Heavy Hitters: The Digital Industrial Podcast

We discuss the ‘6Ts’ framework Aaron developed to evaluate industrial automation innovation, how he analyzes the total market opportunity for robotic applications that are blazing new trails, the capitalization strategy he leverages for businesses that have both s/w and h/w components (bits meet atoms!), what role blitzscaling has to play in these industrial categories where bits meet atoms, and finally, we discuss the underlying macro factors and tailwinds that are at play globally leading to what Aaron coins “The Golden Age of Automation”.

Sunil outlines how he got the conviction to leave a premier VC platform to launch Ubiquity Ventures, breaks down his thesis and definition of investing in “Software beyond the screen”, shares how he defines Deep Tech (and what its not!), details how he got comfortable investing ahead of the curve in Deep Tech categories that often don’t have clear exit potential paths/comparables at the outset, and finally, Sunil provides a critique of why Elon Musk’s comment of “Space is hard” is not only wrong but counterproductive to the ecosystem.

Heavy Hitters episode 37 is live now thanks to BuiltWorlds allowing the release of their 2021 US Summit panel discussion “Tech Strategy: Build vs. Buy”. Listen in on the discussion I hosted with a diverse group of Builtworld experts including Stacy Scopano at JE Dunn, Meg Baldini at Procore, Vivin Hegde at Hilti, and Dave Burns at McCarthy. We cover a lot of ground including evaluating frameworks to decide on “Build vs. Buy (or Partner!)”, how subsequent implementation considerations weigh heavily into those decisions, what tech trends are currently prominent to this discussion, and how the current capital market environment is driving various incentive structures (rationale & irrational) into the equation.

Tim shares his own driver for jumping into the digital industrial investment ecosystem, what he defines as the ‘pre-covid and post-covid’ macro factors that outlined the time was now to focus on these industrial markets in order to both drive alpha for the fund and align to OpenView’s mission to “improve people’s working lives”, why he thinks specialization and having a prepared mind are critical to moving fast within industrial automation applications, how OpenView applies their Product-Led Growth (PLG) model into blue collar industries, and aligned to deploying resources such as PLG, how their platform leverages an impressive 6:1 OpenView employee headcount-to-portfolio company ratio to drive value for their portfolio.

We walk through how Brentt found himself carving out a thematic focus on the Builtworld ecosystem within Greycroft, how he defines the Builtworld ecosystem start-to-finish, why the time was now to begin investing behind that thesis to drive alpha for their fund, why its critical to be thematically and sector-focused in order to compete within the venture asset class today, how Greycroft leverages their value-add platform of resources to support founders scaling in these sectors, share Builtworlds themes of “What’s Hot and What’s Hype”, and how he evaluates exit potential within the emerging Builtworld ecosystem.

Cutler shares why a world-recognized, 60-year old general contractor decided in 2018 to launch a dedicated innovation division, Dysruptek, what his latest industry pulse on the state of construction tech today is, what some of the unique challenges that come with deploying innovation within a construction environment, how he leverages Dysruptek’s corporate venture capital platform to drive sector-focused value both to startups and to Haskell, and we wrap up discussing construction tech trends “What’s Hot and What’s Hype”.

Chris walks us through the history that led to Fontinalis Partners launching one of the very first thematic VC funds specifically targeted on mobility and “Reinventing the way people and goods move”, how the broader mobility ecosystem has evolved over the past 12 years since launching the fund and what that has meant to Fontinalis’s thematic strategy, why sector-focus and thematic specialization in venture capital is important to compete in the current VC asset class, why the automotive industry specifically is somewhat unrecognizable from the decades past, and finally his thoughts on “What’s Hot and What’s Hype” within the mobility ecosystem right now.

Sam shares how his iconic, early-stage enterprise s/w venture fund found itself investing in emerging tech applications like warehouse robotics, drones, etc., outlines why “cognitive applications” will be the next generation of great s/w companies and how those apps are built on top of the current foundation of cloud & SaaS infrastructure, describes how Scale leverages their Mega-Trends Process to identify the upside potential/alpha within emerging technologies, walks us through lessons learned of what does and doesn’t work to hit product-market-fit in industrial robotic settings where bits meet atoms (hint: start with doing one high-frequency task associated with a tangible ROI really well!), and finally he discusses how he thinks about early-stage investment syndication within these emerging tech and industrial applications.

Canaan is a storied, early-stage venture VC fund that has been around 34 years with ~6B AUM across 12 funds, and Rayfe discusses what the macro factors were that led Canaan into expanding a frontier and industrial tech thesis that would drive alpha for their fund. With a large and diverse partnership that is split 1/3 healthcare (digital, biopharma, medtech) and 2/3 tech (consumer, fintech, enterprise/cloud, frontier), he discusses both how to navigate a partnership into a new investment category/thesis and how the diversity of thinking within such a broad partnership leads to the beneficial cross-pollination of complimentary ideas and networks. He discusses how he leverages his thematic specialization to diligence and win deals (hint: a prepared mind from specializing = speed!), how he thinks about financing syndication nuances aligned to the categories of frontier and industrial tech applications (hint: supercharge networks), and finally why he is for off-cycle founder conversations to ensure deep relationships are built long before a fundraising process.

Ginger explains why a private, fourth-generation family-owned industrials business founded in 1930 with over 38 operating companies (heavy construction and materials, environmental services, and specialty chemicals) would spool up a venture group, how her team leverages the extensive resources of The Heritage Group to drive differentiated value to their portfolio companies, why we should all remember industrial innovation relies on physical world innovation (i.e. hardware) not just digital innovation, what team DNA is required to lead these hard tech innovations that often require physical materials, and finally a capital markets discussion on the downstream investment and exit underwriting outlook in these categories (hint: value the moat!).