In a dual announcement, ThoughtSpot unveiled that they had received new funding and launched a new update. The new funding of $60 million was led by LightSpeed Ventures. Existing investors participated in the new funding round and Capital One Growth Ventures became a new investor as well as a new customer. The second announcement was around the launch of SpotIQ, a next generation AI driven solution providing enhancements to their search based analytics solution.
ET spoke to Ajeet Singh, Co-founder and CEO of ThoughtSpot about both announcements this week.
How are ThoughtSpot going to spend $60 million?
It seems a lot of money but will only goes so far. We asked Singh where ThoughtSpot would invest. The majority of the investment is in Asia. It will be split between engineering and marketing according to Singh. He said: “We have started a centre in Bangalore India that will focus on cloud related technologies. On the sales side, we are looking at Japan. We have some customers already using us in Japan although we don’t yet have a sales team there yet. We will potentially cover the rest of APAC out of Singapore.”
This approach may seem cautious but it is sensible. Singh is spending his money on both expansion through sales and the product itself. In total ThoughtSpot has now raised $160 million. This is the second set of funds the company has received this year. At the beginning of the year an unnamed “enterprise technology company” invested $10 million.
What will success look like
The press release states that ThoughtSpot has already had significant growth citing an increase in customers by 270%. We quizzed Singh on this. With no base number of customers available it is hard to understand how successful the company is. Singh answered: “We don’t disclose the specific number of customers but they are in the hundreds.”
While the exact number is unknown they can name some significant brands as customers. These include FannieMae, Amway, Bed Bath and Beyond, Capital One, Celebrity Cruises, Chevron Federal Credit Union, DeBeers and Scotiabank.
Singh uses a different measure when asked what success will look like he said: “Success for us is all about driving adoption. There is a lot of analytics that becomes shelfware because they need analysts. Last year we delivered over 3 millions insights to our customers. One year from now want to be delivering more than 10 million insights to our customers without requiring an analyst.
In reality this is not just about the insights but of ThoughtSpot’s customers driving business outcomes from those insights. It will be interesting to see what difference it makes to the bottom line of those businesses. One advantage of ThoughtSpot though is fundamental, the removal of the need to hire analysts.
Singh also hopes that SpotIQ, the latest iteration of the AI platform, will help deliver those insights. It is available now for no extra cost on the ThoughtSpot platform. So what is it?
According to ThoughtSpot, “SpotIQ is the next AI-driven solution built on the platform to leverage ThoughtSpot’s massively scalable high-performance computing back-end”
We asked Singh to clarify what he meant by AI. It is an overused and over-hyped term that can mean so many things. Singh answered: “We are not just throwing together a bunch of rules and calling it AI. We use techniques such as supervised learnings.
(Super Wide Model).
“You can feed your data into the systems it will generate insights and then the users can give us feedback, thumbs up/thumbs down. Based on that feedback we can do collaborative filtering and figure out what are the things that are really correlated and what insights people like more than others.”
How does it work?
This use of machine learning, along with an inbuilt feedback cycle, will ensure that in each organisation, for each person, the system should become more intelligent. There is always a risk that the algorithms in use don’t discover new insights because of the lack of rules. However, customers are already seeing an advantage.
FannieMae was an early adopter of SpotIQ. Bruce Lee, SVP and Head of Operations and Technology at Fannie Mae commented: “Easy and comprehensive access to customer and loan servicing data is critical for streamlining our loan process. SpotIQ’s built-in artificial intelligence automates analyses and generates new insights for us about borrowers – all while clearly explaining the results in a trustworthy way. It’s a great complement to ThoughtSpot’s search-driven analytics approach and helps us service our clients more efficiently.”
It is that element of trust that Singh believes differentiates ThoughtSpot from its competition. Singh added: “You can always hire people that know algorithms and can write them. The problem is can you generate insights that people can trust?”
This is where the feedback loop really helps. Users are able to determine whether they think the insights are useful or not. Over time, as the system learns their ideas through search and their preferences through feedback, it should combine both the elements of human innovation and machine learning into a tool that is useful for the organisation.
Will it work?
The new investor Capital One seems to believe so. Jaidev Shergill, managing partner of Capital One Growth Ventures commented: “CapitalOne is known as one the most data driven companies in the world and we have always deployed some of the most innovative technologies to create a competitive advantage in delivering intuitive customer experiences. With ThoughtSpot, non-technical teams can quickly analyze data using natural language search and get automated insights with SpotIQ. ThoughtSpot is fundamentally changing business analytics in companies of all sizes and we are thrilled to play a role in its continued growth and evolution.”
Singh has a clear vision for ThoughtSpot: “Ultimately AI is techniques but we must remember that our end goal is to put power of 1,000 analysts in a hands of a business person.”
Is this enough? We are not sure. Success will not be measured by the absence of analysts but by corporate success. It is something that might be beyond the control of ThoughtSpot in its current iteration. However, its integration to an ERP solution to deliver prescriptive insights could become very interesting. Just who was that mystery investor?
What does the future hold?
On the technology front Singh is looking to develop the machine learning capabilities even further. He commented that they were working on neural networks. However, it seems likely that speech recognition is coming first. When asked about that technology he answered: “We are definitely looking at bring it in. We like to bring in technology that works in a production environment. We have been building a layer of capabilities on top of our search to deliver high fidelity speech recognition for data.”
What does this mean
There is a trend in analytics companies to introduce user interfaces that are simpler for end users to use. Tableau recently bought ClearGraph for its natural language interface. ThoughtSpot is at an interesting point in its growth where if successful it could become a major player in the business analytics arena. Its challenge is scaling up. It will be interesting to see whether it can maintain its growth trajectory helped by SpotIQ over the next year.