Week Seven: Shaking things up

Going heavy on the news.

Housekeeping

Welcome to the seventh edition of Venture Vantage. We’ll be exploring topics related to tech and the venture ecosystem. Please forgive me for the late edition this week, it’s been a busy one!

Boo! Did I scare you? I hope I did.

I got one repeated piece of feedback from last week: people thought last week’s edition was too long. Therefore, I will be removing The Meat & Potatoes to keep this newsletter news-focused. This week's edition is 1,534 words compared to last week's 2,861.

Adding two new sections this week: Rapid Fire & Continued Reads.

Please provide your feedback on the length of this week’s edition and if there are any sections you'd like to see either expanded or removed.

As always, please?hit me back?with feedback and comments—I’m constantly seeking ways to make this newsletter a more valuable read.

Diving right in and keeping things brief:

News, Deals, and Pretty Things

Google wants glasses

Context:

• The Info is reporting that Google recently approached Samsung in hopes of partnering to create smart glasses that compete with Meta’s Orion.
• Instead of building devices independently, Google decided to focus just on developing software for smart glasses.
• Google tested a variety of smart glasses types, from heavy AR glasses to lightweight, simple smart glasses. The simple option won, prioritizing wearability and comfort over more complex AR features. Meta’s Ray-Ban smart glasses influenced this decision.

Vantage:

• Google has famously tried and failed with glasses in the past. Google lost $895 million on developing and launching the failed Google Glass. Their leadership is likely using this experience as their north star for future smart glasses endeavors.
• This is another step forward in proving out that glasses will likely be the next mainstream form of wearables. The current most popular form of wearables is wrist and hand-based (like Apple Watch, Garmin, Whoop, and Oura).
• Startups offering supporting technologies like image processing and real-time data analysis can become increasingly appealing for acquisition by these big companies looking to enter the smart glasses space.

xAI’s big round

Context:

• Elon Musk’s xAI, creator of Grok, is raising a $5B funding round at a $45B valuation.
• Existing investors in xAI include Valor Equity Partners, Sequoia, a16z, Vy Capital, and Saudi Prince Alwaleed Bin Talal. New investors for this round include the Qatar Investment Authority.
• OpenAI raised a round earlier this month at a $157B post-money valuation. That makes it much, much more valuable than xAI. Elon Musk was also a founder of OpenAI.
• Elon boasted on X that Grok is really good at analyzing x-ray, PET, MRI, or other medical images. This could be a huge leap forward for Grok as a foundational model.
• The goal of Grok is to be a more open source model than competitors, and offer less filtered responses.
• xAI rapidly developed a large AI server cluster in Memphis with Nvidia chips, rivaling OpenAI and Anthropic, and plans to double its chip cluster.

Vantage:

• Having the Qatari government in xAI could be problematic to xAI’s mission, and potentially harmful to the United States and its allies. The government of Qatar has ties to supporting terror groups like Hamas, Al-Qaeda Affiliates, and the Muslim Brotherhood.
• This raises the competitive bar for new startups to raise cash, as they now have to compete with these behemoths that somehow manage to remain relatively nimble.

ChatGPT launches search functions

Context:

• OpenAI introduced ChatGPT Search, a feature in ChatGPT designed for up-to-date answers on various topics, drawing directly from online sources.
• This will likely be competitive with Google Search.
• To enable ChatGPT Search, you simply have to click the Search button below the query window.
• ChatGPT Search is available to ChatGPT Plus and Team users for the time being, but broader access will roll out in the coming weeks.

Vantage:

• OpenAI is looking for more ways to turn ChatGPT into a robust tool. Initial polling by the company found that people still rely on ChatGPT mostly for simple factual answers or creative prompting, rather than replacing things like Google Search.
• It will be interesting to see how ChatGPT sorts and filters data that it finds on the web for poor-quality information—something that xAI seems to be very concerned about as well.
• This will likely make a stronger API available to startup product developers, leading AI-based startups to have access to web data more easily.

Deals that caught my eye

Here’s the latest and greatest:

• Final Boss Sour raised $3M from Science Inc, Aoki Labs, F4 Fund, LAUNCH Fund, and more.

