Tech

The rapid hard-tech emergence – TechCrunch

My friend of tech shook his head when I joined the HAX team at SOSV, a venture program designed to help early hardware founders. Did you still know that the hardware is too hard? What they didn’t see was the rapidly evolving hardware scene, in contrast to the glacier’s reputation. The old Hard Knock hardware playbook has been replaced by a new, much more exciting one. It is emerging to meet civilization-level opportunities such as climate that software can solve on its own.

Today, when I work with the founders of the HAX program, it’s normal to have an incredible (but feasible) plan to “reduce global energy consumption by 10%.” Seppure, “Eliminate all waste in the apparel supply chain” Not spun Or “Make global battery recycling five times more profitable” Green Lion..

These ambitions reflect a new megatrend in the global economy centered on decarbonization, infrastructure modernization, supply chain protection and the demand for full digitalization of traditional industries.

From machine learning to sensors to nanomaterials, the tools and technologies to move forward are more powerful and affordable than ever before, significantly reducing your ambitions and time to market. .. Foresighted people like Bill Gates and Elon Musk are paying attention, and institutional giants like BlackRock are putting pressure on climate negligence.

In fact, the scope of this new world is so wide that HAX’s treatise on “hardware” is no longer defined.We call it Hard teknoNot only is it as difficult as it is, but it’s far beyond the initial scope of personal hardware devices and home IoT in the early 2010s.

Emerging around us are the founders, investors and technologies of a new generation of hard tekno. There are some early signals of a hard tech tsunami.

If “software eats up the world”, hard tekno gives it a tooth

The last three decades have been defined by “World Eating Software”, which has been feasting on the lowest hanging fruits. But our screen-based, server-based digital world is increasingly limited to marginal profits in niche markets. As a friend of Ubiquity Ventures says, it’s time for “software beyond the screen.”

Affordable robotics, AI-driven sensor fusion, uninterrupted connectivity, and supermaterials are integrated into the technology stack, unleashing new tranches of value to customers. Many HAX companies run over 80% gross profit business, and industry experts have said that only SaaS companies can achieve it. In addition, the combination of hardware and software can address more serious industry-wide problems that software alone could not.

Learn from Tesla: Take big shots at big companies

Industry experts point out Tesla’s “software-driven” approach as it tries to explain the unexpected rise of Tesla into a mass-produced car maker over the last decade. The truth is Tesla’s rise centered on hardware innovations in battery, motor, manufacturing and distribution models.

The same equation is being developed in dominant trillion-dollar industries such as energy, construction and agriculture. Investors looking for opportunities in these categories need to be bold, but will find disproportionate returns when hard technology is included.To move the world forward, we need to shoot big things like the fusion energy of the Commonwealth Fusion reactor, Boston Metals Emission-free steel Or Deepspin’s Low cost MRI.. Like Tesla and transportation, software may open up opportunities, but the Industrial Revolution comes from innovation in the physical world.

A new door opens for B2B sales

Dealing with these large-scale opportunities requires industry-wide partners and customers. Startups can’t afford to do it alone. The traditional advice for startups is to avoid corporate partners as they are scary and slow-moving beasts that can’t work at the startup’s pace. In reality, large companies are significantly more motivated by emerging hard tekno startups, and many are setting up pipelines to tackle higher-risk, more complex technologies.Number of companies that have ventured in the last few years Great deals more than doubled More companies are preparing for an industry-wide upheaval that is already underway.

This will allow startups to quickly enter the B2B market for their enterprise. This shows that many B2B hard tech startups will grow to millions of revenues at a pace that was previously limited to software-only peers. It also explains the surge in venture capital to the same company and the changes in the composition of HAX itself. Since its inception in 2012, the HAX B2B portfolio has grown from 10% to 70% of total investment. This includes the vast majority of the fastest growing early-stage companies.

Touring for hard tech companies is easier and cheaper

Technology and strategies for spinning up early-stage hard-tech startups have advanced by orders of magnitude in less than a decade. The price of 3D printers has dropped from $ 20,000 to $ 200. Printed circuit boards ship worldwide in just a few days (even if the wild supply chain is scarce). Hundreds of thousands of suppliers are online and ready to manufacture and ship components overnight. It makes sense for early-stage founders to create impressive and profitable prototypes on a small budget. As a result, hard tech founders can focus on developing core technologies and take for granted many things that were previously considered really “hard.” A similar revolution is the backbone of the new hardware technology world, as is the rise of “no-code” that unleashes new API, AWS, and software applications.

PhD is an icon of the future

The commercialization of hard tech is no longer a quest for Quixotic, so more PhDs and postdocs are signing up to start a business. It’s not uncommon for HAX startups to have a PhD founder or someone who has worked on a dissertation for years (Over 40% of SOSV Climate 100 companies There is at least one PhD founder). They deal with more entrepreneurial nudge directly from the university, but are also inspired by the demands on major civilization-level technology challenges such as climate.

It’s not an easy path for investors. Most of the time, the work that comes out of a university lab bench is very sophisticated, somewhat speculative, and lacks a proven market. In other words, hard-tech startups are usually very deep-sea, and expert leadership and insight are valuable. As a result, many VCs hire scientists and engineers for their investment teams to avoid the risk of missing out on the next generation of great founders and industry-changing start-ups. We are at the beginning of a golden age of opportunity for the highest spirit of science and technology.

These highlights from the rise of HAX’s new hard tekno reflect what the HAX team is doing every day in our portfolio, rather than forecasts for the coming years. We are amazed at the quality of the ideas, the ambitions of the founders, and the speed of execution for projects that weren’t impossible years ago. Sure, it’s still difficult, but more entrepreneurs and investors are moving to hard tekno as it will be an unavoidable force in the coming decades.

Disclosure: Former TechCrunch COO Ned Desmond has become SOSV’s Senior Operating Partner.

The rapid hard-tech emergence – TechCrunch Source link The rapid hard-tech emergence – TechCrunch

Related Articles

Back to top button