Bullish on Blockchain and Bearish on Bitcoin

By Hunter Hartwell

This is not, to the relief of most, another primer on blockchain or cryptocurrencies, and it is not a breakdown on the difference between the two – I’d recommend that you go here, here, and here for those things, respectively.

Instead, this post is intended to answer some of the most common questions that our Forté team gets regarding the above topics. Fortunately, many better minds have already provided their thoughts on these topics, and I’ve provided links to prior articles and opinions below. Unfortunately, those references are just a small subset of the broader conversation on these topics, so we’d encourage you to provide your or others’ thoughts via email and Twitter.

Q: “Do you believe that blockchain will live up to the hype?”

A: Absolutely. Without a doubt. 100%. Blockchain, as a technology, offers a superior solution to countless problems across a number of industries and business models. Some of my favorite blockchain use cases include a more transparent supply chain, a better health record system, and, near and dear to a VC’s heart, a new form of legal document management (the days of scanning and emailing countersigned pages are nigh!).

There are still a number of problems that need to be solved before blockchain technology can be widely adopted, including, but not limited to, 51% attacks, integration of existing centralized ledgers and new blockchains, and scalability constraints. With those in mind, I would predict that the blockchain boom (and VC returns in that sector) might happen later rather than sooner, but I, also, believe that the impetus on various industries to adopt blockchain-based solutions will reach critical mass by 2020.

Q: “Does Forté Ventures invest in token launches / ICOs / cryptocurrencies?”

A: We do not today and are not likely to start doing so anytime soon. There are several reasons for this answer, but they mostly boil down to two things:

First, participation in any of the various cryptocurrency purchasing opportunities (more on the difference between token launches and ICOs here) falls outside of the bounds of the typical equity and convertible debt investments that our LPs have entrusted us to make. Despite what some may claim, holding a company’s token does not afford a VC the same terms as an equity or debt investment (no matter how outsized the potential returns may be). Thus, it becomes difficult for us to provide value to the company, in the form of guidance, introductions to strategic partners, and board oversight, and to protect value for our investors. This second piece around investor value is especially true given the legal uncertainty surrounding ICOs.

Second, our investment strategy of reducing risk through collaboration and co-investment with our strong network of corporate strategic partners does not fit well with the token / coin model. This is because the benefits to portfolio companies typically provided by strategic relationships, such as privileged distribution channels and technology collaboration, do not necessarily correlate to higher (or less volatile) token prices.

Forté is actively looking for exciting investment opportunities in companies that are using blockchain technology to disrupt various industries, but our desire is to invest in those companies through conventional venture funding, rather than through token launches or ICOs.

Q: “Is Bitcoin a bubble?”

 A: In my humble opinion, I would say that, yes, a correction will hit Bitcoin at some point in 2018.

I, by all means, recognize and agree with many of the benefits of Bitcoin and its fellow cryptocurrencies. The circumvention of fallible governments and financial institutions, the reduction in fraud and counterfeiting, and the (near) instantaneous speed and low cost of global transactions are all appealing for various reasons to various audiences.

However, Bitcoin will face several hurdles, as both a currency and as an asset class, in the near future, and one or more trip-ups will lead to downswings in price. A few that are top of mind for myself and others include looming regulatory decisions around the world, high dependency on flawed exchanges (e.g., Coinbase), tension between Bitcoin’s appeal as an investment and as a currency (or its questionable viability as a currency, alone), and a good-old-fashioned crash from Main Street investors buying in on credit.

As with any good debate, key influencers and decision makers have split opinions on the matter. Japanese Finance Minister Taro Aso, who will have a big say in the aforementioned regulatory conversation, is taking a wait and see stance, whereas Fed Chair Janet Yellen came right out and called Bitcoin an “[un]stable store of value”. JPMC CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett are probably the most high-profile Bitcoin doubters, but famed investors, including Bill Miller, Marc Andreesen, and Tim Draper, have all come out as both public advocates and investors in the cryptocurrency.

Although the “Bitcoin is a bubble” camp, into which I gladly place myself, is large, there remains a next question that divides pundits. The crux of that question is whether Bitcoin is a bubble more akin to the Dutch Tulip crash or to the dotcom burst. That is to say, will Bitcoin fall and see its value (and legitimacy) lost forever, or will the bubble burst serve as a reset and foundation for a more sustainable, stronger Bitcoin moving forward? The answer to that, in my mind, remains unclear, but I find it difficult to imagine that some form of cryptocurrency (or a group of them) will not emerge as a viable alternative to existing currencies, in due time.

