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Turing Labs lands $16.5M to bring AI to product formulation

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The consumer packaged goods (CPG) industry has struggled to grow over the past decade. That’s partly because companies have tended not to economize when it comes to R&D spending. For example, producers of home and personal care goods surveyed by Accenture in 2014 on average invested 2.3% of their total revenue in R&D. Yet according to IRI, most new CPG products fail to capture more than $10 million in sales in their first year.

The declining cost of computing, however, promises to improve product design, prototyping, and testing — particularly with the explosive growth of cloud computing. These trends have catalyzed the launch of startups like Turing Labs, which are applying AI to assist CGP companies with product design and formulation. Investors believe in their potential — Turing today announced that it raised $16.5 million in venture capital, bringing its total raised to over $18.25 million.

AI-powered formulation

Product formulation deals with understanding how materials interact to provide properties, processing, and delivery of active ingredients in a usable form. Formulation is a key area of product development, helping to determine the patentability and lifecycle of products ranging from perfume and sunscreen to processed, frozen foods.

Turing aims to streamline the formulation process by using companies’ data to build a knowledge base and then leveraging AI to create visualizations that show how formulations compare to benchmark products. Customers can use data from existing product ingredients and factor in aspects like the package’s impact on product stability.

“Sharing data is hard, and the role of a product developer doesn’t scale, and it is hard to truly innovate on ingredients, formulations, and new product categories when it is such a manual process. With Turing, we set the stage for the next generation of product innovation, by AI that continuously learns and recommends prototypes optimized for a wide range of goals,” CEO Manmit Shrimali, who cofounded Turing with Ajith Govind in 2019, told VentureBeat via email. “The C-suite and management structure cares about time-to-market above all. Because we dramatically shorten the product development lifecycle, they are [often] happy with the results.”

Turing Labs

Above: Turing Labs’ web-based dashboard.

Image Credit: Turing Labs

Turing’s platform can support food, cosmetic, personal care, and cleaning products among others, according to Shrimali. The startup is already working with “top 15 global CPGs” and its platform has been used to formulate plant-based foods, beverages, personal care items like shampoos and cosmetics, and laundry detergents, Shrimali claims.

“To address health and wellness trends, supply chain constraints, to ongoing pressure to improve margins … companies are wasting huge amounts of money and resources and money on [an] antiquated manual [formulation] processes. The issue is not what to build, but how to develop that deliver unparalleled returns in the market — that’s exactly the problem we are solving,” Shrimali said. “Our growth has been explosive: zero churn, 400%-plus net recurring revenue. [W]e are becoming the default platform for product development. All of our customers have come back with bigger orders and more ambitious projects as soon as they’ve seen what the product can do.”

The value of AI

CPG companies stand to gain from investing in AI not only for product development, but across their organizations. A 2018 Boston Consulting Group (BCG) survey found that AI-driven demand forecasting, personalized customer experiences, and innovation cycles can boost CPG companies’ revenue by 10%.

According to a recent PricewaterhouseCoopers survey, 83% of retailers and CPGs said that AI would become a “mainstream technology” in their companies in 2021. Nearly half of retail and CPG respondents say that the pandemic accelerated their initiatives.

For example, PepsiCo is using AI to collect data on potential product categories, allowing R&D teams to glean the types of insights customers don’t report in focus groups. The company also taps AI to analyze how those data-driven decisions ultimately played out, PepsiCo executives told VentureBeat.

Despite the promise, some CPG companies remain skeptical about AI’s feasibility and impact. While those in consumer electronics, food, and nutrition are at the forefront of AI adoption, the cosmetics and luxury industries remain further behind.

Turing Labs

BCG blames the gap on the “decentralized and matrixed” nature of many CPG organizations. Though often pros at branding — with first-rate marketing, advertising, and product innovation capabilities — CPGs are typically less advanced in implementing large-scale analytics or technology transformation programs, a 2020 BCG analysis concludes. “[Their corporate] structure has led to marketing and product development prowess, but it can hinder [their] ability to invest in data and analytics platforms or to build the agile ways of working necessary to scale them,” the analysis reads.

In a 2019 report, analysts at Bain write that, as in other sectors, CPG companies must stop thinking about AI as “projects” and embrace the technology as a way of doing business.

“[W]e make accurate predictions about new potential formulations before they are made. This reduces the need for costly and time-consuming physical synthesis and testing,” Shrimali added. “[In product formulation,] every ingredient has an effect on every other ingredient. A seemingly innocent ingredient going out of stock triggers a full reformulation process. This is where our AI can help; it can recommend replacement ingredients, but also offer suggestions on what else needs to change about the ‘recipe’ … of the product.”

