Lior Susan on Why Now Is the Time to Build Industrial Giants

Lior Susan (0:00)

This car is driving better than me in the oilbound. It's much harder for us as humans to let it go. It's more of a psychology and education than actually reality, because the reality is self-driving cars today driving way better than 99 percent of humans have no doubt in depth.

Peter High (0:16)

Welcome to Technoventure. I'm Peter High, President of Metis Strategy. My guest today is Lior Susan. Lior is the founder and managing partner of Eclipse, a venture capital firm he founded in 2015 with a focus on transforming the physical industries that underpin the global economy, including manufacturing, supply chains, transportation, energy, healthcare infrastructure, and defense. The firm partners with entrepreneurs building technology companies that combine software, AI, and advanced hardware to modernize these essential but historically underserved sectors.

Its portfolio includes companies such as Cerberus, Bright Machines, Augury, and Ursa Major. Before founding Eclipse, Lior led Lab 9, the hardware investment platform and global manufacturing company Flex.

Earlier, he helped build Intocel, a pioneer in software-defined networking that was acquired by Cisco. He also served in the Israeli military. In this conversation, we will discuss why manufacturing and other physical industries represent such a significant investment opportunity, how AI and robotics are changing the economics of the physical world, and why rebuilding industrial capacity has become central to economic competitiveness and national security.

Lior, welcome to Technoventure. It's great to speak with you today.

Lior Susan (1:26)

Thank you, Peter. Great to be here.

Peter High (1:28)

It's a great pleasure. Well, let's begin, if you don't mind, with Eclipse, the venture firm you founded in 2015

When you founded it now 11 years ago, much of Silicon Valley was focused on consumer technology and enterprise software. What did you understand about physical industries that the broader venture ecosystem was missing at the time?

Lior Susan (1:48)

Yeah, no, absolutely. And the goal was not to start a venture firm. That's actually was not the goal. The goal was to go and build companies in the physical world, because that's my passion. And I think the impact of the world is the greatest. When you touch the physical, we live in the physical world. We don't live in the enterprise software world.

And we saw, I saw from first hand when I was at FIX, how China did it so well, and how they grow the GDP from close to zero to a 20 trillion by only innovating the physical world. And I thought to myself, is like, it's just not make sense that all of my friends trying to convince me to come and build in the fintech or consumer or enterprise software when 85% of the world are focusing on the physical element, and there is literally nobody investing in that space.

Peter High (2:32)

Yeah, fascinating.

Yeah, I also have another question I want to ask you here at the outset. Eclipse is described as a team of operators building companies that transform physical industries critical to humanity. It's the way that it's framed, at least I've seen it framed. Talk about this whole notion of a team of operators doing so. We'll get further into the other parts of it as we get further into our conversation, but describe that if you would.

Lior Susan (2:57)

Yeah, I mean, we wanted to not stop building while we transition our lives from being an operator to an investor. So the first part was we're selfish and we didn't want to stop building. The second part was those companies that we build, when you build a rocket or when you build a fab or when you build a robotic solution or mine, those companies being built different than just the world of enterprise software.

And we felt it's required to bring more than capital to those companies. So we assembled what I will think is the best operating team in the industry. So when we are bringing capital, we're also bringing our expertise of how to build those businesses.

Peter High (3:42)

What are some of the common characteristics that make a physical industry attractive for technology driven disruption in your mind?

Lior Susan (3:49)

Yeah, I mean, I think, I mean, we're seeing it. I mean, only this year alone, you saw SpaceX and Cerebrus IPOs. You see a lot of market share has been created in the physical world.

I think, you know, we had this notion that we can outsource all of these physical things to other countries. And then we learn in COVID to begin with, that we cannot produce ventilators. We learn in the world with Ukraine that we cannot produce drones and missiles. We learn that we cannot build enough energy sources to power our data centers. So I think, you know, we are facing choke out of after choke on a physical industries transformation. And the value of solving it is so big.