I wonder if there's a systematic reason why deep tech companies fail to focus on the atomic transactions. I argue that it is rooted in how VC and the startup ecosystems chooses who to back in join: that we overvalue technological differentiation. We assume extrapolate technologies to their full maturities and use that to absolve any architectural sins.
For example consider Relativity, I think that investors and early stage employees were eager to find "the next SpaceX", and people extrapolated their 3d printing technology to full maturity, and let it blind themselves from the atomic transactions at heart: no one cares how you build a rocket, they merely ask to minimize kg/$ to orbit. And what held SpaceX back was never the structural iterations.
Specifically pulling apart the Relativity example, I cannot comment how the investment was actually made, but I suspect the 3D printed rockets component was definitely overstressed in pitch decks and hiring calls.
I am not saying that 3D printed rockets are snake oil, or that any company pitching with high technology risk is flawed, and thus they are the fools. But rather that we as investors and employees perpetuate cases of overestimation. By allowing ourselves to hype up startups and industries on shaking footing, either through eagerness to invest in the industry as a whole or through lack of understanding, we allow some companies to slip through the cracks: to let them center on technology, not transactions empowered by technology.
I argue that the myopia plaguing deep-tech startups is not only from their founders and teams, but also the broader investment community, journalism, and early stage employees.
I have a hard time drawing the line between a hater and a constructive critic of companies who are pushing things that the market has no home for. But perhaps if there were a better discourse around "ayo bro I think you're solving a good problem, but don't you think you can do it without using magnetic levitating trinkets" --- then maybe there would be more space to draw the line.
Thank you Kevin for dissecting this space! I think we need to be more active in discussing "is this really the best use of 10 bright engineers' time?"
Do you know if any of the air taxi startups tried pivoting to catering to commerce instead of passengers? I feel like there would be fewer regulatory hurdles (mainly regarding safety) and the economics there would be slightly better, especially in high traffic, high population density areas. For example, maybe there could be some use case where Amazon Prime is trying to move a bunch of stuff from warehouse to warehouse.
Amazon, Flyby, and a few others built small drone delivery businesses but as with air taxis, regulations proved too daunting (e.g. FAA requires remotely operated drones to be flown WITHIN line of sight of the remote pilot)
Thank you for writing this piece.
I wonder if there's a systematic reason why deep tech companies fail to focus on the atomic transactions. I argue that it is rooted in how VC and the startup ecosystems chooses who to back in join: that we overvalue technological differentiation. We assume extrapolate technologies to their full maturities and use that to absolve any architectural sins.
For example consider Relativity, I think that investors and early stage employees were eager to find "the next SpaceX", and people extrapolated their 3d printing technology to full maturity, and let it blind themselves from the atomic transactions at heart: no one cares how you build a rocket, they merely ask to minimize kg/$ to orbit. And what held SpaceX back was never the structural iterations.
Specifically pulling apart the Relativity example, I cannot comment how the investment was actually made, but I suspect the 3D printed rockets component was definitely overstressed in pitch decks and hiring calls.
I am not saying that 3D printed rockets are snake oil, or that any company pitching with high technology risk is flawed, and thus they are the fools. But rather that we as investors and employees perpetuate cases of overestimation. By allowing ourselves to hype up startups and industries on shaking footing, either through eagerness to invest in the industry as a whole or through lack of understanding, we allow some companies to slip through the cracks: to let them center on technology, not transactions empowered by technology.
I argue that the myopia plaguing deep-tech startups is not only from their founders and teams, but also the broader investment community, journalism, and early stage employees.
I have a hard time drawing the line between a hater and a constructive critic of companies who are pushing things that the market has no home for. But perhaps if there were a better discourse around "ayo bro I think you're solving a good problem, but don't you think you can do it without using magnetic levitating trinkets" --- then maybe there would be more space to draw the line.
Thank you Kevin for dissecting this space! I think we need to be more active in discussing "is this really the best use of 10 bright engineers' time?"
Do you know if any of the air taxi startups tried pivoting to catering to commerce instead of passengers? I feel like there would be fewer regulatory hurdles (mainly regarding safety) and the economics there would be slightly better, especially in high traffic, high population density areas. For example, maybe there could be some use case where Amazon Prime is trying to move a bunch of stuff from warehouse to warehouse.
Amazon, Flyby, and a few others built small drone delivery businesses but as with air taxis, regulations proved too daunting (e.g. FAA requires remotely operated drones to be flown WITHIN line of sight of the remote pilot)