Seattle Week in Review: AI Chickens of Silicon Valley

It was an historic week as Hillary Clinton secured enough delegates to be the first woman to become the presumptive nominee of a major political party for the highest office of the most powerful country on Earth. Meanwhile, we’re reviewing another debate about where Seattle’s startup ecosystem ranks nationally; new data on urban startup clusters; a $15 million funding round for BitTitan; Bill Gates’ poultry program; news of artificial intelligence watching and writing sci-fi films; and a good read on how “Silicon Valley” delivers such an accurate satire of the real Silicon Valley. (No, we’re not aware of any actual AI chickens… Startup idea?)

—Fred Wilson, the revered early-stage venture investor based in New York City, admittedly was “doing this entire post from my head” when he placed Seattle in the third tier of the U.S. startup sector, alongside Chicago, Atlanta, Boulder, and Washington, D.C. Local feathers were rightly ruffled, and Wilson, to his credit, received the feedback graciously and revised his outlook in a follow-up, writing: “Here’s the thing that is amazing about Seattle. It doesn’t rank as high as NYC, LA, or Boston in the number of startups funded or capital invested. … But the companies that have come out of Seattle over the past thirty years put NYC and LA and probably even Boston to shame. So on a dollars in/dollars [out], Seattle outperforms. By a lot.”

photo by João-Pierre S. Ruth

Wilson. Photo by João-Pierre S. Ruth /Xconomy

The perennial debate about who’s No. 2 (always behind Silicon Valley) is tiresome, but look, here I am writing about it.

One really good thing to come out of this is Tren Griffin’s essay at GeekWire on what it takes for a city to develop a top-tier tech and startup ecosystem. Griffin, who took to Twitter to defend Seattle, helping prompt Wilson’s revision, quotes several local venture capitalists and entrepreneurs on attributes of Seattle and the people living and working here that contribute to a unique, authentic culture.

—Richard Florida, the noted author and researcher on urbanism and venture capital, is out with a new analysis that finds “a marked shift of startup activity and venture-capital investment from suburban ‘nerdistans’ to dense urban areas, where more people walk, bike, or use transit to get to work each day.” Specifically, he and co-author Karen King find “57 percent of startup companies and 54 percent of venture-capital investments located in urban ZIP codes.”

Not surprisingly, dense metro areas like San Francisco, Boston, and New York, share many of these attributes, and together capture some 60 percent of total U.S. VC investment. Seattle, not so much. Its only mention in the analysis (PDF) is as an example of the past: Microsoft’s suburban campus. Though this is changing as transit connects denser Seattle neighborhoods such as the U District, Capitol Hill, and Pioneer Square. (South Lake Union, home to Amazon, has become too expensive for many startups.)

—At the heart of both Wilson’s initial third-tiering of Seattle and Florida’s data on urban startup neighborhoods is venture capital investment, which are often the beginning of the story. Wilson re-evaluated his assessment of Seattle after being presented with data on the end of the story—the big public companies that grew up here. IPOs and big M&A transactions are the exits, the big liquidity events that investors and entrepreneurs seek.

Yet, the startup world and people writing about it often focus attention on funding announcements—the bigger the funding, the better—even though that doesn’t necessarily mean the funded company is on the path to a positive outcome. Read our recent interview with Bill McAleer and Erik Benson for more on this topic: Make Exits, Not Unicorns: Voyager Charts the Early Stage VC Course

—Then there are companies that toil away for years, building businesses without need of venture capital. That was the case with Kirkland, WA-based BitTitan, a cloud services company, founded in 2007 by Geeman Yip. After nine years, BitTitan just raised its first outside capital, announcing a $15 million Series A round from San Diego-based TVC Capital and San Francisco-based family office Tao Capital Partners this week. The new capital will fuel geographic expansion and automation of its platform to help other IT service providers sell cloud services to their customers.

Vikram Jandhyala, left, vice provost of innovation at University of Washington, and Barry Crist, CEO of Chef. Photo by Benjamin Romano / Xconomy

Vikram Jandhyala, left, vice provost of innovation at University of Washington, and Barry Crist, CEO of Chef. Photo by Benjamin Romano / Xconomy

— Barry Crist, CEO of Seattle-based software company Chef, and University of Washington vice provost for innovation strategy Vikram Jandhyala covered the topic of venture capital in Seattle—among many others—in The Xconversation, our series pairing innovation leaders for lunchtime discussions (Part I, Part II). “As an entrepreneur, I do not think that being in the Seattle area you’re hindered from lack of capital,” Crist said, noting the interest many VC investors from outside the region show in locally based companies. Chef, for example, raised $40 million last fall from a half-dozen VC firms, only one of which—Ignition Partners—is based in the Seattle area. (Another, DFJ, has a partner based here in the person of Bill Bryant.)

