Tuesday, December 23, 2014

A “Mash-Up” as a Business Model



The term “mash-up” is most commonly used in the context of web development. It happens when content from more than one source is used (via an open API) to create a single new service that shows information in a new way. Mapdango, is a good example in which Official National Park Service (NPS) maps are overlaid on Google Maps.

A “mash-up” can also describe a business model that mashes-up digital / web based content or services with the analog world. There are two smart start ups using this approach to meet some very basic needs: food and shelter.

The food example, “Mary’s Secret Ingredients,” started with a simple love for food and cooking by Mary Pisarkiewicz. She is a St. Louis native who was trained at Parsons The New School for Design and has owned a highly successful marketing and design boutique in NYC for many years.

However cooking is her true passion. A couple of years ago, when she wanted to publish a cookbook, publishing experts told her she did not have any credibility in the food / cooking world. She responded by starting: “Love- The Secret Ingredient” blog. Three years later it now has 29K+ followers.  

Her blog features engaging stories of love, joy, comfort and friendship interspersed with proven, scrumptious, healthy recipes. Mary confides the "secret ingredient" for all this wonderful food is love.

Mary's Secret Ingredients Gift Box.
She then developed the idea for creating a sampling / surprise subscription gift box as way to share the special natural ingredients she uses with fellow food lovers – and in the process a mash-up business was born. 

Mary’s Secret Ingredients (MSI) is a limited edition culinary surprise box containing unique gourmet and artisanal ingredients, along with innovative small kitchen products. Every season, a limited number of themed boxes are filled with surprises to inspire cooking, delivered right to the subscriber’s door. 

One of her most popular creations is Bruce Cost Ginger Ale Spice Cake made with Bruce Cost ginger ale – created in Brooklyn,  with real fresh ginger and pure cane sugar, was part of the Summer MSI 2014 gift box.

The blog’s engagement numbers really tell the story in terms of a low “bounce rate,” tens of thousands page views, numerous comments, and social media “likes” on Facebook and loads of Twitter impressions. Some fans have even taken to making original streamed video reviews of her surprise gift boxes.

MSI is being marketed with a “growth hacker” approach that will use creativity, analytical thinking, and social metrics to sell products and gain exposure. The MSI team is in the process of delivering an optimized mix of owned, earned and paid media to build sales volume. 

Mary, who is in the process of seeking an initial round of seed funding for early 2015, envisions a digital marketplace and a mobile app that will connect the recipes to the marketplace, along with streamed web content. She would also like to see a line of MSI cookware and a Mary’s Marketplace (in brick and mortar) akin to famed NYC venues like Chelsea Market or Eataly

If Mary’s business acumen is like her cooking skills, she is sure to have a recipe for success. 

The shelter example is NYC-based Zenly, co-founded by Isaac Palka and Omer Palka. Zenly is the first online apartment rental marketplace that lets people browse various Manhattan venues with video tours and rent online without a broker.

Before Zenly, a typical Manhattan apartment hunter poured over Craig’s List then made numerous calls often in search of elusive apartments. The alternative was to run around town with a residential real estate broker. With rental apartment vacancy rates now hovering at near all-time lows, the whole process is considered a real nightmare.

For the first time ever, Zenly’s innovative web-based business allows people to see what apartments actually look like without having to run all over town.

Zenly's online apartment listing: An end-to-end solution.
Zenly offers an end-to-end solution, from viewing properties online to scheduling visits to the apartments without a broker, to an online application process on a secure web-based platform. The business offers to greatly reduce the stress normally involved with the apartment search process, making it more “Zen” as it helps drop illusions and allows things to be seen without distortion.

Zenly also employs a pricing model that makes this business quite attractive to prospective customers. The Zenly “no-broker” model charges a 5% fee only one third of the15% traditional Manhattan broker’s fee. 

Underpinning the Zenly brand is a genuine “trust factor” as their listings come directly from property managers, and then Zenly sends “apartment verifiers” out to every listing to review the listing for accuracy and create video tours. Brokers cannot list on Zenly, and listings are not aggregated from other websites. 

I suspect that Zenly may get a call from Douglas Elliman Realty in NYC early in the new year with a big fat acquisition offer. Elliman will likely make this move to simply shut down Zenly, as a defensive measure to protect their massive broker sales force. 

Monday, December 8, 2014

Should we Fear or Embrace Artificial Intelligence?


Elon Musk, the mind behind Tesla Motors, CEO of Space X and a co-founder of Pay Pal generated lots of news starting last August from his comments on Artificial Intelligence, including a comparison to nuclear weapons. 
 
