Investor Stories 22: What’s Next (Hamid, O’Donnell, Tunguz)

*Please excuse any errors in the below transcript

Nick: In this special segment, we have Mamoon Hamid of the Social+Capital Partnership. Mamoon, are there any big sectors, trends, or thermals that you see on the horizon that you think could have significant impact? And if so, could you pick out one and talk about it?
Mamoon: Sure, yeah, so we do a love of investing throughout healthcare, education, and financial services. And I would call out our thesis in education as one we’re like really passionate about. And that’s our desire to invest in skills as opposed to degrees, and learning on demand as opposed to learning once and that lasting a lifetime. And so really, we think that education’s really kind of messed up, and we think that over the next ten, twenty years, if you’re gonna meet the skills gap, you’re gonna do a lot of things very differently in education. So we’ve built a really nice portfolio around bridging the skills gap and creating on demand learning experiences and consumer zing ed-tech as well. If you go into a school today, you’ll find that there’s not much technology being used. And if you’re a teacher in a public school you’re really paying for the technology yourself as opposed to having the school subsidize it. So there’s a lot of stuff that’s really broke in education, and we really take it to heart to make a dent there.

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Nick: On today’s Investors’ Stories segment, we have Charlie O’Donnell of Brooklyn Bridge Ventures. Charlie, are there any big sector changes, thermals, or trends that you see on the horizon? And if so, can you select a couple that may have significant impact or experience outsized growth in the coming years?

Charlie: I think in general, what is being considered to be venture backable is widening in a good way. You know, actually, venture capital used to be three main categories. It was IT, Biotech, and actually like retail and consumer products, like the PF Chang’s and Blockbuster. They were venture backed companies. And there were some really terrific venture investors that used to do these types of venture deals, but one of the best was a guy who actually just passed away a couple years ago named Jerry Gallagher who was at Oak.

Absolutely terrific retail investor. And what happened was in the late ‘90s, if you weren’t doing the .coms you were basically underperforming relative to your peers. And so a lot of people switched over, or the retail specific funds kind of died out because they didn’t have the same kind of performance, and no one jumped back into that category.

Now you’re starting to see a little bit of that, where you have Blue Bottle Coffee that got venture backed, and some of the ecommerce players have started breaking into some physical retail. We’ve seen companies like SoulCycle and Shake Shack have huge exits. And they’ve got some of the VCs thinking “Hey, wow, wait a second. We would have liked to be angel investors in some of those companies.” And so a lot of VCs are sort of looking over their shoulder to creating experiences around physical spaces.

When you look at a company like Tough Mudder which never took any angel money and is doing well north of a hundred million dollars in revenue. So those types of models, we say “Oh, well, there’s not a lot of technical achievement there,” but they probably acquire most of their users online just like anybody else. An efficient, well margined business model. I think VCs are opening up to a lot of different things.

Actually, what just got announced today is I led an investment in a food company called Hungry Root, and they make packaged food, which right now is mostly dominated by cruddy frozen dinners you get in the supermarket aisle, and this is super fresh vegetable based meals that have a ten day shelf life and a seven-minute prep time. And it’s incredible convenient, and they’re delicious and healthy and we’ve seen huge first month for the company. And so it’s really exciting.

Yes, there’s technology that goes into how they package their stuff and the distribution process and all the orders are online, but it’s food. We kid ourselves about what it is that we’re selling—and it’s a huge category. People are looking for healthier, faster, more convenient options.

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Nick: On today’s special segment, we have Tom Tunguz. Tom, are there any big sector changes or trends that you see on the horizon and if so, can you talk about what may have significant impact and/or what’s positioned for outsize growth in the coming years?

Tom: I think machine learning you know, deep learning is a big trend. You know, what’s really great is there’s been a bunch of technology advances with the big companies like #Google and #Facebook and #Badoo others have really advanced and like the deploying stuff is interesting for that but even just basic machine learning really hasn’t been applied at scale to software companies. The most successful manifestation of it so far is probably #RelateIQ which is a company that #Salesforce bought that has some intelligence around extracting data from your email on your calendar in order to up to your C.R.M. records but I think machine learning is going to take… is really going to infiltrate a lot of different software. I mean, every different piece of workflow software should be recommending to the person who logs in, what you should be doing today, right?
Whether it’s calling this set of customers or this set of patience and so I think that’s a really big trend that we really haven’t seen yet.

Nick: Yeah, I recently purchased an Echo…

Tom: Oh, what do you think?

Nick: I think it’s cool so far. I’m really anticipating what’s coming to your point on machine learning and you know I want to see where it can go, if it can adapt and learn and you know, have sort of that negative latency decision making.

Tom: Yeah. I mean, I think speech is another really big area. That’s dep learning is going to impact a lot, you know. Did I see this movie, Her? Did you watch that movie?

Nick: Yes, I did. Yeah.

Tom: Yeah. So I’ll the thing you know… Set the story starts for a second. The thing that I love about that movie is the human computer interaction. Like the fact that the guy you know he’s writing love letters and he’s just talking to his computer he dictates this letter and then he says print and then the printer prints right or he says play a melancholy song in the elevator and it plays a melancholy song and it reads email and like, if he uses Android, you know that we’re really close. Like, I have a nexus 6 and I can say to my Nexus 6, “Okay, Google Play Coldplay on Spotify right” or “Okay Google, what’s the weather today” or “Okay Google, remind me to buy milk when I get to the Safeway.”

Nick: Yeah.

Tom: Right and it will do all those things, right and so I think that can be a transformative way.

Nick: Agreed. I love it so much. It’s been super helpful to me so far and if when they get it integrated with my personal task manager…

Tom: Yeah!

Nick: I use it to remember the milk so right now I’m transporting all my messages from Alexa over to it but when they make that add on it’s going to be even better.

Tom: Yeah, I agree hundred percent.