An Experimental Playground

An Experimental PlaygroundEmpowering founders to create a could-be world

Money. That’s what most entrepreneurs desperately need to develop their ideas and make new concepts a reality. And money is what most hedge funds and traditional investors provide — the intensive capital required for high-risk/high-reward development.

But many entrepreneurs and innovators also need something money often can’t buy: a real-world environment and partner for testing their concepts. As Fred Koch learned in 1927 (see Koch as a Republic of Science article), a great idea is just an idea until it is proven. Proving your design for a better dog leash is probably easy and affordable. Proving your new technology for brain surgery is not.

That’s why the Vision for Koch Disruptive Technologies includes “To be the preferred partner in accelerating both the value of entrepreneurs’ disruptive companies and the transformation of Koch Industries.”

KDT was formed in 2017 for the express purpose of finding and funding disruptive technologies with the potential to be truly innovative compared to current solutions or other market alternatives.

Unlike many investor groups, KDT is willing to invest at any stage of a company’s life cycle ­— from early development to commercialization and growth — and does not limit itself to a narrow range of industries or countries. It has invested in medical devices, robotics and automation, 3D printing and cybersecurity to name a few. It evaluates each partnership based on individual merit and timing, rather than taking a more common portfolio approach.

KDT has also been able to provide something most funding sources cannot: an effective laboratory for validating complicated concepts.

KDT’s Vision

To be the preferred partner in accelerating both the value of entrepreneurs’ disruptive companies and the transformation of Koch Industries.

The Koch Labs concept has been well received in the market,” explained Chase Koch, president of KDT. “Not only because Koch can help tech founders access such a large part of the economy, but because employees across Koch are accelerating the experimentation with these technologies and demonstrating our philosophy of mutual benefit. The combination of our MBM® philosophy and the Koch Labs model creates a significant point of differentiation for us.”

As well as offering a diverse group of businesses for implementing and testing concepts, Koch Labs provides entrepreneurs with a wide range of internal capabilities they can leverage, such as product development, operations excellence, engineering, supply chain and logistics management, and technology licensing.

“In keeping with our mindset of mutual benefit, we help entrepreneurs maximize their upside while reducing their risks. We offer them the potential to build a network that includes commercial contacts across Koch. Once they’ve proved their concepts at our sites, they have a better chance of successfully selling them to a worldwide marketplace.

“Koch Labs extends beyond Koch Industries to include introductions to other strategic partners, potential customers and suppliers across Koch’s networks.”

Chase Koch and Byron Knight

Chase Koch (left) and Byron Knight of KDT

Case Studies

“If you’re an entrepreneur,” added Byron Knight, KDT’s managing director, “you realize that KDT is able to offer the depth and breadth of Koch’s capabilities. We don’t just fund the early stages of your business concept, we provide various use cases across multiple industries to test your concepts. We also offer the capabilities and talent needed in areas from safety and compliance to material science and packaging. It all ties back to Koch’s concept of mutual benefit.”

The results of KDT’s investments in Insightec and Ibotta have already been highlighted in Discovery, D-Net and the KochNews website. But those are just the tip of the iceberg. During the past three years, KDT has provided more than $1 billion in essential funding to a wide range of innovators with ideas for 4D sensing, vision-guided warehouse trucks, improved cancer diagnostics and “deep learning” for devices.

Although the names ­­— Automox, Dragos, Strider, Proteantecs — may not be familiar, each company illustrates a fundamental principle: Creative destruction is and always has been inescapable.

Seeing in 4D

Vayyar Imaging Ltd. first developed what it calls “intelligent radar sensors” as a non-invasive way of detecting breast cancers. Since then, and with the help of KDT’s 2019 investment, Vayyar’s horizons have broadened to include vehicle automation, home monitoring, signal testing, construction and security.

In less than two years, 15 beneficial collaborations and applications across Koch were identified. These have included strategies for improved supply chain efficiency from KBX, introductions to key players in the automotive industry thanks to Koch’s public sector capability and data analytics provided by i360.


Deep learning

Last September, KDT made a significant investment in DeepCube, a company focused on machine learning. DeepCube has developed the world’s first software-based inference calculator, an innovation that accelerates how devices “learn” so they can operate faster, more accurately and more independently.

“It can sound strange and complicated,” admitted Eli Groner, the managing director of KDT in Israel, “but in essence what we’re doing is making it easier for any device to harness artificial intelligence, regardless of who developed the hardware.”

DeepCube offers a major boost for semiconductor manufacturers trying to develop leading-edge applications. It also makes data centers more efficient by reducing processing costs and memory requirements while lowering the amount of costly energy needed to power intensive computing. Edge devices (such as security cameras, drones and mobile technologies) can operate with greater speed and security using DeepCube’s software.


Yours or mine?

Intellectual property and customized supply chain technology are some of the most valuable assets a company can own. Both are vulnerable to corporate espionage efforts from those who want to steal ideas or disrupt operations. Strider, which received funding from KDT in October, has created a risk identification platform that helps combat these kinds of attacks.

Strider is merging public data and human expertise with proprietary data science into what is called its “Risk Intelligence Platform.” Companies can use this platform to proactively identify risks before attempts are made to steal information, as opposed to reactively attempting to stop a breach once it has occurred.

Chase Koch summed it all up this way: “We are just scratching the surface of what can be accomplished by applying MBM and the Koch Labs model to advance Koch Industries’ Vision. All of us can play a role in the Koch Labs concept by leveraging our networks to identify and experiment with new approaches to innovation. That effort and personal transformation can result in truly disruptive technologies that provide great benefits.”