In scouring the startup universe for the companies and technologies that can reshape human society and create entirely new industries, one has to play the role of a prospective Venture Capitalist, yet not be constrained by the need for a financial exit 3-6 years hence.
Therefore, I have assembled a list of nine small companies, each with technologies that have the potential to create trillion-dollar economic disruptions by 2020, disruptions that most people have scarcely begun to imagine today. Note that the emphasis is on the technologies rather than the companies themselves, as a startup requires much more than a revolutionary technology in order to prosper. Management skills, team synergy, and execution efficiency are all equally important. I predict that out of this list of nine companies, perhaps one or two will become titans, while the others will be acquired by larger companies for modest sums, enabling the technology to reach the market through the acquiring company.
1) NanoSolar : NanoSolar produces low-cost solar cells that are manufactured by a process analogous to 'printing'. The company's technology was selected by Popular Mechanics as the 'Innovation of the Year' for 2007, and Nanosolar's solar cells are significantly ahead of the Solar Energy Cost Curve. The flexible, thin nature of Nanosolar's cells may enable them to be quickly incorporated onto the surfaces of many types of commercial buildings. Nanosolar's first shipments have already occurred, and if we see several large deployments in the near future, this might just be the company that finally makes solar energy a mass-adopted consumer technology. Nanosolar itself calls this the 'third wave' of solar power technology.
2) Tesla Motors : I wrote about Tesla Motors in late 2006. Tesla produces fully electric cars that can consume as little as 1 cent of electricity per mile. They are about to deliver the first few hundred units of the $98,000 Tesla Roadster to customers, and while the Roadster is not a car that can be marketed to average consumers, Tesla intends to release a 4-door $50,000 sedan named 'WhiteStar' in 2010, and a $30,000 sedan by 2013. The press coverage devoted to Tesla Motors has been impressive, but until the WhiteStar sedan successfully sells at least 10,000 units, Tesla will not have silenced critics who say the technology cannot be brought down to mass-market costs.
3) Aptera Motors : When I first wrote about Tesla Motors, it was before I had heard about Aptera Motors. While Tesla is aiming to produce a $30,000 sedan for 2013, Aptera already has an all-electric car due for late 2008 that is priced at just $27,000, while delivering the equivalent of between 200 and 330 mpg. The fact that the vehicle has just three wheels may reduce mainstream appeal to some degree, but the futuristic appearance of the car will attract others. Aptera Motors is a top candidate for winning the Automotive X-Prize in 2010.
The simultaneous use of Nanosolar's solar panels with the all-electric cars from Tesla and Aptera may enable automotive driving to be powered by solar generated electricity for the average single-family household. The combination of these two technologies would be the 'killer ap' of getting off of oil and onto fully renewable energy for cars.
Related : Why I Want Oil to Hit $120/Barrel.
4) 23andMe : This company gets some press due to the fact that co-founder Anne Wojcicki is married to Sergey Brin, even as Google has poured $3.9M into 23andMe. Aside from this, what 23andMe offers is an individual's personal genome for just $1000. What a personal genome provides is a profile of which health conditions the customer is more or less susceptible to, and thus enables the customer to provide this information to his physician, and make the preventive lifestyle adjustments well in advance. Proactive consumers will be able to extend their lifespans by systematically reducing their risks of ailments they are genetically predisposed to. As the service is a function of computational power, the price of a personal genome will, of course, drop, and might become an integral part of the average person's medical records, as well as an expense that insurance covers.
5) Desktop Factory : In 2008, Desktop Factory will begin to sell a $5000 device that functions as a 3-D printer, printing solid objects one layer at a time. A user can scan almost any object (including a hand, foot, or head) and reproduce a miniature model of it (up to 5 X 5 X 5 inches). The material used by the 3-D printer costs about $1 per cubic inch.
