Teymour Boutros-Ghali
At BOLD we invest predominantly in early-stage companies with an emphasis on life sciences and frontier tech.
Irrespective of the product or service and its specific industry structure, success (or failure) is invariably determined by the quality of the entrepreneur, the team and their culture.
Great entrepreneurs and teams can take modest technological innovations and will turn them into valuable businesses–an observation that is one of the few constants in the venture business. How valuable however, is very much an industry structure question. Companies that merge multiple technologies and disciplines to solve a particular need in a large market (we think of “Convergence” as the fusion of multiple unrelated technologies to create new product or service opportunities), out of the gate, have a significant competitive advantage and, we believe, in success produce outsize risk-adjusted returns.
Why?
The very act of merging disparate technological innovations often leads to disruptive products with both dramatic cost advantages and superior, if not breakthrough, performance which tend to redefine markets.
Second, the merging of different disciplines builds on an ability to effectively integrate those technologies which incumbents may have difficulty replicating or just give the newco a significant time advantage (a critical element in a time compressed world).
Third, by the time an incumbent perceives such companies as competitive threats they are combatting a significant learning advantage.
Finally, many investors are less comfortable with cross-discipline investments often making for a less competitive investment landscape.
Examples
Our portfolio abounds with successful examples of “convergence”.
Whether it is medical devices that are democratizing access through dramatic cost breakthroughs and novel form factors (which in-turn disrupt existing markets while opening new ones) such as:
- Alivecor (at-home FDA approved EKG device),
- eXo (low-cost, portable, AI supported ultra-sound device), or
- Oura Ring (at-home sleep and wellness monitoring).
or companies at the intersection of software and biology such as:
All are reshaping the economics of their markets, and convergence is often key to the restructuring of their industries.
In success, they lead to outsize returns.
© 2022 Teymour Boutros-Ghali
