
Bootstrapping is the practice of launching and growing a business using minimal funding or external resources.
*Editor’s note: This is it second Part of the expectations of the industry.
In addition to growth in deep tech, life sciences, clean energy, aerospace, and SaaS 2.0, Puerto Rico’s tech sector will move toward bootstrapping, and AI will undergo a “purge” of sorts, said Hector Girao, CEO of Parallel18. For News is my Business website.
Boot
Gerau believes the tech sector will see a resurgence in bootstrapping — the process of creating and growing a company with minimal outside funding or capital.
By bootstrapping, entrepreneurs rely on their personal savings, company-generated revenue, and resourcefulness to maintain and expand their operations rather than seeking large investments from outside sources such as venture capitalists, angel investors, grants or banks.
“Entrepreneurs noticed that the stories that came out of Silicon Valley — that you have an idea, you get $10 million in funding, you launch, and 10 years later you worry about whether you’re going to make money or not — were far removed from what entrepreneurship is,” Girau said.
“This is a classic example of survivor bias, focusing only on companies that have done well while ignoring the many companies that have not. It paints an unrealistic picture,” he added.
Jirao mentioned Amazon and Mega as examples.
“We focus so much on Amazon, forgetting that Jeff Bezos had a multibillion-dollar hedge fund, and he came from a circle of people with a lot of capital to help him. We think of Mark Zuckerberg because he started Facebook in his Harvard dorm room, but we forget that his mother came From the Fortune 500, not the supermarket. She came well trained, with many connections and a lot of capital.
Jirao said that the goal of entrepreneurship is to start a business, and business depends on making money.
“We will see more companies focusing on achieving profitability first, and then seeking capital once the operation stabilizes,” he said.
Girau acknowledged that the resurgence of the boot is a controversial topic.
“There are many opinions on this, but I think doing the bootstrapping is a very reasonable thing to do,” he said. “If you start a business, it’s because you want to make a living at it. But some people are used to an evolving ecosystem where you raise capital to see if you can move the business forward, and if you’re going to fail, you’re going to fail fast.”
However, he noted that bootstrapping in science is different from bootstrapping in other industries.
“To open a cafeteria, you save, you take out a loan, you build infrastructure, and when you make money, you pay off your loan. In bioscience you have to be capital intensive because you need $4 [million] “Or $5 million to complete each phase,” Jirau explained.
A few words about artificial intelligence
When it comes to artificial intelligence, Jirao had words of caution. He strongly believes that a “Great Purge” is underway.
“There will be a purge in the AI ecosystem,” he said. “Right now, we have a lot of companies that say they’re in the AI space, but what they’re doing is using ChatGPT, and they think that by adding a chatbot to their website, they’re becoming an AI company.”
Gerrad believes that the companies that will survive the purge are those with functional models specific to artificial intelligence and language learning. “Other AI companies will disappear. I’m sure this will happen. I have no doubt.”
Regarding reports that artificial intelligence could cause harm, Gerau compared it to what has been said about the Internet.
“There will always be repercussions because technology is not always effective, but we have to understand that although it seems quick to us, this is a gradual process – we are now seeing the results of something that took 15 years to achieve.” Develop. He said that artificial intelligence has not emerged in the past five years.
He stressed that the belief that artificial intelligence is more intelligent than humans is a misconception. “AI relies heavily on humans behind the scenes to motivate and control what the AI does,” he said.
“These systems need a lot of human intervention. You can’t leave them alone. You have to tell the AI what you want, why you want it and how you want it, so it’s not that efficient,” Jirao said, adding that AI will open up many opportunities for software and motivate engineers. .
Jirao also highlighted the dangers of the Ouroboros effect. Ouroboros is an ancient symbol of a snake eating its own tail. In AI, this term refers to a scenario in which systems begin consuming their own output as training data, creating a self-referential feedback loop that can lead to poor quality, inaccuracy, and potentially harmful biases, essentially eating their own tails.
“This is an effect that no one yet knows how to control. AI and language learning models are creating a lot of content, a lot of information, collecting ideas based on the information you give them, and they are releasing that information out there, essentially in the same environment where they They themselves collect information in order to “think and produce the information you require,” he explained.
“So, you have all these models producing information on such a large scale that it’s possible for them to start feeding themselves off of the same information that they’re producing,” Girau added.
J Torres is a freelance journalist, writer and editor. She has worked in business journalism for more than 25 years, including positions as reporter and copy editor at Caribbean Business, business editor at the San Juan Star and oil markets editor at S&P Global Platts (formerly McGraw Hill). She has also worked in marketing on and off for decades, and now freelances for local marketing and communications agencies.