Having noticed that Melbourne seemed to be popping up as a hot-spot over the last few years with the emergence of Atlassian and 99designs, I asked Steve Lipchin, a business school friend who recently moved there from South Africa, to let me know what companies he thought we should look at. A few weeks later, Steve put me in touch with Kaggle.
I met with Anthony Goldbloom and Jeremy Howard for coffee on a Sunday when I was passing through San Francisco, and yes it was one of those meetings that is supposed to be 45 minutes and ends up being 3 hours. It was also one of those meetings that makes you smile on your drive home because it reminds you why it is such a privilege to be in the business of helping entrepreneurs fulfill their missions.
Kaggle is a big data company that allows enterprises with vast amounts of data to get the best data scientists in the world to uncover hidden relationships in their data and produce superior predictive mathematical models. It exploits the fact that the people with the data are not necessarily the people with the best skills to see patterns in the data or build algorithms to model them.
As a web-based marketplace that connects data owners with data scientists, Kaggle exploits the power of interdisciplinary collaboration. In one real case, a glaciologist was able to do a better job of seeing patterns in radio telescope data than the NASA data scientists who submitted them. Kaggle allows research institutes (like NASA or the Royal Astronomical Society) and companies (like Allstate, dunhumby and Deloitte) to sponsor competitions in which data the 17,000 data scientists who have already signed up on Kaggle, compete to come up with the best predictive algorithms for their data.
We see Kaggle at the intersection of three major trends: the universal recognition of the gold hidden in big data and the imperative of finding better ways to extract it; the growing willingness of enterprises and institutions to entrust mission critical work to talent in the cloud, and the increasing dominance of web marketplaces. Granular, relevant, real-time data is everywhere and not a day goes by that one doesn’t come across a process or a transaction that couldn’t be improved by a better algorithm.
Kaggle builds on our investments in Factual and The Climate Corporation which use a variety of tools to tame the big data beast and bring tangible value to corporations and farmers, PeoplePerHour and Stack Exchange which leverage the limitless know-how and expertise of cloud talent and experts and Just Eat, Etsy, Shapeways, Housetrip and Funding Circle among other marketplaces of various shapes and sizes.
Kaggle’s plan to refine and scale it’s offering to enable hundreds of businesses, institutes and agencies to leverage the collective expertise of the world’s best data scientists is extremely compelling to us. The impact that Kaggle can have by tackling some of the world's biggest data problems was also not lost on Max Levchin who is becoming the company's chairman, bringing his phenomenal experience as an entrepreneur and as an innovator. We are very excited about working with Anthony, Jeremy and the talented team they have already begun to assemble, as well as Vinod and David who have joined us in leading this investment, in the wake of other exciting Index/Khosla Ventures collaborations Boku, The Climate Corporation and AdMarvel. While a business that originated in Australia and has moved to San Francisco from where it intends to address a truly global market may feel rootless to some, it feels very familiar to us.