Transcript:

 

Bradley Metrock: [00:00:12] Hi and welcome back to the Alexa Podcast, Episode 10. This is June 2018. My name is Bradley Metrock. I'm CEO of a company called Score Publishing based here in Nashville, Tennessee. I'm joined by my cohost Kevin Old Kevin, Say hello.

 

Kevin Old: [00:00:30] Hello Bradley.

 

Bradley Metrock: [00:00:32] Kevin nice to be back in the saddle with you, this is fun.

 

Kevin Old: [00:00:35] Absolutely, it's great to be back and excited to hear what's going on with our guests today.

 

Bradley Metrock: [00:00:41] We've got two pretty special guests especially given the namesake of this show. We've got Aviel Ginzberg, who is the head of the Amazon Alexa TechStars incubator. Aviel, did I get that right?

 

Aviel Ginzberg: [00:00:54] Not quite, The Alexa Accelerator powered by TechStars.

 

Bradley Metrock: [00:00:58] Cool and share with us right here at the top, what you do for that program and what that program tries to accomplish.

 

Aviel Ginzberg: [00:01:09] Awesome. I am the TechStars managing director of the program TechStars. We are the worldwide network that helps entrepreneurs succeed in one of the ways we do that is through our accelerators and this program specifically is an accelerator that we run with the Amazon Alexa Fund. It's a three-month program where we work with companies, that are in what we kind of view as the seed phase of the startup lifecycle, and these are all companies that are doing really interesting and novel things in voice and things that are especially relevant to Alexa.

 

Aviel Ginzberg: [00:01:46] My job is to work with the Alexa Fund to select the companies and then I'm hands on day in and day out during the three months of the program working super closely with all those companies and helping shepherd them towards Demo Day. And then I stay very actively involved with the companies for pretty much as long as they'll have me after the program finishes.

 

Bradley Metrock: [00:02:08] Cool and so y'all have done your first crop of companies right and you're moving on and you're selecting the second currently?

 

Aviel Ginzberg: [00:02:14] That's correct. We ran the first year of the program last July through October. We are actually about to kick off this next year's program this July and will once again run July through October. And you know we are right now in that process of getting everything up and going. You keep your eye out for us to announce the participants and all that in July when the program begins.

 

Bradley Metrock: [00:02:39] Thank you for joining us. We also have joining us Rodrigo Prudencio from the Alexa Fund. Rodrigo, did I pronounce that right?

 

Rodrigo Prudencio: [00:02:46] You got it right on. Thank you.

 

Bradley Metrock: [00:02:48] So share with us a little bit about what you do for the Alexa Fund and what the Alexa Fund is.

 

Rodrigo Prudencio: [00:02:55] Great. Yes. Thanks Bradley and hello Kevin. The Alexa Fund was formed in 2015 by Amazon as its first venture capital program and, as the name says, to back companies that are supporting companies that are leading the way on building compelling experiences, applications, and even integrating Alexa into their own devices. We back these companies with investment and work with them closely following the investments to make sure that the integrations that they are proposing that we've found exciting and interesting are all successful on Alexa.

 

Rodrigo Prudencio: [00:03:34] I am one of three team members that focus on recruiting companies, building our deal flow and ultimately making investment decisions. And then we have people on our team that support the companies afterwards in terms of those connection points into different and specific teams within the Alexa organization.

 

Bradley Metrock: [00:03:56] Rodrigo, thank you for joining us as well.

 

Rodrigo Prudencio: [00:03:58] It's a pleasure.

 

Bradley Metrock: [00:03:59] So I want to start by asking y'all and sort of getting from both of your vantage points your perspective on how you view the success of the program for the first crop of companies. It's not a hard concept to understand, you've got these companies that are going to be doing something with Amazon's Alexa technology, they're going to be working with voice-first parameters. They work with Amazon, they work with you know through the TechStars program and the Alexa Funds right there looking to make investments in a strategic way. There's a lot of different ways you could possibly view success of the program. Share with us, and Aviel I'll start with you and then Rodrigo I'll go to you, share with us how you measure the success of the program and share with us how successful by those metrics you view the first crop of companies that have come through.

