Summary: Two days ago I had the privilege of moderating a roundtable with some of the smartest futurists and forward thinkers in the industry. Our panelists included Tim O’Reilly, James Allworth, Ben Gilbert and Jeff Morris Jr.<br> [VIDEO REPLAY] <a href="https://thesyndicate.vc/the-future-of-consumer-tech-and-humanity-roundtable-with-tim-oreilly-james-allworth-ben-gilbert-and-jeff-morris-jr/">The State of Consumer Tech Roundtable with Tim O’Reilly, James Allworth, Ben Gilbert…</a><br> It was an interesting experience. They say you are the average of the 5 people in your life and these four certainly padded my total — and informed my perspective on the future.<br> There was one point in particular that Tim on the nature of disruption and innovation. During the panel I pushed back some, with time however this truth becomes more and more apparent.<br> Tim rightly pointed out, there is no such thing as a J curve. Sure short term graphs show up and to the right, but eventually everything levels out. There are only so many billions of potential consumers, pushing beyond that is impossible.<br> <br> <br> And technology naturally plateaus. Moore’s Law is pushing its physical limitation already (at least in terms of economic feasibility), and many other technologies have displayed similar trends.<br> But with every new plateau the new normal shifts further and further.<br> “If I have seen far, it is because I stood on the shoulders of giants.” — Isaac Newton<br> <br> The interesting intersections<br> Technological innovation is interesting. Ultimately however, each innovation can only go so far. The most intriguing areas are found on the fringes, where multiple innovations meet.<br> Today genetic sequencing is hot. But scientists have been studying the human genome for years. The intersection with AI and machine learning is particularly interesting because DNA is so vast. No human could ever understand or analyze DNA.<br> Instead geneticists employ basic ML (machine learning) to find and analyze relevant genome sequences. Using data, companies like 23andMe can then accurately pattern match to known research and provide personalized conclusions: “you may have a 15% higher risk of heart disease”<br> And in genetics we are still in the early innings. But with advances in gene therapies, medicine delivery, 3D printing, artificial intelligence and robotics, is a future of cyborgs really so far off?<br> I would argue no. And as innovation is generally additive/transformational, this implies our S curve actually continues upward — in a lumpy, stepwise manner.<br> <br> <br> Hockey sticks can hurt though<br> There is a potential problem with conventional venture analysis. As a rule, any graph with up and to the right growth gets investors excited.<br> But this only paints a small portion of the picture. Yes, founders found product-market fit but that isn’t always enough. What about the market?<br> Actual total addressable market (ATAM)<br> Investors always ask about the TAM (total addressable market). In general this is helpful, but not as much as you would think.<br> The best startups are reinventing the world and creating new markets. If Uber’s addressable market was just the market for taxis/black cars, Benchmark wouldn’t be suing them (<a href="https://thesyndicate.vc/uber-going-0-benchmark-knows/">for the real problem with Uber’s business model, see this post</a>).<br> Instead this innovative “taxi” company redefined transportation and is destroying car ownership globally.<br> They MASSIVELY exceeded original expectations.<br> But this is generally not the case. In businesses where startups look to take on incumbents, it is often about stealing market share. In these scenarios TAM is largely unchanged. Great businesses can still be built in this manner, but the upside is capped (as opposed to almost unlimited).<br> So the question VCs NEED to ask is: is the ATAM greater than or less ...