—It’s good to be a step ahead of Bill Gates. He took to his Gates Notes blog to extol the virtues of raising chickens as a step out of poverty for the very large segment of the world’s population living on $2 a day. “[T]hrough my work with the foundation, I’ve met many people in poor countries who raise chickens, and I have learned a lot about the ins and outs of owning these birds. (As a city boy from Seattle, I had a lot to learn!) It’s pretty clear to me that just about anyone who’s living in extreme poverty is better off if they have chickens. In fact, if I were in their shoes, that’s what I would do—I would raise chickens,” Gates writes.

Xconomy Seattle, pecking away. Photo by Benjamin Romano / Xconomy

Xconomy Seattle, pecking away. Photo by Benjamin Romano / Xconomy

Our family has raised backyard chickens—right here in Seattle, Bill—for going on eight years. Let me acknowledge right away that this is something we have the privilege of doing as a hobby, rather than as a means of alleviating poverty. But I can attest to at least one of Gates’ given reasons for promoting chickens: They are easy to care for. He outlines the many benefits they bring in terms of health, income, and empowerment—particularly for women in poverty. As Melinda Gates puts it in a related post on Medium: “if you ask a woman in a developing country about chickens, she’s likely to show a lot more respect. That’s because a chicken can mean the difference between a family that merely survives and one that thrives.”

Bill Gates highlighted chickens as part of Coop Dreams, a partnership with Heifer International, to donate flocks of chickens on behalf of readers of his blog.

“Our foundation is betting on chickens,” he writes. “Alongside partners throughout sub-Saharan Africa, we are working to create sustainable market systems for poultry. It’s especially important for these systems to make sure farmers can buy birds that have been properly vaccinated and are well suited to the local growing conditions. Our goal: to eventually help 30 percent of the rural families in sub-Saharan Africa raise improved breeds of vaccinated chickens, up from just 5 percent now.”

That goal is tightly aligned with that of Tanzania-based African Chicken Ltd., a company in the latest session of Fledge, the conscious company startup incubator in Seattle. African Chicken will be one of the companies presenting at Fledge’s Demo Day on Tuesday, June 14, at Impact Hub Seattle.

—AI at the movies? Last week, it was AI watching “Blade Runner,” then creating an impression of it, using a neural network. The exercise resulted in a DMCA takedown notice from Warner Bros., later rescinded. In the through-the-looking-glass words of Aja Romano (no relation), writing at Vox: “Warner had just DMCA’d an artificial reconstruction of a film about artificial intelligence being indistinguishable from humans, because it couldn’t distinguish between the simulation and the real thing.”

This week, news that an AI named Benjamin, trained on scores of sci-fi film scripts, wrote one of its own. “Sunspring,” the resulting short film, stars Thomas Middleditch of “Silicon Valley.” Annalee Newitz, a human person writing at Ars Technica, which is hosting the film online, summarizes: “Somehow, a slightly garbled series of sentences became a tale of romance and murder, set in a dark future world. It even has its own musical interlude (performed by Andrew and Tiger), with a pop song Benjamin composed after learning from a corpus of 30,000 other pop songs.” Brad Feld, the Colorado-based venture investor (who piped up this week to defend Seattle’s honor, btw), calls the film “[a]wesomely awful. But it’s worth watching all ten minutes of it to get a taste of the gap between a great screenplay and something an AI can currently produce.”

—Speaking of “Silicon Valley,” here’s Andrew Marantz writing in The New Yorker about how the show—which he describes as “a reported sitcom”—gets its subject just right, with the help of former Twitter CEO Dick Costolo (once a Second City Theatre student), and others with real technology and startup expertise, on the writing staff and as consultants. Among the many interesting passages:

“[E]ven careful viewers might not understand the complexity of the invisible web of communication between Silicon Valley and ‘Silicon Valley.’ In addition to [more than 200] consultants, [showrunners Mike] Judge and [Alec] Berg maintain informal conversations, both on and off the record, with several Silicon Valley bigwigs, including a few billionaires with either a sense of humor or an axe to grind. This kind of back-channel relationship—satirists texting casually with the satirized—is a departure from much of comedic history.”

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