Delivering Talent for the AI Revolution
April 27, 2023 – Not a day goes by in recent weeks in which artificial intelligence has not been a part of the global conversation, be it in the headlines or on social media or in the halls of government. With the arrival of ChatGPT late last year, along with competitors Chatsonic, Bing AI Chat, Google Bard, and others, AI has sparked the public’s imagination, stirring debate, controversy, and perhaps most of all, high hopes for how it can make for a better world on a virtually limitless number of fronts. “Through automation, improved data analysis capabilities, and predictive analytics, AI is helping businesses become faster and more efficient while cutting costs,” says Entrepreneur magazine. “With its potential for tremendous growth and its ability to revolutionize existing industries, AI is set to be one of the most important drivers of economic growth not just today but for the foreseeable future.”
In a recent conversation, three leaders who are helping to build the executive teams for the space from Daversa Partners—Lindsay Keith, Paige Kuderka, and Kenny Denton—say the sky’s the limit for the sector and discussed the part they are playing in what has been dubbed the “AI Revolution.” Daversa, which helps build leadership teams for growth and venture-backed companies, works with start-ups and well established companies on the cutting edge of AI and its development, including Scale AI, Brex, Jasper AI, and many others. Partner Lindsay Keith, who co-leads the firm’s product and engineering practice, says that virtually every company the firm talks to is “tripling down” on figuring out how they can improve their product or users’ experience using AI. “Where it really becomes interesting is the question of who are going to be the big winners in the next few years,” she said. “Is it going to be the big incumbent cloud businesses like Google and Microsoft that use AI to enhance their products and convenient features and functionalities? Or is it going to be the vertical players like Panos AI that’s using camera technology and computer vision to help in earlier wildfire detection, or Infinitus that’s leveraging AI to automate administrative calls and tasks within the healthcare industry to help the system focus on positive outcomes and not administrative burden? What we do know is that we expect AI will only continue to grow over the next three to five years with record breaking venture dollars being funneled into this space.”
On the engineering and product side, Ms. Keith says, every candidate that Daversa meets with is attracted to the advancements in AI and is anxious to get their hands on a tough problem to solve using it. “I expect the best talent will race to focus on AI in the next few years, which will only help us advance faster,” she said. “And the last piece is that unlike Web3, where the use cases and problems that technology will solve haven’t been entirely defined yet, there are very clear and immediate advancements being made with AI. And that’s why I think that the space will only really continue to grow as we see more and more breakthroughs.”
Some, however, have a more skeptical outlook on the advancements and widespread adoption of the technology coming out of this space. The tech industry, including some AI-centered businesses, has been facing economic headwinds and regulatory concerns. Partner Paige Kuderka, one of the leaders of Daversa’s emerging industries practice, says that while the economy poses its challenges, things might not be as bad as one might think. “There’s been a lot of negative discussion around the economy lately, and it’s affecting AI to some degree on two fronts,” she said. “The first front is that more entrepreneurs are sitting in this market right now, getting the opportunity to go found new businesses. It’s not as interesting right now to join a Series C or Series D company and build upon what’s already been built. We’re seeing much more interest stirring amongst executives and young founders, who are recognizing the value in creating companies from the early stages. Don’t take it from me, take it from Bill Gurley, who said it’s the best time in 15 years to start a company right now. So I think we’re going to see more entrepreneurs in the market.”
“I also think there’s a few different industries right now that will see an uptick this year or early next due to accelerating advancements in AI” said Ms. Kuderka. “And one of those industries is the semiconductor industry. I would argue that the semiconductor industry growth is the reason why we’ve been able to take some really awesome new strides in artificial intelligence. The access that we have to data now, because of the advancements in semiconductors, is the reason why we’ve seen so many incredible advancements in AI. It’s cyclical. I anticipate that this AI surge will boost the semiconductor sector as well. The need for more memory chips inside of servers will rise, as the need for a lot of memory to run these advanced applications grows. The economy of course affects all of this, but it could be more positive than negative.”
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Added to the mix is that in the days and years ahead artificial intelligence will only continue to evolve to improve the accuracy and efficiency of predictive analytics and decision making, building on its value and attractiveness to users. “It’s fair to say that if you’re building a software company in today’s world, you’re using modern artificial intelligence as a core pillar of your offering.” said Director Kenny Denton, who is entrenched in Daversa’s B2B software practice. “The mass adoption of AI models like OpenAI’s GPT-4 — has unlocked the ability for companies outside of Google, Amazon, and Meta to build real commercial products in virtually every vertical. One of our clients, Scale AI is helping shape the framework of how large language models are used and deployed in real world business applications. It’s exciting to see tangible AI reach the end user, not just the research project inside of a large tech company.
