In the next 10 years, multi-trillion dollar industries will become completely unrecognizable, entirely new sectors will emerge, and global behemoths will be toppled.

The rise of geopolitical instability and increasingly rapid technological progress will define how we live. And the challenges presented by significant inflection points in areas from AI and robotics to climate change and international conflict will transcend the scale of individual nations.

Strategic missteps made during a golden age of neoliberalism have led to a world that, while economically more productive, remains critically imbalanced. In many ways, we have been borrowing from the future.

Asymmetric warfare is giving way to a potential return of great-power competition as the free world faces constant gray-zone provocations from Moscow and Beijing. A future major war has become part of the drumbeat of news in a way not seen for 50 years. 

Cost of goods in the developed world is too often subsidized by the low wages and poor working conditions of the least well-off in developing countries. Intensive production of commodities, from energy supply and semiconductors to pharmaceuticals and coffee, are in many cases environmentally devastating. Often their centralized nature also represents a major supply chain risk.

Our lack of top-down technocratic planning and politicians devoid of competent statecraft has seen a systematic loss of leadership by Western democracies in developing countries and allowed bad state actors to take advantage of almost universally naive foreign policy. 

Supply chains and frontier technologies that will be foundational to industries of the future have been underinvested in. 

While the United States and Europe should not be underestimated when it comes to industrial potential or technological depth, when compared to China’s command-and-control capitalism, 5 year plans and a pro-active expansion of their sphere of influence via their Belt and Road initiative - or bridge and tunnel as we prefer to call it - any truly coherent strategy to counterbalance these moves, at national or supra-national level between the traditional international Allies, has been absent. 

The organizations of democratic societies - governments and large corporations - are poorly equipped to adapt to and adopt the technologies which will protect them and promote future prosperity. Society tends to view technological change as gradual. But it is the step-change technologies of the last 100 years which define how we live today, the once in a generation scientific discoveries which become commercial products, that produce breakthroughs for humanity. 

The jet engine has made anywhere on the planet accessible within a day’s travel. Semiconductors and microchips have enabled everything from cellphones to rapid DNA sequencing. The space economy has birthed GPS and instant global communications from the palm of your hand, anywhere - the internet provides more human beings with unlimited information than have access to clean drinking water. 

So it is “deep tech” which can help us fix the big problems of today by providing security and enabling greater resilience for commerce, health and even political stability.

By driving progress in key technological areas we can reduce future uncertainty. It is a coordinated, dynamic approach to the development of the cutting edge technology that will realize civilization-level change for the better. The best companies are often born in the struggle of a downturn, by founders and technologists with their backs against the wall. 

These startups need patient capital. Science risk is the job of universities, research laboratories and corporate R&D labs. Commercial engineering risk is the role of deep tech investors; to back the founding teams who can accelerate new technology from a proof of concept to a product or service which can change the world for the better.

The future will be different to today...

For the past 10 years, as individuals and subsequently as a team, 7percent has been investing in frontier technologies and solutions which transform laggard markets. We have four core themes, all essential to provide technological resilience and maintain leadership for the free world. We strive to be where the hockey puck is going, focused on backing technology which will create new markets, or transform the old.

• Future Compute
  • As we trend toward an end for Moore’s law, there is a new generation of computing architectures that, just in time for the extreme demands of artificial intelligence, will provide a step change in compute speed, processing capacity and energy efficiency.
    
    Demand for compute cycles is increasing at more than 10% year-on-year. While AI represents an inevitable challenge for society, whether fake news, financial scams or robots gone rogue, those who lead this revolution will get to set the regulations and ensure our safety.
    
    Though we believe we’re still many years from a general AI - something which can pass the Turing test - its rapid advance is inevitable. As they say in Hollywood, you ain’t seen nothin’ yet.‍
• ‍Defense and dual use‍
  • Drastically cheaper launch and the ability to return goods, people and even asteroid mined minerals easily from space, will accelerate the new space economy. Once Space-X’s Starship comes fully online, the growth of the in-space economy will be faster than most thought likely. And those who control space, control planet Earth. 

    
    Along with democratization of access to data from satellites, and an explosion of - often - decentralized content and sensor data from edge devices, we’ll see big changes in our ability to detect and analyze everything from immigration, to the environment, to the battlefield.
    
    As advanced technology becomes cheaper and easier to deploy, the ability for aggressors to take on an opponent with high-tech expensive weaponry, will change the dynamics of war. Very soon reconnaissance drones will be almost invisible, the size of insects. It's already possible for someone to adapt a virus with equipment that would fit in a regular garage. While our focus has shifted to China’s aspirations for Taiwan and Russian expansionism, we probably haven’t seen the end of terrorism from radical religious groups. Technology will help us prevent future terrorist attacks and stronger sovereign defense capabilities can help deter state aggressors.‍‍
• ‍Smart Planet‍
  • The accelerating pace of climate change is underlining the need for technologies that can replace fossil fuels providing greener energy and to decarbonize our global supply chain, the way we build and transport goods as well as people.
    
