20VC How AI Can Enhance Not Replace Humans What Will Differentiate Between The Winners & The Losers In AI Why AGI Is Further Away Than We Think with Nitesh Banta, Founder & CEO @ B12

In the final 2016 episode of "The Twenty Minute VC," host Harry Stebbings interviews Nitesh Banta, founder and CEO of B12, an AI-powered web design startup. Banta shares his journey from a Harvard student to a Google intern, and later to a venture capitalist at General Catalyst, where he co-founded Rough Draft Ventures to support student entrepreneurs. He discusses the transition from VC to startup founder and the motivations behind B12, emphasizing the role of human-assisted AI in enhancing productivity and democratizing services for small businesses. Banta remains optimistic about the future of AI, advocating for realistic expectations and the potential for AI to improve work and life, despite concerns about overpromising capabilities. He also highlights the importance of building proprietary data sets and the challenges of scaling a team while maintaining a balance between motivation and productivity.

• Host Harry Stebbings introduces the episode and mentions his social media presence.
• Harry promotes the Pearl Rear Vision, a wireless backup camera and alert system.
• Nitesh Banta is introduced as the guest for the episode, who is the founder and CEO at b12.

Hello and welcome back to the last 20 minutes VC episode of 2016. Can you believe it? With me, your host Harry Stebings found drinking mojitos on Snapchat at htebbings with two B's and found trying to write some rather academic pieces on our new blog, mojitovc.com.

This quote introduces the host and the context of the podcast episode, highlighting the host's social media presence and blog.

Now, for those that don't know, b twelve is the startup that uses artificial intelligence to superpower their team of world class creatives to create even more intelligent websites.

This quote provides an overview of b12, the company founded by the guest Nitesh Banta, and its focus on using artificial intelligence.

• Nitesh Banta shares his background, including his education and early exposure to technology and startups.
• He discusses his experience interning at Google and the influence of the Silicon Valley culture.
• Nitesh explains his first project, a website for teachers to find summer internships, and his passion for technology and startups.
• He details his post-graduation experiences, including his time at Singularity University and co-founding Getaround.
• Nitesh's venture capital experience at General Catalyst and his involvement with Rough Draft Ventures are highlighted.
• The decision to leave venture capital and start b12 is discussed, along with the challenges and motivations behind the move.

Yeah. So I grew up in Stanford, Connecticut. I was very lucky to be one of the first folks from my high school to go to Harvard.

This quote provides background information on Nitesh Banta's early life and education.

After I graduated, I spent a short amount of time in consulting and then was lucky to be part of the first class at Singularity University, where I was on the founding team of a startup called Getaround, which is a peer to peer car sharing company out in the valley.

Nitesh shares his post-graduation experiences, highlighting his entrepreneurial journey with Getaround.

But I told myself if I found the right person an idea that I thought was big enough, I really would love to try and go out and start a company.

This quote reflects Nitesh's mindset and the conditions he set for himself before starting his own company, which eventually led to the founding of b12.

• Nitesh describes the state of the venture capital industry when he joined in 2010 and his mentors' advice at the time.
• He reflects on the changes in the industry since his college days and the growth of interest in startups.
• The decision to transition from venture capital to entrepreneurship is discussed as a difficult but necessary step to fulfill his aspirations.
• Nitesh expresses the importance of teaming up with the right co-founder and the unique opportunity presented by the AI space.

The venture industry itself was not as in vogue or exciting a place to be. A lot of career mentors were saying, do you really want to be exposed to that asset class or do you want to be working in that industry?

Nitesh provides insight into the venture capital industry's perception at the beginning of his career and the advice he received from mentors.

It gets harder with time, just economically, it gets harder. You get comfortable, you start to feel like you can actually do a good job in the venture industry.

This quote discusses the challenges of leaving a stable career in venture capital for the uncertainties of starting a business.

• Nitesh talks about the solo nature of venture capital work and the responsibility of leading deals.
• He comments on the growth of young people in the venture industry and the increasing number of people doing incredible things.
• The importance of a support network in venture capital, personal interactions with entrepreneurs, and the human aspect of the job are emphasized.

Not really. I think at GC there's a really great cohort of associates and principals, and so we had a really great group of people to work with.

