The Automation Economy
AI and robotics will propel us towards the biggest productivity boom in recent history
With data showing a shift towards profitability via automation, 88% of executives are leaning towards profitability over growth. We believe that AI software and robotics will accelerate their path to profitability. Specifically, products with the potential to augment both blue collar + white collar productivity by 10x.
Generative AI and the underlying large language model as a platform shift that will disrupt the way that white collar workers live, breathe, and work. McKinsey estimates that 30% of all hours worked could be automated by 2030, which will add $2.6-$4.4 trillion to the global economy. The scope? Endless: from drug development, to agriculture, to transport and logistics, to mental health. We’ve never seen AI technology that can be applied to such a wide breadth of end markets.
We also believe the blue collar workforce will be disrupted by robotics. As such, we’re looking at the robotics and self driving market with renewed interest. Cruise and Waymo, two of the self driving titans, have successfully removed the safety driver, and are in the process of scaling their fleets across the US. Based on simulation studies, it would only take a few thousand driverless vehicles to displace Uber’s entire business in San Francisco, and Cruise already operates 400 concurrent vehicles.
On the commercial trucking side, Aurora, the industry leader, recently closed a capital infusion of $820M, which gives it ample run-way to commercialize its service later this year. The stock is up 190% YTD. We expect to see these companies successfully transition from R&D to commercialization, and start to focus on improving their unit economics.
Our expertise in the automation economy runs deep. In 2017, I co-founded rideOS. rideOS built intelligent dispatch and routing software to efficiently move people and things throughout the world, helping customers to increase their fleet efficiency by 50%. Gopuff acquired the business in 2021, and our teams saw firsthand what technology could do to improving the economics. The experience here translates to 3 advantages.
Relevance: Entrepreneurs building products in the automation economy often reach out to us to jam on new ideas (or struggles!). We’d love to hear from you.
Understanding: We understand the customer problem well, which allows us to appropriately assess products, technologies, and go to market.
Partnership: Our domain expertise allows us to lean into developing a culture of serving entrepreneurs.
Welcome any thoughts or feedback on the automation economy. We’d love to hear from you!