 

Aviel Ginzberg: [00:04:55] Sure, happy to. First off I just want to say how much I appreciate being on a podcast with someone that says y'all. I live in the Pacific Northwest, even though I went to Vanderbilt, I lived in the south for a while. I still say y'all the time and people are like what are you doing? I feel right at home.

 

Aviel Ginzberg: [00:05:12] I think there's a couple ways that we look at it and I think to take a step back there you know things like accelerator are always tricky in that what we're looking to do here is support great companies, and it can take a long time for a company to truly grow into that and come to fruition. There's a joke in the investment world that you don't know if you're a good or bad investor for 10 years. So you spend the first ten years making decisions and you really have no idea if you're good or bad. But there's a couple of ways from the TechStars side that we came into this program to look at success, and I'd say one of those is you look at what is the overall reception in the wider voice ecosystem of the companies that we've brought into the program. So are they establishing themselves as thought leaders within the space as companies that are having a meaningful impact? I can think about you know companies like Pulse Labs who are helping power everything from a user testing side of the world, to companies like Novel Effect which you know find themselves in the press all the time as like a really novel, pun intended, use of voice and voice experience. So it's definitely one angle. Another that was super important to me specifically was to have those companies find success, collaborating with folks inside of the Alexa org, so for them to really find who are those teams who are those stakeholders and for them to do something truly unique with Amazon, which again we saw happened a couple times within the program, so that was a great success.

 

Aviel Ginzberg: [00:06:48] And I think you know purely from a metric standpoint we of course look at...you know it takes a long time to know how great is a business going to be in terms of the revenue they get to generate, customers they're going have, that takes time. But you know investment is obviously a great avenue to see, okay are there folks externally who believe that there is something super exciting about what these companies have done? And when we look at the success of our program there is historical data we have far outperformed other programs in terms of the external validation through funding that these companies have gotten, and we've had a couple really exciting venture led rounds announced thus far, and we have a couple more that will be coming out in the next several months.

 

Aviel Ginzberg: [00:07:32] So with all that I feel like from the TechStars side that we delivered a ton of value to the founders, we really helped deliver a bunch of value into the voice ecosystem at large, and got a lot of external validation from investors in these companies really were ones that were doing something that was going to have a large impact in the future.

 

Rodrigo Prudencio: [00:07:53] One of the reasons why this program was successful in the first year is because a lot of the goals that we had with the program align very well with [00:08:01] how taxers runs [1.5] over all its accelerators. So the Alexa Fund similarly set out to make sure that not only were we identifying great founders who were resilient and capable of adapting throughout the program, because at the end of the day these are really still very early stage companies, they're building their businesses as much as they are building their Alexa connections and their Alexa [00:08:26] remains. [0.3] So engaging with fantastic founders who work really hard during the program showed that the capability and the mettle to build their businesses over time, that's reflective of the kind of entrepreneur we like to back overall with the Alexa Fund.

 

Rodrigo Prudencio: [00:08:44] Many of the points that Aviel mentioned and the only other one I would mention and add would be that engagement level from our Alexa mentors. You know Amazon is a customer obsessed company, and in this case the customers or the startups, and what's important about the way that our mentors connect with the startups is ultimately these startup companies that are building Alexa experiences are going to be then touching our customer, the Alexa users, and so the ability for our mentors to really engage, you know sometimes some of these mentors are folks who work internally on software and capabilities on Alexa for them to step out of those roles, mentor a company that is ultimate customer [00:09:23] they seem [0.5] really enriches their experience of thinking about the customer and thinking back from the experience that the customer might have through one of our accelerator companies. And that really is a helpful engagement and a great building experience fo our mentors as well.

 

Rodrigo Prudencio: [00:09:39] So we were very happy with the engagement that we got from our internal mentors. We get great support from the Seattle community of mentors that also supported these companies. And what was great as well is that all of the companies in the program last year showed a little bit of different capabilities that were available on an Alexa, offered a unique paths to engaging with different APIs and different aspects of Alexa that again were meant to delight customers. And that again, it shows the breadth of capabilities on Alexa, the many things that are Alexa is capable of doing, and the many ways that startups can build on that.

