Crossing the Chasm for Emerging Technologies
As friends, guests, and investors joined us at Hemi’s Annual Summit, it was our great honor to host such innovative minds who are passionate about new and emerging technologies. Guests got to take a peek at ten different innovative technologies, ranging from machine common sense to low-cost genome sequencing, all of which are still nascent to the industries. As we learned from the past years of investing in emerging technology startups, it’s difficult to know what people are thinking. The technology itself is not enough, and scaling technology needs more than a group of pure technologists to make it happen.
Being optimistic technologists, we believe in a better future; being venture investors, we know we have a long way to go from identifying the technologies to help them benefit more people. This reminds me of a book, Cross the Chasm, I read in business school, written by Geoffrey A. Moore. There’s a chart that was applied to a variety of startups, but for emerging technologies, this may be the most important advice.
The chasm between early adopters and early majority shown here is a dead chasm for most startups. They think they attract many early adopters, but they fail to reach out to the mainstream customers. I would say 90% of the emerging tech startups fail at this chasm. The fundamental reason behind this is that founders can easily understand innovators and the early adopters because they are usually part of that group. However, the early majority is hesitant to adopt the new technology because they are not familiar with it. Do the early majority have the same pain points as early adopters? Could they adopt the new tech as fast as early adopters? Do they have the same requirements as early adopters? Where are those early majority? These are the hard questions that need to be asked, and founders should know the answers before they start a company.
One example that vividly shows this is Tesla. When Tesla first launched Roadster ten years ago, they announced their new technology that gives the car a range of 227 miles per battery charge and enough acceleration to go from zero to 60 in under 4 seconds. 1080 customers, including Google founders, were on the waitlist. However, they were called “costly toys” by many critics quoted in The New York Times. Today, Tesla’s Model 3 is the best selling luxury car in America. It’s not just tech founders who want this car, but people from all walks of life have bought Teslas for the technologies they offer to make lives better. I have a friend in the real estate industry, who has nothing to do with tech, who continually tells everyone how much he likes his Tesla and how he can track the car everywhere. Tesla crossed the chasm and reached the early majority.
An example that I think is on the dangerous edge of the deadly chasm is the virtual reality startup. The headset, the software, and the content haven’t reached to the early majority after a temporary enthusiasm among early adopters who said VR changed their entertainment experience. It has yet to reach the people on the street because they do not understand how VR could be helpful to them. What’s the tipping point? No one knows. That may need more research into the needs of a typical American and why they need VR services.
There is only ONE WAY to help startups cross the chasm after realizing the differences between the early majority and early adopters. That is to iterate the technology and product for quick adoption by the early majority. This is what a lot of tech companies are good at, fail fast and try new ideas fast. It’s an approach to running a company or developing a product that embraces lots of little experiments with the idea that some will work and grow and others will fail and die.
As I spoke at the Toyota AI Ventures & SPARX’s event last week, I used Waymo’s Early Rider Program as an example. Recently, Waymo launched its commercial autonomous ride-hailing service called Waymo One. Waymo has been publicly testing its technologies through the “early rider program” since last April with more than 400 participants. This is how they bridge the chasm between early adopters and the early majority. The move is monumental not only because Waymo set and met its publicized target of launching the service by the end of 2018, but because it’s the first commercial ride-hailing service based on autonomous vehicles, one of the emerging technologies. Traditional OEMs and Tier 1s could never imagine testing publicly this early on during the product development phase. Receiving feedback from public customers and iterating its product at such quick speeds is instrumental to Waymo’s and any emerging tech companies’ success.
People know that at Hemi, we invest in seed stage companies. This is the stage where the technology is almost ready to demo and there are a few customers in the pipeline. Our job is to identify the ones with the most potential and help them cross the chasm to reach the majority. This is not easy, but it is the most fun. In the past two years, we have invested in 21 amazing companies that have developed incredible technologies and are on their way to commercializing them. Their work defines our work, and their chasm is also our chasm.
As a fund, Hemi helps to cross the chasm by working hand in hand with entrepreneurs, empowering them to dream big and build new technologies and businesses that will shape the future. Many of our portfolio companies are already transforming the future of transportation, including:
- Polysync, an AV middleware company focused on safety;
- Point One Navigation, a precision GPS and sensor fusion company that solves the urban canyons problem;
- PlusAI, a company building a full-stack solution for lvl-4 vehicles;
- Starsky Robotics, a full stack autonomous trucking company that’s operating its own fleet;
- Scotty Labs, providing safe teleoperation to subsume level 5 autonomy;
- Tanvas, connecting people to the digital world through rich touch interactions; and
- Ample, delivering a full charge to any electric car in minutes.
Hemi is also crossing the chasm with our interests in biotech. In this sector some of our portfolio companies continue to gain national recognition:
- Epinomics, recently acquired by 10X Genomics to decode the human genome and drive personalized medicine;
- Cypre, a leading 3D bioprinting company that drastically improves drug development;
- BioAesthetics, regenerating the nipple-areolar complex for mastectomies patients;
- Persephone Biome, targeting gut microbiome to fight cancer;
- Nebula Genomics, enabling consumer genomics data sharing by blockchain; and
- Phenomic AI, AI-guided phenotypic screening.
Another area where Hemi is helping companies cross the chasm is artificial intelligence. Real-world applications of artificial intelligence are surely one of the biggest problems facing society nowadays. In the vertical of Enterprise AI, we invested in:
- Melo, recently acquired by U Commune to make meetings productive;
- Skymind, an enterprise solution for scalable machine learning;
- Alcatraz AI, a facial authentication platform using 3D sensing and AI;
- Apprentice, augmented reality solutions for the lab environment;
- Paladin Cyber, protecting small businesses against cyber attacks; and
- Tensorflight, instant and automated commercial property inspections.
These are just the first steps in our long-term vision. As we continue to grow with our early-stage startups, I want all of us to bear in mind this question: who makes up the early majority of these technologies and how can they cross the chasm? Your input and feedback will be tremendously helpful. We may have identified the technologies early on, but we need everyone’s support to help build them into something that can have a huge impact on the world.