Unconstrained Futurism and the Billion-Dollar Unicorn

There’s a big difference between being a futurist and evaluating start-up companies. The former picks longshots constrained only by imagination, while the later funds the wager. Of course, every investor worth his salt wants to get in on that billion-dollar unicorn while everyone else still thinks the idea is wild speculation. Unfortunately, you don’t capture a unicorn by being 10% better than the next guy at evaluating customer acquisition costs. It takes imagination, guts, and yes…a bit of futurist skill. Here we’ll discuss a framework for hunting unicorns that has both vision and discipline.

I’m not about to tell you there is a magic formula that guarantees success in finding a billion-dollar investment opportunity before anyone else. However, you can learn a lot from how futurists have been wrong in their predictions. In particular, their imagination is too constrained. A constrained futurist will underestimate how the fusion of multiple technologies that exist in their time can transform social structures. It turns out that unicorns prefer a rare climate that simultaneously favors technical and social transformation. Most investors don’t venture into such climates because they are as pre-revenue as the Sahara is dry. However, for the intrepid adventurer who wants to tempt fate in the desert in search of great reward, here is how to separate the value longshots from the rest.

As an example of constrained futurism, let’s consider the Jetsons cartoon series from the 1960s. Many articles have been written on what the Jetsons got right and wrong about the future. Importantly, popular science fiction needs to be entertaining, and that precludes it from focusing on technologies or social interactions that are too alien to the audience of the time. The Jetsons got smart watches and flat screens right, but those are just smaller versions of television which existed at the time. The Jetsons missed Twitter. For Twitter to exist, those small TV’s also had to be powerful computers by 60s standards. Further, even if the writers floated something Twitter-like in a production brainstorming session, it wouldn’t make it to TV. No one in the 1960s could relate to an episode where Mr. Spacely fires George over something he said to the world over his wrist television. Who would gossip over a TV that would become a public record? And that’s the point. The future is a blend of multiple technical and social interactions where possible branches are captured best by visionaries of what is contemporaneously considered to be preposterous speculation. It’s where the unicorns are.

The fusion of multiple technologies and their postulated social impact are a great critical framework for separating Hugo Award winning sci-fi from Mega-Lizard vs. the Mech-Zombies, but how do you make money off it? You can’t bank these predictions, but you can play the odds and take advantage of non-linearity. Consider the Jetsons again. That televisions would get smaller was a good bet. So were advanced robots that acted like people. Add that gossip and reward seeking are human nature, and you might get Twitter, influencers, bot-armies, and micro-targeted advertising. Even if your script didn’t get made into an episode. 

For fun, let’s try a couple of examples appropriate to today. Remember, take at least two good bets on technological advances. Fuse them, de-constrain yourself from today, and ask what people would do with this new thing. First up, virtual reality and 5G wireless. In this scenario, 5G has 50 Gbit/s speed, connects 1000s of devices in a household or business, has sub millisecond latency and seamless hand-off across access points at 500mph. Virtual reality is embedded in smart contact lenses (unless you prefer glasses) and/or implants that provide sound and possibly haptic feedback—connected to the 5G network of course. In such a world, you wouldn’t need a television or smart phone anymore. A virtual screen would appear wherever you wanted it: total field of view, on a wall slightly above and behind your mother-in-law, or like a heads-up display while you rode your bicycle. Virtual work meetings, remote classrooms, and romantic dates would be as real as being there.

Now the fun part, what wild things could happen with all this connected virtual reality? People will still need a place to eat, sleep, sit, and go to the bathroom, but maybe not much more. So, what about the health conscious, adventurous, social types who want to maximize life-work balance in this new era? Answer: tiny house meets mobile home, which meets intermodal container, with a touch of time-share thrown in. People live in pods optimized for VR and logistics where real estate is abstracted as a service.

Preposterous, right? Here’s an investor speed-dating pitch I wouldn’t ignore in this scenario: “We give a new generation of mobile residents their life necessities as they travel. Our residences are modular and integrate across land, sea, and air modes of travel. Our residents never have to worry about logistics; just where and when they want to go and what to enjoy on life’s exciting journeys. Ownership shares start at $800,000.” So preposterous. Right?

As a second example, let’s turn to biology. First, we’ll bet on gene editing. You know, designer babies and that sort of thing. Second, prenatal care. In this scenario, you have essentially complete control over the baby’s genes, multiple parents and unique designs are common, and you have artificial wombs. A little too far out for you? Yeah, well, the Jetsons-era IBM Model 30 weighed 1700lbs and had 64 kilobits of memory.

In this second scenario, there are the obvious genetic planning service B2C plays, but remember, a key in this thought framework is guessing how major behaviors could change. What happens if sex isn’t necessary for survival? People are torn between their own genes and specialized ones. The convenience of artificial birth is great, until you have to bring the baby home. Reproduction isn’t an act of passion, it’s a sense of duty, and probably big tax breaks. Add to that income generated by children designed as prodigies, and you have a very different world. Let’s ignore the dystopian and utopian futures, after all it can be hard to tell the difference, and play it down the middle. The new technology is a reality, what do people do?

Here’s the speed-dating pitch I wouldn’t ignore in this scenario: “Before investing in a child, you need expertise and compassion. Don’t navigate the patchwork of paternity laws, genetic licenses, and pediatric training contractors by yourself. We’re your partner, not just another way for the banks to get your genetic property. Your child is your investment, and we’ll be there from conception contract to emancipation to ensure that investment is protected.”

So, children are investments? When labor was short on the family farm, strong sons were prized. Look at the incentives being dropped in Japan to have babies. If there is population crisis, incentives will appear, and this is even before we consider whether to license some genetics from a sports star. Someone will do the math and figure out these new children can be net positive investments with the right choices. Will it be Goldman-Sachs, or the guy in front of you at a seed round who wants to start buying up genetic rights?

Let’s recap. No one can predict the future perfectly and unicorn plays are always longshots. That said, as technologies change around you, remember that people often overlook how two or more tech trends will fuse together to produce something really novel. Add that futurists and investors are often constrained by the behaviors they are familiar with, and you might be ahead of the crowd in evaluating start-ups. Unless of course, your own start-up idea fuses multiple technologies and has a strange, but plausible, use case. In that case, my contact information is in my LinkedIn profile.