In co-leading Daversa’s emerging industries practice, Ms. Kuderka largely focuses on the firm’s frontier tech work, which requires a strategic approach to help build category creating companies. She has a team of functional specialists, all of whom must be highly creative. “This work really requires deep relationship building, and cross-pollinating talent from analogous experiences or industries, to build up talent in new ones,” she said. “The formation of a specific practice here happened organically over time, as our firm as a whole has always focused on following the smart money and our VC partners, to work with founders and to build companies very early in their lifecycle.”
Hunt Scanlon Ventures Agrees to Make Investment in AiFlow
Hunt Scanlon Ventures, a leading M&A advisory firm focused on the human capital markets, announced that it has participated in a successful funding round for AiFlow, the innovative AI-driven market intelligence platform designed to automate competitor analysis and market research for private equity firms. AiFlow is supported by a heavyweight team of advisors, including Dr. Karthik Narasimhan, one of the original creators of GPT, Princeton Assistant Professor in NLP, and former OpenAI Research Scientist; Suhit Gupta, Chief Information Officer at General Atlantic; Scott A. Scanlon, CEO of Hunt Scanlon Ventures; and Cody Crook, Managing Director at Hunt Scanlon Ventures. Their combined expertise and industry connections are set to drive AiFlow’s growth and expansion.
“AiFlow has created a powerful new solution to automate real-time market intelligence,” said Mr. Scanlon. “The company’s software compiles data that would take an entire team of analysts weeks to gather. For private equity firms seeking a competitive edge, AiFlow delivers.” The investment round will enable AiFlow to bolster its advanced technology currently being piloted by three large-cap private equity firms with combined assets under management (AUM) of $300 billion. Since raising their seed round in conjunction with Y-Combinator Demo Day on April 6, AiFlow has lined up more than 73 private equity firms requesting demos.
“Market research is a complex, expensive, and time-consuming process,” said Mr. Crook. “AiFlow is disrupting this space by automating it with state-of-the-art large language models (LLMs) that create detailed, accurate, and dynamic reports at a fraction of the cost. Nick and Josh have a big opportunity ahead to leverage AiFlow and bring efficiency and scale to the companies they serve.” The funding round comes as private equity firms increasingly seek more efficient and accurate ways to source and analyze information. Global AUM has surged to $9 trillion and is projected to reach $17 trillion by 2027. “AiFlow’s unique value proposition has already captured the attention of key industry players,” said Christopher W. Hunt, co-founder of Hunt Scanlon Ventures. “This latest investment is anticipated to further spotlight the importance of large language models as a new intelligence solution for the private equity sector.”
Ms. Kuderka started her career at Daversa working with a small 30-person company that ultimately became Uber, which as everyone knows has disrupted the taxi and transportation industry. She followed that assignment with searches for companies like Eventbrite, Spotify, Patreon, Planet, Matterport, and many more. Today, most of her work is with AI enabled infrastructure or marketplaces across a variety of industries.
“My favorite place to spend time at the moment is helping put together the building blocks of the defense tech industry,” said Ms. Kuderka. “Historically and in the early phases of our emerging industry practice build, the Pentagon was not ready for this sort of technological innovation that traditionally comes from Silicon Valley. In the past, the process of start-ups trying to work with the Pentagon has been described as like trying to plug in a USB cable to a horse and buggy. That’s history. It’s a whole new ballgame now, and I’ve had the opportunity to work with innovators and founders, like Chris Lynch of Rebellion Defense and Grant Verstandig of Red Cell Partners, who are really modernizing defense tech, the entire landscape, and the entire infrastructure. There’s also an official defense tech cohort now. So I predict we’re going to see a lot more investment in entrepreneurs in defense tech.”
While working in emerging industries is exciting, finding the talent who can bring a unique diversity of thought to both the team and to the industry as a whole, and then convincing that talent to take a leap of faith to join such companies can be a challenge. “It’s hard because the innovation ecosystems in emerging markets are not well developed when we get our hands on them,” said Ms. Kuderka. “And neither is the talent in that particular market. No exec search is created equally. But it does require this creative approach to cross-pollinating talent. And the searches are really not for the faint of heart, but rather for the flexible and determined mind. It requires a much deeper understanding of the client, the industry and the business model. So it is a bit of extra work.”
