Gaming’s Impact Toward Data Science and AI Careers

Under the circumstances and the economy of the world we’re working with in 2020, many of our consumer experiences at home are helping uncover new opportunities in work. A most obvious place to start is in exploring what streaming media, social media, and gaming, can mean in other fields of work or in uncovering opportunities for entrepreneurs.

Our friends at GamerJibe (a Collective graduate) and The Level Up Experience have been exploring this for some time; and since hosting one of the first-to-market virtual career fests, it’s been fascinating to watch their work and impact, mature in new ways that keep our economy informed and working.

Gamerjibe, the next-gen events platform, makes it easy to organize 3D browser-based events that appeal to the digital generation, to run networking events, job fairs, esports watch party, or conferences.

Emerging Tech in Cyber Security

One such talk recently hosted Cyber Warrior Network’s Nigel Leblanc, Marine Corp Captain and Mentorch Founder Lavontay Santos, and Patrick Kelley and Jeff Barron of Critical Path Security, with MediaTech VenturesTed Cohen and Gamerjibe’s Michael Lubker.

“The first time I entered the Gamerjibe space and I saw the Marine avatars in Dress Blues, I was like, ‘Yep, it’s on.’ The uniform speaks for itself… this event showed me the tip of the iceberg [for] what is possible when people think outside of the box on how to use technology to connect with other human beings.”

Captain Lavontay Santos; Innovating with Virtual Recruiting with U.S. Marines

The panel, of course, explored cybersecurity and getting into the space, as well as security threats, the significance of the number of intrusions that occur every day, and how the Quarantine has exposed companies; but it was the talk of the discipline and control it takes to work in cybersecurity and the challenges of AI that caught my attention.

Patrick Kelley, “we never really define the intelligence that we’re trying to emulate. Machine Learning is between supervised and unsupervised, depending on the models, so pivoting is a matter of what you’re looking for and doing your best to not include some unintentional bias so that you’re not over-fitting or under-fitting your model.” Given the real cost of capably spinning up AI, such as with IBM Watson, he explores, it’s not an approachable solution for most; the more data and faster you need to move with machine learning, the more difficult it becomes.

“There is this attention to detail and discipline, and control, and the ability to drop in interchangeably with your teammates. There is a readiness that we find with our veterans in the space, that is really hard to match.”

Critical Path Security’s Patrick Kelley

It’s that readiness that struck me given what we do here and how we might better prepare everyone for the future of careers in this science.

Daniel J. Valentino sat down virtually, thanks to these experiences and talks that The Level Up Experience and Gamerjibe are facilitating, and spoke with data scientist and Collective grad, Rob Campanell uncovering how gaming provides a path to these challenges and the high bar of workforce development in machine learning, A.I., and cybersecurity.

Learn Unity ml-agents.  The toolkit focuses on a niche in the machine learning space, called reinforcement learning.  This is how to get started with example environments; the imitation learning environment of ml-agents is going to have an impact on how game testing is done.

“The Unity environment is really good tool for reinforcement learning because it can vividly show you the failures with your assumptions.  I am looking at ml-agents as new tool for optimization problems.  Key advice is to learn it now, because it will creep into many industries, and you will be expert when a lot more opportunities open up.  Another Unity tool to learn is Unity Simulations where beta users have used it highly effectively for game balancing.”

Rob Campanell

What we’re exploring here is the use of simulation environments to provide circumstances in which we can learn and then even test situations in safe environments. Unity is already used for a wide range of simulation tasks and Unity Simulation leverages the cloud to run millions of simulations simultaneously. “By running the LGSVL Simulator on Unity Simulation,” as an example of the credibility and diligence of this approach, shares Seonman Kim, Vice President of Engineering, Advanced Platform Lab at LG Electronics, with Help Net Security, “Autonomous vehicle developers will be able to dramatically accelerate the training of their systems by running multiple scenarios in parallel.”

Generally, Campanell adds, those getting started might use Kaggle to build their data science portfolio. The opportunity to showcase your work as you learn is found in more than competitions now. “Highlight your data sets you’ve created, analysis with notebooks, and Q&A to the Kaggle community.”

How VCs Make Money: the 2 and 20

Starting those conversations and considerations doesn’t actually start with your pitch, it starts with knowing how Venture Capital Funds operate and get paid; so that you can discern which firms are “in business” funding entrepreneurs.

