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Launching the ML Startup Business and What You Need to Know

AI with ALLIE

The professional’s guide to quick AI bites for your personal life, work life, and beyond.

September 14, 2023

My first couple of editions will be coming with the fresh enthusiasm of a newsletter rookie and the promise of updates— kind of like a new software rollout. So please bear with me as we enter AI with ALLIE’s beta era.

This first newsletter will be providing a behind-the-scenes look at how I started the ML startup business at AWS, diving into the business tactics, and key moments that shaped its creation and what you need to know. Then, I’ll be showcasing one of my most exciting adventures to date and wrapping it up with interesting AI tools, courses, and blogs that have caught my eye.

Starting strong with edition one. Let's get started.

The biggest trend I’ve been talking about for years: ML is not just a tool, it’s the blueprint. The companies of the future will be AI-first, and the startups launching and growing now are doing so with machine learning at the core of everything they do.

Or if you have a sweet tooth and like analogies (a lethal combination): AI is not the frosting on top of the cake for these new startups, it’s the flour mixed into the batter.

This insight wasn’t obvious a few years ago and is still not obvious to the majority of folks, especially those in older or more slower moving industries. And that’s okay, we’re all learning together.

For years, it was my job to speak with the world’s top deep tech venture capitalists, ML researchers, and AI founders to figure out where the future of AI as an industry was going, and then build and run a business to move toward that future. I launched and scaled the ML startup org at AWS—and with everything happening in AI right now, I thought it would be interesting to share the founding story from early 2019.

Or at least, a version that can fit in a newsletter 😉

AI is not the frosting on top of the cake for these new startups, it’s the flour mixed into the batter.

I often get asked how I ended up at AWS, so let’s start there. I was working on multi-modal AI at IBM Watson as a Lead Product Manager, and quit to take the AWS role (originally “US Head of AI for Startups and Venture Capital” and then Amazon rebranded to ML and expanded my role to “Global Head of Machine Learning for Startups and Venture Capital”) at Amazon for five main reasons:

  1. To take a big risk

  2. To stay in and dive deeper into AI

  3. To get back into the world of startups

  4. To launch and shape an entire business line from scratch

  5. To work for the incredible manager who hired me (hi Brad!)

There are very few boring roles in AI—everything in the space feels like a new challenge. When it comes to taking a new job (recruiters and hiring managers, take note), friends in AI seem to be prioritizing the type of impact they want to drive and the type of leadership they want to work with and for. My journey was no different.

One of my mentors, Adam Cheyer, the founder of Siri, speaks of the idea of “chapters” in our lives. And deep down, I felt a new chapter brewing. The Transformers paper from 2017 was still new and not commercializing as fast as the authors expected—the research was there, but it was up to startups to take a leading role. It was the right time to move back into the startup world, but I wanted a horizontal view of every single thing happening in the startup ecosystem.

The job couldn’t have been more perfect. A couple of interviews later (the Amazon interview process is a beast), I accepted the role and was ready to carve out what this future would look like.

And most notably/terrifyingly: I was going to be the first person in the world with this job.

So I did what anyone would do: I chugged some Diet Coke, took a hot bath, and outlined a plan to launch the business. This revolved around understanding the company, the market opportunity, and aligning both with the vision of Amazon leadership.

Here’s the launch story of the ML startup biz 👇

First, understanding Amazon.

When you start any new job, it’s important to wrap your head around the company, the culture, the people, and the operations.

We’re used to onboarding trainings where someone teaches you how to print something or where to find your healthcare benefits, but the rest of your first 3-4 weeks should really be dedicated to laying your foundation and learning the culture of the company you just joined.

(The book “First 90 Days” has a great walk-through of this, and I’m grateful another mentor Bill recommended it to me. Buy it if you’re ever starting a new job.)

Some questions you should ask in your first few weeks at a new job: what is everyone’s role? What are they goaled on? Where do you fit into the puzzle? What do you think you are goaled on? Does that make sense at first pass? Who are you expecting to collaborate with? Who is glad your role exists? Who is annoyed that your role exists? Where are the dependencies, and can you forecast your blockers or resistance? What are people expecting from you, and what are you expecting to build? Do those ideas overlap or contradict—how?

