Getting started with an industry insight
Whilst large technology companies have for decades thrown money at research and development.
Speed of technology development is accelerating. Focus point of medium-sized companies are turning towards understanding deep technology. Fear of being in the crosshairs between developments.
Looking to move forward through breakthrough technology, sprung from research out of Universities. Desire to get ahead of their competition. Aiming to fuel technology advancements. Determined to lead the next industrial revolution.
What is deep technology
Deep technology is not technology based on providing regular product or service. It is a recent coined term. Deep Technology design is developed in-house and is different from what is out there.
It is not someone saying: “I saw this can be done, now I’m going to take the same tech and apply it to a different problem”.
It is actually that the technology in this company has only become possible. The academics have only written the paper on it.
Ideally, it has only just become possible.
This is why deep technology research and development services are so attractive. Deep technology is a perfect basis for building a company around it. It is much harder for competitors to follow you.
In the past, there was a longer time-frame to take an idea to commercial viability. The support system at present is crating shorter time-frame.
With this foundation, you can get operating leverage out of it as you scale, better the gross margins. As you scale you can go to more countries, more regions, more products so on and forth. These characteristics are fundamental to entrepreneurs. Giving ability to medium-sized company and build a big business.
If you’re differentiated then you can scale quick.
Bottom line is, if you’re effective and differentiated, your growth will be quick.
Source of development
Image: Oxford University
When it comes to deep technology, universities have various operations.
At one end, you have got professors using a public funding to build multi billion-pound facilities to do deep deep deep science. At the other end, you have got talent pool. Students who have new skills specifics to enhance technology development.
They lack commercial experience.
Current commercial experience comes from research and development companies. Venture capital firms are also hands on.
They do so with the interest of being at the heart of the next industrial revolution. Acting as middleman between companies aiming to develop deep technology, and academic talent pool.
They understand the unique requirements of companies to create new research or take existing research outputs of the staff and professors from universities. Then wrap commercial team around it to build a successful project.
This practice being effective, but often leads to closed doors practice and an exclusive network. Leading to painful slow speed development of technology clusters. And to stress the reduction of transparency. At the other end of the ‘human spectrum’, there are the deep technology academics which world is miss out on.
Moving forward we have made it our job to open up the discussions. Reaching out and collaborate with universities, venture capital firms, research and development companies.
This is the perfect opportunity for medium-sized companies to get involved.
Inspiration and imagination
Image: Kim Taylor
Deep genetics, material science, chemistry, there’s all sorts of stuff. Some fantastic opportunities are out there implemented across global industries.
People look at Deepmind as an example, one of the first companies to use the ‘deep’ word, now a fashionable term. They are not the exception in this space. But, they are a catalyst on getting companies inspired in developing breakthrough technology.
Indeed, it’s hard to exaggerate the positive impact Deepmind story has had. Within the machine learning world, Deepmind shows what’s possible for technology advancements.
The amazing combination of talent they have achieved is without precedent. Showing the utmost importance of building the correct combination of drive and skills. This talent pool in U.K and across Europe exist. They may be graduating or currently working at a deep technology company, they go on to invent the next generation of advancement.
Looking at machine learning, it is an area where a lot big exit are happening i.e. Magic Pony technology. Which is in a way is not a dissimilar model to Deepmind. A group of 15 machine learning researchers, applying very novel machine learning techniques to problems in video. In this case, around compression.
Many promising deep technology companies sold at the early stage of their lifetime. Twitter brought Magic Pony Technology relatively early in the company’s genesis for a large amount of money.
Is approach is lucrative. A financial gap in the market exists for deep technology companies. They are unable to grow into likes of Twitter scale business. (We cover this issue in further detail below.)
European technology ecosystem
Image : Google DeepMind
The big change we have before faced is the ability and the willingness of the medium sized companies to say, ‘No, we can do it here. We don’t need to go to the Silicon Valley. We can develop the technology and the talent pool. We can execute the company vision. We can get the finance. We can do it right here.’
We encourage company’s permanent home to be in their specific countries. Allowing these customers to create unique technology clusters around them. Allowing them to build and lead a successful ecosystem.
When raising funds, even to this day, many of the US investors will make it a condition for the companies to move over to the US. Having spent time in the US, there’s no magic pixie dust over there.
In Europe, you have access to a lot of raw talent. Hiring is much better and people are loyal and they stay with you through the journey. In a specific way, it is a lot better. This is due to our universities right across Europe.
To make a ‘go to market’ point, I want to go back to Deepmind. For them, it will be hard now to replicate and start again, doing what they did and what they’re doing. Deepmind said that “…we are only ever gonna do research, we’re not going to really solve commercial problems…”.
