Inflection Point

People ask us all the time if we’re in a “technology bubble.” I’m not sure what that question means so I try to think about it through a different lens. The key question I ask is whether one should be optimistic or pessimistic for the near- and long-term trends in technology. Peter Thiel has some incredible thoughts on optimism versus pessimism.

When it comes to the long-term, I’d argue that there has never been a better time to be more optimistic about technology. But that’s just one opinion. Hard technologies like drones, virtual reality, cryptocurrencies, life extension and others are like a Rorschach Test - one can be either optimistic or pessimistic of whether they will be valuable and/or create value.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
-Bill Gates

In the near-term, most investors like ourselves focus on the opportunities based on the mobile computing platform - mainly new ways to communicate, interact and transact among people and companies. In her 2014 Internet Trends Report, Mary Meeker had the following slide:

Screenshot 2014-05-29 08.29.43.png

I remember her saying back in 2007 or so that 20% adoption was a “critical mass inflection point” for any new technology. And beyond that point, you reached an inexorable and almost inevitable path to global adoption. Her slide above shows that while we may be past that 20% number, there is still “lots of upside.”

The obvious caveat here is that most of the growth is outside of the U.S., and those regions have been historically harder to monetize. But if you consider other factors - such as the rise of consumer demand in emerging countries and the number of people who will become “banked” (i.e., not unbanked) - then there’s reason to be optimistic in the near-term as well.


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