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HAX for Credit Suisse

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Global Hardware Trends and China's Impact. Presentation given at Credit Suisse's annual conference in Shenzhen on Nov 1st, 2017.

Published in: Technology
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HAX for Credit Suisse

  1. 1. LATESTTRENDSIN HARDWARESTARTUPS 
 A.I.&MACHINE-LEARNING—ENABLED ANDWHATITMEANSFORCHINA
  2. 2. 2011, Silicon Valley
  3. 3. “NEVER AGAIN!” — PR2 PRICE: $400,000
  4. 4. “NEVER AGAIN!” — PR2 $400,000
  5. 5. EVERYTHINGTHAT’SRIGHT ANDWRONG ABOUTSILICONVALLEY
  6. 6. BENJAMINJOFFE PARTNER HAX/SOSV BEN@HAX.CO
  7. 7. Analyst / IP Licensing Founder/Consultant 1999 Partner 2013 ENGINEER IP/STRATEGY CEO/CONSULTANT PARTNER 2004
  8. 8. Analyst / IP Licensing Founder/Consultant Partner RESEARCHER (1M+VIEWS) SPEAKER (200+EVENTS) WRITER ANGELINVESTOR
  9. 9. FRANCE JAPAN SOUTHKOREA SILICONVALLEY CHINA SINGAPORE HONGKONG MALAYSIA BENJAMINJOFFE PARTNER HAX/SOSV @benjaminjoffe
  10. 10. MYPLAN 1. WHYHARDWAREISAMAZING 2. WHYSCI-FIIS(MOSTLY)WRONG 3. WHYTRUEINNOVATIONISHARDTONOTICE 4. WHYCHINAMATTERSMORETHANYOUTHINK 5. WHYWESHOULDTALKMORE;)
  11. 11. 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 HAX | HARDWARE TRENDS 2017 | PAGE 15 $300M ASSETS UNDER MANAGEMENT 600+ STARTUP
 INVESTMENTS №1 EARLY STAGE INVESTOR (2017)
  12. 12. THE“BIGFOUR”(>150STARTUPS/YEAR)
  13. 13. 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 776.65.8 576.65 HAX | HARDWARE TRENDS 2017 | PAGE 17 HARDTECH VERTICALPROGRAMS MILESTONE-BASEDINVESTMENT №1 EARLY STAGE INVESTOR (2017) (NEXTFUND:1Q’18)
  14. 14. HARDWARE LIFE SCIENCES SOCIAL/MOBILE FOOD DEEPTECHVERTICALS
  15. 15. WHY HARDWARE & LIFE SCIENCES? DEEP IMPACT ON THE PHYSICAL WORLD AND HUMAN BODY
  16. 16. AI, energy, &
 life sciences are promising fields where you can make a huge impact. It's what I would do if starting out today.
  17. 17. “When it started raining, I thought ‘fantastic’”
  18. 18. STARTUPS238 YEARS5 RAISED$430M KICKSTARTERS111 BACKERS$50M
  19. 19. Richard Branson, CO-INVESTORSSAMPLE
  20. 20. CHINA: 10% US+CAN: 50% EMEA: 25% OTHER: 15% 90% 10% GLOBALINVESTMENTS
