A#1: We believe Einstein’s statement to be a profound truth. Gaia Labs’ mission is to solve the Grand Challenges facing humanity and the planet.
The different angle we take in part, is based on the fact that the current stage of consciousness that created our problems also believes in a concept of solutions. The first thing we need to do is to consciously explore a new interactive dynamic between our perception, thinking and use of language. Even though we use the label Grand Challenges, we are not seeking solutions to them per se.
We are placing an evolutionary context around the problem and we are guiding the problem towards its evolutionary transformation. Much like a caterpillar weaving its cocoon, we seek a metamorphosis.
Venture capital has a role to play in finding, structuring, investing in and implementing metamorphic change. That role, however, cannot be to repeat the status quo venture capital business model. In light of the Grand Challenges, it is clear that the traditional VC model must make adjustments. This new VC approach must reflect a change in consciousness, and as a result, a change in investment strategy.
For instance, VCs have traditionally focused on three overarching tech innovation investment sectors: Digital, Life Sciences and Greentech. Gaia Labs is adding a fourth investment sector: Social Innovation.
A#2: Most VC funds are stand alone blind pools of money, where the LP investors passively hand over their capital to a trusted third party GP with a track record of success, who then in turn opportunistically invests. Gaia Labs is strategically moving beyond that tradition for an important part of our deal flow, while strategically maintaining the traditional VC approach for the remainder of our deal pipeline. A bit like a transcend and include strategy.
First, we are bringing vetted Company Building Project (CBP) deal flow. For CBP deals, investors in Gaia Labs will not invest in a blind pool. Our process of deep due diligence and our global network has allowed us to identify compelling CBP deal flow, and also take a strategic approach to stocking our CBP deal flow pipeline. Where there is a need, where there is pain, we are strategically structuring a VC approach and company building team around it.
Second, we expect our investors to contribute more than money. Ultimately, we want them to become part of an active global community of change agents. In order to address the Grand Challenges, it is all hands on deck.
Third, what are the Grand Challenges and what is their nature?
Finding financially and economically viable alternatives to the fossil fuel development paradigm, for example, is already an intractable problem. The combination of tropical, communicable and neglected diseases, poverty, sanitation and hygiene related causes, kills millions every year, particularly in the developing world. This century, we reached a planetary milestone – for the first time in history more than 50% of the world’s population lives in cities. What this means for our natural resources, our biodiversity, clean water, food, housing, our collective and individual physical, mental and spiritual health are core issues to be addressed. In addition to the fact that time is an enemy. Things are getting progressively worse and at an unchecked velocity. Climate change is a huge problem.
All of this, including Gaza, Ukraine, Yemen, Bangladesh, Brazil’s favelas or the ghettos and barrios of the USA – the state of the world today, absolutely all of it, is due to and embedded in a spectrum of consciousness – both at an individual and a collective level. And no globally sustainable approaches, whether driven by non-tech innovation or so-called exponential technologies (or a combination of both) will be found without dealing with the question of consciousness.
In this sense, we go beyond triple bottom line investing. Weaving consciousness into the investment calculus adds a fourth alchemical element – it forces us to think differently and more comprehensively when conducting due diligence, it allows us to unearth value that has traditionally been off the radar screen, it locates deeper chemistry and psychic connection with our execution teams and our targeted consumer audiences; it naturally broadens the definition and roles of stakeholders, and it creates hockey stick scaling and more powerful strategies of monetization, which in turn allows for a maximization of consciousness raising, financial, social and ecological impacts.
A#3: In addition to bringing deal flow to our investors, we are also using a different model of value creation. That means that we are customizing each deal with a handpicked team of deal executioners and advisors.
Instead of investing in dozens of deals, we are limiting the number of deals and concentrating our efforts.
We are emphasizing quality over quantity. Our deep due diligence process also means that we are not seeking singles and doubles. We de-risk to the extent that we do, exactly because every deal is structured to be a home run. The best performing fund in the history of the venture capital asset class is a mid-1990s vintage Matrix Partners fund that garnered a 42x return. At Gaia Labs, we think that that is a worthy target.
A#4: We are embedded in a global capitalist system. That system requires that in order to accomplish our goals, we have to maximize returns on investment. Gaia Labs is being structured to do that.