In my first month (and really my first day), it was obvious to me that my remit was extremely broad. Too broad. But that was part of the job, and actually the best part of the job—they hired someone to not only deliver results but also add structure and vision to an otherwise vague landscape.

Navigating ambiguity is a skillset, and you can absolutely stretch that muscle. There were 400,000 global startups and 100+ different types of AI, and I had to make sense of it all. So, I started where any overwhelmed learner does: I opened a blank note page. In this case, I created folders in OneNote (one for internal conversations, one for external conversations, one for research, and one for takeaways and hypothesis testing that resembled a mad scientist’s notebook).

I spent my first few weeks talking to as many internal folks as possible. Among many, my two most eye-opening conversations were with Matt Wood (VP of Product, AWS) and Eric Heikkila (Director of WW GTM for Databases).

My learnings from part one: lay your foundation, know and earn trust with your stakeholders and collaborators, stay open-minded, be ready to be surprised, and don’t let others sway you.

Second, understanding customers.

After 50+ internal conversations with product managers, VPs, technical leads, solution architects, marketers, sales, and PR, I started phase two: going deep with startups.

I had posted about my new job on LinkedIn and went quite viral (100K+ likes), and between that and friends in the space, I had a healthy pipeline of top ML folks to speak with all over the world. It’s important here to do an 80/20 evaluation—80% of your conversations and interviews should be with the “this is very obviously my customer” group, and 20% of your conversations or interviews should be with the “I bet they impact my customer and would have interesting things to say and shape my wider view” group. With that, 80% of my conversations were with AI founders, with a 20% extra sprinkling of individual contributing ML engineers, AI ethicists, data scientists, research scientists, and professors.

To prevent data fatigue, I devised my own process to get to the insights faster (navigating ambiguity quickly turns into frameworks and consistent discovery processes). Every conversation was its own page, and every conversation included the same questions to more easily compare. (Author’s note: LLMs has made this much much easier, and if I did it today, I would use LLMs in the process).

Those interview questions included: tell me about yourself? What are you building? Why are you building that/what inspires you/what problem are you solving? Why is now the right time for your business? What are you blocked on? What is a wonderful funky surprise in your company that makes people smile—could be a funny mascot or an offsite tradition or a way you’re using AI? How can I help?

1. Every conversation had its own page in the respective folder.

2. I created an interview template and evaluation framework to auto-populate my insights and thesis testing plan.

2. I added takeaways at the end of every conversation and quickly summarized at the end with tags so I could search for specific quotes later.

I started mapping out the landscape and it became obvious that the market segmentation approach adopted by other teams was wrong. (And every PM knows that if your segmentation is wrong, your solution and strategy is probably wrong too.)

Onto fixing it!

Third, I made sense of the mess.

The biggest finding was that late-stage startups who integrated AI later in their business (like DoorDash) behaved incredibly differently compared to startups that “went deep from day one” into AI (like Scale AI).

It wasn’t just that one was building an AI product and one wasn’t. Everything was different. The founder profile, the attitude, the motivations, the research, the ops, the team skills and structures, the salaries, the raises, the business model, the speed they moved at, and even the cap tables. EVERYTHING.

GPT-2 had just come out with 1.5 billion parameters, ML ops companies like Tecton AI and Fiddler AI had been grooving for just a few months, YC’s AI track had only had a few cohorts…it was still so early.

Most companies were treating these startups as your standard VC-backed fast-moving SaaS companies with a little AI frosting on top, but there was a revolution brewing and 99.99% of people didn’t know it was coming.

Fourth, I packaged the mess.

Your insights are worthless if you can’t tell a good story around it.

It’s correct action on the insight that counts. And at some point, even if you’re a solo founder, you’re going to need to convince someone of your insight.

Coined terminology is a big part of that storytelling—you have to give people the right words and phrases to use when you’re not in the room to defend or explain it. The bigger your org, the more important it is for your strategy doc to speak for itself.

So how did I come up with the business name?

I knew three things:

  1. I needed two terms, one for “the startups who are using AI from day one” and “the startups who are adopting AI later in their journey to gain some efficiency”.

