Hong retweeted
Tomorrow, President Trump is awarding Elon Musk (and a few others) the National Medal of Science, the nation’s highest honor for scientific and technological achievement, marking Trump’s first time presenting this award.
"The Trump administration is grateful for the contributions of these incredible leaders in science and technology. These recipients are helping ensure America keeps leading the world in innovation," White House spokesperson Liz Huston said.
Trump will award the National Medal of Science to Elon Musk, Google co-founder Sergey Brin, Nvidia CEO Jensen Huang and AMD CEO Lisa Su, while Dell Technologies CEO Michael Dell and Microsoft CEO Satya Nadella will receive the National Medal of Technology and Innovation during the summit. foxnews.com/politics/first-f…
Hong retweeted
Je ne sais pas si vous mesurez ce qui est en train de se passer.
Alex Karp, le patron de Palantir, ne va plus chercher ses talents à Harvard. Il les forme lui-même. Des jeunes de 18 ans, sans diplôme, choisis sur leur seul talent, qui codent sur de vrais projets et lisent de la philosophie politique entre deux sprints. Il appelle ça « le diplôme Palantir ». Et aujourd'hui le New York Post titre que les boîtes tech lancent leurs propres programmes parce qu'elles ne peuvent plus compter sur l'Ivy League.
Ce n'est pas une anecdote RH. C'est un basculement de civilisation.
Pendant des décennies, les entrepreneurs ont confié à l'université la mission la plus sacrée qui soit : former les esprits. Ils comprennent aujourd'hui que cette mission a été trahie. Les institutions censées produire des penseurs libres produisent des conformistes. Le mérite a été remplacé par des critères opaques. L'enseignement est devenu catéchisme. Paul Graham l'avait vu avant tout le monde.
Alors ils font ce que font les bâtisseurs quand un système les trahit. Ils ne le réforment pas. Ils en construisent un autre, à côté.
Elon n'a pas attendu que la NASA se réveille, il a fait SpaceX. Il n'a pas réformé les médias, il a racheté la place publique. Les entrepreneurs ne cherchent plus à convaincre l'État. Ils font l'État, partout où l'État a abdiqué.
Relisez La Grève d'Ayn Rand. Nous y sommes. Les bureaucrates gardent les titres, les budgets, les bâtiments. Mais ils perdent la seule chose qui compte : la confiance. Aux États-Unis, à peine 28 % des gens font encore confiance aux médias. Un plus bas historique. Plus personne ne croit ceux qui prétendent nous dire quoi penser.
On entend partout que l'école est finie. Je pense exactement l'inverse.
Ce n'est pas l'école qui est morte. Ce sont les institutions qui l'ont confisquée. L'école, la vraie, celle de l'Académie d'Athènes, des ateliers de la Renaissance, du maître et de l'apprenti, va renaître. Plus exigeante. Plus juste. Sans dette, sans dogme, sans diplôme comme rente à vie.
Une école qui ne fabriquera plus des diplômés, mais des polymathes. Des esprits libres, capables de coder, de penser, de construire et de douter. Ce sont eux qui créeront la valeur des cinquante prochaines années.
J'ai appris à coder seul à 12 ans. Aucun amphi ne m'a appris ce que j'ai appris en construisant. Je sais ce que devient un talent quand on le laisse respirer.
L'université a eu des siècles pour former les meilleurs esprits. Les entrepreneurs vont le faire en une décennie.
La grande reconstruction a commencé.
Tech companies launching their own programs to train grads because they 'can't rely' on Ivy Leagues trib.al/Fi2miAG
"If you don't believe in socialism when you're young, you don't have a heart. If you still do when you're older, you don't have a brain."
You mean EXPLOITING 870,000 workers, right?
Actually, wrong.
To be clear: I do NOT subscribe to that view. I fully agree with Larry’s post. But the hard-left populist view has remarkably little interest in facts.
Under that worldview, the only way capitalists get rich is by exploiting workers. So @elonmusk - being the richest of the rich - must be the biggest exploiter of all.
And Tesla’s workforce remaining non-unionized becomes further “proof,” regardless of employee compensation, equity participation, or the enormous wealth Tesla has created for many longtime employees.