Nitesh addresses whether he found being in venture capital a lonely experience, highlighting the supportive environment at General Catalyst.

So it's very different than a startup or a bigger company where day in and day out work with the team. But there's luckily a great support network and the folks at GC have been very close mentors, friends and partners to the whole process.

This quote elaborates on the differences between working in venture capital and a startup environment, emphasizing the value of a support network in venture capital.

• Nitesh Banta spent five years in venture capital before founding B12.
• He values the venture experience as a significant advantage for future entrepreneurs.
• Successful companies like Naturebox and Grammarly were founded by former investors, demonstrating a trend of investors becoming founders.
• Venture capital provides extensive networking opportunities and exposure to numerous companies and ideas.
• Being involved in venture capital offers deep learning experiences through board participation and exposure to entrepreneurial challenges.
• There are gaps in venture experience, such as the lack of exposure to operational tasks like setting up payroll, but these can be learned while founding a company.
• Venture capital experience is not perfect training but provides a strong foundation in networking and exposure for venture-backed startups.

"And I often say I think being a venture investor for me is the second best job in the world. With being the founder of a company, you really believe in being the best job."

This quote highlights Nitesh Banta's personal ranking of career paths, placing venture investing as highly valuable but second to founding a company he's passionate about.

"When you do venture, you spend a lot of time meeting people, so you're able to very quickly grow your network with investors, potential partners or companies, potential people you'd recruit or co-found companies with."

Nitesh emphasizes the networking benefits of working in venture capital, which can be crucial for a future entrepreneur in building a successful business.

"There's, I don't think any perfect training for any company that you want to start, but I feel like I was able to get a really good grasp network instead of exposure on the venture side."

Nitesh acknowledges that while venture capital experience isn't a complete preparation for entrepreneurship, it provides a significant advantage in terms of network and industry exposure.

• Nitesh Banta believes AGI is not as close to realization as some predict and warns against startups overpromising AI capabilities.
• The current state of AI technology is far from achieving all tasks a human can perform, which leads to unrealistic user expectations and potential disappointment.
• Narrow AI, which focuses on specific tasks, is where the industry currently excels and can have significant implications, despite being seen as limited compared to AGI.
• B12 has developed a tool called Orchestra, which combines narrow AI with human effort to create complex workflows.
• The progress from narrow AI to AGI involves improving automation from a high percentage to near perfection, which is a significant challenge.
• Human-assisted AI is a practical approach where people remain part of the process, allowing for gradual increases in automation without the need for complete AI autonomy.

"But I think it can also be a little bit dangerous for startups to kind of sell the dream a little bit too hard, because if you look at where we are from a technology perspective, and even look at the most optimistic individuals in the field, there's still a long way to go before we could get to a point where a machine can do all the things that bull can do."

Nitesh warns about the risks of overhyping AI capabilities, which can lead to unrealistic expectations and ultimately user dissatisfaction.

"For example, self-driving cars are an example of narrow AI, and it has massive implications."

This quote illustrates a successful application of narrow AI, which, despite its focus on a specific task, can have far-reaching consequences and benefits.

"We open source this tool called orchestra, which is a human machine based workflow system, and it stitches together narrow pieces of AI with people, so you can start to have really dynamic and complex experiences using the technology that we have here now."

Nitesh describes how B12's Orchestra tool integrates narrow AI with human input to create sophisticated workflows, demonstrating the practical application of current AI technology.

• Many AI services achieve high levels of automation but still require human intervention to reach near-perfect reliability.
• The last stretch from high to full automation is the most challenging and may not always be achievable.
• B12 focuses on human-assisted AI, acknowledging the ongoing need for human involvement in complex workflows.
• The presence of humans behind AI services is not always transparent, and in many cases, it is essential for delivering the desired consumer experience.

"Yeah, I feel like a lot of companies are able to get to 80 95% automation, but the challenge is most people don't care about if you could get a driverless car that could drive, well, 85% of the time, that's not particularly useful because that's still too dangerous or inconsistent experience."

Nitesh points out the importance of reliability in AI services, where even a high degree of automation may not be sufficient if it doesn't ensure consistent safety or performance.

