Posts by Author Garry Tan

Investing in the future of retail with Standard Cognition: Bringing real time computer vision to all brick-and-mortar stores

Standard Cognition is building the retail experience of the future, where you just walk out to pay for whatever you’re carrying out of a store. It’s seamless, checkout-less shopping for consumers and retailers all over the country.

We’re proud to announce that we just joined Charles River Ventures and Y Combinator in backing the company through an initial $5 million round.

In their first proof of concept, they use cameras to identify who walks in, what goods they’re carrying and what they ultimately purchase. All of these processes are handled on-site at the local store using computer vision techniques Standard Cognition is developing.

The most interesting innovations happen when technology cost curves hit magic levels where they become possible in new packages for the first time. Realtime computer vision with off-the-shelf GPUs has just reached that level now, and we are excited that this team is bringing it to reality today.

The team has not only founded a company together before, it has three PhDs in mathematics and nuclear science and its CEO Jordan Fisher led a team at the Securities and Exchange Commission developing quantitative tools that could make sense of the agency’s data.

For retailers, this will lead to reduced prices, no lines, better stocked shelves and fewer misplaced items. Every year, retailers lose $45 billion to theft, so even before the holy grail of checkout-without-lines, Standard Cognition can make a huge dent in anti-theft in a way existing solutions have only dreamed.

Technology cost curves unlocking new capability is only half of it. To bring amazing tech to market, you also have to have a strong business motivation to do it, and frankly we’re there today. Traditional American retailers face an oncoming crisis as e-commerce continues to take mindshare and revenue directly from brick-and-mortar retail. Standard Cognition is such a powerfully better customer experience that this is the kind of thing that goes from cool to must-have in very short order.

Welcome Alda and Brett!

I’m pleased to announce that Alda Leu Dennis and Brett Gibson have joined the Initialized Capital team.

A common refrain at our firm is that we’d be a pretty killer startup if we weren’t busy funding and advising tomorrow’s best early stage startups. Our partnership has expertise in almost every essential discipline needed to build high growth startups: engineering, design, product management, operations, legal, finance, communications and marketing.

We’re proud to say Alda and Brett are helping us get both deeper and wider on that front.

Alda Leu Dennis joins us as Partner & COO. She’s bringing decades of sharply honed legal and operating experience to both Initialized and our portfolio companies. She previously was a managing partner at 137 Ventures where she led investments in Planet Labs, Wish and CourseHero. Before that she was COO at Airtime, General Counsel at Founders Fund, Assistant General Counsel at Peter Thiel’s Clarium Capital Management, and practiced as a litigator for IP disputes at WSGR. She graduated from Stanford with bachelors degrees in economics and political science, and a JD from UCLA.

Brett Gibson joins us as a Partner. He’ll be working closely with our portfolio helping them build world-class software teams, as well as build software that supercharges what we can do as a partnership and founder community. He co-founded both blog platforms Posthaven and Posterous (which was acquired by Twitter) and also worked closely with me on the Y Combinator software team, where the two of us built and re-wrote many of the essential software systems that run interviews, applications, events, and the internal alumni social network. He was a founder in the YC S08 batch with Slinkset, a link-sharing community site. Prior to that he cofounded DrawHere, a browser drawing startup acquired by DeviantArt in 2006. He graduated with a BA in philosophy from University of California, Santa Barbara.

Most venture capitalists end up lone-wolfing the way they do their business. We’ve built our team in a way where the opposite is true — when Initialized funds you, you’re not alone. You get the full force of our partnership to help you think through the engineering, design, product, marketing, legal, and strategic challenges that every startup must overcome.

A newly funded Initialized portfolio founder recently told us they got so much out of our team that they wanted to double check that they weren’t going to get a consulting bill. We laughed and said our investment check to them was all the compensation we needed.

Why Initialized invested in Better: Software that files medical claims for you automatically is indistinguishable from magic

Health insurance remains one of the most file cabinet-y of file cabinet industries in our modern age. 

This is the realm of fax machine and call centers, and the quality of service you get from these modern day bureaucratic nightmares can vary greatly. Most disturbingly, the poor user experience is possibly intentional— random call drop rates for some phone requests can be as high as 20%, which really reduces the chance customers actually get their claims actually paid out.

Luckily, when a smart team comes along with a software-first approach to tackling such a file cabinet industry, we love to roll up our sleeves and get involved. 

We’re proud to lead the $1.1M seed round in Better alongside Designer Fund and top angels including Karma & Tapjoy founder Lee Linden, Rock Health founder Halle Tecco, and Mixpanel cofounder Tim Trefren

The team has filed around $1,000,000 worth of claims on behalf of patients since starting late last year. Users just download the app (Better — Health Insurance Claims Made Simple) and upload a photo of their insurance card and any medical claim you might have. Better takes care of the rest, and advocates on the user’s behalf so that they get reimbursed, and will also correct any billing errors found in the process too. 

The service works great for all kinds of out-of-network medical expenses, and has been used across all types of reimbursements including therapy, psychiatry, acupuncture, chiropractors, dentists, lab tests and medication. 

“In America, patients frequently can’t afford to access the care they need and get trapped in a bureaucratic nightmare whenever they try to use the insurance they pay for,” CEO Rachael Norman said. “Better’s mission is to make healthcare simple by supporting patients.”

That’s what we particularly love about this founding team: how truly mission driven they are. Rachael previously managed operations at analytics startup Mixpanel and Bitcoin hardware company 21, and John Stockdale was a site reliability engineer and open source advocate at Facebook. They started working on this when they realized how many maddening hours are lost fighting with health insurance companies over bills that should obviously be paid. 

Patient advocate platforms have existed for years, but they historically have been just as paper-oriented as the health insurance companies they try to save their customers from. Healthcare remains a $3.2 trillion per year industry, and at 18 percent of US GDP, at least thirty cents of every one of those dollars is spent on people, systems and processes that manage administrative tasks. If a smart software system can streamline this process, it can do a whole lot more than just make our lives more convenient. 

You can also read more about what founder Rachael Norman learned while building Better, or read their launch article at TechCrunch.

Better is available now and is currently free during the beta at https://getbetter.co.