What disruption looks like in 2017

Hint: software is only one piece of the puzzle

Earlier this week, Inc. published a list of the 25 most disruptive companies of 2017. It’s a terrific list of startups across a wide range of industries, including aerospace, agriculture, biotech, and autonomy/mobility.

What struck me most about the list is how many of the companies have a product that’s tangible and not purely software — 17 out of 25, by my count.

Five companies on the Inc. Disruptive 25 list (source: https://www.inc.com/disruptive-25)

Some on the list are software-enabled hardware companies, like Capella Space, a Spark portfolio company launching radar micro-satellites, and Blue River Technology, an agricultural automation startup.

Others leverage the information coded in DNA and proteins to create new products, like Beyond Meat, an artificial meat company, and Ginko Bioworks, a synthetic biology startup creating perfumes, sweeteners, and cosmetics via micro-organisms.

Of course, there are a number of truly remarkable software companies on the list, like the alternative lender SoFi and edtech company ClassDojo.

This list is simply what the writers at Inc. find to be disruptive and doesn’t represent the whole technology industry. That said, I resonate with this viewpoint on what disruption looks like in 2017.

Software is a crucial tool for every disruptive company today. As software has become nearly ubiquitous, many industries — like transportation, agriculture, and medicine — are largely bottlenecked by the quality of physical products available. Startup entrepreneurs with big ambitions are rising to the challenge to develop these products, especially as the cost of development is decreasing over time with cheaper sensors, faster computers, better automation, and advanced manufacturing techniques.

At Spark, we’ve seen a surge of entrepreneurial energy around physical products over the past few years, and we’re investing more and more at the intersection of software and the physical world. Owning the “full stack” of hardware and software can allow companies to tightly control their product experience, which is appealing to many product-oriented founders that we’re drawn to. Our investments in Oculus, Thalmic Labs, Freight Farms, Cruise Automation, and many others fit this bill.

Congratulations to this year’s winners of the Disruptive 25. In the years to come, we hope to support more companies that end up on this list — ones that aren’t afraid to take big technology risks to solve important societal problems.