April 2021 - The Itinerant

Edi. 4.0 - 4.31.2021 (in spirit)



Your trusted source for multidisciplinary, actionable global insights into real estate, hospitality and travel; health & wellness; and transformative technologies.


1.0 - Overview

It’s hard to believe that we are already into Q2 of 2021 – and what a year it has been!

Though the world continues to wrestle with COVID we are already seeing a monstrous push in disruptive innovation, with global venture funding hitting an all-time record high of $125B, a 50 percent increase over Q4 2020, and an astounding 94 percent increase over Q1 2020 (Source: Crunchbase). We also saw an unprecedented, wartime-like logistics effort to scale-up nationwide COVID vaccinations and many of us have already had one, or both, vaccinations. I for one got my second one last weekend – hence why this month’s edition of The Itinerant is coming a few days later than usual.


Not to be one-upped by the market, things at 2c9 Ventures have also been quite exciting. A long time coming, the website will soon be completely overhauled, I am finalizing the pieces for what will be 2c9 Venture’s first fundraise (email me for more info, the SEC says I can’t say more about it here), and next month The Itinerant will start to be open to friends and family.


Thank you to everyone who has been so enthusiastically and actively involved in providing input on how to make The Itinerant the most interesting and valuable newsletter you receive each month. Give some thought to who you know that might find value in this participating in – and contributing to – this experiment.


This month’s edition of The Itinerant touches on starting a side-hustle, choosing a target market in international real estate, publicly listed Chinese healthcare companies, and edge computing. It also introduces another new section, “Expanding Horizons”, which includes 3 of my favorite STEM-related articles from this past month for you to nerd-out on.


A glimpse at next month:

  • Private Markets Investing’s Role in Your Career Strategy

  • Colombia Market Spotlight – Growth Opportunities in the Late Pablo Escobar’s Old Stomping Grounds

  • Longevity – Opportunities in Extending Life

  • Spatial Computing – How long until your desktop is obsolete?

VOTE (also at end) – http://doo.vote/394e966

2.0 – Private Markets Investing, Side-hustling & the Future of Work


Last month I introduced a new section to The Itinerant about side-hustling & the future of work. The feedback was overwhelmingly positive; I guess many of us are in fact considering how to bring a side-hustle to life.


But how do you get started? Its not as hard as you are probably making it out to be. At least its not as hard as I initially made it out to be (typical). Be thoughtful about it but make a conscious decision to just start. Set a specific timeline during which you will experiment with the concept, at the end of which you will make a ‘go/no go’ decision to invest further time and energy. There will always be reasons to not do something – we all have competing day-job time and energy commitments, family, health, you name it. Remind yourself that by starting, you’re not dedicating yourself to investing thousands of dollars and years of your life into this venture. All you are dedicating right now is a few hours and possibly a little bit of money to scope-out an idea and begin testing and refining it. In many cases you don’t even have to be investing any reputational capital, because until you prove that there is a “there there”, it probably makes sense to just keep the project to yourself – and not bring it up to supervisors / colleagues at your day job.


In starting out don’t just jump in blindly. Critically ask yourself:

  • Why do I want to do this? What is my underlying motivation? What is the vision of a better future that I’m working towards and believe this project can get me closer to?

  • Do I have the skills/experience (or can I obtain or outsource it) necessary to make this successful?

  • What resources do I have that I can reasonably invest to test this concept? How much time per week can I dedicate? How much money can I invest?

  • How will I compete with others who are doing this full time?

  • Would I ever want to make this project a full-time thing? If yes, what would it take for that to happen? If no, why not – and why am I still interested in testing this concept?

  • Who do I know who can help me along with this journey? Who will hold me accountable?

  • Does my contract with my employer allow me to pursue a side-hustle like this? Are there any restrictions?


