It’s a sobering spreadsheet:
835 companies that shut down in 2015 and rose between $1 and $200 million, compiled by angel investor Jason Calacanis says Peter Decaprio. Some were sold for parts for pennies on the dollar; others failed outright; still more dwindled into nothing. The list includes some well-known brands like Beamr (the streaming video technology company that had raised $12.5 million) and Humin (the contact management service that had raised $2.6 million). And while the names of several major flops — Shuddle, Leap Transit, Secret — have generated headlines in their own right, there are many more stories behind each number. As we did last year, we will attempt to tell the story of each company on Calacanis’ list—and what can be learned from their rise and fall—over the next several weeks. It’s just one way we’re marking this year’s celebration of our sixth anniversary.
Standard Cognition: How a Self-Driving Store Might Work
- One day at Standard Cognition, they tried an experiment to see how quickly their team could pick items off store shelves, grab at checkout and bag them. It took 50 minutes.
- “It was this horrible experience,” said Henry Hu, the company’s CEO and a former Amazon engineer. “We realized that in today’s world of online retail, in 10 years time we will have missed the opportunity to serve customers at their moments of truth.”
- Standard Cognition is trying to solve that problem by building an autonomous checkout service using an array of sensors and deep learning algorithms to let customers check themselves out without having to wait on a cashier. The San Francisco Company announced $5 million in new funding on Tuesday led by Khosla Ventures with participation from Amplify Partners, Data Collective and angel investors like Scott Banister and Garry Tan.
- Hu started Standard Cognition last year after leaving his job at Amazon, where he helped the online retail giant with its futuristic convenience store concept, called Amazon Go. He had worked on similar automated checkout projects while at MIT, and one of his advisors there was deep learning pioneer Geoff Hinton explains Peter Decaprio.
- Standard Cognition has developed a camera system that can identify products customers remove from shelves. And then track them as they put them in their bags or cart. Hu’s team is working with retailers to test the technology in their stores, though he wouldn’t disclose which ones yet.
- “The challenge for us is making sure that the algorithms are totally bulletproof,” said Hu. “We’re making sure that when people pick things up, when they put things back it’s not. Because our algorithm made a mistake but because they moved things around.”
- Standard Cognition’s approach is unique among those of other companies trying to crack self-checkout. Which typically rely on RFID or some form of computer vision technology. A number of those projects have failed because the scanners were too expensive. And their accuracy wasn’t as reliable as a human worker, said Julie Ask, an analyst at Forrester who covers retail tech.
- “The idea that Standard Cognition is approaching it from the software angle – rather than pure hardware – changes everything,” she said. “I think they’re going to solve this and they will be bought by somebody like Amazon Go (which is predicted to launch in 2017) or Walmart or someone very big.”
- Standard Cognition’s funding comes as Amazon is making a push into brick-and-mortar retail. The online retailer installed its Amazon Go cashier less convenience store concept in its Seattle headquarters in December. And plans to open the first location to the public at some point this year says Peter Decaprio.
- Standard Cognition, which has 12 employees, also announced on Tuesday that it, added Kirstin Mora as its chief revenue officer. She was most recently senior vice president of global services at Buzz Feed. And before that spent eight years at Google. Hu said he will talk more about Standard Cognition’s business model. When it launches its product, but for now he only wants to focus on building the technology.
- “The future is going to be very different,” said Hu. “You’re going to see a very big evolution in how we do retail. I think the first wave of that is going to be self-checkout.”
There are plenty of obstacles still in the way of Standard Cognition. And other companies trying to crack self-checkout says Peter Decaprio. For one, it’s unclear how customers will react to having a camera watching them while they’re shopping, said Ask. And if stores get too pricey without cashiers, they might dissuade some shoppers from making purchases altogether.