Humans have always been farsighted, but few knew it until 1450. In 1450 Gutenberg invented the printing press and soon afterwards the masses were reading. Then people suddenly realized that they couldn’t read small print, which created a huge market for reading glasses.
Reading glasses led to microscopes, which led to telescopes, which led to fiberglass, which led to fiber optics, which led to semiconductors. Silicon comprises over 90% of the Earth’s crust and it was useless until 1450. Now we can’t live without it.
The chain reaction that went from printing press to semiconductors was impossible to see in advance, but technology is good at exposing things we always needed but did not know we needed. The on-demand economy is one such example. Sure, we had taxis before we had Uber. But the idea of mixing telematics and mobile messaging to make the physical world respond to your phone was new. And soon we will have the “uber”-ification of everything.
Another foundational technology is 3D printing. Right now 3D printing is associated with tchotchkes and MakerBot, but we are on the doorstep of a revolution. Within the next few years everything that is made with job production (i.e. one-off manufacturing process) will be made with 3D printing. This means faster prototyping, lower manufacturing costs, less inventory, and cheaper replacements. 3D printing will make hardware investments exponentially more lucrative because it lowers the capital intensity of these businesses. And in the distant future, 3D printing will enable humans to travel through space because we won’t need to be tethered to the earth for spare parts.
Another foundational technology is virtual reality. While VR is largely a hardware and software technology, the biggest opportunity in virtual reality is content. Nobody has expertise in developing for the VR medium, and a lot of the old content rules need to be rewritten. For instance, the average cut in a typical motion picture is just three seconds long. In VR you can sit for minutes and be fully engaged in a shot, turning your head to follow the story. I have seen demos of this tech on Oculus and it is clearly the future of movies, gaming, and sports. The only problem is that once you see it you never want to watch “flat” television again.
Yet another foundational technology is sensors. Sensors underpin everything from wearables to driverless cars. Like other silicon technology, sensors follow Moore’s law. And as they become cheaper they will also become ubiquitous. Forks that tell you when you are eating too fast? Check. Baby socks that measure blood oxygen level? Check. Breathalyzers that check for cancer? Check. One of my favorite quotes from Heart of Darkness is, “One can’t live with one’s finger everlastingly on one’s pulse.” Joseph Conrad never anticipated Fitbit.
So what do I make of all of this?
I think these technologies pose the greatest opportunity for investment in the history of mankind. Period. And we are just at the start. Yes, I think the venture market is bubbly right now. And yes, I think some companies are over-valued. And yes, I think there is more noise than substance coming from Silicon Valley. But in spite of all of that, as I sit in my NY apartment in the winter of 2015, I am very optimistic about the opportunities ahead.