The Human Touch
Beyond creativity and a deep understanding of complex business models, Ms. Kuderka’s work calls for a personal touch, a human approach to everything that she and her team does, with a focus on relationships. And that’s just the basics. “The thing that all these emerging markets companies have in common across innovation is one, the advancement of semiconductors; it’s allowed for the rise of data, and AI algorithms. And then the second piece is the intellect and grit of the founders and investors I’ve had the pleasure of working with. The candidates have to mirror that. They have to be all in, which requires some really personal introspection, and a personal touch. If you take that approach with everything that you do, and pair that with a passion for your work, and you also mirror the passion and the grit that you’re recruiting for, practically anybody can be successful in emerging industries.”
Serving as one of the leaders in Daversa’s product and engineering practice, Ms. Keith for her part counts one of the more innovative groundbreaking companies, San Francisco-based Scale AI, among her clients. In short, Scale is an AI data platform that is in its growth stage. “The biggest challenge for start-ups is the data piece,” she said. “Not only the amount of data that you get, but once you have that data, how do you organize it in a way that’s digestible, that you can actually apply artificial intelligence to it. Think about the amount of data that a healthcare system or the healthcare industry sits on, for example, without any of the resources or the wherewithal to be able to apply anything meaningful to it. Scale is setting out to solve that problem.”
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Recently, Ms. Keith closed a search for the company’s chief technology and chief product officer. This leader now runs both engineering and product for the company. “I’m biased because I specialize in placing CTOs and CPOs,” said Ms. Keith. “But I truly believe that these are the two most important roles at any software company. Engineering leaders and product leaders are the leaders of what the product is and how well it’s built, period. The best CTOs, and specifically on the engineering side of the house, not only help businesses, especially start-ups, to be savvy when it comes to how to build the product, what technologies are built in-house vs. outsourced, how the architecture roadmap will help power the go-to-market strategy, and making sure that customers understand the short-term and long-term benefits of the product, but they also recruit and they attract and they retain the talent that gets all of this work done. And for many start-ups having a VPE or CTO that can attract and successfully recruit talent is the most important job that that leader will have.”
The Cutting Edge
“Mentoring young stars and helping them grow in their careers will really promote the culture of what that engineering team is and what it is will make others want to join,” said Ms. Keith. “They very much evangelize the problem that the company is solving, and they sell on the outcomes. It’s widely known that engineers love a hard problem to solve. That’s what they are hired to do. That is what they’ve set out wanting their careers to be, and shaped the impact that they want to make. And AI is a perfect platform for many of these leaders that love getting very technical and being on the cutting edge of new technological movements.”
Mr. Denton, meanwhile, has spent the better part of the last decade building a deep network within enterprise software, counting among his long list of clients businesses like Scale, Chronosphere, Brex, Jasper, and Drata. “I’ve always been innately curious and passionate about technology. I’m fortunate that I have a front row seat to see just how fast software is evolving, and we’re only scratching the surface of where AI models will take our industry.”
Mr. Denton says he enjoys working with businesses in every vertical from the bottom of the stack, hardware-tech businesses all the way to the top of the stack, and more end user focused applications. “My broad set of work allows me to see the big picture, and the impact that new technology has on each of our daily lives,” he said. We sit at the intersection of technology and innovation, but the most exciting part is speaking with people who are inspired to build companies that disrupt the status quo. I have a huge appreciation for risk takers who bet on themselves.”
One particular client that Mr. Denton points to is Austin, TX-based Jasper, a generative AI platform for businesses to create original content tailored to their brand or target audience. “That’s what their product does, but their impact within the broader marketing process is much more disruptive and far reaching,” said Mr. Denton. “If you think about the crux of what Jasper is doing, and you think about where marketers spend most of their time, traditionally it’s in the execution phase of a marketing program, and not the ideation phase. Now, what Jasper fundamentally does is unlock the ability to spend more time finding the best idea, or in Jasper’s case, prompting AI, and largely takes the execution out of the hands of the human. This results in more time for research and creativity on the front end, and thus, more thoughtful, concise marketing programs. I think we’re going to begin to see more thoughtful marketing programs and a massive reduction in time spent on tedious manual tasks. I can’t wait to see the new generation of marketing where the idea is king.”
Today, says Mr. Denton, the “GPT-4 cat is out of the bag,” and AI platforms and services like Jasper are here to stay. “We’re seeing this not only in content creation, but all different types of verticals like customer support, coding, and even art production.”
But it’s important to note, says Mr. Denton, that the content that companies like Jasper and others are delivering is only as good as the idea that the human can input. “This is still a frontier technology that has been quickly adopted by the masses,” he said. “Another thing to consider is, given how quickly this capability is maturing and how easy it is to access with an API call, the barrier to adoption is so much lower than it historically is when you have a platform shift. People are still tinkering with all types of applications, and one thing is for sure, we’ll continue seeing rapid improvement.”
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Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media