    Technologies will emerge to provide transportation with less environmental impact and lower cost. From electric aviation and point to point mobility, to next gen nuclear and fusion power, we’re due a commercial breakthrough to help correct the damage the industrial revolution has wrought.

Buildings and building materials have changed only iteratively the last 150 years since the invention of steel. As new, stronger, greener materials arrive, we should see construction costs fall and green credentials rise. Smart building should be a thing - from the detection of health problems in a building sewage output, through to active heat management.
• Humantech
  • We’re approaching a tipping point in quantified self. With basic wearables now ubiquitous - smart watches, fitness gadgets, sleep and glucose monitoring - more advanced health and wellness devices will provide an unprecedented amount of data, building on the basics of step count and blood oxygen levels and extending to constant non-invasive health monitoring and brain control interfaces which can help with pain relief, support mental health, or simply read our thoughts so we don’t have to swipe and type. These technologies are already in development. 


    
    This granular biometric data and the next generation consumer interfaces will redefine the human experience, both how we interact with our own body and the world around us.

Timing is everything.

It’s relatively easy to predict the broad trajectory of future technologies, it is timing that is the nemesis of investors. This is how we think about whether a new technology is ready to be scaled by a startup and change the world.

1. ‍People are everything. Great startups are often led by highly competent generalists - or specialists who have become generalists - who are able to hire and retain extraordinary people. The leadership of these startups often have a specific insight about a problem and solution which others have overlooked or don’t believe. They then scale with cross-disciplinary teams, hiring the best in the world.‍
2. No hammers in search of nails. Technology must solve a specific problem. Too often technology is built which is then in search of a market or a problem. Much better to set out to solve a very large problem and identify, deploy or co-opt technology which will solve that problem 10x better than anyone else.‍
3. Rate of change. Deeptech is driven by a scientific advancement that a startup can translate into a commercially viable technology, or deploy known technology in a new way into a very large, existing laggard market. The product or service must deliver a step change in capability, rather than incremental progress.‍
4. Patience required. New technology often requires extensive work to commercialize. Startups require investors who will drive urgency but recognise that engineering can take time. Startups must have a cap table which will enable them to raise sufficient funding to take their technology to market and then grow at sufficient speed to win. That means sensible ownership structures - for investors, incubators, and universities - and a clear, focused roadmap, toward milestones (proof points, either technical or commercial) that the market (investors) will respond to.  ‍
5. Planet-scale potential. Winning startups can deliver positive change across whole  societies and national economies. To affect this change, above all else any “deeptech” should be fundamentally disruptive. When a tech startup goes to market, it can be a category creator or it can rapidly consolidate an existing fragmented industry. Step-change technology companies should have the ambition to go big, or go home.‍
6. Risk. Rarely in our experience do deeptech startups fail because of the technology. They fail because of the human factor: co-founders fall out, the CEO can’t hire the very best team, they get the go to market wrong or believe product wins when it’s more often than not distribution which beats product. Often precisely because of its transformative potential, deeptech involves risk and uncertainty. Sometimes these risks are regulatory, sometimes related to market adoption or timing. On the other hand, technology and intellectual property is often complex, making them harder for competitors to replicate.‍
7. High stakes. The problems humanity faces are significant. With climate change it could be existential, even if not in our lifetimes, for our children. Globally volatility across economies and interstate rivalry continues to increase. We are seeking companies which will contribute to solutions for these issues. We look at dual-use (those that may have a defense and civilian applications) and defense technologies, critical to national interest. Put simply, these startups matter. 

As capital allocators, we’ve never been more confident that, more than at any other time in history, it is deeptech which will be the foundation of our future health and prosperity. The world’s future trillion dollar companies are being created today. 

We embrace the uncertainties, because that is how we will find the teams who will deliver true progress. 

7percent has flourished because so often, deeptech is overlooked and undercapitalized at the early stage. Building a great company is incredibly difficult. As a team of ex-founders, we have direct operational, technical and investment experience. We’ve been through the ups and downs since the first dot com bust.

The stakes are too high for free society, to underinvest in these new technologies. We’ve committed our careers to this cause - to back the step change technology of the future. Founders make great sacrifices in their relentless pursuit to deliver solutions that matter to humanity and to bend the future in a more positive direction, to make a dent in the universe. 

We back the products and services that in ten years people will wonder “how the world ever lived without ''. Positive progress through technology and resilience — that's the 7percent mission. Welcome aboard our ship, on a journey of discovery.