• Axonis Therapeutics, a neuro-focused biotechnology company that focuses on the development of novel neuro medicines, raised a $129M Series A.
• Matter Intelligence, a remote sensing company that makes sensors that use hyperspectral imaging, raised a $12M seed round led by Lowercarbon Capital with participation from Toyota Ventures, Pear, Mark Cuban, and E2MC.
• Infinite Machine, a non-auto vehicle company, raised a $9M seed round led by a16z’s American Dynamism team to bring scooters to the US market.

Rapid Fire

• Apple released the new Mac Mini. It’s really affordable ($599+), and really powerful (new M4 chips).
• Microsoft just delayed a Windows 11 feature called Recall again. Recall takes snapshots of your screen and saves them, allowing you to find past moments in time with natural language.
• Ford has halted F-150 Lightning production until next year.
• Waymo’s latest funding round of ~$5.6B valued the company at $45 billion. Waymo has raised $13B to date, making their valuation shockingly low.
• Meta announced they plan to increase capital expenditures next year by up to 43%, causing investors to panic and sell shares. Microsoft and Alphabet shares fell by 3% as investors worry about the costs they will incur related to AI.
• Zhang Yiming, founder of TikTok’s parent company ByteDance, tops China’s wealthiest list with a net worth of $49.3 billion.
• The European Commission will formally investigate Temu after finding its responses inadequate about how they prevent counterfeit, unsafe, and illegal products on their platform.
• Reddit stock is up more than 51% over the last five trading days.

White Hot

I was asked last week where I find these topics. I come up with all of them myself—either by observing interesting startups/founders or learning about different spaces that Fortify invests in. 80%+ of the time, I think of these industries by taking a minute to notice the imperfect things around me as I write this newsletter.

Human Health:

• Out-of-womb IVF treatments, like Gameto, that require less hormone disruption to the mother. About 85,000 babies each year are born in the US as a result of IVF.
• Real-time health statistic monitoring that normally requires labs, like vitamin deficiencies and cholesterol. 35M+ Americans suffer from nutritional deficiencies, and 86M+ Americans have high cholesterol (total cholesterol levels above 200 mg/dL).
• Electronic stents to proactively prevent re-blockages of arteries after the stent has been placed, both at the site of the stent and elsewhere around the body. Over 2 million stents are implanted in the US each year.

Future of Work:

• Tools to enable long-distance and rapid collaboration on physical prototyping. Over 90% of North American hardware/manufacturing companies rely on overseas manufacturers for prototypes, with the average lead time for prototypes sitting between 6-8 weeks.

Infrastructure:

• A low-fee alternative to traditional credit card processing. U.S. merchants paid approximately $135.75 billion in credit card processing fees in 2023.
• An effective way to disconnect unused electronic devices without requiring the user to do so manually. ?5–10% of a household’s total energy consumption or energy bill comes from standby power of unused devices (like your TV plugged in while it’s off).
• Affordable fire prevention systems for home construction. As of 2021, less than 7% of US homes had fire sprinklers installed, leaving them vulnerable to fires, with 73% of all structure fires occurring in residential properties.

Some cool stuff on my radar

• The new Tudor Pelagos designed around the classic French Marina style.

• The Fjallraven Kamas Lite jacket feels so premium for the price, I’m a fan.
• My On RODGERs have been my daily footwear of choice recently, outperforming Common Projects from a comfort standpoint.
• I just changed my desk pen to the Monami 153, and it’s been great so far, despite being a bit heavy.
• All hail the Apple EarPods! The quality of my microphone on calls has gone up dramatically since switching to these as my main driver.

Continued Reads

This week’s continued read is an HBR article that talks about the 100 Lovers principle from YC put into practice. A snippet:

you need a group of users who love your product. We call this the “100 lovers strategy.” The concept: As a starting point, get 100 people to love your product. Airbnb started with this strategy. “It’s better to have 100 people that love you than a million people that just sort of like you. Find 100 people that love you,” advised Paul Graham of Y Combinator

Read it here.

Closing

Thanks for taking time out of your Wednesday to read. I hope you get lots of candy this spooky season.

As always, you can find me on?X?and?LinkedIn, and I’d love to hear from you via?email. Whether it’s talking startups or just shooting the shit, I’m always happy to connect.

Onto the next!

//Eli