Issue #1 - The Future of Manufacturing
To put it with the words of Reid Hoffman: “if you're not embarrassed by the first version of your product, you’ve launched too late” - so I’m glad you signed up for the newsletter even if the landing page of it looks like Industry 1.0.
Why am I doing this? I’m spending a lot of time looking at startups reshaping the manufacturing sector. If you want to, you can call it “Industry 4.0”. Merkel does it as well.
I read a lot and I’m glad to have a lot of discussions with entrepreneurs and in general with people who are working in this area. After a while, some people approached me and asked me if I can share what I’m reading and what I’m thinking - and here you go.
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I enjoyed reading
🔮 The Future of B2B Software is B2U: Coming from SaaS, the consumerization of enterprise software has become a big trend. I believe that there is a great opportunity to empower the workers on the shopfloor and within factories since many software solutions have focused on machines and processes in the past – not on the worker. Does B2U also work for industrial startups? To be seen.
🤖 One of the biggest challenges of the digitization and automation of jobs lies in the transformation of workers. According to this article, Amazon is doing a decent job of transforming its workers to find new roles while upgrading its warehouses with robots. Our Swedish friends are also seeing something good at the automation of jobs.
🏢 Publicly, things looked very good at GE Digital in the past years but behind the curtains, things are less rosy according to this article by Alex Moazed, CEO of Applico, a digital transformation advisory company. In his view, the company GE Digital became a consulting rather than a product company and had too little focus.
🖼️ Just yesterday, Aaron Small published a framework for assessing IIoT companies. I think this can also help entrepreneurs to better understand how (some) VCs are thinking about IIoT companies.
About industrial Startups and Companies
🎙️ In a recent interview, Natan Linder who founded the manufacturing app platform Tulip, highlights why manufacturing is “one of the last bastions of enterprise software.”
🤑 Fanuc - you never heard this name before? This is one of the biggest factory automation companies in Asia with a market cap north of $50bn and Bloomberg even goes one step further - explaining why the robots of the company are reshaping the world.
😓 Building hardware is incredibly hard. Otto, a startup working on a smart lock was on its path to success – but it had to suspend operations at the beginning of this year. Here is an insightful piece from the CEO about the development of the company and why it had to shut down.
🔢 Many startups are focusing on the analytical part of data that is collected in manufacturing processes, e.g. Sightmachine to name one of the bigger startups. However, getting “clean” data can be even harder since you have to deal with many data silos. I’m quite excited about Element Analytics which is trying to make use of the unorganized and inconsistent data. You can read more about the company in this WSJ article.
Additional thoughts on recent development
More dedicated Industry 4.0 funds
In recent weeks I heard more investors talking that they want to focus on “Industry 4.0” or even launched a new fund dedicated to that segment. Yes, to some extent this might make sense since it’s a huge market and it’s a great sign for entrepreneurs. However, from a VC perspective, I’m a bit concerned that too much capital is chasing too little VC-compatible companies in that segment.
Segment.io for industrial companies
Legacy systems and data silos are a big bottleneck to leverage manufacturing data. You might know Segment.io, a customer data platform. I was wondering if you have come across a company doing the same for manufacturing? Element Analytics as mentioned above is probably the closest one I know so far but I’m sure there must be more?
Thanks to everybody for supporting this newsletter and for sending me interesting links. Since this is the first issue, I would value any kind of feedback and input from your side.
Robin
P.S. I’m in SF next week for SaaStr. If you know any entrepreneurs working in the industrial sector, I would be very happy about any suggestions or intros.