In October the billionaire tech guru warned an MIT audience, "With artificial intelligence we are summoning the demon" He went on to say, "In all those stories where there's the guy with the pentagram and the holy water, it's like yeah he's sure he can control the demon. Didn't work out…"

Adario Strange from Mashable wrote a sensible follow-up article to Musk’s comments that takes into account the perspectives of other leaders in the AI field, and at a recent BlueWater Labs NYC meet-up he declared: “Musk may have ready too much science fiction…”


AI has not escaped the attention of many tech giants with deep pockets. Google paid $ 400 million last January for a British start-up Deep Mind. Indeed, its stated mission is simple if not ambitious: Solve Intelligence. The new company combines the best techniques from machine learning and systems neuroscience to build powerful, general-purpose learning algorithms.

The MIT Technology Review reported that Deep Mind has unveiled a prototype computer that mimics some of the properties of the human brain’s short-term working memory. This apparently solves one of the great challenges of neuroscience to replicate the same kind of memory in silico.


The Deep Mind computer is a type of “neural network” that has been adapted to work with an external memory. The result is a computer that learns as it stores memories which can later be retrieved to perform logical tasks beyond those it has been trained to do. Wow.


The future of the mundane work commute?
Yet there is still confusion about the basic definition of AI. Some think of AI as a machine that learns a specific algorithm, while others talk about autonomous robots or self-driving cars.

The AI discussion has in fact created a whole new vocabulary unto itself. Last month Vanity Fair took on the AI debate in their article entitled “Enthusiasts and Skeptics DebateArtificial Intelligence.” Topics included the evolution from “soft” to “hard” AI, and the debate around “Singularity” - defined as, "A technological singularity is a predicted point in the development of a civilization at which technological progress accelerates beyond the ability of present-day humans to fully comprehend or predict."

An argument has come up between the "Singularitarians" versus their skeptics about the moment when machine intelligence will surpass the human kind. This fascinating, if not somewhat ethereal debate is raging among the "digerati" - the elite of the computer industry and online communities.


The Maginot Line for this inflection point between the opposing camps is simple: A computer will be able to pass for human by 2030. The test for this is known as the “Turing Test” in which an average human interrogator will not have more than a 70% chance of distinguishing a computer from a human after five minutes of questioning. A partial threshold was passed last summer at the Royal Society in London when a computer fooled 10 of 30 judges, or 33%.

Hans Moravec and robots.
But let’s take a moment for a reality check. One of the major stumbling blocks for AI research is called “Moravec’s Paradox,” which says things that are easy for people to do are extremely difficult for computers to do. 

As Moravec observed: "It is comparatively easy to make computers exhibit adult level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility."

This problem does not appear to be deterring the likes of Apple (with Siri) or IBM’s billion-dollar investment in Watson – its cognitive computing platform that uses natural language processing and analytics. Watson processes information akin to how people think, representing a major shift in an organization’s ability to quickly analyze, understand and respond to Big Data. Watson’s ability to answer complex questions posed in natural language with speed, accuracy and confidence is transforming decision-making across a variety of industries.

Frankly I like the pragmatic approach to employing AI that one well-known company is taking: Amazon is currently unleashing a robot army to speed holiday package sorting in their million-square foot order fulfillment center in Tracy, CA. 

"Whether it's consumables or toys or electronics, with 3,500,000 items plus in this building, the odds are, pretty much anything you wanted was likely here," says Dave Clark, Amazon's Senior Vice President of worldwide operations and customer service.

Kiva robots at work at Amazon facility in Tracy, CA.
 At most warehouses, goods are stored on shelves, and it's up to humans to out stock or retrieve stuff. But with the technology that Amazon acquired when it purchased Kiva Systems in March 2012, the goods come to the humans. Orange robots the shape and size of ottomans zip to the shelves, lift up the desired goods and whisk them to stations where workers complete the packing process.

With this system, not only is there no need for warehouse workers to march for miles up and down the aisles collecting orders, there is no need for aisles at all. This means Amazon can squeeze 50% more product into its already massive warehouse.

I am not quite ready to sleep with lights on in fear of Skynet - the self aware evil intelligence system featured in the Terminator franchise. It served as the series main antagonist and succeeded in scaring the daylights out of me starting back in the mid 1980s. 

Wonder about their IPO valuation?
But I do plan to give the whole matter of AI further investigation, all the while hoping that Amazon promptly processes my last minute holiday gift purchases this year, as I will surely wait until December 23rd to place my orders.