Assessing its future, both the bad and the good.
Assessing its future, both the bad and the good.
Building, scaling and launching new tools and products is the lifeblood of the technology sector. When we consider these concepts today, many think of Big Tech and flashy startups, known for their industry dominance or new technologies that impact our everyday lives. But long before garages and dorm rooms became decentralized hubs for these innovations, local and state governments, along with many agencies within the federal government, pioneered tech products with the goal of improving the lives of millions.
Long before garages and dorm rooms became decentralized hubs for innovation, local and state governments, along with many agencies within the federal government, pioneered tech products with the goal of improving the lives of millions.
As an industry, we’ve developed a notion that working in government, the place where the groundwork was laid for the digital assistants we use every day, is now far less appealing than working in the private sector. The immense salary differential is often cited as the overwhelming reason workers prefer to work in the private sphere.
But the hard truth is the private sector brings far more value than just higher compensation to employees. Look no further than the boom in the tech sector during the pandemic to understand why it’s so attractive. A company like Zoom, already established and successful in its own right for years, found itself in a situation where it had to serve an exponentially growing and diverse user base in a short period of time. It quickly confronted a slew of infrastructure and user experience pivots on its way to becoming a staple of work-from-home culture — and succeeded.
That innate ability to work fast to deliver for consumers and innovate at what feels like a moment’s notice is what really draws talent. Compare that to the government’s tech environment, where decreased funding and partisan oversight slow the pace of work, or, worse, can get in the way of exploring or implementing new ideas entirely.
One look (literally, see our graph below) at the trends around R&D spending in the private and government sectors also paints a clear picture of where future innovations will come from if we don’t change the equation.
Look no further than the U.S. government’s own (now defunct) Office of Technology Assessment. The agency aimed to provide a thorough analysis of burgeoning issues in science and technology, exposing many public services to a new age of innovation and implementation. Amid a period of downsizing by a newly Republican-led Congress, the OTA was defunded in 1995 with a peak annual budget of just $35.1 million (adjusted for 2019 dollars). The authoritative body on the importance of technology to the government was deemed duplicative and unnecessary. Despite numerous calls for its reinstatement, it has since remained shuttered.
Despite dwindling public sector investment and lackluster political action, the problems that technology is poised to help solve haven’t gone away or even eased up.
From the COVID pandemic to worsening natural disasters and growing societal inequities, public leaders have a responsibility to solve the pressing issues we face today. That responsibility should breed a desire to continuously iterate for the sake of constituents and quality of life, much in the same way private tech caters to the product, user and bottom line.
My own experiences in government have shaped my career and approach to building new technologies more than my time in Silicon Valley. There are plenty of tangible parallels to the private sector that can attract driven and passionate tech workers, but the responsibility of giving government work realistic consideration doesn’t just fall at the feet of talent. The governments that we depend on must invest more capital and pay closer attention to the tech community.
Tech workers want an environment where they can thrive and get to see their work in action, whoever the end user may be. They don’t want to feel hamstrung by the threat of decreased funding or the red tape that comes as a result of government partisanship. Replicating the unimpeded focus of Silicon Valley’s brightest examples is a must if we’re serious about drawing talented individuals into government or public-sector-focused work.
A great example of these ideas in action is one of the most beloved government agencies, NASA. Its continued funding has produced technologies developed for space exploration that are now commonplace in our lives, such as scratch-resistant lenses, memory foam and water filters. These use cases came much later on, only after millions of dollars were invested without knowing what would result.
NASA has continued to bolster its ability to stay nimble and evolve at a rapid pace by partnering with private companies. For talent in the tech sphere, the ability to leverage outside resources in this way, without compromising the product or work, is a boon for ideation and iteration.
One can also point to the agency when considering the importance of keeping technology research and innovation as apolitical as possible. It’s one of the few widely known public entities to prosper on the back of bipartisan support. Unfortunately, politicians typically do all of us a disservice, particularly tech workers in government, when they too closely connect themselves or their parties to a particular program or platform. It hinders innovation — and the ensuing mudslinging can detract from talented individuals jumping into government service.
There is no shortage of extremely capable tech workers who want to help solve the biggest issues facing society. Will we give them the legitimate space and opportunity to conquer those problems? There’s been some indication that we can. These ambitious and forward-looking efforts matter today more than ever and show all of us in the tech ecosystem that there’s a place in government for tech talent to grow and flourish.
