Disruptive Technology Innovations
Hi, ✋
I always felt like there was a nice ring to the word “disruptive”!! In all my short 26 years old of experience, I always felt a special inclination towards the underdogs, mainly in sports but also in other subjects like in school.
Actually, my mom suffered a little bit with this behaviour, because I only felt like studying or applying myself to something when I really felt that there wasn’t much room to escape.
There is some magic in overachieving and surprising forecasts, making everyone that bet against you or your believes wrong (“told ya!!!”). 😜
And I always felt that “Disruptive Technology Innovations” were like the underdogs in the economy, the ones that usually are born from the real customer’s needs and difficulties and that look to improve their situation and change the current status quo. 🤘
The ones that fight the incumbents regime and inefficiencies of the market. 💪
Like the example that Simon Sinek gave on is famous TedTalk (here) about an inspiring and motivational mission companies’ statement.
"Everything we do, we believe in challenging the status quo, we believe, in thinking differently. The way we challenge the status quo is by making our products beautiful design, simple to use, and user friendly... we just happen to make great computers. Wanna buy one?"
On that trend, nowadays you may have seen a lot of Cathie Wood (here) and her ETF — Ark Invest (here), because of their solid investment in Tesla that now it’s paying a lottt (here). 🤑
If you don’t like to read, here is a good video on who she is and what she believes — SU Global Summit 2019 | Investing in Disruptive Innovation:
<a href="https://medium.com/media/31a6db3c722f4783400851f2168428de/href">https://medium.com/media/31a6db3c722f4783400851f2168428de/href</a>
In resume, she believes that “innovation is key to growth” but that the financial markets have lost the plot, due to recent bubbles and market busts that have generated tremendous risk aversion and fear. This has manifested in portfolios going passive, in a movement towards passive and index based investing.
Also, Cathie Wood believes that this new trend of investing based on benchmarked is very backward looking (it’s based on passive historical data). 👴 👵
In the sense of it, innovation it’s about the future; and this gap between current investment philosophy and innovation has developed a void in the public asset management world and public equity market.
In their website you can better understand their vision (here):
"Today, we identify more innovation platforms than ever before. Over time, innovation should displace industry incumbents, increase efficiencies, and gain majority market share. It is up to investors to understand the opportunities and invest at the pace of innovation."
One disruptive thought that Cathie Wood underlines on her presentation it’s that they disagree with current sector classifications, they consider that tech its blurring the lines between and among sectors. Furthermore, they think that a number of innovative platforms that are evolving right now are converging. 🤔👏
What are the new disruptive techs? Why now?
The goal and the most challenging part it’s the “when”. When is it the prime time?
It’s not that difficult through some research ending up with a couple of “Disruptive Technology Innovations” that most likely are going to change the market and the way that people live, identifying the “what”.
On the “what” subject it’s quite good to listen to the guru Gary Vaynerchuk on his impressions on consumer behaviour shifts (here).
However, the “when” it’s the key factor at the time to invest and look for compelling opportunities.
The logic they use behind the “when” is:
"Investment process recognizes that true disruptive innovation causes rapid, cost declines and demand growth, cuts across sectors and geographies and spawns further innovation, stimulating growth over extended tine horizons." by ARK INVEST
They sustain this argument on the pioneer Theodore Wright’ Law (here), and his example in the airplane industry:
"For every cumulative doubling in units produce cost decline at a consistent rate." by Wright’s Law 1936
And where they foresee the future “what”, are the following platforms:
DNA Sequencing (here);
Blockchain (here);
Artificial Intelligence (here);
Robotics — collaborative robotics (here);
Energy Storage (here);
On this 5 major topics for sure you have listen some podcast or watch some YouTube video (maybe TV? 😝) warning for their future impact and how they are going to restructure our lives.
Happily ever after?
Please, do not take me too seriously because I just write for fun and I do not have any valid investment background.
I just love to see underdogs coming to live and change the rules. The world and Human Kind / Tech Developments, on a very paradoxical and funny way, sometimes move too fast for us to even notice them.
So, sleep with one eye wide open because you don’t want to be the last guy buying horses before seeing the streets filled with cars. 🙈
IMPORTANT: most of the images I use are from Muzli, and are used without any monetization purpose.