  21. 21. INDUSTRIAL CONSUMER HEALTH ENTERPRISE 10 20 30 40 2012 2013 2014 2015 2016 2017 B2B SHARE IS GROWING
  22. 22. INNOVATORS EARLY ADOPTERS EARLY MAJORITY LATE MAJORITY LAGGARDS ADOPTION CURVE
  23. 23. 0 50 100 150 1 2 3 4 5 6 7 8 9 10 YEARS 1R&D INCUMBENT STARTUP 2 64 128 100
  24. 24. MAKEBLOCK:RAISED$36M
  25. 25. PARTICLE:RAISED$34M
  26. 26. INNOVATION ISEVERYWHERE BUT RESOURCES ARENOT
  27. 27. SEED4 MONTHS + $75K FEE + $100K CASH GROWTH6 WEEKS O TO 1 1 TO N SHENZHEN PrototypetoLaunch SANFRANCISCO ProducttoScale
  28. 28. OURVALUE-ADD 70% 30% COMMUNITY PROGRAM
  29. 29. SCI-FIHASARRIVEDSCI-FI
 HASARRIVED01/
  30. 30. FLYING CAR Slovakia
  31. 31. JET PACK U.S.A.
  32. 32. ANDROIDS Japan
  33. 33. IMPRACTICAL EXPENSIVE
  34. 34. First R&D (Japan) (not for sale) 1986 Segway (USA) $5,000 2001 Ninebot (China) $330 2016 30YEARSFROMLABTOMASSMARKET
  35. 35. FIRST WAVE
  36. 36. WHAT’S NEXT?
  37. 37. CHINA: 14 USA: 12 THE28HARDWAREUNICORNS EU: 2
  38. 38. 1. MINDMAZE 2. SIGFOX 1. BITMAIN 2. DJI 3. HUAMI 4. MEIZU 5. MOBIKE 6. NINEBOT 7. NIO 8. OFO 9. ROYOLE 10. SMARTMI 11. UBTECH 12. XIAOMI 13. ZHANGYUE(IPO) 14. ZMI 1. BLOOMENERGY 2. ESSENTIAL 3. GOGORO 4. MAGICLEAP 5. PLENTY 6. PELOTON 7. PROTEUSHEALTH 8. RAZER(IPOSOON) 9. ROCKETLAB 10. SPACE-X 11. VIEW 12. ZOOX THE28HARDWAREUNICORNS USA EUROPE CHINA 7% 43% 50%
  39. 39. MOSTIMPORTANTTREND?
  40. 40. BUILDPROTOTYPE(R&D) CHALLENGES
  41. 41. POSITIONPRODUCT(STRATEGY) BUILDPROTOTYPE(R&D) ITERATE(DEVELOPMENT) FINANCE(FUNDING) PRODUCTIZE (PRODUCTION) LAUNCH(PR&MARKETING) SCALE(DISTRIBUTION&SALES) CHALLENGES
  42. 42. HAX | HARDWARE TRENDS 2017 | PAGE 48 ANEWWAY TOBUILD HARDWARE STARTUPS CHEAPER 
 COMPONENTS ONBOARD
 CPU RETAILERS
 FOR HIGH-TECH SMALL BATCH
 MANUFACTURING 
 MICRO-CAPS,
 REG A+… CLOUD CROWDFUNDING
 & PRE-SALES SOCIAL MEDIA
 TO TEST DEMAND SMARTPHONES NEW & BETTER
 PROTOTYPING
 TOOLS
  43. 43. 18MONTHSFROMCONCEPTTOSTORE?
  44. 44. MOSTIMPORTANTTREND =FUNDAMENTALCHANGE INTHEWAYSTARTUPSAREBUILT
  45. 45. HAX | HARDWARE TRENDS 2017 | PAGE 51 RE-INVENTION 
 WITH
 HARD TECH CONNECTED
 PERSONALIZED
 SPECIALIZED
 AUTONOMOUS