In the present moment, you can no longer do that. Our experience, sitting with academics, who love doing research. We have to often steer them towards understanding the end vision. Where it is going to end up commercially. Indeed it is a best quality problem to have.
We recommend medium sized companies to to engage with academics. Bouncing experienced commercial perspective and entwine them with experienced research developers. Allowing you to build strong foundation to let deep technology in becoming a reality. Furthermore, allow you to prepare and accelerated route to market.
It is important to consider the post knock-on effect of deep technology development. All the negative and positive. Preparing strategies to avoid or tailor effective resolution for negative impacts.
It takes one bad actor to create distrust in an entire industry. Technology leaders, universities and government bodies need consider regulations which protect consumers.
This requires enabling a voice at all levels from all sides.
VC and the Government on Deep Technology
Image: Marçal Prats
A lot has progressed for the better in the last 10 to 15 years. Through accidental or planned policies, organisations have worked hard in collaboration to develop breakthrough technology ecosystems. This was not an easy task and a lot of work left to do.
It is multi-factorial in the sense that, there were an enormous number of internet entrepreneurs in the late-90s. The intrapreneurial boom but there were few scientific talent.
In the present day, several things have changed. The VC ecosystem which went through a bad time in the early 90s, almost disappeared mid-90s. They reemerged really around that time. It has grown ever since to the present moment.
With a couple of hard knocks post compost of the financial crisis, it’s now in a better form than ever.
VC ecosystem is now recognised as an important instrument in the whole of economic policy. Europe financial system started to allocate capital to VCs. This goes back to 1997 when the EIF was formed, now has grown and still provide strong support for VCs.
One of the things that is not well known. Life sciences in European VC ecosystem has done better than Information Technology sector. Where there are unicorns are being built and surviving inside the European environment. We have got to solve the next edge problem and then move on to the next one.
The UK government has spent a lot of time figuring out how to get angels involved. The EIS tax system which many of our customers are the end beneficiaries of. This goes back to 1995, which has been improved on, enlarged and embraced as a mechanism to bring capital into the early stage.
On top of that, the other thing that’s happened. It happens in Europe and it happens in the UK as well. An active investment approach in research and development with outlook of economic growth.
The horizon 2020 program. This is the EU program for research and development won the battles of the budget of the program from 2013 to 2020. It was able to get 90 billion, a pretty impressive at the time. This was the EU side.
The UK government has invested substantially in research and development. The phase we’re in right now is that they understand, the politicians understand. They are allocating further capital both near and in the UK.
There’s also the issue of translation. It is how you then get the research and development outcome out into commercial scale. This has been left to more or less the private sector to some extent.
There is a financing gap as our customers start research and development, think of moving towards commercial implementation and growth. Mark Zuckerberg had up to 10 billion in the offer and he turned around and I said ‘No. I’m building something bigger’. This is a perfect example, when given the right encouragement, companies will wait for big outcome.
Mark Zuckerberg was did that in a context where he had access to capital.
With a correct eco-system has access to finance, talent pool, unbeatable attitude by VCs and government bodies. This allow ambitious deep technology companies to keep going for the long-term success. This will also prevent market dominance by a handful of companies.
The need to build this eco-system is why our work on deep technology is important and urgent. As an industry, we need help with moving forward, faster and overcome obstacles.
We need to select deep technology developers as ambassadors. Create voice at government level. Hold university posts and leadership roles from industries.
There is also a mass gap between white male holding privileged advocate roles over white women and other ethnicity.
Women are creating louder voice and striving forward with each others support, there is a lot of work to be done.
There is a gaping hole for people of different ethnicity. Again, the world is missing out on amazing talents, rich diverse thinking and opportunity to understand the world.
Our vision is when we have not one or even 50 unicorn companies. But when that becomes a regular feature of our landscape. When in our market cap, unicorn businesses that were founded less than 25 years ago as opposed to companies that are nearing century old. That is when we’ll see that we have made it.
We haven’t got there yet. But all that fabric for it to happen is here. With a support system, we can preserve and advance this. No matter what happens politically in the near future.
Being a revolutionary
Image: Peter Goes
Companies thinking about breakthrough technology space, see the big talent allocation problem. Building the correct source of development and the perfect team with balance skills.
Where do companies go, what do they want to do? Yet, more and more companies are jumping in to develop breakthrough technology. Partly because of the advantages created by structural policy, tax and investment reasons.
Fundamentally, it is a better time to build deep tech businesses.
These ideas need structured support to have a higher rate of success. Technology transformation have 70%+ failure rate. Building transformation through deep technology is a case by case unique game.
Although they can be costly and time-consuming, each step taken are calculated. Focused on the specific area with return on investment around 7–10x. Each idea can change the face of your industry. It is a transformation with prepared solutions for risks, but only with the right idea.
