HP CTO Shane Wall on Industry 4.0, 3D Printing, Healthcare Technology, and Investing for the Future of Humanity
On May 9, 2018, Fusion Fund held its annual meeting at Filoli Gardens in Woodside, CA. Guests included sector experts from leading industry and academic institutions, general partners from Silicon Valley’s top growth stage firms, as well as the founders of Fusion Fund’s portfolio companies.
We were fortunate to have had Shane Wall, Chief Technology Officer (CTO) of Hewlett-Packard (HP) and Global Head of HP Labs sit down with Fusion Fund Founding and Managing Partner, Lu Zhang and have a dialogue on “Silicon Valley’s Innovation Trends and Ecosystem”. Shane Wall has been at top executive positions in HP and Intel, driving company innovation strategies for the past 20 years and is passionate about the start-up community being an active angel investor himself.
The following were highlights from the conversations between Shane Wall and Lu Zhang:
Impact of Industry 4.0
Lu Zhang: Industry 4.0 is a hot topic right now that involves the internet of things, automation, cybersecurity etc., so which sector will be hit first, and which sector will be hit the hardest by this revolution?
Shane Wall: I would like to first put it into some context so that we know why it is going to be so big. At HP and HP Labs, we spend a lot of time looking into the future. We want to anchor our technology development on megatrends in humanity that span 30 years into the future. Some of these trends point to the limitation in resources, space, energy, and waste management that we will never be able to address using traditional manufacturing. In fact, it is estimated that if we continue our current growth, in 30 years, we will be consuming two earths to manufacture what we are doing. Industry 4.0, will have a totally different vision of manufacturing. The industries that will definitely be disrupted include the airline industry; the airplane you flew on today may have a jet engine and other components that are 3D printed. The other ones are the automobiles and life sciences/healthcare industries. Those are the three big industries that will be impacted.
Then the question is where the biggest impact will be? Our view is that it is not on a particular vertical industry, but on the approach of manufacturing. Rather than manufacturing in particular locations, the manufacturing itself will be distributed on-demand. Imagine a world that I can design digitally, transmit the design digitally, and I can edit and change in the locale that it is consumed and manufacture and print on-demand in that location. It can have massive impacts on, for example, taxes, import/export… it will have amazing impacts.
Lu Zhang: If we don’t need distributed supply chains anymore, do you think it will help or hurt the globalization?
Shane Wall: For globalization or “hyper-globalization”, we are more connected thanks to the internet and mobile technologies (therefore, elimination of distributed supply chains will not affect the globalization). Come back to the supply chain question itself, it will be massively, massively impacted. Some of our biggest customers are in logistics. With the advent of 3D printing, they will never work the same again. For example, UPS and FedEx’s core business are shipping physical goods. Suddenly everything is being transmitted digitally, they have to figure out how to reinvent their business. It was a surprise when they came to us first, but when you see their motivation you can figure out what is happening.
Lu Zhang: When big companies such as HP are pushing the development of Industry 4.0, where are the opportunities for small start-ups to be involved in this industry 4.0 revolution?
Shane Wall: This will be an ecosystem. Beyond HP Labs, I also run HP Tech Ventures. We do a lot of investments in strategic areas that are of interest to us. If you look at the venture capital market, the most recent data indicates that the largest sector for current investment is in manufacturing. That involves everything from supply chains to parts, to novel material technology… Yes, it will be huge for both large companies and small startups.
Lu Zhang: My next question is about computing capability. There are lots of discussion on edge computing and quantum computing. What do you think about the computing capability into 2050?
Shane Wall: We have been driving toward a vision called “blended reality”, the concept that physical beings like people, places, and objects you interact today are intertwined with our digital reality. The endgame, for example in 2050, means the boundary between what was human and what was man-made disappears as the two worlds merge together. Combine that with the continuous scaling effect of Moore’s law and the amount of computing power you are going to have, you will have the unbelievable computing power, incredible sets of sensors, all integrated naturally. The printed electronics, natural language processing, on-demand artificial intelligence is just the primitive beginning of this future tech conversion.
