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Long Term Trends: Entering The Fifth Wave of Startups

When we examine history through a retrospective the lens, the oldest recorded companies in the world were primarily in the hospitality industries: restaurants, pubs, and hotels with one of the oldest recorded pubs in history in Ireland called Sean's Pub in 900 A.D. and the Bingley Arms in the UK in 953 A.D. The first hotel was recorded in Japan called Nishiyama Onsen Keiunkan in 705 A.D. Many other companies would crop up within the next few hundred years in consumer discretionaries such as textiles, jewellery, pharmacies, and an explosion of breweries and restaurants. 1400-1500 saw the rise of the financial sector with the first bank founded in 1472 in Siena, Italy called Banca Monte dei Paschi di Siena.

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Ten centuries old, The Bingley Arms in the North Leeds, a pub that had been established in 953 A.D.

These days, when we think of companies, corporations, or even startups, we often think of technology companies. If we take a closer look at long term trends, currently, we are nearing the end of the Information Age and moving into the Diamond Age (a term borrowed from Neal Stephenson's book of a future world in which nanotechnology has infiltrated all aspects of life).

One interesting long-term trend to note is that although we often think disruption happens very quickly, such as in the case of the mobile devices and the smartphone, often the technological advancements of disruption often take between 45-55 years in gestation before we see mass distribution within the population. For example, during the period of the Industrial Era when many companies were founded based on light, electricity, telecommunications, sound and printing such as GE, Xerox, Bell Labs and HP; however during this era, the initiation and development of computers, electronics, mobile phones and biomedicine were already in gestation, setting the stage for the next wave of companies which would become Intel, Microsoft, Apple, Sun Microsystems, Cisco et al.

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The bicycle craze of the 1800s to early 1900s.

First Wave: Dawn of the Industrial Age (1740-1890)

First oil well and refinery 1745

First automobile 1768

First locomotive 1784

First bicycle 1817

Second Wave: Industrial Age: Light, Sound, Printing, Manufacturing (1890-1945)

Gestation: Computers, electronics, mobile phones, biomedicine

GE 1892

Xerox 1906

(Discovery of vitamins 1912)

Bell Labs 1925

HP 1939

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The first car phones "mobile phones" became available to the public in 1946.

Third Wave: The Digital Age: Hardware and Software (1945-1990)

Gestation: 3D printing, Fiberoptics, electronic communication (email), GPS, holography, nanotechnology

Intel 1968

Microsoft 1975

Apple 1976

Sun Microsystems 1982

Cisco 1984

Fourth Wave: The Information Age: Internet, Social Network and AR (1990-2040)

Gestation: Nanofactories/ molecular assemblers, Wireless Energy, Hover Cars, Molecular (DNA) computing

Google 1998

Facebook 2004

Twitter 2006

Magic Leap 2010

Meta 2013

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Currently in gestation for the last fifteen years, nanofactories or molecular assemblers can produce and replicate anything.

Fifth Wave: The Diamond Age: Transportation, Energy and Nanotechnology (2040-2090?)

Hover cars

Wireless energy

Nanofactories/ molecular assemblers

Closing the recycling loop in waste

Sixth Wave: The Space Age: Interplanetary travel (2090-2200?)

Return to the Silk Road era of commerce and trade between many nations

Interplanetary trade agreements with Kepler's habitable zone planets and beyond?

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According to NASA, we are most likely not alone in the universe and many exoplanets have been discovered  which resemble a parallel atmosphere such as Earth.

We are also curiously close to the end of the Information Era, and nearing the next Fifth Wave of companies in which the technology for hover cars, wireless energy, nanofactories have long been in gestation. 

Since the average lifespan of a contemporary mobile app company is around 3 years, it is sometimes difficult to look beyond short-term trends and population growth/ decline and look further out into the next 50 years and beyond. Nic Brisbourne wrote an interesting post recently regarding lessons for the startup ecosystems from the history of Silicon Valley in which he excerpts from Nicolas Colin's Brief History of the World (of Venture Capital).

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In summary, Silicon Valley embraced military funding for nascent technologies and often   funded startups based in research universities such as Stanford. Their goal was to reach out to prospective military customers and develop a prototype in Stanford's research laboratories:

1) Reach out to military prospective customers to better understand their needs, then offer to craft them a prototype in Stanford’s research laboratories—this generated substantial revenue for the university and strengthened its trusted relationship with key military figures;


2) If the prototype satisfies the customer, encourage one of your students to found a company and manufacture the product at a larger scale—this inspired an entrepreneurial spirit among the students and contributed to stimulating their hard work in the university’s laboratories;


3) Make sure a member of the Stanford faculty becomes a board member or consults with that newly founded company—this contributed to training Stanford scholars in business and turned them into better teachers and researchers;


4) Provide office space in the Stanford Technology Park, which was made possible by the fact that the university was the primary land owner in Palo Alto—this ensured that the upstart company stayed close and helped the nascent entrepreneurial ecosystem reach a higher density.

This is actually often the opposite approach in many nations, such as in South Korea, in which when a nascent technology is developed by a researcher, often the company or technology gets usurped or absorbed into a larger corporation, and you never hear about the Founders again. Silicon Valley set an interesting precedent of letting many technologies exist in a state of gestation but develop in parallel with military technology. I think that is one of the many reasons why in the Third and Fourth Wave of companies respectively, in the Digital Age and the Information Age, we saw an explosion of small businesses focused on technology that would become part of the start-up ecosystem.

There were many search engines before Google, but what Google did differently was the ability to track and individualise each user's search results. This sort of customisation allowed for more information to be known about user behaviour, something that didn't happen before the pre-Google era, and everyone's search results were the same. 

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Facebook's tagging feature of visual facial identification has been used by law enforcement and Federal agencies across the globe. 

Likewise, there already existed many social networks before Facebook, but Facebook was the first to utilise a tagging feature that allowed people to be visually identified- which culminated in their acquisition of the Israeli facial technology company If we carefully examine all the startups out there with viable IP- IP that the military wants, those are the companies that eventually move past the startup phase into the global corporation phase. As a bit of a tangent, former Defense Advanced Research Projects Agency (DARPA) director Regina Dugan has worked for Google, and just last month, now is a key executive at Facebook. In Silicon Valley, military spending co-exists with the startup ecosystem, and the United States has often been criticised due to its multi-trillion dollar defense fund, the largest in any single nation.  

Despite the social argument for whether this large defense fund has inevitably lead to a disproportionate society of economic inequality in the US, what makes the UK different from the US is that many UK-based startups are moving towards becoming independent from military resources and influence. Although London's DeepMind had been acquired by Google/Alphabet in 2014, two of the conditions set forth by CEO Demis Hassabis was that their technology not be used for military applications and that there would be a diverse Board of Ethics to guide their next steps. 

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Demis Hassabis, Co-Founder of DeepMind set forth conditions for its acquisition by Google/ Alphabet that its technology would not be used for military applications.

In addition, one exciting thing about being in our current transitionary period into the Fifth Wave of startups is that we are at a place in history that is similar to the dawn of the Industrial Era, in which many new emerging precedents are being set once again in transportation and energy. The UK has always been at the forefront of embracing emerging technologies in energy and transportation. Bristol's bio bus began its trek last year being entirely fuelled by human and household waste. However, there will also be significant progress in how we visualise transportation and I think although we are currently steeply involved in automated cars, we have to imagine that the vehicles of tomorrow will not be anything like the automobiles of the past century. The twisting concrete highways that have been part of our landscape since the mid-century might soon be a thing of our collective past.