{"id":19398,"date":"2024-07-16T22:02:43","date_gmt":"2024-07-16T22:02:43","guid":{"rendered":"https:\/\/www.michaeldempsey.me\/blog\/?p=19398"},"modified":"2024-07-17T14:07:20","modified_gmt":"2024-07-17T14:07:20","slug":"the-venturification-of-research-capital-the-resulting-prisoners-dilemma","status":"publish","type":"post","link":"https:\/\/www.michaeldempsey.me\/blog\/2024\/07\/16\/the-venturification-of-research-capital-the-resulting-prisoners-dilemma\/","title":{"rendered":"The Venturification of Research & The Resulting Prisoner’s Dilemma"},"content":{"rendered":"\n

At Compound<\/a>, we spend a lot of time thinking about the transition periods between core Research\/Science and Company Building and have oriented our firm to help founders building at this intersection. Over the past few years, we\u2019ve noticed a structural shift in this period of technological development that is now reverberating throughout both research communities and the startup ecosystem.<\/p>\n\n\n\n

In recent history, groups of people in deeply technical or scientific areas would implicitly (or explicitly) separate themselves as Research Groups, Applied Research Organizations, and Companies.<\/p>\n\n\n\n

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The left end of the spectrum was for those only interested in solving technical problems and the right was for those commercializing and productizing technology that was largely ready at scale.<\/p>\n\n\n\n

The Applied Research Organization, which takes early novel research and expands upon it with the goal of creating a closed-loop value capture organization (company) has now become the far more natural state of this paradigm in startups.<\/p>\n\n\n\n

This is great for progress, good for capitalism, and likely unnatural for a variety of given spaces that are earlier in their cycles than traditional AI is, for example.<\/p>\n\n\n\n

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Playing Venture Games<\/span><\/b><\/p>

The top talent now understands their market signal and use it to capture large sums of capital to go after a broader \u201carea\u201d with a looser idea of product\/GTM than many boomer investors expect. They observe the supply\/demand imbalance of top talent, and thus raise enough money up front to rip out a large chunk of their current team\/lab or a collection of labs under the (correct) thesis that a focused startup can make more progress than a constrained R&D group in a large company or institution.

The earlier generations of this looked like a top professor being pulled by a few great students, then progressed to larger groups led by top executives, like Nuro\/Aurora or Anthropic, each splitting off with very large fundraises and collections of talent aimed at doing what the incumbent was doing but better or slightly adjacent (in Nuro\u2019s case).<\/p>

In AI, it\u2019s even more clear this pillaging of academia will continue to happen as maybe for the first time in history, the dollars in large not-for-profit institutions aren\u2019t properly allocated to empower the research\/science. Put simply, universities and research orgs aren\u2019t buying enough GPUs to push forward experiments that require scale of any kind.<\/p>\n