The Deep Tech Difference: Best Practices for Building Successful Deep Tech Ventures
Deep tech has evolved into a distinct approach to innovation and will drive the next great wave of innovation. While the narrative evolves quickly, it has also developed very specific characteristics.
This session introduces an overarching reference framework for deep tech that we call the Deep Tech Approach. We contemplate the characteristics that participants must understand in order to thrive in the deep tech ecosystem, and ultimately grow to harnessing these dynamics to develop competitive advantage (through the Design-Build-Test-Learn cycle).
Here are some highlights from the session that we hope you’ll find useful!
4th Wave of Innovation
- Deep tech is being heralded as the 4th wave of innovation, and barriers to innovation are dramatically decreasing because of the previous waves of innovation.
- The 1st wave consisted of the first and second industrial revolutions.
- The 2nd wave started around WW2. Out of necessity, the war triggered much innovation. These innovations eventually flowed over to corporate labs (like IBM, Xerox Parc), with high-calibre multi-disciplinary teams strongly involved in the scientific community conducting research.
- The 3rd wave saw the decline of corporate research and the emergence of small disruptive firms backed by venture capital, which later defined a “Silicon Valley” model that focused on IT/ digital and biotechnology. This wave created the likes of Apple, Microsoft, Google, and Facebook.
- Just as each wave grew from the last, the 4th is now gathering momentum. By bringing together bits and atoms, we are creating a different wave of innovation — one that requires a different approach.
The Deep Tech Approach
Deep tech is not just about technology. It is an approach towards innovation.
- It is a convergence of approaches and technologies, and leverages the power of the design, build, test, and learn (DBTL) cycle to compress development times.
Deep tech ventures live at the convergence of three approaches
- A convergence of approaches: bringing together science, engineering, and design from the very beginning allows a different, evolved perspective of the problem at hand, and, correspondingly, the conceptualisation of solutions that wouldn’t otherwise have been possible.
- A convergence of technologies: when technologies converge, the option space expands. The previously impossible becomes not only possible, but possibly a promising option.
The convergence of technologies widens the option space
- The DBTL cycle is the de-risking and speeding up of the innovation development and time taken to commercialise. Beyond standard development cycles, deep tech DBTL cycle times are accelerated to reach a breakthrough solution for the given problem.
- To leverage the deep tech approach, consider these four questions:
- Are there alternative views to this?
- Can I prototype it quickly?
- Is it working?
- How can I scale it?
- These four questions should be addressed simultaneously. If a solution cannot be scaled, for instance, then chances are it’ll be a waste of resources.
Deep Tech Ventures
Deep tech ventures are characterised by four main attributes:
- They are problem-oriented, not technology-driven.
- They situate themselves, instead, at the convergence of technologies (96% of deep tech ventures use at least two technologies, and 66% use more than one advanced technology).
- Building on the advancements stemming from the digital revolution, deep tech has shifted innovation away from the digital world (“bits”) towards the physical one (“bits and atoms”), developing mainly physical products, rather than software (83% of deep tech ventures are currently building a product with a hardware component).
- Deep tech ventures rely on a deeply interconnected ecosystem of actors, without which it cannot thrive.
Ventures must continually evolve broader views of the situation while focusing deeply on the problem/s at hand.
Special thanks to our speaker:
Check out the paper on which this session was based here.