Anand Sanwal, co-founder and CEO of CB Insights, talks customized babies, robotics companions, and lab-grown diamonds, among other innovations in these excerpts from our annual N+1 presentation.
Customized babies. 3D-printed homes. Interchangeable limbs.
This sci-fi future isn’t as far off as we think, according to Anand Sanwal, CEO and co-founder of CB Insights.
These trends, dubbed “N+1” are not wholly new technologies but rather extensions of existing tech poised to “redraw competitor lines in a big way,” said Sanwal.
“It’s about becoming future literate,” he said, and preparing for future markets by understanding the potential of today’s technologies in the next 5-10 years.
Below we highlight a selection of N+1 innovations from Sanwal’s presentation.
To see all 13 trends and view the entire presentation, enter your email address in the box below.
1. Customized babies
What it is: As prenatal genetic testing becomes cheaper, more accurate, and easier to conduct at an earlier stage, the ability to genetically modify babies becomes a reality.
Why it matters: It could allow for early detection of disorders and/or diseases and give rise to new therapies to help manage/prevent them. This type of tech would enable parents the ability to “customize” traits in their offspring, while also raising questions about how far parents will be allowed to take this genetic customization.
2. Robotics companions
What it is: The use of personal robots that can provide emotional and physical support to people, especially children and the elderly.
Why it matters: For children, robotics companions can act as tutors and nannies, educating them in concrete skills as well as providing limited childcare services. For the aging population, these robots could fill health services voids, keeping people on track for prescriptions or catering to mental health issues.
3. The rise of personalized food
What it is: The ability to personalize meals through lab-designed foods or based on your DNA.
Why it matters: People can customize their diets based on their genetics, leading to the ability to help manage certain diseases through proper food consumption. Foods can also be designed to align with personal preferences.
4. 3D-printed housing
What it is: Homes that are constructed from a digital file.
Why it matters: The industrial implications include driving down costs and time taken to build these homes, leading to an overall increase in affordability and quality.
5. Lab-engineered luxury
What it is: Luxuries — from diamonds to leather to wine, and more — created in a lab.
Why it matters: Lab-engineered luxuries could drive down costs and production time. If the quality is consistent, this could lead to an increase in accessibility, but it will also force people to decide whether method of production matters to their view of luxury.
Cool. All right, so I have 25 minutes I think and 125 slides. So we’ll see, this is probably not gonna go very well. So we’re gonna talk about what we call n+1 trends, and I’ll explain what that means in a second.
So I’m gonna start with this sobering statistic. How many of you work for an S&P 500 or a Fortune 500 company here? Okay. So that’s your reality, and so what we see right now is the level of displacement amongst the incumbent companies has reached a level we’ve never seen before and you see the life span of companies declining over time. This is a graphic we’ve shown many times in the newsletter if you get it.
In 1955, you didn’t have to worry about exiting the S&P 500, sorry, because by the time it happens you were dead, and now in 2015, as a CEO, it’s something you do have to worry about or somebody who’s an executive. So that continues to decline, and Marc Andreessen famously said, “Software is eating the world.” And you see it, and this is at a moment in time in 2016. Am I doing something wrong here? Two thousand six, can we fix this? Sorry. Two thousand six, one of the five most valuable companies in the world was a tech company, 2011 only one. In 2016 for a brief period, and it’s no longer like this, but in the fall all five of the most valuable companies in the world were tech companies. So you have this issue as an incumbent company of trying to bite back.
And what we’re seeing is we do this popular graphics around the unbundling of an industry. So we have the unbundling of FedEx, the automobile, Honeywell, P&G, Starwoods. We done that a lot, and so what we…what we’ve been trying to track is what’s the evolution of new technologies and what’s been interesting is to see the evolution from platform to platform. So we started with the main frame, and then the mini computer and the PC, and now what we see is these waves happen incredibly quickly. So mobile is still going and we’re already sort of into the connected platform world, and so they’re overlapping and they’re moving incredibly fast, which is problematic.
This is my favorite infographic of probably all time. So if you follow…look at the telephone in 1900s, so kind of 5% penetration, took about 105 years for the telephone to get to 90% of U.S. households, and then scan over on the X-axis over to 1990, you see the cellphone and internet got there in 10 or 15 years. So the level of technology change is accelerating, and so this idea for big companies of being a fast follower I think is now a misnomer, because fast followers basically miss the entire wave. And so what you see here is even within technology now, the pace of advancement is quicker than ever. So Skype or Twitter or Facebook grew remarkably quickly, and then you look at WhatsApp which just blew them out of the water, and so the level of adoption continues to climb significantly.