 

Bradley Metrock: [00:10:16] That's great and I'm glad to hear Novel Effect come up. Novel Effect was the first company that we've lined up to speak at Digital Book World, first group that we engaged for that. Just fascinated by the whole premise of it, and love that it came out of this sort of farm system you know that Amazon has cultivated. I just I find it fascinating. I think it's awesome. And of course Novel Effect will be at the Alexa Conference presented by VoiceFirst.FM, as well. The thing I love about Novel Effect, probably more than anything, is that their story tracks so similarly to voice technology itself. I've had conversations with publishers here in Nashville and elsewhere about Novel Effect, this is early on in our promotion of Digital Book World, saying that they didn't get it. They thought, "oh okay that's fantastic you got this gimmicky thing here" and then over time all of a sudden you know there's been the Shark Tank and exposure for Novel Effect. There's been different things. And finally now people are understanding that Novel Effect is not just a gimmick, it's not just this fad sort of thing. It is for real and can add demonstrably value in a number of different sectors in different ways and of course education sort of the first stab at that.

 

Bradley Metrock: [00:11:34] I think voice has followed the same sort of trajectory where if people wanted to call it a gimmick, they wanted to call it a fad, they wanted to put it in the box, and it just wouldn't go there. It's too big, it's too powerful, it's too value added and so I see a lot of parallels and I want to ask both of you, and Aviel you spoke to Novel effect, but how gratifying has it been. I mean you sort of spoke it, you say that it's unusual for some of the successes that you've had with your program to have already come to fruition. How gratifying has it been to see what Novel Effect specifically has managed to do in such a short amount of time.

 

Aviel Ginzberg: [00:12:12] I just feel lucky that we get to work with companies like them. You know going back to the first in person meeting we had after they had applied to the program. It was our last interview of the day, I think it was like 5:30 when that interview started. And you know Matt comes in and we'd obviously you know were aware of what they were working on, but when he gave us a live demo and showed us some things that were you know were coming down the pike, it was probably my first voice moment where I was like oh wow this really is something you know magical. This isn't just cool, or I can see how this is cool. You kind of get like the hairs stand up on your arm a little bit, you're like there's something that is special here and obviously you know the team themselves have had that to them as well.

 

Aviel Ginzberg: [00:12:59] But to your point about sort of that natural pass, it was also so obvious to look at the basic incarnation of what they were working on back then with the super buggy, early mobile app. But just that what they had latched onto, and where they could take that, and how that was going to become so much more powerful through the proliferation of you know voice assistants and voice-enabled speakers and things like that. I got home after that meeting, I immediately installed the application and started reading a book to my son, who at that point was only like 7 or 8 months old so he was like what are you doing, like he didn't understand what was going on at all, but the fact that I was enjoying it too just had me realizing we were we were working with something special here.

 

Rodrigo Prudencio: [00:13:47] What's [00:13:48] in it to [0.9] look out with Novel Effect but really across other companies in the Accelerator or the Alexa Fund portfolio is that we again get a chance to work with companies who come forward and help us imagine the future. That the entire way that we've built Alexa with its third party APIs, we want to present a [00:14:11] course and [0.5] set of capabilities that ultimately allow outside companies to build experiences and connection points to what Alexa can do. But after that it's really up to the portfolio companies, or to these companies and the founders, to paint a picture of what the future of voice can be, and a program like the accelerator that we run with TechStars, or the companies that we engage with at the Alexa Fund that some of them are or most of them end up being a little bit past this accelerator stage but still bring that that same creativity. It is a really exciting way to engage these founders in imagining the future. We at Amazon we like to invent the future, but in this case we also like to empower the entrepreneurs who are inventing the future with Alexa.

 

Kevin Old: [00:15:01] Hey guys I'm going to jump in here. I want to shift gears a little bit. I am interested in knowing a little bit about the review process that you - that y'all - at the Alexa Accelerator go through when you're evaluating a company into the program.