To those friends and colleagues determined to join the investor frenzy, I recommend looking towards ether (ETH) as a Bitcoin alternative. Ether, which functions as a token for purchasing services on the Ethereum platform, is not a direct competitor to Bitcoin, as it is not intended to be exchanged for goods like other fiat currencies. Instead, it fuels the Ethereum platform on which many blockchain startups are being built, so its value should appreciate as more and more blockchain applications are developed and used around the world – instead of appreciating solely based on demand and exchange. 

Forté Ventures invests in Ushr to bring high-def maps to autonomous vehicles

By Louis Rajczi

How do we make an autonomous vehicle see the road and plot the journey the way that we do? It’s a question that some of the best minds in the tech and automotive worlds have spent decades trying to solve – and one in which VCs have invested staggering amounts of capital. The answer remains incomplete, but most agree that the near-term solution will involve a number of inputs that all provide a piece of a vehicle’s larger navigational picture, just as human drivers use each of their senses in tandem to get from Point A to Point B today.

Forté Ventures is excited to announce its investment in Ushr, a company that’s developing one of the most critical inputs in that autonomous navigation equation – high definition maps. Ushr’s mapping and navigation software, which integrates directly with vehicles’ Autonomous Driving and Advanced Driver Assistance Systems (ADAS), allows for precise vehicle control by determining vehicle position, detecting roadway landmarks, and enabling quick and effective decision making.

The high degree of accuracy of Ushr’s technology is possible thanks to the company’s expertise in LIDAR mapping and the innovative ways in which they are using LIDAR to provide a “real world” view of roadways and routes.

“Ushr provides a long-range view that allows the vehicle to proactively plan safer routes and anticipate roadway changes instead of merely reacting to sensor inputs,” says Bruce Gordon, Ushr’s CEO. “In a recent road test comparison, our nearest competition had dozens of lane touches and several crossovers; our maps had zero touches and zero crossovers.”

The 2018 Cadillac CT6 is the first vehicle on the market using Ushr’s technology as part of the new Cadillac Super Cruise feature (more on that here). Collaboration with Cadillac and GM came as a natural follow-up to GM Ventures’ strategic investment in the company, alongside Forté Ventures.

There remain a number of unsolved pieces to the driverless puzzle, but Ushr is poised to fill in a major gap with its mapping technology. Forté Ventures is excited to work with the team on their path moving forward.

RapidSOS is helping 911 dispatchers get into 2018

By Tom Hawkins

Calling 911 in the middle of an emergency is not an experience that anyone anticipates or wants. It’s an action that we’re taught as children and one that, when the time comes, we hope works flawlessly to bring aid our way.

Unfortunately, the existing emergency response infrastructure, with 911 at its core, does not always work flawlessly when we need it most, as both emergency victims and responders can be left disconnected by poor communication and limited information flow. The immediate question that comes to mind when presented with this dated system, then, is, “Why, when we’re constantly connected to smart devices that record our location, heart rate, voice, and other pieces of data, can emergency responders not always find and help us?”

Photo by Benjamin Voros

Michael Martin, the founder and CEO of RapidSOS, asked just that question after experiencing his own moment of personal emergency in December 2012. He spent much of 2013 researching the ins and outs of 911 and found a system more equipped for 1965 than for today. "The system was built back when landlines were king and so it's not well equipped to handle cell phones," said Martin. "Over 10,000 people die a year because calls drop or dispatchers can't accurately pinpoint a person's location.”

Michael and his team have spent the last 4 years building RapidSOS to bring the emergency response system up to speed. Their data platform links connected devices to 911 and first responders, leading to faster response times, more accurate and data rich information, and lower operating costs. 

In its journey to date, RapidSOS has developed strong relationships with key players in the broader emergency network, which we believe will be invaluable in the path towards a better 911 system. Those key players include most major 911 software providers and countless first responder organizations around the country. Also, RapidSOS has the strategic support – and equity investment – from industry leaders, such as Motorola Solutions and AAA. 

Forté Ventures is excited to announce its investment in RapidSOS, which we hope will fuel the company's growth and help the team execute on the mission to transform emergency response. We look forward to our partnership with Michael, his team, and strong strategic co-investors, like Motorola Solutions Venture Capital and A3 Labs (AAA), and to the ways in which this life-changing technology will evolve in the coming years.