So that’s kind of the backdrop of what we wanted to discuss. We call these n+1 trends. What I’m gonna cover next is what are the technologies, the business models, the distribution innovations that we think you guys should know and watch for in the next 10 years, 5 to 10 years, and you’ll see that some of this is kind of some sci-fi stuff.
How do we do this? Our model and our thesis on this is that there’s a ton of signal out there, and we just have to find that signal. So we’re what doing is we’re mining patents, we’re mining what Angels and VCs are doing, what startup descriptions look like, government grants, news media, for instance, if there’s chatter happening in subreddits or niche, or the sub-communities, we think there’s interesting signal there and then looking at academic and corporate research, and you smash all that stuff together and these are these n+1 trends that we’re gonna cover.
Why should you care? You either wanna win or you don’t wanna die. I think that’s…when we talk to big corporations we find that there’s two things that motivate them, either fear or greed, so either they want to be around or they wanna win, but you need to be motivated by something. So that’s obviously important. And then it’s really just about becoming future literate. So some sci-fi shit as you’ll see.
I think the other big thing, again, I’ve harped on this earlier is the ethical and societal questions that this will cause us to confront. So I’m gonna jump in to our first trend. So we’re seeing a lot here and this is gonna be, again, this is not imminent, we’re thinking 5 to 10 years, so the idea of customized babies. So we see pre-natal genetic testing is becoming cheaper, more accurate. It can be done even earlier. You see some statistics here, and I think it was heavily focused on identifying disorders, so can we, through CRISPR and things, identify these disorders earlier and then ideally try to fix them.
There’s a ton of gene editing companies now that are becoming more mature, that are starting to raise significant amounts of funding, and you’re now, you’re starting to see what’s happening in CRISPR in humans, and so what are the types of things that are happening. So when you think about where this goes, these are common genetic disorders in children that we could see new therapies around using this technology, but when you think about it further out, can you basically pick the traits of your children, and how many of you, just by show of hands, would say that this is a place we shouldn’t go? Okay.
So I would say that Jeremy made a really good point about privacy earlier and I think this will be, this will follow the same path where people will be outraged by it and then some people will do it, and there will be a perceived advantage and then everybody will start doing it. So it’s sort of the way the world is going, and you can see that the line around what people consider a disorder is going to get blurrier and blurrier. So, I want a prettier kid, a smarter kid, a taller kid. It is going to happen. There will be lots of consternation about this, but it’s one of those things that we’re seeing and technology is now going to enable this.
So this one of the first n+1 trends, and so you have these ethical questions that we have to confront that Vinod Khosla here talks about. That’s one of the things that we think is interesting and worth tracking. When we think about this, and autonomous vehicle is, just to take a digression, is an interesting case study in this. Autonomous vehicles obviously impacts the automakers, but then it impacts insurance companies. We talked to local municipalities and governments who make a lot of money writing speeding tickets who are worried about what happens with autonomous vehicles. So when you think about customized babies, it’s not just health care. It’s what happens to cosmetics companies, what happens to fitness companies, what happens to education outfits. Again, the impacts of something like this are massive. So one of the things that we’re tracking that we see signals around.
Sort of n+1 innovation number two, robotic companions. So personal robots is still a relatively nascent area. So Amazon’s Echo is sort of a home assistant, but it’s not a personalized robot. This is obviously, again, lot of conversation about this where we’ve been. This has been going on for a long time. Oops. Sorry.
So here we start to see, and again here’s where when you track what Angels and early stage investors are doing, you start to see, there’s a lot of investments now into personal robotic companions. So again, kind of strange stuff, small number of deals. I mean, we’re not even at 20 deals, but again, these tend to be nuggets that become bigger over time.
And so what’s around the corner for these personal robotics companies? I think it’s two things. We see two main initial applications. Again, we’re looking at a 5 to 10 year horizon. One is with children. How do you provide emotional companionship and/or gamified education for this companies, so facial recognition technologies to help users build uniquely tailored interactions for children, and then you have the nanny mode, right, lesson planning, health, diet, sleep analysis, a whole bunch of things now that a robot can do. So again, this is scary stuff when you think about it, but again, like we’re seeing applications here. Here you’re seeing this CASPER hospital robot companion where they’re actually trying to use robots to make children happier and they find that that has long term impacts in terms of their ability to help those children from a medical treatment perspective, so interesting robot companion ideas there.
