What’s ripe for change?

Technology has touched almost everything but some verticals have had more change than others.  As I think about my investment thesis for 2017 there are a few areas that interest me because I believe they are ripe for change.

I am still very interested in the cannabis space.  The consumer products is what I find the most interesting and being based in California is also a bonus.  The state is big enough to build a very large business without every having to go into other states but it will be easy to move up the coast to Oregon and Washington.  The biggest issue here will be capital.  Most institutional investors will not be investing in this area because of their LPs.  Eventually this will change but right now the majority of investors are people like me.

I have been a fan of the real estate sector for years and it shows in my portfolio.  There is a lot more opportunity in this space particularly when it comes to building.  There will be changes in the next decade in urban living from rethinking space from new materials to new innovations around innovating old buildings.  It is an area that I spend a lot of time in and as much as the past decade has changed the foundation for architects, real estate owners and contractors with software and products there is much more to do here.

The other area is the art.  The art world has been slow to change but the consumers have changed quickly.  New collectors are across the globe and how they operate and collect is a bit different than the traditional way that galleries and auction houses operate.  This particular industry is like turning around a cruise ship but eventually it will get there with smart founders who get the space and connect with the forward thinkers in this vertical.

The farming industry, when it comes to waste, is just starting to hit strides.  I have seen a lot of start-ups in this arena the past year and expect to see more.

Of course there will be outliers but my thesis has always been geared toward areas that are just starting to change.  I invested in healthcare and education years ago and certainly there is much more to do there but it is an area that has become so saturated with new ideas and change that I no longer feel comfortable jumping into it.  The investors that spend the majority of their time in those spaces are much more equipped than I am to invest in that arena.  As a generalist I have to look into areas that are still underserved.

As always, looking forward to what’s next.

Comments (Archived):

  1. William Mougayar

    But I think that we are still scratching the surface of what tech can do for healthcare, especially as more smart devices connect to our bodies to extract data non-invasively.In particular, I’m interested in solving the integration of the personal medical record, but it’s a very complicated thing.

    1. Gotham Gal

      I agree. We are barely scratching the surface on healthcare but it’s an arena I do not want to play in

    2. Donna Brewington White

      Even healthcare delivery, making it more accessible for the way we now live. For instance, Heal, using technology to bring doctors physically into the home (or office, hotel room, etc.).

      1. William Mougayar

        yes, to Home care. The need will increase with the aging population.

  2. pointsnfigures

    Was talking to a hedge fund manager. If they started trading Bitcoin and lost a bunch of money, their LPs would scream.

  3. kirklove

    Art has felt like one that’s “coming” for a long time now and yet no one has been able to crack that nut despite LOTS of attempts. Who’s out front in your opinion at the moment? Or do you see a new entrant to the space with a model that’s not just a “digital” gallery / auction house?

    1. Gotham Gal

      I just invested in Tagsmart that I believe can change the game. Art needs to be authenticated in order for purchase to be made from anywhere.Also the secondary market purchases is a big part of that

      1. JLM

        .Tagsmart is a very good beginning on the issue of establishing the provenance of a piece of art. The big question is what happens if they get it wrong? Can they be asked to undertake any financial expense because of their mistake?A painter I love is Eduardo Cortes who painted Paris street scenes. Thirty years ago one could buy them for less than $5K. Now they are often sold for up to $50K. He had a student, Blanchard, who painted the same street scenes and who finished off some of Cortes’s paintings.You can find tons of Cortes’ and Blanchard’s in estate sales but one can’t be certain they are genuine. As you can imagine art students have been assigned to paint Paris street scenes for centuries.The joke about Cortes paintings is he painted 2,000 Paris street scenes and 6,000 of them are in Texas.The big opportunity will be to convert the simple issue of provenance to the equivalent of title insurance.Title insurance is modestly expensive but it gets paid by the seller — in effect insuring the provenance (title) of the artwork. It is also a recurring expense and could create a very meaningful cash flow with no more work than “inspecting” the provenance of a painting.This is also a good example of something that could be an app for the blockchain.JLMwww.themusingsofthebigredca…

          1. JLM

            .A lot of these approaches are outgrowths of physical/data combinations — such as putting chips in freight containers, putting chips in cattle, putting chips in cars, registering warranties/activation codes in digital equipment.Blockchain simply provides a different type of database while taking some of the record keeping burden from one of the parties, usually the customer. In new applications, it has a much better chance of being embraced as there is no incumbent to unseat.The music app is an excellent idea but it will take a lot of promotion and acceptance to make it actually work.Thanks for those insights. Very ……………………………………. insightful.JLMwww.themusingofthebigredcar…

          2. Twain Twain

            That’s part of my issue with Blockchain: it’s an outgrowth of existing physical/data combos with a different type of database (and not different enough, imo).Greenfield builds with no incumbents and no “let’s do Google/FB/Amazon/techco X for Blockchain” is much harder but, maybe, more worthwhile.

  4. Twain Twain

    Women and AI because the algorithms needs us to design+train them or they will be all sorts of biased, incapable of understanding natural language and affect female employment prospects:* http://thenextweb.com/insid…* https://www.technologyrevie…* https://www.technologyrevie…AND including female design+code in the AI is important in adtech because, according to Sheryl Sandberg, over 90% of women say advertisers don’t understand us:* http://www.adweek.com/news/

    1. Donna Brewington White

      Diversity in this case ties into actual product efficacy. Of course this is true of many categories (CPG figured this out decades ago) but here is a particularly strong test case for tech.

      1. Twain Twain

        Exactly.And here’s another thing. Our intelligence benefits from the male Y code from our fathers, the female X code from our mothers and the cultural context cultivated by both of them and the people we meet from the moment we’re in the womb.Meanwhile, the AI baby has only been designed and coded with male logic code. So, at the most, it can only be 50% intelligent.And the other 50% is all about language understanding — which existing AI can’t do (don’t be fooled by Alexa, SIRI, chatbots etc) because if it could …There’d be a whole lot less fake news, trolls, click bait and economic risks+unknowns.AND there’d be much better ads because the systems would understand us.

  5. Twain Twain

    For architects, there are one or two at the frontiers who are starting to experiment with Deep Learning AI & robotics:* http://museumofnonvisiblear

  6. daryn

    Pot, Art, and Real Estate; let me know when you need a tech partner (or beta tester!) :)Food/Foodtech is notably missing from your list this year, still an area of interest, or overly saturated?Also, just saw this article about the size of the legal marijuana market last year. Such huge potential there.http://www.geekwire.com/201

    1. Gotham Gal

      CPG is so hard. Food tech is interesting but def saturated

      1. awaldstein

        I like the consumerization of robotics a bit as it touches local and food.My interests going into the year are here:http://arnoldwaldstein.com/