No Humans Needed

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  Speaker 1:
  Hello, I’m Mike Collins. I’m the founder and CEO of Alumni Ventures. Today we’re going to go through an AV big idea called No Humans Needed, where we explore human-light or no-human ventures. This is an emerging trend that we think has a lot of legs over the next five or ten years, and we’re sharing a few of our thoughts and how we’re thinking about it. Next slide.

  Yeah, so the disclosure: we’re speaking today about Alumni Ventures and our views of the associated investing landscape. This presentation’s for informational purposes only and is not an offer to buy or sell securities. Those are obviously made pursuant to formal legal documents. And today we’re just here to talk about some of the things we’re thinking about and looking at.

  So with that, we are asked every day by some of our almost 11,000 investors: What investing ideas do you have? What do you think is going on? What does the future hold? This particular technology or world events—what’s your read of it? So we really enjoy sharing some of our investing ideas, and we think that this is a really important trend.

  There’s a nice quote here by Jensen about the potential of AI robotics—the number of businesses that are going to be able to be run with probably an order of magnitude or two fewer people than in the current state. And so that kind of opportunity creates enormous potential if you’re in our business.

  So we’re going to talk a little bit—this is a blog I co-wrote with Keaton Nankivil, one of my teammates here—and we’ll just start going through it a little. I think most people are pretty familiar with Alumni Ventures. We’re one of the most active venture capital firms in the United States. We’ve been around a decade. We have a huge network of investors, investing professionals, over well over a thousand portfolio companies. We have a nice trophy case.

  So our claim to fame is that we’re retail-oriented and we’re network-powered. So that’s kind of our niche in the entrepreneurial ecosystem. We get to see a lot of stuff. It’s a cool gig. We learn, make a lot of bets.

  We support some amazing entrepreneurs, and we’re right at the nexus of technology innovation and venture capital. So with no further ado, let me just kind of get into the big idea.

  So again, we’re entering a decade of no-human or human-light businesses. If you want to bring this to reality, most of us can remember tollbooths, where you would have people waiting in line with change or tokens or cards. And for the most part, those no longer exist—that is being run kind of humorless or in a very human-light orientation.

  ATMs are another great example, but I think we’re going to see many, many more industries going into kind of this framework.

  And just, I’ll give you another example—what it takes now to build a software company. We have seen over the last two decades kind of order-of-magnitude fewer people, less money, faster results, and we’re just going on kind of a Moore’s Law inversion on what you can do with software creation, for example.

  So we’re seeing this in a variety of industries—just real geometric progression. So that’s what I’m talking about today and just bringing that to life over the next ten or fifteen minutes for people.

  So yeah, let me tell a story about a particular startup. So this company, PingPod. PingPod was started with the idea of, oh, we want to rent out table tennis facilities. And the entrepreneurs really wanted to do it in a way that was as convenient as possible.

  And really, they created kind of a no-person facility. So through an app, it was all automated. You could reserve the room, pay for it, use it—and just really, it is very much like a locker at an airport. No people required.

  So everything just kind of run through an app. And then they realized the real value of that innovation. A lot of entrepreneurs are like, oh, you do one thing, it leads to something else, leads to like, oh, this is actually the real thing that we want to focus on—which is really the system software platform to run any kind of no-touch space.

  So whether that be pickleball courts or chess rooms or what have you—this ability to go no-touch with an experience, we’re just seeing this take off really, really fast. And obviously this saves you the cost, both direct and indirect, of a staff.

  I think like ATMs, we find that a lot of people actually prefer just to deal with apps, especially younger people.

  And again, just to bring to life their particular story—you can now, in urban centers, and these things are spreading greatly—get a lot of things where you would have to sign in and there’d be a bunch of labor floating around the core experience that really isn’t necessary if you think first principles about what am I trying to deliver here? And that obviously becomes much more scalable and economically attractive.

  So where are we seeing these things? I’m going to just kind of run through a bunch. One—we just talked about retail. Retail—I think we’re going to see this more and more.

  Some examples. I think people are familiar with some of these things going on at airports now, where they’re still kind of human-supervised. I think that that’s kind of an interim step.

  You’re seeing this with self-checkout at grocery stores. Sweetgreen, the salad company, is doing a lot with robotics. You put in your custom thing, you’re going to have it created by a robot. I think you’re going to see this in some other things like coffee, fast casual food, ghost kitchens.

  Again, retail—absolutely, you’re going to see more automation, fewer people at retail.

  Next, autonomous factories. Yes, again, another area. 

  So again, everybody’s pretty familiar with the Amazon facilities that are just incredibly robotic, but you’re going to see this in a lot of back-office space stuff.

  Manufacturing—I think we’re seeing automation. I think you’re seeing this in a lot of production facilities, warehousing facilities. Sometimes it happens incrementally by one job at a time. Sometimes companies from the ground up saying, I want X, I want Y, I want Z with as few people as possible—exacerbated by labor shortages, but also kind of an abundance of capital markets.

