CEO Michael Zammuto is blogging on AI, Data and Analytics on CIO.com
We are proud to announce that Cloud Commerce Consulting CEO Michael Zammuto will be featured in a new blog on CIO Magazine’s site called Practical AI, Data and Analytics Strategies. Mike’s column will help technology industry executives and enterprise CIOs who are trying to develop and implement critical strategies in these areas. You can view Mike’s column here and subscribe via RSS to get future updates.
How Small Businesses Can Use AI to Outrun The Competition
Cloud Commerce CEO Michael Zammuto recently published an article on artificial intelligence and related technologies. He argues that “AI” is often used an umbrella term for a shift to a digital-first strategy of automation and learning. He provides an overview of Machine Learning, Smart Robots, Virtual Assistants, Speech Recognition, Natural Language Generation and Decision Management as key technologies for most businesses.
Zammuto argues that unlike other major digital technologies, these collectively represent a disruptive force that can move too quickly for companies to safely adopt a fast-follower strategy. he points to Amazon using their data and technology advantages to simultaneously compete in diverse spaces against grocery stores, robotics companies and cloud providers as an example that these technologies can allow disruptive competition to come from unexpected outsiders.
He proscribes a strategy for small businesses to focus on using current analytics and data initiatives to gain operational advantage and then reinvesting that into commercial products like virtual assistants that can easily be adapted to a company. After that, small companies can further develop internal skills and expert connections to make additional, highly targeted and strategic investments.
Zammuto advises focusing on using virtual assistants followed by investments in NLG analytics platform to realize quick cost and performance benefits. with better data capabilities he suggests focusing on a single, potentially transformative, part of the business for another investment. Be the best at that thing, he argues, and gain a focused, impactful advantage in one area. This can be cost, service, product, quality, logistics or other areas but make sure it has the potential to change your position within your industry. This he concludes will start you on a virtual cycle of innovation and differentiated advantage that can make any small business a leader.
A New Innovation Model: Amazon Evolved from Books to Cloud and Groceries & Meal Delivery
Data, AI, Automation, Quantum Computing and the Post-PC Revolution
IDC projects that total worldwide data will be 163ZB (that is a trillion gigabytes) in five years. The power to transform our world is locked up, unused and unstructured, in this data. Fully a third of business leaders say they cannot access their own data in meaningful ways, let alone discover all new insights from it.
A strategic cluster of technologies will take a fast-growing flame of human knowledge and accelerate it into a chain reaction, immeasurably larger and hotter than anything imagined today.
Innovation in cloud, data and analytics have lit a fuse. EDM and machine learning added fuel and commercial AI and Quantum Computing will launch self-fueling chain reaction.
Cloud accelerated data, data accelerated analytics, analytics accelerated automation, EDM accelerated analytics, AI accelerates automation. Quantum computing will supercharge the whole ecosystem.
AI Growth Accelerating Past 300% a Year
Forrester says businesses investment in machine learning and artificial intelligence (AI) will increase 300% in 2017 than in 2016. Current generations of Machine Learning technologies allow us to analyze data at scale and will ’drive faster business decisions in marketing, e-commerce, product management, and other areas of the business by helping close the gap from insights to action.’ AI will be used to automate discovery, experimentation and even coding and further AI. It is a self-fueling technology with no practical limit in scale.
Rose’s Law of Quantum Computing is Moore’s Law on Steroids
Rose’s famed predictions for Quantum Computing tell us that we are about to break Moore’s Law forever. For all our technology improvements, we compute much like we did decades ago. We don’t know when we will get commercial devices that use quantum states in place of binary values. But we know when we do it will change everything. Quantum devices will allow AI to solve problems and innovate, manage data and develop insights at orders of magnitude greater than imagined today.
The End of Tools
Computers, data, cloud services, analytics tools and so on are tools. Better, more powerful, easier to use tools. AI fuels automation and, when hyper-charged with quantum computing power, takes the tools out of our hands. The chain reaction of all this means innovation at speed and scale that will require new terms for measurement.
The Amazon Innovation Model
This means that humans will primarily contribute principles, strategies and vision to the next revolution. Those who don’t focus on building strategy and capabilities now will be left behind. Companies of all sizes and in every industry need to develop a strategic road map. Innovation will come to every industry and from unexpected directions. The model that took Amazon from books to challenge cloud computing and retail food and meal services is the future of innovation. Their strategic competitive driver is data and computing power. They didn’t expand or pivot into new businesses, these businesses were exposed to disruption by anyone who could innovate using this new model.
Contact us today. CCC helps business and technical leaders to develop these strategies and capabilities to ensure more than their survival.
