Looking ahead, despite being slightly behind
Apologies for running late! These posts are typically shared in December or January to kick off the new year, but having been busy welcoming our first daughter to the world in January (Hello world, meet Iris Grim!), I ask for permission to deliver this now.
Entering my third year in VC with Northzone, it’s become increasingly clear that to not only survive but also excel long-term, focus is everything. The sheer number of great businesses and entrepreneurs across geographies and industries, is just too vast to try to be relevant to all of them.
A good exercise I’ve been running is to regularly (at least quarterly) sit down to zoom out and think through where I want to put that focus. Yearly, I tend to do a deeper review. For 2019 (at least the remaining ~85%..), there are a few key topics I’m particularly excited about. If you’re building a company in any of these spaces, I would love to talk.
Can digital distribution + new data + personalisation = healthcare²?
During my wife’s recent pregnancy, she was unfortunate to develop a condition called pre-eclampsia. This is not uncommon, but can be serious if not treated. After many trips to the hospital during the last month of pregnancy, for daily/bi-daily physical check-ups and tests, meeting new doctors every time, we got the message you never want to hear: it seemed that for the previous two weeks, they’d misread the tests. Given poor systems support and lack of ownership, they had let my wife’s condition go untreated longer than it should. Thankfully, all was well in the end, but this is just one anecdote of the healthcare industry’s struggle to provide high-quality, personalised and convenient care.
Through better use of data — breaking down existing data silos or leveraging new data sources — there’s never been a better opportunity to improve access and personalise treatment, leading to better patient experience, higher adherence and better effectiveness.
Digital tools are increasingly improving access to healthcare and wellness treatments. Through better use of data — breaking down existing data silos or leveraging new data sources — there’s never been a better opportunity to improve access and personalise treatment, leading to better patient experience, higher adherence and better effectiveness. I’m super excited about this trend in general health & wellness, and particularly interested in how this can address the topic of mental health, one of our generation’s biggest health challenges. I’ll be sharing more on this theme soon.
Open banking enabling democratized access to banking outside of banks
At Northzone, we’ve followed the banking-outside-of-banks trend for a while, and are happy investors in several fintech challengers targeting both consumers and SMEs (such as iZettle, Klarna, Anyfin), as well as players building the enabling infrastructure (such as TrueLayer).
I believe we’re still in the early days of providing consumers & SMEs access to high-end banking services, that traditionally have been available only to wealthy individuals and large enterprises. I’m particularly excited about the opportunities arising with open banking & PSD2, enabling entrepreneurs, that historically have been chained to traditional banking infrastructure, to build and provide access to new products and services across potential consumer touch-points. Areas of particular interest include easy-to-understand, high-quality, automated personal finance management, autopilot financial management for SMEs, and others.
Media + Commerce = (Did anyone say) influencers?
(And the continued shift of commerce online…)
Having spent time with some of the leading companies in media and commerce coming out of northern Europe in the last few years (Spotify & King in media, NA-KD in commerce), I’ve developed a keen interest in the opportunities in both spaces.There are also vast opportunities ahead in the merging of the two worlds. As old monetisation models in media (eyeballs -> ads -> $) are being eaten up by the incumbents in the space (FB & GOOGL), media players have been looking for new avenues to monetise. In parallel, in commerce we’ve seen consumer decision making being increasingly influenced by role models and communities. The merging of those two forces has given rise to the influencer economy, which we will continue to see evolving.
We’ve invested into several influencer-driven models at Northzone, such as NA-KD (DNVB in female fashion) and Activate (Influencer platform), and I would love to talk if you’re building something here, especially if video is a core part of your consumer interface. Interesting examples of such models includes ShopShops, a livestream marketplace connecting retailers and brands with shoppers through influencer hosts. In general, look towards China for innovative models here — they’re way ahead of the US & Europe in terms of scale and innovation in the influencer market.
With ecommerce representing only 12% of global retail sales in 2018, we shouldn’t forget that online commerce in general still has a long way to go, and we keep looking for innovative models that enable that shift to happen even faster. There are e.g. opportunities to digitise larger share of transactions further upstream in the value chain, e.g. through digital, B2B marketplaces. If interested, check Faire in the US — if you’re building it for Europe, do please reach out.
Automation in increasingly consumerised (small & medium-sized) enterprises
At McKinsey, I spent most of my time in digital strategy / digital transformation engagements, working with incumbents in large, often stale industries, to define and realise “Digitalisation Opportunities”. In reality, I saw many great ideas, but shit-loads of terrible software slowing everyone down (consultants included, we just did most work outside those systems — didn’t scale, but did show short-term impact). I hated bad enterprise software, and still do. Moreover, I realise I’m not alone.
In enterprise, I spend my time focusing on the SME market, with the underlying thesis that data proliferation, automation and great UX can satisfy the demands of a younger generation of employees in SMEs. This can unlock significant value for a segment that historically has been underserved, due to high cost to serve vs monetisation potential. Given my consumer-focused background, I mostly look for SME propositions with consumer-like adoption, where entrepreneurs leverage aspects typically found in consumer businesses (great UX, digital channels for distribution) to scale faster than ever before. We’ve already invested into several companies in this space (e.g. Personio in HR, iZettle & Klarna in payments), and continue to actively pursue opportunities. Key topics that engage me in particular are found in the horizontals of finance and productivity.
Platform shifts: the road ahead for AR/VR
Marshmello’s recent concert inside of Fortnite, seeing more than 10 million concurrent viewers/participators, is just one example of the vast potential for consumers to engage in virtual worlds at mind-boggling scale.
Albeit very different types of opportunities, I’m extremely bullish on the long-term prospects of both VR and AR. Marshmello’s recent concert inside of Fortnite, seeing more than 10 million concurrent viewers/participators, is just one example of the vast potential for consumers to engage in virtual worlds at mind-boggling scale. I do think we have some time to go before hardware availability is widespread enough to unlock the full potential of immersive, virtual worlds (in the case of VR) or fully merging the information flow between the physical and digital world (in the case of AR). Until then, we’ll have to make due with the platforms we have (mobile, desktop & TV), and I’ll be monitoring opportunities based on that HW in particular during 2019. For AR, that likely means consumer-facing mobile AR applications, probably initially distributed as cross-platform propositions in gaming, entertainment and/or media.
However, if you’re developing the next dominant form-factor for AR or VR hardware and want to take on the giants in the space, let’s discuss.
Where are you in all this?
If you’re an entrepreneur in the midst of starting out, iterating on product, or aggressively growing your business within any of the above themes, I’d love to be in touch.