by Mark W. Bailey and Sam Fort, DFJ Growth Partners
DFJ Growth is pleased and excited to announce our investment in DataRobot, an emerging leader in automated machine learning for predictive modeling. This investment is part of our ongoing investment thesis in artificial intelligence (AI) and our growing portfolio of AI-powered companies.
The AI Revolution
Recent years have seen the rapid and inexorable digitization of the world. More and more of our collective time, be it work, commerce, chores or play, is spent in the digital world. As more and more of our society is automated and online, this is creating enormous amounts of digital data. Much of this is behavioral data which is often considered to be the most reliable and desirable data for modeling and predictions.
The race is on to apply advanced analytics to all of this rich digital data. Today’s most cutting-edge analytics utilize advancements in AI, and its sub-fields of Machine Learning (ML) and Deep Learning (DL). And all of these technologies are enabled by the enormous compute resources of the cloud in conjunction with specially designed processors optimized for AI-driven analysis. Businesses around the world and across every industry can now use these tools to explore how to better utilize their rapidly growing stores of digital data to improve customer experience, identify operational efficiencies and manage their workforce more effectively.
The Adoption of AI
While there is a great deal of interest and enthusiasm for applying AI, there are many challenges to organizational adoption:
Skills gap — Demand for skilled data scientists well outstrips supply.
Rapidly evolving technology — The field is evolving quickly, making it difficult to keep pace.
Analytics without domain expertise fails — Success requires a fusion of the two.
Knowing where to start — Where can you build early competence and success?
We see some of the more successful organizations using the following tactics to drive adoption of AI:
- Purchase a third-party solution powered by AI — Leverage the AI expertise of other vendors. Examples of these solutions from our portfolio include Cylance (AI powered next-gen antivirus) and Sumo Logic (ML applied to log file analytics).
- Jumpstart your internal efforts with automation — This is where DataRobot comes in. For internal projects that might benefit from more sophisticated predictive modeling and analytics, DataRobot can accelerate these efforts by automating the process.
DataRobot automates the process of identifying which ML algorithms models will provide the best predictions for your business. The DataRobot product also helps users explain to others the essential elements of the model; promoting an understanding of the predictions helps build support and trust across the organization. Finally, DataRobot facilitates the deployment, utilization, and management of models.
Importance of Driving Business Value
When embarking on the journey to harness the power of AI in your business, it is important to remember that the point of analytics is to drive business value. The best way to select initial projects is to assess where superior analytics can drive near-term value. This assessment sets the organization up for early wins, positive ROI on the investment in technology, time and people, and builds enthusiasm for becoming a more data-driven business.
The first steps might well include taking inventory of the data sources that are now available inside your business. Be prepared to be surprised. If you do a thorough search, the length of the list and the amount of data collected may astound you. With this data inventory in hand, common areas for identifying opportunities to drive business value through predictive analytics include the following:
Operational improvements — Business processes that require forecasting and estimates can often identify efficiencies with the application of advanced analytics.
Revenue optimization — This can range from marketing program allocations to pricing optimization.
Customer success and maximizing value delivered — This is the heart of any business. Is your business leveraging all of the digital touchpoints with your customers to better understand and meet their needs today and in the future?
The Future of AI Driven Enterprises
Over the past decade, the wide availability of web search and smartphones has made us all researchers. We all expect more data when making decisions.
In the enterprise, this has raised the bar for the amount of data that is expected when making decisions. Institutions of all sizes and in every part of the world will increasingly be leveraging AI-powered decision making, therefore operating on ever-growing pools of data. This increased leveraging is likely to take the form of both fully automated processes, as well as decision support for humans.
Just as the world powers are in a race to develop their AI capabilities, we expect that the next frontier of competition for businesses around the world will be harnessing the power of AI. DataRobot offers companies a jumpstart in this critical race, and we are thrilled to partner with Jeremy Achin, Tom de Godoy, and the rest of the DataRobot team on their next stage of growth.