I had touched pretty gently on Verbit when its series A funding came in at $23 million. The series B funding is in at about $31 million earlier this year. Now Verbit’s announced a strategic partnership with the STI and professional flip flopper, Jim Cudahy. Migliore & Associates already came out with the hard truth of what this means: ASR doesn’t make the cut for the production of legal transcripts without a qualified court reporter no matter what you name it, NLP, ASR, AI, computer magic, automated transcription.
Do I come off as angry? I am angry. I’m angry that investors are being led down a path of burning capital where there’s just not a bright future. When the series A funding was happening, Verbit used words like automated, “save an enormous amount of manual labor.” “Adaptive speech recognition” with over 99 percent accuracy. Series B is out. They “would not take the human transcriber out,” “the AI will enhance the human.” So investors are fundamentally paying millions of dollars so that they can be another Rev. I doubt very much that that’s what was sold to investors. I don’t think anybody would be putting down millions on that.
Then the partnership with STI? A complete joke. I have already gone into how, without any doubt, stenographers and NCRA are by far the best equipped to deal with the court reporter shortage. AAERT and the STI just don’t have the funding, infrastructure, or experience to tackle the problem, and it shows in their data. By their estimates, court reporting companies stand to save $250,000 over the next decade by adopting digital tools. First, I would love to know if this is individual savings or cumulative. We don’t know because there are no sources linked or cited. If this is cumulative, it’s embarrassing that they would even post that. That would mean 25,000 in savings a year across all companies. If that’s the projected individual savings per company, only slightly less embarrassing. That’s less than the average annual salary of a single court reporter. This may come as a shock to Jim Cudahy, but court reporting companies adopted digital tools throughout digital’s birth in the 70s and into the 80s and 90s. Stenographers are already a part of the Information Age, utilize AI, and produce quality records daily. The idea that investors are going to dump $50 million into “technology” expected to save $250,000 over 10 years and expect a return is terrifying. “Most courts are digital,” again, assuming everything they have to say is true, and yet judicial candidates show a preference for stenographic court reporters and returning them to courtrooms. The growth here is in stenographers, stenography jobs, and stenography schools, and Verbit’s current leadership is missing this boat completely.
Let’s just tell it like it is. When a grassroots-funded stenography blog can give you some pretty solid reasons you’re backing the wrong horse, it’s time to give investors nothing less than what they deserve. Open up a Steno Department, throw down some money on us, and we will make sure you’ve got real and steady returns. Verbit, with proper leadership from Tom Livne, can still save the day. Just not with this bait and switch technology-to-transcription model that amounts to little more than a repackaging of old tech. The only other viable alternative I see is buying this blog for a good $8 million and hoping investors don’t see it before then. Not a difficult decision. Come on over to the winning team. Vote for sten!
July 18, 2021 Addendum:
I reread this article for the first time in a while and I feel I did an inadequate job of explaining just how pathetic the cost savings promoted were. I took to social media to spread the word, and I am copying and pasting what I had to say below.