Additional Interesting Articles & Resources


3.0 – Real Estate, Hospitality & Travel - International Real Estate 101: Choosing a Target Market


In last month’s edition of The Itinerant I introduced the concept of adding international real estate to an investment portfolio – it’s a topic I’m personally very passionate (and bullish) about. Like everything though, its not easy and is fraught with risks to be avoided.


Let’s assume for a moment that you’re potentially interested in buying property overseas. Where do you even begin?


Start simple. Start with figuring out which country(ies) could be a good fit based on your reasons for wanting to buy overseas, your risk/reward appetite, and your goals. In starting my own journey, I’ve found it most helpful to consider the variables in three categories:

  1. Investment objective – Do I want a pure investment, a hybrid investment/personal utilization (“lifestyle investment”), or pure personal use (“vacation home”)? Or am I looking for a long-term investment I can rent out now, and use in a few years when I retire? Why?

  2. Risk appetite / return expectations How much do I have to spend today? What is my appetite for risk and what financial returns am I expecting? For example, if I weren’t going to invest in international real estate, what would my alternative investment option by and what sort of returns would I target?

  3. Investment indicators – What are the fundamental economic indicators of the market? What is the exchange rate with my home currency? How stable is the political situation? What ownership rights and privileges does the country afford foreigners? Etc.


Going through this process on my own has taken me hundreds of hours narrowing down the list of options from 195 (the total number of countries in the world), to a short-list of approximately twelve, and ultimately to what I’m calling a market-entry list of only a handful countries I’m targeting first.


Everyone’s list will be slightly different based on what their objectives are, the timing within which they are looking and the broader macroeconomic climate during that time period. In the spirit of ‘building in public’ and completely open-sourced and transparent experimentation – I’ll share everything about my process and how I’m approaching it in the coming months. For those who are interested, there may even be opportunities for us to co-invest together. Let’s save more about that for another day though.

Illustrative Investment Opportunities (not investment advice)


Additional Interesting Articles & Resources


Example Real Estate Deals Evaluated Last Monthnames and details obscured to protect confidentiality

  • Assembly-line-like home builder producing at 50% cost and 2-3x faster than traditional custom home builds (Series A+)

  • Shares in a boutique hotel in Medellin, Colombia



2c9 Ventures Real Estate Portfolio Updates


4.0 – Health & Wellness – Publicly-listed Chinese Healthcare Companies


We often approach healthcare at a very localized level – from country to country, and at the sub-national level, from state-to-state and community-to-community. In most circumstances, that is the most efficient way to approach a highly regulated market. My experience living and working around the world has taught me however that even when opportunities must be assessed and understood within the local context, there are tremendous opportunities to learn from geographic arbitrage. Healthcare opportunities in China is one case in point…


The Chinese healthcare system only recently began privatizing (in the ‘90s to be precise), meaning it is still several decades behind the United States in terms of maturity and stage of development. Nevertheless, analysts are already projecting it will be worth $2.4T by 2030. Comparing it to the U.S. again, healthcare ranks second by market cap for U.S. industries, while in China it ranks eighth. Yes, the developmental trajectories of the Chinese healthcare industry will inevitably be distinct from that of the United States, however if one is looking for nascent market opportunities with high alpha potential, healthcare in China is certainly one.

Chinese healthcare companies, like many around the world, had a breakout year in 2020. After tech companies, healthcare was the top sector by new listings proceeds in both Hong Kong and mainland China. Like in the U.S., the surge in demand has been driven by an aging wealthy Chinese population who is looking for world-leading healthcare solutions at home. Unlike the U.S. healthcare market however, because of its relatively nascent state, some of the leading healthcare companies have their origins not in care provision but in e-commerce and other technology industries.


Its not too dissimilar from what we’re observing in the U.S., with the likes of Amazon, Google, Apple and Microsoft. The main difference however is in China these tech giants are not “new entrants” looking to disrupt the incumbents. Rather, they are building the healthcare infrastructure, virtually from the ground up. We see this type of emerging market development occur across industries and segments when developing countries “leapfrog” the developmental stages of more developed economies because they do not have to navigate the incumbent infrastructure already in place. They can take the ‘best of’ solutions from around the world and introduce them as de novo concepts within the local market as they build.


