Growing up as a kid, I spent summers with my grandparents in a leafy suburb of Detroit, Michigan. Driving around town, my Dad would point out places like the old Ford factory at Highland Park. There, Henry Ford and his engineers iterated the first principles of mass production, stopwatches in hand!
Our family worked in the auto industry for most of the 20th century. When my Dad rebelled after college by instead venturing into Oil & Gas, he was joining another of the many industrial booms that are uniquely American and have created vast swaths of the modern economy.
Throughout my career in first banking and now venture capital, I’ve often been struck by the common threads that run through much of heavy industry, whether in semiconductor manufacturing or energy exploration. These industries are often:
- high-stakes and capitally intensive
- composed of highly technical teams
- comparatively under-digitalized
Most of these sectors saw their greatest upheavals in the 1970s & 80s. Sure, there have been substantial innovations since then — but nothing so dramatic as the introduction of automotive automation, the adoption of digital recorders in the oilfield, or the first Manufacturing Execution System.
Now, as we look at the dramatic impacts of COVID on the ways we live and work, one of the knock-on effects is to pull forward the next phase of the industrial economy. Whether through our founders or on calls of my own, I keep hearing the voice of the customer telling us: it’s coming.
The era of industrial digitalization is just starting
Even if they call themselves “old-school” or “old-fashioned,” customers are all saying the same thing right now — that these times are forcing them to do things differently. In some cases, this means production floors where every shift now looks like the Third Shift —lightly staffed either due to safety or other commercial impacts post-COVID. Elsewhere, it means operating when in-person hand-offs—whether OEM field support, bills of lading, or back office payments—are no longer sensible.
One such customer noted that while he believed most work still ought to be done in-person, his service team’s travel budget didn’t need to be quite so large in an era when digital tools can connect you with the customer in hours, not days.
In nearly all cases, management expects that many of the changes unfolding right now will become permanent ways of doing business.
What does this mean for us in tech?
Ultimately, this means that the era of pen and paper systems of record, of purely “in your head” operations are waning. COVID has acted as a catalyst for organizations to realize the long-term value of leaner, more adaptable processes using technology. Many of these opportunities fall into two categories:
- Augmentation — Whether it’s Connected Worker technologies that empower industrial workforces to do more better/faster/safer or Field Support technologies that enable customers to get better value out of their products, augmentation provides a lot of room to run.
- Automation — Software solutions that enable more seamless and flexible robotics operations are in higher demand than ever. Tools that elevate production or asset management with superhuman awareness of their health and productivity will grow.
While we’d already begun to see the early innings of digital transformation unfolding at the early adopters, now we’ll get to see these players really start to swing hard for the fences.
I believe that we in tech, as partners to those working in industry, can do the above if we focus on:
- Solving for major pain points that are truly urgent
- Bringing great empathy mixed with domain understanding or expertise
- Becoming the system of record
Our long view at REMUS
As a newly reborn firm, REMUS is well suited to help founders going after these goals. Whether we’re tackling a commercialization of science play or a startup driven by a deep technical or domain edge, we know what it takes to help build category-leaders of every stripe. It’s what we’ve been doing for the last decade, and we’re now even better positioned to seize enormous opportunity.
At REMUS, tech for the industrial enterprise is an arena we’ve tracked for the last decade and began investing into these past few years, including with companies like Scope AR here in the US and Flexciton in London. Peering back in my inbox tells me that I joined one of the first accelerators, started by my friend Kirk, back in 2011! Even then, it was clear that market timing wasn’t trivial.
Tech adoption often takes both a compelling event and sufficient conditions to sustain itself. With the increasing validation of Industry 4.0 use-cases, growing interest in the C-suite, and this phase shift at a macro level, the time feels right more than ever. While 2020 didn’t kick off the decade in a way any of us would’ve wanted, it’s given us all a tremendous opportunity to change and adopt new technology.
Personally, it means I’m excited to find entrepreneurs who are passionate about bringing unique products to these heavy industries looking for the “better way” of doing what they do. One of my favorite bits of customer feedback was hearing that a startup’s products are so good they keep people from retiring early. That means you must be doing something right! As others have noted, software-izing these verticals will create billions in value that should improve people’s lives.
If you’re someone who also is interested in this nexus of tech and industry, feel free to reach out to me at [email protected]