The great economist and management guru, Peter Drucker, was fond of urging entrepreneurs not to solve problems but rather pursue opportunities. It is in this spirit that I wanted to highlight some particularly large opportunities associated with technology. The opportunities mentioned below are discussed in George Gilder’s new book, “The Israel Test.” If you are an entrepreneur or investor looking to pursue opportunities that would appear to have sizable upside in the years ahead, here are four to consider from Gilder’s book and two more that are near and dear to my heart:
Opportunity 1:
Insufficient bandwidth is the plague of networks. The promise of a global network seamlessly providing near-infinite bandwidth indifferent to application is the promise, like almost every major economic advance for the past 200 years, to render geography relatively trivial.
Pursue technologies and companies that the supply increasing bandwidth to the marketplace
(Note: We have been engaged in this opportunity for over a decade).
Opportunity 2:
The next major challenge in home electronics is “the mat” – that is, the tangle of connections behind the TV and workstation and the high-definition home theater and the set-top box and the network node and the game player and the residential gateway and the cell phone and the video teleconferencing center and the teleputer and the DVD machine and the intercom and the digital camera and the audio player and the fire and burglar alarms and the camcorder and the speakers and the microphones. This is, as Gilder says, “an incredible morass.”
Pursue technologies and companies that can eliminate the mat.
(Note: We are analyzing this space as there are many companies currently pursuing this opportunity).
Opportunity 3:
Use advances in molecular biology to generate new, powerful biopharmaceuticals to spec on computers rather than discover them empirically.
Pursue technologies and companies that are harnessing advances in molecular biology and computing to generate innovative drugs.
(Note: We launched a biotech mutual fund in the late 1990s that invested in companies pursuing this opportunity).
Opportunity 4:
Develop nano-computers that can flow through the bloodstream, calculate imbalances in the body, and emit the appropriate medicines.
Pursue technologies and companies that are using nanotechnology to create powerful new drugs.
Not mentioned in Gilder’s book, but something I’ve been thinking about for a long time, is this opportunity:
Significantly reduce or eliminate the waiting time associated with phone and cable repair.
This is big hassle. According to a new survey conducted by Harris Interactive, almost half (49%) of American consumers waited for a cable technician or some other service professional in their homes in the first half of 2009 — and 32% took a vacation day or sick day to do so. The hassle seems unnecessary in a world teeming with GPS navigation, wireless communications, and mobile computing. Does anybody in phone and cable land care about their customers and the use of their time? I often wonder.
Obviously, there are many more opportunities associated with advanced technology than those mentioned in this blog post. Kris and I believe that the convergence of the real world and virtual worlds – what we dub, “Real VR” – is a tremendous opportunity in the marketplace today. Hundreds of billions of dollars of new wealth will be created as Real VR gathers momentum in the global economy. Cloud computing represents another large opportunity, as does clean energy technology.
And while there are dozens of sizable opportunities associated with technology in the market currently, we believe it is critical for investors to reorient their focus from monthly and/or quarterly returns and begin to think beyond the quarter. The increasingly narrow time horizon of an ever-larger share of investors over the past decade has created a major inefficiency in financial markets. It is one we intend to exploit in a big way in the future.
A note to our blog readers: If you have identified some major investing opportunities associated with technology, feel free to post a comment on this blog. We would love to hear them!
