Timing The Market For Autonomous Vehicles

A small insight into conviction.

I’ve looked a fair amount of very early companies in the autonomous vehicle space. This leads to a lot of product demos that might underwhelm the general public.

To that end, awhile back one of my colleagues asked “How are you sure we’re not too early in this space?”

As a seed investor I’m operating on a time horizon of AT LEAST 5 years. As a Frontier Tech investor, I’m happy to watch the future take its time, as long as we get to the future we believe in.

In order to get to that future I believe that more funding is needed in the autonomous vehicle space. Thus far the bulk of the venture capital financing to autonomous vehicles has been concentrated in a few large bets, with under 30 total companies raising more than $1M in the past 2 years. When looking at timing the massively underfunded autonomous vehicle space, I look at level 3 and 4 autonomy time horizons.

We’re only 2–3 years from level 3 mainstream adoption with leaders such as Tesla with their Autopilot technology as well as startups like Cruise (acquired by GM after the writing of this post) spearheading this today. For level 4 autonomy, Google and Uber, as well as a variety of other stealth startups will continue to solve technological problems as regulatory roadblocks begin to fall putting fully autonomous vehicles on the road in some capacity in the next 6–8 years.

Overall, the cutting edge tech companies are building (some quietly) in the space, while the bleeding edge upstarts are assembling impressive teams and building prescient products. Meanwhile, behind the scenes, the incumbents are scared thinking about how to future-proof their businesses in a world where autonomy is causing dynamic shifts in car ownership, infrastructure, and technology. So if y0u’re going to make 5, 10 or even 20+ investments in this space this is how I know it’s not too early.

Change happens incrementally until it doesn’t. And while some small teams might not be able to show on the surface the type of product progress that massive public companies have in this space, they will with time and funding, and I’d be happy to back them before anyone else.