Venture capitalists, love ’em or hate ’em, spend their careers scanning the horizon. They meet daily with companies building things you haven’t realized you need yet, or trying to cure diseases everyone agrees are incurable. And if they invest in a company, they typically serve on the board of directors for a few years, so they’re attuned to the things that can cause problems for growing businesses — like economic slowdowns or major regulatory shifts.
So to get a sense of what opportunities and risks lie ahead in 2019, I surveyed a dozen venture capital investors at local firms. I asked just three questions; a selection of their answers to each is below.
What’s an emerging area of tech or science you’re exploring but haven’t invested in?
Sarah Downey, Accomplice: “Virtual avatars and goods. In the not-so-distant future, we’ll have more invested in the digital representations of ourselves and objects we own than the physical. You already see this a bit today with the value people place on things like social media accounts and Fortnite skins, but expect it to skyrocket in importance the more time we spend in virtual and augmented environments. I want to find and invest in whoever’s building the avatar layer that people will take with them online to represent themselves.”
David Barrett, Polaris Partners: “Artificial intelligence-driven decision guidance for pathology and radiology. Increasing the speed and efficacy of cancer diagnosis and treatment through automation is an important, meaningful area for innovation and a massive opportunity.”
Alex Finkelstein, Spark Capital: “Brain-to-machine interfaces, as we will begin to live in a world where we won’t be limited by typing into a phone/keyboard or voice commands, but where we will be able to harness what we are thinking in our brain.” Also “next-generation space technology as costs continue to come down, and alternative protein, as the human population will need meat and plant substitutes in order to feed a growing global population.”
Noubar Afeyan, Flagship Pioneering: Using artificial intelligence to better understand the biological mechanisms in our bodies. “Biology’s complexity, in terms of the number of constituent parts and type of interactions, and the many exceptions to its rules, make it difficult for humans to grasp, but machines may perceive life’s fundamental patterns. Maybe more interestingly, we are asking whether AI might prompt entirely new hypotheses in life sciences — and allow us to do experiments in new ways.”
Rob Go, NextView Ventures: Virtual reality and augmented reality. The latter is an approach to “layering on” digital information and images atop our view of the real world, without blocking it out. “The most exciting companies won’t be primarily about the tech itself, but will be more focused on how consumer or end-user experiences will be made significantly cheaper, faster, or better by applying the technology in mass market categories,” Go says.
Christopher Mirabile, LaunchPad Venture Group: “Sensors everywhere.” The linkage of inexpensive sensors, computing power, and new kinds of wireless networks will lead to “smart cities, smart machines, and smart infrastructure,” Mirabile says. “What new business models and actionable insights will come from more real world, real time data?”
Daphne Zohar, PureTech Health: Therapeutic viruses. While viruses are often seen as evil-doers that lay us low, some of the “commensal viruses” in our body aren’t like that — they may even be playing a constructive role in maintaining good health. “If one could develop therapeutic viruses, that would be quite intriguing,” Zohar says.
Abbie Celniker, Bob Tepper, and Cary Pfeffer of Third Rock Ventures: “Engineered cell therapies,” which involve modifying cells to treat diseases or reduce their symptoms.
An area you’re excited about and have invested in?
John Simon of Sigma Prime says he has made a personal investment in Clear Ballot Group, a Boston startup focused on voting technology that “has the opportunity to dramatically modernize and improve the way we run elections here in the US and beyond — and also increase participation and access, thus really helping us as a democracy.”
Downey: “Beauty automation — the intersection of robotics and aesthetics. Think the Judy Jetson-izing of repetitive beauty tasks that consume time and money, and overwhelmingly fall on women.” Downey said she couldn’t name the company, as it’s still operating under the radar.
Finkelstein: “Africa. The continent will be an enormous growth market for the next 25 years. [It is seeing] rapid mobile penetration, enormous infrastructure build-out, and a growing education system.” Finkelstein’s firm has invested in Andela, an online marketplace that helps software developers based in African countries to connect with customers.
What’s your biggest worry about 2019?
Maria Cirino, .406 Ventures: “Whenever something hits irrational highs” — as venture capital investing did in recent years — “it’s likely to correct at some point. This will make it harder for companies to access capital to fuel growth, and will send a lot of them looking for mergers and acquisition opportunities.”
Downey: “Free speech. I worry that although we’ve never had more platforms and reach through which to speak, the consequences for saying something at all objectionable are massive. Anything you say can and will be taken out of context online. The result is people censoring themselves, and a less interesting Internet.”
Finkelstein: Recruiting “A+ talent” to the companies in which Spark invests.
Zohar: Concerns about “soundbite-driven political rhetoric” that surrounds the pharmaceutical and biotech businesses. “Most of the politicians are making statements that demonstrate a lack of knowledge and nuance about how new medicines are developed.”
Mirabile: “My biggest economic worry is a global shock of some sort caused by some natural or political force, handled poorly by our government, that causes the coming recession to be far worse than it needs to be, leading to a tremendous reset of the economy with attendant human suffering.”
David Fialkow, General Catalyst: “Immigration. The flow of brilliant young people into Boston is the lifeblood of our city and has to date sparked a ton of innovation. We need to continue this flow with open arms.”