It’s the same million- (or billion-) dollar questions that haunt venture capitalists and company founders alike:
Why do some entrepreneurs succeed where most fail? Why do some inventions gain traction and transform the world, while others just fade into the shadows?
No one has a crystal ball to see which unicorn start-ups are really worth their valuations or which CEOs have what takes to go from Series A to initial public offering (IPO), but studying the stories and guiding philosophies of some of the market’s most influential firms reveals that a novel idea alone often isn’t enough. The 10 companies below are engines of progress, pioneering ground-breaking developments in fields like biotech, clean energy, and big data analytics. But just as central to their impact is a tenacious commitment to a higher purpose.
🚗 Turning the wheel toward a better climate
The luxury electric automaker was founded in 2003 by a group of engineers; tech visionary Elon Musk, originally the company’s chairman, became CEO in 2008. From the beginning, he announced in a “secret” master plan, the driving force behind Tesla was “to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.” This higher calling fueled the company through setbacks including numerous production delays and an 11th-hour deal one Christmas Eve to secure desperately needed financing. But in each case, the larger goal of revolutionizing transportation with clean energy helped the auto manufacturer overcome doubts to assume the role of industry pioneer. Last summer, the Tesla Model S became the first electric vehicle to achieve an EPA-rated range of more than 400 miles. Meanwhile, Musk has been dropping hints about a powerful training computer named Dojo, which is “teaching” cars how to drive autonomously.
💡 Keeping the lights on with clean power
The Minneapolis-based renewable energy giant isn’t shy about making big statements and going public with its ambitions. As it accelerates plans to move to wind- and solar-generated power, it became the first major US utility to pledge to be 100% carbon-free by 2050, building on its earlier goal to achieve 80% carbon-free production by 2030. This journey isn’t without its challenges: Xcel has had to reckon with maintaining reliable service amidst increasing rates of extreme weather events like hurricanes, floods, and tornadoes. Now the utility is turning to machine learning to forecast weather patterns, using predictive analytics to optimize the grid use while sourcing more power sustainably.
🤖 Improving healthcare outcomes with robotics
Intuitive Surgical’s vision for making high-stakes medical procedures safer with the help of robots seemed more like science fiction than science when it got started in 1995. Early incarnations of its da Vinci system, which performed the world’s first computer-enhanced coronary bypass, faced skepticism from doctors and industry analysts. But now, the company is seeing close to $4.5 billion a year in revenue and was used in more than 1.2 million procedures in 2019. Its system helps surgeons work through just a single incision, allowing patients to recover more quickly. In the biggest compliment to its relevance, the tech company is now facing competition from the likes of Johnson & Johnson and Medtronic, who are developing their own robotic surgery ventures. To stay at the front of the pack they helped create, Intuitive Surgical executives are now looking to 3D modeling and augmented reality to see patient anatomy clearly and spot biological abnormalities the human eye can’t detect.
🚀 Making the world safer through simulation
When the powers that be won’t listen to your brainstorms, start tinkering on them from home. That was the route Ansys founder Dr. John Swanson took in the 1960s when he set out to create groundbreaking engineering simulation software. As a manager at Westinghouse Astronuclear Laboratories, he envisioned a future in which structural analysis calculations would no longer be carried out by hand, but relied on computers to predict the effects of physical forces on tools and infrastructure like bridges. When his bosses wouldn’t listen, he quit and began working out of his Pittsburgh farmhouse—an employee of one. Now Ansys (employing more than 4,000 employees last year) is using its 3D design and simulation software to make engineered products safer, from spacecraft fuel tanks to record-speed snow skis, and guiding scientists to a deeper understanding of the spread of Covid-19.
💊 Designing the life-saving drugs of the future
In 1989, chemist Joshua Boger left Merck and created the biotech start-up Vertex by writing his goals on a whiteboard: “design better drugs, faster; and become the 21st-century biopharmaceutical company.” There were many times in the ensuing decades that those aims seemed unlikely to be accomplished. The Boston-based company did not turn a profit for 20 years, while burning through hundreds of millions in capital. An apparent success with a hepatitis C drug that generated a billion in sales was quickly overshadowed when the competition caught up. But a rigorous adherence to a highly collaborative R&D process led Vertex to recently develop a trio of drugs for cystic fibrosis that’s been approved by the FDA to treat 90% of the patient population. It’s a feat for an industry in which most companies are lucky to develop one breakthrough medicine in a decade.
