and events such as the Notman House (where our main office is) the FounderFuel Accelerator, the Innocité MTL Accelerator, StartupFest, Startup Open House and the C100 that have helped Montreal grow into a sustainable startup ecosystem. We are proud to say that much like Silicon Valley, Montréal is home to a welcoming “pay it forward” startup community where people help each other for the greater good. We are also actively involved in the Canadian startup community as a whole, contributing as much as we can, especially in markets like Toronto (where we have an office), Waterloo and Ottawa and look forward to expanding that reach going forward.