In my previous post, I wrote at length about our approach to hardware and how we are defining a new model to help companies navigate the challenges of physical product development. If you haven’t read it or Andy’s blog, a quick glance will help this post make more sense. Our website and our blogs talk a lot about hardware, but at the end of the day what does that mean? Why do we believe hardware is critical to the future of technology? And how does that inform our thinking on potential investments? Yes, software IS eating the world, but it can’t do so without eyes, arms, and a brain.
Many technologists and industry observers enjoy conjecturing what the next computing platform will be. As Chris Dixon suggests in a blog post, maybe it’s not a singular platform that drives computing forward, but instead we may see “multiple new eras” or a “Cambrian explosion” of new devices. Peter Barrett, one of our founders, perceives an "effervescence at the boundary of hardware and software unlike anything we have ever seen, and the evolutionary forces at that boundary are unprecedented."
At Playground, we don’t claim to know what the next computing platform will be. What we do know is that technology confined solely to the virtual world is severely constrained. The convergence of atoms and bits, the connectedness of the physical world is where creativity and opportunity will thrive. For simplicity, we call it Artificial Intelligence, but in practice it’s sensors (i.e. cameras), intelligence (i.e machine learning / computer vision), and actuators (i.e robots) that instrument and augment the physical world. In reality there is nothing “artificial” about it.
Oftentimes what will be required to succeed in building these products and companies will be tightly integrated hardware and software – all the way from the sensors and silicon to the application layer. This requires a new approach to product development where you have to manage multiple external stakeholders – contract manufacturers, silicon venders, component suppliers, industrial designers, etc., not just engineers with laptops and AWS. Because it’s possible and maybe even likely that the hardware becomes commoditized over time, the best companies aren’t building just products but systems. Hardware can be reversed engineered and copied, but systems cannot.
Many of our investments are companies building some combination of sensors, intelligence, and actuators in a fully integrated product and business model. But we may also invest in a company that’s solely at the intelligence level or pure software. While they may not need our industrial design expertise, it turns out the team knows a thing or two about building software platforms as well!
One thing we know for sure about new computing platforms is that they emerge in mysterious ways. It’s a fool’s errand to pick one company to define the next platform, as history shows it’s an unexpected new entrant who creates the category. That’s the beauty of having a portfolio. We can work alongside many different companies creating and defining categories in their own way. At the end of the day, we hope we are lucky enough to be a part of those companies that determine this new era.