Startups I Want to Fund

I hear a lot of startup pitches. I’ve been angel investing now for ~4 years, and I’m an LP and advisor to a number of VC funds. I also heard a lot of pitches through my work at Firebase (the company I co-founded), as many of its customers are startups.

I like being pitched – partly because I enjoy meeting smart people, and partly because it’s a chance to pay-it-forward to the next cohort of entrepreneurs, but largely because it’s a chance to be a part of the solution to some of the world’s biggest problems.

My favorite pitches solve a problem I’m already concerned about. These pitches present me with a novel approach I had not considered, and they back up their approach with some promising initial data and a high-powered team that’s ready to take this all the way to the finish line. I walk away from these pitches excited, hopeful, and with a new perspective on the problem. I find myself thinking “what can I do to make sure they are successful?” These are the startups I invest in, and they’re the ones I share with my investor friends.

The pitches I’m most excited to hear are the ones solving the big, scary problems that most people don’t want to touch. Climate change? Here’s a credible path to solving it. Infectious diseases? Here’s how home testing can make a difference. Net neutrality? Here’s how a new model for ISPs can change things. Electricity access for the poor? Here’s how 1.3 billion more people can get it.

So, without further ado, here are some startup pitches I’m just itching to hear!

Bigger, bolder developer platforms

It should come as a surprise to no one that I’m an active investor in the developer products space (some of my investments here include Imgix, Iterative.ai, Sentenai, and EnvKey). Here are several ecosystem-wide problems that I think about a lot, and for which I’m eager to hear a good solution.

  • An open app runtime – Proprietary mobile app runtimes are winning, as they provide a better user experience, better performance, and greater security than the open web. Proprietary app stores are winning too – and in the process, they are distorting markets and censoring apps. The open web is in full retreat, but the war has not been lost. There are still far more web developers than native developers, and they’re just waiting for a platform that can really go toe-to-toe with native apps. Could a browser be built that provides an actually better app experience and performance than native apps? What legacy could we throw out to make this happen? URLs? The DOM? Even HTML?
  • A new developer-oriented touchscreen OS – The number of touchscreens in our daily lives is exploding. Android and iOS are optimized for consumer tablets and phones, but what if you’re a developer building a non-consumer product? What if you want to build a cash register, or a digital menu, or an in-flight entertainment solution, or a vending machine?
  • Federated databases – The most common use case I hear for “the blockchain” is the ability to have a database “in the cloud” that multiple parties can share without needing to trust a single, central authority to run it. We don’t need blockchain for this! Tools like git have already partially solved this problem for source code. Could a similar solution be built for structured data? Could cryptography provide solutions for access control and auditing that provide protections against malicious actors?
  • Re-inventing the package manager – existing package managers are security and compliance nightmares. What if a package manager could give me confidence that the software I’m relying on is built by trustworthy people, has dependencies I understand, has a license I understand, and will continue to be maintained going forward? Or, what if a package manager could help developers of open source software monetize their work?

Social Silo-busters

Facebook started as a way to share updates with your friends. Instagram and Snapchat started as ways to share photos. YouTube began as a way to share videos. Twitter began as a way to share short thoughts.

Each of these services _started _as a way to help the producers of content get their message out to the world. They thrived and grew rapidly. But then they changed… the advertising business model created an incentive not just to help people produce and share content, but to keep people in the app as long as possible. They morphed into carefully engineered machines for sucking up as much of your time and attention as possible. They encouraged narcissism, clickbait, partisan politics, “fake news”, creepy videos, and other negatives. They stopped being healthy, fun ways to connect with your loved ones.

Then came privacy issues. Advertising requires personal data, so these companies began mining our personal communications for ad targeting. This led to adverse product decisions – weakening of encryption, overly-liberal privacy defaults, merging of personal data between seemingly independent sources, “creepy” behavior, and so on.

People are becoming aware of these problems like never before, and they’re beginning to demand better solutions. Below are some areas that I would be excited to invest in:

  • Social utilities – What if a social app was optimized for the creation experience rather than the consumption experience? What if the goal was to minimize time-in-app rather than maximize it? What social products would people pay for? (note: Google Photos is the closest I’ve seen to this so far)
  • Messaging and Email – in the beginning, we had email. And it was federated, and open, and it was good. Then came spam, and mobile, and tons of images and video, and new security threats. With these new requirements, we still had email, but now we also had SMS, and Whatsapp, and iMessage, and Messenger, and WeChat, and Skype, and Twitter DMs, and Hangouts, and Slack. And, it is unusable. Is it possible to return to a single, federated protocol that supports modern requirements? Could email be upgraded to make this possible, or could a new open, federated service be invented? Could we break up the messaging silos and return to a single unified inbox?
  • A social calendar – Google seems to be winning the calendar fight without really trying. Their basic UI and functionality hasn’t changed in years. Why can’t my calendar better help me manage my day? Why can’t it make it easier for me to spend time with friends and family? Why can’t I more easily see the calendars of businesses and events nearby? The existence of Doodle, Stanza.co, and other products built around the calendar to plug its feature gaps tells me this space is ripe for a new approach.

Capital-heavy Industries

Capital-lite startups have reigned for the last decade. AirBnB, Uber, and Instacart have been poster-children of this movement. “Let someone else own the assets,” they said. “We’ll just bring the software”.

