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The DL - An inside view into Pacific Northwest Tech

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Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
 
September 23 · Issue #14 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
This week’s issue covers Day 2 vs. Day 1 initiatives at Amazon, the hottest AI companies in Seattle, another DL survey, and a local alternative to LSD (that offers a 30 day free trial).

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Ask your friends at Amazon what they think
One of the best parts about living in Seattle is hearing Amazon’s leadership principles pop up in casual conversation.
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just kidding 😂. But actually, one of the things that has always intrigued me about Amazon’s leadership principles is the tension between customer obsession and delivering (financial) results.

Lately, a bunch of tech companies have gotten in trouble for promoting their own content in search. For Google, it’s the fact that the majority of searches now result in no clicks or clicks to Google-owned sites. For Apple, it was ranking their own apps at the top of search.

Now, for Amazon, it is ranking products that are more profitable for the company at the top of search (often Amazon’s own brands). According to the WSJ, this was a “yearslong battle” between the execs who run the retail business and the execs who run the search team.

Stratechery had a great article on this last week, where he evaluates Amazon search algorithm adjustments to favor its own products against Jeff Bezos’s advice on how to avoid Day 2 from his 2016 shareholder letter:
Shifting results away from relevance towards factors that benefits Amazon’s bottom line is not a decision that results from “true customer obsession
Goal-seeking for profit is a poor proxy for that customer obsession that Bezos focused on in the 1997 shareholder letter
Amazon allegedly spent “years” deciding whether or not to do this, which is definitely not “high-velocity decision making

And when you compare that to Amazon’s investment in one day shipping:
Customers love getting items in one day instead of two
One day shipping is a clear goal
Increased convenience will always be the ultimate external trend
Ramping up one-day shipping in a manner of weeks by definition requires high-velocity decision making

I don’t like that Amazon, Apple, and Google promote their own products first, but I think they should be allowed to if they want. But more than two-thirds of voters think big tech platforms should be broken up to ensure they don’t prioritize content they benefit from financially, so seems like the customer ask is pretty clear.

What do you think? DL Survey #2
I had a bunch of interesting conversations with people last week about the WSJ article on raising AI-savvy kids, so I’m extending it into a survey:
Do you think kids should say please and thank you to virtual assistants like Alexa and Siri?

I’ve also got a Day 1 or Day 2 question in there, so please share your thoughts on Amazon as well… I’ll publish results next week!

“You have to have machine learning in your story or you’re not sexy.”
Speaking of AI, last week Forbes released its list of the 50 most promising AI startups in the country, and there were five Seattle companies on the list. Here’s a quick look at each of the companies:
  • 👯 DefinedCrowd - Quality-focused data platform that helps customers define standards and collect training data for AI applications
  • 📷 Xnor.ai - On-device AI solutions that allow customers to run AI models in resource-constrained environments
  • ⚙️ Algorithmia - AI platform to automate DevOps for ML and allow for rapid iteration of ML models
  • ✍️ Textio - Augmented writing platform that helps companies write better emails and job descriptions based on historical outcomes
  • 📝 Icertis - Enterprise contract management platform that can analyze documents to provide contextual reports and notifications

Some interesting takeaways:
  • These companies operate at all levels of the “intelligent app stack - from data collection and prep, to building block services, interfaces, and finished services
  • The CEO of every company on this list is a former Microsoft employee (Daniela Braga, Jon Gelsey, Diego Oppenheimer, Kieran Snyder, Samir Bodas), and most were PMs
  • AI is hot, but this hasn’t opened overnight. Most of these companies were founded over 5 years ago

Stay tuned for more content on Madrona’s intelligent applications investment theme from me coming out soon!

Other stuff I've been talking about
💊 LSD vs. Asana - Is microdosing still a thing? Not sure - but in any case, you could also try Smartsheet for the same benefits 😉
☢️ Public service announcement - Most smartphones exceed legal safety limits for radiation exposure because companies test phones 5-25 mm from the body, even though most people carry their phones next to their body. Don’t carry your phone in your pocket!
🧬 Gene editing in Excel - One in five genetics papers has errors from using Excel because there’s a gene called SEPT2 which gets saved as Sept 2, 2016
🎒 $995 - Google and Saint Laurent collab on a connected backpack
💰 Rewards - Hundreds of Microsoft employees shared their comp details to a Google Sheet (haha) after bonuses came out. Here are the numbers

Please hit reply! (Or subscribe or forward!)
About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
If you have thoughts, questions, or comments, hit reply!
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