When I first invested in Facebook more than a decade ago, the business’s extraordinary potential was clear to me even though the full impact of social media had only begun to be realised. I was fortunate to be among the first to invest in some of the world’s most prominent start-ups, including Uber, Spotify, Airbnb, and Didi that continue to disrupt markets.
Now I believe we are on the cusp of a new cycle as Covid-19 leads to the rapid adoption of a wave of transformative technologies.
Covid-19 has undoubtedly accelerated many of the trends we were seeing at companies we have invested in, in the technology sector and across the wider economy. I have spent many years meeting the brightest technology entrepreneurs around the world, who continually inspire me both with their vision and the enthusiasm to turn dreams to reality.
Through Man Capital and our venture capital firm in California, 1984 Ventures, we have the opportunity to support some of the most highly promising, early-stage ventures that have gone on to transform society across multiple verticals.
These relationships give us a unique perspective of the new technologies that will have the biggest impact on the way we live, work and do business.
As an investor, it is clear to me that Covid-19 has changed the world permanently and created new opportunities. The door has been opened to innovation, from digital communications to biotech where there is untapped potential. Most strikingly, the past year has fundamentally altered the way people work – and live – with technology enabling office workers to operate seamlessly and efficiently from home and creating new ways to collaborate even once we have returned to offices.
There has been much opining on the winners and losers from the pandemic, though in the case of technology we will all benefit from the solutions innovation provides. Regardless of the fate of the physical office, for example, no one can doubt the vital role telecommunications will play in powering the future, alongside other technologies.
I see five key areas that will grow exponentially. Today the youngest generation is digitally native, making remote learning possible and in some cases, even more desirable than in-person tuition. Many students have returned to classrooms, but technology has created possibilities for hybrid learning.
Ultimately this will lead to better educational outcomes and greater accessibility to services for under-privileged children, something that could have lasting social and economic benefits. Inspired Education Group is one such innovative project, the world’s first fully online independent school, which I am proud to support.
Perhaps the most striking example of pandemic-induced growth is e-commerce. The retail sector has undoubtedly reached a long-anticipated tipping point in the transformation of the high street. This year we have seen online spending dramatically exceed projections to reach 70 per cent year-on-year growth.
Indeed, a measure of how the crisis has accelerated a long-term trend is that e-commerce has grown as quickly this year as in the previous 10 years combined – from 2010-2019, e-commerce penetration in the US grew from 7 to 14 per cent, and then in 2020 it grew from 14 to 21 per cent.
The third area I am bullish about is supply chain management technology. Panic buying at the start of lockdowns and a reliance on home delivery exposed flaws in just-in-time supply chains and logistics, yet I am confident that technology will continue to add efficiencies and enable more dynamic procurement.
The real estate sector is also primed for disruption, and the impact of Covid-19 will be deep and lasting, not only to property values. So-called ‘proptech’ showed its worth when real estate became physically inaccessible. Longer term, technology promises to reduce transaction costs and increase market transparency.
Similarly, the pandemic has served as a reminder that technology can continue to be transformative to the way that health services are delivered. While out of necessity there was an immediate demand for digital healthcare solutions in lockdown, we have seen the benefits of remote medicine and now welcome it into our homes.
This is both a challenging and exciting moment. The challenge for investors is determining which trends are short-term and which will survive the vaccine rollouts. From high tech solutions in healthcare to the humble online course, the benefits of technological innovation have shown us a means to build a better future.
Technology has been stress-tested like never before, and has demonstrated its ability to foster new business models and sustain entire communities. I believe that we will look back on this period as the catalyst for another great wave of growth and innovation.