1Mby1M Virtual Accelerator Investor Forum: With Nick Adams of Differential Ventures (Part 4)

Sramana Mitra: I’ve been in this industry for a long time, and I’ve seen a few cycles. When we see discontinuities, every VC firm goes through a process of considering that discontinuity and developing a thesis around what kinds of companies should be doing well in this environment.

We just discussed one of your companies that is a perfect example. Do you have a broader thesis on the kinds of companies you’re looking for? Our community is full of entrepreneurs.

Nick Adams: Sort of. I’m hoping in 10 years we can do this again and I’m going to tell you that I’m the most brilliant VC on earth and I planned all this perfectly. The truth of the matter is we closed fund one on February 29th.

Our last two investments that came weeks before this crisis hit is Knockri and a company out of Israel called Cyolo. Cyolo is a one or two-click way to access the tools and applications that you need at the enterprise level without going all the way into the network.

It’s a simpler and more secure version of VPN. These guys have been remarkably counter cyclical because everybody is struggling to get people online.

Times like these tend to also breed other cyber attacks and hacks. Getting people online safely and securely is still very interesting for us. A lot of these fundamental core platforms are going to really be adopted in places like government, financial services, and the healthcare system. It’s necessary now. For the first time, we’ll get over the hump.

For the developing world, I’m not sure if I can invest in this space. In the energy world, I would say hardening and modernizing infrastructure. I’ve spent some time in India. India has amazing opportunities to leapfrog the rest of the world. 

Sramana Mitra: One of the areas that I think is going to be a big area after this is industrial AI and machine learning as the supply chains try to become more resilient and self-sufficient.

A lot of the factories that supply the US supply chain are going to try to come on shore. Those are not going to be human-powered factories; they’re going to be largely automated factories. There’s got to be a huge boom on industrial automation. 

Nick Adams: I agree with you. Barring much change at the political level, we’re prone to go into a more isolationist type of future, which would bring a lot of manufacturing back into the US. I still see globalization having a chance and places like China undercutting their own prices to make sure they retain their market share.

Either way, technology is going to be the leader behind it. As much as we invest in machine learning and AI, there are some social things that scare me around the readiness of this technology in replacing a lot of jobs that may not come back.

In addition to the health concerns, there’s also significant tax benefits for US corporations since late 2017. It’s promoting more technology. As a human being, how can we retrain people and find new homes for them in the workplace?

Sramana Mitra: There’s a huge question mark around the 30 million people today. Globally, it’s a much bigger number. What percentage of this is going to come back or become the victims of this accelerated automation trend, which was already in full swing. That part really is very worrisome and cumbersome.

Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Nick Adams of Differential Ventures
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