 

Aviel Ginzberg: [00:15:18] You know from a process standnpoint it begins with... we open up applications, we have you know tons of folks apply. We travel around the world taking in-person meetings, giving talks, and we also you know just just have tons of conversations. I mean many hundreds of conversations. If you could see my calendar during the first several months after we announced the program every year, you would certainly not envy me. But what's also amazing about that is sort of get to drink from the fire hose of the entrepreneurial hive mind of what early stage folks are thinking about with voice, which is an amazing experience.

 

Aviel Ginzberg: [00:15:59] So in terms of what we actually look for in the company is, we very much biased towards very strong founding teams, very resilient teams. Rodriguez spoke to this earlier. You know it's really early. You have to be adaptable, you have to have the ability to move quickly and that means you're having a horse power on your team to be able to accomplish things really quickly, not having the same skill set where you need to hire someone, not come in with a really big unknown. Like we love those teams that just take initiative and have the ability to get stuff done. And we also really love teams that are doing something in voice that aren't exactly what we're even thinking. Like a lot of folks will ask me "well what ideas you're looking for" or "what areas are you looking for." And in my mind that's not the point. What I love to see is companies who are are looking at the ecosystem with their own unique point of view and saying this is a thing that should exist in the world. And I especially love companies that are thinking about things there where it may not yet even be possible. And those are some of the best conversations that we have. As we start to figure out hey it's part of the accelerator. How can we set you up with folks inside the organization? How do we get folks inside of Alexa really excited? This happens quite often to work really close with you, to bring a product to market that you know may not even be possible to be shipped today. So we find that overlap of just like a really strong team who is the right team for the area that they're trying to tackle. And they're thinking about the future in a unique way. And we know we can help them. That really becomes a super super sweet spot, and it you know leads to that to the best companies that we take.

 

Rodrigo Prudencio: [00:17:41] So a little bit more about how we we go deeper with some of these companies. We will engage in, typically the first conversations are ones that Aviel and others from TechStars are having, as well as us from the Alexa Fund, are having getting to know these entrepreneurs. Hearing them pitch. That we start with short 25 minute meetings. The ones that sort of passed through the filters, getting to next round interviews, and we go longer. At some point we engage specific experts inside the Alexa organization to ask next level questions, and it's those kinds of interviews have two purposes to them. One is we can go a little bit deeper on the technical capabilities that these companies are proposing, or the technical capabilities that companies have, and the ways that they want to interface with Alexa, and we get an ability to dig deeper on that and the companies oftentimes walk away learning more from those engagements that then improve their own voice capabilities inside their company.

 

Rodrigo Prudencio: [00:18:44] And the second is, it's a great way for us to start to identify potential mentors that can work with these companies on the way. So it's a very similar program or approach that we take with our Alexa Fund investments where when we are diligencing companies, we ultimately pull in resources experts inside of the Alexa organization depending on the specific kind of company that we are assessing and what they are proposing to do with with Alexa and how they're proposing to interface or build a voice capability. It's just that in this case we have a much more compacted period of time and a lot more companies to assess you know in that short period of time. So, but each one of them get a deep look from our internal teams, and that means that when we announced the class we launch with a lot of confidence that these companies are going to be something special.

 

Kevin Old: [00:19:37] That's great to hear. I think we all want to have, a least myself, I want to have the idea like Novel Effect and I know we've talked about that quite a bit here already but. I really think that when everyone approach, everyone I've come in contact with, who learns about what Novel Effect is doing, they're like "oh wow that is amazing how how did I not see that?" And I think it's great to hear your process for evaluating these companies and that you're looking not only for a good idea if it's there, or a great use case for the technology that you didn't see, but also the team and the support that goes into making that happen from an execution standpoint. As a follow up is there is there anything you can share with us about maybe a success from last year's Excellorator cohort potentially building new functionality. Was there something from that that you guys could share with us that your team was able to to add to the Alexa voice service or skills kit or something like that. Was there any feedback that you could - is there an example you can share with us?

 

[00:20:46] The last years quote of any where that advanced our internal work but I can certainly tell you that our portfolio overall provides a lot of opportunities for us to learn about how Alexa customers Alexa users are using. Companies are using technology in their homes and in their increasingly new workplaces with what we're doing with Alexa for business. A good example of this is again it's outside of the accelerator class.

