Where do advantages lie in university AI spin outs?
For the launch of Founders Factory’s partnership with OxAI, the University of Oxford’s AI Society, I shared my experience with university students about my journey from AI research to the launch of my startup, Cortexica.
Henry Lane Fox, CEO Founders Factory: Can you tell a bit about your research at Imperial [College London]?
Dr Jeffrey Ng: The journey started with a Research Council UK basic technology grant of £4M to increase the competitiveness of British industry. Our particular project was to create a next generation vision system by reverse engineering the human/mammalian visual system. For context, this was early 2002 in full throes of an AI winter and the deep learning breakthroughs in computer vision were 10 years away. We believed it was a good idea to copy this amazing piece of computational machinery that exists inside our skulls, shaped by a million years of evolution to detect food, shelter, predators, etc. So, we reverse engineered the human visual cortex into software.
HLF: How did you/your investor know there was a foundation to build a company on?
JN: For one we had a real-time demonstrator using a GPU (Graphics Processing Unit that powers Xboxes and PS3) that could detect a coke can under all rotations, in light or dark conditions etc. The venture arm of Imperial organised a beauty parade, a.k.a. a workshop, to show off our demonstrator and promise of a technology to experienced entrepreneurs in the internet space. Two of these entrepreneurs decided to get involved, one as a chairman and the other as a non-executive director, which was an early signal for the investor to move forward.
HLF: Did you have a specific idea about the go to market strategy and how many pivots did you do?
JN: We carried out many market analysis sessions with senior corporate and small enterprise executives than surfaced pain-points in the industry. Following on from that, we secured some seed money from our investor to build a scaled-up version of our technology, and proceeded to put aerials on the roof of Imperial College and bring the feeds down into the data centre. Within nine months, the lure of the smart phone was too tempting to resist and we flipped the model from monitoring live video streams for logos to matching a single image against a database of millions. We pivoted through many categories of images from wine labels, paintings, cars, fashion, etc.
HLF: Would you discourage university spinouts that are great technology looking for problems?
JN: Quite the opposite. Several years of research at world-renowned British universities bring a level of credibility and depth to the technology in conversations with investors and clients. They also bring a level of self-confidence going into benchmarking and tech comparison exercises. At the same time, it’s tempting to see nails everywhere when you have a big hammer. I would advise not straying too far from the basics: the size of the market opportunity and the unfair advantage provided by your tech.
HLF: Would you go for big corporates, e.g. silicon-valley internet players, with their long sales cycles and how long did it take you? How much due diligence and change did it involve and how much resources did it consume internally?
JN: Definitely, it was amazing to go through the technology sourcing and due diligence process of a big tier-1 player. B2B business cycles are traditionally long but this one involved a live real-time shoot-out with five other image recognition providers and several months of backend infrastructure design and re-architecting. Not to mention, multiple flights from London to Silicon Valley, many late night calls crossing eight time zones. And the prize at the end of the rainbow was a big contract.
HLF: What are the lessons that you learnt along the way?
JN: It’s good to keep an eye on potential exits but I would say not worrying about it and instead focussing on building great products and having a good time with people you want to work with.
HLF: Would you recommend the people in the room to do it?
JN: Definitely, there is no faster way to learn a lot of real-world skills such as fund-raising, running a business, tech development and managing people than to “do” a startup. This rollercoaster has very tall highs and deep lows but I would argue it is a lot more satisfying than years of academic research on one problem.
If you are an early stage startup and want to know more about the Founders Factory accelerator programme, visit: https://foundersfactory.com/accelerator/