MGMT Boston - W9, Q2 24 - Arcee // Highlighted Operator Rewind
Arcee // Highlighted Operator Rewind
Welcome to MGMT Boston where we try to help 910+ of you manage your awareness of top Boston startups and local up & coming operators putting in the work. Glad to have you here!
TLDR:
Arcee - an AI startup building Small Language Models (SLMs) so companies can deploy their own proprietary models quickly & cheaply without hallucinations or purchasing GPUs
Thanks to Brian B. for the intro to Arcee
Highlighted Operator Rewind - continuing to resurface past operator profiles and the good work being done by members of the MGMT Boston Operators Club like Sejin Mong, Nick Abate, Ben Brostoff, Sheila Connolly, Alan McKinnon III, Daria Axelrod Marmer & Michele Choi. More to come!
Individual operator profile will return next week!
🔥 Upcoming Q2 Event: MGMT Boston Sports, Gaming & Wellness Breakfast - 5/30 @ 9am, co-hosted by Fidelity for Startups 🔥
Inviting Boston-area venture backed operating leaders, founders & investors to join for a Sports, Gaming & Wellness breakfast on Thurs, 5/30 to engage with the MGMT Boston Operators Club, co-hosted by Kristen Craft @ Fidelity for Startups
Other Resources:
MGMT Boston Operators Club - helping 50+ Boston based up & coming operators grow beyond their day to day
Dana Wensberg, Senior Engineer @ Paperless Parts - 4 Pieces of Advice for the next Manufacturing SaaS Startup
Sean Smith, VP Product @ Denim - lessons from a product guy who spent time moonlighting in revenue
Dillon McDermott, Head of Sales @ Zowie - this one’s for the job hunters out there. A report from the front
2024 Boston Tech Big Board - 2024 Companies to Watch
The Endeca Effect: Overview / Markets / People / Products / Conclusion / Bonus - Steve Papa Alumni Learnings
Q2 Startups Highlighted: Starburst, Neurable, Software Defined Automation, airSlate, Ayble Health, Occupier, Blink
Q2 Operators Highlighted: Adam Fisk / Tech Superpowers, Bryan Dsouza / Aptiv, Noah Massucci / Robin, Erica Kangas / Scroobious
Would you like to sponsor MGMT Boston in Q2? Reach out by replying to this e-mail!
Arcee
Founders: Brian Benedict, Mark McQuade, Jacob Solawetz
Founding: 2023
Mission: Pioneering end-to-end small, specialized, secure and scalable language models
Employees: 15 & 10% Local
Workplace: Remote
Stage & Capital Raised: Seed & $5.5M raised
Investors: Long Journey Ventures, Flybridge,
Key Customers: PIMCO, workhuman, Guild, AngelList, AngelKids
Glassdoor Rating: N/A
Valuation (estimated): $25M – $50M (assuming they sold ~10-20% of the company in the $5.5M Seed fundraise)
^ this is a useless number from MGMT Boston. There is no tangible valuation until the business is sold or goes public. Don’t forget it!
Arcee is an AI startup building Small Language Models (SLMs) so companies can deploy their own proprietary models quickly & cheaply without hallucinations or purchasing GPUs. This team is building domain specific models for enterprises & startups who don’t need to present their data in the prose of an 18th century poet.
Arcee was started by Mark McQuade & Brian Benedict who worked together as early employees at Hugging Face. There, they helped lead Hugging Face’s monetization strategy at the forefront of the Generative AI explosion. Brian & Mark talked to a LOT of enterprise & mid market companies working to figure out how to build and use AI internally. Unsurprisingly, there were gaps.
Mark went to work for another company but, after ChatGPT 3.5’s launch, he called Brian and said “this is the moment, we’ve got to build something in the AI space”. Jacob Solawetz joined to round out the Arcee co-founder trio and they were off to the races in the spring of 2023.
Brian, Mark & Jacob set out to give companies a better way to use their data to build proprietary models. Let’s be real, LLMs (large language models) are awesome at extrapolating very general knowledge bases (at least today). However, if you need LLM capabilities for a more limited set of use cases from a dataset you own, it becomes harder to customize.
Just to state the obvious, AI is booming! There are something like 67,000 AI startups building globally in 2024 (src). AI startups raised $40B+ in 2023 (src). You know this, I know this, we all know this. But Enterprise AI spending is still a minority of overall enterprise software spend so we are really *just* getting started.
The advantage Arcee brings to the market is their deep domain knowledge of Enterprise needs. Companies want new business applications that can replace manually intensive tasks or processes. Or, even better, create new revenue streams for their shareholders. In both cases, details matter. These details live in the company’s own data formatted in their internal language, culture, operating procedures, and other individualized details of the business.
If you’re not able to successfully inject your data into a LLM to get the level of performance you need, what do you do?
Arcee wants to own the model training component of small language models to solve that very problem. Their selling points are simple - give organizations a way to build, deploy, and own their proprietary models at a fraction of the cost without unpredictable hallucinations.
