IoT and the Vision of Rocket Wagon Venture Studios
Today we launched Rocket Wagon Venture Studios. To say I am excited about this new venture is putting it mildly. I feel like my entire life has been leading to this exact point.
But like many things, this is not necessarily entirely unique or entirely new, rather, it is a combination of ideas meld together in a way that should deliver extraordinary results.
One of my two favorite books is “the Second Machine Age”, by Erik Brynjolfsson and Andrew McAfee. In it they artfully portray this very idea; that the increasing rate of progress, especially in technology, is seldom the function of a single breakthrough, but rather good ideas being combined and enhanced into new ones. The combinatorial effects can be remarkable.
Venture Studios are designed to be a complete team of entrepreneurs from the CEO through to the developers and engineers, who collectively have “been there and done that.”
They engage with young, often first-time entrepreneurs, becoming an extension of their new companies to bring them from ideas to the point of commercialization. The goal is to decrease the time it takes to get to commercialization while increasing the likelihood of success. But long before there was this more aggressive embrace of entrepreneurs, there were accelerators like TechStars, Y-Combinator, and many others where entrepreneurs would be hosted in a co-working facility for a shorter time with specific mentorship and guidance, and possibly even a small amount of early capital.
The goals were similar: shorten the time and increase the value and likelihood of success. These models have shown good success, which probably accounts for the ultimate development of the venture studio models building on the success of accelerators.
But before there were accelerators, there were incubators. These mostly build on the idea of shared workspace like a Regus facility or similar offerings for small companies to share services like reception, conference rooms, and other like offerings. The incubators might also have entrepreneurs in residence for at least some level of mentorship, along with seminars and other tools to help entrepreneurs. This probably accounts for the development of accelerators building on the success of the incubators.
What makes Rocket Wagon Venture Studios different from others.
In many ways, it isn’t. I would suggest, or at a minimum, hope, that all studio teams want to build great companies. That should be table stakes. But the key for us is our focus on the Internet of Things, and how we are rendering that in our model.
We are establishing RWVS as the parent entity that will provide a set of common underlying systems (accounting, CRM, code management, etc.), horizontal services (legal, tax, accounting, IT…), and mostly setting standards and providing key functions for underlying studios such as the baseline IoT architectural considerations, the recruitment of both entrepreneurs and the subsequent recruitment of a supplemental team, go to market strategies, and ultimately the process of exiting from the studio via funding or acquisition.
Underneath the parent, we are building a series of vertically aligned studios because IoT is fundamentally a domain specific proposition.
The team for Food and Beverage IoT will be people with entrepreneurial experience, but also domain expertise in Food and Beverage. We will do the same for travel, or elderly care, or whatever the specific vertical alignment of the associated studio. This approach has been exceptionally well received, especially by people involved with corporate innovation. So much so, that we are expecting, and now preparing, to launch studios that in some cases will be funded entirely by one company, using the specific RWVS Studio as its own skunkworks. In short, we are combining the venture studio model with general IoT expertise and thought leadership with domain specific expertise and thought leadership, all in what will be a very efficient and effective model.
I have been an entrepreneur for 20 years, running several companies and sitting on several more boards. Mostly, though, I have been fascinated by IoT for the last decade. Along with my good friend Brenna Berman, we started the Midwest IoT Council at the end of 2014. I co-authored a book called “The Future of IoT” in 2017 with my friends Emil Berthelsen from Gartner and Wael Elrifai from Hitachi about the importance of IoT architecture relative to the data. I also sit on the executive committee of the Array of Things Smart Cities Project from the US Department of Energy and recently joined the board of the Illinois Autonomous Vehicle Association. IoT is my job and my hobby. I am 100% fine with that.
The real driver is the long view. This means stepping back and asking what are the implications are of the progression to the cyber-physical world?
We are undoubtedly committing to building great IoT companies that are profitable; that contribute to job growth and to the economy and provide great products and services. These are our table stakes. But to look further is to tap into the ethos of what we want with RWVS.
The other book I really love is “Principles” by Ray Dalio, who has shown unparalleled success with Bridgewater over the years. While this book is jammed with great insights, the two key aspects I want to highlight here are the laser focus and insistence on objectivity, and the notion of understanding and learning from nature. I think these two ideas intersect with the progression to the cyber-physical world in the most profound of ways.
As a society we are well functioning on a national and in many ways a global level. But that progression is never a straight line, and various parts of the world are wildly varied in the state of that progression. But from a natural view, the world evolves in a manner to optimize at the systems level. Objectively speaking, nature suggests that sub-optimal elements in our universe are eliminated naturally over time.
When you look at the sub-optimal elements of our “system” today, we see hyper-concentration of wealth and resources associated with poorer outcomes.
We see false trade-offs like energy sustainability vs. water sustainability, when in fact we can and must have both.
A few years back the United Nations published the 17 Sustainable Development Goals, and for some, this began to look like a framework for measuring value in our ecosystem. But if we are to broaden our view of the value of companies from the income statement or the balance sheet to the broader view as represented, at least to some extent, by the broader factors of sustainability, resiliency, diversity and the other considerations and actions that can create a better world, we must measure.
Data becomes the equalizer. It becomes the enabler.
\My thesis here is not whether or not this progression will or will not happen. Nature and objectivity tells us it will. Systems will optimize. But it absolutely highlights the long-term value and implications of building great IoT companies. It’s about better profits. It’s about greater employment.
It’s truly about a better world.
Neither the young indigenous partnership having access to capital or the little girl in the hills of Kentucky having access to better healthcare may ever stop and think that their lives are better because we deployed technology in a thoughtful way to make that happen, but rest assured, it will happen.
That, in a nutshell, is Rocket Wagon Venture Studios.