And then, obviously, at the other end of the spectrum is the elderly, I know we have some folks from AARP here, so we have, you have an ageing population, and so how do you use these personal robotic companions to fill these health services voids? On mental health and dementia, late in life companionship, memory lapse and then just keeping people on track with prescription regimens and other things. So again, interesting applications there. Again, who’s impacted here? HCP, big provider of…maker of retirement homes, real estate companies. So lots of different applications here that will impact lots of big companies. So trend number two.
The third thing we’ve seen a lot of signal around is the rise of personalized food. So there’s a lot of money right now going into meat and dairy tech. Meat tech is a hot area. So plant protein lab-designed foods, but what we’re seeing now is the cost of that lab cultured meat is coming down pretty significantly. So you’re gonna see an expensive burger in 2013, it’s a lot less expensive now, and then what you’re seeing is folks at Campbell Soup just invested in this DNA based personalized diet startup. And so again, I don’t know if this company is going to be the next big company, but again when you think about, when you look out a little bit, the idea of individually tailored diets at the DNA level.
So this is the kind of thing that people are thinking about, and again what this ends up doing is creating unique partnerships and/or competitors. Is this the world of a pharmaceutical company or is this the world of a CPG company or, who should be building this products? And so it’s an interesting question that we’re gonna have to probably come to deal with relatively soon. Again, it’s not just food producers that are gonna be impacted by this, so you kind of see all of the different adjacent spaces that might be impacted by the ability to grow meat in a lab setting. So what does that do for real estate? What does that do for agriculture and farming, and a whole bunch of different impacts. So the other trend that we’re looking at.
3D printed housing, so n+1 innovation number four. So 3D printing was really hot like when we started CBI, I remember 3D was like the thing, and there was gonna be, there were stores, and it was gonna be the thing that everybody was doing. And then, I think now we’ve settled into a lots of industrial applications of 3D printing, and so there’s a lot of innovation right now happening in the construction world and you see some of that here. And a lot of that’s focused on driving down the cost and complexity of construction and so there’s a lot innovation and work happening in pre-fab homes. So modular housing and things of that sort, that’s popular, but I think what we’re now on the precipice of is can we just print homes. And so there was a 3D printer than was able to print 10 homes in a single day. Obviously, cost is gonna be the other big lever that we have to work on, but things always tend to come down in cost as the technology advances.
So it’s already being done in medical devices, consumer products. They’ve even built this bus. So again, just a matter of time, it drives down the cost and time of building, and so affordability, quality hopefully can all happen as a result, and then it’s just not your construction workers. How does this impact insurance companies? Obviously, your real estate companies. Obviously your building suppliers and manufacturers of building supplies. These are all impacted. So another trend that we’re watching.
Solar roads, I’m not doing very good on time guys, sorry. So I’m gonna speed up. Solar roads, I think it’s well documented. The price of solar panels has dropped quite bit, and so now there’s lots of pilots going on about heated road cells, and we’ve seen some things happening in Europe where on very short stretches this is happening and this just sort of creates this energy revolution that’s just on our roads. So are they self-heated, are they lit by the energy they create, are they powering the vehicles that drive over them, especially in cities and densely populated areas. So really interesting applications here, and then again, you see the impacts here. So lots of adjacent companies that will either be the leader in this space or will be casualties of movements like this.
Ephemeral retail, so last night we had a dinner with some of our biggest clients and we gave everybody there some Snapchat spectacles and this idea of ephemerality in retail is one that I think is catching on, partly because retailers are…traditional retailers are just not doing any…not doing very well. So there’s a bloodbath here that we’re seeing in partly, you saw Charmath’s view point on Amazon. I mean I think a lot of that is driven by them, and if you look back at the quotes from 1999 and 2000 during the dot com boom, people discounted Amazon and eBay pretty significantly. And I used to work at a startup called cosmo.com which failed dramatically and spectacularly, and so like, I think Macy’s and all those folks took solace in the fact that, “Oh yeah, look at these stupid dot com folks that flamed out.” and what they missed was that Amazon was just gonna come in and continue to eat their lunch. And so now Amazon for instance is one of the major retailers of clothing which nobody ever thought would be the case. It’s not pretty for retailers.
Andy Dunn is one of the founders of a startup called Bonobos that has, in Manhattan they have a pop up store of sorts that you can’t actually buy anything in. You just go in and have to place an order and then they deliver it to you, and I’m not sure that that’s the ideal experience. I just went there before this conference because I needed to buy a blazer and I liked one. Then they’re like we’ll ship it to you, and I was like, “That doesn’t work. I need it today.” But I think people are trying things, and so you have these new models of distribution that are on the rise. So the convenience store, the high end pop up store, the next gen vending machines, and so these are gonna be the stores of the future.
