James Hardiman of Data Collective joins Nick to discuss The Deep Tech Debate: Why Invest in a Capital Intensive, Long Time-to-Exit Category?. In this episode, we cover:
- James’ definition of deep tech
- The segments within the category
- How this area differs from others
- Types of founders and founder profiles that he looks for
- Why he’s willing to invest in a capital intensive, long-time horizon category
- Why deep tech will drive the biggest outcomes
- How founders are able to de-risk deep tech opportunities where many others don’t
- The waves that are coming in deep tech
- and finally how some consumer, social companies became deep tech companies by accident.
Guest Links:
Quick Takeaways:
- Deep Technology companies have a technological, engineering or scientific advancement– and that’s the core asset
- Investment areas within deep-tech include biotech, medtech, semiconductor, quantum computing, robotics, AI, blockchain and new materials
- In the past business founders were looking for technical co-founders; now it seems the technical founders are looking for business or domain experts
- A key question James asks w/r/t founding teams is: “Do the complementary skill sets need to manifest in one person or two different people?”
- The pivot-based approach of “move fast and break things” is not one that lends itself to deep tech– That’s one for software-based companies
- Technologists in deep tech should validate market questions early, then build the technology– Many entrepreneurs are taught the reverse
- In many deep tech areas high-level SMEs are required to validate the tech
- Deep tech innovation requires more time and more money– and that timeline seems to be increasing
- If you build core technology that provides massive economic value, it leads to monopolistic outcomes that are large and defensible
- High growth, low friction software businesses have lower barriers to entry– the same goes for investors targeting startups in these areas
- Hardware is finally at a stage where quantum computing may become a reality
- Many consumer social companies became deep tech by accident b/c they ran up against scale and speed issues that required novel engineering