The Third Kind of Luck

Last month, Naval Ravikant and Babak Nivi produced a thoughtful and enjoyable podcast on the Four Kinds of Luck, referencing this old gem from Marc Andreesen.  The third kind of luck (or “Chance III” as Andreesen termed it) can be summarized by Louis Pasteur’s observation that “chance favors the prepared mind.”

In that spirit, TransLink pursues investments around targeted thesis areas.  For example, we recently participated in the most recent round of investment in AiFi.  We had identified cashierless checkout as a fundamental shift in how brick-and-mortar retailers will be doing business, and subsequently met with or investigated every startup in the category.  Ultimately we decided that AiFi had the best combination of design approach (i.e. pairing cameras with shelf sensors, not camera-only), technology IP, and business traction, and we were fortunate to be able to invest in the AiFi team.

What are some of the other current areas of focus for TransLink?  As noted below, in many cases our investment theses are informed by our relationships with our fund’s investors (Limited Partners), all of which are large multinational corporations in Korea, Japan, and Greater China.  We have a high success rate of helping our portfolio companies eventually forge business and/or investment relationships with our investor base.

Robotics as a Service (RaaS).  Industrial robotics presents the classical case for outsourcing: doing it yourself is hard, incurs high upfront costs, and requires specialized knowledge and skills.  RaaS allows customers to shift robotics capex to opex, and get started quickly without needing to build an in-house team of experts.  Simply hire a robot like you hire a human employee!  The global service robotics market was valued at $10.4B in 2017, and is expected to reach $28.7B by 2023.  This area is very relevant to our limited partners in the electronics and automotive spaces which have significant manufacturing operations.

Cyber Insurance.  Insuring companies and individuals against cyber attacks and other electronic mishaps is a relatively nascent but fast-growing market.  The cyber insurance market is projected to grow from a few billion dollars today, to $14B in 2022.  Insurers lack much experience data, making cyber-risks difficult to price.  Startups in this space require expertise in both information security and insurance, and very few founding teams have experience in both.  The cyber insurance market is of interest to virtually all of our limited partners as potential customers, but of particular interest to our investor that is a large Japanese insurance company.

Health IT / Digital Health.  Regulatory pressures are the dominant value driver in this space.  Value-based care is driving initiatives to take cost out of current processes, while at the same time deriving better care out of the clinical setting.  Particular themes of interest include patient monitoring, SaaS solutions placed at the center of the medical data flow, digital neurocognition therapeutics, and health care security management.  This space fits well with the interests and capabilities of several our limited partners, including those in insurance, banking, and contract manufacturing.

Logistics.  The explosion of ecommerce and the fragmentation of the retail supply chain continues to create opportunities.  Though huge companies such as Shopify and Flexport have already been built riding the waves of changes to how products are produced and sold, there is still considerable innovation yet to play out in the entire chain from drayage to ocean freight and warehousing.  Themes we are considering include logistics marketplaces and next-gen 3PL companies.  The explosion of SMB ecommerce players creates the need for shipping and 3PL providers to be able to support these smaller businesses efficiently.

If you are an entrepreneur in any of the above areas, please give us a shout!

Author

Tom Cole

Apr 08, 2019