The case for atoms
Software's eaten the world — all sorts of marvels have been brought about by bits being ordered and transported in organized, structured ways. This unlocked unprecedented value with products and services that are contained in its own realm of bits: games, streaming, social media, metaverse, web3, much of the web… It'd be impossible to make an exhaustive list.
Bits, as great as they are, are not sufficient. They don't move water across a pipeline system from storage to houses. They can't feed anyone. They're not the sole responsible to take a rocket to space (and then back). Bits won't capture carbon from the atmosphere. Bits won't fight disease.
Tasks above are essentially performed by atoms. They most definitely should receive input from bits, but the essential way in which these very important jobs get done is through very material, real-world, atom manipulation. The sort you get with physical and chemical processes in large scale — some times very large scale.
Many of the most pressing problems (and largest opportunities) are intrinsically related to atoms:
- water desalinization
- carbon capture
- space exploration
- increase transportation efficiency across the Earth (both private and commercial/cargo)
- new drug, therapy or vaccines developments
- solving housing
- solving starvation
- transitioning out of fossil fuels
- I can go on, but the point is made.
Step vs incremental changes
Many of the atoms-bound issues I described above are ripe for step changes rather than incremental solutions. This means that applying knowledge, tech and experimentation on them are bound to bring asymmetric gains to the respective markets, industries and ultimately to the lives of people involved in these cycles — and most affect a very large portion of the world.
While some of these efforts (e.g., carbon capture, water desalinization, new drug therapies) require a lot of research and deep tech to bring improvements, others could be approached with commercial tech paired with clever business models, that are willing to ask tough questions and work through tough business challenges. I see housing, starvation, logistical efficiency in this category.
Insanely big markets
Many of bit-first markets seem very attractive due to the size of the pie. Fintech market is bound to reach a $305 billion size by 2025¹, the gaming industry is set to reach almost $546 billion by 2028², and don't even get me started on the already $1.8 trillion crypto market, expected to reach $34 trillion by 2027³.
Well… housing is a $10.5 trillion market today, and growing⁴. Food? $8.77 trillion — evergreen, growing.⁵ Logistics? $7.6 trillion at 2017, expected to be almost $13 trillion by 2027.⁶
1% of fintech by 2028 and you'll capture ~$3 billion in revenue. 1% of food and you're biting over $80 billion in annual revenue. Any valuation exercise that says that the fintech company at $3b revenue is worth more than the food co at $80b should be looked under a very critical scrutiny.
Beyond wealth — peoples lives
People do better in life with a bank account — that's a hard truth. But they can do well without one, it happens. Most people in the world do not own a single satoshi — or ever will. But everyone eats. Everyone should be housed — its way worse to go by without a roof over your head than without a bank account. And the way people and things move around the globe influences everyone's quality of life.
There are also adjacent opportunities to these hard problems: the chain involved in housing, logistics, food, for instance, is filled with precarious labor, wealth inequality due to traditional businesses malpractices, or just plain unwillingness to innovate. These are huge problems to tackle on their own, and improving even a small dent in them will outright improve the human experience on the planet.
If we go into carbon, pharma or water related opportunities, then we're talking about developments that are necessary for the continuation of our life on Earth — and on the short-term!
Atoms open up opportunities to not only make a real buck, but to create the very paths through which we'll not only survive, but improve and thrive as a society. Great software is desperately necessary to help solve this issues — for instance, blockchains will be of much importance to us in the near future, I firmly believe. But without the willingness to get real dirt on our hands and tackle the heavy work needed to change the way of atoms, little can be accomplished.
So factor this when you start a business, join a company or just plan your next step: what is the size and rate of the change I'm working to make in the world? Who will I serve? What am I building?
Consider atoms.
----