Geo Week News

January 4, 2013

Should you listen to the VCs in 2013?

One thing I know about news like 3D Systems’ buy of Geomagic (and Rapdiform…), or the many other acquisitions that have rippled through the 3D data acquisition space in the last couple of years, is that it’s attracting the attention of folks with money to invest. When start-ups start cashing out, that smells like opportunity to people who know how to make money work. 

That should be a good thing for our market. Money breeds innovation and is likely to spur more technologists to consider start-ups that work with 3D data, hardware or software (but probably software), and that should lead to better products that will help lots of people do their jobs better – which will lead to more money flowing in… You get the idea. 

And where does that money come from? Often, the venture capitalists (the “VCs,” for those of you not big in the investment marketplace). There are other ways to raise capital, of course: “angel investors,” like friends and family who happen to have a few million extra bucks lying around; grants; even traditional loans. But you don’t see that much in the technology space, since a lot of these new ideas are risky and don’t make a lot of sense to conservative banker types who need to make sure they get their money back (especially in this lending environment). 

So, I thought this article on Venture Beat was pretty interesting and possibly instructive for how people should be approaching growth in our market this year. Essentially, VB got a bunch of VCs to talk about what they see as “hot” for 2013, and some of it relates to our little corner of the business universe.

Take Mike Maples, founding partner at Floodgate Capital, which got in early on Twitter:

In 2013, people will expect to be hyperconnected on the hyperweb: They will want to manage content on any device. We will see user experiences that are no longer assumed to be windows on a computer screen or a smart phone. Some of my favorite examples are Google’s self-driving car or Nest‘s thermostat, which learns the temperature you like and turns it down when you’re away. 

Sure, the self-driving car has some lidar going on, but think about the big picture here. Fundamentally, what you’re doing with laser scanning and photogrammetry is capturing the real world and making it digital; you’re allowing for interaction with things and places that may be otherwise completely out of reach for most people – rare objects and artifacts, remote places (or at least places that are expensive to travel to), and, yes, offshore platforms that are a pain to get to. How can the user experience of 3D data, the way that people interact with a point cloud or 3D information, be improved so that people can’t get enough of it? Or so that early adopters can quickly and easily convey the utility of the information to those who are a little more skeptical?

Think about what Ross Fubini, partner in Canaan Partners, is talking about when he’s talking about the potential in “big data”:

“Data has been a big deal and a big market for years — SQL, hello!. But ‘big data’ is a big deal because of the sheer volume of trackable data and because it’s cheaper than ever before to build an application to make that data valuable. By the end of the year, we will see some big winners emerge leading up to some splashy 2014 and 2015 IPOs.” 

No one can create more data faster than a guy with a laser scanner. So much data can be captured that the possibilities are really just starting to be explored (and what Bipul Sinha, investor at Lightspeed Venture Partners, says about storage getting sexier bodes well for managing and moving all that data), but it’s those “application[s]to make that data valuable” that are the crux of the situation. People want to interrogate their world more than ever before. 3D data allows them to do that in very new ways. How does that become a business?

Maybe in a way that’s new and different. Look at the way that LeapMotion is entering the market: By giving away their device to 10,000 developers and letting them create applications on their own before the device is even available to the public so that when it hits, there will already be a suite of apps that people can use to take advantage of the new gesture-control system. Should Faro’s app store have been launched two years BEFORE the Focus3D? Should Leica’s P20 have hit the market alongside 10 new custom-oriented software packages that targeted 10 specific verticals so that the P20’s advantages could immediately and obviously be capitalized on? Heck, should Leica just make Cyclone free and charge for the plug-ins and for access to the SDK? I’m making things up, but the distribution of developers, and the network of people looking to use their coding ability in new markets, is something 3D data acquisition needs to be taking advantage of more.

Heck, Google thinks indoor location is the next big thing, and what can contribute to that better than laser scanning and new products like the Zebedee/Viametris/TIMMS/Allpoint solutions? 

“Indoor location will be bigger than GPS, which only works outdoors. We spend 90 percent of our time indoors, whether it’s in shopping malls, offices, schools, restaurants, and so on, where GPS doesn’t work or is inaccurate. In 2013, you’ll use your smartphone to find the exact store aisle location for every item on your shopping list.

So says Don Dodge, developer advocate at Google. (You might want to check out Venture Beat’s round-up of indoor location companies, too.)

“With indoor location, you can find people, products, or services plotted exactly on a floor plan with walking directions to get there. You could receive coupons, advertisements, or free offers for products based on where you are in a store. Imagine playing indoor location games like capture the flag, tower defense, or other games based on real-life indoor locations. There are thousands of applications in many different market segments that will be built using accurate indoor positioning technology.”

Can you be a part of rapidly acquiring accurate indoor data and serving that back up to folks who’d like to navigate it? Seems like folks like Matterport, etc., could get in on that, no? What are the trade-offs between precision and speed, between density and usability?

Of course, Brian Singerman, partner at Founders Fund, has the most level-headed outlook (even if it’s solidly cliche):

We are always highly suspicious of trends. The best investments are often in companies and industries that others do not consider hot or trendy. Therefore, a theme for 2013 will be to not invest in trends, but rather long-lasting value. Trends come and go, but the best companies will be the ones that buck the trends and don’t look like all the others, companies that don’t appear to have much competition. 

Talk about opportunity! I can’t tell you how many times has someone asked me, “who’s their competition?” about a company in our space and I’ve sat there and thought about it and then said, “well, no one really does EXACTLY what they do.” Laser scanning and high-end photogrammetry are right there on the cutting edge, creating new possibilities to deliver things that people will value once they find out about them.

How are you spreading the word and who might be able to help you along the way? 

Actually, though, I’m reminded about a question I get from bands all the time because of my music writing: “How do we get an agent?” My answer? “Just be awesome, and the agent will find you.”

If you’re looking for funding, the answer is probably pretty similar: “Just be awesome.”

That shouldn’t be so hard.

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