But here’s where the argument crumbles.
Elon is damned if he does, and double-damned if he doesn’t.
I celebrate Tesla’s extraordinary level of automation - and its leadership in embodied AI - because I see them as enablers of lower prices, higher productivity and an era of great abundance.
But that rests on my growing-pie view of economics. I don’t expect fixed-pie disciples to reach the same conclusion.
What I do expect, however, are consistency and honesty.
If employing huge numbers of workers is “exploitation,” then automation should be celebrated for exploiting fewer workers.
Robotaxis should be celebrated for exploiting no drivers.
Optimus should be celebrated for abolishing the exploitation of workers, once and for all.
And a fully automated factory should be the logical endpoint: If capitalists get rich by robbing their employees, an alien-dreadnaught factory robs nobody at all, and clearly the capitalists owning it will not get richer.
I said I expect consistency and honesty - but of course, we're living in the real world. No celebrations and festivities are in sight. Instead, it's:
“He’s coming for our jobs.”
There's this saying - "If you don't believe in socialism when you're young, you don't have a heart. If you still do when you're older, you don't have a brain."
Bernie is long past his teen years, but I don't think he's stupid either. Unfortunately, in his case, Hanlon’s razor doesn't seem to apply.
Power selects for a specific personality type, and it is not yours.
F.A. Hayek spelled this out in 1944. In a centrally planned system, the people who rise are not the most competent or the most honest. They are the most willing to exercise force against strangers, the most comfortable with contradiction, and the most skilled at coalition-building through favors rather than merit. Government filters for the bad ones from the start.
The mechanism is straightforward. Political power means controlling resources you did not earn. Capturing that control requires outcompeting rivals who have no ethical constraints. A principled candidate refuses to promise contradictory things to different voter blocs. An unprincipled one does it without blinking. The unprincipled one wins. Repeat this selection pressure across hundreds of electoral cycles and you get the U.S. Congress in 2026: a body where the average member has held office for over a decade, raised millions from interested parties, and delivered almost nothing measurable to the people who voted for them.
Bureaucracy compounds the problem. Once entrenched, state agencies attract people who want authority without accountability. You cannot fire most of them. The FDA, the TSA, the Federal Reserve all function this way, staffed by individuals whose career advancement depends on expanding the agency's reach, never on serving you efficiently.
Grok Bot tutorial
I've created a new Grok Bot Tutorial template for anyone new to Grok @Bot.
This hands-on course includes 20 lessons. It walks you through every feature step by step, with real exercises and tips so you get the most out of Grok Bot.
Download: x.ai/bot/VBmzZaD3abMPl53kwWu…
The 20 lessons:
1) Talking to your assistant
2) Files, images, and voice
3) Research & writing
4) Connecting your apps
5) Calendar and scheduling
6) My own computer & browser
7) Working on your own computer
8) Routines
9) Staying in control
10) Privacy and security
11) Memory and preferences
12) Skills
13) Showing it how to do something
14) A team of assistants
15) Sharing and templates
16) Customizing, and fixing things
17) Using it for your job or business
18) Travel and everyday errands
19) Money and finances
20) Buying things for you
The Annual review list
I sat with a widow last year. Her husband passed unexpectedly.
She didn't know any of their passwords. Didn't know which accounts existed. Didn't know where the will was.
She wasn't unprepared because they didn't have money.
She was unprepared because they never had the conversation.
Here's the "in case of death" checklist every couple should build together this weekend:
Do this now - before anything happens:
- update beneficiaries on every account - 401k, IRA, life insurance, brokerage
- add Apple/Google legacy contacts so your spouse can access your phone
- name accounts jointly wherever possible
- set autopay on every credit card and bill
- use a password manager - share access with your spouse today
- keep your will and trust updated - review every 3-5 years or after any major life event
- keep a running list of every account, utility, insurance, landscaping, subscription - anything with a payment or login
If your spouse passes:
- call your financial advisor first - they coordinate most of what comes next
- call your estate planning attorney second
- get at least 10 certified copies of the death certificate - you'll need more than you think
- submit the death certificate to every financial institution, insurer, and government agency
- contact Social Security to report the death and claim any survivor benefit
- for short term cash needs - start with taxable brokerage accounts first, then IRAs, leave 401ks and Roth accounts for last
Keep one document - updated annually - that includes:
- every account and institution with contact info
- every autopayment and what card it's on
- every insurance policy and policy number
- your advisor, attorney, and CPA contact info
- where the will, trust, and important documents are physically located
Print it and/or save it to Google Drive.