Lu Zhang: Let’s talk about 3D printing. 3D printing has tremendous potential in manufacturing, healthcare, and other industries. I was trained as a material scientist, I know 3D printing still has limitations when printing different materials. What’s your opinion on the challenges and opportunities in the scaling-up process for this technology?
Shane Wall: That’s a very good question! I will tell you about what we have developed at HP Labs, the Multi Jet Fusion, which has been marketed for a few years. All the existing technologies like SLS (Selective Laser Sintering) are analog. What is unique about Multi Jet Fusion is that it is truly digital. We can print at a Voxel (Volume Pixel) level of 20mm. At the 20mm level today, we can specify everything, like material type, translucency, flexibility, conductivity, color… All of these can be specified in a digital voxel level. Translating that back into material, that means I can create materials on the fly. Imagine that we can have a digital alloy, instead of mixing different metals together, we can start out with a base metal and through digitally applying these agents I can build a 3D alloy on-demand. Now imagine a metal that starts with a solid material and transitions into a different type and comes back to another type in the 3D space. What we are doing is opening the platform up it is an open platform. There are material development kits and instructions on how people can add their own material to our system. Then our customers are not limited to the options we can provide. We are at the beginning of this process and it will be exciting to watch how it develops in the next 5–10 years.
Lu Zhang: The next question is about healthcare. Healthcare capital investment has been quite popular since 2017. I published an industry report on AI in Healthcare last September and it received lots of attention. And earlier this year at the JP Morgan Healthcare Conference, AI in healthcare was a popular topic. Valuation of life science companies has been getting higher and higher. So what are your insights on this trend?
Shane Wall: It’s a huge market and huge opportunity and I think as long as we are still living, it will continue to be that way. You are right, valuations are just astronomical on some of these companies. To put into context, we know that in the long run, some of the healthcare issues we are facing today will get much more acute, whether it’s the cost of healthcare in mature markets or access to healthcare in emerging markets. The solutions have to adapt and adapt rapidly, that is part of the reasons that some of the valuations being so high.
Our own investment in the life sciences and healthcare sector is from a very different angle compared to most other people. A lot of folks are thinking about AI and the application of AI in the imaging space, we are looking into mobile analytics. One of our core competences which we have ~10,000 patents is in microfluidics. The ability to move a very small volume of fluid very rapidly and precisely. Today we use it to move ink, but we can use it to move a lot of things, for example, blood, saliva, cancer cells… All of those can be done very precisely and at very low cost and it can solve some big problems in the healthcare area. I think microfluidics will continue to be a big area for investment.
Lu Zhang: I agree that microfluidics has become an industry trend especially in cancer diagnostics. I invested a company in 2015 called MissionBio. It has become a leading company using the microfluidics technology for early-stage cancer diagnostics. Investment for microfluidics has increased dramatically.
Background on Shane Wall
Lu Zhang: You founded a startup, and you’re managing an innovation lab. At the same time, you are the chief technology officer of a very big corporation in Silicon Valley, and you do your own investments. Which role do you like the most?
Shane Wall: It’s like asking which child I love the most. Honestly, I love all these areas. What I like the most is the ability to impact where the world is going and being able to have multiple tools at scale to do it. To go after a big problem, I have got a set of people that we can invest directly, but I cannot do everything, so I can pull a startup from another area and help it scale up. The ability to operate at scale and use all the avenues is the most satisfying to me.
Lu Zhang: As the CTO of a large technology company, what is your thought process on identifying new markets and technology?
Shane Wall: At HP, we look at the megatrends of our society including mass urbanization, hyper-globalization, and demographic changes and ask what will be the toughest challenge that humanity is going to face. Then we ask ourselves: “Do we have the intellectual property or capability to solve that problem?” That’s the future market! That is the anchor and the guide for all the technology developments and investments. The beauty of the big humanity issues is that there is so much blank space, people have not solved these problems. That means there are so many opportunities sitting out there!