For using satellite images to make startlingly accurate predictions about the world.
Why It's Disruptive
Satellite images can tell us a lot about Earth; Descartes Labs is taking that knowledge to the next level. The company, which spun out of the Los Alamos National Lab, analyzes photos of the globe and compares them, pixel by pixel, to make predictions about anything from crop outputs to the effects of climate change. In 2016, Descartes projected U.S. corn yields--which number in the billions of bushels--to within 1 percent accuracy, beating the USDA's estimate, according to co-founder and CEO Mark Johnson. "We're able to get to an astonishing margin of error," Johnson says, "without ever seeing an ear of corn."
Johnson says the startup's clients include a number of agriculture companies, scientists, and government agencies. Descartes recently signed a contract with Darpa to monitor crop outputs in the Middle East to warn of food shortages. Another client tracks stagnant water to predict the flow of mosquito-borne diseases like Zika, and another is trying to use Descartes's data to estimate worldwide pollen counts.
The company's biggest asset is also its biggest challenge: data. Johnson says that Descartes's supercomputer processes so much data that the first time the company did a test run, Google thought its cloud services were falling victim to a denial of service attack. The startup processes quadrillions of pixels of data in a single analysis, which can take hours. Downloading millions of satellite images from the web takes time too--so much that instead of downloading them over the web, the company has considered having them shipped via FedEx. Descartes's growing number of partnerships with satellite companies has helped address the problem, since the data sets those companies provide are often more manageable--and better suited to the startup's unique needs--than the massive files it downloads from NASA's servers. --Kevin J. Ryan
For turning ex-convicts into successful entrepreneurs.
Why It's Disruptive
Guided by the belief that entrepreneurial potential can be found anywhere, Defy Ventures teaches former drug-ring organizers, gang leaders, and others with prison records that they too have the skills needed to launch a successful business. Catherine Hoke, who formerly worked in venture capital, launched the nonprofit in 2010. Defy Ventures currently operates entrepreneur-in-training programs in New York, San Francisco, Los Angeles, San Diego, and Omaha, Nebraska.
The program lasts six months for those who are still in prison, while those who have recently been released from prison participate in a 14-month-long training program and business incubator. During their time with Defy, the entrepreneurs-in-training are expected to show up on time, dress professionally, and start each class with a group hug, to build a sense of camaraderie. In exchange, Defy Ventures teaches them how to write a business plan, come up with a revenue model, and pitch investors. Venture capitalists and local executives serve as mentors, and throughout the program, trainees can participate in four different pitch competitions--where they can win up to $30,000 in seed capital, if they clean house at all the competitions.
To-date, Defy Ventures has incubated 166 businesses--which have created more than 350 jobs--and has brought in more than 3,500 executives and VCs to serve as mentors. Both Richard Branson and venture capitalist Mark Suster have sung the program's praises. Notable alumni include Coss Marte, who created a prison-style workout class called ConBody.
Despite its successes, the nonprofit still faces skepticism from some corners. In March, Defy was set to expand to Mississippi, before the state's Department of Corrections suddenly pulled the plug. Of her critics, Hoke says: "Most of them haven't actually seen us in action, and they think it can't be done. Some philanthropists wonder why this population is worth investing in. Once I get through the objections and convince people to get involved, their doubts quickly fall away." --Anna Hensel
For using behavioral science and artificial intelligence to change the way home insurance works.
Why It's Disruptive
There's an underlying tension between most insurance providers and their customers: Denying a homeowner's or renter's claim means more money in the company's pocket. Lemonade thinks it can turn that model on its head. The company tells its customers up front that it will take 20 percent of their annual premiums. Of the remaining money, whatever isn't paid out in claims is donated to the customer's charity of choice. "You're bringing out the best behavior in [the insurance company]," says co-founder and CEO Daniel Schreiber, "because [Lemonade] has no incentive to deny you." The company argues that this will lead to less fraud, since customers are reminded before placing a claim that they're taking money from the charity of their choosing, not from the company.
Lemonade has no brokers--it uses algorithms to determine customers' monthly fees. Signing up takes about three minutes and, thanks in large part to the company's low overhead costs, most renters' policies can be had for $5 per month. The startup is already selling insurance in New York, California, and Illinois, and its founders have the ambitious goal of reaching 90 percent of the U.S. by the end of 2017.
While Lemonade offers both homeowners and renters insurance, its target audience is young urban dwellers--a group that primarily rents. Only 63 percent of U.S. renters have insurance. Even though the company's rates are inexpensive, for many potential customers, it will be a cost they didn't previously incur. "In a way," Schreiber says, "we're fighting against non-consumption." --Kevin J. Ryan