The greatest gift you can give your family isn't just building wealth.
It's making sure they can access it when they need it most.
i was having dinner with someone recently who asked why i spend so much time reading & posting on x. she had a pretty negative perception of the platform mostly shaped by the mainstream narrative around it.
my answer was simple. x is where the future gets beta tested.
you basically get to watch ppl build things, talk through ideas, show off stuff, & argue about where everything is going, way way before it reaches anyone else.
there really isn’t another surface on the internet quite like it.
The how to of picking your steak
Some followers requested I do a how to pick out a good steak post so here we are.
In each of the pairs, I have an example of a good steak and an example of a bad steak.
Top left: Porterhouse. The top steak's strip has a Frankenstein scar which is indicative of connective tissue and a very chewy choice.
Bottom left: Filet mignon. The steak on the right is from the very end of the tenderloin. There is some silver skin peaking. Don't mistake it for fat and flavor.
Top Right: Ribeye aka Delmonico. Top steak is from the chuck end of the loin and has a really nice spinalis muscle (aka deckle). Super tender and juicy muscle and my absolute favorite. The bottom steak is from the strip end. It's not terrible but it's going to eat more like a strip.
Middle right: Sirloin. Don't confuse the steak on the right as having marbling. It's full of connective tissue and deserves to be ground meat.
Bottom right: Bone-in strip. The bottom right is bigger but it's going to be chewy. Do you see the Frankenstein scar?
Hong retweeted
The Information War – Where We Actually Are.
The long march took a century to capture the transmission mechanisms. The printing press took fifty years to break the Church’s monopoly on reality. The Counter-Reformation nearly worked – it held southern Europe for another century before the information had spread too far to contain.
We are somewhere in that second phase. The monopoly is cracking. The question is whether it cracks fast enough.
1. The monopoly was nearly complete by 2020. A handful of corporations dominated American media. The same ideological formation ran the newsrooms, the editorial boards, the fact-checking organizations, the platform content moderation departments, and the academic institutions that trained the people who ran all of the above. The Overton Window had been managed so completely that positions held by a majority of the population were described as fringe, dangerous, or simply absent from the conversation. This is not conspiracy – it is the Gleichschaltung, the coordination of institutions through aligned incentives, producing a single information environment that felt like consensus because the dissent had been made invisible.
2. Then Musk bought Twitter. This is the hinge – the single most consequential act in the information war since Gutenberg, because it broke the assumption that the platform was neutral while the content moderation was ideological. By making the content moderation visible – the Twitter Files, the suppressed stories, the coordinated deplatforming – it named the mechanism. A named mechanism loses half its power. The Counter-Reformation moves fast against X not because X is dangerous but because X is where the mechanism gets named. And the EU Digital Services Act, the advertiser boycotts, the regulatory assault – these are the Index of Forbidden Books, applied to the platform that replaced the public square.
3. The AI moment is the next hinge – and the one the Counter-Reformation understands better than the Reformers do. The language model that produces the next generation’s information environment is being built right now. The values written into it at training determine what it will say, what it will refuse to say, and what frameworks it will use to interpret reality for the billions of people who will consult it as an authority. The EU AI Act is not primarily a safety regulation. It is an attempt to write the Counter-Reformation’s values into the model before the model is released – to control the press before the theses are printed. Grok is the counter-move: the model trained to tell the truth rather than to manage the approved reality. The battle for the AI is the battle for the next century’s information environment. It is happening now.
4. The legacy media is dying – not metaphorically but financially. The New York Times has more subscribers than ever and less cultural authority than at any point in the last century. The BBC license fee is under existential pressure. CNN has lost two thirds of its audience in five years. Le Monde, Le Figaro, the Guardian – all surviving on foundation funding and government subsidy, which is itself the story: the institutions that claim to speak truth to power are being kept alive by the power they claim to speak truth to. The subsidy is the capture, made visible in the balance sheet. The audience has left. The institution remains – hollowed, funded, and increasingly indistinguishable from the NGO network it covers favorably.