Venture Capital Funds are Businesses

…and the Partners get paid

When raising venture capital this fact may be the most important thing for all entrepreneurs to know: How the VCs Make Money

Before you jump to the often advised conclusion that Venture Capital Funds seek exits or only big opportunities, appreciate first that Partners get paid.

Venture Capital Funds are businesses.

The typical structure is what’s referred to as 2 and 20 and knowing if/that/how/who operate as such, really changes the expectations both parties (you and them) have in exploring opportunities.

 2 and 20 refers to the business model that compensates VCs for running their funds

  • 2 – 2% of the capital in the fund is charged to the fund as an annual management fee. That fee is used to cover the cost of running the VC fund – salaries, rent, resources, and other overhead.
  • 20 – refers to a participation on profits: 20%. This is called carried interest (or often, just, “carry). After the investors in the fund get a return of their capital invested, under whatever terms are in place, then the VC(s) get 20% of any profits.

That’s a Venture Capital Fund’s business and what it means to you as a founder, is that you want to KNOW (and appreciate) IF a source of capital operates that way because the SIZE of the fund then establishes the kind of operating capital they have to work with, how much they could invest, and whether the fund is paying (employing) people that can help you (or not).

Let’s back up because that model can really be confusing and it’s rather transformative when you know how it works and why.

You might have noticed from time to time that I can be a bit of a stickler about what the word “Venture Capitalist” means and how that word is not the same as Angel Investor, Business Investor, etc. It’s always been my experience that Venture Capitalist refers to the Partners in such Funds.

Venture Capitalists raise money.

See, I told you knowing this might be transformative. Venture Capitalists raise the capital that they use to invest in startups.

Investors, in a sense, as such, are not “Venture Capitalists;” the investors are referred to as limited partners (“LPs”). Funds usually form as a limited partnership with the VC being the general partner (“GP”) managing the fund.

Why the Size of a Venture Fund Matters

Let’s say a “Venture Capital Firm” has a $100 million fund.

What that means is that the General Partner(s) have raised $100MM from investors and sources of capital, usually high net worth individuals (“accredited investors”), pension funds, foundations, and endowments. A 2% management fee is charged as a percentage capital meaning that each year, $2,000,000 is what the Fund/Firm has to work with to pay people, hire, and operate other resources

Note that there are technicalities, circumstances, and variations in which this isn’t exactly how it works and certainly not always how it works. For the sake of keeping it simple and upskilling everyone, let’s stick with the basics (should you be someone who knows this stuff better)

That fee is charged over the length of time General Partner(s) need the money to operate the business of managing the investments.

Meaning, say our $100MM fund invests into 10 companies over 10 years…

That’s $20MM (twenty million) that goes to just running the business. And $80MM in fact available for the investments. Thus, a glimpse into how much the Fund can actually invest in anything. Appreciating that any good startup investor is investing in at least 10 things (hoping to hit one good return), we’re looking at a firm that is likely little more or less than $8MM in any investment.

In time, the startups exit and let’s say the Firm ends up with $100MM PROFIT from the exits. As it comes back to the fund, over time, the LPs (the “investors”) get 100% of any cash until they get back whatever they have invested to date. Eventually, in our case, there is $100 million of profits to split. The General Partners get 20% of that, and the LPs get 80%.

Why this matter so much to understanding from where and how to raise capital?

That fund size matters.

The life of the fund (over what time frame they’ll invest), matters.

The investment thesis (in what and when/how) they invest, matters.

Their operating budget matters because a Venture Capital Firm is a business that should have resources available to help you!

A $10MM Fund under the same circumstances, would only have an operating budget of about $200k per year. That’s essentially just paying one person. And for 10 investments, we’re talking about $900k. Such a fund is genuinely a seed stage fund, more of an Angel Investor, and certainly not something you’d want to think of as the same as a Venture Capital Firm as in First Round Capital.

A $300MM Fund under the same circumstances is understandably structured as a business to be more involved in all that you do and to capably fund later rounds and/or follow previous rounds of funding. We’re working with an operating budget of $6MM a year in this case; that means Executives, EIRs, and other resources, such as their own PR firm, which you could (should) expect are part of the value of what they’re bringing to the table.

These questions and structures matter. Venture Capitalist is a JOB and a job means you can have expectations of the people doing that work; raising capital isn’t just a matter of you pitching, they’re raising capital too. Let’s get to work together.