Model pre-training (PEFT) helps decrease compute and storage costs with comparable levels of accuracy. LoRA (low rank adaptation) techniques make sure only subsets of the neural networks are adapted during training, reducing costs too. Most importantly, Charles Goddard’s open source model merging work (mergekit) helps audit & select new open source models across the ecosystem based on what fits best for each individual customer - Mistral, Llama 3, PaLM, etc. Their evolutionary model merging software picks the base model that will be most performant based on customer data. It’s worth noting that on Hugging Face today, 75 of the top 100 models are in fact merged models.
Arcee can deploy customer models into production on a client side VPC (virtual private cloud) within a couple weeks and consistently under a month from asset gathering to deployment. As Arcee rolls out their SaaS offering in the coming months serving startups to F500 companies, all customers will need to do is upload their data, pre-train a model, merge it, and then get to work building out their own use case - all with button clicking.
Companies want more ownership, performance, and something they can speak to confidently in terms of deployment that is de-risked from the closed source LLM platform players like OpenAI. It also helps that they don’t need to spend $10M for a <$1M revenue lift.
Arcee has only been out in the market selling their product since October 2023 and has already surpassed a seven figure ARR run rate for 2024. They’re currently growing 40% quarter over quarter! Hiring will definitely increase this summer and their team of 15 will hopefully double into the end of 2024 across most functions - including GTM, Engineering, and Research.
Naturally they’ll be looking for people interested in building their career in AI and would love for many of these jobs to be in Boston where Brian Benedict calls home..
They work with small startups and enterprises and will be expanding both the customers and verticals they serve as their SaaS offering is unveiled. AWS and MongoDB are two big partners they work closely with and they most recently won MongoDB’s 2024 AI Partner of the Year award with more partnerships to be announced in the quarters ahead.
Operators to Know:
Malikeh Ehghaghi, Applied NLP Research Engineer
Charles Goddard, Senior Research Engineer
Vladimir Karpukhin, AI Researcher
Tyler Odenthal, Solutions Engineering Lead
Mary MacCarthy, Head of Growth & Marketing
Luke Meyers, Applied NLP & Research Engineer
Michael Nason, Founding Software Engineer
Gomathy Venkat, Senior Applied NLP & Research Engineer
My investigative powers continue to need work so apologies to the Arcee team if I missed any up & coming operators internally
Key Roles To Be Hired:
More roles coming soon!
If I were interviewing here are some questions I’d ask:
Could you share some details about the goals for 2H 2024?
What are the biggest challenges as you navigate a crowded AI market?
What is the long term vision for the company?
What are the most important milestones you’ll need to achieve to be “enterprise ready” in 2024 and beyond?
We’re optimizing for readability here so to learn more about Arcee you’ll have to D.Y.O.R. I’m excited to watch this team bring more enterprises into the AI age. All innovators applaud your efforts. See you around town and the internet!
Highlighted Operator Rewind
Over the past few weeks I’ve been reposting past operator profiles and highlighting members of the MGMT Boston Operators Club on LinkedIn who are making a dent in the Boston startup universe. I will continue to relentlessly highlight Boston based up & coming operators who help startups grow! The pace will continue to increase until further notice!!
Sejin Mong, Head of Customer Success @ Pathstream / LI Highlight / Operator Profile
How many tech leaders do you know who went from teaching in a public school system to leading software teams?
Nick Abate, Director Global Sales Engineering @ Salsify / LI Highlight / Operator Profile
As the Director of Sales Engineering at Salsify he manages Sales Engineers & Enterprise Architects supporting their Strategic Global Accounts, helping 1000s of Brands and Retailers win on the digital shelf.
Ben Brostoff, Lead Software Engineer, Manager @ Klaviyo / LI Highlight
Engineering leader who loves building useful things, seeking out challenging opportunities that solve problems to positively impact people.
Sheila Connolly, Senior Product Manager @ Veson Nautical / LI Highlight / Operator Profile
a FinTech Product leader who tackles squishy problems with a love for project management by understanding the basics as a Senior Product Manager at Veson Nautical.
Alan McKinnon III, Revenue Program Manager @ Jellyfish / LI Highlight / Operator Profile
Often referred to as the "Swiss army knife" of the Jellyfish GTM team, Alan has first-hand experience building teams, sales territories, tech stacks, pipeline models, and playbooks.
Daria Axelrod Marmer, Product Leader / LI Highlight
From eBay to LinkedIn to HubSpot she has led multi-product horizontally positioned software teams coast to coast for almost 15 years from 4 to 16 PMs with revenue from $10M to $1B. Daria nurtures existing products to help companies reach escape velocity through a metrics driven approach.
Michele Choi, Head of Business Development & Marketing @ Medley / LI Highlight / Operator Profile
BD & Marketing leader who has spent countless hours investing in herself. Before making the transition from to Medley she had 50+ conversations to get feedback and more deeply understand what drives her.
Any feedback for me? One thing you liked? One thing you didn’t? Local startups or operators to highlight? Just reply to this e-mail!
See you next week!
-Matt