Shrimali says that the latest investment in Turing — a series A — will be used to support R&D, grow the engineering and operations teams (the company plans to increase headcount by 300% by 2023), and a further build a go-to-market organization. Insight Partners led the round with participation from Moment Ventures, Y Combinator, and Medallia CEO Borge Hald.

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Seoul court rejects warrants for former Terraform Labs employees and investors over Luna collapse  • TechCrunch

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A Seoul court rejected a request from prosecutors for warrants to detain eight people related to Terraform Labs, including the co-founder of Terraform Labs, Daniel Shin, early investors and former engineers.

It’s difficult to believe they would flee or destroy evidence as Shin and the seven other suspects have been cooperating with the investigation, Yonhap News said, citing the Seoul court. In addition, the suspects also need to be guaranteed their rights to defend themselves against the allegations of capital market rules, which is the core accusation of this case, according to the court, per Yonhap

The Seoul Southern District Prosecutors Office told TechCrunch that it is hard to understand that conclusion as the court knows the seriousness of the allegation and the fact that some of the suspects allegedly made money by selling Luna tokens before the collapse. And yet, the court dismissed the warrants, saying the eight people need to have rights to defend their cases against accusations.

Shin is being charged with taking illegal profits worth about $105 million by selling Luna tokens when it was near its all-time high without disclosing this move to investors. It happened before the collapse of the TerraUSD and Luna earlier this year, contravening the Capital Market Act. Prosecutors also suspect Shin used customer data from his separate fintech startup called Chai to promote Luna, violating the Electric Financial Transaction Act. The other seven people involved in Terraform were also alleged to have similar charges.

Shin has denied the claims of trading Luna at a market high and violating the customers’ data. Terraform was founded in Singapore in 2018 by Do Kwon and Shin. Shin left Terraform in March 2020 to found Chai and stepped down as CEO of Chai earlier this year.

South Korean prosecutors began the investigation after the crash of the UST-Luna token earlier this year, which wiped out $40 billion in market value. In September, South Korea issued an arrest warrant for another co-founder, Kwon, whose whereabouts are currently unknown, and requested Interpol, the international law enforcement agency, to issue a red notice for Kwon.

Terraform Labs could not be reached for comment.

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Amazon may lay off 20,000 employees, including managers: Report

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Amazonmay lay off about 20,000 employees across divisions as the company reevaluates its pandemic-induced hiring spree, according to a media report.

A Computerworld report stated that the tech giant could lay off employees across the company, including distribution centre workers, technology staff, and corporate executives. Staff at all levels will likely be affected, it found.

Last month, the New York Times reported that Amazon plans to lay off approximately 10,000 people, and “the cuts will focus on Amazon’s devices organisation, including the voice-assistant Alexa, as well as at its retail division and in human resources”.

However, according to Computerworld, the layoffs could impact nearly double the number of employees– roughly 6% of the company’s corporate employees and about 1.3% of its global workforce of more than 1.5 million composed primarily of hourly workers.

YourStory could not independently verify the report.

Corporate staff have been told that employees will receive a 24-hour notice and severance pay, in accordance with their company contracts, the Computerworld report noted. “There is a sense of fear among employees in the company as the news has come out,” the report added, quoting a source who was informed directly about the layoff effort.

The layoffs would be the largest staff reduction in Amazon’s history.

“There is no specific department or location mentioned for the cuts; it is across the business. We were told this is as a result of over-hiring during the pandemic and the need for cost-cutting as the company’s financials have been on a declining trend,” the source told Computerworld.

After the New York Times report, Amazon Chief Executive Officer Andy Jassy shared some information about role eliminations in a note. Jassy confirmed that layoffs were occurring, though he did not specify the planned number of employees to be laid off.

“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organisations early in 2023,” Jassy wrote in the message, noting that Amazon had already communicated that layoffs would occur in the Devices and Books businesses, and would be extending a voluntary reduction offer for some employees in the People, Experience, and Technology (PXT) organisation. 

“We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organisations), but each leader will communicate to their respective teams when we have the details nailed down,” Jassy noted.

Meanwhile, the Computerworld report noted that employees on Amazon’s robotics team have been laid off.

Amazon’s muted third-quarter earnings as well as disappointing fourth-quarter projections led the company’s stock to plummet. Its third-quarter earnings were severely impacted by unpredictable consumer shopping habits and inflation. 

Amazon is likely to lay off several employees in India across divisions, according to media reports. Last month, Amazon confirmed that it will shut down its wholesale unit Amazon Distribution. This is the third business unit to be closed after the e-commerce giant announced the wrapping up of Amazon Academy and the food delivery business in India.

