“The Hive’s vision of the future of the enterprise is an AI-based autonomous enterprise,” says Co-Founder and Managing Director, T. M. Ravi – and there simply aren’t enough hours in the day to absorb the excitement and world-changing pace of building AI companies.
This week, Ravi’s Palo Alto-based co-creation studio announced Hive III: a $25.6 million fund intended to create seven more startups over the next three years. When these new ventures are added to their current roster of 24 AI-powered companies that have already emerged from The Hive – including six already acquired – the success of The Hive’s high-touch engagement model becomes clear.
I spoke with Ravi about the unique value-add of The Hive’s “hive” approach, the undying influence of the Silicon Valley, and the potential for AI to change the world.
M.R. Rangaswami: Your firm was an early user of the “hive” concept. What does “The Hive” mean for your startups?
T.M. Ravi: When we think of the 24 ventures we’ve created, we picture them as bees buzzing around in The Hive, collaborating with each other and creating energy out of that collaboration. Our hive actually has a physical space where our companies tend to be located during the first 12-15 months of their existence. In addition to providing infrastructure and office services, the physical co-location of our companies fosters sharing of best practices and technological approaches.
The Hive is unique in that it is a studio for co-creating AI-powered startups. The underlying AI technology of all our startups is very similar but how each one applies the technology is very different from company to company. This results in a variety of use cases and applications in the enterprise.
We don’t simply fund the companies, we help them at every stage of growth – especially in the first 12-15 months. For more than 80 percent of the companies we are involved with, we were involved on Day Zero – before the company existed. We collaborate with entrepreneurs and in some cases, corporations – to explore thematic areas of opportunity. Out of this collaboration, we develop business concepts for our startups. We then validate these concepts by engaging with thought leaders and the market, fine-tuning the idea along the way. If we see strong validation and major revenue potential, we go ahead and fund the company.
In some cases, there is already a founder working with us at this stage, in other cases, we recruit one. We then help to hire the first 15-20 employees, guide the technology and prod development, design business, and the go-to-market strategy. From very early on in its life, we connect startups to larger corporations that can be customers. By addressing the needs of these customers and developing the solution in context, we facilitate the convergence of product-market fit. This approach helps avoid a common problem in Silicon Valley: Building products in a vacuum.
M.R.: Many startups today preach the cost advantage of being located away from the Silicon Valley. The Hive is based in the epicenter of tech innovation – University Avenue in Palo Alto. Why?
Ravi: There is an AI revolution taking place in the Silicon Valley. It is hard to absorb the pace of change AI is driving. It is not just impacting traditional infrastructure technologies but operations every industry – financial services, healthcare, industrials, and so on. Our location is right in the middle of the players driving this revolution: We are 10 minutes from Google, 5 minutes from Facebook, and 5 minutes from Stanford. We are close to the 101 Freeway and the rest of the Silicon Valley. You can take the train from San Francisco.
While it makes sense for us to be based here and have a good fraction of our companies based here, we also encourage our startups to leverage the talent pool wherever they end up putting down roots. Many companies have offshore centers or other locations in other parts of the U.S. or the world where talent is more freely available and cost effective.
But make no mistake, the AI revolution is still centered here in the Silicon Valley. Virtually every large corporation that wants to drive leading-edge innovation has an office in the San Francisco Bay Area. Any important startup will have its most significant talent, leadership, investors, and partners all located in this area. The physical proximity makes it very efficient to engage here as opposed to elsewhere. And after 5pm, the amount of innovation and networking that takes place is astounding.
The Hive taps into this buzz by hosting community-building events. We host The Hive Think Tank, a thought leadership forum focused on all-things AI. We have this event platform that is a physical place where 150-800 people show up for talks, panel discussions every other week. In addition, we host a content platform that is accessed online by 10,000 members, again, covering all the issues related to AI. The Hive’s brand is very well known in the AI circles, because of these events. This week, we host The Hive annual summit, a gathering of 300 CXOs, thought leaders, VCs and other experts who get together to hear speakers on AI in the enterprise in Palo Alto.
M.R.: You just announced your $26.5 million Hive III fund. What has changed at the Hive between 2012’s Hive I and Hive III? Will AI continue to be your dominant focus going forward?
Ravi: AI is a very rich field to mine – there is still so much to do. The impact of AI is going to be orders of magnitude bigger than the Internet. It will not only dramatically transform the enterprise, AI will change the world.
The pace of change we are witnessing is just astounding. The past few years have been an incredibly exciting journey. We are involved in everything from personalized flying cars to smart industrial machines to robo financial advisors to cybersecurity and beyond.
We are changing the world. There aren’t enough hours of the day to be busy enough to drive that. I can’t imagine a more exciting thing to do. I am speaking on AI a few times each month – I’m even speaking at Burning Man this year. People from all walks of life see this change coming and it is really exciting.