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European satellite and communications startup, Hiber BV has secured €26 million in EU and private investment to expand its IoT satellite network. The funding comes from the European Innovation Council Fund (EIC Fund), the EU’s innovation agency, which has a €278 million Innovation Fund. The EIC co-invested with an innovation credit provided by the Dutch government and existing shareholders. Other investors include Finch Capital, Netherlands Enterprise Agency and Hartenlust Group. Hiber’s satellite constellation tracks and monitors machines and devices in harder-to-reach places.
At the same time co-founder of Hiber, Laurens Groenendijk, is to step aside as managing director to turn his attention to “other investment initiatives” the company said in a statement. Steven Kroonsberg joins as CFO. Roel Jansen joins as CCO. Groenendijk has been Co-founder and Chief Executive Officer at Treatwell as well as a serial investor.
Coen Janssen, Chief Strategy Officer and co-founder of Hiber, commented: “The €26 million funding is fantastic validation for Hiber’s success and a major boost for the European ‘New Space’ sector. It is a key step in realizing our aim of making the Internet of Things really simple and available for everyone in remote and developing regions of the world.”
In particular, because it can reach out-of-the-way areas, Hiber’s network may be able to reduce losses in food production and leakages from oil wells.
Nicklas Bergman, European Innovation Council Fund Committee Member, commented: “I am glad to announce the EIC Fund support to this highly innovative company aiming at creating a European champion in the satellite Internet of Things sector. This equity financing will help Hiber to enable affordable and ubiquitous connectivity for the IoT solutions.”
Elia Montanari, Head of Management and Control at the European Space Agency, commented: “This major success has been supported at European level by collaboration of major EU bodies (EIC, EIB, ESA) fostering the Space Value Chain”.
The transportation industry is abuzz with upstarts, legacy automakers, suppliers and tech companies working on automated vehicle technology, digital platforms, electrification and robotics. Then there are shared mobility companies from cars to scooters and mopeds to ebikes. And who can forget the emerging air taxi companies?
At the center of this evolving industry are the investors. Simply put: TechCrunch can’t hold an event on mobility without hearing from the people who are hunting for the best opportunities in the industry and tracking all of its changes. That’s why we’re happy to announce investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital will join us on our virtual stage at TC Sessions: Mobility 2021. The virtual event, which features the best and brightest minds in the world of mobility, will be held on June 9.
p.s. Early Bird tickets to the show are now available – book today and save 35% before prices go up.
Brenner, Garcia and Holt will come on stage to discuss their near and long-term investment strategies, overlooked opportunities, and challenges that face startups trying to break into the transportation sector. They’ll lean on their considerable experience to provide the advice and insight that will help attendees understand the state of the industry and where it is headed.
Brenner is a serial co-founder. She is co-founder and managing partner of the Urban Innovation Fund, a venture capital firm that provides seed capital and regulatory support to entrepreneurs solving urban challenges. Urban Innovation Fund has backed curbflow, Electriphi and Kyte among others. She also co-founded Tumml, a startup hub for urban tech that provided 38 startups with seed funding and mentorship, and hosts events around urban innovation. In 2014, Forbes listed her as one of its “30 Under 30” for Social Entrepreneurship.
Garcia, a lifelong ‘car guy’ with an MS degree in management science and automotive engineering from Stanford University, is managing director at Autotech Ventures. He’s also a board director, board observer and advisory board member to a number of mobility companies including Lyft, Peloton Technology, and Connected Signals.
Garcia has been on the ground floor of startups, notably as part of the initial team at the electric vehicle infrastructure startup Better Place, where he was responsible for partnerships with automakers and parts suppliers while living in Israel, Japan and China.
Holt is co-founder and Managing Partner of early-stage venture firm Construct Capital, which is focused on finding founders that are trying to change foundational industries such as manufacturing and supply chain, logistics and transportation. The company’s transportation-focused investments include ChargeLab. Holt also sits on the board of MotoRefi.
Prior to Construct, Holt was at Uber, where she was one of the company’s first 30 employees. During her 8.5-year stint at Uber, Holt rose through the ranks of the company, including roles running the U.S. and Canada “Rides” business as well as global marketing and customer support. She was a longtime member of the company’s executive leadership team. Her last position at Uber was leading the company’s new mobility organization, which focused on its e-bike and scooter businesses as well as running its incubator, which funded and developed new products and services.
Rachel began her career at Bain & Company, advising companies in the private equity, financial services and healthcare industries. She was ranked No. 9 on Fortune’s 40 under 40 and was named by Fast Company as One of the Most Creative People in Business.