Amazon Go which should again scare everybody. These guys are just monsters, and then you have your Snapchat which has been doing these little vending machines in really random places. At times for us to get 50 for this conference, we couldn’t just go to the store and buy 50. We had to send 50 people from our team to go buy one at a time because they wanna control who has them and so limit the supply and everything. So it’s a really interesting new way of doing retail. Again, these can replace or will be adjunct to brick-and-mortar retail. We talked to lots of retailers, and they…for some reason they think brick-and-mortar retail is going to come back, and it’s like how many times do you have to get kicked in the nuts to realize this is not going to happen? But they still believe it for God knows what reasons. So I think looking at these models is interesting. So you hear again, I won’t go through all the examples from payments companies to the distributions companies, FedExs of the world, lot of impacts.
Enhanced workers, kind of the other thing that we’re seeing a lot of right now. So essentially the “Iron Man” suit. Hyundai is developing this wearable robot with the aim of basically enhancing what human workers can do. So this idea of exoskeletons and there’s a lot of really interesting things that we’re seeing here for veterans, and things to help veterans who are coming back who’ve served this country really admirably who can now do things that they weren’t able to do, but again, that technology is now going to weave its way into industries. So you get increased safety and you get enhanced strength. So you get this all this productivity that comes from that and sort of you know, if you’re old like me like there was the bionic man. That’s what we are headed to, the bionic man or bionic woman.
So you have all these exoskeleton news that’s happening and so you have investors like GE, Schlumberger investing in these companies. Again, that are able to do things with supernatural strength or with flexibility that humans don’t have, power clothing, so electric muscles, you see that here, and then I think this is one those interesting things where robots don’t necessarily take over the human job, they augment the human, they make them better, and so can we have zero-accident workplaces? Can people who are older and maybe with disabilities of some kind continue to work now as a result of having access to these exoskeletons?
So another interesting area, not just heavy industries. So what does this mean for people who deliver workman comp insurance? What does this mean for pharma companies, etc.? So again, implications throughout.
Lab-engineered luxury. So it’s been interesting for us to see the likes of Prada and Louis Vuitton thinking about what is luxury look like in the future, and so we have now lab-crafted leather. So it’s one area is starting to gain some level of interest. You have lab-made diamonds, all sorts of interesting things around luxury market now that are trying to happen. Now you have this 10K bottle of wine that is now being produced in the lab, and so can you reverse engineer top wines and will people care that they don’t have that story that they’ve come from wherever in the south of France if the quality is the same? So interesting idea and then, how does this work? Will people pay for lab-created luxury the same way they would pay for hands-stitched blah, blah, blah from some luxury provider? And again, like the mores and things on this will change over time. People will start to accept these things. So not just Prada, and so you’ll see a lot of change there.
So this one I think…this is one of my favorite ones, the botroot movement. So we talked earlier about all the bots that are happening in corporations. So this is sort of maybe the more insidious side of bots. We saw the fake news conversation that happened around the election. So what if these bots can bend public discourse? What if you think you’re talking to somebody and you don’t realize that it’s actually a bot? And a flood of bots, these botroot movements can actually make people think that a certain thing is happening because the interactions with them are so natural.
And so they have this nation state actor issue but then you also have…what’s gonna end up happening is nation state like bad actors are gonna use this, and then people in porn are gonna use this, and then marketers are gonna get their hand on this shit, and then they’re going to send you messages that you should buy something and fool you into buying things because marketers just do slimy shit like that all the time. And so that’s what gonna happen with these bots, and so basically any entity dependent on accurate signals and public opinion is going to be one that can be kind of massaged. It’s a nice way of saying manipulated, I guess. So you have everybody from the government to ad agencies to what shows up in Google that is impacted by this botroot movements. So another interesting movement.
Oh man, I didn’t really put it…all right. Micro-made chemicals, I’m just gonna leave through this. Petrochemicals used in every industry and so what we’re seeing is let’s see, oils and gas companies are looking for new ways to drive petroleum-based chemicals and biofuels, and so we see synthetic biology companies that are coming back to change chemical production. So the sort of I think the ugly, or the unspoken about thing is that clean tech, if you wanna call it that, is coming back. Nobody will call it clean tech, like that would be…if you’re a VC, that would be a terrible idea to call it clean tech and go pitch LPs, but effectively what would have been clean tech a few years ago is sort of coming back in different forms. So we’re seeing a lot here making cheaper chemicals. There’s a lot of production increases that are happening as a result and yield increases creating extracts from petrochemical that are things that from…that petrochemicals could not do previously. I’m gonna just go through this very quickly.