Globally, tech companies have announced layoffs as part of their cost-cutting efforts. In November, Meta CEO Mark Zuckerberg announced that the company had decided to reduce the size of its team by about 13%, cutting over 11,000 jobs. In the same month, Elon Musk reduced half of Twitter’s workforce or about 3,700 jobs at the social media firm.

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Unlock The Entrepreneurial Potential Of Your Team With Employee-Ownership

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A strong team of many outperforms even the most hardworking of entrepreneurs on their own. But when hiring employees, freelancers and contractors, how do you ensure they have the same entrepreneurial skills and drive that you do as your company’s owner? Is it unrealistic to expect employees to be motivated and committed to an organisation they didn’t found?

Nicki Sprinz thinks she has cracked the code of unlocking the entrepreneurial potential of your team, and the answer lies in employee ownership. Sprinz is managing director of B-Corp certified ustwo London, a company of over 200 employees, and cofounder of Ada’s List, an 8000-strong community designed to support women working in the tech industry. ustwo has recently become employee-owned and has already seen the benefits of breaking down the distinction between owners and employees.

According to the Employee Ownership Association, this way of working can improve productivity, support more resilient regional economies and empower team members, resulting in them being far more engaged. Sprinz explained the main benefit for entrepreneurs of this model along with practical tips for managing directors and company founders to make the transition to becoming employee-owned.

Employee ownership protects the company

“Being employee-owned means existing team members, who are now partners, feel empowered as owners,” said Sprinz. She believes that this encourages everyone to put in the work to uphold a strong company culture and course-correct if they see anything awry.

Whilst this might not happen automatically, a founder can make it more likely that their team upholds the vision. Sprinz has put frameworks in place to ensure everyone has a voice. “We hold open firesides, have elected partner representatives on the board, and ensure there are regular channels of communication for all team members to be part of growing the culture and living the values,” she said.

Keeping the team on board means protecting the company. “There are no surprises about the direction we are taking with the business,” explained Sprinz. “We involve everyone in the decisions we make on our projects and ensure we are accountable, both commercially and ethically.”

Attract and retain top talent

In a competitive market, how does your company attract and retain the best talent in the world for the benefit of your clients? Employee-ownership could be the solution. Not only does it make job listings stand out, but it attracts individuals who are like-minded and think long term. They are committed to a future with whichever company they choose to join and are prepared to push themselves to make it happen.

“High quality potential recruits and employees are interested in values and purpose,” said Sprinz. “Being able to talk about employee ownership helps you stand out in a tough hiring market. We have several interview stages so a candidate can get to know us as well as we’d like to know them.”

Sprinz’ interview stages aim to weed out “cultural and value mismatches that ultimately lead to an unfulfilled team.” They ask candidates multiple questions about their values and examples of them in practice, and they encourage candidates to probe with questions about ustwo. They also “publicise the salary for all open roles and candidates have the opportunity to meet other members of the team,” she added.

Control quality

When scaling a business, ambitious entrepreneurs cannot afford to let quality slip. Growth at all costs is a false economy that ends with the business back at square one and having to work harder to undo reputational damage. “A more entrepreneurial team ensures quality stays high,” explained Sprinz. Not only do your team members care deeply about the work they do, they also know they benefit from company growth, so they are incentivised to keep raising the bar.

“If your team is invested in the long term financial success of the company, they also feel pride that their work contributes to overall success,” said Sprinz. “They respond by raising the bar on their work.” Sprinz also believes that, “Regular transparent sharing of financial results and metrics maintains dialogue on personal and company impact.”

Direct the future

An employee-owned company has options for the future. The owner might one day want to step aside or sell, and the company’s succession plan will already be in place. In the meantime, the company has hit new heights and progressed with new ideas because its foundations are solid.

Like Maslow’s Hierarchy of Needs, you cannot reach self-actualisation without warmth and shelter, and a company cannot break through ceilings with constant recruitment issues. When team members are bought into the company, they are bought into its future too, making more certain outcomes for everyone involved.

“The partner representatives on the board surface the priorities of the rest of the team and ensure the conversations of the board are directed accordingly,” explained Sprinz. “The representatives are actively part of the bigger picture and playing a huge part in shaping the company’s future.”

Unlock the entrepreneurial potential of your team by exploring employee ownership, advised Sprinz. The best people will be proud to tell their friends that they are part-owners of the place they work. They will feel valued and listened to and respond with their effort and devotion. Could employee ownership be the right step forward for you?

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