44:10 Nia: Alright, let's get practical. For our listeners who are convinced that quantum computing is worth including in their investment strategy, what's the step-by-step approach to getting started?
44:20 Jackson: The first step is really understanding your own risk tolerance and investment timeline. Quantum computing investments span a huge risk spectrum, from relatively conservative positions in large tech companies to highly speculative bets on early-stage startups.
44:35 Nia: So before you even start looking at specific companies, you need to know how much quantum risk you're comfortable taking?
4:46 Jackson: Exactly. And this isn't just about the percentage of your portfolio—it's about the type of quantum exposure. Someone investing for retirement in 30 years might be comfortable with pure-play quantum stocks, while someone closer to retirement might prefer quantum exposure through diversified tech companies.
18:16 Nia: That makes sense. Once you've figured out your risk tolerance, what's next?
45:03 Jackson: Education. Quantum computing is complex enough that you really need to understand the basics before you can evaluate investment opportunities effectively. You don't need a physics PhD, but you should understand concepts like qubits, quantum advantage, and the different technological approaches.
45:21 Nia: Are there good resources for investors who want to learn about quantum computing without getting lost in the technical details?
45:27 Jackson: IBM's quantum education materials are actually quite good for getting started. McKinsey and BCG have published accessible reports on the business implications. And there are several books aimed at general audiences that explain quantum computing concepts clearly.
45:42 Nia: Once you've got the educational foundation, how do you start evaluating specific investment opportunities?
45:48 Jackson: I'd start by mapping out the quantum ecosystem. Understand the different layers—hardware, software, applications, services—and the major players in each layer. This gives you a framework for thinking about where value might be created and captured.
46:03 Nia: Can you walk us through that framework?
33:09 Jackson: Sure. At the hardware layer, you've got companies building quantum processors—IBM, Google, IonQ, Rigetti, PsiQuantum. At the infrastructure layer, you've got companies making the specialized equipment quantum computers need—dilution refrigerators, control electronics, specialized lasers.
46:22 Nia: Those would be the "picks and shovels" plays we talked about earlier?
0:57 Jackson: Right. Then you have the software layer—quantum programming languages, development environments, algorithm libraries. Companies like Microsoft, IBM, and various startups are building these tools.
46:38 Nia: And then the applications layer would be companies using quantum computing to solve specific business problems?
4:46 Jackson: Exactly. Though that layer is still mostly in development. Most companies aren't generating significant revenue from quantum applications yet, but they're building capabilities and partnerships for when quantum computers become more capable.
46:57 Nia: So how do you evaluate companies in this early-stage ecosystem? Traditional financial metrics probably don't work very well.
10:58 Jackson: You're absolutely right. For quantum companies, you need to look at technical metrics as well as financial ones. For hardware companies, track metrics like qubit count, error rates, and coherence times. For software companies, look at adoption metrics and ecosystem partnerships.
47:20 Nia: What about the business metrics? How do you evaluate a company's commercial potential?
47:24 Jackson: Look for companies that have clear go-to-market strategies and are building relationships with potential customers. The companies that are working closely with end users to develop applications are more likely to succeed than those that are purely technology-focused.
47:37 Nia: That sounds like the classic technology adoption challenge—you need to understand not just whether the technology works, but whether customers will actually use it.
4:46 Jackson: Exactly. And in quantum computing, that's complicated by the fact that most potential customers don't understand quantum computing well enough yet to know how they might use it.
47:57 Nia: So there's an education and evangelism component to quantum commercialization?
3:48 Jackson: Absolutely. The companies that succeed will be those that can help customers understand and implement quantum solutions, not just those that build the best quantum hardware.
48:11 Nia: What about portfolio construction? If someone decides to allocate, say, 5% of their portfolio to quantum investments, how should they think about spreading that across different opportunities?
48:21 Jackson: I'd probably start with a core position in one or two of the big tech companies with quantum programs—maybe IBM for their quantum leadership, and Microsoft or Google for their broader technology capabilities.
48:33 Nia: That gives you quantum exposure with downside protection from their other businesses?
0:57 Jackson: Right. Then I might add some pure-play quantum exposure—maybe split between different technological approaches. A trapped ion company like IonQ, a superconducting company like Rigetti, maybe a photonic play if you can find good exposure.
48:51 Nia: And then some infrastructure or software plays?
4:46 Jackson: Exactly. Companies that benefit from quantum development regardless of which specific approach wins. And if you're an accredited investor with access to private markets, maybe a small allocation to quantum-focused venture funds.
49:07 Nia: What about geographic diversification? Should investors think about spreading quantum bets across different countries?
49:13 Jackson: That's increasingly important given the geopolitical aspects of quantum computing. The US, China, and Europe are all making major quantum investments, but they're taking somewhat different approaches.
49:25 Nia: And regulatory restrictions might limit cross-border collaboration and investment?
4:46 Jackson: Exactly. Investors might want exposure to quantum development in multiple regions, but they also need to be aware of potential regulatory restrictions on international quantum investments.
49:40 Nia: Let's talk about monitoring and portfolio management. How often should investors reassess their quantum positions?
49:47 Jackson: Quantum is evolving rapidly enough that I'd want to review quantum investments at least quarterly, maybe more frequently during periods of major technical developments or market volatility.
49:57 Nia: What are the key things to monitor? Technical progress, competitive developments, regulatory changes?
50:04 Jackson: All of those, plus funding flows and talent movements. If a major quantum company loses key technical talent, that could be a significant red flag. If government funding shifts toward specific approaches, that could create opportunities and risks.
50:19 Nia: What about exit strategies? How do you know when it's time to take profits or cut losses on quantum investments?
50:25 Jackson: This is where having clear investment theses becomes crucial. If you invested in a company because you believed they'd achieve certain technical milestones by specific dates, and they're consistently missing those milestones, that might be a signal to reassess.
50:40 Nia: And on the upside, if quantum computing develops faster than expected and your positions appreciate significantly?
50:46 Jackson: That's a good problem to have, but you still need to manage risk. If quantum positions become a disproportionate part of your portfolio due to appreciation, you might want to rebalance to maintain your target allocation.
50:59 Nia: What about tax considerations? Are there any special tax issues with quantum investments?
51:04 Jackson: Most quantum investments would be treated like any other stock or venture capital investment from a tax perspective. But if you're investing in quantum startups through opportunity zones or other special structures, there could be additional tax benefits or complications.
51:19 Nia: Any final thoughts on building a quantum investment strategy?
51:22 Jackson: I think the key is to stay humble about what we don't know. Quantum computing has enormous potential, but the timeline and ultimate applications are still uncertain. Build positions that can benefit if quantum develops as expected, but don't bet more than you can afford to lose on any specific quantum outcome.