There were some big successes here, to be sure, but I think we’re now starting to see that there are limits to innovation when all you have is software. More recently, we’ve started to see what can be done when software is combined with capital assets: Bird and LimeBike are buying huge numbers of scooters, SpaceX, Rocket Lab, and others are building new launch vehicles, Joby Aviation is building new airplanes, and WeWork is one of the world’s biggest landlords. Public tech companies are even better examples of this: Tesla is investing billions in batteries and manufacturing, Amazon is investment billions in distribution centers, and Google, Microsoft, and Amazon are investing $10’s of billions on data centers for their cloud products.

I’m very bullish on a capital-heavy, asset-full future for startups. I believe this combination will be needed to tackle our most pressing problems: energy, infrastructure, transportation, and so on. Some capital-heavy investments I’ve made already include Charm, B8ta, Aurrion, and Sigora. I remain very excited about the space, and below I’ve listed some specific areas I’d be excited to invest in.

  • Waste management – how can technology transform this sector? For example, could AI be used to sort recyclables and other valuables efficiently out of trash? Why can’t I manage waste pickup from an app? What might a re-invented garbage truck look like?
  • Next-gen ISPs – Fixed wireless radios, cheap satellites, LoRa, and mesh networking have the potential to make existing wired ISPs obsolete, as well as to bring internet access to billions in the developing world, and trillions of IoT devices.
  • Utility-scale batteries – energy storage is critical to a clean energy future, but today’s batteries are too expensive. If size, weight, and mobility constraints are removed, could battery costs per KWh be reduced 90%? 99%? Many people are already working on flow batteries and other technologies in this space, but I believe much more investment is needed here.
  • Electric charging stations – Electric charging is less dangerous, less toxic, and more space efficient than pumping gas, meaning it’s more practical to place it next to shopping, food, and entertainment. In addition, charging a car takes longer than filling a gas tank. Could the “gas stations” of the future be exciting destinations rather than eyesores?
  • Air conditioning – As more people in hot climates enter the middle class, and as climate change accelerates, the demand for air conditioning will explode. What innovation is possible here?
  • Alternative energy generation – Ocean thermal? Fusion? Thorium? Biofuels? Fuel cells? Bring me your crazy.
  • Experiential retail – many traditional retailers are dying at the same time that B8ta, Apple, Amazon, and Warby Parker are growing rapidly. People will always like to shop, but they’ll look to stores for experiences and product discovery, rather than as just a place to buy things. What new businesses will emerge from this shift?
  • New aircraft for regional transit – Aircraft have historically been used almost exclusively for long-range transportation, but could cheaper, denser batteries and smarter AI make short-range, regional air travel practical? How could these new aircraft change cities, especially in emerging markets? Many people are already working on this space, including Joby Aviation, Kitty Hawk, Lilium, and others, but I believe much more investment is warranted here, given the size of the opportunity.
  • Receiver-centric package delivery – why do we still mail packages to an address rather than to a person? When I shop online, why are my delivery options limited by what the retailer chooses to support? Why can’t I see a list of all packages en-route to me from a single app and re-route them to a different address with one button click? If I’m on vacation, why can’t I have my packages held and delivered on a future date, or placed in a nearby locker until I return?
  • Space – what opportunities will cheap commercial rocket launches open up?

Sleeper Markets

Despite all of the recent “disruption” from Silicon Valley, there are still many huge industries that have been left largely untouched. Many of these industries look boring from the outside, or appear to have intractable problems that software can’t solve. When a startup does manage to crack one of these markets, though, they find themselves with a huge market and no competition in site.

Investments I’ve made in these “sleeper” markets include OpenLattice, Fairy, and Embark. Here are some additional startups I’d like to fund:

  • New staffing agencies – companies like Adecco and Manpower take a huge cut of workers’ pay, and the industry hasn’t fundamentally changed in years. Could a new staffing agency use software to provide higher quality staffing to companies and better pay and services to workers?
  • New insurance companies – renters insurance, title insurance, business insurance, etc have yet to enter the 21st century.
  • New media companies – BuzzFeed, Vox, and Huffington Post have built successful online-first media businesses. What does the internet-native version of the WSJ or The Economist look like?
  • Online zoo – Animals are more popular than ever. 700 million people visit a zoo each year. Online, videos of animals are among the most popular. Meanwhile, climate change and habitat destruction are threatening our world’s wildlife, and many endangered animals are at risk because local communities lack the funds to effectively protect them. Could an online zoo address a huge underserved market while simultaneously help to save wildlife? Could high speed internet and VR finally make this a really good experience?

How I Invest

If you’re working in one of these areas, feel free to reach out to me: startupandrew (at) gmail dot com. I typically like to invest early in pre-seed or seed (though I’ve invested all the way up through Series B in the past). A normal first check from me ranges from $50k to $250k.

Besides providing just money, as an investor I can be especially helpful advising on engineering plans, team-building, and overall business strategy. I also can provide introductions to other investors, and in some cases, help with hiring and business development.

If you’re a founder who is just starting out, and you’re not yet looking for investment, feel free to borrow some ideas from this list. And, don’t be shy about reaching out as well. I’d be interested in hearing about your plans, and I may be able to provide more insight into the space you’re tackling too.

Thanks to Max Henderson, James Tamplin, Peter Reinhardt, and Timothy Lee for reviewing drafts of this post.

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