THE CENTER ELECTRIC STORY
Over the past several years, we have seen a tectonic shift in the way that new products come to market. We have witnessed a significantly decreased cost of innovation in technology – brought about by open APIs, open source software, rapid deployment developer kits, on-demand purchasing of critical infrastructure (network, compute, storage), inexpensive hardware and even the Maker Movement/3D printing. At the same time, the rise of alternative forms of financing, such as crowdfunding, have changed the dynamics of early-stage capital funding. As a result, we often see innovators and entrepreneurs developing and testing products before they look for traditional sources of capital. The venture industry has been slow to react to these changes.
BUILDING THE FOUNDATIONS OF THE FUTURE OF IoT - NOT JUST SHINY OBJECTS
Many venture capital firms interested in this space focus on shiny objects, the Things, the one consumer start up in a thousand that will make it big. These opportunities will not succeed, however, without a powerful and stable ecosystem enabling IoT concepts to come to life quicker and more efficiently. An ecosystem provides these innovators with context needed to focus on their differentiation.
To build this ecosystem, the Internet, investments must be made in the infrastructure needed to support IoT as well as the hardware that takes advantage of it. Center Electric is a firm designed to invest in the full stack, for both the Internet as well as the Things.
A VISUAL REPRESENTATION OF OUR LANDSCAPE
LOOKING FOR CORE ELEMENTS TO MAKE THE INTERNET OF THINGS SUCCESSFUL
1. A FASTER AND EASIER PATH TO PRODUCTION.
This is already happening – open systems and the spirit of collaboration around IoT technology means we’re sharing like never before. We’re investing in companies and technologies that will further this. Companies that interoperate within the IoT ecosystem without “re-creating the wheel.”
2. REDEFINING SECURITY
As we invest, we’re looking to help the IoT ecosystems improve and rethink the notion of security. Many IoT devices are collecting an enormous quantity of new kinds of data – about our bodies, about our environments, about the connection among all sorts of things in our lives. How this data should be secured varies with its sensitivity, and it requires putting decisions about data collection in the hands of the individual so they feel informed and empowered to activate or deactivate applications. For IoT to work – especially B2C IoT – we must build a foundation of trust.
3. COMMON INFRASTRUCTURE
IoT is not just about devices – it’s about the platforms underneath that connect everything. These underlying “pipes” make up a core technology component of our investment strategy.
4. INVESTIGATING AND EXPANDING OPEN STANDARDS
Open standards hold the key to enabling technologies that can work together seamlessly. In B2C IoT applications this means that people have an IoT experience where everything just works. In B2B IoT applications, this means that factories, supply chains, alert systems and other infrastructure is more flexible, scalable and reliable. We focus on investing in companies that are about inter-operability rather than reinventing the stack.
WHY CENTER ELECTRIC?
In the 1940's, Jay Adelson's great grandfather moved to Detroit, Michigan for a chance at a better life. Capitalizing on his skills, he began working in the construction business, eventually building a series of relationships and strong reputation. In the 1950's, he founded an electric supply business on 8 Mile Road, which grew over the years into a solid business providing for the family. In the 1960's, he left the business to Jay's grandfather, and in the 1970's, he in turn left the business to Jay's father.
The recession of the late 1980's destroyed many construction businesses in Detroit, leaving both the contractor customers and suppliers bankrupt. The business went under, but not before leaving a strong impression on the community around it. Most importantly, it left Jay with the fundamental belief that a business need not compromise a strong moral compass to achieve amazing things and incredible success.
The electric supply business was called Center Electric.