  And I think we’re going to see this probably accelerate again over the next five or ten years as kind of these dual forces of the challenges of human labor and the capital available and the increasing quality of the technology solutions being brought to bear here.

  Speaker 2:
  Okay.

  Speaker 1:
  Driverless logistics. So transportation—those that live in San Francisco understand Waymo works. People use it, people like it. It’s expanding, which is basically: call up your taxi or Uber and no humans required.

  Again, we’re going to see that expand across the country. We’re going to see that disrupt industry after industry.

  I think you’re going to see things in trucking—long-haul truck driving is coming. These are situations with huge amounts of limitations and safety concerns for people that drive too long.

  So even if a truck is driving as cautiously as possible, and you can outfit these trucks—these self-driving things—with just enormous technology, even exceeding what you can do on a self-driving consumer automobile.

  So I think we’re going to be seeing these things approved and put into production.

  And then delivery—I think you’re going to see this in urban environments. Drones, robotics—whether it’s last mile or internal things—but moving stuff from A to B, we’re going to see more automation, fewer people across the board.

  I’ll pause for a second because the natural thing—I think that when we encourage questions, they’re coming into the chat. They’re part of your GoToWebinar screen over there to the right. Please send them in. We’ll try to get to them at the end or I’ll just work them into the conversation.

  But a clear implication of all these technologies is, oh, what about employment? A lot of these jobs are huge employers—retail in the United States, truck driving in the United States.

  Yeah, I think there are disruptions. Disruption’s coming and there is displacement coming. And I think there will be—as we’ve talked about in other shows—some unintended consequences, some backlash. But these technologies are coming, and hopefully we can find opportunities for people to do new work, higher-level work.

  These ultimately create value. But a lot of those are kind of social questions. So we’re not oblivious to—if you disrupt the truck driving industry, there’s millions and millions of jobs that are going to be disrupted in that kind of scenario.

  Hopefully those companies are able to do more, grow more, do other things that are still going to require people—but it is the reality.

  Okay, plowing ahead. Financial services—again, we’ve seen this with the ATM, but I think you’re going to see a lot of financial advisors basically reducing the amount of people required.

  So robo-advising platforms, AI, digital planning, low-touch environments where you see a high—touch wrapper on a high-tech solution. So I think what we’re going to see increasingly in financial services is a really strong—and maybe even more robust—kind of human-to-human interaction layer with a whole lot of technology and AI underneath it.

  So again, just some examples here. A couple of these are AV portfolio companies. I should mention that—examples—we try to disclose here that if it’s an AV portfolio company that we’ve listed, either current or prior, we try to indicate that. They all aren’t. I’m just trying to give some examples for people to understand some of the companies that are just doing this in a really profound way. Big companies, small startups—all of the above.

  Okay, financial advisors—definitely we are going to see a human-light approach.

  Farming, food production—again, seeing this more and more all the time—is an area that we’re super interested in. Very labor-intensive, a lot of really tough jobs. A lot of data really is helpful, but the world has seen incredible productivity increases in the ability to create calories cheaply and affordably. I think we’re going to see that continue, which enables population growth and wealth creation and longevity.

  But I think we’re going to see, again, a continuation of industrial practices, more AI, a lot more robotics, a lot more sensors, a lot more smart farming brought to bear. And it is an economic imperative that this stuff goes on in order to do things smart, do things that scale.

  So food production—absolutely fewer people producing more food.

  Next, healthcare. Again, I’ll tell a little bit of a story. I was chatting with a teammate, grabbing a cup of coffee in the kitchen. She was talking about shoulder pain and she had an X-ray taken and hadn’t heard back from it. So I just said, “Hey, why don’t we sit down together? I’ll show you how to do this.”

  And she was able to kind of upload her X-ray into a diagnostic tool, printed it out. So when her doctor got back to her later in the day, she was incredibly well-informed, basically knew what was going on, had good questions, and basically had the diagnosis—which was the exact same one the doctor gave, having read the X-ray—but was much more empowered to have a good consultation with her doctor.

  So I do think that this is coming in the healthcare profession. We’re talking about the increasing use of AI, software, tools, sensors—all of these things kind of removing bureaucracy from the healthcare system.

  And at the end of the day, I think we’re going to have human beings going direct for sensors, going direct for the diagnosis, and really having more of a consulting relationship with a very experienced human healthcare provider—which obviously is incredibly important.

  But there’s also a lot of things around the edges that can be used by doctors. Again, there is a lot of bureaucracy between the actual sensor, the read of the data, what do we do about the data, and the action plan. There is a huge amount of GDP that goes into this and tremendous opportunity for improvement.

  So I think we’re going to see this really attacked over the next decade, and I think we’re going to see a new kind of healthcare worker—whether that be elder care or reading sensor data or drug discovery.

  I think it’s a combination of fewer people doing more, doing better, disintermediating, disrupting.

