When I started my summer internship at a venture capital firm a few months ago, I had a vague idea about how VC worked, mostly derived from pop culture, such as the HBO hit show Silicon Valley.  I never really paid attention to it, mostly because of the insistence of pop culture and tech to portray the industry as something only for the mega-rich and their money managers. But the past couple months at McRock Capital have transformed that vague sense into a firm understanding and helped open my eyes to a world I now know I knew very little about. It was a steep learning curve to say the least, but here’s a couple of things that I quickly learned that really stood out and surprised me.

1. It’s a people business
All aspects of venture capital from deal sourcing to deal making to managing portfolio companies require having and maintaining good working relationships with people. As much as you need to have good business and financial sense, you also need to have really great people skills to have any sort of sustained success or longevity, and in truth, any enjoyment in the work you do. You rely heavily on your network of entrepreneurs, peers in the VC world, and co-workers. Without having good working relationships with all these people, it becomes nearly impossible to get anywhere.

2. You’re never not learning
At its core, venture capital is all about curiosity and learning. You are learning about companies in the sectors your firm is interested in. You are learning about how different companies operate, what makes their solutions or products different from their peers and competitors, and how macrotrends will shape their businesses in the years to come. Part of the job description of anyone in venture capital is being a constant and curious learner. And ironically, the more you know, the more you figure out how much you don’t know, which for most people, is a self-sustaining loop that pushes you to not fall behind.

3. Don’t stretch yourself too thin
There are so many companies out there. There are thousands of ideas, solutions, products, and pitches and that’s just in North America. There are multiple more companies in Europe, Africa, the Middle East, East Asia, South America, Australia, and in every other part of the world. Those companies are also in different stages and cycles of growth. It’s impossible to be an expert on everything so be a specialist. Most people in VC spend their entire careers on one focus area, and sometimes one investment stage in that focus area. Being a generalist is fine (sometimes) but being a specialist will take you a long way.

4. Communication, communication and more communication
The ability to effectively communicate is a skill needed in almost every type of job and industry, but it is especially true in VC. You need to be able to communicate your thoughts, your ideas, what’s holding you back, what you’re excited about, what makes you feel great, and what makes you feel uneasy. And you need to communicate all of that CLEARLY. There are so many different crucial lines of contact that need a clear gauge on your own thoughts from your bosses to portfolio companies to potential investments to even other firms and LP’s (a VC’s investor). You need to be sure to communicate what you want and need or else that lack of clarity will snowball into much bigger issues really quickly.

5. Have a process and trust it:
Your decision-making process, whatever it is, is incredibly important. What are your criteria for investment? What criteria do you have for management teams, for solutions, for financials, for yourself? How you make decisions on what to invest in and what not to invest in and making sure to trust your decision and not second guess it is crucially important not just for your own success, but for your own well-being and sanity. This process serves as a routine for you and allows you to focus on the process rather than the outcome. In basketball, players spend their entire careers having the same free throw routine and mastering it, so no matter if it is in practice or in the last second of a tight game, players have the same process that they trust and know that will lead to the outcome they want, no matter the situation. Humans can agonize over decisions for years after, which is terrible for your psyche and mental health, but if you have a trusted process you won’t beat yourself up as much. You’ll be able to say, “such is life!”.  

There are so many things to be said about the VC world, and so many more lessons I’ve learned personally, but my eyes have been opened and I have realized that a career in venture capital is attainable and extremely interesting.

McRock Capital provides paid summer internships to recent graduates and young professionals from underrepresented minorities in the venture capital industry to educate them on a potential career in the sector and provide practical work experience. McRock was founded with Diversity & Inclusion as a key pillar of its culture. The McRock Summer Internship Program integrates candidates into many aspects of the VC business with frequent interactions with all members of its investment team including the co-founders.

Who owns the ‘T’ of the Aye Aye Oh Tee!

The new year’s got McRock Capital’s Research Squad cracking its knuckles, ready to crystal ball the biggest trends that could influence the Industrial Internet of Things (IIoT) in 2020.
 