Citing data from Dow Jones VentureSource, Cloud Commerce CEO Michael Zammuto published a warning for startups. Raising your next round will be tougher than the last round. Zammuto wrote that several trends including the economy, some successful startup exits and seed and venture platforms combined to increase rates of startups. From 2010 to 2015 the rates of seed and ‘A’ round investments more than doubled but “B” and later rounds did not increase. At the same time, startup failure rates dropped to historically low rates. All this supports the premise more startups are launching but failing to get growth funding to scale.
The Cloud is Pushing Down Startup Costs
Research has shown that cloud services, particularly Amazon Web Services (AWS) have led to an increase in seed and early venture funding. This is because cloud providers succeeded in lowering the costs t founder of launching and operating a startup. Shared work spaces, freelancer networks and faster and cheaper development tools and technologies are also lowering costs. The implications of this are that it has become cheaper for a founder and investors to test an idea so we saw a corresponding increase in startup rates.
We have not seen a corresponding increase in the success rates of startups. Venture staffing did not increase substantially so startups got less guidance and VCs are less connected to many of their investments. We have already seen a large drop off in later round funding or successful exits. But we also have not seen an increase startups ceasing operations. This is because this same reduction in startup costs also means lower operating costs.
Scraping By – Not Winning But Not Losing
There has been a dramatic increase in the number of under-capitalized startups where the founders struggle to raise funds. Early stage staff have become great at keeping these companies limping along but many are not really progressing. Cloud Commerce Consulting helps firms avoid this trap. First, we can help firms to gain the momentum and validation they need to stand out and succeed in ‘B’ round investments. Second, we can help with workable, organizational scaling program that transitions the firm from startup to growth mode.
Startups are not just competing within their industry against entrenched players and other innovators. They are competing against startups of every kind for increasingly dear venture dollars. You developed a development plan for your product and a marketing and sales plan for your growth, do the same for your fundraising today.
Michael Zammuto has launched a new blog focused on major technology trends and their impact on our future. This journal included writings on Artificial Intelligence, Automation and various policy issues. Please consider visiting,
Cloud Commerce CEO, Michael Zammuto on a Challenging Environment for ‘B’ Rounds
The gap between initial funding and firms shutting down has increased and with overall funding dropping Michael Zammuto says
to expect a massive increase in failures in 2017 and 2018. From 2010 to 2015 the number of companies receiving early stage angel and ‘A’ round investments climbed dramatically. Market forces, tech trends contributed but so too did some concerted efforts to make it easier to form a tech fund. Everything from Amazon Web Services (AWS) to shared workspaces, to better smart phones to better development tools all contributed to lowering the barrier to entry for startups.
As published online today, Michael Zammuto explains the the unintended consequence of this is that those startups did not get access to more VC governance or talent (or luck). Overall funding has started to drop and the gap for later stage, ‘B’ round investments has gotten large to a concerning degree. This creates a special challenge for startups to stand out and demonstrate why they deserve more capital.
To offset this increased challenge, Cloud Commerce suggests reviewing your strategy well before you need to raise money, to start raising money earlier and ask for more. Critical to ‘B’ round funding it to ‘prove’ that the core assumption about how the business will scale is demonstrated, even on a small scale. If you depend upon network effect, or cheap content or clients upselling then focus on optimizing for that metric. Don’t spend unnecessary capital on product enhancements, focus instead on proving you have the model right and just need capital to hit your multi-year projections. You should expect that your ‘B’ round will be more difficult to complete and you have a business to run so get help and stay focused on proving your story.
As mentioned in this LinkedIn post, ‘B’ round fundraising is getting more difficult in 2017 and may stay that way for some time. Starting several years ago, a number of innovations came together to make startups cheaper faster and easier to get off the ground. There are actually a lot of contributing elements. the Journal of Financial Economics report focuses on AWS and certainly cloud services and cloud infrastructure have helped a lot of startups get from concept to beta very quickly. I would add a lot of other things to the list including shared work spaces, freelancer networks, angel investing and kick starter funding platforms and even improved mobile communications and productivity apps.
All these things did cause an increase in Angel funding and that also led to more ‘A’ round candidates and funding. More ‘A’ round funding has not led to more success. Venture firms are not increasing staff along with the increase in early stage funding so their early stage investments are getting less governance and attention. So, at least so far, this has led to more failures and harder ‘B’ round fundraising. Cloud Commerce Consulting is here to help in this process and can position early stage companies to demonstrate the progress and market traction needed to warrant closing that critical ‘B’ round.
About the author
Michael Zammuto is the founder and CEO of Cloud Commerce Consulting. He has helped 6 startups achieve profitability, been involved in six exits and major fundraising rounds. He is an adviser to several companies. He also currently servers as Chief Executive of Completed.com. Zammuto was the CEO of Brand.com and Sapago and was President of Chaikin Analytics and Chacha.com. Zammuto also served as COO of Ontario Systems and was a senior executive with Ecometry Corp. before the acquisition by Golden Gate Capital. Mike’s full profile can be read here.