The Clean Machine Revolution: It’s Here
Machines have the potential to set us free — from manual labor, and ultimately, the deep inequality that results. At a time when unique problems in America — labor, supply chain, sustainability — drive a social and economic imperative. What a special opportunity.
I’d like to start with the original clean machine — the washing machine. THANK GOD FOR WASHING MACHINES. But don’t take my word for it, take it from Hans Rosling:
Many across the globe don’t have access to cleaning machines, or any other for that matter — 10% of the world lives below the poverty line. 1B without electricity. 1 in 3 people worldwide have never used the internet. We have a ways to go.
But once we get there, machines have the potential to truly set us free. To free us from the constraints of manual labor, and the time it requires. And what’s more — this will create a more equal society. The time we spend on labor today, paid and unpaid, will be freed for higher pursuits: knowledge, growth, education and enlightenment. Ascension. Innovation. The rise of a new creative class.
So, we need machines. Lots of them. More electricity, more automation. But, given the threat of climate change — the machines must be clean. That’s the big goal. Clean Machines for a better and more equal world.
And why now? The stars have aligned, and here stateside, we have some big problems to solve. We require clean machines.
First up, back to labor. We are short over 10 million workers — about the population of Michigan, the tenth largest state. Essential services simply won’t happen. When they do, they’ll cost more, driving inflation even higher. What’s more —between aging Baby Boomers, educated younger generations, and declining birth rates (20% since 2007, speaking of cleaning machines)— the problem is here to stay.
Twenty percent of the labor shortages are in trade and transportation —the supply chain. The United States has heavily outsourced manufacturing, to China who now controls about a third of global output. So, we buy goods from China, and transport them worldwide, costing in both dollars and emissions. We transfer wealth to China and destroy the environment.
Last but not least, we have a sustainability problem. Weather volatility is costing us directly — $19T in recent history, about one year of US GDP — and drives a host of challenges across transportation, supply chain, agriculture and real estate. But it’s bigger than that. The threat is existential.
This all translates to: higher costs → higher emissions → higher inflation → depressed economic growth → a limited ability to compete. This is the challenge of our lifetime.
Gone are the days of pumping money into things that don’t really matter. We have bigger fish to fry.
This is about America, and our responsibility as global leaders. Luckily, the US Government is on it. We are making moves.
That said, it won’t be easy. We — the innovation community — has been myopically focused elsewhere for decades. Venture has steered clear of real assets because “hardware is hard”. Core industries, like infrastructure and energy, have not modernized. Labor, supply chain, sustainability — all of it operates in the physical world. Now, we must bridge the gap.
Now, the innovation community does not have the talent base nor connectivity to the real asset markets. Venture does not intuitively understand how to build these businesses, which presents a challenge —resulting in missed opportunity, and the misallocaation of capital.
Large pools of infrastructure capital are also disconnected. First, the problem of scale. New technologies are small dollar endeavors. Infrastructure investors manage billions and can’t spare the time or attention. These investors are also low-risk, which precludes the assumption of deep technology risk.
But real assets are having a moment. The United States just passed a huge Infrastructure Bill, and big money is hot in pursuit. This, on top of tense geopolitical dynamics and America’s painful need for an independent industrial base, creates a wildly suited macro environment.
On one side, big R&D, more to come. On the other, an enormous and growing exit market with economic appetite. But we have an early stage hole in the middle. A go to market challenge.
The Path Forward
Here’s what we do now:
We bridge technological innovations into hardware, real assets and infrastructure.
We work together to translate the amzing innovations of the last several decades into physical equipment and infrastructure. We automate, for the sake of economic productivity and growth. Efficient machines and circular systems, domestic manufacturing and modern infrastructure. Local supply chains. All sustainable, rooted in clean energy: electricity, storage, hydrogen, and advanced material sciences. We build entirely new ways of getting the job done. We’ll need new networks to do it.
We focus on early-stage innovation, rooted in the universities and labs.
Thirty years of limited investment in real asset innovation means no pipeline. So we start at the beginning — in the early stage, pre-seed and seed. We commercialize new technologies.
Deep tech lives in university and government labs. This is the nervous system through which R&D dollars are distributed, and the hubs of talent, capital and industry around which innovation ecosystems emerge. Billions in R&D over several decades has IP laying in wait. This is where we focus.
We invest in emerging hubs across America’s industrial economies.
We have been underinvesting outside of California, Massachusetts, and New York for decades. COVID triggered a massive migration of tech talent to new, budding tech economies. The emerging hubs are ripe with opportunity. Austin, Atlanta, Pittsburgh, Denver and the like.
We also require a nationwide innovation economy, driving distributed growth. Again, the US Government is on it — pumping a cool $10B into the emerging hubs of innovation across America. We take this seed money, build public private partnerships and translate our innovation ecosystem know how across America.
The Bottom Line
Big challenge, big opportunity. We solve our own problems, drive competitiveness and economic growth — all the while, creating a better, more equal and englithened world.
What a special opportunity.