However, to maximize the return on investment and address the Grand Challenges has no precedent. To achieve that combination of goals requires a new consciousness and approach to venture capital investing and to capitalism itself.
The question we are facing is: How can capitalism be used to evolve capitalism beyond itself? Is there such a thing as a non-exploitative, non-extractive, non-violent, equitably distributive and ecologically regenerative global economy? We do not know the answer to that question. But via Gaia Labs’ investment strategy, we have to do all we can to find a means toward evolving a sustainably constructive approach to get there.
In this context, Gaia Labs’ investing process is informed by three (3) philosophies, which together create a new approach to consciously aware venture capital investing.
Philosophical Principle #1: Steve Jobs & The Importance of Design
The first philosophical principle is based on design aesthetics.
A profound lesson about the importance of design aesthetics can be learned from Steve Jobs. Beauty and functionality, when melded together, attract us. That attraction can be monetized. However, design thinking cuts more deeply than producing aesthetically and functionally pleasing products that consumers will buy. Design aesthetics moves towards the essence of sustainability.
This Jobsian notion of aesthetic design leads us to Cradle-to-Cradle (C2C) design thinking — the second philosophical principle that feeds into our venture capital investing strategy.
Philosophical Principle #2: The Role of Cradle-to-Cradle (C2C) Design
C2C takes biomimetic approaches to field and bench scientific research and technology driven product development, triggering designs that mimic the natural recycling of nature itself and incorporating these notions into both products and the life cycle of those products. C2C expands nature’s scope to include how we live and work together, and how we treat the planet. We can and must create a new design thinking architecture for both the creation of our exterior material world and our interior consciousness, and apply it to all we do.
Philosophical Principle #3: Gaian-Driven Venture Capital
The third philosophical framework is Gaian-driven investing, and this is arguably the most all encompassing of the three philosophies. This philosophy believes that the earth is alive, and that the earth is the origin of our collective being and becoming as a species.
It pushes forward the notion that instead of having “things” be the foundation of our perception and our notion of reality, that an animated living energy serves as the foundation of our existence and reality. We are moving from a perception of the world and the universe itself, as myriad “things in motion,” which largely treats the earth and human beings themselves as “things,” commodities and statistics, to a view of the world as intimately and fully connected (in both a micro and a macro context), and foundationally based on energy, flow, flux and awareness.
Such a philosophy deals with the very structures of consciousness itself. It is a lens through which we can see the world and ourselves in both full depth and breadth, and because it provides tools for dealing with often conflicting and overlapping levels of consciousness, it naturally provides (digs up one might say) creative approaches to the Grand Challenges facing humanity and the planet.
In addition, Gaian-driven thinking and analysis provides insights into how we are evolving as a species, how that evolution dove-tails with our planet’s evolution, and finally, how we collectively (in the broadest sense) begin to realize that each one of us is an agent of evolution.
The evolutionary impulse passes through us. In that passing it brings not only consciousness, but responsibility, and just as importantly, true freedom and the energy that that freedom brings, to create and innovate – all the while pushing the evolutionary process forward.
These three philosophies together define what Gaia Labs means by design thinking creating a new core set of investment values.
A#5: We see Company Building Projects (CBPs) as the key game changer. However, Gaia Labs’ basic premise is that we need to think differently about these challenges. Where we can, we need to transcend and include the best aspects of old models. That means we see the global roll-out of AI, broadband, mobile devices, cloud computing, big data and storage, cypto, the blockchain, robotics, etc., as significant developments, and we are assuming that digital will increasingly play an important role in addressing the Grand Challenges.
Digital, in the broadest sense, is a global real-time laboratory for collaboration.
Dr. Leroy Hood, of Seattle’s Institute of Systems Biology, began his pioneering efforts of combining digital with life sciences in the early 1970s. The result is our current post-genomic sequencing world (i.e., CRISPR, etc.). In truth, we are just getting started.
The same phenomenon of digital’s overlapping industry sector impact is occurring with greentech, and we have social innovation in our crosshairs as well.
Because many of the Grand Challenges disproportionately impact the developing world, one of Gaia Lab’s goals is what we call technological leap-frogging opportunities.