Now that the hoopla around IoT has settled, a lot of companies have started treating it as less of a buzzword and more of a way to accelerate their growth trajectory. Consequently, we’ve identified five trends we think will dominate the industry this year, transforming the digital landscape as we know it.

IoT and ClimateTech—Mother Earth is on FIRE

Mother Earth is heating up in an unprecedented way; it’s DEFCON 1, people!

As more countries start to take the threat seriously and strive towards sustainability, green technology is expected to take the lead in reducing waste and energy consumption while facilitating effective resource utilization. However, the high cost of implementation and dearth of awareness can impede the growth of the green technology and sustainability market. To combat this, we expect Industrial IoT to play a major role, since its entire premise is based on improving productivity, reducing uncertainty and providing greater visibility to all stakeholders.
 
Several Industrial IoT solutions have the potential to optimize processes, streamline operations, reduce emissions and create a positive impact on the environment. Take agriculture for instance. By employing ground humidity sensors and leveraging environmental data, farmers can accurately gauge the amount of water required to irrigate their land, minimize the use of exorbitant chemical products and increase crop output.
 
In a similar vein, electricity demand for a city or an industrial complex can be anticipated so that requisite energy is delivered to less populated areas. Even waste management is being revolutionized, thanks to cyberphysical systems. For example, Songdo, a smart city in South Korea, has integrated IoT and sensors to bolster its waste management system. In fact, the city aims to recycle 76% of its waste by 2020. 
 
We think corporations, governments, and tech companies are well on their way to partnering like never before to play their part in making a difference. Solutions addressing electrification in mobility, adaptive traffic control to reduce emissions in megacities, and waste management will gain unprecedented attention in 2020.

Predictive Maintenance #FTW—I Appeared, I Predicted, I Solved

With predictive maintenance and Industrial IoT working in tandem, disparate systems and assets can connect, capture, identify, share, analyse and act upon data that require attention.
 

We crafted the body of the IoT over the past decade, now we are building its mind. 

Predictive maintenance, which employs condition-monitoring equipment to evaluate performance in real-time, is not a new concept. However, the key to optimizing it is IoT. With predictive maintenance and Industrial IoT working in tandem, disparate systems and assets can connect, capture, identify, share, analyze and act upon data that require attention. 
 
At the risk of sounding poetic, predictive maintenance is the utopia of asset optimization—a beautiful dream that all operators and CxOs in the industrial space fantasize about. 
 
Since the inception of McRock Capital in 2012, we have tracked the number of sensors that have been shipped. Their Compound Annual Growth Rate (CAGR) has finally come down from its previous triple-digit growth to 92%. Moreover, we have also seen machine-to-machine (M2M) communication soar. To us, this signifies that industrial machines and devices are now equipped with sensors and can communicate with the web by themselves.

Thanks to a surge in predictive maintenance, we can now start making sense of data using Artificial Intelligence (AI) and Machine Learning (ML) models. Rest assured, though, machine whisperers (aka plant operators) are not being replaced, just augmented, as predictive maintenance solutions will continue to evolve and become part of the overall maintenance workflow.
 
In fact, with better quality of data and advanced AI and ML models, the workflow will become semi-supervised, and inevitably, unsupervised. In simple terms, we won’t have to pore through data as much as we have in the past. The software will figure it out by itself. Predictions will become much more accurate, insightful and faster than we have ever experienced.

The Future is 5G–Mo’ G’s, not Emojis😀😃😄😁😆😅😂🤣😊😇🙃

5G, in congruence with IoT, is already powering the Fourth Industrial Revolution; much like steam, electricity, and silicon powered the previous three.

There’s a storm coming, Mr Wayne. It’s called 5G.

The ubiquitous smartphone and the advent of 4G have already metamorphosed the way we communicate. With 5G, we are on the threshold of the next generation of mobile communication. 5G, in congruence with IoT, is already powering the Fourth Industrial Revolution; much like steam, electricity, and silicon powered the previous three. This revolution is blurring the divide among the physical, biological and digital worlds that comprise AI, 3D printing, genetic engineering, and varied technologies. With enhanced capacity and accelerated response time, 5G is a solid foundation for this transformation.
 
