Excel at Acceleration
When it comes to measurement of change, most want to gauge it as a matter of speed. How fast something is coming. How quickly it will change things. But a more accurate quantification is the force of change. We often look at Moore’s Law – that being the number of transistors on a microchip is doubled while the cost of microchips is halved every two years – as an exponential measurement for the speed of technology. But the real beauty lies in how the acceleration of things like computational power, sensors, and networks affects industries, society, and people.
In their book, The Future is Faster Than You Think, writers Peter H. Diamandis and Steven Kotler identify three elements that are causing this rapid acceleration of technology:
The exponential growth of computing power.
The merging of individual technologies.
The second-order effects that fuel innovation.
It’s the intersections of these second-order effects that allow for some truly remarkable innovations and advancements. We want things to be faster, cheaper, and smarter, and at Arcspring, we determine how these effects will determine change going forward, and intelligently predict where our investments should be made.
Time. We only have so much of it, and, as morbid as it sounds, we’re running out of it by the second. But when technology can save us this precious commodity, it becomes incredibly more useful. Think about the waiting game we used to endure with dial-up modems throughout the 90s. We’d wait patiently as our 28k modems struggled for minutes to align 1s and 0s into something resembling an image or a webpage. But now, if our lightning fast internet takes more than half a second to load a picture or a site, our patience wears thin as we count the seconds of our lives being taken away.
Arcspring knows how precious time is. If we can engage technology that allows companies to trim their service times, or develop automated routines that spare employees mundane or tedious tasks, we know that, in the long run, these are technologies worth investing in.
Money makes the world go ‘round. This cliché statement is almost cringe-worthy when it comes from an article produced by a private equity firm. But the fact remains, having more capital allows for increased development of new technology. Mark Zuckerberg would still be digitally ranking college co-eds if Peter Thiel hadn’t taken out his checkbook. Martin Eberhard and Marc Tarpenning would still be dreaming of electric vehicles had Elon Musk not taken an interest in their fledgling car company.
Obviously, the main function of Arcspring and any private equity company is to infuse capital into businesses to help them grow. But what sets us apart is that we invest in companies that desperately need technology to transform their businesses. We recognize the digital potential and ensure that our capital is used to create strong companies powered by smart technology.
One half of Moore’s law states that the cost of technology is halved every two years. And as we approach the heat death of Moore’s law, technology has become so incredibly cheap that even the smallest companies and personal users can utilize it to advance their businesses or help in day-to-day activities. It’s why your mechanic can run a full computer diagnostic on your car’s engine or why a cheap autonomous robot might be vacuuming your living room right now. The demonetization of technology has had far-reaching effects across every single industry, but it’s how this cheap technology is used that makes it so powerful.
Arcspring’s innovation team is constantly researching the newest, best, and cheapest technology. Additionally, our wide network of tech industry professionals keeps us up-to-date on all of the trends and revolutions currently developing across the digital landscape. In turn, we use this knowledge to make informed decisions about how best to deploy cheap technology in our portfolio companies.
In addition to having cheap technology, it’s imperative to have the right people in place to implement it. Creative, motivated, and intelligent people are required to help drive innovation. Until recently, genius was often squandered as a result of race, sex, education, and location. But with the rise of the “global village,” we’re able to find these hidden geniuses in unlikely places. These incredible people and the way we can utilize them leads, of course, to an acceleration of creative problem-solving.
This translates to Arcspring in a unique way. We are staffed with finance industry professionals, but we’ve also created an in-house innovation team made up of creatives who specialize in out-of-the-box thinking. This group looks for atypical solutions to help shift portfolio companies away from their analog processes and use their creative genius to develop modern digital results.
Speaking of the “global village,” aside from opening up a tremendous talent pool, it’s also provided easier communication. Technology can now be shared, rather easily, with half the people on the planet. And in the next half-decade, we expect to add 4.2 billion connected people to that list. Now, instead of relying on your crosstown network to find a solution, you can contact an expert in another hemisphere to find your answer. This helps eliminate the friction of finding solutions while making them quicker and more accurate.
Arcspring’s vast network of industry professionals spans the globe. We’ve worked with developers in Vietnam, India, and the Philippines. We’ve worked with technology leaders in Japan, South Africa, and China. And we have close ties with finance gurus in the UK, Switzerland, and Germany. This allows us to get almost immediate feedback on a wide variety of questions and ensures we’re delivering the absolute best solutions to our companies.
One of the ways our network of advisors has helped accelerate innovation is by encouraging the use of new business models. Companies like Airbnb and Facebook operate within different business models that wouldn’t have even been considered only a few decades ago. Whether it’s decentralized autonomous organizations, free data economies, or crowd sharing, these new ways of doing business provide innovative ways of utilizing new technologies to create value.
Finally, the last force that’s affecting change is one of longevity. Simply, we’re living longer. Medical technologies have advanced to the point that our lifespans are constantly having years added to them. This means the job pool is larger, people are spending more, doing more, and taking more active roles in society. But it also requires analog companies to be updated to modern times to sustain their growth.
Jeff Bezos has said that Amazon won’t last forever. At some point, someone will come along and “out Amazon Amazon.” And while it’s hard to imagine something replacing the online shopping behemoth, but someone probably said the same thing about Sears. So, to keep up with the pace of technology, companies need to be constantly improving. They need to innovate, push the boundaries, and look for creative solutions to match the longevity of their customers.
Technological change is happening. It’s gaining momentum, and there’s no way to hold it back. We are at a critical moment in time where the rate of change and the availability of technology is converging. For companies to succeed, they need to understand the effects that this moment will have on their businesses, and realize that now is the time to act in order to harness innovation.
