Brian Li 🍊👾
@bli.eth
Spent the weekend talking to dozens of founders at YC alumni reunions and realized that we’re in the middle of an inflection for hard-tech companies. (10% of the recent batch of 240 startups are in hard-tech) Sharing some thoughts on why this is happening below ⬇️
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Brian Li 🍊👾
@bli.eth
💥 Global conflict including wars are causing significant policy shifts - Defense tech has broadly been “uninvestible” at the startup level due to the dominance of existing oligopolies, but Palantir and Anduril have broken through as flag bearers for innovation. - LPs at funds are now changing their perceptions around weapons due to wars and are loosening restrictions for what VCs can and cannot back. - Deglobalization is resulting in a focus on domestic manufacturing through both tariffs and subsidies. This enables manufacturing startups that would otherwise be uncompetitive at a global level to emerge through government support.
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Brian Li 🍊👾
@bli.eth
🧠 Improvements in compute and novel AI models - AI reduces the barrier to entry for startups in capital intensive industries like pharma where they can bring the cost of developing viable drug candidates from $1b to tens of millions. Pharma companies are willing to commit to large contracts and foot the R&D bill of these startups for the potential payoffs. - Powerful foundational models like AlphaFold are now capable of generating viable synthetic data for training new models, creating an explosion in training data that can be purchased at affordable prices. - New models like o1 with advanced reasoning capabilities can synthesize complex scientific papers/concepts, making it easier for motivated founders to gain the technical knowledge needed for hard-tech. - AI is creating massive new demand for energy and chips that outstrips supply, creating market opportunities for profit and innovation in industries that had previously been relatively competitive and commoditized.
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