Developing nations can and must lead many of these investment thrusts. This goes for tech-driven and non-tech driven innovation.
In this context, we can think of no better place to start than with startups focused on AI, the Internet, mobile, software & apps, etc. We can build from there.
Digital is a bridge across industry verticals. It allows for the first time, a true cross-border, cross-cultural fertilization and combinatorial approach to value creation. In addition, we believe that entrepreneurs will increasingly demand a focus on the Grand Challenges.
A#6: Great question. We define social innovation, as taking tech innovation ideas from the three traditional VC investing sectors and applying those concepts to urban challenges and toward the alleviation of poverty.
No one at Gaia Labs or anywhere for that matter, is naive enough to assume that technology can solve everything. Non-tech innovation is crucial.
New forms of governance, master planning of green communities and even entire cities, the mixing of ideas across related industry verticals like transportation and materials science, raises a host of new investment horizons.
So the answer to your question is yes, at Gaia Labs we believe that we can do all of this and generate excellent top-tier world-class returns on investment.
There is a rarely critiqued notion (on Wall Strreet especially) that growth, whatever the nature of that growth, is somehow a good thing, not only for the company that experienced that growth but for the investors in a given company and society as a whole. For instance, if a publicly traded waste treatment company saw a dramatic rise in its share price due to a correspondingly dramatic increase in the size of the landfills it manages, this does not exemplify a win-win situation for investors, the general public and the planet. But technically, GDP will have risen. There are “n” number of examples like this. These concepts need to be challenged and deconstructed because they are holding us back – as a species. The goal has to be an alignment among all stakeholders, not just a few.
Our strategic one-off social innovation focus at the bottom of the pyramid is really a focus on the entire global pyramid, and has to do with empowering all people — to change and improve their lives, to realize their dreams and to participate with them in generating new broader deeper definitions of returns on investment.
Silicon Valley-like returns on investment for our investors and our partners at the bottom of the pyramid is more than feasible. It is imminently doable. And in the process, we will stop using the term “bottom of the pyramid.” The goal is to eliminate not just the concept but that reality.
A#7: Let’s slow down a bit. We have projects in various stages of deep due diligence and maturation in the pipeline.
The project that is furthest along in the pipeline is in the digital space. This is not an accident. The digital investment sector (i.e., AI, consumer Internet, social media, software & apps, mobile, e commerce, etc.) is the cheapest, fastest and easiest sector to scale to regional and global impact. It is also the easiest route to liquidity and monetization.
We believe we have found a project that has immense grassroots monetization potential, that can scale quickly to regional, national and even global impact, and that carries deep positive societal ramifications.
The project is in the live entertainment industry vertical and it is focused on the United States and Canada (and to a lesser extent Mexico).
Gaia Labs anticipates generating a virtuous cycle of returns on investment for our investors beginning with CBP #3 and as a result, for the subsequent deals in our pipeline.
A#8: Correct. Today, the top performing decile of VC firms, a majority of which are based in the United States, are investing globally.
Gaia Labs will be investing globally. Our company building model means we bring the financial, technical and human resources together where we deem it most appropriate for global impact.
The idea is to be a lean, multi-cultural and multi-lingual team project-by-project, and because the United States and Canada are our target market for CBP #3, New York City (and to a lesser extent Silicon Valley) becomes the natural platform for our investment efforts, deal structuring, team building and launch.
Rio de Janeiro, on the other hand, will always be Gaia Labs’ physical and spiritual home and headquarters, despite the establishment of a strategic presence in other non-Brazilian venues to support our pipeline of deals.
A#9: Life science, greentech and social innovation startups offer a different set of investment challenges. Generally speaking the founders involved are older and more seasoned professionals. Many of the entrepreneurs we have seen who are focused on these investment sectors have advanced technical degrees, often Ph.D.’s and post-docs with deep industry vertical experience.
Because of the level of technical and scientific sophistication in these investment sectors, the amount of investment dollars and the time needed to launch a company into the market is considerably longer than for a typical digital startup. Deep due diligence and de-risking is especially important.
Currently, we have at least one deal in the Gaia Labs’ pipeline for each of the four investment sectors. In some cases the due diligence process and team identification exercise began well over a year ago.