  46. 46. HAX | HARDWARE TRENDS 2017 | PAGE 52 02/ HAX | HARDWARE TRENDS 2017 | PAGE 52 FASTER
  47. 47. PROTOTYPE
  48. 48. 3 MONTHS EARLIER…
  49. 49. ROVENSO makes heavy-duty agile robotic rovers for rough terrains and remote intervention. Switzerland
  50. 50. 3MONTHSLATER
  51. 51. SCALE
  52. 52. France OCTOPUS
  53. 53. 1 2 3 4 18MONTHS
  54. 54. R&D1 2 5 4 3 Prototyping Production Investment World-ClassSTARTUPS World-ClassRESOURCES Sales
  55. 55. R&D1 2 5 4 3 Prototyping Production Investment World-ClassSTARTUPS World-ClassRESOURCES Sales
  56. 56. HAX | HARDWARE TRENDS 2017 | PAGE 65 CHEAPER03/ HAX | HARDWARE TRENDS 2017 | PAGE 65
  57. 57. “NEVER AGAIN!” — PR2 $400,000
  58. 58. 2011 GENERALROBOT ONBOARDCOMPUTING
  59. 59. 2017 SPECIALIZEDROBOT CLOUDCOMPUTING
  60. 60. $400 (2017) U.S.A.
  61. 61. HAX | HARDWARE TRENDS 2017 | PAGE 70 04/ HAX | HARDWARE TRENDS 2017 | PAGE 70 PERSONAL
  62. 62. EXAMPLE HEADPHONES
  63. 63. UNIQUESHAPES UNIQUEHEARING
  64. 64. low tones mid tones high tones sensitivity
  65. 65. CUSTOM-FIT
  66. 66. REVOLS: CUSTOM FIT Canada
  67. 67. PERSONAL SOUND
  68. 68. NURA: TUNED TO YOU
  69. 69. HAX | HARDWARE TRENDS 2017 | PAGE 83 05/ HAX | HARDWARE TRENDS 2017 | PAGE 83 SPECIALIZED
  70. 70. EXAMPLE HEADPHONES
  71. 71. WITHNEW SENSORS?
  72. 72. E.G. BRAINWAVES
  73. 73. KOKOON: FOR SLEEP U.K.
  74. 74. MINDSET: FOR WORK
  75. 75. THECASEOF
 ROBOTS
  76. 76. SPECIALISTS
  77. 77. DULL DIRTY DANGEROUS
  78. 78. WAREHOUSING
  79. 79. AMAZON: WAREHOUSE ROBOTS ACQUIRED KIVA FOR US$775M IN 2012 45,000 ROBOTS BY JAN. 2017
  80. 80. LOGISTICS
  81. 81. HAX | HARDWARE TRENDS 2017 | PAGE 98 DELIVERIES AMAZON PRIME AIR JD.COM TEAM ROADRUNNER DRONE ‘BEEHIVE’
 CONCEPT PATENT
 BY AMAZON HAX | HARDWARE TRENDS 2017 | PAGE 98
  82. 82. SIMBE ROBOTICS U.S.A.
  83. 83. CLEANING
  84. 84. AVIDBOTS Canada
  85. 85. HUMANOIDS?
  86. 86. HAX | HARDWARE TRENDS 2017 | PAGE 108 06/ HAX | HARDWARE TRENDS 2017 | PAGE 108 SMARTER
  87. 87. A.I.&MACHINELEARNING EVERYWHERE
  88. 88. SMART SPEAKERS
  89. 89. NEST
 THERMOSTAT PHILIPS HUE
 LIGHT ECOBEE
 SWITCH BELKIN
 OUTLET KEEN
 VENT SAMSUNG
 HUB AUGUST
 LOCK RING
 VIDEO DOOR BELL FITBIT
 FITNESS TRACKER DROPCAM
 CAMERA HYDRAO
 SHOWER HEAD SAMSUNG
 ROBOTIC VACUUM
  90. 90. HAX | HARDWARE TRENDS 2017 | PAGE 113 LENOVO
 ALEXA ASSISTANT LINGLONG
 DINGDONG ASSISTANT
 JV OF JD.COM (CHINA’S ‘AMAZON’)
 & IFLYTEK (VOICE EXPERT,
 MARKET CAP: $8.2B) BAIDU & INEMO
 LITTLE FISH
 TENCENT
 QROBOT
 (2ND GENERATION)
 USES TENCENT’S
 XIAOWEI CLOUD ASUS
 ZENBO SMART COMPANION ROKID
 MELODY
 RAISED $50M SERIES B INCHINA TOO MOBVOI
 TIC WATCH
 RAISED $252M ALIBABA
 TMALL GENIE XIAOMI
 MI BUNNY
 DESIGNED FOR KIDS
 HAX | HARDWARE TRENDS 2017 | PAGE 113
  91. 91. IOT&INSURANCE
  92. 92. HAX | HARDWARE TRENDS 2017 | PAGE 115 MOTIVATIONS PREVENTION
 AVOID DAMAGES PRECISION
 TAILOR TO NEEDS PROOF
 VERIFY CLAIM CONNECTED
 DEVICES
 ATTRACT
 INSURERS HAX | HARDWARE TRENDS 2017 | PAGE 115
  93. 93. HAX | HARDWARE TRENDS 2017 | PAGE 116 BUSINESS MODELS CONNECTED
 DEVICES
 ATTRACT
 INSURERS HAX | HARDWARE TRENDS 2017 | PAGE 116 DISCOUNTS
 
