Batch brew #6

No-Code for the Win, Chips in Geopolitics, Lucky Hands with Celsius & Helium

GM, this is The Caffeine Capitalist. We tell you what opportunities are brewing in Central Europe, what is hot & what's not in VC & Boring business spaces. Hot weather brings some hot stuff! โ˜€๏ธ

Estimated read time: 8 minutes and 6 seconds

If ya only have a minute, the TL;DR actionable insights:

  • ๐Ÿ–ฅ๏ธ Technology sovereignty. Chip production capacity and quantum computing as a definition in economic and geopolitic power.

  • ๐Ÿก No code for SMBs trend. Traditional smaller & medium sized companies have troubles implementing tech. We believe that no-code tools are the ultimate opportunity to gain competitive advantage in SMBs and catch up digital transformation. What tools? Scroll down halfway!

  • ๐Ÿ”— Helium Experience. We were in Celcius and in Helium, read about our wild story in new crypto department of this newsletter!

Before we kick-off, special thanks to 45 new subscribers since last issue ๐Ÿ™๐Ÿป

Dept. of Venture Capital

Perhaps you caught the chip ๐Ÿช news too. This Wednesday, the US Senate passed a $280 Billion bill to boost U.S. semiconductor sector.

The bill allocates $39 billion for semiconductor manufacturing, additional $11 billion to advance semiconductor manufacturing research and workforce training, and a $2 billion fund to more quickly translate laboratory advances into military and other applications.

Last year, Intel also received commitments of โ‚ฌ6.8bn in subsidies from Germany. We might expect a race to bottom in chip subsidies between US, EU and Asia to recreate the balance in chip production globally. Currently, around 80% of chip production is located in Asia and around 12% in US. Where is the EU? ๐Ÿ‘€

Computer chips might be the 21st century strategic version of the fossil fuel. The location of oil had defined geopolitics of the last decades but location of chip factories might define the geopolitics and economic power of the next decades. The goal - Technology sovereignty of the region.

The weakness of technology dependence might be see in the Russian-Ukraine war aswell. There are export chip sanctions to Russia and the country is now effectively denied access to high-end semiconductors and other tech imports critical to its military advancement - more to this in FT article.

Similar to oil, chips are also a significant driver of the inflation calculation. And we can clearly feel it today. During the last decades the declining cost of asian-produced chips have driven the disinflation but the tables have turned now due to supply chain disruptions and regions are impacted differently.

Thinking about buying a new EU manufactured car, lets say ล koda? Expect a wait time of 12 months which is both due to high demand and a shortage of microchips. Shortage of chips has direct effect on the economy and GDP growth.

Quantum computing might be the next milestone in Technology sovereignty of nations.

Quantum computing is an important next tech revolution enabling massive opportunities in AI, drug discovery, ML, financial markets, cybersecurity, military.

Quantum computing could create up to $850bn of value globally over the next 15-30 years, accoring to BCG report. No wonder that such a huge market and opportunity attracts new interest in deep-tech venture capital.

There are several use cases for quantum but the most prevailing and researched ones are:

  • Cryptography

  • Machine Learning

  • Simulation

  • Optimization

We see a huge increase in quantum computing investments. It is expected that quantum will move from R&D into adoption/commercialization between years 2025-2035.ย 

Comparable to chips, quantum might be a strategic technology shaping the economic and geopolitic powers of the next decades. This is also partially recognized in the EU. The public Quantum Technologies Flagship fund, which started to handing out first grants in 2018 will provide โ‚ฌ1 billion of grant funding for quantum research over the next years. The goal here - technology sovereignty, not being dependent on Asia or US.

And deep-tech venture capital will be again the frontrunner and driving force in this innovation. ๐Ÿš€

Dept. of Crypto War-stories

Oh a new department in the newsletter? Let's call it a MVP of a new department! ๐ŸŽ

Lucky man in the burning crypto forest. Martin, one of our Caffeine Capitalist's editors is heavily invested into Crypto. More of a Bitcoin maximalist himself rather than a Crypto bro, but as a right capitalist, he jumped on an opportunity when he saw it. Let us set the tone:

What was the opportunity?

Actually, there were two of them. First one was Helium network. Yes, thatโ€™s the in the tweet above. Lovely little crypto project with 365M$ investment and 6,5k$ monthly revenue. You heard that right.

