humans we are the latest and greatest
version of life form produced by
evolution what’s truly special about us
is that we can do things we have
abilities and capabilities that go well
beyond what evolution by natural
selection or DNA designed for us we can
fly we can cure our own diseases we’ve
even come up with machines that
essentially do most of our work we have
what is called technology technologies
what it’s enabling us to go beyond the
capabilities that nature provided for us
and do things that many other life-forms
are unable to to do but what is truly
unique about humans isn’t just the
technology it’s because we are one we
are this uniquely capable of taking that
technology and progressively improving
it over time this is a human activity we
refer to as innovation now
innovation has meant that we’ve started
out with very basic stone tools and over
time we’ve improved it to get to the
modern society that we live in today
we’re not the only ones coming up with
technology other intelligent beings come
up with technology this is birth
technology it’s a nest okay but it’s
been like that I mean we’ve had birds
for over 200 million years I mean humans
have only been around for a couple of
million years but humans have come up
with this bird’s nest
this is Beijing National Stadium 80,000
people capacity this is thousands of
years of innovation and improvement to
building technology and that is what has
led us to building these capabilities
that other beings other intelligent
beings have been unable to do and when
we’re talking about innovation
essentially we’ve observed that
innovation happens in waves and these
waves all largely have this shape this
form of an s-curve and well in a world
we talk about this s-curve law
and the s-curve is essentially we’re
looking at the dimensions of time and
performance so in reality what happens
is that all early versions of technology
start out you know with the limited
capabilities and start improving very
slowly in time and then there is an
inflection point where suddenly the
technology becomes exciting it improves
its rate of improvement over time
increases quite radically and it’s also
adoption in society takes up quite
dramatically all the way until you we
get to a phase where the technology
matures and at maturity those
improvements become marginal or
essentially they’re incremental in
nature and all of this until the next
cycle of innovation comes through to
push the boundaries of performance
further up quick example we’ve had
landline phones and the early mobile
phones were essentially large bricks
very limited capabilities they were
adopted by very few because they were
expensive they provided limited coverage
limited battery life and so we went on
from the late 80s to the mid 90s and
from then really this technology through
a mini act miniaturization and
improvement to battery life and
improvement in coverage of networks
really became ubiquitous and overall the
performance of that radically exceeded
what landline could offer and it became
a product that was massive massively
adopted by society and so forth and the
interesting thing is in those early
phases the technology that we’re looking
at seems almost hopeless because when
you look at it it’s not performing as
well as the existing technology for
example in mobility the early cars were
not as good at horses you know these
early versions of well you know we can
call vehicles were in the late 1800s and
early 1900s
we’re not like people couldn’t really
get their head around the fact that
these would ultimately someday replace
the horse and
fact I mean it was so incredible that
the and this is apparently you know a
statement from the president of Michigan
Savings Bank in 1903 advising his
customers not to invest in a young
startup called Ford Motor Company
because according to to his view based
on the early phase of that s-curve the
horse is here to stay but the automobile
is a novelty a fad okay
needless to say that the people that
invested became billionaires Ford
started off with the equivalent with
$28,000 at the time which was the
equivalent of a seven hundred thousand
dollar investment in today’s money and
as you all know the rest is history
when we talk about the s-curve the
s-curve is also the reason why many of
the things that today we take for
granted just only a few years ago
happened to feel like completely you
know crazy ideas that no one would ever
adopt I remember I started my career in
the early days of the internet and the
very first project I undertook was in
the e-commerce field and I obviously
what we were offering at the time in the
late 90s was a poor service we didn’t
offer a lot of choice internet was poor
not too many people have access to the
Internet the visualization the delivery
all sorts of issues and problems add to
that the fact that people really
couldn’t get their head around the fact
that you know you would buy things
without actually having to touch and
feel them and I remember vividly you
know people essentially challenging the
notion that this e-commerce thing that
could ever become mainstream in society