Additional Interesting Articles & Resources

Illustrative Investment Opportunities (not investment advice)


Example Health & Wellness Deals Evaluated Last Monthnames and details obscured to protect confidentiality

  • Personalized technology-generated medication recommendations for otherwise treatment-resistant illnesses, starting with mental health (pre-seed)

  • End-to-end managed services organization for non-clinical functions targeting community health centers in underserved communities (pre-seed)

  • Vertically integrated, on-demand at home healthcare provider (seed)

2c9 Ventures Health & Wellness Portfolio Updates


5.0 Transformative Technologies – Edge Computing


In the 90s and into the early 2000s the computer was all about mainframes and servers – computing at a localized, confined level (aka – ‘on-premises’). In the 2010s as the internet had grown into a more mature state computing capabilities evolved into the cloud (aka ‘off-premises’). Now in the 2020s with the advent of more and more powerful computational processing capabilities within smaller chips, faster broadband speeds, and the ever-increasing number of internet-connected devices, computational power is moving back to the local level only now it won’t be stored solely in a mainframe or desktop computer, now it is being embedded directly in the devices you use every day – this concept is what we know as ‘Edge Computing’. It involves placing computer processing resources closer to where the data originates (i.e., sensors, motors, electronics, etc.). This new processing speed and power allows for data to be generated, analyzed, and acted on at much faster speeds since it can be done locally. For example, Tesla and many other cars are increasingly becoming mobile computers. This is all thanks to edge computing capabilities and Tesla’s embedded onboard computers which allow for near real time data processing from dozens of sensors placed throughout the vehicle. Since the processing capabilities provide near real-time insights which the vehicle can take action on, it allows for autonomous driving capabilities. (Disclaimer, I am not an expert on autonomous vehicles – nor edge computing for that matter. If you know someone who is, I would love to get to know them).


As I’m sure you can imagine, this type of processing speed and power will have a significant impact on the way we are able to passively interact with devices and with the world around us. With edge computing, we’ll be able to receive near real-time analysis and work with tools and devices making near real-time, almost human-like, decisions on our behalf.


While the technology exists, widespread adoption is still in its infancy and will only continue to increase as the number of internet-connected-devices proliferates. So much so that its projected the market will reach $250B+ by 2024, with a CAGR of 12.5% from 2019 to 2024.

We may not be hearing much right now about ‘Edge Computing’ in mainstream consumer marketing, but I would be shocked if in a handful of years companies are not using it to differentiate their products similar to how wireless carriers today are touting ‘5G Coverage’ as a network differentiator. (OK, not a perfect analogy – but you get the point).


Interesting Articles & Resources


Illustrative Investment Opportunities (not investment advice)

  • Zedada (Founded, 2016) – centralized, subscription based, open-edge computing platform. Prior investors include Lux Capital, Juniper Networks, and Almaz Capital.

  • Pensando (Founded, 2017) – performs with 5x – 9x more productivity and scale than Amazon Web Services’ Nitro edge platform. Prior investors include Hewlett Packard Enterprises, and Lightspeed Ventures.


Example Transformative Technology Deals Evaluatednames and details obscured to protect confidentiality

  • One-hour global transportation (Seed+)

  • Machine Learning (ML) infrastructure automation platform (Seed)



6.0 – [NEW] – Expanding Horizons


In this new section to The Itinerant I will bring you three of my favorite STEM articles from this past month. They will be a bit ‘out there’, and about some of the most cutting-edge, at times theoretical, advances across STEM disciplines. Not necessarily actionable, yet, but incredible interesting and about topics the majority of us do not come across at our day-jobs.




7.0 – VOTE – http://doo.vote/394e966


If you’ve read this far – thank you for sharing part of your month with me. I hope you found it as enjoyable and worthwhile to read as I did to write it.

Warmly,

Ben

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