Technology evolves in waves. Innovation drives adoption, and soon what previously only existed as science fiction suddenly becomes commonplace. We’ve seen this before with the internet, mobile devices, and now we’re increasingly seeing it with AI.
Similar to the waves within specific types of technology, there are also waves across particular industries. Often, the volatility in both asset prices and hype are counter-cyclical to when the most interesting work is done in a category. Coinbase was founded in 2012, but rode the hype waves of crypto in 2017 and 2021. OpenAI and Anduril were founded in 2015 and 2017 respectively, but are clearly riding waves of hype in AI and “American Dynamism” today.
Often, investors and talented people alike too frequently get caught up in tracking hype cycles, rather than cycles of technological progress. Think of the people who rebranded quite quickly from web3 in 2021 to AI in 2022. Instead, the most successful outcomes often occur in counter-cyclical periods of time.
Take one example of a potential wave that is, arguably, currently experiencing a downturn: biotech.
One of the best reflections of this is Illumina, a biotech company that operates in a broad swath of development and manufacturing to integrated systems across genetics and biology. The company’s market cap reached a high of ~$76 billion in 2021, before declining significantly over the last two years to ~$21 billion.
Despite the company’s performance, and the broader skepticism of the category, there are still significant opportunities arising in the category. Noah Smith describes it this way:
“We usually think of biotech as distinct from innovation in electrical and mechanical applications, but the two are beginning to merge. Computation is essential to modern drug discovery and chemistry in general, and AI looks like it’ll be another important tool. Meanwhile, biological experimentation is increasingly making use of robots in the lab.But the biotech revolution that’s unfolding right now isn’t just downstream of those other technologies — it’s the result of decades of massive work and deep-pocketed investment that’s now coming to fruition.MRNA vaccines, the heroes of the Covid pandemic, are now being applied to a ton of other diseases. A new mRNA vaccine for malaria promises to help conquer humanity’s most deadly chronic illness. And a new mRNA vaccine for pancreatic cancer — which you actually take as a therapy after you’re diagnosed, not before — promises to save a lot of lives from one of the deadliest cancers. Other cancers are probably also treatable this way.Another technology that’s just now coming to fruition is genetic engineering, especially via CRISPR. The FDA just approved a drug that actually goes in and reengineers the cells in a living human body to treat sickle cell anemia. Other such drugs are in the pipeline. Genetic engineering is also proving useful for modifying bacteria and other organisms for useful purposes, such as producing fuel or fighting cancer. Of course all of this is in addition to the potential for reengineering the human species itself, but that’s still on the horizon.A third major area of technology whose potential is still on the horizon, but could be realized in the near future, is synthetic biology. This year, scientists synthesized the DNA to make an artificial yeast cell. Synthetic biology could eventually be used to create all kinds of custom-built organisms to do various jobs.”
As powerful and attention grabbing as the latest hype cycle is, there is often more opportunities identifying those areas where fewer people are paying attention, but significant technological progress is being made. Even within AI, there are a myriad of use cases that aren’t getting the attention they deserve!