on the basis that you know people really
have the need to physically touch the
product in order to purchase it now we
all know how that ended up I mean
particularly when we’re looking at the
fashion sector I mean I you know lots of
people were saying particularly for
fashion items there will be no such
thing as ecommerce ever
okay now fashion today happens to be the
second largest category of e-commerce
worldwide and last year in the UK they
called to
17 the rear of the retail apocalypse and
over a dozen major bankruptcies 8,000
store closures predominantly in fashion
and apparel so you can you can see in a
cycle that led from the early days to
maturity you’ve gone from people being
completely skeptical I mean even
ordinary people about the use of a
particular technology to literally
taking it for for granted and not even
thinking about wanted up happening in
the past and these waves essentially are
continuous and the the notion that they
are the the the movement is the movement
that progresses our technology forward
is is a given when you’re looking at the
automotive for example the waves that
we’re looking at right now are in
self-driving now if I tell most of you
guys that look most of you in a few
years are gonna stop driving and owning
cars many will feel this to be an
outrageous statement but it’s as
outrageous as saying back in the early
1900s that you’re not going to be riding
horses and you’re not going to be owning
horses okay so these s-curves
are in just natural phenomenon these
s-curves they have real people behind
them okay I’m in the business of venture
capital and essentially one of the first
bets that we make is the existence of
these s-curves
we have to have a point of view we come
into this game very early you know
that’s very early stage where there’s
very limited information so we have to
have a point of view that in fact this
particular phenomenon will have an
uptake at certain point in time the
timing of our investments and the
duration that that flat line is going to
go will largely establish whether or not
we will succeed in these investments or
not but one of the other drivers are
actually critical factors provided the
the actual s-curve exist within the
timing that I mentioned are the
entrepreneurs now the entrepreneurs and
inventors and entrepreneurs or
innovators whoever you call them these
are the people that are actually
creating these s-curves and they’re
driving these eschars forward and the
quality of these intrapreneurs are
another important factor for the success
of us as investors and particularly of
driving the advancement of innovation
and technology in society now the
curious think about these intrapreneurs
as many of them are quite weird
individuals I mean if you look at him
majority of him are very young I mean
mostly we invest in people between 28
and 32 I would say in the overwhelming
number of cases including myself when I
started doing this way back they have no
experience in the industry they want to
disrupt none okay we recently invested
in a company of recent book winning
graduates these kids have 27 28 years
old and they’re getting into the
business of disrupting or coming up with
innovations in the buying and selling of
property residential properties okay and
it was fascinating that we had no
sensitivity on this thing but when we
would take him to let’s say more mature
investors they’d come up and say so well
how many years of experience these
people have in real estate let’s say why
is that even a question first obviously
zero these people you know that are
penniless they’ve never even bought a
house for themselves let alone for
others but we trust them to do this okay
and in fact if you look at myself when I
started out it was 28 years old got into
this whole business of Internet I had no
retail or commerce experience and
nevertheless were quite successful in
building a company in in in the
e-commerce space later on I started a
business in in software and procurement
I’d never sold enterprise software ever
in my life and I could barely spell
procurement to be honest but but if you
look at it I mean ii think i love about
this picture is that you know the
entrepreneurial journey is a journey to
complete unknown okay
these individuals are recklessly
rational okay for their pursuit because
first of all you’re talking about
something that’s beyond those mountains
and no one knows what’s beyond those
mountains and secondly the people that
are funding you we okay we’re barely
giving you enough money to get two miles
down this road I mean literally yeah I
mean the money that we give to company
venture capital in general gives you 12
to 18 months lifeline in your journey
and that’s the equivalent a few miles so
these people say hey we know there’s
nothing between here and there
we’re just gonna go we’ll see what
happens so fundamentally these are
irrational human beings and youth is I
think it’s a necessary ingredient for
having that level of reckless behavior
okay because you have nothing to be
responsible for and you can pursue crazy
and amazing dreams and not being from
