Haystax featured on the front page of the Orange County Business Journal – July 17th, 2023
BY PETER J. BRENNAN – Orange County Business Journal (full article here)
What word do entrepreneurs most frequently use in pitches that are ultimately unsuccessful in raising capital? “Need,” according to Dave Beck, Creator and General Manager of Haystax, a new artificial intelligence program sponsored by Orange County tech and medtech-focused business accelerator Octane. “They say the word ‘need’ repeatedly. Maybe they need advisers, more resources, more capital,” Beck said. “This could be valuable for an entrepreneur. They could realize, ‘I said the word ‘need’ 50 times in my pitch. That’s hurting me. I need to change my narrative, so I don’t come across as so desperate.” Beck and Octane built Haystax, which he said can predict a startup’s ability to raise capital with 90% accuracy.
Octane says it has developed the world’s first Al-driven startup evaluation tool that includes a “Coachability Curve Index” and the capacity to analyze a pitch video. “This is really exciting,” added Octane Chief Executive Officer Bill Carpou. The program can help an investor analyze the strengths and weaknesses of the pitch, from the product to the management to the potential market, Carpou said. “This will have not only national, but international acceptance. Orange County could be the ground zero,” Carpou said. A demonstration of the program was given last month at Octane’s annual Ophthalmology Tech Conference in Newport Beach.
Beck calls himself an “entrepreneur who got caught by golden handcuffs,” having worked at large corporations like Coca-Cola, PwC and Beckman Coulter. He decided to make a change when he was selected for an accelerator program while working at Cognizant, a technology consulting firm. “My entrepreneur neurons started firing like crazy and I thought, ‘What am I doing at a huge company with 300,000 employees? Perhaps I should get back to an entrepreneurial ecosystem.”
About two years ago, Beck joined Octane, where he worked in its accelerator program that trains entrepreneurs how to make their pitches and capital readiness. Octane says it’s helped 1,573 companies raise S5.9 billion in capital, creating 28,732 jobs since 2010. Furthermore, 82% of the companies are still in operation today. During the past decade of analyzing startups, Octane has collected about 80,000 data points now leveraged by machine learning. “We were sitting on a data gold mine,” Beck said.” Anytime you have a huge data set and a binary outcome, you can train for machine learning projects.” The name is a play on the image of looking for a needle in a haystack, he said. Beck says Haystax is taking the approach made by “Money Ball,” the popular book and movie that told how an executive used data to select baseball players.
Haystax, while in beta, already has paying customers, including venture capitalists and other accelerators. Local data analytics software companies including Alteryx Inc. (Nasdaq: AYX) and Veritone Inc. (Nasdaq: VERI) have contributed their skills to the project.
The 13th Judge
In a typical presentation by an upstart firm seeking funding, an entrepreneur speaks for 20 minutes followed with an hour of questions and answers by a panel of usually 12 judges. “Our Al is picking up on the questions and comments of those judges and able to provide a high-level sentiment analysis,” Beck said. “We’re using it to complement human judgment. It’s not intended to replace human judgment. It’s the 13th judge.”
Haystax can also judge an entrepreneur’s pitch. using it as an “entrance exam” to quickly determine if a company will get funding. “There’s always been a vacuum of data when it comes to early stage startups,” he said. “It’s about identifying the winners early on.”
The program also has a “‘Coachability” index where the entrepreneur is asked to do a self-assessment that is compared to a similar questionnaire filled out by judges and investors. The greater the difference between the two, the more difficult it is to coach the entrepreneurs, Beck said. “We could only take a startup as far as the entrepreneur was willing,” he added. “It demonstrates to everyone how grounded this entrepreneur is to reality.
The Successful Word
Haystax tells an entrepreneur “What’s the temperature of my pitch deck and how is it being responded to?” Haystax also provides a “word cloud” to analyze which words are used most frequently in speeches by entrepreneurs. What’s the most common word in a successful pitch? “Product,” Beck said. “They’ve passed ideation, proof of concept. They have traction, something concrete to point to. It demonstrates some degree of maturity.”
- BUSINESS: AI analysis of startup pitches
- OWNER: Octane
- DEVELOPER/GENERAL MANAGER: Dave Beck
- HEADQUARTERS: Newport Beach
- NOTABLE: Octane rolling out Haystax AI to help investors identify winning pitches likely to raise funds
The Pinnacle of AI
Dave Beck has a long background in artificial intelligence, having served as the Al solutions leader in the media vertical for Cognizant, a technology consulting firm. “I had to out-innovate Google, Apple, Verizon, Disney and come up with Al solutions that they would want to buy from us,” Beck said.
He said the goal of any data scientist is to move from descriptive analytics to predictive analytics to prescriptive analytics. Using basketball as an example, Beck said descriptive describes who won the game, predictive is who will win the next game and prescriptive determines which players on the court for certain length of time will increase the chances of winning by a certain percentage. “It’s giving the coach exact recommendations he needs in order to win. That is the pinnacle of any data scientist.”
Written by Peter J. Brennan, Orange County Business Journal | July 17, 2023
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