Several years ago I had the opportunity to spend a weekend with some really accomplished finance folks. The kinds of people who’ve spent thirty years trading stocks and have dinner-table conversations about whether or not it’s time to upgrade their private jet.
While talking to one of them on the patio, I confided that although I have a good eye for trends I also have a tough time figuring out when it’s too late to get in on something — and to make matters worse, my ego can get in the way because I hate looking like I’m just jumping on the bandwagon.
In reply, he game me some advice:
“The trend is your friend. You don’t have to get in at the bottom and you don’t have to get out at the top—you just have to get out higher than you got in, and then do it again.”
He was talking about stocks, but it applies all over the place. Sometimes I lose track of the fact that I’m an early-adopter in technology. I joined Twitter in 2007. So by the time something looks achingly blasé to me, it’s only just appearing on the public radar. Andreessen Horowitz investing in Twitter in 2011. Seattle real estate over the last decade. SPACs today.
So the lesson for me, especially as it applies to VC, is that it’s worth getting into things even (or perhaps, especially) when the “clever” insider thing to say is that all the value has already been captured. As long as I’m convinced it’s really valuable, getting in is actually contrarian! And that’s where I like to be.