 RENTAL
 
 USAGE-BASED
 
 GIVEAWAYS
  94. 94. MINUT: CAMERA-FREE HOME SECURITY
  95. 95. HAX | HARDWARE TRENDS 2017 | PAGE 118 USAGE- BASED
 INSURANCE
 
 OBD SYSTEM FREE SMOKE ALARM
 
 NEST PROTECT
 -5% POLICY FEE HOME SECURITY
 DISCOUNT $30 OFF RING
 + POLICY REBATES FREE SMART TOOTHBRUSH
 + USAGE- BASED REBATES BEAM DENTAL FREE TRACKER FOR CUSTOMERS TO STAY HEALTHY CONNECTEDDEVICES
 ATTRACTINSURERS
  96. 96. HAX | HARDWARE TRENDS 2017 | PAGE 119 2015 SMART TOOTHBRUSH 2016 . INSURANCE PLANS
 . FLOSS, TOOTHPASTE 
 SUBSCRIPTION . FIND & RATE DENTISTS NEXT: PURE
 IOT-POWERED
 INSURERS? IOT:
 TROJANHORSE
 FORINSURANCE
 ANDMORE (Not a HAX company)
  97. 97. IOT&SECURITY
  98. 98. HAX | HARDWARE TRENDS 2017 | PAGE 121 MAR 2017 - SMART BEAR LEAKED KIDS VOICE & INFO OF 1,000’S OF CUSTOMERS. SEP 2016 - MIRAI BOTNET DVRS & WEBCAMS TURN INTO ZOMBIES
 2015 - CHRYSLER HACK
 RECALL OF 1.4M CARS JUN 2016 - INSULIN PUMP WARNING
 OF 114,000 PATIENTS THREATTO:
 CARS,HOMES…
 ANDINSULINPUMPS
  99. 99. HAX | HARDWARE TRENDS 2017 | PAGE 122 07/ HAX | HARDWARE TRENDS 2017 | PAGE 122 HEALTH
 TECHNOLOGIES
  100. 100. BEYONDFITBIT
  101. 101. FROMHEALTHTRACKING TODIGITALTHERAPIES
  102. 102. Solving for SLEEP
  103. 103. FROM TRACKING TO SOLVING
  104. 104. “You just waited?”
  105. 105. MOONA (Smart) Pillow Thermostat Movement Machine Learning
  106. 106. SANA (Smart) Mask Light Sound HRV Machine Learning
  107. 107. #Snoring #MeToo
  108. 108. KOKOON (Smart) Headphones Comfort Brainwaves Machine Learning
  109. 109. Solving for MENTAL HEALTH
  110. 110. Anti-Stress Patch
  111. 111. FEEL Emotions Tracker
  112. 112. FLOW NEUROSCIENCE Depression Treatment
  113. 113. KEEN Subconscious Behaviors
  114. 114. DIGITAL THERAPIES = THE NEW PHARMA ?
  115. 115. “You went to hospitals?”
  116. 116. DATAISTHE NEWBLOOD
  117. 117. “Donating your data
 might help more than an organ” DUNCAN TURNER, HAX DATAISTHE NEWBLOOD
  118. 118. P4 MEDICINE PREVENT PREDICT PERSONALIZE PARTICIPATE
  119. 119. FROMDIGITALTHERAPIES TOAUGMENTEDHUMANS
  120. 120. BEYOND 5 SENSES
  121. 121. NUADA Grip glove
  122. 122. HAX | HARDWARE TRENDS 2017 | PAGE 152 08/ HAX | HARDWARE TRENDS 2017 | PAGE 152 INDUSTRY- CHANGING
  123. 123. MANUFACTURING
  124. 124. 1.SMARTROBOTS LOWCOST+COMPUTERVISION
  125. 125. SMART CO-BOT China
  126. 126. 2.AUGMENTEDWORKERS
  127. 127. NUADA Portugal
  128. 128. 3.DIGITALFABRICATION &DESKTOPMACHINES
  129. 129. CIRCUIT PRINTER
  130. 130. CIRCUIT PRINTER
  131. 131. U.K.
  132. 132. AGRICULTURE
  133. 133. PYCNO SECROP 
 FIELDSENSORS EDYN HAX | HARDWARE TRENDS 2017 | PAGE 164
  134. 134. PLENTY RAISED$226M
  135. 135. LETTUCE WEEDING ROBOT ACQ.FOR $305M
  136. 136. DATAIS THENEWOIL ADOPTION WILL DECIDE THE FUTURE OF ENTERPRISES HARDWARE- ENABLED SOFTWARE INSIGHTS BRING
 NEW REVENUE INDUSTRIAL IOT GROWS FASTER THAN CONSUMER HAX | HARDWARE TRENDS 2017 | PAGE 167
  137. 137. HAX | HARDWARE TRENDS 2017 | PAGE 168 09/ HAX | HARDWARE TRENDS 2017 | PAGE 168 CHINA
  138. 138. PERCEPTION TRAILS REALITY
  139. 139. IP
  140. 140. WORLDLEADER INPATENTS SOON?
 2016 NUMBER OF APPLICATIONS BY COUNTRY (‘000) SOURCE: WORLD INTELLECTUAL PROPERTY ORGANIZATION WORLD’S #1 & #2
