YOUR EYE ON INNOVATIVE MACHINE LEARNING SOLVING REAL WORLD PROBLEMS
Azafran Capital Partners
INSIGHTS Platforms, to be or not to be... Looking at the stats, predictions and progress (examples throughout this issue) over the past decade it is hard not to jump on the platforms bandwagon. Many prognosticators are going as far as saying go platform or get out of the way. Our team definitely looks for and is favorable towards investments with platform possibilities but we stop short of seeing this trend as a panacea for success. The pace of change in tech is accelerating and as fast as the “incumbent” platform companies listed below so quickly took over most of the Global Top 10 list, another group could usurp them just as quickly or faster. One example we see moving fast from the horizon to the here and now is quantum computing. Changes that used to take decades are now taking years, or less. We don’t see platforms going away, per se, but definitely another strategic element in the investment equation. Stepping back for a moment, the simple Azafran definition of a platform is a connected set of technologies that other people can leverage, that they can cobble together for end to end solution. What you are doing really is fostering an ecosystem where others create value and you then participate in that, take a sliver of that, but the shift to a platform is a huge change. The tall order of extra work comes in the form of documentation, evangelizing, getting partners on board, maintaining all those requirements, the effort cannot be underestimated. The payoff could be huge, but distraction looms around every corner and the discipline of the team, from product, content and finance must be airtight to effectively make the jump to platform speed. Here and now, as we factor in the platform variable, we ask ourselves at each opportunity, what would get the attention of Google, Amazon or IBM, something that could plug right into their platforms and add value. We look as much for companies that can plug into one or more platforms, looking across the opportunity in the context of voice, acoustics and imagery applying machine learning and deep science in health & wellness, IoT and Enterprise spaces.
issue EIGHT issue eight FOCUS At Azafran Capital Partners, we are an early stage venture fund investing in companies ($2M to $8M) that are using deep learning and machine learning, emphasizing voice, acoustics and imagery datasets in the health, wellness, IoT and enterprise spaces. Issue Eight of INSIGHTS focuses on the incredible advance and phenomena of the new platform economy. In just over a decade, the top ten companies in the world have transformed from extraction, manufacturing and other “old world” businesses to those firmly rooted in platform economy dynamics. This is a wave that has been building in various forms for decades, since even before the advent of the Internet, expansion of broadband and ramping of big data, machine learning and deep science. The Azafran team is keenly focused on the platform opportunity, as our investment thesis includes companies that either already have a platform dynamic or have the potential to become integrated into a platform downstream.
Largest Global Companies: 2018 vs. 2008 7 of the Top 10 now platform companies 2018
2008
Powerful platforms have given digital natives from Alibaba to Amazon global reach and towering market capitalizations. While that’s no secret, these platforms raise difficult questions for CEOs of incumbent companies pushing ahead with their own digital transformations: Should they emulate the frontrunners, join forces with them, or not play at all? Not playing may seem risky in a world where “platforms beat products.” Yet building your own platform, in a majority of markets where global platforms are already thriving, may be akin to arm wrestling with a bulldozer. -
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McKinsey Quarterly: The Right Digital Platform Strategy
Volume 1 Issue 8 - Page One