the sector is also almost the criteria
because it allows you to actually
approach problems from radically
different angles now large organizations
they’re designed to do things
systematically deliver quality on large
scale and they are amazing places for
bringing incremental improvements on
products and services but they would
never undertake these irrational
journeys because they would put
thousands of jobs at risks they would
put their own livelihood at risk so
there are risk averse organizations and
plus because they want to actually
pursue something with quality and so
forth
the entire regimen of their business
model depends on following specific
routines now when you take an individual
and lock him up for 10 or 15 years in
that sort of mentality then they
struggle to come up with out-of-the-box
thinking or completely radical
approaches to a particular problem and
that’s why the people that are going to
disrupt the real estate build business
are not going to be people who have done
10 or 15 years of real estate they’re
going to be Bocconi grads who’ve never
done real estate ever in their life and
I’m gonna wrap up by making an analogy I
think you know I see entrepreneurs in
our modern society and in our modern
system or in our system going forward as
being as essential to our technological
evolution as mutants are to our
biological evolution all right we need
flaws in genetic replication to come up
with the weird things
that ultimately they start out looking
weird but because they are different
somehow they gain some magical
competitive advantage that the process
of natural selection somehow a few of
them turn into dominant designs that
overtake the previous generations of
life-forms and this is how life form
evolves and if you look at it technology
evolves in a very similar way by the way
this is a real thing
a Loris McCraw ruse it’s called or
better known this little dude is called
the the the punk turtle okay what’s
weird about him it’s not his face all
right now okay forget the green mohawk
and forget the horns coming from under
his cheeks all right forget those this
guy this little creature he can breathe
from his genitals this is no joke look
it up all right it’s this is how
phenomenal the process of evolution is
now in my business we look for the punk
turtles these are the people that we
look for and Punk Turtles in our society
are the ones that are critical to our
technological advancements and are those
few individuals among us that are going
to drive this wonderful journey forward
thank you very much [Applause]
version of life form produced by
evolution what’s truly special about us
is that we can do things we have
abilities and capabilities that go well
beyond what evolution by natural
selection or DNA designed for us we can
fly we can cure our own diseases we’ve
even come up with machines that
essentially do most of our work we have
what is called technology technologies
what it’s enabling us to go beyond the
capabilities that nature provided for us
and do things that many other life-forms
are unable to to do but what is truly
unique about humans isn’t just the
technology it’s because we are one we
are this uniquely capable of taking that
technology and progressively improving
it over time this is a human activity we
refer to as innovation now
innovation has meant that we’ve started
out with very basic stone tools and over
time we’ve improved it to get to the
modern society that we live in today
we’re not the only ones coming up with
technology other intelligent beings come
up with technology this is birth
technology it’s a nest okay but it’s
been like that I mean we’ve had birds
for over 200 million years I mean humans
have only been around for a couple of
million years but humans have come up
with this bird’s nest
this is Beijing National Stadium 80,000
people capacity this is thousands of
years of innovation and improvement to
building technology and that is what has
led us to building these capabilities
that other beings other intelligent
beings have been unable to do and when
we’re talking about innovation
essentially we’ve observed that
innovation happens in waves and these
waves all largely have this shape this
form of an s-curve and well in a world
we talk about this s-curve law
and the s-curve is essentially we’re
looking at the dimensions of time and
performance so in reality what happens
is that all early versions of technology
start out you know with the limited
capabilities and start improving very
slowly in time and then there is an
inflection point where suddenly the
technology becomes exciting it improves
its rate of improvement over time
increases quite radically and it’s also
adoption in society takes up quite
dramatically all the way until you we
get to a phase where the technology
matures and at maturity those
improvements become marginal or
essentially they’re incremental in
nature and all of this until the next
cycle of innovation comes through to
push the boundaries of performance
further up quick example we’ve had
landline phones and the early mobile
phones were essentially large bricks
very limited capabilities they were