Martin bought a few hotspots & set them up around Prague. It was at a time, when he had to pay around $1k per hotspot (which is a 150% premium).

What are average monthly earnings per hotspot now? Around $3.

Another Martin's opportunity?

Celsius. What is Celsius? Long story short, it was a company promising its users yield on their crypto. OFC Martin wanted yield, so he sent 25% of his portfolio to Celsius.To some of you, might Celsius sound familiar. It might be because that's the billion dollar crypto company that fell completely apart recently. Greatly explained by our favorite YouTuber Coffeezilla. When crypto market collapsed, they've stopped withdraws and recently declared official bankruptcy.

Great job Martin.

Sounds like pretty rough opportunities to take, but why did we call Martin โ€žLucky manโ€œ at the beginning?

Well, because he made money on both of these opportunities.

Martin was so early on Helium, that the miners were doing $20 a day for 2 straight months. He sold the mining devices later, also with a small premium. Helium token was falling, but he converted most of it instantly into BTC. So at the end, he ended up with a lot of his beloved BTC.

And what about Celsius? One week. Yes, one week before Celsius banned withdraws, Martin took all his crypto out. โ€žI had a bad feeling about itโ€œ he said.

We can imagine the look on his face when he found out about the Celsius banning withdraws.

Pleased Shifu

Thatโ€™s what we call luck. Or does Martin have really some sense for this type of stuff? Let us know about your adventurous crypto stories & we might do a short interview with you for the next issue, drop you story here > [email protected]

Dept. of Boring Businesses

Tech talent is expensive & difficult to hire these days. SMBs are usually on tech diet, mainly due to their lacking affinity to tech and running the companies the same way it has been run in the past. Psst, isn't that an opportunity lurking around the corner? Absolutely, digitalisation, automatisation and introduction of tech are some of the growth levers that you can pull. How to do it? Let me introduce "no-code" tools. ๐Ÿ–ฅ๏ธ

"No-code" is a trend of building digital apps, websites, processes etc. visually instead of hiring tech talent. The main belief is that you don't have to recreate wheels every-time you develop something. What are SMBs lacking? Understanding of Tech, ability to attract tech talent & willingness to invest heavily into dev. What does "no-code" bring to the table? It's much cheaper, it's visual, it decreases execution risk and can be easily applied in legacy SMB companies.

No empty words here, as you can see below the market is huge & rapidly growing. I believe that companies which can adopt this will end up with a competitive advantage and the ability to execute innovation quickly. Oh by the way, only 0.5% of the global population can code & 85% of people believe no-code tools will significantly make their life easier.

We do like the trend and the implications to corporates, but being in the Boring Business sector, this is our take:

Our hypothesis is that "no-code" will allow SMBs to catch up in the field of digital transformation, digital experience & turning mundane capacity heavy workflows into automated ones

The Caffeine Capitalist Collective

If you are an SMBs owner, or an investor, below you can find some of the best tools which can help. Based on our experience we filtered them into separate categories:

One-pagers, Websites & MVPs:

Workflow automation tools:

  • ActiveCampaign - no code automation of internal / client facing stuff

  • - client portals & Airtable connections

Building audience & content tools:

  • Podia - sell digital content & host communities

  • ConvertKit - newsletter, course & other digital assets

  • Beehiiv - this is what we use for The Caffeine Capitalist

This summer we are in the no-code exploration mode looking at ways how to apply these tools to our boring businesses. There is a strong gut feeling that successful identification of high impact use-cases will lead to very positive outcome (alpha). In autumn we will do a recap on this trend & we can cover some of the use-cases that we have explored, the wins & pitfalls.

Do you want to explore "no-code" but don't know where to start? Get in touch with Martin our expert on this topic or just email us at [email protected] , he will point you in the right direction. Let's keep building & shipping!

Dept. of Twitter Thread Research:

1/ Vacation homes we're the focus of our last issue, Codie Sanchez brought a thread of her own looking at tiny homes, a subcategory in the refreshed vacation rental space:

2/ VC data on exits & next round raise probabilities. Worth exploring the Medium article in the thread.

Dept. of Visual Research:

Why not continue the crypto mood of this issue & throw some more data at you ๐Ÿ‘‡

Do you enjoy this type of content? The best way you can help us is to share The Caffeine Capitalist in your community using the button below:

Enjoy your coffee fresh, allocate capital, repeat! See you in 2 weeks ๐Ÿ‘‹

What do you think of this issue?

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.