We predict that this year, the private adoption of 5G will accelerate and take over its public deployment, yet have more machines as its customers than humans. Billions of devices will come to life, connect and exchange data at speeds we’ve never experienced. The biggest reason 5G networks will demand AI to do so is that they’re much more complex than previous-generation networks. In November 2019, multinational networking and telecommunications giant Ericsson estimated that by the end of 2025, 5G will have 2.6 billion subscriptions covering up to 65% of the world’s population. It went on to state that the number of cellular IoT connections will reach 5 billion worldwide, up from 1.3 billion then. If that’s the number of connections humans will use, think of the number machines will. Unimpressed? What if we tell you that there are about 38.5 billion connected IoT devices worldwide as compared to 9.5 billion mobile phones right now?
 
Let that sink in. Not only will the smart brick in your hand connect to 5G, but so will everything from autonomous vehicles and robots to industrial pumps. Industrial and urban infrastructure will enable the 5G network and influence the rollout of Automated Guided Vehicles, real-time edge analytics for more secure operations, video surveillance, etc.

Industrial Robotics will Transcend the Everyday–Domo Arigato, Mr Roboto

Industrial robots are transcending the world of manufacturing and supply chain/logistics because they have proven their worth in addressing the labour shortage and undertaking perilous tasks.

The robots are coming and the industrial jobs they are doing may surprise you!

Industrial robotics has remarkably changed in the past few decades. Customarily, robots are tailored for a certain task at hand, and industrial robots have revolutionized the manufacturing industry because they offer several bottom-line benefits. At the top of this list is efficiency. The robots synthesize speed and uptime to bring about higher production capability at reduced costs.
 
Moreover, industrial robots, when programmed accurately, are scalable—vastly improving the consistency of production, the quality of the product, and helping reduce waste. They also deliver excellent returns on investment (ROI) despite the high initial cost.
 
These robots are now transcending the world of manufacturing and supply chain/logistics because they have proven their worth in addressing the labour shortage and undertaking perilous tasks. However, in emerging markets, where robots have not yet made a disruptive impact, robotics companies can still get by with single-point solutions.
 
Either way, industrial robots will eat away at cobots in conventional industries. New sensors that can be applied to faster industrial robots will make them smarter, reliable and more cost-efficient. A word of warning to our little cobot friends: resistance is futile. 

Edge Computing will Bring the World Closer–The Scorpions got it right… We are Walking on the Edge

Self-driving cars are an excellent example of edge computing as Tesla’s Model X autopilot controls the distance from the lead car and centres the vehicle in the lane.

Who’d a thunk that the 80s anthem will be so relevant in the industrial context by 2020? 

For our intents and purposes, ‘edge’ refers to literal geographic distribution. So edge computing is just computing that takes place at or near the data’s point of origin, rather than in the cloud. But fear not, the cloud is not going away any time soon; in fact, it is coming closer to you by transforming the way data from millions of devices around the world are processed. The dramatic growth of IoT and a slew of new apps needing real-time computing power is powering edge-computing systems.
 
Edge computing has gained momentum, as evidenced by the recent acquisition of the edge AI startup, Xnor, by Apple. Despite the current shift from centralised/cloud to edge architecture, the two share a symbiotic relationship. The faster network of today (to which 5G is a contributor) facilitates edge-computing systems to support real-time applications.
 
As we process and compute more data in real-time, edge computing will become more pervasive in the industrial setup and enable the execution of most mission-critical processes and functions, including self-driving cars and video analytics.
 
So, here we are, on the Edge with our 5Gs and Predictions. Mother Earth, forgive us. Mr Roboto, help us. Time to roll up our sleeves and dedicate 2020 to individuals and organizations that have the courage to do their part and change the world.
 
Author: McRock Research Squad