Sizing Something That Doesn't Exist: Forays into the Robotics Market

The “robots are coming” narrative has two parallel conversations. One is a dialogue over whether or not this is a good thing. Team Bee collaborated (argued, postulated, wrote, erased, and wrote again) over several months last year to develop our core thesis, Machines Will Win on that topic. Spoiler alert: Yes, they will win, and we’re excited to be among those leading the way to positive human-machine engagement as evidenced by the companies in our portfolio.

The other conversation is around financial rewards and it goes something like this: Robots are coming and they bring with them dramatically reduced labor costs, blindingly fast efficiencies, and embarrassingly large profits for their makers, users, and investors.

If only any of it were that simple.

Yes, a global robotics industry is rapidly emerging. Writing about it has been like trying to describe the ground under my running feet. And the industry, as well as the investment it requires, faces all the challenges of any emerging business field. It also has some unique and unprecedented challenges, and has us posing questions we’ve not asked before.

In “Demystifying the Robotics Market,” I set out to define the developing space, looking at the simplicity (not) and cost (high) of implementing robots, market conditions among the two dominant robotics producers and users (the U.S. and China), and possible solutions to the problems of business models and expense. Please have a look. I eagerly await your thoughts and opinions, so start a conversation with me at kira@beepartners.vc, and use that email address as well if you’re interested in a job in robotics. Our robotics investments in Skycatch, Carbon Robotics, and Iris Automation have given us fascinating and unique insights and we know them to be exciting and rewarding places to work.  

CalFounders Elites Meet Elite Meet

Does Silicon Valley need more AI PhD’s? Or could some seriously operationally-savvy generalists, say … people trained to deal with existential uncertainty and practiced in keeping cool in the midst of often unrelenting chaos, fill a meaningful role in tech startup?

That was the question on our minds as we developed this year’s first Frontier Innovators Quarterly for CalFounders. On April 3rd, we partnered with BearX and SkyDeck to bring together CalFounders and Bee Founders with Elite Meet, a national group of military veterans transitioning to the workforce. The goal: Learn how hiring military veterans can benefit early-stage startups.

And while being grateful to anyone in military service, I should make clear that these aren’t rank-and-file military. Elite Meet members have served in special forces like the Navy SEALS, Army Rangers, Marines MARSOC, and in the Air Force as fighter pilots and members of AFSOC. Hence the “elite,” a well-deserved acknowledgement of their rank and achievements.

Tim likes to say Elite Meet members casually walk through walls. That might not have been exactly what Bee Founder Rosanna Myers of Carbon Robotics was looking for when she first interviewed Elite Meet member and Navy SEAL Zach Marshall, but she was able to see his no-nonsense potential at their first interview.

Zach and Rosanna participated in a panel I led along with Bee Founder Rachel Olney of Geosite and Joel Tolbirt of the Elite Meet management team.

In the panel and later in smaller sessions in the CalFounders’ tradition, Zach recalled how he pitched himself in their interview, particularly how he proved his readiness to engage with the business aspects of Carbon by completing some writing tasks on request, and how he was completely upfront about not being knowledgeable about robotics. His honesty appealed to Rosanna more than any preconceived industry notions he might have had.

The panel and discussion sessions also addressed what jobs might be appropriate for generalists like Elite Meet members. Early-stage companies are hungry for employees who can figure “it” out even if they don’t know what “it” is, and they crave horizontal generalists with independent, can-do attitudes. This often manifests, as it did with Zach at Carbon, in a chief of staff or business operations role, managing long-tail tasks with very little oversight.

Our upcoming Frontier Innovators Quarterly events will certainly vary in topics while keeping the hallmark CalFounder small-group sessions. Next up, we’re sponsoring StEP, co-founded by Bee spring intern and Cal MPH / Haas MBA candidate Santiago Freyria Dueńas. Stay tuned for dates and details. We hope to see you there.

Heroic Sideqik

Back in 2012, I was a sole GP investing from a windowless office in a shared workspace south of Market. With the backing of several remarkable and patient LPs, I had raised $7M of capital and invested in only 25 companies. I was learning a lot in a very hands-on manner.

The portfolio had its moments of high drama, as portfolios usually do. During this time, Sideqik (Bee I) was on the violent swing of the entrepreneurial roller coaster, with a big personnel change at the top. Co-Founders Jeremy Haile and Tree McGlown and I jumped on a call ... It could have been our last. We were brutally honest about the challenges ahead and the near-certain death as a result of an utter lack of capital and a product that just wasn’t working. On that call, I promised to work with them weekly to help right the ship.  Sometimes daily, on those calls and in those meetings, we would discuss the upcoming opportunities, what was being learned every week, what was being accomplished, and what to do next. After every session, Jeremy and Tree would return to the grind and execute with what limited resources they had.

Through those meetings two things happened. One was that a spark began to be lit in these Founders that gave me measured confidence (hope, perhaps?) that these two were the right people to raise this phoenix from its ashes. The second was the conviction that Bee Partners would dedicate and devote time to any founding team that was truly struggling yet definitely had the functionality, the resource magnetism, the empathy, and the passion to execute for brilliance. And, we had LPs who had co-invested as well—we weren’t about to cut bait as would so many other “rational” VCs. We saw that this was not a situation where they weren’t cut out to be Founders, not at all. They just had their backs against the wall and had to make remarkably difficult choices in that phase of their entrepreneurial journey.

Just like a society should be judged by how it supports its most vulnerable members, so should investors be judged by how we support our portfolio companies in their darkest hours.  

This was by no means a quick turnaround and I have long been inspired by how Jeremy and Tree navigated the very squiggly line of entrepreneurship. Every single time they generated some revenue, they would plow it back into the company, and Sideqik became a steady drumbeat of more customers, more employees, more resources. There were always trade-offs—should they hire for marketing or engineering—and real struggles to determine the best uses of capital. But they were making progress, picking up customers like Coca-Cola, Universal Music, and Procter & Gamble.

And then, in 2017/2018, growth rocketed—they had found product-market fit! Their phenomenal patience finally started to pay off and, as of this week, the company is now capitalized with a $5M Series A, led by Jackson Square Ventures.

So, congratulations to Jeremy, Tree, and the entire team at Sideqik, and to JSV for adding these resilient operators into your portfolio—Next step, $100M in revenue!


Neighborly Launches an Opportunity Fund for Open-Access Fiber Infrastructure

Back in 2014, we invested in a crazy Founder named Jase Wilson, who had the audacious vision to connect capital and local communities to drive investment in public infrastructure like schools, parks and more. Our investment thesis: The inefficiencies in the $3.8 trillion municipal securities market can only be solved through software.
   
Since then, Neighborly has closed more than $30M in funding from investors including 8VC, Emerson Collective, and Stanford University. The company won The Bond Buyer "Deal of the Year" award and has grown to a team of 35.

We recently held a call to invite qualified investors to join Neighborly’s Opportunity Fund which would enable local communities to fund their own open-access fiber network infrastructure. Read more about this uniquely powerful effort here, in Jase’s clever and very wise post, You Drive a 1972 Pinto Because Your Neighborhood Makes You.