Max’s Investment ThemesVersion One
In my first post, I shared a bit about my worldview and values. Today, I’d like to outline some of my investment themes. Note that my personal interests and theses (each of which ties into Version One’s firmwide network effects thesis) are constantly evolving – so this is a perpetual rough draft.
1) Open Internet
The promise of the Internet in my mind has always been to facilitate permissionless innovation, information exchange, and commerce among peers. As a child, the sharing and gift economy ethos of the early Internet resonated deeply with me. As an adult, it still does. While the last two decades have brought a wealth of exciting Internet developments, I’ve been saddened to see what was once a messy web of p2p connections become increasingly domesticated into walled gardens ruled by a small handful of megacorporations.
Fortunately, I believe the tides are shifting. People are waking up to the dangers of being the product and trusting their personal identity and data with stockholder driven entities not made for human scale. The Snowden revelations and Facebook congressional hearings on user privacy were just the beginning. In order to help average people regain personal sovereignty, however, we must make the new generation of p2p Internet infrastructure and applications deliver at least as much value and be at least as easy to use as modern web apps. Projects like Urbit, Blockstack, Scuttlebutt, and Twitter’s Blue Sky Initiative among many others are leading the early charge here.
Although it’s difficult to predict exactly how the move towards a decentralized Internet will shake out and where/how value will accrue, I ultimately agree with Tim Berners-Lee, creator of the world wide web who is himself building an open Internet project, that while “[y]ou can make the walled garden very very sweet …. the jungle outside is always more appealing in the long term.”
2) Democratized Investing & Peer to Peer Finance
Living in Mexico for ~5 years radically changed my view of our global financial system and who gets to participate in it. Many of the financial services and products that we take for granted in the U.S./Europe (e.g. a relatively stable currency, stocks, bonds, etc.) are simply not available for 6+ billion people throughout the world. In Mexico, for example, research that a colleague and I conducted with Bitso shows that >70% of the population believes that the Peso will devalue, but only 10% have access to any financial product other than a local Peso savings account or physical USD (i.e. cash under the mattress). Anecdotally, I’ve heard similar stories across the globe. The basic truth is that we’ve built a financial system that excludes the majority of the world. Such a system seems very obviously not sustainable.
To that end, I’m excited about solutions that help include the financial and intellectual capital of the currently excluded (many of whom do actually live in the U.S./Europe without formal banking btw). I am most excited about the potential of Bitcoin to serve as the basis for a new global financial rails (as a settlement layer). I’m thus particularly intrigued by companies and projects that are helping to facilitate bitcoin payments via layer 2 or sidechain solutions like Lightning or Liquid, using bitcoin to collateralize all sorts of other synthetic assets (e.g. see how Abra was offering stock exposure via bitcoin collateralized contracts for difference), and creating more globally accessible fiat to crypto ramps (from traditional exchanges like Coinbase to p2p exchanges like Bisq and even more creative offerings like Lolli) . I’m also very interested in how Bitcoin and cryptocurrency more broadly can replace every function of a bank – lending, borrowing, insurance, etc. To date, we’ve seen the most exciting progress here with Ethereum and Defi projects like Compound, Maker, and Nexus Mutual. Long-term, I’m bullish on opportunities to bring bitcoin to Defi (e.g. via tBTC) or Defi to Bitcoin (e.g. via a platform like DEBNK).
3) The Future of Human Organization (DAOs and Global Hive Mind)
It’s becoming increasingly easy for groups of people to coordinate on anything from anywhere at any time. A new generation of trustless, internet native corollaries for corporations and nation states will likely evolve to facilitate such cooperation. Although we’re still very early in what is likely to be a multi-decade shift, I’m particularly bullish on the potential of Decentralized Autonomous Organizations (DAOs). Eleftherios summarized the ultimate vision for DAOs quite nicely: “The promise of DAOs is the promise of trustless coordination.”
So far, it seems that the necessary building blocks for a successful DAO include: A) a pool of collectively owned internet native capital (e.g. cryptocurrency) and B) encoded rules on how to distribute that capital according to blockchain-based voting. Some of the most promising projects to date include: Decred, Bisq, Nexus Mutual, Maker DAO, Moloch Dao, and Aragon.
My ultimate hope is that we can develop tools to help humanity coordinate in ways that are more transparent and inclusive for all 7+ billion people on this planet. I believe that the creative, empathetic, and intellectual potential that this will unlock can help us evolve into our inevitable hivemind or superorganism form.
4) Solving Climate Change
In order for humanity to collectively realize its vast potential, we first need to survive some tumultuous global challenges. Climate change and general natural destruction rank very high on this list. In order to avoid calamity, I believe that we need to invest heavily in deploying existing technologies (e.g. solar/wind), bringing down the cost of almost ready tech (e.g. energy storage and Electric Vehicles (EVs)), and developing moonshots (e.g. carbon capture & storage or geoengineering). While large-scale government funding, corporate R&D, and private philanthropy seem better suited for the last category, I think that there is tremendous opportunity for traditional VC in deploying and scaling up existing tech.
I believe that the next ten years will see a massive uptick in the adoption of solar, storage, and EVs. As such, I’m particularly excited about software companies that apply machine learning to help manage an increasingly smart grid, create tools and marketplaces for the long tail of distributed solar/storage installers, and that build upon a world where most people will be carted around in autonomous EVs instead of driving their own cars. Other areas of interest here include creating more efficient means of sustainable food production, manufacturing, and intelligent recycling (ala projects like Mattereum).
5) The Rise of the Rest
Having lived for so long outside of the U.S., I’ve gotten to witness firsthand how much untapped talent there is ready to participate in the next wave of global entrepreneurship. The rise of online education, collaboration, and reliable communication bodes well for: A) new global companies based in previously unheralded tech ecosystems, B) sizable companies solving specific local problems in a specific language or cultural context, and C) distributed companies that are based entirely in hyperspace. I believe the first step will be a rapid increase in the number of highly successful tech companies in geographies like Latin America, Southeast Asia, and other developing markets. I hope to participate in and accelerate this trend.
In addition to these initial areas of interest, I’m also following along closely with other topics like: applying AI/ML to specific industries, the fusion of biology and code, traditional open source software with enterprise service opportunities, and how we can make a good living accessible to indie artists/hackers/entrepreneurs of all backgrounds.
If you’re an entrepreneur for whom any of these areas resonate, please don’t hesitate to reach out via email or Twitter! Also, just a heads up, I mentioned a few V1 portfolio companies in this post: Blockstack, Nexus Mutual, Coinbase, and Lolli.