  Okay, next—education. Again, I think we have a very labor-intensive system currently. Colleges and universities have had their expenses explode, their overhead explode. The value proposition is increasingly challenging, especially for second- and third-tier colleges and universities, where it’s less about the branding and the networking and more about what you’re actually learning.

  A lot of this stuff can be done with personal AI tutors, robotic-assisted instruction. Just a huge opportunity, I think, to again wring inefficiency out of the system where it’s not adding value.

  So again, I come back to this idea of letting humans do what humans do really, really well: establish relationships, empathy, creativity, salesmanship, relationship development—all of that kind of stuff is fundamentally human and won’t go away.

  But a lot of the other stuff—I think we’re going to see hugely more efficient models when it comes to how people learn things.

  The ability just to, even today, open up an AI program, say, “I want to learn X. Give me a 30-day learning plan. Let’s start today. What should I read? What should I do?”—totally capable of doing that.

  Again, real interesting companies here taking different tacks to it. But I think we’re going to see a huge revolution in education again over the next period of time. Very exciting, because this is a huge unlock for human potential.

  Speaker 2:
  Next—buildings, where we live, how we live, where we work. Again, there’s great innovation. Fewer people required to do things. A lot more sensors related to home management, AI-powered buildings, real estate insights—how you make new forms of building more efficient, requiring a less bespoke approach to getting things built.

  There are elements in the approval process that can be greatly automated. So we’re seeing, I think, just far, far fewer humans required to do some of those things.

  And going back to the original story from the ping pong guys, that’s really a real estate play and a capital play. So once you develop the software and the systems, and then it’s just real estate.

  And so, how do you do that as efficiently as possible as well? So I think these things are going to definitely impact some of the things that we definitely, as a society, need—which is more housing.

   

  Speaker 2:
  I will pull together a few of the questions here. Yes. Can you elaborate on the regulatory implications of investing in autonomous technologies? Yeah. So there is definitely a strong regulatory legal framework that impacts a lot of these things, right? The regulatory frameworks were built in kind of a given technology landscape. And as those things change, the regulatory environment has to catch up.

  So if you take something, for example, like health tech—hugely regulated, appropriately regulated—but I do think we need to be looking at those things in a new and fresh way.

  You can’t deny technology. And so we tend to, as a society, take a few bad examples and not really do a full cost-benefit analysis. And we are prone to just—take self-driving vehicles, for example. Any unfortunate accident that takes place with a self-driving vehicle becomes headline news.

  And what isn’t headline news is the 35,000–40,000 fatalities that take place every year on US roads.

  So I do think we need regulation. We need to think through the ethical dimensions of technology, unintended consequences, backlash. These things come with the territory.

  And I think there are no simple answers, but we just need to keep working and pushing and finding ways to balance disruptions, displacement, and just the ongoing march of progress and the importance of that. 

  And second question—what is a way that I can act on some of these ideas?

  Well, at the end of the day, there’s the personal dimension of managing your career and understanding kind of where technology is going.

  I think you want to fully embrace where technology is going and be really good at these technologies.

  So if you are in an industry that is going to become increasingly automated and require fewer people, you want to think about the skills that are going to sustain in that kind of world.

  I’ll speak personally—as I’ve told my board, I think there’s going to be two kinds of venture CEOs: ones that are AI-enabled and former. And so I think you want to be enabled and empowered to ride the waves of these technologies.

  From an investing standpoint—again, I think one needs to use fundamental principles of diversification and not trying to time markets. And we think, obviously, that there’s an appropriate place for venture capital with accredited investors in an appropriate allocation to participate and invest in these things.

  So I think that’s both playing offense and playing defense.

  Let’s see what else we have.

  What are the challenges and risks that investors face, and how can you mitigate these risks?

  Venture capital is a tough job. I think you always have to look for great teams. I think you’re looking for businesses where, as technologies get better and improve, that’s going to be a tailwind to the company you’re investing in—and not, oh, this thing’s going to work for a very limited period of time, but then the next generation of the technology is going to make this thing obsolete.

  So there is an art where you’re getting the advantage of compounding.

  I also think one also has to be realistic about—things take longer, more difficult, more competitive, unintended challenges in every business. And you want to just be sure that the team and the capital structure can endure the time and the setbacks that come into being a good venture investor and a good entrepreneur.

  I mean, doing hard things is how one creates value. If it was easy—not much of a moat. Anybody can do it, right? And there’s probably somebody smarter and with more capital and more assets than you.

  So being a good entrepreneur requires having a real problem and tackling a really hard set of issues in creating moats.

  So those are some of the things we look for when we do those things.

  So I just want to try and wrap up with time here.

  So just—yes. So here’s our commercial.

  If this sounds interesting to you—Alumni Ventures, AV—we do have an AI and Robotics Fund. Just check us out, learn more. You can book a call, you can visit the website.

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  So feel free to share this if you’re interested in learning more, meeting us, becoming part of our world, our community—book a call.