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Opening remarks of Paul Asel - World of Connections 2018
- 1. World of Connections: Digital Transformation Innovation in the Second Half of the Chess Board Paul Asel Managing Partner, NGP Capital November 14, 2018
- 2. Softbank Vision Fund founded 2017 $100B venture fund – largest by 30x $1.6 $2.0 $3.3 $100.0 A16Z Fund V Sequoia Global Growth II NEA 16 Softbank Vision Fund
- 3. $1B Seed Round Largest first round ever
- 4. $150B valuation – highest for private tech firm
- 5. 16… The Birth of Chess
- 6. 0 1E+18 2E+18 3E+18 4E+18 5E+18 6E+18 7E+18 8E+18 9E+18 1E+19 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 GrainsofRice ChessTiles Square 32: 2 Billion Grains of Rice The Second Half of the Chess Board
- 7. 1944 ENIAC 1996 Nokia Communicator (4MB RAM) 2007 iPhone (128MB eDRAM) 2015 Apple Watch (512MB DRAM) 1952 IBM 700 Series (2048 Bits) 1983 Apple Lisa Computer (2MB RAM) 1969 Apollo 11 landing (2048 word RAM) 1984 IBM 5155 Portable Computer (256KB RAM) 1999 iBook (32MB SDRAM)1940 2018 Moore’s Law & the Supercomputer in our Pocket
- 8. United States 2017 VC Funding: $84.2B China 2017 VC Funding: $41.5B Israel 2017 VC Funding: $2.6B Europe 2017 VC Funding: $17.5B Japan / Korea 2017 VC Funding: $4.9B Global Technology Innovation
- 9. Source: “The Pace of Technology Adoption is Speeding Up”, Harvard Business Review (11/25/2013) Pace of Technology Adoption is Increasing
- 10. NGP Connected World Vision A world in which: • Everyone & Everything transmits a signal • Data is Everywhere • Robust, real-time intelligence
- 11. Digital Transformation: Rise of Data First Companies 1st Wave Computers 2nd Wave Internet 3rd Wave Mobile 4th Wave IoT TotalData Time 1975 1994 2007 2025 IDC predicts global data to grow 10x between 2016 and 2025 to 163 ZB Computer Wave Internet Wave Mobile Wave IoT Wave 10x
- 12. Digital Transformation: Augmenting our Digital Lives Work/ Learning Digital Health Entertainment/ Local Services Smart Mobility = NGP Portfolio Company @ World of Connections @ World of Connections
- 13. Digital Transformation: Industry Disruption Financial Sector Digital Health Smart Logistics Intelligent Enterprise = NGP Portfolio Company @ World of Connections @ World of Connections
- 14. Our portfolio company founders
- 15. Thank you! Paul Asel Managing Partner, NGP Capital @PaulAsel
Editor's Notes
- Welcome to our fourth annual World of Connections. Thank you for joining us and helping to make this our biggest ever conference with over 450 people joining us from the US, Europe, Middle East, India and China. We would also like to thank the 74 entrepreneurs and industry experts who will share with us how the Connected World is transforming their industries. It is great to see many friends and also welcome new acquaintances to the audience. For those who don’t know us, NGP Capital is a global, growth stage venture fund with $1B under management currently managing a $350M fund. We are thesis driven investors focused on investing in the Connected World. I will describe our point of view further later in the opening remarks. I would like to thank our co-sponsors for the conference: Nokia, Square1 Bank and Foley Lardner LLP. Our focus is on technology. Yet the skies above remind us that nature sometimes intervenes in more powerful ways. Let us pause for a moment before we get started to wish Godspeed to those that are fighting nearby fires and for friends and neighbors who have been effected by them … {pause}
- In 2017 – Softbank raised a $100B fund: 30x larger than any other venture fund at the time
- April 2018: Earth Now raised $1B seed round – largest first round ever
- June 2018: Ant Financial raised $14B at a $150B valuation, the highest for a private tech firm And so we are left to ponder: has the market run amok? Surely the markets are ebullient and the recent correction is a needed reality check. We may also ask, what fundamentals are driving the longest bull run in venture history?