adopted by very few because they were
expensive they provided limited coverage
limited battery life and so we went on
from the late 80s to the mid 90s and
from then really this technology through
a mini act miniaturization and
improvement to battery life and
improvement in coverage of networks
really became ubiquitous and overall the
performance of that radically exceeded
what landline could offer and it became
a product that was massive massively
adopted by society and so forth and the
interesting thing is in those early
phases the technology that we’re looking
at seems almost hopeless because when
you look at it it’s not performing as
well as the existing technology for
example in mobility the early cars were
not as good at horses you know these
early versions of well you know we can
call vehicles were in the late 1800s and
early 1900s
we’re not like people couldn’t really
get their head around the fact that
these would ultimately someday replace
the horse and
fact I mean it was so incredible that
the and this is apparently you know a
statement from the president of Michigan
Savings Bank in 1903 advising his
customers not to invest in a young
startup called Ford Motor Company
because according to to his view based
on the early phase of that s-curve the
horse is here to stay but the automobile
is a novelty a fad okay
needless to say that the people that
invested became billionaires Ford
started off with the equivalent with
$28,000 at the time which was the
equivalent of a seven hundred thousand
dollar investment in today’s money and
as you all know the rest is history
when we talk about the s-curve the
s-curve is also the reason why many of
the things that today we take for
granted just only a few years ago
happened to feel like completely you
know crazy ideas that no one would ever
adopt I remember I started my career in
the early days of the internet and the
very first project I undertook was in
the e-commerce field and I obviously
what we were offering at the time in the
late 90s was a poor service we didn’t
offer a lot of choice internet was poor
not too many people have access to the
Internet the visualization the delivery
all sorts of issues and problems add to
that the fact that people really
couldn’t get their head around the fact
that you know you would buy things
without actually having to touch and
feel them and I remember vividly you
know people essentially challenging the
notion that this e-commerce thing that
could ever become mainstream in society
on the basis that you know people really
have the need to physically touch the
product in order to purchase it now we
all know how that ended up I mean
particularly when we’re looking at the
fashion sector I mean I you know lots of
people were saying particularly for
fashion items there will be no such
thing as ecommerce ever
okay now fashion today happens to be the
second largest category of e-commerce
worldwide and last year in the UK they
called to
17 the rear of the retail apocalypse and
over a dozen major bankruptcies 8,000
store closures predominantly in fashion
and apparel so you can you can see in a
cycle that led from the early days to
maturity you’ve gone from people being
completely skeptical I mean even
ordinary people about the use of a
particular technology to literally
taking it for for granted and not even
thinking about wanted up happening in
the past and these waves essentially are
continuous and the the notion that they
are the the the movement is the movement
that progresses our technology forward
is is a given when you’re looking at the
automotive for example the waves that
we’re looking at right now are in
self-driving now if I tell most of you
guys that look most of you in a few
years are gonna stop driving and owning
cars many will feel this to be an
outrageous statement but it’s as
outrageous as saying back in the early
1900s that you’re not going to be riding
horses and you’re not going to be owning
horses okay so these s-curves
are in just natural phenomenon these
s-curves they have real people behind
them okay I’m in the business of venture
capital and essentially one of the first
bets that we make is the existence of
these s-curves
we have to have a point of view we come
into this game very early you know
that’s very early stage where there’s
very limited information so we have to
have a point of view that in fact this
particular phenomenon will have an
uptake at certain point in time the
timing of our investments and the
duration that that flat line is going to
go will largely establish whether or not
we will succeed in these investments or
not but one of the other drivers are
actually critical factors provided the
the actual s-curve exist within the
timing that I mentioned are the
entrepreneurs now the entrepreneurs and
inventors and entrepreneurs or
innovators whoever you call them these
are the people that are actually
creating these s-curves and they’re
driving these eschars forward and the
quality of these intrapreneurs are
another important factor for the success
of us as investors and particularly of
driving the advancement of innovation