• Large companies have accumulated significant machine learning research and capabilities.
• Many of these companies are democratizing access to machine learning by open-sourcing technologies.
• There is a possibility of a monopoly in machine learning as a service, but individual teams may still create tailored algorithms.
• The future may involve a mix of proprietary algorithms by individual teams and widespread use of machine learning services provided by larger companies.

"Yes, I think it's certainly true that the big companies have aggregated massive amounts of machine learning and machine learning research capabilities."

Nitesh acknowledges the concentration of machine learning expertise and resources within large corporations, which could influence the future landscape of AI development.

• Democratization of specialized machine learning services is occurring, making advanced tools accessible to startups and companies.
• Engineers, even fresh out of school, can now perform tasks previously limited to specialists.
• Big companies are acquiring startups focused on machine learning research and intelligence.
• Startups can compete by creating unique data sets and building products on top of existing machine learning algorithms.
• B12's service utilizes human-assisted AI to build and optimize websites, leveraging unique data on user interactions with machine output.

"So I feel like there is definitely a democratization happening around some of the specialized machine learning services, which I think is a really great thing for the ecosystem because it enables startups and companies to create real applications."

This quote emphasizes the positive impact of the democratization of machine learning, which allows for broader innovation and application development within the ecosystem.

"There's a ton of open data around websites that companies like Google and us and others are able to get access to. But we're building kind of very unique data around how people interact with machine output and feeding that back into the way that we build our product."

This quote highlights B12's approach to building a competitive edge by focusing on unique data regarding user interactions, which is not traditionally collected or prioritized by others.

• Startups can offset incumbents' data advantages by specializing in niche data sets, such as user behavior on websites.
• Unique data sets can be more applicable to the product experiences startups aim to create.
• Collecting specialized data can be challenging but may be easier for startups due to fewer reputational risks and the ability to focus on smaller, important user groups.

"So would you say the incumbency advantage with regards to data set is offset through the further specialization of data sets, as you said there, into actually how users behave on websites?"

This question probes the potential for startups to overcome incumbents' data advantages by focusing on specialized, niche data sets.

"I think it really depends on the particular space or application, but it certainly is true that a lot of the data that bigger companies have captured or will capture may or may not be the types of things that actually create the product experiences that startups build or technology companies build and that consumers ultimately love."

This quote suggests that while big companies have vast data, startups can carve out their own space by focusing on data that directly enhances product experiences for consumers.

• Understanding workflows and processes is crucial before developing advanced technology and algorithms.
• B12 initially focused on grasping the web design process to create simple rules for machine output.
• As scale increases, leveraging a network of experts helps in acquiring specialized data sets for improved machine learning applications.

"So with our first product, the first thing we did is just really understand how exactly the website and web design process worked."

This quote explains B12's initial focus on understanding the web design process, which is a foundational step before integrating more complex technology.

"And then as we start to get more and more scale, we're able to use a network of experts that we have to think about ways to get very specialized data sets specific to web design."

This quote outlines the strategy of using expert networks to obtain specialized data sets, which becomes feasible as the company scales.

• Despite concerns about AI's impact, it's important to embrace technological innovation and its potential benefits.
• AI can improve work satisfaction by automating mundane tasks and enabling access to better services.
• B12, as a value-driven B Corp, aims to use AI to create a brighter future for work and life.
• AI can democratize services that are currently cost-prohibitive, benefiting small and mid-sized businesses.

"I'm generally bullish for a couple of reasons. The first being you can't really play defense against technology."

This quote reflects a positive stance on technological progress, suggesting that embracing innovation is better than resisting it.

"And so I'm really optimistic that if you have companies with the right sets of values, we're a fairly value driven company at b twelve or a 1% company at B Corp, that you could actually use this moment in time when there's a lot of change happening to build a brighter future for the way that people work and the way that people live."

This quote conveys optimism about the future, emphasizing the role of value-driven companies in leveraging AI to improve the quality of work and life.

• B12 focuses on B2B products and services for small to mid-sized businesses, aiming to make certain services more accessible.
• By automating aspects of digital presence, businesses can have a more impactful online presence without extensive expertise.
• AI and humanistic AI models can reduce the grunt work in jobs, leading to new work models that move away from the traditional nine-to-five structure.

