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Quantum Startups: High Tech Entrepreneurs & the QSI Mission

by
Brian LenahanQuantum Strategy

By Brian Lenahan, Founder & Chair – Quantum Strategy Institute

Kanav Setia is CEO of qbraid, a New Hampshire-based quantum startup developing a cloud-based platform for managed access to other quantum computing software and hardware. Setia thinks now is the perfect time. For what? The perfect time to invest in quantum technologies. He envisions the long-term opportunities that quantum affords, yet also is squarely focused on what he and others need to do to prepare for the coming technology wave. Many forecasters agree with Setia’s position.

Take a look at some recent forecasts for the quantum market.

Quantum Market Forecasts

      According to Persistence Market Research, in a piece titled “Rising Demand from Consumers to Push Sales of Quantum Computing Market” quantum computing alone has a projected compound annual growth rate (CAGR) of 33.7% from 2021 through 2031 (with a worldwide valuation of $5.6 billion as of 2020). The Quantum Economic Development Consortium (QED-C) and Hyperion Research have their own view; that “the global quantum computing (QC) market… will grow at an anticipated 27% CAGR between 2020 and 2024…” Yet another quantum industry research firm, Transparency Market Research predicts revenue from the global quantum computing market “is estimated to expand at a CAGR of 35.3% during the forecast period (through 2031)”. The quantum random number generator (QRNG) chip market alone is expected to reach $7.2 billion by 2026 (according to an Inside Quantum Technology Report). One Gartner representative says “by 2023, 20% of organisations will be budgeting for quantum computing projects compared to less than 1% in 2019. There could be between 2,000 and 5,000 quantum computers worldwide by 2030 and $1 trillion in global market value according to McKinsey & Co.

      Even if quantum computing growth sees a fraction of the progress in the forecasts above, it will be an exciting time to be in this space where leading quantum industry names like IBM, Honeywell, D-Wave, and Microsoft are consistently associated in the media with breakthroughs and roadmap developments. It’s early days, and the technology is maturing, yet there are early examples of where these quantum vendors are helping organizations solve their most complex business problems. IDQuantique, a Swiss-based quantum security provider, is not only one of those companies, having developed the QRNG chip in the latest Samsung phone, it also supported the creation of SK Telecom’s quantum virtual private network (VPN) based on their quantum key distribution (QKD).

      Sometimes it’s simply a matter of finding the right business problem. Kefeng (Kevin) Hua of Bayer, a quantum proponent for the Life Sciences industry argues “One big challenge we’ve seen is that it is difficult to find a business problem that is small enough to fit in the existing quantum hardware but is also big enough in terms of business value.” Scaling is critical to repaying technology investments. How is the German multinational getting ready for quantum? “At Bayer, we are defining a quantum computing roadmap in a three-step process: to be engaged with the technology community, to be prepared for the potential technological breakthrough and to produce value by solving hard business problems now.”

      Many major companies are offering free access to their quantum computers through cloud platforms, to create awareness and initiate developer communities based in research groups, colleges and universities and inside organizations. According to the Quantum Computing Report, a well-respected industry resource, there are over 200 private companies and startups listed in their database. More are being conceptualized every day around the world. So what will all of this mean for the pioneering startups? Will it be a large number of them pursuing too few potential clients until the consumer side catches up? Will revenue models stand up to investment demands? According to Setia, he’s not worried about too many vendors chasing too few customers, in fact he believes that problem is years away. Qbraid is “not focused on capturing the market”, Setia argues, rather he’s focused on the growing quantum market size” for those willing to pursue it.

      So what is happening on the consumer side of the ledger? The majority of potential consumers are in the very earliest of quantum adoption stages, exploring the possibilities. NGEN, a Canadian manufacturing innovation organization, recently hosted the mining community, where the business problem was stated by the presenters as “the Canadian mining industry does not have an “innovation problem,” but rather a “tech adoption” problem.” Such a challenge is hardly unique to the mining industry.

Industry Transformation

      A 2021 study by Gartner asked organizational leaders about their pace of intended digital transformation (PIDT) by industry. The top three industries planning to accelerate their PIDT included insurance, telecommunications and services, followed by transportation, health payers and media. Natural resources, utilities and education providers planned to maintain the same pace or even scale back the most of all industries, the least PIDT of industries surveyed.

