The quantum tech landscape post Corona
Full stack ecosystems vs. commercial niche players
Quantum Tech for executives and investors
This week’s long take looks at the Quantum Tech landscape post Corona
The short take shares the most recent quantum news from the past week
The fan favorite SciFi section introduces the concept of Quantum Steampunk
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We have 7 new quantum firms, 20 new institutes, 1 new quantum VC, 11 new quantum deals in our fundraising pipeline this week
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The long take
Corona is changing everything and Quantum Tech is no exception. Many ventures are burning through their cash, most investors are preoccupied with preserving their existing portfolios, and the large vendors are scenario planning for what the market might look like whenever this is over.
The only thing that is certain is that things will be different. Let’s look at what trends have started to emerge and then try to paint the future.
Strategic investments are on the rise
Though the past week has been quiet, we have seen an unprecedented number and amount of investments in quantum within the last 6 weeks. And, largely, they can be put into one of two buckets:
Strategic investments - we have seen a number of very large checks written by DARPA, other government bodies as well as strategic partners into a variety of Quantum Tech firms to (1) preserve the variety of quantum computing modalities (superconducting vs. photonics vs annealing etc) (2) protect national interest and (3) shield teams of experts from losing their jobs and potentially turning to other pursuits
Commercial investments - we have also seen a number of much smaller checks being written to much smaller teams. Teams that have (1) a clear solution/product that meets a very specific need, (2) a commitment to go after customers and some signed LOIs or even contracts and (3) a commercial market that is possible to assess and plan for
Very simply, the chaff is being separated from the wheat. Unless you’re so large or special that you are strategic, we see a clear trend picking up to weed out those ventures that have unrealistic business plans, no clear route to market, or fail to prove their technologies
Uncertainty is the new certainty
This comes to no surprise to anyone who has ever looked at a technology maturity cycle or enterprise technology. Corona is simply accelerating that process like so many other things in our spooky world.
The only thing that we know for certain is that post Quantum Winter (aka The Great Rona) the quantum world will look very different. Only those preparing, planning and executing for that world today - despite the uncertainty - will be competitive in that new world.
Post Corona landscape
Uncertainty or not, (corporate) history gives us a clue or two of what that world might look like:
Full stack cloud vendors will solidify. This is the cloud wars all over again and many of the players are the same
Understand individual value propositions and positioning
What are their channels to market (enterprise and devs)
Ecosystems of partners, applications, verticals, etc
Use cases and solutions will win. Technology and products rarely ever sold; solutions and stories do
Founders with a commercial vision and great storytelling on top of their academic prowess
Smaller quantum teams with clear niche applications and a plan on how to scale
Assess the potential for disruption or network effects
Move over amateur investor, the venture landscape will be cleaned out and it’s time for the pro’s to take over
Data and technology driven investment decisions
Combination of DeepTech + commercial expertise
Identify, track and score use cases/solutions and their vendors to look for markets, network effects, disruption potential
Scenario plan the various full stack vendors and their emerging ecosystems. Identify the gaps and opportunities, and what ventures might fill them
For executives interested in Quantum in means that if you haven’t yet aligned with one of the above ideas then it’s probably too late to convince you. A lot can be learnt in failure - I certainly did myself many times.
For investors interested in Quantum it is time for investors to put your chips on the table. If you have funds, a strong existing portfolio and the resources to execute this is an enterprise technology field, which is about to write the rules for the next decade or two.
For Quantum Executives
Quantum Inspire, the new, European quantum platform has been launched in the Netherlands.
Quantum Communication has shown to be possible under water (stunning!!), thus opening up tremendous strategic opportunities. In similar but unrelated news a new breakthrough for a “quantum GPS” has been announced, a key effort for an independant, self contained location system.
IBM has released a new algorithm for protein folding with a very cool visual interface to try it out here.
A new report by consultancy McKinsey estimates the Quantum market to reach $10B by 2035 - a great report but IMHO it does not account for true disruption across verticals.
Personalities can gel or they can clash, even in Quantum. And apparently these two did not find a state of entanglement. Watch out on how this evolves as it might boost a competitor with much needed credibility.
For Quantum Investors
This week we added:
7 new quantum firms to our tracker
20 new quantum institutes
1 new quantum VC fund
11 new quantum deals in our fundraising pipeline
Details available here in our weekly investor digest.
The SciFi corner
A new field, called Quantum Steampunk, is emerging. Quantum Steampunk combines the theories of thermodynamics with the theories of quantum mechanics. The hope is that through this new thought framework, around the shared concept of entropy, we will be able to solve new, complex problems.
Thermodynamic’s second law states that the entropy of a closed, isolated system cannot shrink. Which also defines why time can only flow into a single direction. If applied within quantum mechanics, where we regard each single entity as a closed, isolated system, one has to wonder what the limits of this law are, as through quantum entanglement, it potentially extends into the infinite.
If you want to feel very dizzy and small in the world, think about the microsystems with entropies that nest into larger systems with larger entropies, and so on and so on—all the way up to the scale of the universe itself. Suddenly, the idea of a computer made by monitoring individual electrons one at a time doesn’t seem so far out.
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My framework to help Quantum companies survive this winter, crisis and pandemic is being adopted my more and more quantum firms. Read about it here and reach out to me if you’d like details or help.