The $5000 printer is a successor to similar $100,000 devices used in mechanical engineering and manufacturing firms. Due to the Impact of Computing, consumer-targeted devices costing under $1000 will be available no later than 2014. I envision an ecosystem where people invent their own objects (statuettes, toys, tools, etc.) and share the scanned templates of these objects on social networking sites like MySpace and Facebook. People can thus 'share' actual objects over the Internet, through printing a downloaded template. The cost of the printing material will drop over time as well. A lot of fun is to be had, and expect an impressive array of brilliant ideas to come from people below the age of 16.
6) Zazzle : Welcome to the age of the instapreneur. Zazzle enables anyone to design their own consumer commodities like T-shirts, mugs, calendars, bumper stickers, etc. on demand. If you have an idea, you can produce it on Zazzle with no start-up costs, and no inventory risks. You profit even from the very first unit you sell, with no worries about breakeven thresholds. You can produce an infinite number of products, limited only by your imagination. At this point, those of you reading this are probably in the midst of an avalanche of ideas of products you would like to produce.
While the bulk of Zazzle users today are would merely be vanity users who manage to sell under ten units of their creations, this new paradigm of low-cost customization will inevitably creep up to major industrial supply chains. Even more interesting, think about #5 on this list, Desktop Factory, combining with Zazzle's application, into an amazing transformation of the very economics of manufacturing and mass-production.
7) A123 Systems : Read here about how battery technology is finally set to advance after decades of stagnation. A123 Systems is at the forefront of these advances, and has already received over $148 Million in private funding, as well as an article from the prestigious MIT Technology Review. A123 is a supplier for GM's upcoming Volt, and has already has begun to sell a module to convert a Toyota Prius into a plug-in hybrid. For choices beyond those offered by the #2 and #3 companies on this list, A123 Systems is poised to enable the creation of many new electric or plug-in hybrid vehicles, greatly increasing the the choices available to consumers seeking the equivalent of more than 50 mpg. A123 may just become the Intel of batteries. Combine A123's batteries with Nanosolar's cells, and the possibilities become even more interesting.
8) Luxim : Brightness of light is measured in Lumens, not Watts, which is a measure of power consumption. Consumers are learning that CFL and LED bulbs offer the same Lumens with just a fifth or a tenth of the Watts consumed by a traditional incandescent bulb, and billions of tons of coal are already being saved by the adoption of CFLs and LEDs. Luxim, however, aims to take this even further. Luxim makes tiny bulbs that deliver 8 times as many Lumens per Watt as incandescent bulbs. The bulbs are too expensive for home use, but are already going into projection TVs. With $61 Million in funding to date, Luxim's main hurdle will be to reduce the cost of their products enough to penetrate the vast home and office lighting market, which consumes tens of billions of bulbs each year.
9) Ugobe : Ugobe sells a robotic dinosaur toy known as the Pleo. A mere toy, especially a $350 toy, would not normally be on a list of technologies that promise to crease the fabric of human society. However, a closer look at the Pleo reveals many impressive increments in the march to make inexpensive robots more lifelike. The skin of the Pleo covers the joints, the Pleo has more advanced 'learning' abilities than $2500 robots from a few years ago, and the Pleo even cries when tortured, to the extent that it is difficult to watch this.
The reason Ugobe is on this list is that I am curious to see what is the next product on their roadmap, so that I can gauge how quickly the technology is advancing. The next logical step would be an artificial mammal of some sort, with greater intelligence and realistic fur. The successful creation of this generation of robot would provide the datapoints to enable us to project the approximate arrival of future humanoid robots, for better or for worse. Another company may leapfrog Ugobe in the meantime, but they are currently at the forefront of the race to create low-priced robotic toys.
This concludes the list of nine companies that each could greatly alter our lives within the next several years. Of these nine, at least three, Nanosolar, Tesla Motors, and 23andMe, have Google or Google's founders as investors. The next 24 months have important milestones for each of these companies to cross (by which time I might have a new list of new companies). For those that clear their respective near-term bars, there might just be a chance of attaining the dizzy heights that Google, Microsoft, or Intel has.