How to Invest in Tomorrow’s Tech Trends Today
We put the question to Jerry Yang co-founder of Yahoo!
3 min
Which companies, public and private, are best-positioned for the next 100 years—or at least the next few years? We put the question to Jerry Yang, founding partner of AME Cloud Ventures and co-founder of Yahoo!, and a member of Barron’s Centennial Roundtable. Yang, a longtime venture capitalist based in Silicon Valley, has seen his share of start-ups and innovations. He highlights some of today’s most promising companies and trends in the edited interview below.
Barron’s: Which companies excite you these days, and why?
Jerry Yang: I’ll start with Zoom Video Communications [ticker: ZM]. Never in a thousand years would we have thought that ‘Zoom’ would become a verb in this context. This company took the opportunity to become massively skilled in the past 15 months. In hindsight, we might say it was easy for them to have done that, but they had to overcome a lot of privacy and scale issues. They really matured in a hurry. The future for video is huge. How do we enhance it? How do we make video more intelligent and productive?
Will the future belong to Zoom or a host of competitors?
From the big competitors to start-ups, everyone is emulating or attempting to catch up to Zoom’s capabilities. Zoom has announced a platform marketplace for applications. It is adding more intelligence to its platform, and more productivity tools. In my view, by launching an app store of sorts, Zoom can create an ecosystem that is a defensible barrier to competition.
Zipline, an on-demand delivery service, is another company to watch. It operates fixed-wing drones that carry a few kilograms of payload. They can fly 160 kilometres round trip. When they reach their destination, they drop an insulated package with a parachute. Zipline was founded in Silicon Valley, but its first scaled deployment is medical supply in Rwanda, Africa. Zipline delivers blood supplies and critical medicines. It continues to scale. It is an incredibly exciting company.
Do you expect Zipline to go public in the next few years?
That’s a good question. Companies are raising as much money now in private funding rounds as they would have in an initial public offering. IPOs help with branding and maybe create a new investor base, but if a company just needs capital, there is plenty in the private market. From 2012 to 2015 or ’16, there were few companies coming public. The IPO market goes in cycles. With today’s abundance of low-cost capital, private companies can take risks and have the money to grow.
What other industries or companies look promising to you?
In the area of artificial intelligence and drug discovery, we invested in Recursion Pharmaceuticals [RXRX], which went public in April. Recursion is based in Salt Lake City, which has become a hotbed for biotech start-ups. The company uses massive data computational tools, lab robotics, and a petabyte-level database to speed up the drug-discovery process. Zymergen [ZY] also operates in an area I’m pretty excited about—biofacturing. This is a materials manufacturing company, using AI, automation, and biology for scale manufacturing.
How does biology fit into the equation?
Instead of using chemicals, for instance, they’re using yeast fermentation to make new materials and products—from new electronic displays to naturally derived bug repellents. Ginkgo Bioworks is another biofacturing company I’m excited about. More broadly, the birth of genetic sequencing launched a whole industry that’s exciting, including gene editing. Synthetic biology is at an early stage, but we’re already starting to see companies come to fruition, such as Twist Bioscience [TWST], which manufactures and sells synthetic DNA-based products. The world will need more of these technologies in coming years. Ten years ago, we hadn’t “printed” a single gene. Now we’re printing tens of millions, and that will go to billions in the next few years.
What other technologies should we be watching?
I’ll emphasize a couple of trends. We’re moving into a world where cameras will be smarter. Whether cameras are manned by Zoom apps or cars or your watch, they will be equipped with more sensors, and the sensors will get smarter. That means more data will be fed into the cloud. We’re also seeing huge investments in natural-language processing. A lot of theoretical work was done in this area, and now we’re starting to see practical applications. All of this means the cloud is getting smarter. We’re going to need a lot more bandwidth. If we build bandwidth, the applications will come. Sensors and devices will be communicating with each other, without human intervention. That’s another massive source of new data that will come online.
The idea of using biomaterials in sensors is still in the research lab, but it’s something to watch. Sensors made of carbon, instead of silicon, could be much more responsive to an individual’s biology.
We haven’t talked about longevity. Science tells us the average life span for today’s teenagers could be well beyond 100.
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Continued stagflation and cost of living pressures are causing couples to think twice about starting a family, new data has revealed, with long term impacts expected
2 min
Australia is in the midst of a ‘baby recession’ with preliminary estimates showing the number of births in 2023 fell by more than four percent to the lowest level since 2006, according to KPMG. The consultancy firm says this reflects the impact of cost-of-living pressures on the feasibility of younger Australians starting a family.
KPMG estimates that 289,100 babies were born in 2023. This compares to 300,684 babies in 2022 and 309,996 in 2021, according to the Australian Bureau of Statistics (ABS). KPMG urban economist Terry Rawnsley said weak economic growth often leads to a reduced number of births. In 2023, ABS data shows gross domestic product (GDP) fell to 1.5 percent. Despite the population growing by 2.5 percent in 2023, GDP on a per capita basis went into negative territory, down one percent over the 12 months.
“Birth rates provide insight into long-term population growth as well as the current confidence of Australian families,” said Mr Rawnsley. “We haven’t seen such a sharp drop in births in Australia since the period of economic stagflation in the 1970s, which coincided with the initial widespread adoption of the contraceptive pill.”
Mr Rawnsley said many Australian couples delayed starting a family while the pandemic played out in 2020. The number of births fell from 305,832 in 2019 to 294,369 in 2020. Then in 2021, strong employment and vast amounts of stimulus money, along with high household savings due to lockdowns, gave couples better financial means to have a baby. This led to a rebound in births.
However, the re-opening of the global economy in 2022 led to soaring inflation. By the start of 2023, the Australian consumer price index (CPI) had risen to its highest level since 1990 at 7.8 percent per annum. By that stage, the Reserve Bank had already commenced an aggressive rate-hiking strategy to fight inflation and had raised the cash rate every month between May and December 2022.
Five more rate hikes during 2023 put further pressure on couples with mortgages and put the brakes on family formation. “This combination of the pandemic and rapid economic changes explains the spike and subsequent sharp decline in birth rates we have observed over the past four years,” Mr Rawnsley said.
The impact of high costs of living on couples’ decision to have a baby is highlighted in births data for the capital cities. KPMG estimates there were 60,860 births in Sydney in 2023, down 8.6 percent from 2019. There were 56,270 births in Melbourne, down 7.3 percent. In Perth, there were 25,020 births, down 6 percent, while in Brisbane there were 30,250 births, down 4.3 percent. Canberra was the only capital city where there was no fall in the number of births in 2023 compared to 2019.
“CPI growth in Canberra has been slightly subdued compared to that in other major cities, and the economic outlook has remained strong,” Mr Rawnsley said. “This means families have not been hurting as much as those in other capital cities, and in turn, we’ve seen a stabilisation of births in the ACT.”
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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