 IN PUBLISHED APPLICATIONS 
 TOP 10: 7 FROM ASIA, 3 FROM U.S. 4,123 PATENTS 3,692 PATENTS USA Japan China Germany South Korea France UK Netherlands Switzerland Sweden 0 15,000 30,000 45,000 60,000 -1% +3% +40% IN 2017?+45% HAX | HARDWARE TRENDS 2017 | PAGE 171
  141. 141. INVEST
  142. 142. USA
 $14.5B CHINA
 $10.6B EUROPE
 $3B1Q2017 3% 35% 4% 10% 48% USA Europe India China RoW SOURCE: DOW JONES VC EDGE 1Q 2017 CHINA = WORLD’S#2 INVCINVESTMENT
  143. 143. SHENZHEN
  144. 144. THE SILICON VALLEY OF HARDWARE
  145. 145. MANUFACTURING SUPPLYCHAIN COMPONENTMANUFACTURERS TECHNICALWORKFORCE ASSEMBLYSUPPLIERS SHENZHEN&GUANGDONG
  146. 146. SHENZHENSUPERPOWERS SKILLS ANY SCALE SPEED SAVINGS
  147. 147. ‘AWEEKINSHENZHEN ISWORTHAMONTH’ ‘SHENZHENTURNS ATEAMOF2INTO ATEAMOF20’
  148. 148. FACTORYROBOTS
  149. 149. HAX | HARDWARE TRENDS 2017 | PAGE 181 ROBOT MAKERS 100,000 200,000 300,000 400,000 500,000 Fanuc Yaskawa ABB Kawasaki Nachi Kuka Denso Epson Adept 25,000 45,000 80,00080,000 100,000110,000 250,000 300,000 400,000 SOURCE: ROBOTICS & AUTOMATION NEWS, 2016
  150. 150. ROBOTS
 PURCHASED BY COUNTRY
 (SOURCE: IFR, 2015) CHINA BUYS ROBOTS 20,000 40,000 60,000 80,000 China SouthKorea Japan USA Mexico Canada 2,7004,700 27,000 35,00038,000 69,000 SALES 2015: 248,000 (+12%YOY) +20%YOY
  151. 151. Old China
  152. 152. New China
  153. 153. INVENT
  154. 154. DJI NINEBOT MAKEBLOCK UBTECH NEXT INNOVATORS
  155. 155. DJI NINEBOT MAKEBLOCK UBTECH NEXT INNOVATORS >$10B >$1B >$1B
  156. 156. MAKEBLOCK($200Mval.)-BORNGLOBAL
  157. 157. For innovation, 
 China Today is like Japan in the 80’s” SEAN O’SULLIVAN, FOUNDER, SOSV/HAX “ HAX | HARDWARE TRENDS 2017 | PAGE 189
  158. 158. SCALE
  159. 159. 0 5 10 15 20 25 1Q17 2Q07 2.81.8 3.4 5.7 3.7 3 11.79.5 Others Xiaomi Fitbit Apple XIAOMI=#1WEARABLE SOURCE: STRATEGY ANALYTICS, 2017
  160. 160. BIKESHARING HOWMANYUSERS?
  161. 161. BIKESHARING 2016:28M—2017:>200M
  162. 162. MOBIKE START: 2015 BIKES: 5M USERS: 100M INVEST: $1B (Not a HAX company)
  163. 163. YOUON START: 2010 IPO: $87M
 CAP: $1B REV (’16): $116M NET: $17M
  164. 164. HAX | HARDWARE TRENDS 2017 | PAGE 198 RENTALSTARTUPS FRENZY BIKES >$2B CHARGERS $127M UMBRELLAS $45M BASKETBALLS
 $1.4M
 HAX | HARDWARE TRENDS 2017 | PAGE 198
  165. 165. SEXDOLL RENTALSERVICE
  166. 166. OEMSINVEST TOO!
  167. 167. BUY
  168. 168. HAX | HARDWARE TRENDS 2017 | PAGE 202 BUYING
 INNOVATION CHINESE APPLIANCE MAKER MIDEA
 BOUGHT GERMANY’S KUKA FOR US$4B HAX | HARDWARE TRENDS 2017 | PAGE 202
  169. 169. HAX | HARDWARE TRENDS 2017 | PAGE 203 BUYING
 DESIGN PHILIPPE STARCK 
 DESIGNED THE MI MAX HAX | HARDWARE TRENDS 2017 | PAGE 203
  170. 170. HAX | HARDWARE TRENDS 2017 | PAGE 204 10/ HAX | HARDWARE TRENDS 2017 | PAGE 204 FOURCONCLUSIONS

  171. 171. Hardware is transforming industries 01/
  172. 172. Most of it doesn’t look like old Sci-Fi 02/
  173. 173. The key is software / A.I. / M.L. 03/
  174. 174. China invents, invests, and enables 04/
  175. 175. Get on the rocketship! So…
  176. 176. THANKS! Questions / Next fund: ben @ hax.co Wechat: benjamin2301 “Teach how to fish …and give a fishing rod” www.slideshare.com/haxco

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