For Venture Capitalists, predicting, measuring and evaluating the success of the startups they invest in is risky business. Although various computational programs have aided this procedure by crunching and projecting numbers that have valuable insight to an infant company's potential, the final decision remains in the hands of a real person, creating room for a variety of human biases.
Madrid-based broadband and telecommunications multinational, Telefónica's Open Future network has partnered with a machine-learning API company called BigML to develop an algorithm that helps VCs decide what startups to invest in. The partnership will push a new startup competition that will select its contestants and winners through this algorithm.
Telefónica is set inaugurate this startup battle – held in cities like Buenos Aires, Valencia and Bogota – next year. The company has not disclosed the dollar amount that is going behind this project, telling The Verge that "the best startups working on state-of-the-art predictive apps ... will be able to access funds managed at Telefónica Open Future."
However, given the amount of confidence behind this endeavor, the idea of putting full responsibility for one's investments is still subject to scrutiny. As BigML's announcement reaffirms, "Machine learning's impending impact on jobs that so far were considered exclusively to highly skilled humans will likely remain a controversial yet unavoidable topic for the foreseeable future."
The startup battle, then, is just a platform to test these ideas out in relatively safe waters.