We expect our digital startups to maturate for six months to a year on average (i.e., before reaching minimum viable product (MVP) status) and full market launch. A life science, greentech or social innovation startup could easily be expected to take twice that amount of time or longer. The amount of pre-seed, seed and follow-on round investment will have to be determined on a case-by-case basis.
To reiterate an important point, we will determine with our founders and partners in each case, which legal jurisdiction is the best to maximize the value and global impact proposition that the company building startup team seeks.
If it makes more sense to set up in Delaware, we’ll do that. If Brazil makes more sense, then we’ll go in that direction. We are venue agnostic. We simply want what is best for the team, for the idea and for scaling to regional and global impact.
A#10: In this context, civilization can be viewed through the metaphor of a blanket that has been cast or thrown upon the earth. Possibly, a better metaphor would be a quilt, with the patchwork pieces representing the differing cultures which span the planet, and which have become and are now interconnected via imperialism, colonialism and capitalist expansion. This cultural patchwork would seem to account for the inequitable distribution of global economic development – that somehow culture is the primary determining factor of the differences claimed between the so-called developed world and the less developed nations.
Culture, however, is not the driver of the dramatic differences of well-being and wealth concentration that we find on the planet. Capitalism is the driver – as well as the nature of the reasoning process which undergirds capitalism. That particular kind of reasoning is at its essence conservative, expansionist, violent and disconnected from self, other and the planet.
At the core essence of conservative thought and values is the reification, or the thingification of the self, the “other” and the planet/cosmos. It is the foundational notion that the universe is a “thing”, and that at bottom the earth is inanimate and machine-like in its functionality. Ultimately, this is the legacy of Descartes and Newton — the separation of the mind from the body.
The battle to save the planet, other species and ourselves, therefore, is obligatorily juxtaposed against capitalism, and as a consequence, is ultimately a battle against conservative thought and conservative values – against the ontological and epistemological thingification of all that exists.
A#11: We are facing dire circumstances globally, exactly because humanity has stepped outside these fundamental natural laws of connection and thriving.
The mythology, or better the lie, is that profit exists. It doesn’t. Profit is an illusion. Profit only exists on the basis of a sophisticated veiling of the unaccounted-for consequences of violent land expropriation, extraction, human exploitation, and product (commodity) distribution, each step in the process of which creates detritus that the perpetrator (the capitalist) has avoided responsibility for – because the capitalist creates legal frameworks (an aspect of the base and superstructure) which he controls, that allow him to pass along these costs to society.
“Buy Now!: The Shopping Conspiracy,” out on Netflix, describes the backdrop of the global calamity of Amazon’s (read capitalism’s) zero accountability in their contribution to the daily creation of massive amounts of waste and the runaway unchecked growth of pollution and the world’s landfills (the largest of which are in developing world countries because developed countries export their refuse). This model can be extrapolated to the oil industry and energy companies generally, to the military-industrial complex, to pharmaceutical companies, to the auto industry (including electric cars), and the list goes on.
Someone will say that software, for instance, doesn’t pollute. But there are unaccounted-for costs of software’s development, production, and distribution, and the very businesses that use software are sitting on top of our global “quilt” with the feigned understanding or belief that they didn’t directly contribute to the problem. The Grand Challenges leave no room for a shirking of individual or collective responsibility. It is akin to thinking that “I didn’t have anything to do with slavery and its repercussions across the centuries,” and therefore, I need do nothing about the institutionalization of racism or sexism or the other isms that resulted from imperialism, genocide, ecocide, and capitalism. “It’s not my problem!” is the self-centered essence of conservative and capitalist thought.
A#12: Gaia Labs will act as Master General Partner for all our projects. That means we will be building individual dedicated project teams for each deal as we move forward. These founders will be venture partners in the company building process.
To the greatest extent possible in the context of CBPs, we are removing the line in praxis between entrepreneurs and venture capitalists. By fully aligning our interests and pooling our respective resources, we maximize the chances of altering the VC business model and finding and executing on ideas that will truly have globally disruptive and sustainable impact in addressing the Grand Challenges.
In most cases we will structure the deal as a limited partnership with a dedicated general partner and/or with a complementary LLC, “C” or “B” corporation. Compensation and incentive structures will be tailored for each venture.
