Tech Shifts That Drive Our Investments — A Great Second Act
At Tsingyuan Ventures, we invest in early stage technology startups that can potentially generate big returns. Two years ago, I proposed the thesis that these types of startups typically happen alongside major technological shifts as a necessary condition for startups to disrupt larger incumbents. Recently we have also revisited how that 2-year-old tech thesis has panned out. In this post, I’d like to discuss what new technology shifts we are paying attention to in the next 2 years.
The great second act: Google wasn’t the first search engine — there’re more than a handful search engine companies before that. Facebook wasn’t the first social network. Apple was very late in the mp3 player business with the iPod; and the iPhone wasn’t the first mobile phone or even the first smartphone. ZOOM was a second effort after Webex. Pinduoduo followed many big successful ecommerce giants in China and yet found a very different path. Brand new ideas sometimes find good success. But it is the great second effort that generates truly astonishing results. With that thought in mind, let’s dive in the five tech shifts here.
The Democratization of AI
AI as the core of the fourth industrial revolution has been touted for years. And yet, besides the few tech giants, most companies still don’t rely on AI for their core business. The reason is that AI is still too hard to use. It still takes highly paid specialists — data scientists and data engineers for example — to implement highly customized solutions and a lot of ongoing maintenance. There’re “AI in a box” tools but even those are targeted at specialists and are difficult to use by others. The great second act in AI revolution is making AI truly easy to use by non-technical business users.
This will finally enable AI to power more industries such as manufacturing, agriculture, retail logistics and services. The democratization of AI will allow business managers and technicians in these industries easily tap into the power of AI by simply giving examples and high-level feedback. Building these tools require deep vertical knowledge and specialized product design. Startups are much better suited here.
Key innovation points: vertical-specific auto-tuning and product design.
Remote working tools
In the current global pandemic we learned that working remotely is not only possible, but most likely a lasting trend for most knowledge workers. Existing digital collaboration tools such as Zoom, Slack and Otter obviously got a big boost in adoption. But many more types of tools are needed to cover so many enterprises suddenly need to go fully digital and remote.
When we become increasingly dependent on digital tools, the cost of breach, hacking and digital theft
The original promise of the internet is that anyone can work anywhere with anyone else. While it is technically possible, not a lot of people have taken this seriously until now. When billions of people are working remotely we suddenly find out that our tools are extremely shallow and limited.
Key innovation points: computer vision and speech/voice cue understanding; workflow redesigned around virtual presence and attention tracking.
eCommerce
Historically commerce is often the first to adopt the power of new media — telephone, radio, TV, internet, mobile phones — to further the reach and efficiency of buyers and sellers. Yet none has really replaced the dominance of physical retail. Even with Amazon becoming one of the most valuable companies in the world, eCommerce in the US last year is about 11% of total retail. China with multiple big players in BABA, JD and PDD lead the world in both percentage (25%) and total size (also 2.5X bigger than US). We believe the time is now for a great second act to see ecommerce flipping into the lead in retail.
Online discovery, ordering and fulfillment need to be easy, reliable and delightful. It means logistics needs to be 10X better than it is today. In the current Fedex TV commercial customers are still surprised to receive packages; there shouldn’t be any surprises.
Key innovation points: 10X better product discovery and personalization; Sensor enabled goods/people/process tracking down to seconds/minutes.
Digital health
We often wonder why the trillions dollar 20% GDP healthcare industry is mostly impenetrable with the type of technology normal companies take for granted. First batch of effort yielded many big service companies but largely business as usual of a mixture of papers and PDFs, tools don’t talk to each other and devices that are on a 20-year refreshment cycle. We think the time is right for a great second act.
We envision software tools that are not only delightful to use but are designed with deep clinical knowledge so they are as trustworthy as the institutions adopting them. We believe we can fully unlock the power of big data in clinical decisions with a combination of technology and sensible/modern policy. What’s happening in the world this year has taught us that we should dramatically accelerate the pace of digital health innovation, and let data and scientific facts guide policy makers.
Key innovation points: consumer owned electronic medical records that are enhanced by wearable sensor data and personalized testing, tracking and recommendations.
Other miscellaneous thoughts
Why isn’t email dead yet? Email is the original killer app that predated the web. While many modern productivity/communication/social media tools rise and fall, email is the only constant due to its open protocol that allows different companies with different systems and client tools to talk to each other. Will another open protocol rise up and finally kills this old tool, or will email learn a few new tricks to outlive them all? I’m open to the former but will probably bet on the latter.
Why isn’t password dead yet? Password is annoying, messy and dangerous for almost everyone involved. Yet it is still irreplaceable. In the what-you-know(password), what-you-have(device) and what-you-are(biometric) triad, password is the most flexible, hidden and portable dimension. We clearly have a problem here. But the winning solution probably isn’t simple or obvious yet.
AR/VR second act? Virtual/augmented/mixed reality has been hyped and under-delivered in the last a few years. With the biggest tech companies all secretly working on the next generation devices, we might finally see a magical second effort that delivers the original promise of truly immersive experience and perfectly blend-in of ubiquitous computing. When this happens, it could be as big a platform shift as the web, or mobile; or, it could be yet another control point in already dominant big tech companies’ hands.
No matter what happens, the future of technology innovation is as important as ever. In the next several quarters we’ll dive into some of these clusters as we follow our research and investments deeper into each area. We might find new patterns and new tech shifts emerge as that happens as well.
