Depending on who you choose to believe, up to 85 percent of AI implementations fail. Atrium, a new kind of consulting services company, hopes to change that by helping its customers build successful business transformation outcomes using AI techniques and analytics. It's a lofty goal and one we hear many times. On this occasion though I was intrigued by the pitch offered by CEO and co-founder Chris Heineken.
Bozeman, Montana seems an unlikely candidate for technology hot spot of the year, but Atrium aspires to change that perception. Launched in 2018, the company has more 30 customers, about 100 employees and has grown from around $3 million in revenues in year one to more than $14 million in year two. Its mission, according to Heineken:
We help Fortune 1000 companies define what they can do with artificial intelligence and machine learning. We help them create a vision for the possibilities, and then we help them implement that vision. In many cases this involves taking the infrastructure they’ve already invested in and making it smarter and more useful.
The rapid growth of Atrium (and other AI consulting services firms) is a product of the shift of focus of systems development away from 'repaving old cow paths' to a paradigm that puts data and analytics at the center of business strategy. Again, we're heard that before too but on this occasion, the story is more compelling than most.
Atrium’s largest partner, Salesforce, has an analytics tool called Einstein Discovery that enables business users to automatically discover relevant patterns based on their data--without having to build sophisticated data models.
But, evaluating the data, setting the right metrics, and turning raw data into useful business insights requires a level of analytics or IT expertise that many companies don’t possess. Success is not guaranteed. Industry analysts like Gartner predict 85 percent of AI projects through 2022 will fail to produce results.
About half of Atrium’s clients are at the early stages of their AI journey and setting up the systems, structuring data to make it more presentable and analyzing and processing data for insights. The other half are companies working on customer retention through more advanced forecasting and predictive analytics.
A few months ago, Atrium introduced a service offering to the broader market called Elevate that is focused on helping companies with current or new investments in AI. The offering enables companies to identify the possibilities available with AI, the implementation of technologies to achieve breakthrough AI outcomes and most importantly a long-term partnering model to support the critical tuning of AI platforms for on-going success.
Heineken says Elevate combines industry-based algorithm templates with monitoring tools and a partnering model that emphasizes long term success through outcome-based support provided by Atrium:
Our goal is to dramatically improve the success rate of AI adoption by creating a clear vision with regard to the possibilities. Companies looking to take advantage of new business paradigms available through AI need to approach AI programs very differently than a traditional IT investment.
We do a quite a bit around helping companies with analytics and getting predictive algorithms built within their business. And so typically they come to us wanting to improve things like lead conversion, customer churn, employee productivity, and to help them weave machine learning and AI into the investments.
Some of our customers have data science teams that can build and maintain the algorithms once we get them going but others don’t so our level of engagement varies from case to case.
The Atrium Model
Although the company is only two years old, three of the four co-founders—Heineken, Colin Gelfer, and Geoff Birnes, are all customer relationship industry veterans who have worked together at other companies over the past decade, most recently another big Salesforce partner, Appirio, an IT technology consulting company owned by Wipro, headquartered in Indianapolis. The other co-founder, Eric Loftsgaarden, was a statistics professor at Montana State University.
We've been very fortunate that the crew that we're working with has been in the consulting world for a long time in this space. Now we're kind of weaving together some of the new paradigms with artificial intelligence and machine learning and applying that to what we've known in the past. So in some respects, we've had a 20-year head start. Our network is really strong. So we have continuity with our team. And we've also benefited tremendously from that experience.
To date, the company has been bootstrapped by the co-founders who each put in $200,000. Heineken says they have no current plans to seek outside funding. The company is already profitable, has a 20% operating margin, and has set a target of $25m in revenue in 2020.
Atrium’s main sectors of focus are financial services, healthcare/life sciences and higher education. Over the next five years Heineken said the company will target three-fourths of revenue from two or three verticals. It is solely focused on the US market.
Why, Bozeman, Montana? Lots of reasons, Heineken said:
Bozeman provides a quality of life that is hard to find in most large cities. Housing is inexpensive compared to Seattle or San Francisco. Montana State University is the largest engineering school in Montana with almost 5,000 engineering students. The affordability of Bozeman also makes it an attractive location for top talent. Bozeman airport has daily direct flights to Seattle, Portland, San Francisco, Los Angeles, Salt Lake, Denver, Phoenix, Las Vegas, Dallas, Houston, Chicago, Minneapolis, Atlanta, and Newark, making travel easy. Oracle has a large operation here (formerly RightNow) so there is a well-developed software community.
On top of that, the city is one of the primary gateways into Yellowstone national park along with numerous other biking, fishing, hunting, hiking and skiing opportunities so if you like the outdoors, it’s kind of a paradise.
Atrium’s growth trajectory in its first three years is proof—if any were needed--that enterprise demands for business insights through the fusion of AI and big data analytics is a key driver behind much of tech spending nowadays. We’re talking new Gold Rush with data as the gold.
The back story of Atrium is also fascinating and unusual. This is not a startup with VC-funding based on a genius idea by a couple of bright techies. It is a full-fledged business—profitable from month one--started by middle-aged individuals with more than two decades of experience and deep connections in the customer relationship space, the most important of which is its partnership with Salesforce.
Its owners are not particularly interested in going public now, or maybe ever, or moving to an already-oversaturated tech capital. They’re betting that if you build a better mousetrap, the mice will find you. However, it is competing in a market that promises to become very crowded very quickly in the early 2020s. The extent to which that impact its relatively attractive location remains to be seen.