Investment Theme: Digital Transformation Through AI
Great North Ventures Investment Themes
Great North Ventures is a network-driven, generalist early-stage fund that prioritizes exceptional execution. Founded by founders, for founders – we back repeat founders, we back strong first-time founders, and we form founder teams in our venture studio.
Our innovator network and team’s connections drive our value-add to startups, and our network density is greatest in Minnesota and the Upper Midwest. While we are a generalist fund, we invest in three theses: “Solving Labor Problems”, “Digital transformation Through AI”, and “Community-Driven Applications”.
Digital Transformation Through AI
In Steve Case’s book “The Third Wave”, Case describes how the greatest opportunity for innovation will come from startups who disrupt legacy industries, and that proximity to these companies in these industries will enable founders to better empathize with their prospective customers and grow faster.
We agree with Steve, but we would take it a step further. The tools and technology that use AI to solve pervasive problems in legacy industries are going to be the dominant wave of technology-driven innovation in the years to come.
From the 1990s to the 2010s, early adopters of AI implementation were largely found in financial services and digital media. The talent required to build and deploy machine learning models was inaccessible by most companies- the world has an extreme shortage of scientists with advanced degrees in machine learning. Our firsthand experience backs this up, as founders from the digital media space where our company implemented predictive modeling at scale, our machine learning talent came at a premium.
In the last few years, we have seen developer tools and cloud infrastructure improve so much that building applications using AI is now less of a scientific hurdle. These advancements enable startups to implement machine learning in their target market, and will accelerate the pace of digital transformation.
Now the problem is more of a data acquisition hurdle. Can a startup identify a path to acquire the data they need to train the AI in the beginning? Can they build a proprietary data pipeline, that with scale, creates a strong competitive advantage? In our experience, typically, the best way to monetize data is to keep it to yourself. Startups succeed by requiring users to engage through their product to make use of their data.
What We are Looking For
E-commerce has gone from nice-to-have to a requirement for retailers, accelerated by the pandemic. Digital has become a cornerstone of retail strategy because of the ability to collect and act on customer data at the right time, in the right place. Top retailers are refining omnichannel strategies that embrace the right channels and offer seamless customer experiences.
An example from our portfolio is NextGem. NextGem has developed core AI technology to create an image scanner which reads and maps data, and a search engine which uses that data for their trading card platform.
Digital transformation in manufacturing includes things like asset optimization, workforce productivity, and production speed. It also includes IIoT (Industrial Internet of Things), which encompasses the use of smart sensors and actuators to enhance manufacturing and industrial processes.
In our portfolio, FactoryFix is a marketplace for skilled manufacturing labor, which uses a matching algorithm to help predict the best-suited candidates for hiring managers.
It doesn’t always take a container ship lodged in the Suez canal to cause worldwide supply chain issues- worldwide pandemics and war easily do the trick. Predicting behavior, weather, demand based on troves of data leads to optimization of routes and delivery, increasing efficiency, decreasing waste, and better service and profits – whether the cargo is goods or people.
An example in our portfolio is Dispatch, which is a last-mile delivery company that provides on-demand delivery services to businesses of all sizes.
Protein folding algorithms, case triage, and AI-enabled medical devices are three examples of how AI is changing how healthcare professionals research new drugs, diagnose issues, and treat patients.
Flywheel is an example which offers solutions for the life sciences, clinical research, and academic research industries to accelerates collaboration, enables machine learning, and streamlines the massive task of data aggregation, curation and management. Nested Knowledge, which consolidates insight through metastudies, systematic reviews and living reviews in medical research, is an example in our portfolio.
The most visible of digital transformations in education was accelerated during the pandemic: remote learning. Not only is it improving accessibility, but it has opened the door to personalized learning approaches, and wider inclusion of digital resources – both of which can be complemented or optimized through AI.
Yardstik is an example from our portfolio focused on worker training, screening, and verification. Its platform offers solutions to help marketplaces and platforms more easily hire, onboard, and manage safer workforces.
Food and Ag
Agriculture is being optimized at all levels through AI. Tools for crop and soil monitoring, systems that can develop models and tools for assessments and management strategies, and self-operating machines are some uses of AI.
An example in our portfolio is Allergy Amulet, which uses AI to correlate allergen detection in food at the point of consumption.
From restaurant reservations and food delivery, to airline pricing and route planning, to chatbots and data analysis, digital transformation through AI has affected every facet of the travel and hospitality industry. From what is available, to how it’s procured, and even to how we experience it – every aspect has been affected.
Examples from our portfolio include Inhabitr and PrintWithMe. Inhabitr curates, sources, and delivers furniture for rental or purchase. PrintWithMe provides self-serve in-house printing amenities for coffee shops, apartment buildings, and other places people gather and work remotely.
Transformations in the industry are as mundane as chatbots serving real estate customers, to AI-controlled robots performing dangerous construction tasks. Scheduling, monitoring/sensing, and cloud-based collaboration are all widely used, and AI is increasingly used for planning, design, and risk mitigation.
CoverLease is software that enables data collection for the commercial real estate industry, which enables insight discovery and decision-making. Another example is SiteKick, a construction site monitoring and reporting system that allows for remote, constant monitoring of job sites.
Work with us
If you have a startup that is driving digital transformation through AI in these or other ways, submit here for feedback.If you have a startup that is driving digital transformation through AI in these or other ways, submit here for feedback. We will provide pitch deck feedback to all startups who submit.
Before you submit, get an inside look at our process first: “This is how to evaluate early-stage consumer app startups”