Turbulence

Let's see how this post ages

TLDR: Long-term problems with long-term people.

Everyone is talking about FTX, and while the turbulent tech moments these past few years should have made us more accustomed to the craziness, somehow I think it made us even more myopic.

Here are some things worth revisiting:

• When we first started working from home, everyone was up in arms. Now no one wants to go back

• When Clubhouse took off, we thought social media was changing forever

• When NFT’s went mainstream and Bored Apes minted millionaires we thought the future of art, access, and utility had arrived

• When we printed obscene amounts of debt to buoy the economy, and everyone was feeling rich, very few took the long-term view on what that would really mean

• When Elizabeth Holmes finally went on trial, we assumed there would be greater accountability and diligence going forward

• Now, we’ve got companies creating fake coins to bolster balance sheet value, and the money flowing to all kinds of interesting places…

But what’s the point of laying this out?

It’s to remind people that the long-term view is the hard one, but the right one. If we go back, I’ve written about why the move to remote work would ultimately be hybrid regardless of the near-term swings. We covered why Clubhouse was fundamentally interesting and where the flaws were too, before the air was let out of the balloon. We went deep on NFT’s to talk about utility and access, likening the more surface level use cases to gambling. I even opposed the enormity of the debt printing, in favor of short-term (personal) pain in the stock market, and going as far as to share that sentiment in emails to Earhoox customers on why—even though it would never happen—that taking PPP loans should be reserved for those truly in need.

Fundamentally, we need to avoid the urge to make a quick buck. I mean sure, play the $1.9B Powerball on Jackpocket (disclosure: I’m an investor), like I did. But we’re talking about gambling tens of dollars there, not tens of billions of dollars like the government and the largest investors in the valley. Like the metaverse for example—the only advancement in civilization that has accrued more investment than the metaverse is the moon landing. And that’s why we wrote about equal and opposite reactions—investing in the real world to balance investments in the digital one.

As interest rates continue to rise, we’re going to see a reprioritization of asset classes, and it’s going to be harder for VC’s, particularly emerging managers, to raise from investors. That’s why we need to look at a 5-10 year arc—probably even longer. We need to focus on fundamentals, and step-changes in technology, not follow bandwagon opinions—at least not with any outsized allocations. That’s why we also need to return to investing in people—the right kinds of people—the ones who focus on long-term problems, leveraging first principles, and optimize for the future over the present.

That is to say, everything finds equilibrium eventually, and as the pendulum swings, it’s important to ask ourselves about the counterforce. To me, right now, it’s interoperability, AI/ML, quantum, longevity (also here), blockchain & cryptography (specifically zero-knowledge proofs & DeFi), personal data, and incentive alignment. Each of these areas have fundamental use cases that stand to better humanity and improve our collective abilities to live better lives and solve the world’s most pressing problems. We won’t make billions overnight, but those overnight wins have proven to be false idols anyway.

See you Monday.