I lost the bet here (blog.samaltman.com/bubble-talk) from 2015 to Michael de la Maza, a TechStars mentor, and will cheerfully donate to a charity of his choice. Here are some reflections on it:
It's easy to forget how much chatter there was, mostly from the press but also from VCs, about how certain it was that tech was in a bubble. And it's interesting how little there is now.
Although I lost, I'd say it looks like we were not in a bubble, and categories 2 and 3 performed incredibly well over the past 5 years. Category 1 was close.
(It is possible that YC companies have done really well and other companies were very overpriced, but I doubt it.)
In general, it's unlikely to be a bubble when everyone is saying that is, but that it could be a bubble now that not many people are saying that it is.
Or it could just be that the media has shifted from the "tech is overvalued" to the "tech is evil" storyline.
(The latter is easier to keep saying for a long time, and has some kernels of truth.)
Would I make a similar bet today for the next 5 years? Hmm. Probably not. I expect certain segments of tech investing to continue to wildly outperform, but I wouldn't be as comfortable saying everything will do super well.
Specifically, seed-stage software seems quite overpriced, and late-stage everything seems overpriced. A low-confidence guess is that A and B rounds in 2020 will look like the best risk-adjusted return bets in hindsight. And "hard tech" will be good.
Investors who pick companies exceptionally well will continue to do exceptionally well. People who chase the pack will not do as well. There are now so many startup investors it's just all harder.
Biggest prediction of all: we are going to look back at this period in time and say "How did we not realize it was super weird to have negative interest rates? That clearly meant X; how did we miss it?"
I do not know what X is, but I bet it's going to be bumpy.
The good news: betting on innovation is always a good long-term bet, and with a sufficiently long time horizon you can ride through the ups and downs without too much worry.
Thank you to @DanielleMorrill for writing up the results here: daniellemorrill.com/2020/01/result… Proposition 1 missed by around 15%, Proposition 2 is up 5x in 5 years, Proposition 3 went from almost nothing to way over the threshold.
