Steam engines had a habit of exploding.
A few hydrogen plant explosions have rocked the rollout of that ultra-green power source too.
Not to mention nuclear power debacles.
My dad invested in a company that sold “unbreakable wine glasses”. During a demonstration to the head of Novotel, the wine glass they’d been using for demonstrations a little too long broke.
The list of failures goes on. But this week, serial innovator Elon Musk copped a one-two punch in quick succession. Will it be a knockout blow? I don’t think so.
Musk’s SpaceX rocket blew up during pressure testing. And the impact-proof windows of the new Cybertruck broke on impact. Twice. During the unveiling ceremony.
Both events were broadcast live to the schadenfreude of plenty.
But I’m out to side with Musk today. For the reasons you’ll guess from the above.
Innovation and humiliating failure go together like nothing else. Which means that, if you want to profit from innovation, you need to be willing to believe in someone who is willing to humiliate themselves.
Musk is certainly good at both innovation and humiliating himself.
This doesn’t make someone embarrassing a good bet. It just means that it shouldn’t put you off.
How many unicorn companies, which end up valued over a billion US dollars, start in garages and basements? That’s embarrassing at the time.
So innovation tends to cost ego. Which also suggests you need some ego to put up with the failures. Hence the bizarre personalities of those who make large things happen.
Of course, all this can go spectacularly wrong. In fact, it usually does. But that’s also part of the nature of the punt. If you’re investing in innovation, you’re trying to find gains measured in thousands of percent, while weathering the regular losses measured in tens of percent.
Things going dreadfully wrong is an inherent part of radical change. Don’t be put off by shemozzles. But stay sceptical about all your investments too.
Not that this rollercoaster style of investing is for everyone. But that’s what has me so excited about this tech revolution. Because it’s different. It’s for anyone.
The innovation is all about enhancing the capacity of something to the point where it’s revolutionary. Something you already use every day. But could use so much more if only it worked faster and more reliably.
This advance is not reinventing the wheel, but making it so fast and frictionless that entirely new applications of the wheel become possible.
Now those applications don’t really exist yet. They’re dreams waiting to become possible. And my bet is, there will be plenty of Musk style spectacular failures to come.
But our tech expert Eoin Treacy has found a way to profit from the rollout of the tech itself, not the applications it enables.
He calls it the “Genesis Chip” – what makes the wheel frictionless and superfast. And he’s found the silent partner which makes that chip.
If Eoin is right, it’s set to be installed in 369 million devices. Which means a lot of money for whoever makes that chip.
You’ve probably heard about the mantra of selling shovels during a gold rush. Well, the Genesis Chip is the modern equivalent. Any tech that wants to be part of the modern economy, is going to need a Genesis Chip of some sort.
All the attention will be on what the Genesis Chip makes possible. Driverless cars, pilotless aircraft, virtual and augmented reality… But the genesis chip itself could be the best way to profit from the lot.
If you’d like to, you can find out more here.
Until next time,
Editor, Southbank Investment Research