1Mby1M Virtual Accelerator Investor Forum: With Don Hutchison (Part 4)

Sramana Mitra: Talk a little bit about your investments. First and foremost, what have been some of your most interesting and satisfying investments so far?

Don Hutchison: If I look at deals that have graduated, I would say Sugar Media would be one. They’re a software stack for managing personal media at home. It was sold to 2wire. It was a really good outcome. It helped accelerate the management and the installation of higher-order applications and fundamental broadband hardware in the home. 2wire is the preferred hardware and software on the media sell side and others would be for cable. It helped move the market forward.

At the same time, it was a very good outcome for the company and investors. Recurrent Energy is very active. I actually put a team together and ran as Chairman for a while. We would sell that to Shark. A large group out of Canada would buy that. Recurrent was an idea that I and Matt Garlinghouse had to find a way to make large commercial solar installations much more affordable from a cost standpoint.

One of our contributions to the category was the development of the idea of the purchase agreement. Even more than that, it was treating large solar more as a real estate transaction. That was personally satisfying. W & W Communications was a company that was focused on improving graphic throughput based on 264 advanced standard. It was acquired by Cavium which is a stellar innovator. We were somewhat punching above our weight class. It might have been doubly satisfying because you came close to going over the falls more than once.

There’s Trovix. Trovix is an early play using artificial intelligence to help guide the definition of job description. Oftentimes, hiring managers describe a candidate using other people’s writeup and what they think they should say. It tends to be frustrating from a fulfillment standpoint because the person they described isn’t actually a good hire.

Oftentimes, you don’t realize the delta. The focus is helping to create a description that was much closer to what they really were after. Then the backend of it was using that insight to sift through applicants and make a better match. That’s an area of personal resonance. I was happy about that outcome.

There’s Automatic Labs. They were in front of fitting AI to cars. They provided tremendous amount of insights. They’ve done some very nice work. They got acquired by Sirius. I quite liked what they did.

MindMeld is a voice AI interface. It was earlier in the market than Siri. The idea is conversational interaction with computing. They’ve done some very nice work. Cisco acquired them.

Sramana Mitra: AI is a personal interest for you?

Don Hutchison: It has become such. It’s not so much that I’ve got a pre-existing bias towards it. It just seems obvious that machine learning is going to affect most everything over time.

Sramana Mitra: Everybody is talking about AI as their area of interest. Everybody wants to invest in AI right now. It’s a huge trend.

Don Hutchison: It is. I’m looking for what difference does it make. How are we applying the insight? I’m more interested in its applications. For example, Trovix made enormous sense to me because I love the problem that they were describing. Much earlier in my life, I was also a senior guy on the HR side. This is something that I knew of. What they are doing was very useful.

A company that I’m in today is Scientific Revenue. It’s looking to optimize the purchase of accoutrements in otherwise free mobile games. You’re playing your game and you want to add more ammunition or unlock something. You can do that for a fee. The intriguing question there is how do we optimize that experience so that you maximize revenue for the seller and maximize satisfaction for the buyer.

At some point in time, maybe I’ll pay X for that but maybe another time, I’d pay a tenth of that. I think what they’re doing is terribly interesting. Most price will become situational. I see great opportunity for this to be applied in other areas. That would include entertainment where you already have pay-per-view options. I look for applications of AI to a practical task and improve it.

Sramana Mitra: To optimize a business problem. Very quickly, how would you characterize what is your focus in your investment? Where in this continuum that we discussed earlier is your sweet spot? B2B, B2C? What about geography?

Don Hutchison: Geography is Bay Area predominantly followed by Santa Monica and New York. I would be generally coming in with the first experienced money. I’d probably be the seed round. I don’t understand pre-seed. Post-seed is a bridge. I also think that bridges are almost inherent in the category today. I would say seed. In terms of the areas, B2C with a focus on small to medium sized businesses. Work in AI is a newer interest.

I find myself contrarian on some hardware-oriented products. For example, I’m an investor in Lemnos Labs, which is an incubator in the city that is very hardware-centric. I’m an early investor in TrackR out of Santa Barbara. They are all about tracking the physical things in your life. They originally started with cellphone but the ambition is to be able to track anything anytime.

Given that I’m independent, you can do whatever intrigues you. When you think of funding with investors, it’s still not totally restrictive but a more serious commitment.

Sramana Mitra: Wonderful and extremely insightful conversation. Thank you for taking the time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Don Hutchison
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