Simon Francis, the founder of SHINC, a laytime claims platform, harks back to the dot.com bubble in assessing who will come out on top in today’s crowded maritime start-up scene.
Mark Roberge at Stage 2 Capital and founder of the CRM software platform Hubspot did a recent podcast where he posed the question who will win the AI race, start-ups or incumbents.
He pointed out that if one looks at the company names that made up the Dow Jones Index 30 years ago versus today virtually none of them are still on the index
With the improvement of AI and machine learning now it is like when the internet hit the world in the mid- to late-1990s. The potential power of it enables one to start to re-imagine everything.
How would a post-AI/ML world look for your industry in eight to 10 years rather than in 30 years?
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Whilst we may not know exactly what AI will be capable of in 10 years one has to look to build with it at the heart of any solution.
Tech moves that fast nowadays that new companies can build a business that can scale in a much shorter period and start to displace some of the existing Dow Jones Index companies
However, is AI and ML just in a hype cycle? Like the internet was back in the late 90s/early 2000s, where lots of money got pumped into it but with no real understanding of how to actually generate revenues and profits.
Is the market really ready for AI in its current guise? This is where the incumbents have to be careful. The innovators’ dilemma commences when big companies are too slow to respond. Their priorities are on protecting their current revenue stream. They have a tendency to ignore the smaller start-ups who are not affecting their bottom line and the thought of having to invest in the new tech now would weigh too heavily on their profit margins to make it worthwhile.
We’ve seen many big companies fall foul of this over the years – just ask folk made redundant at the likes of Blackberry or Blockbuster Video.
Those with real vision, who can harness AI/ML to drive real value for the customer, have the potential to grab the incumbents’ market share.
In Anders Vartdahl’s recent maritime newsletter he refers to Coatue’s research paper on the future of AI and its potential implications.
Coatue notes that in the 35 years since the PC and internet were introduced to the world of business the productivity of employees has increased by 35%
Early tests using AI in B2B demonstrate how AI can almost nullify the need for many of today’s manual processes.
In addition, ML can crunch the data lake of internal and external information and provide commercial decision-makers with insights to make faster and more accurate decisions.
Coatue also notes that the adoption of new platforms/technologies has steadily decreased over the years.
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PCs took 20 years to be adopted, the internet 12 years, and mobiles just six years. Given the speed of development nowadays it may not be unreasonable to predict the adoption of AI may only take four or five years.
How will this affect the maritime world? Whilst many have been noting the number of acquisitions and consolidations going on in the market you do have to wonder whether they will become the incumbents or the innovators going forward.
We are already seeing the likes of SEDNA and Cleardox extract data from emails and documents and automatically populate users’ VMS and ERP platforms
The next stage is to combine all the data sources – internal, external, forward-looking and historical – to create a data lake that ML can learn from.
The goal being to provide commercial decision makers (chartering and ops) with the information and workflow tools to make the best commercial decision at the time of fixing as well as monitor the shipment through the life of the voyage, create actionable alerts, minimise variances, analyse results, feed variance learnings back into the data lake to enable the ML model to improve the decision process next time and finally analyse whether the commercial decision made on fixing was the correct decision.
The end goals are maximised profits, losses minimised, continuous improvement/accuracy of decision making and measurable value creation.
Which companies will be on the ‘Dow Jones Index for Bulk’ in the next 10-15 years? I believe there are two or three existing start-ups/consolidators that are making good progress and have the potential to be on the index.
I also predict that one or two new start-ups will also appear on the scene. They’ll be AI/ML-centric and create real value for the industry. If they can execute well in the timeframe they’ll displace or even acquire some of today’s incumbents.
In 10 to 15 years the names making up Dow Jones Index for Bulk Shipping could look a lot different than today. I wonder if one of them might be called Levelseas 2.0.