We need to talk about Frontier Technology in Europe

Recently, I co-hosted a panel discussion here at betaworks about Europe’s role in developing frontier technologies. We were fortunate to have three awesome, and oh-so European, guests:

Alice Lloyd George 🇬🇧: Investor at RRE Ventures
Dennis Mortensen 🇩🇰: CEO and Founder at x.ai
Alexandre Winter 🇫🇷: Director at Arlo/Netgear (previously sold Placemeter to Netgear)

Some highlights of the evenings discussion:

European founders still timid

European sensibilities, on both the operator and investor side, are still proving to be the handbrake to achieving ambitious outcomes — especially in emerging technologies. This is manifesting itself in a number of ways:

• Though attitudes are changing, European founders remain content with smaller company outcomes.
• European investors still favour business models which have a view to revenue, this is often difficult with frontier/deep technologies
• Frontier technology often requires much longer time horizons, still too few European venture investors who find comfort with that

US soil still more fertile for frontier tech

• European frontier founders are still seeing more traction with US investors, many of which are more willing to invest in untapped new sectors such as NewSpace, crypto, robotics and computer vision
• Deepmind, SwiftKey and Magic Pony are success stories for UK/Europe, though would be considered small exits for US — tellingly all acquired by US companies, Google, Microsoft and Twitter respectively.
• European talent still heading to the US in order to get paid — question as to how this changes with US administrations change in immigration policies
• Still not clear how Europe will address the Series B “crunch”

The role of academia

• European academic institutions are still predominantly funded by the public sector, whereas the US also benefits from private sector and/or philanthropic grants. Example: the new Cornell Tech campus has, in part, been funded by Mike Bloomberg and a number of other individuals and companies
• European academics are often more puritanical in their application of theoretical work. An increasingly applied mindset would aide academic products move out of the lab
• Europe has the academic talent but fails to turn this into tangible business outcomes, at least on the continent

A continent, evolving

• Forward-thinking government support is providing fertile ground to new technologies; cyber, autonomous vehicles and AI in the UK, cryptocurrencies in Switzerland (aka “Crypto Valley”), AI and computer vision in France. This, along with new hubs of deep tech such as Finland and Estonia
• European antitrust and anti-regulation (is a double-edged sword) can provide a more stable competitive environment for new technologies and insurgents
• In 2016, there were 282 deep/frontier tech investments — accounting for $1.3bn in investment, approximately a quarter of this came from US venture investors — up 5x from a few years prior

Europe’s room for improvement

• “Stay put, stay strong” — developing the European ecosystem by shunning the bright lights (read: capital) of the United States
• More patient capital — the US has benefited from ‘moonshots’ and venture investors have been brave enough to allocate capital. Europe is now poised to replicate this