We can’t wait to hear from this investor panel at TC Sessions: Mobility on June 9. Make sure to grab your Early Bird pass before May 6 to save 35% on tickets and join the fun!
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Health and life science specialist investment firm Foresite Capital has raised a new fund, its fifth to date, totally $969 million in commitments from LPs. This is the firm’s largest fund to date, and was oversubscribed relative to its original target according to fund CEO and founder Dr. Jim Tananbaum, who told me that while the fundraising process started out slow in the early months of the pandemic, it gained steam quickly starting around last fall and ultimately exceeded expectations.
This latest fund actually makes up two separate investment vehicles, Foresite Capital Fund V, and Foresite Capital Opportunity Fund V, but Tananbaum says that the money will be used to fuel investments in line with its existing approach, which includes companies ranging from early- to late-stage, and everything in between. Foresite’s approach is designed to help it be uniquely positioned to shepherd companies from founding (they also have a company-building incubator) all the way to public market exit – and even beyond. Tananbaum said that they’re also very interested in coming in later to startups they have have missed out on at earlier stages of their growth, however.
“We can also come into a later situation that’s competitive with a number of hedge funds, and bring something unique to the table, because we have all these value added resources that we used to start companies,” Tananbaum said. “So we have a competitive advantage for later stage deals, and we have a competitive advantage for early stage deals, by virtue of being able to function at a high level in the capital markets.”
Foresite’s other advantage, according to Tananbaum, is that it has long focused on the intersection of traditional tech business mechanics and biotech. That approach has especially paid off in recent years, he says, since the gap between the two continues to narrow.
“We’ve just had this enormous believe that technology, and tools and data science, machine learning, biotechnology, biology, and genetics – they are going to come together,” he told me. “There hasn’t been an organization out there that really speaks both languages well for entrepreneurs, and knows how to bring that diverse set of people together. So that’s what we specialized i,n and we have a lot of resources and a lot of cross-lingual resources, so that techies that can talk to biotechies, and biotechies can talk to techies.”
Foresite extended this approach to company formation with the creation of Foresite Labs, an incubation platform that it spun up in October 2019 to leverage this experience at the earliest possible stage of startup founding. It’s run by Dr. Vik Bajaj, who was previously co-founder and Chief Science Officer of Alphabet’s Verily health sciences enterprise.
“What’s going on, or last couple decades, is that the innovation cycles are getting faster and faster,” Tananbaum said. “So and then at some point, the people that are having the really big wins on the public side are saying, ‘Well, these really big wins are being driven by innovation, and by quality science, so let’s go a little bit more upstream on the quality science.’”
That has combined with shorter and shorter healthcare product development cycles, he added, aided by general improvements in technology. Tananbaum pointed out that when he began Foresite in 2011, even, the time horizons for returns on healthcare investments were significantly longer, and at the outside edge of the tolerances of venture economics. Now, however, they’re much closer to those found in the general tech startup ecosystem, even in the case of fundamental scientific breakthroughs.
“Basically, you’re seeing people now really look at biotech in general, in the same kind of way that you would look at a tech company,” he said. “There are these tech metrics that now also apply in biotech, about adoption velocity, other other things that may not exactly equate to immediate revenue, but give you all the core material that usually works over time.”
Overall, Foresite’s investment thesis focuses on funding companies in three areas – therapeutics at the clinical stage, infrastructure focused on automation and data generation, and what Tananbaum calls “individualized care.” All three are part of a continuum in the tech-enabled healthcare end state that he envisions, ultimately resulting “a world where we’re able to, at the individual level, help someone understand what their predispositions are to disease development.” That, Tananbaum suggests, will result in a transformation of this kind of targeted care into an everyday consumer experience – in the same way tech in general has taken previously specialist functions and abilities, and made them generally available to the public at large.
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One of the upsides of this job is that you get to see everything going on out there in the startup world. One of the downsides of this job is seeing just how many ideas out there aren’t all that original.
Every week in my inbox, there is another no-code startup. Another fintech play for payments and credit cards and personal finance. Another remote work or online events startup. Another cannabis startup, another cryptocurrency, another analytics tool for some other function in the workplace (janitor productivity as a service!)
It honestly feels at times like we are stuck: it’s the same rehashes of old software, but theoretically “better” (yes it is a note-taking app, but it runs on Kubernetes!). In fact, that feeling of repetitiveness and the glacial pace of true innovation isn’t just in my head or maybe yours: it’s also been identified by scientists and researchers and remains a key area of debate in the economics of innovation field.