 

[00:21:13] But when we invested with Ngobi this is a smart thermostat that ultimately integrated the Alexa voice service into their next generation thermostat. We learned a lot about how how to better regulate the Wakey of multiple Alexa devices in a house because you had a thermostat now in the room that had Alexa voice service plus somebody had an Alexa device in their living room that wasn't too far away from that thermostat. We wanted to make sure that when somebody was speaking to the thermostat that the thermostat woke up and when someone was speaking to their echo device the Echo device woke up and answered the question or followed the command. So we learn from from our companies who put devices in the field and we learn a lot from those engagements. Last year I'd say we had more combat and he is building new capabilities but they were building off of awful ape's guys that were emerging for Alexa and so we'll continue to see new experiences there. And I think over time and these companies do they become part of the Alexa fund and they continue to get the support we provide to all of our most investment companies. We'll learn from them how their customers are using the product and try to try to use that learning to always be Alexa experience. I think just the only thing that I would add is just to reiterate the longer term relationship that comes out of all of that which is that companies are getting to work you know initially for Hands-On With the organization.

 

[00:22:44] So in some cases you know there are there are no API and things that are in flight that you know are in early testing and things like that and to be able to work closely with the right people and to be able to see where things are going really helps these companies help shape where that goes as well as help shape their own roadmaps based off of what things they think we'll be able to leverage in the future. And that's something that you know we've seen post accelerator maybe even more than during the program. Companies continue to do that and to continue to leverage those relationships. So I think that not too long didn't read. There it is. Stay tuned for that day's types of things out of the accelerator the blog posts that I've read on the Alexa blog about the accelerator really mentioned startups but do you guys engage with enterprises that may have a great thing that they want to execute but they their developers aren't able to have that functionality. Is that a possibility that you guys explore as part of the accelerator the accelerator is very much for startups. But there are a lot of enterprises and larger companies that are really interested in voice that we end up having conversations with and that them as being you know mentors or value adds to the companies that we have in the accelerator because a lot of times they could end up being lighthouse customers for some of our companies are more collaborators or things like that. So we don't you know take them into the program.

 

[00:24:15] But we connect them with our companies and that's you know again another value that our companies get out of this is that we have faced coming out of the TechStars side and now in the Alexa fun side as well and we're able to do that matchmaking and we've seen out works super well I think like you know last year specifically you don't want to keep mentioning the exact same companies but I will because they're the ones that have the most public information about them. But you know with with publisher interest the thing is a novel fact as well as with tons of large enterprises looking to build voice applications having whole slides. You know there's a lot of how those relationships came to be were folks coming in saying hey how do we get involved in how they get involved as you know helping mentor and collaborate with those companies finding those opportunities. And we have an entire group inside of Alexa that does business development work and does outreach with large enterprises that are either building a voice experience or skill. We help them with that and again pulse labs for instance has become part and parcel of our process of testing skills that we assist large companies bill. You know we used to used to test those skills as Amazon employees we used to walk in two lobbies and be asked to test a skill which is great but it's not the most scientific way it seems skill with with a general public user and also Lapps has become the de facto way that we now test skills for customers of Alexa and in brands that are building on top of Alexa and that is the rate adding envelopment. And again another proof point of how the accelerator and the Alexa front companies add value to the overall Alexa experience. Just to wrap up with one last question and I would be remiss also not to mention sensible object.

 

[00:26:01] We did a great episode of voice-first roundtable with them last year. Love what Alex and that team are doing as well. That was another company that came out of that first crop of the accelerator that we're discussing right now. My last question for both of you all is that and really Yahl are you calling out that earlier. You know you've got to be who you are. You know I feel that strongly like I could say you know I hope you all are enjoying this podcast. But that's not me. Similarly Amazon DNA is all about voice and vote. It's coming from the top and it is really really fun to watch. Amazon as a total outside observer like I am we are we all are what Amazon is doing. And I feel strongly that it's such a shame that we lost Steve Jobs but we still have Jeff Bezos. And you know I feel both those two guys are on par with one another just visionary leaders. And you know Apple lost Steve Jobs and the results have been visible and they've been obvious. And you know Bezos has been drive voice and it's just been in your DNA and it is. I want to say articulate explicitly on the show. I've said it many many times on other VoiceFirst.FM shows. It is so great that Amazon is leading the market place and leading the world with voice-first technology and the way that it is spending the money with the Alexa. It's investing in partnerships like with TechStars it's investing in the evangelism team that's all over the world. It is very rapidly entering new markets at breakneck speed.

