Nonconformity and Questioning Authority

The author embraces the philosophy of "nonconformity as the highest form of social attainment" and "questioning authority," rejecting blind acceptance of prevailing narratives that defy logic or rationality.

Recalls being skeptical of biblical stories as a child, exhibiting a low tolerance for dubious claims.

Advocates questioning the herd mentality and critically examining the reasoning behind popular trends or beliefs.

Applies this mindset to analyze potential bubbles in the real estate and business investment markets.

Identifying Real Estate Bubbles

The author warned against the unsustainable real estate price surges between 2000-2008, recognizing the signs of a bubble despite dismissive responses from friends and investors.

Pointed to historical data showing property values typically grow at a modest rate above inflation, contradicting the rapid price escalation at the time.

Argued that property prices are inherently tied to rental rates and local income levels, not perpetual supply shortages or changing "fundamentals."

Advocated selling amid the artificial gains, as the market was overheated and disconnected from economic realities.

Concerns over the Angel Investment Bubbles

The author expresses similar skepticism towards the current frenzy in the angel investment and venture capital markets, drawing parallels to previous bubbles.

Highlights the difficulty of making money through angel investing, calling it a "mug's game" for the masses.

Notes the surge in the number of deals and startups, questioning their long-term viability and ability to generate sustainable profits.

Cautions against the "forever ramen profitable" mindset and the reliance on acquisitions as an exit strategy, which may not hold during market downturns.

Emphasizes that great businesses often take 7-10 years to build, longer than the average economic cycle, requiring resilience through good and bad times.

Conformity and Timing in Investing

The author critiques the herd mentality and poor timing that often plagues investors, leading to irrational exuberance and market imbalances.

Suggests that investors tend to conform to derivative thinking and "hot" trends, rather than embracing true innovation.

Cites data showing that investors tend to buy at market peaks and sell at lows, contradicting sound investment principles.

Observes the "market amnesia" phenomenon, where investors chase deals at high valuations after a downturn, repeating the same mistakes.

Navigating the Investment Landscape

While acknowledging the risks, the author remains optimistic about certain sectors and adopts a selective approach to investing.

Avoids "frenzied" deals and focuses on identifying long-term trends, such as video production, digital media consumption, and data-as-a-service.

Advocates for sophistication and commitment over short-term opportunism when selecting investors or raising funds.

Emphasizes the importance of knowledgeable and experienced investors who can weather market corrections and provide long-term support.

Lessons for Entrepreneurs and Investors

The author's insights offer valuable lessons for entrepreneurs and investors navigating the dynamic and often unpredictable technology and business landscape.

Maintain a critical mindset and question narratives that seem detached from fundamentals or logic, especially during periods of market exuberance.

Evaluate investment opportunities based on sustainable business models, revenue streams, and long-term growth potential, rather than short-term hype or conformity.

Seek out knowledgeable and experienced investors who can provide guidance, support, and resilience through market cycles.