Of course, there are a bunch of new horizons out there. Synthetic biology and personalized medicine. Satellites and spacetech. Cryptocurrencies and finance. Autonomous vehicles and urbantech. Open semiconductor platforms and the future of silicon. In fact, there are so many open vistas that it surprises me that every entrepreneur and investor isn’t running to claim these new territories ripe for creativity and ultimately, profit.
It’s a quandary at least until you begin to understand the entrance requirements for these frontier fields.
We’ve gone through the generation of startups you can do as a dropout from high school or college, hacking a social network out of PHP scripts or assembling a computer out of parts at a local homebrew club. We’ve also gone through the startups that required a PhD in electrical engineering, or biology, or any of the other science and engineering fields that are the wellspring for innovation.
Now, we are approaching a new barrier — ideas that require not just extreme depth in one field, but depth in two or sometimes even more fields simultaneously.
Take synethtic biology and the future of pharmaceuticals. There is a popular and now well-funded thesis on crossing machine learning and biology/medicine together to create the next generation of pharma and clinical treatment. The datasets are there, the patients are ready to buy, and the old ways of discovering new candidates to treat diseases look positively ancient against a more deliberate and automated approach afforded by modern algorithms.
Moving the needle even slightly here though requires enormous knowledge of two very hard and disparate fields. AI and bio are domains that get extremely complex extremely fast, and also where researchers and founders quickly reach the frontiers of knowledge. These aren’t “solved” fields by any stretch of the imagination, and it isn’t uncommon to quickly reach a “No one really knows” answer to a question.
It’s what you might call the dual PhD problem of today’s startups. To be clear, this isn’t about credentials — it’s not about the sheepskin at the end of the grad program. It’s about the knowledge represented by that diploma and how you need two whole rounds of it in order to synthesize the next generation of solutions.
Now, before you start yelling, let’s talk about teams. There is a reasonable argument that teams with the right specializations can come together and solve these problems. You don’t need a single founder with experience in bio and AI or cryptography and economics or computer vision and mobility hardware — you just need to bring the right talents together in the room to make innovation happen.
There is certainty truth in that, and indeed, that’s the impetus for many of the companies we are seeing today in these fields.
But that also feels like precisely the block today for pushing innovation even farther forward. Today’s startups have a biologist talking about wet labs on one side and an AI specialist waxing on about GPT-3 on the other, or a cryptography expert negotiating their point of view with a securities attorney. There is constant and serious translation required between these domains, translation that (I would argue mostly) prevents the fusion these fields need in order for new startups to be built.
Perhaps there is no greater and more obvious example of these domain requirements than the response to COVID-19. Epidemiology and public health are quite possibly the two most difficult fields out there in terms of the number of specializations required simultaneously to do them well. You need to know medicine and human physiology to understand the etiology of diseases, have the social science background to understand how humans interact individually and in groups, understand the economic and public policy implications of different prophylactics to comprehend the trade-offs involved, and finally, master the statistical training to read, understand, and build correct data models.
All this, and all at the same time. Is it any wonder that so little consensus emerges when so few people have all the requisite skills in their head?
The reason that teams run into resistance is that each specialist needs to understand the constraints that all the other specialties have, while also having enough nuance to understand what is really a barrier and what is perhaps a rule that can be broken. You can’t have a non-technical PM manage an AI product (“Can’t we just use TensorFlow for that?”) anymore than you can have these companies built by incompatible experts, always trying to explain to the other why an idea isn’t fathomable.
We aren’t used to this sort of cognitive challenge. Software is so democratized today, we forget just how blisteringly difficult almost all other facets of human endeavor are to even start. A middle schooler can build and deploy a web service scalable to millions of people with some lines of code (learned from easily and widely accessible resources on the internet) and some basic cloud infrastructure tools that are designed to onboard new users expeditiously.
Try that with rocketry. Or with pharma. Or with autonomous vehicles. Or any of the interesting new frontiers with green fields that are just sitting there waiting for the taking.
So to propel the progress of the world further, we need to fuse more fields together and compress the requisite knowledge faster and earlier for more people. We can’t wait until 25 years of school is complete and people graduate haggard at 40 before they can take a shot at some of these fascinating intersections. We need to build slipstreams to these lacuna where innovation hasn’t yet reached.
Otherwise, we are going to see the same pattern in the future that we see today: the thirtieth app for X with no barrier to entry whatsoever. That’s not where progress comes.
So long to overhyped innovations. Hello to tech that embeds accessibility into everyday devices.
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