Post #27: “People want outcomes, not widgets” - Heptagon Capital – Production

One of the great things about following multiple future trends is getting to meet with a broad range of interesting people who work at the cutting edge.

Post #27: “People want outcomes, not widgets”

One of the great things about following multiple future trends is getting to meet with a broad range of interesting people who work at the cutting edge. The past week was fairly typical: we had lunch with the Chief Technology Officer of a cybersecurity start-up, as well as meetings with executives working for important players both in the plastic recycling and liquefied natural gas sectors. Below follow some brief highlights –

On cybersecurity,the reason, we were told why people want “outcomes, not widgets” is a reflection of the fact that buzz terms such as AI in particular are becoming over-used (and correspondingly over-hyped). This is a useful lesson for much of the industry: avoid talking about AI if you want to win business. It matters particularly in cybersecurity, where some 3,500 businesses are currently active (per a US venture capital business database), yet only 10% of these have revenues of more than $5m. Some consolidation, therefore, seems inevitable, particularly since the current market environment remains propitious for capital raising. Note stories this morning across the media of Broadcom’s interest in Symantec.

On plastic recycling, we were reminded of the shocking statistic that only 2% of all plastic produced today is currently recycled, which compared poorly to rates of well over 50%+ for glass, aluminium and paper. Plastic, however, remains popular as a material of choice owing to its cheapness and durability. There is a future for plastic, but increasingly a recycled one. For those unaware, the EU’s Single Plastics Directive, released this March, mandates for 77% of plastic to be recycled by 2027 and 90% by 2029. Nations need to get to work to hit these targets. Logically, growing interest in those businesses producing recycling solutions such as reverse vending machines should follow. 

On liquefied natural gas (‘LNG’), supply-demand dynamics remain highly favourable, we were told. While supply is currently increasing (led by the Qataris in particular), it remains the case that long-term supply will be constrained by the significant costs of infrastructure build. Current demand (liquified gas is outpacing any other hydrocarbon at present) is more than able to accommodate increased supply. The fact that liquefied natural gas has a superior carbon footprint relative either to coal or oil is one factor helping to support demand. Interestingly, we were informed, this dynamic also creates a relative opportunity for players in the LNG space to stress their environmental credentials. 

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The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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