  2. The market segmentation names would probably be leaked or used publicly at some point, so I couldn’t use terms like “AI-first” (because who the heck wants to be called AI-second?).

  3. AWS publicly rebranded in 2019 from ‘AWS AI’ to ‘Amazon Machine Learning’, so I knew I needed to use ‘ML’ in the names.

I stayed up with an ML engineer friend late at night thinking through names. His favorite was ‘ML-native’ (like “digitally native” which had been used for companies like Airbnb and Pinterest). My favorite was ‘ML-core’ because that’s what it was: ML was at the core of every single part of their business. It told the story I needed, it was short, and it was easy to say and understand.

So I went with it.

For the other startups (where they used ML later in life, usually around series B to start and series C in a “big way”), I went with the term ‘ML-supported’. Their business would still exist without AI, but it was supporting everything they did and making them more efficient.

Five, I made a plan.

I wrote up the first business strategy document in a famous Amazon narrative with this new segmentation, including everything from my research insights to market segment analysis (like TAM, CAGR) to an algorithm to segment these two groups, the two strategies to help the heck out of these startups and grow the business, as well as how we should structure our entire org around this shift, including breaking the rules to make my first hire an ML engineer.

What started as a OneNote folder on my laptop grew into a multi-billion-dollar business with 100 people on staff entirely dedicated to it across solution architects, technical business development, operations, sales, marketing, partnerships, and more. I still stand in awe at the unbelievable talent AWS has, and this team was the cream of the crop.

Final thoughts

I’ll wrap it up with this: I've always believed that before we leap forward, we need to glance back, challenging the assumptions and frameworks laid down by previous leaders but also learning from their incredible work. It sounds strange, but it helps to think of the business as a living organism with a connected and shared learning curve.

Now, it's your turn to carve out your path in the AI age. Grab the knowledge from seasoned subject matter experts in your company, but don't lose sight of what's coming next. It's about finding the perfect blend of the tried-and-true bits and the groundbreaking bits. As you pivot towards starting to use AI and eventually embedding ML at the core of your work like these startups are, remember it's not about keeping up; it's about leading the charge.

Set your foundation, stay customer-centric, and be ready to challenge the status quo; your AI leadership journey starts now.

For a continued exploration of leveraging AI in business and exclusive tips, this is for you.

This course will cover:

  • How to become an AI leader in your org

  • Finding, evaluating, and prioritizing real-world use cases and their trade-offs

  • Strategies to enhance customer trust and value

  • Path to responsible AI deployment and risk mitigation

Join me and four world-class guest speakers, including the COO of OpenAI, the Founder of Siri, an AI governance expert, and a 20-year tech and AI executive to shape your AI leadership future. Your moment to make sense of AI in your business begins on September 19th.

Seats are limited. Enroll by September 18th to secure your spot.

Tools, courses, and blogs that caught my eye:

  1. TaskCrusher AI - A free AI tool (that I created) designed to turbocharge your productivity by prioritizing your to-do list. A good reminder that AI will impact all ops, even in your own life (demo) (my thoughts)

  2. AI in Education - OpenAI’s guide for teachers on how to use ChatGPT in the classroom. We’re going to see more AI companies helping the education sector (read it) (my thoughts)

  3. Ideogram AI - A new text-to image generator that specifically focuses on high-quality text in images. So-so performance but strong hopes for the future, and with that, an increasing worry for deepfakes (demo) (my thoughts)

  4. What is Generative AI? - Free 45-min course on LinkedIn Learning with 20K+ ratings and counting (watch here)

  5. AI for Business Leaders - my new 2-week course with leadership essentials for business leaders and executives to build a stronger organization in the AI-driven era (sign up)

  6. TextFX - AI-powered tools for rappers, writers and wordsmiths from Google. A great reminder on task-specific AI and creativity boosts and the power of an influencer or celebrity endorsement (demo) (my thoughts)

  7. HeyGen AI - Video translate feature that allows you to record a video in one language and then sync your voice and lip movements into almost ten different languages. Global communication for you and your business is only going to get easier (demo) (my thoughts)