Most popular consumer social internet products sound stupid when they first started. I’d argue that most of them are still stupid. The only difference is that the popular ones gained enough social proof to not look stupid.

So if they’re all stupid, what then separates the products that take off and the ones that don’t? Well, this reminds me of the old ‘hedge funds are all luck’ theory: take 100 hedge funds. They’re run by the same white-shoe, pedigreed types, and they’re all investing according to their own arbitrary ‘investment theses’. 80 of them suck, 10 match the S&P500, 9 beat the market, and 1 looks like Midas. Statistically, someone’s going to luckbox their way to the top. The problem is that you can’t play...

Early-stage technology (especially software) start-ups today are over-priced as an investment class. Over the last decade, technology development techniques have matured, the costs are well-understood, and all infrastructural problems now have commodity solutions. I argue that most technology startups created today are structurally similar to brick-and-mortar small businesses and manufacturing-based ventures, and therefore should be priced at multiples similar to those businesses.

Defenders of current valuations might argue that the technology component opens up vast scaling opportunities and capabilities that brick-and-mortar and manufactured goods companies cannot. I’m not convinced that there’s particularly more real estate for a business to conquer in the technology...