and technology in society now the
curious think about these intrapreneurs
as many of them are quite weird
individuals I mean if you look at him
majority of him are very young I mean
mostly we invest in people between 28
and 32 I would say in the overwhelming
number of cases including myself when I
started doing this way back they have no
experience in the industry they want to
disrupt none okay we recently invested
in a company of recent book winning
graduates these kids have 27 28 years
old and they’re getting into the
business of disrupting or coming up with
innovations in the buying and selling of
property residential properties okay and
it was fascinating that we had no
sensitivity on this thing but when we
would take him to let’s say more mature
investors they’d come up and say so well
how many years of experience these
people have in real estate let’s say why
is that even a question first obviously
zero these people you know that are
penniless they’ve never even bought a
house for themselves let alone for
others but we trust them to do this okay
and in fact if you look at myself when I
started out it was 28 years old got into
this whole business of Internet I had no
retail or commerce experience and
nevertheless were quite successful in
building a company in in in the
e-commerce space later on I started a
business in in software and procurement
I’d never sold enterprise software ever
in my life and I could barely spell
procurement to be honest but but if you
look at it I mean ii think i love about
this picture is that you know the
entrepreneurial journey is a journey to
complete unknown okay
these individuals are recklessly
rational okay for their pursuit because
first of all you’re talking about
something that’s beyond those mountains
and no one knows what’s beyond those
mountains and secondly the people that
are funding you we okay we’re barely
giving you enough money to get two miles
down this road I mean literally yeah I
mean the money that we give to company
venture capital in general gives you 12
to 18 months lifeline in your journey
and that’s the equivalent a few miles so
these people say hey we know there’s
nothing between here and there
we’re just gonna go we’ll see what
happens so fundamentally these are
irrational human beings and youth is I
think it’s a necessary ingredient for
having that level of reckless behavior
okay because you have nothing to be
responsible for and you can pursue crazy
and amazing dreams and not being from
the sector is also almost the criteria
because it allows you to actually
approach problems from radically
different angles now large organizations
they’re designed to do things
systematically deliver quality on large
scale and they are amazing places for
bringing incremental improvements on
products and services but they would
never undertake these irrational
journeys because they would put
thousands of jobs at risks they would
put their own livelihood at risk so
there are risk averse organizations and
plus because they want to actually
pursue something with quality and so
forth
the entire regimen of their business
model depends on following specific
routines now when you take an individual
and lock him up for 10 or 15 years in
that sort of mentality then they
struggle to come up with out-of-the-box
thinking or completely radical
approaches to a particular problem and
that’s why the people that are going to
disrupt the real estate build business
are not going to be people who have done
10 or 15 years of real estate they’re
going to be Bocconi grads who’ve never
done real estate ever in their life and
I’m gonna wrap up by making an analogy I
think you know I see entrepreneurs in
our modern society and in our modern
system or in our system going forward as
being as essential to our technological
evolution as mutants are to our
biological evolution all right we need
flaws in genetic replication to come up
with the weird things
that ultimately they start out looking
weird but because they are different
somehow they gain some magical
competitive advantage that the process
of natural selection somehow a few of
them turn into dominant designs that
overtake the previous generations of
life-forms and this is how life form
evolves and if you look at it technology
evolves in a very similar way by the way
this is a real thing
a Loris McCraw ruse it’s called or
better known this little dude is called
the the the punk turtle okay what’s
weird about him it’s not his face all
right now okay forget the green mohawk
and forget the horns coming from under
his cheeks all right forget those this
guy this little creature he can breathe
from his genitals this is no joke look
it up all right it’s this is how
phenomenal the process of evolution is
now in my business we look for the punk
turtles these are the people that we
look for and Punk Turtles in our society
are the ones that are critical to our
technological advancements and are those
few individuals among us that are going
to drive this wonderful journey forward
thank you very much [Applause]
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