From Hightech to deeptech towards…….. What??

Language and labels of startup investors varies a lot over time. The 1990s catchword high tech (super tech never caught on) was substituted by prefixes to “tech” related to application areas etc. In recent years, deep tech has become a catchword as the risk aversion in the stock market has increased. Investors turns now, again to startups with strong technologies as a possible recession becomes likely. Why bother about a tech label, which may be abandoned when the next upturn arrives?

As a book writer, I prefer to use clear definitions of the terms I use in my books. Now in my third book on best market practices on startup selection, financing and guiding I continue to bother about the characterizations of strong technology concepts, because they are important for selecting high potential startups, designing fair deal financing agreements and for guiding strategies for their early-stage years and beyond. Here are some reflections on what the term deep tech among others may be defined to mean. 

Following the traditions from the 1990s, I prefer to use high tech for technologies that have recently been developed in so-called frontier technology areas. VCs in Silicon Valley are always looking for the next tech trend to invest in. This concept fits well with the first mover investor preferences of the 1990s. 

The use of the deep tech concept refer more to the uniqueness of a technology, which may be in a mature or new tech field. The term is comparable to the term patentability and relates to the originality of a possible invention, idea or research breakthrough. As such, this concept may also refer to the importance of an unpredictable creativity behind a problem solution that the new technology´s product may address.

Both the prefixes high or deep indicate distances from some norm. May that indicate that other distance concepts might be relevant as well? Could we give meaning to the term wide tech?, for example. I may refer to that a new technology leap has potential multiple product applications, such as is the case for platform technologies. 

What about also introducing a long tech term? What possible meaning may be defined for a long technology? Well, as a startup investor, I look at the potential duration a technology leap of radical or disruptive proportions might get before a second tech leap may occur in the same field.  Consequently, a short tech may be expected to have short product life cycles that necessitate a new product generation in the market in, say no more than three years. The market pioneer may then have to be ready with its second generation at this time point, but it may not have to be radically or disruptively deviating from the first one because it may address broader market segments or other geographies. 

While playing a bit with the use of concepts in this LinkedIn article, my forthcoming book takes the issue of technology labeling more seriously. My due diligence methods are built on a characterization of technology startups already introduced already in a 2006 book on Best Practice Venture Capital. These methods were instrumental when I founded the first and second business angel funds of the Stoaf Group in 2008 and 2013. A second book (in Swedish) focused on getting accuracy in select promising tech startups and became important when I founded a much better capitalized Stoaf III SciTech fund. My third book (forthcoming in English) focuses broaden the application areas. There, methods for characterization, compartmentalization and integration are presented. Thereby, consistency is achieved in accurately selecting high-yielding startups, designing their fair deal financings and choosing their optimal strategy paths primarily for their early-stage years.