🧘 Outfitting the wellness movement with clothes built to move
The founding of Lululemon in the late 1990s coincided with the nascent days of America’s yoga craze. At that time, devotees of the posture-driven practice were accustomed to wearing cast-off T-shirts in scratchy, moisture-absorbing cotton, while the reigning philosophy of big box women’s fitness apparel was “shrink it and pink it”—an approach that simply appropriated men’s designs. Lululemon’s use of stretchy, high-quality synthetic fabrics and flat seams became a catalyst for change across the industry, designing clothes that were actually meant to accommodate women’s bodies in motion. A staple of today’s wellness wardrobe, Lululemon continues to embrace textile innovation, recently funding efforts to develop a mushroom-based leather, and is staking out territory in the remote exercise space with the recent acquisition of Mirror, a home fitness start-up. With direct-to-consumer sales surging almost 70% and liquidity assets of more than $800 million in cash, Vancouver’s athleisure pioneer is here to stay.
🖥️ Empowering customers by democratizing tech
The foundations of computing processing innovator Xilinx lay in a user-oriented tech philosophy. The idea, generated in the 1980s by three cofounders in Silicon Valley, was to create a programmable computer chip that would be the equivalent of a blank tape, allowing customers to tailor the technology to their needs. At the time, the concept for this “universal chip” was considered an outlier at best and unrealistic at worst. But the founders’ success in designing the processor prevailed just as transistor prices fell, making it affordable to produce the chips, and Xilinx transformed the semiconductor industry. Today the company has half the total market share in its category and more than $3 billion in revenues. You’ll find their chips under the hoods of Subaru vehicles, enabling a next-generation driver assistance feature, and in rovers on Mars, orchestrating complex maneuvers. Just as it was envisioned in the beginning, it’s empowering others to program the future.
🗣️ Forging social bonds through digital platforms
When the coronavirus pandemic hit, Zoom’s video service quickly became essential both for remote working and maintaining sanity. Coworkers and classmates stuck in their homes with little to no social interaction now had a rare window to see the faces of family and friends. Yet few had faith in the project when the company was getting started. When Eric Yuan, who previously led Cisco’s Webex engineering team, first began pitching the prototype for Zoom in 2012, everyone thought the conferencing market was already saturated. But Yuan saw there was vast room for improvement on the often buggy technology, and hard work and a frugal mentality led to the invention of a lightweight software that was soon the envy of competitors. Now Zoom is adding new bells and whistles to help teachers direct virtual seminars and is even indirectly influencing the real estate market, with affordable “Zoom towns” pulling some workers away from cities like New York and San Francisco. Never underestimate the power of the right tool at the right time.
📊 Making big data safe for the digital age
More and more businesses today run on big data: complex chains of information too voluminous to be deciphered by the human mind. In many cases, our security depends on these systems running smoothly. That was the foresight that Splunk co-founders Michael Baum, Erik Swan, and Rob Das had back in 2003, when they first conceived of a search function that would allow IT administrators to sift through mountains of system log data to find glitches that ground operations to a halt. It was an ambitious attempt, especially at a time when the business world was just coming to grips with trends like the Internet of Things. One venture capitalist asked if they really thought they could build such a program. Build it they did, going on to a red-hot debut in 2012, with a 109% jump in share price following their IPO. Now they’re working on data analytics for most of the Fortune 100 and fortifying protections for the digital age, from keeping consumers’ biometric data private to defending businesses from cyberattacks.
📝 Speeding transactions via virtual dotted line
The impact of a digital signature service might have seemed limited in scope when DocuSign was launched in 2003, when most business meetings were conducted in person in conference rooms and cubicles. Almost 20 years later, with the world’s digital transformation put into hyperdrive by the pandemic and resulting rise in remote working, the notion seems almost prophetic. Whether it’s helping with the onboarding of patients in Covid-19 clinical trials or enabling advances in telehealth by streamlining compliance documents, DocuSign is aiding essential businesses that are spearheading change through this difficult time. With analysts referring to it as the “Amazon of the legal world,” the technology is poised to give a boost to the business economy as in-person transactions remain in limbo, with the potential to revolutionize how paperwork-heavy professions like real estate and law do business.
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As of February 10, 2021, Invesco QQQ had 5.1% exposure to Tesla, 0.25% exposure to Xcel Energy Inc., 0.71% exposure to Intuitive Surgical Inc., 0.26% exposure to ANSYS Inc., 0.43% in Vertex Pharmaceuticals Inc., 0.33% exposure to Lululemon Athletica Inc., 0.27% exposure to Xilinx Inc., 0.65% exposure to Zoom Video Communications Inc., 1.60% exposure to Cisco Systems Inc./Delaware, 0.20% exposure to Splunk Inc., 0.37% exposure to DocuSign Inc., and 0.0% exposure to Subaru, Merck, Johnson & Johnson, Westinghouse Astronuclear Laboratories, and Medtronic. As of March 3, 2021, Invesco QQQ had 9.48% exposure to Microsoft Corp. and 0.32% exposure to eBay Inc.
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