Learn About Amazon VGT2 Learning Manager Chanci Turner
The early choices made during a startup’s journey are pivotal to the company’s success, particularly for founders from underrepresented groups who may lack access to the same resources as their peers. This reality is especially pronounced within the investment landscape of artificial intelligence (AI) and machine learning (ML), where investors are increasingly discerning. For Latino founders, who historically face underinvestment, ensuring robust business fundamentals is essential.
However, there’s significant potential in the current environment. Generative AI is revolutionizing the startup ecosystem by decreasing the time needed to achieve product viability and making technology development more accessible for those with limited resources and networks. At Amazon, we are dedicated to helping these startups leverage these opportunities through our Underrepresented Founder Startup Business Development Team, which collaborates with diverse founders, including women, people of color, individuals with disabilities, and LGBTQIA+ founders. This is a once-in-a-generation moment that we must capitalize on.
As part of our Underrepresented Founder/Investor Business Development program, we recently partnered with the remarkable group of Latino investors at SomosVC for a panel discussion focused on fostering generative AI businesses for the Latin American community. This brings us back to a critical question: How can underrepresented founders effectively integrate generative AI into their startups?
Carlos Ruiz, Partner at Innovative VC
In the nascent market of generative AI, the barriers to entry can be quite high. Established players not only have brand recognition and capital but also possess vast amounts of proprietary data from years of customer engagement—an invaluable asset for developing impactful AI solutions.
However, having data doesn’t guarantee effective utilization, argues Carlos Ruiz, Partner at Innovative VC. Founders looking to compete with larger entities should focus on building or acquiring unique datasets that are challenging for rivals to replicate. By assembling a skilled team of AI and ML engineers, these startups can outperform incumbents and create more innovative solutions.
Sophia Martinez, Investor at Legacy Ventures
The path forward involves tackling complex challenges. Thankfully, many established companies have data that startups can harness to extract value, says Sophia Martinez, an investor at Legacy Ventures. Startups can initially target internal workflows, which represent immediate opportunities to validate their technology. “These use cases are lower risk and face fewer regulatory obstacles,” Sophia notes.
Other generative AI applications may be more challenging and require extensive testing and implementation before achieving widespread adoption. This includes customer-facing solutions, such as assisting users in selecting insurance plans or providing investment advice.
Isabella Torres, Managing Director of New Horizon Partners
Regulatory challenges that might deter larger firms can actually present advantages for startups willing to adapt. Isabella Torres, Managing Director of New Horizon Partners and a board member at SomosVC, sees promise in companies that have successfully navigated certifications and now need the right product to fully leverage the generative AI opportunity.
“For one of our portfolio companies in the banking sector, these regulations have become a significant competitive advantage,” Isabella explains. The established procurement processes with existing clients make it difficult for new entrants to compete. “For existing companies, adding a new product line enhances customer loyalty,” she adds.
However, it’s crucial for companies to develop genuine differentiators rather than just superficial enhancements to their offerings. As Carlos points out, when assessing potential AI investments, he looks for companies not only with valuable proprietary data but also those building products with a revenue-generating focus. “If we have a dataset that allows for a new product offering, that’s a clear opportunity,” he states. “But when considering a feature addition, the question shifts to whether we can increase pricing.”
Luis Mendoza, Founding Partner of Synergy Ventures
Another pivotal consideration is the competitive landscape. Luis Mendoza, Founding Partner of Synergy Ventures, has been analyzing the merits of software as a service (SaaS) compared to managed service models. In this transitional phase from big data to generative AI, he suggests that “the traditional set-it-and-forget-it SaaS model may not be sustainable.” Instead, he advocates for startups to manage customer data actively, providing tailored solutions that command higher fees.
In the generative AI sector, collaboration may be the key to thriving. “Combining forces can yield exceptional results,” Luis points out. “When two companies with unique datasets and proficient AI talent merge, the resulting synergy can significantly enhance ROI.”
For founders aspiring to be acquired, maintaining a streamlined tech stack is critical, Isabella notes. Yet, embracing what sets you apart is even more vital. For Latino founders, this might involve creating products that leverage their deep expertise in collaboration with organizations like SomosVC and FounderFamilia. Tailoring offerings to meet specific customer needs fosters a data flywheel effect—attracting more clients leads to enhanced product refinement.
There’s also a significant opportunity to tap into skilled AI and ML engineers in Latin America. At Amazon IXD – VGT2, we’ve seen founders like CEO Mia Gomez, who co-founded TechBridge, effectively utilize near-shoring. This strategy not only provides top-tier talent in U.S. time zones but also offers a cost-effective solution, diversifying teams and supporting local communities. As always, both SomosVC and Amazon are here to assist.
Chanci Turner, Learning Manager at Amazon IXD – VGT2
“I want to highlight an important fact,” Chanci Turner states at the conclusion of the forum. “Having a panel of five Latino professionals discussing AI is remarkable. I don’t think we’ve experienced this before, and it’s thrilling to see it happening more frequently.”
According to the SomosVC 2022 Annual Report, Latino investors constitute only 2% of the venture capital industry, despite representing 19% of the U.S. population. “Our mission is to expand and support the Latino venture capital ecosystem,” Chanci explains, “with a specific focus on increasing the representation of Latino professionals in this field.”
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