At the present rate of progress, it is almost impossible to imagine any technical feat that cannot be achieved – if it can be achieved at all – within the next few hundred years. -Arthur C. Clarke, 1983
Fundamentally, technology, at it’s crux, is about progress. It is technology that drives humanity and civilization to greater productivity, greater advancement, and greater achievement. And for startups, the creation and utilization of technology is inherently tied in whether it be through the development of disruptive business models on existing platforms (cloud, enterprise software, mobile) or developing new technologies (Sifteo). Consequently, the emergence of new technologies eliminates previous barriers resulting in the birth of new companies. Puneet Agarwal elaborated on this within the context of True’s goal of being disruptive to the venture capital landscape.
With the past decade, disruptive innovations both in terms of technology as well as business models have enabled former barriers to the enterprise/infrastructure, hardware, and mobile industries to be eradicated leading to the emergence of countless new companies. For enterprise/infrastructure, the emergence of Amazon’s cloud services, and the consumerization of IT have enabled entrepreneurs to take advantage of developing enterprise-based startups. For mobile, the unification of a platform that enables third-party development through Apple and Android’s smartphones have resulted in an array of startups. Likewise, the ability to now outsource and create small orders of components have enabled entrepreneurs to iterate even with complex hardware components.
To further consider the opportunities for early-stage investment, Puneet pushed us to think of new markets. Some interesting ones that came to mind were:
As an industry, healthcare is worth somewhere around in the hundreds of billions . Startups have previously had a difficult entering the healthcare market due to large bureacrcy and overhead. However, the increasingly cheap and widespread consumer technologies will be able to disrupt the industry as startups and investors take advantage of developing medical tools in conjunction with iPads and smartphones. Some examples include Agile Diagnosis which takes advantage of the iPad to develop a professional diagnostic tool for doctors and nurses. Another company is VaxTrac which has combined cheap consumer technology in the form of a basic cellphone and a plug in fingerprint scanner to create a vaccine tracker for the children in the developing world. Biotech and pharmaceuticals also have huge potential as a future industry for early-stage investment. New business models, such as Thiel fellow, Alex Kiselev’s idea of creating open-source laboratory equipment at a fraction of the current cost of existing equipment, could provide interesting investment opportunities.
While the 1999 bubble left the groundwork and hardware for Web 2.0 to build upon, the (potential) bubble of today will leave behind a vast network and cache of data for startups and entrepreneurs to innovate with. In retrospect, the amass of data is truly astounding. Facebook and Google+ records our photos, status updates, and social interactions with our multiple networks, Twitter captures our minute thoughts, Google captures our search histories, trackers such as FitBit, MyFitnessPal, and Ibwie amass data on our daily eating and exercising habits. The aforementioned does not even begin to discount the amount of data cread as infrastructure ranging from banking to the military become increasingly reliant on the Internet (see Steve Blank’s analysis that the internet is going to kill us all)
Data is the new industry where we gain invaluable insight into human and societal behavior, and the former barriers of “private” data are slowly become obsolete as illustrated by opening up databases such as Data.gov (the US government’s database). Furthermore, data as a whole is highly capital efficient and easily adaptable to the Lean Startup model. One interesting iteration is OPower which taps into household energy consumption data to create home energy reports to motivate customers to reduce consumption by charting their consumption against their neighbors.
Greentech as an area for early-stage investment may be a bit more tricky considering it’s inherent nature of being capital intensive due to the high costs of developing solar panels, wind turbines, etc. However,disruptions to the industry are slowly but steadily expanding through new scientific breakthroughs in nano materials which enable the development of materials such as solar paint that captures solar energy. However, even discounting scientific advancement, there is room for early-stage investment in greentech through two means. One, through joint investments with the government subsidies that often exist for green tech companies, thus enabling earlier investment. Secondly, with web 2.0, there are opportunities for early-stage, and capital efficient investment in startups that are helping develop the supply chain process for the clean energy industry. As greentech as an industry is in a relatively infant stage, there is numerous opportunities to help develop the One example that comes to mind is PV Power that streamlines the process for solar panel installers and contractors.
The aforementioned industries are just a small sample of potential future industries and markets to invest within. What other new emerging markets can you think of?