- The peasant said, “All I desire is some rice to feed my family” and, using the chessboard as his guide, proposed to start with one grain of rice on the first square and double the grains of rice in each succeeding square. Impressed with the inventor’s apparent modesty, the emperor replied, “make it so.” The initial squares were quickly and easily filled …
- It was only as they went into the second half of the chess board that at least one man got in trouble The last square would contain 9 quintillion grains of rice – more than produced in the history of mankind … {pause} So what do rice paddies in India 1500 years ago have to do with technology today? Square 1: 1958 Square 31: 2018, 1.074B grains of rice Square 64: 9.233E+18 (9,233,000,000,000,000,000 or nine quintillion, two hundred and thirty-three quadrillion)
- The connection, of course, is Moore’s Law. Gordon Moore first postulated in 1965 the doubling of compute power every two years, a relationship that he initially thought would last 10 years yet has served us well for the past 60 years when the first integrated circuit was built. We have come a long way in that time: 250,000 IBM 700 Series wall units would be needed to equal the power of a smart watch today. Still, as we enter the halfway point on the chess board, our math is still plausible. Using Moore’s Law as a guide when I started in Silicon Valley 30 years ago, it was simple math to anticipate the smart watch today … {pause} But as we enter the second half of the chessboard, where we go from here is harder to fathom … Background notes: ENIAC: Vacuum-tube based, no internal memory IBM 700 series: First mainframe computer. Initially vacuum tube then switched to integrated circuit when invented in the late 50s Apollo 11 landing: Automated Guidance Computer (AGC) had 2048 words of RAM (16-bit) IBM 5155: One of the first portable computers. Came in a suitcase. 256KB RAM Nokia Communicator: Fun fact - Made cameo appearance in Terminator 3 and The Saint (Val Kilmer)
- Let’s start with what we now know: Technology innovation is now a global village The mobile gaming industry had its roots in Japan Texting started in India to avoid costly cell phone calls Mobile payments technology originated in Europe dockless bike sharing started in China Bridge rule: Venture investors in Silicon Valley used to apply the bridge rule: if an investment involved crossing a body of water, it was a bridge too far Today, at NGP Capital, we apply the two flight rule – anything within two flights is fair game
- With innovation happening anywhere & everywhere, the speed and magnitude of change is mind boggling. Cell phones reached 40% adoption in US 6x faster than telephones (64 years v. 10) Today, you can go to a manufacturer in Shenzhen, order a customized phone, tour the plant, and receive your personalized phone a half hour later as you leave the plant. Rest assured, the pace of change will only accelerate… {pause}
- At NGP Capital, we are excited about the potential for innovation in the second half of the chessboard NGP envisions a Connected World driven by the confluence of cloud, mobile, sensors, 5G technology and intelligence where (1) Everyone and Everything transmits a signal, (2) where data is Everywhere, (3) yielding insights All the Time
- NGP envisions the rise of Data First companies. For the past 10 years NGP has had much success investing in Mobile First companies with innovation derived from the rise of smart phones. We believe the iconic companies born in the next 10 years will be Data First companies: companies like Moovit that are collecting 4B public transit data points daily or Scandit, which has collected 4B scanning data points to improve its image recognition machine learning algorithms NGP envisions a Digital Transformation entering a fourth wave of innovation. IDC predicts global data to grow 10X in 10 years – or a doubling every 3 years – led by the proliferation of IOT sensors. The impact may be more profound that the rise of computers, Internet and mobile. A McKinsey study said the Internet impacts 15% of GDP; IOT will impact the other 85% Background notes: 1975 Microsoft 1994 Netscape 2007 iPhone mobile apps 2017 IoT 2025
- Data first companies are changing the way we work, learn, travel and play. Sensors are illuminating ‘dark data,’ helping us measure our eating, sleeping and exercise habits - and even our pets as never before. NGP has invested in Whistle, the top pet tracker in the US, and the top fitness apps in Germany and China. The CEO of eGym from Germany has joined us to speak on Digital Health this afternoon. Online education is providing equal access to quality, customized content taught at a self-paced process. NGP has had a front row seat on this advance through our investment in Babbel, the leading language learning app in Europe. Spot work is now more visible and readily available than ever before. NGP has invested in the top classifieds and job sites in India and China in Quikr, 58 and MyJob. Planning daily commutes has never been easier. Moovit is used by over 10M people daily in over 2000 cities globally to optimize their daily commutes.
- Data First companies are also transforming dozens of industry. NGP has focused on three sectors: Digital Health, Smart Mobility and the Enterprise. This coincides with our three streams at World of Connections. Many of the disrupters shown here will play a prominent role in our conference this year. Let me tell you about a couple: Lime is transforming how we travel within cities. Starting just last year, Lime has already surpassed a $100M revenue run rate. Deliveroo and Meican are transforming how meals are consumed in Europe and China. Meican in China has grown 100x since we invested just five years ago. Workfusion is using AI to automate the digital workforce. AI was not a buzzword when we invested 3 years ago and Workfusion has grown 10x during this time.
- Our theme today is Digital Transformation but this conference is about you, the Entrepreneur. We invest We are delighted with the experts assembled to address Digital Transformation … and it gives me great pleasure to introduce one of the longtime experts on industry disruption: Geoffrey Moore …