On the upside, firstly, we are now seeing the proof of the ability to scale business globally from Europe. This has become much more real than it felt 20 years ago.
Secondly, the cost has fallen dramatically. An example being, the largest companies are competing with each other to give server space. This is oppose to you having to build or buy a physical piece. This tells us all something. Almost all technology-based business operating structure can be found or created.
And third, our area of interest is the breadth and universality of some of the techniques that we talk about on deep technology. A fact, some of the most important companies in sectors like transportation, hospitality, agriculture which don’t sound like tech problems or didn’t in 20 years ago. They now are technology problems waiting to be solved. They are waiting on an impact solution created by the most daring and smartest talents.
Thanks to the miracle of the search engine, it is not hard to find these organisations. In many sectors across Europe and the wider world, to whom you can provide breakthrough technology based solutions.
Why there are not more and more Deep Technology unicorns
With all this opportunity, the question we should all ask is: Where are the Google scale and Facebook scale deep technology companies?
Simple. It’s the financing gap. It’s pretty straightforward.
European capital markets aren’t really in love with tech the way the Nasdaq is. This is also about the depth of the asset management system look at technology. You don’t have analysts who understand deep technology. They don’t buy growth, they buy dividends.
Lack of funding cuts the long-term growth. Deep technology companies are getting acquired in the early stage of their life.
By acting as an advocate for growth, we need to go deep into a series of matters to get European capital markets further interested in technology. Provide tangible execution of deep technology visions. Enable support and structure to achieve Google scale. We believe this is absolutely possible.
It is up to companies like us to solve the edge problem and then move on to the next problem. That’s what we’re doing and continue to need further help moving forward.
Peeking at global Deep Technology
Exactly the same factors that make Europe competitive with the US, now exist in India, Turkey, Indonesia and other countries. We are now no longer competing with the US and must recognise that. China is on the list but they tend to be rather insular.
The same factors are affecting deep technology companies and talents around the world. We must better make use tools and structures that we have access to in order to make deep technology successful.
Although Europe is leading in many aspects. Having diversity of ethnic deep technology leaders at all levels, will allow the promoting cross-border partnerships, learning opportunities and trade.
U.K and Europe staying ahead
Among gaining access to capital, attitudes and universities. One of the outstanding things Europe has for companies is, a diversity of thoughts. There are a lot of people, trying a lot of different things and that’s an important piece of it.
For example, no one has nailed AI yet. They have got lots of good tools for solving nice problems and they look like they can scale well. Yet this is some things we don’t know that yet. It is not guaranteed.
This is where Europe’s creative diversity will be the soul of technology advancement. This is one of the things that should make all companies across Europe hopeful and ambitious.
Organisations working with deep technology companies need to encourage a focus on building powerful outcomes rather than segmenting it into tighter and tighter fields.
Ensuring projects, customers and consultants are part of the global network. Are competing with other academics and companies on deep technology development. Become further active on grand challenges, competition and prizes.
If this doesn’t exist at your location….. create it. The US has done a great job of this but not done that as well here in Europe.
Our aim should be to further galvanise companies into attacking problems and create big impacts. The government absolutely has a role to play here. They need to continue to support and build on the strengths of our universities.
U.K. is an extraordinary country, which is relatively small to have so many leading universities, particularly in the deep technology space. These universities allow access to their innovation centres. They provide incredible research and development service to companies looking to make a difference.
Examples being Cambridge, Oxford, Imperial, University College London, Warwick, Edinburgh etc. These are some among many others in the U.K. and across Europe which are magnets for the world’s best talent.
This is a big priority, we need to make sure that we continue to be the magnet for the world’s best talent.
Joining the Deep Technology race
Image: Renaud Roche
The companies working on developing deep technology must aim to quickly build a team with specific background around their transformation project.
The speed of action is, if there’s one, the difference between Silicon Valley and Europe.
We are still slower on the speed of action in both areas of hiring and partnerships. Getting started beats getting ready. There are amazing infrastructure and systems in place to support your needs.
If we can increase the clock speed of research, prototype, tests to fail fast and then move on or build something quickly. This will allow rapid creation of a seamless route from development to commercialisation.
There’s a lot of money about. Particularly at the very early stage of deep technology development. We need companies to be totally convinced by their idea. If you are not convinced, then others will not be convinced.
Find guidelines to help you monitor and collaborate with someone else’s idea that you are sure about. Join their ourney until you get your own convincing idea.
About The Author
Mousuf Zaman.C — Managing Director of GDN Intelligence, inventors of new standards in deep technology research and development services. Standards that you deserve. www.gdnintel.com.