On the human resource side of things, the top tier Silicon Valley VC firms consist of three complementary skill sets:
(1) finance professionals, usually with investment banking or McKinsey-like backgrounds,
(2) former entrepreneurs, who have grown ideas from a napkin to an IPO or other liquidity event,
and done it several times, and
(3) technology-scientific professionals, women and men who have Masters degrees and PhDs and/or have done post-docs in biochemistry, physics, engineering, applied mathematics or computer science, AI, etc. and after graduating worked in R&D, sales & marketing, or they worked for an industry leader and then after years of experience, migrated into venture capital.
The Gaia Labs company building strategy represents a combination of (1), (2) and (3), but we are adding to our core CBP teams, depending on the project, three other complementary skill sets: (4) design professionals, (5) social innovation expertise, and (6) institutional partnerships (both academic and from targeted industry verticals).
Regardless, and despite these traditional notions of talent, we are always on the lookout for the exception to the rule. Here Steve Jobs again provides a source of inspiration:
“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”
A#13: Fascinating question. I have lived and worked in Brazil for more than 25 years. That, however, is not the real reason to choose Brazil, and Rio in particular. First, as I already mentioned, our first major CBP is focused on the USA and Canada (and to a lesser extent Mexico), so we are implicitly acknowledging the general consensus that the USA is particularly suited (for that deal) for scaling that initiative for regional and global impact.
The reason to choose Brazil and Rio as Gaia Labs’ headquarters is as follows:
Being “less developed” offers advantages. The basic idea is simple – create:
(1) a new 21st Century version of Silicon Valley, that is, a new cutting edge research, development and product distribution and service platform for scientific and technological research (where appropriate enhanced by AI), and the resulting startups, that literally rivals the Silicon Valley (and the Top 20 Global Ecosystems), and
(2) a science and technology capital for the Global South, but also a platform to wrestle with and forge new evolutionary approaches to and for the Grand Challenges facing humanity and the planet. AI has a crucial role to play, but it is not the only tool.
Just as important is the tool of knowledge. There are sources of knowledge, that are untappable by AI (from whatever generation or future that AI can contemplate, much less construct). That knowledge is the knowledge of the past that has been lost (or destroyed), as well as, the knowledge that is currently accessible from the imported cultural diapora of Africa, and the remaining cultural diapora of American indigenous peoples. Those two respective diasporas, the African and the American (North and South) Indigenous, are the largest and best preserved in Brazil. Both survived the barbarousness of slavery and the genocidal strategy of colonialism. Coupled with Brazil’s vast biodiversity base and its multiple biomes, and we have a real and virtual (metaphysical) platform to transform the world (planet) and ourselves.
Why Rio? We believe that cities have a future and are the future. Cities working in conjunction with nature, and embracing the three (3) principles of investing cited above, offer a way through and out of our current planetary climate change and pollution predicament.
Rio is a tropical city. It has a unique cultural milieu that centers on the vibratory lifestyle of the beach. It is also stunningly beautiful. It is a surfer’s culture. It has the second largest urban rainforest in the world. The volcanic granite mountains of Rio rise directly out of the sea, creating a natural daily aesthetic kaleidiscope. It is a rock climbing and hang-gliding mecca. It is a spiritual home to bossa nova and other evolving musical genres. It is a fanatic sports and outdoor concert venue. It has arguably one of the best higher educational platforms in South America (i.e., PUC Rio, the Federal University of Rio de Janeiro, UERJ, UFF, IMPA, FioCruz, etc.), and it still maintains a solid federal government presence with the headquarters of the Brazilian Central Bank, the federal and national Brazilian Development Bank (BNDES), Petrobras and Vale, all based in Rio. Lastly, Rio has the largest downtown waterfront development project in the Western Hemiphere in its Porto Maravilha project (5MM square meters).
This “package” that is Rio de Janeiro needs to be “wrapped” and presented to the world, in order to attract not only the best Brazilians and Latin Americans to Rio, but the best talent from around the world to tackle the Global Challenges. The earth needs a new vision. And that vision is for a new global paradigm of development, using Rio (and Brazil) to set that new global standard of excellence. That is Gaia Labs’ mission.
We hope that you will join us and lend a hand!