All right, neuroprosthetics. So this is actual devices integrated with the human nervous system, and so it’s actually able to translate external stimuli into perception, and so let me, and so when we track research we look at Pubmed and look at the number of research articles now that are talking about neuroprosthetics, and there’s been an explosion of late. So we think this is, again, a really interesting area that there’s a lot of research chatter about and when you think about research chatter, in 2006 there was a lot of chatter about autonomous and driverless vehicles. That stuff just take a little while to gestate and get to a point where it becomes commercially interesting, and so again, that’s sort of what we see here. These are some of the applications you see here.
So brain stimulation, allowing a paralyzed man to feel his hand again. Just different things that are happening that are crazy. Google, we mine a lot of patents and so they built this bionic eye for perpetual perfect vision. So again, the idea building things that enhanced human capability. The first prosthesis intended to restore vision that you see here, 3D printed limbs are coming way down in cost. So again, if we take that 3D printing trend that we saw earlier coming way down, and so eventually the idea of can you have custom interchangeable prosthetics. Like I need a arm that can lift something heavy, I’m gonna just snap off my old arm and put a new arm on. So it’s a crazy idea, but again, when we think of these, where the world, this is not again just for the sick. So this is, again, tons of applications here.
Instant expertise, I talked to a bunch of folks in the insurance industry and I think there’s some interesting applications here. So can we download whatever skills we want when we want them, right. So how you do become this instant expert, so you need machine vision to analyze your surroundings, you need this augmented reality overlay to tell you what to do, and then you need in-ear guidance that coaches you on what to actually do. And so the pieces of these are all coming together and they’re disparate, you’ve got your AR platform, you have gestures and eye-tracking, you have remote experts, and then you have these in-ear platforms.
And so what you’re gonna be able to do with that is in an industrial setting, can you look at up a piece of equipment that needs fixing and with an AR overlay and in-ear diagnosis have somebody basically maintain equipment just using this instant expertise model. Remote surgeries, I was talking to somebody earlier that they’re using robots now to do surgeries. So again, can you use instant expertise to do surgeries in remote places, and then do it yourself maintenance for somebody who’s in property casualty insurance or how do you assess the damage and look at things. You have some interesting applications there. So again, lots of implications here.
And then lastly, how many of you watched “Black Mirror”? So there was a recent real life example of somebody, I think it was a woman who’s friend died and then she I think uploaded his emails and all of her correspondence with him and basically created a chatbot to communicate with him, and so are you…can you create the essence of somebody using machine learning and AIs. So this idea of ghost people is something that we think is coming. So can we build digital replicas of ourselves with AI, can we build these humanoid robots here that we see folks talking about? And Hanson robotics kind of done some interesting things here that…and these robots that look like people I think sometimes distract from the actual paths companies are taking. You can actually have a conversation with somebody and it doesn’t necessarily need to even look like this. But it’s like where your loved ones live forever. “Live” probably should be in quotes here.
But can you build robot clones and things that feel like a person, and so what does do for everything from mental health…what are the implications from a mental health perspective and a grieving perspective, what business model does this has open up. It’s a really interesting space that we see stuff happening in, and how do you cure augment grief.
Then you have the second bullet which is sort of like can people take all your Facebook data, and all this data and basically create bots that replicate somebody that you don’t want that to happen. So there’s always the seedy underbelly of these types of things, and marketers, obviously, will do something bad.
So that’s what I had, and these are trend that we think folks should know about. We’re trying to find signals to help diagnose more of these. So that’s what we used and I think when you look back, again, you think of autonomous, this is a great example of CPG where I wouldn’t call mobile an n+1 trend even at any point, but what they end up competing with are mobile phones. People aren’t spending on shampoo and drinks because they’d rather spend that money on their mobile phone and their data plans. So competitive lines get redrawn as a result of these types of trends.
This is Abercrombie and some of their models, and they’re not competing with other apparel makers, they’re competing against smartphones, and experiences, and other things. So these n+1 trends we think end up tending to redraw competitive lines in a big way. So unusual competitors will emerge, and again, this idea of being future literate.
I think when I was at AmEx we spent a lot of time talking about basis points all that time, like we’d have these business unit reviews and we talk about Cap One’s got this much share, and Citi’s got this much share, and I think when you think about…when you over a long enough horizon, people don’t really care about your basis points. They actually want…they want a comma, and so I think it’s a big difference. And you could do nothing and here’s life for you then.
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