Unicorn Cruise Control

This week, news broke of one of our portfolio companies, Cruise Automation (reportedly) being acquired by General Motors for $1bn. While I can’t comment on the transaction, I can and will share my thoughts on investing in Kyle Vogt, Daniel Kan, and the Cruise team.

In June of 2014, I wrote up a brief piece on why we invested in Kyle and never ended up publishing it. I don’t remember why, but I wanted to share it now. We were early supporters for Cruise, after having originally met Kyle by way of introduction through a mutual friend. I couldn't be happier for the team and the future that lay ahead for them.

Blogpost from June 22nd, 2014 below:

I’ve seen Google’s self driving cars on the highway during my morning commute in the Bay Area, and I’ve laughed when watching autonomous cars getting caricatured in HBO’s Silicon Valley. Neither was adequate prep for a demo of Cruise’s autonomous car last week though. A slick looking A4, with a beautifully designed camera / sensor on its roof, elegantly maneuvered through a quarter mile track, getting up to 40 or 50 mph, all the while its steering wheel, brakes, and gas pedal controlled by an onboard computer with a Downton Abbey English lady’s voice. It goes without saying that all 4 passengers, including myself, were pretty impressed, with references to James Bond’s smartphone controlled car in Tomorrow Never Dies flying around more than once from the gathered audience of auto enthusiasts.

Kyle and the Cruise team are tackling a prodigious problem and if it were anybody else, I’d probably be a little skeptical. Kyle previously cofounded Twitch.TV and is an MIT trained engineer with the drive (pun intended), big vision, and stellar team needed to change the way we think about our cars. The product demo I mentioned above was further evidence of the team executing upon the promise we saw in them during the initial pitch back in April of this year. It’s a market invented as we speak. Google, Tesla, BMW, Cohda Wireless, Mobileye are all working on autonomous car tech. Cruise is thinking big, focusing small, and will be a major player in determining our driving experience in the next decade.

Cruise’s solution controls steering, braking and accelerating without the need for driver input. The “big” long term dream is to have fully autonomous cars take passengers from Point A to Point B without any need for driver input. Cruise is focusing on a more near-term dream right now to create autonomous driving only for the highway portion of a route. In-city driving requires far more precise navigation than GPS — e.g. PPP (precise point positioning) that is accurate down to a matter of millimeters versus GPS, which may be inaccurate up to 30 feet. It was best for us to think of Cruise as a far better version of highway cruise control than an autonomous robot driving me where I needed to go. In real world applications of autonomous vehicles, folks have legitimate concerns about their safety. Issues of undesirable and unexpected driver-behavior, unforeseen road conditions, etc. give drivers cause for concern around whether the technology will react as well as an experienced driver might. Cruise will have independent third party safety quality controls and is following all industry best practices around car safety, though public sentiment will grow positively as exposure to self-driving vehicle technology grows in the next five years.

At Signia, we focus on mobility and data, as my colleagues have shared many times. The car is the one last tapped bastion of consumer experience that has seen little innovation to date, relative to what is on the horizon. It’s inherently mobile and Apple and Google have both been vocal about their plans to integrate iOS and Android into on-board navigational, entertainment, and communication systems. What’s more, at Signia, we invest in frontier markets and in engineering heavy teams with a big vision, and an even bigger ability to execute. Cruise certainly presented an opportunity to do both and I couldn’t be more excited about where the company is headed.

Self driving cars…check. Time to move onto flying Doloreans, Kyle.

Sunny Dhillon is a partner at Signia Ventures, an early stage VC fund in San Francisco. He was previously a corporate strategist at Warner Bros in LA, the first business development employee at a VC-backed spin-off of New Line Cinema, and a former entrepreneur, having launched one of the App Store's first social-local-mobile apps (named BarStool) in 2011. Follow him on Linkedin and on Twitter (@SigniaVC).

Sandeep Dhillon