 

[00:27:51] I mean it literally takes a news program like This Week In Voice to keep up with things and even then it's difficult. So y'all give so much credit for what you're doing. And I wanted to make sure that that is explicitly stated on this show okay this is a rare opportunity to do that. And I wanted to say that from both the OSS perspective. Thanks. Thanks Bradley Metrock very kind and we appreciate the support and also the way that you engage your listeners in all these topics on unalike. I appreciate that we are we are. We certainly appreciate that. From your perspective being at the center of the storm so to speak just give me one example. Me and Kevin in the audience. One example of someone or some company that's not you not any company you evaluated from the accelerator standpoint not anybody has a partner or someone that you work with but somebody external that's doing something inv. or some other group or entity that maybe y'all from your perspective in Amazon are working with Amazon have look at and say that's awesome. I really like that or something some other aspect of this voice-first revolution has come about that you have noticed and appreciated. So I don't think I can call out a specific company but I'll give an example of an area that oh really excites us that we really like love to engage companies on but oftentimes can't really work with them or don't get a chance to work with them even in an investment capacity or in NewLink either from the Alexa under the accelerator. Those are companies that are really continuing to push that poor science of voice.

 

[00:29:37] We have a we have a strong team inside of Amazon that's doing that in and of itself. And we're always keeping an eye on really interesting companies and founders and university research projects that are continuing to push the boundaries and capabilities of either corduroys technology whether that's automatic speech recognition Natural Language Understanding science or even the technology that goes into things like microphones. Sometimes we get a chance of any investments that be need in a university of Washington and we ended up actually selling to actually ended up being sold. I do know were always making looking for opportunities to invest in surf or science type type of companies. It's just that it's one of these classic things with an operating system that's where you're building something yourself and sometimes it's not a great fit to be able to invest in companies so we find other ways to engage with them. We have a university fellowship program that's one of our best ways to engage with scientists and researchers that we sponsor. Who ultimately teach students about voice technology but are also doing their own research it's a great way for us to stay close and sponsor their work. The Accelerators another place where we can see really early stage companies come forward and occasionally engage them with our with our science team. But it's an area that we love seeing companies working on on the outside because it's really nice that there's so much more to do and in voice and voice technology to see whether the world will catch up to some of these companies that are really pushing the boundaries.

 

[00:31:17] And then I think we'll all move upward the stack a little bit there then you know probably call out you know companies like pull string and like a Sess to we're you know in that first wave of trying to get brands and larger enterprises into the world of conversation and as well as with the rise of voice over the past several years have realized that voice and send a text message are not the same experience and really helping push the thought leadership in terms of how you need to think differently for voice experiences. And then building the tools to bring brands and those large companies to the voice ecosystem holstering went so far as to completely pivot their product shut down their original product and go all in on voice mail. You know the amount of respect they have for for a company doing that is just immense for for this ecosystem to really flourish. It can't just be small startups and studios and it can't just be you know Amazon themselves pushing out a lot of this. I love these companies that are bringing brands to voice. And I spent a lot of my career in social media I founded a company called simply measure back in 2010 which was the first and eventually largest social analytics company. And I remember that that wave of brands coming into social and I see that happening again here and I think that just helps grow the ecosystem and makes it more and more relevant. So now shout out to those companies doing a lot of that really hard and unsexy work to help you know create a voice-first future. So postering will be a swatch of the Voice of Healthcare Summit that takes place later this summer.

 

[00:33:03] Postering and knobble effect will be at the Alexa Conference presented by VoiceFirst.FM in January novel effect will be a headliner in many ways. Digital Book World 2018 taking place in Nashville this October. Aviel Rodrigo thank you both very very much for joining us today on The Alexa Podcast. Thanks for having me. Yeah thanks for having us for The Alexa Podcast thank you for listening. And until next time.