The NGEN Canada/NORCAT session  in October 2021 articulated the reason they were aggregating – the Canadian mining industry does not have an “innovation problem,” but rather a “tech adoption” problem. Now, consider this pace in relation to quantum technology. Can we assume the same rates apply by industry? More research is needed to determine those answers.

       Increasingly we’re seeing reports of substantial investments in quantum computing, sensing and communication solutions around the world. So there should be little surprise that entrepreneurs are marching into this space with new ideas and ever more support mechanisms.

      As part of Chicago’s Duality Accelerator portfolio, qbraid benefits from access to funding, mentorship, facilities and larger networks. Duality bills itself as the “first accelerator program in the nation exclusively dedicated to supporting quantum startups”. Pranav Gokhale is another Duality Accelerator client. His company, Super.tech, of which he is CEO and co-founder, also based in Chicago, is developing software that accelerates quantum computing applications by optimizing across the system stack from algorithms to control pulses. Spun out of the University of Chicago (UC), where he and Professor Fred Chung developed the software, Super.tech is well positioned to leverage its Illinois network for future success. Yet challenges still remain as Gokhale anticipates a talent race in the near-term. Fortunately, his company is in a position to attract local PhD graduates in an ecosystem which is highly quantum friendly with partners and investors including IBM Quantum Network, Chicago Quantum Exchange and EPIQC. Quantum startups will need the support of such entities to compete with their larger quantum brethren.

     Both Kanav and Pranav’s origin story is similar. Both felt the pull of the bizarre nature of quantum mechanics, becoming curious about the possibilities stemming from the smallest of elements – atoms, protons, electrons, photons. They leveraged the incredible academic opportunities available at Dartmouth College and UC respectively to satisfy their quantum curiousity and translate that into a quantum startup.

The QSI Mission

Is to smooth the intersection of scientific breakthroughs and business applications, by creating an independent, technology-agnostic platform that brings together research, education, business strategy and principles, guiding businesses towards:

  • Understanding how quantum computing can help them achieve business advantage
  • Strategically building quantum readiness
  • Taking steps towards integrating quantum computing in their operations

Quantum Strategy Institute Advice for Startups

      QSI is focused on all segments of the quantum ecosystem, large companies and small, academia, government, research labs and vendors of all ilks in order to support the acceleration of quantum adoption. So what’s our advice for quantum startups?

Here are 5 tips for greater success at the sales table:

  1. Don’t focus on your solution – focus on their problem. You may be a good fit (and have an exciting offering), but be sure you’re creating a relationship with integrity rather than acting like everyone else and thinking about your sales quota. Human beings are still making the buying decision.
  2. As a start-up you need to be aware of the head-start that large organizations and academia have. Leveraging the support of accelerators and innovation centers will be important for setting your foundation. Find creative ways to build out and partner on your solutions.
  3. Really think about your unique value proposition. There are many modalities/hardware platforms out there, over 500 vendors in the various levels of the tech stack as of writing, and many more planned. What positions your solution/company for success?
  4. Consider the role of quantum strategist. Most start-ups are begun by PhD’s who understand quantum mechanics, quantum machine learning, or other technical skills. Find those who understand the industry, its evolution, competitors, consumer trends, technology breakthroughs, etc. to help drive your overall strategy.
  5. Keep in touch with expert content coming from the Quantum Strategy Institute to drive your business strategy.

The Quantum Strategy Institute’s purpose is to demystify quantum technology and encourage the development of a pragmatic quantum mindset within the global business community, sharing practical applications and offering strategies for its successful adoption.

Brian Lenahan is the Founder & Chair of the Quantum Strategy Institute. He is the author of four Amazon-published books on artificial intelligence including the Bestseller “Quantum Boost: Using Quantum Computing to Supercharge your Business”. Brian is a former executive in a Top 10 North American bank, and mentors innovative companies in the Halton and Hamilton (Canada) areas. His training in quantum computers comes from CERN/University of Oviedo, and Technische Universiteit Delft, and he writes extensively on quantum computing.

Copyright 2021 Quantum Strategy Institute

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Copyright 2021 Quantum Strategy Institute

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