"So if you're a mid sized business, there's a lot of things that an average mid size or small business owner probably has a checklist of dozens of things that they would love to get done, and they either don't have the personnel to do it. It can be cost prohibitive or it's just too complicated."

This quote discusses the challenges faced by small to mid-sized businesses, which B12 aims to address through its services.

"And the amazing thing around AI and a humanistic AI model is that you can take away a lot of the grunt work associated with our day to day tasks."

This quote highlights the benefit of AI in reducing mundane tasks, allowing for more fulfilling work experiences and potentially new models of work.

• Discussion of the current phase of AI, which is Artificial Narrow Intelligence (ANI).
• ANI is characterized by self-sufficient systems in specific areas like driverless cars.
• ANI is expected to continue developing for decades, providing opportunities for startups.
• Transition to Artificial General Intelligence (AGI) could take a long time, with predictions ranging from decades to centuries.
• Software complexity, not computing power, is seen as the main challenge in creating AGI.
• Once AGI is achieved, the move to Artificial Superintelligence (ASI) is expected to occur rapidly.
• Speculations about when AGI might be realized vary, with some optimistic estimates around 2042.

"Well, so I think you already see instances, we're firmly in the ANI phase. You see lots of instances where things are self sufficient."

This quote highlights the current status of AI development, which is at the ANI phase with self-sufficient systems in narrow applications.

"I actually don't think the limitation will be compute power, but the limitation will more be around the type of software that you need to build something as complex and dynamic as a person."

This quote emphasizes that the challenge in reaching AGI is not hardware but the complexity of creating software as dynamic as human intelligence.

"So I feel like once you get to AGI and you're able to have machines that can operate 24/7 sufficiently work together and do further research in the space, you'll probably get to an ASI in a much shorter period of time."

This quote suggests that after achieving AGI, the progression to ASI could be swift due to the continuous operation and collaborative research capabilities of machines.

• AI has the potential to significantly alter how humans live and work.
• There are concerns about overpromising and underdelivering in the AI field.
• The long-term challenge is to imbue AI with humanity and ensure it optimizes for human-centric outcomes.
• The need to manage the balance between AI's capabilities and ethical considerations is paramount.

"So I feel like we're firmly in that space right now, and I think this phase will continue for, in my eyes, decades."

This quote acknowledges the current impact of AI on society and predicts its continued influence for decades to come.

"Longer term, I'm probably most concerned about are we able to build the right type of humanity into the various ais that we build."

This quote reflects the speaker's concern about ensuring AI developments align with human values and ethics.

• The importance of literature in shaping company culture and personal development is discussed.
• "Oh, the Places You'll Go!" by Dr. Seuss is given to new employees at B12 to symbolize the startup journey.
• Books can provide context and support for the challenges faced in professional environments.

"Oh, the places you'll go, which is maybe not the most sophisticated literature out there, but I think is a really nice contextual book on the journeys."

This quote explains the choice of Dr. Seuss's book as a metaphor for the entrepreneurial journey, emphasizing its cultural significance at B12.

• The speaker consumes standard tech news and follows influential individuals like Bill Gurley for quality insights.
• Podcasts have become a significant source of information for the speaker.
• The speaker utilizes networks and platforms like Twitter and Medium to discover new content.

"I read all the standard tech news outlets like Techcrunch and everything else just to stay on top of news."

This quote indicates the speaker's habit of staying informed through various tech news sources.

• The challenge of organizing a team to achieve their best work is a focus for the speaker.
• Keeping a team motivated, enthusiastic, and balanced is complex and requires continuous improvement.
• Venture investing and team management are contrasted in terms of day-to-day involvement with people.

"It's how do you really organize people to do their best work possible to motivate them, encourage them, keep them enthusiastic, while helping them build balanced and happy lives."

This quote highlights the speaker's concern with fostering a productive and satisfying work environment for their team.

• The roadmap for B12 involves starting with a narrow focus and expanding over time.
• The goal is to build the best website management and optimization platform.
• B12 aims to leverage its technology to offer additional services to businesses.
• The vision for the next five years includes widespread adoption of B12's services and fulfilling work for many individuals.

"Our kind of belief is that startups kind of earn their ticket to doing great things by building a product that someone loves."

This quote encapsulates B12's philosophy of starting with a product that meets a specific need and expanding from there to achieve greater success.