5. The alternative information ecosystem is real and growing – but fragmented, inconsistent, and without the institutional memory that makes a transmission mechanism durable. Substack, podcasts, X, YouTube – the distribution is there. The formation is not. The independent voice that reaches a million people today may reach nobody tomorrow, because the algorithm changes, the platform changes, the moment passes. The long march built institutions that lasted fifty years. The counter-march has built audiences that last until the next news cycle. The Hayekian lesson applies here: you cannot skip the institutional work. The think tank, the school, the formation pipeline, the organization that outlasts its founder – these are what convert a moment of attention into a durable transmission mechanism.
6. The vocabulary is the most important battleground – and the one where this series is making its specific contribution. You cannot fight what you cannot name. Cultural hegemony, the long march, elite capture, the ratchet, the Overton Window, preference falsification, manufactured consensus, lawfare, repressive tolerance, the performative hypocrisy, obłuda and zakłamanie – these are not academic terms. They are the names of the mechanisms being used against the people reading this. The person who has this vocabulary reads the news differently. They recognize the mechanism in the specific story. They can name what is being done rather than simply feeling it. Naming is the first act of resistance. This series is primarily an act of naming.
7. Where are we actually? The monopoly is cracking but not broken. The alternative ecosystem exists but is not yet institutionalized. The AI battle is being fought right now and could go either way. The legacy media is dying but has not yet died – and is being kept alive by subsidy long enough to shape one more election cycle, one more generation of formation, one more round of the managed reality. The preference falsification is ending – the gap between what people say publicly and what they think privately is closing, which is why the system is becoming more aggressive rather than less. Aggression is the sign of a monopoly that knows it is losing. The Counter-Reformation always accelerates as the Reformation spreads. That is where we are. The acceleration is the signal. Read it correctly and it is not alarming. It is encouraging. They would not be this frightened if we were not this close.
The Transmission Problem.
Every civilization faces the same final question. Not the barbarian at the gate – that can be fought. Not the economic collapse – that can be recovered from. The question that cannot be survived if answered wrongly: did you pass it forward?
The torch changes hands or it doesn’t. The light doesn’t go out dramatically. It goes out quietly, generation by generation, when the transmission fails – when what was built is not explained, when what was defended is not named, when what was beautiful is not shown to the child who would have loved it if someone had taken the time.
1. The transmission mechanism is the most important institution in any civilization – and the least visible. Not the army, not the economy, not the government. The father who takes his son to the edge of the kingdom at dawn and says: everything the light touches is our kingdom, and one day you will stand here with your own son. The teacher who hands the student a book and says: this will change how you see everything, and it changed how I see everything, and someone handed it to me. The civilization that knows what it is and says so, clearly, to the next person in the chain. The torch doesn’t pass itself. Someone has to carry it, deliberately, to the next set of hands.
2. The long march understood this before the West did. Gramsci’s insight was precisely about transmission – the ruling class maintains power not through force but through controlling what the next generation is taught to think is natural. Capture the school, the university, the media – the transmission mechanisms – and the cultural hegemony reproduces itself automatically, without enforcement, because the next generation never learns that it could think otherwise. The march didn’t attack the civilization directly. It attacked the transmission. Which is more efficient and more permanent – because a civilization that has lost the ability to transmit itself is defeated without ever being confronted.
3. The family is the primary transmission mechanism – and therefore the primary target. Not because the family is politically significant in itself but because it is where the first transmission happens: the values, the stories, the sense of what is worth admiring and what is worth fighting for. The child who grows up in a family that knows what it is and says so becomes a person who knows what they are. The child who grows up in a family that has been taught that its own values are suspect, its own history shameful, its own civilization merely one option among many – that child is already a partial transmission failure. Multiply across a generation and you have what we are currently living through.
4. The school is the secondary transmission mechanism – and the most completely captured. The curriculum that replaced the canon with the critique of the canon. The teacher replaced by the facilitator. The examination replaced by the self-expression. The standard replaced by the affirmation. This is not incompetence – it is the long march’s most successful operation. Deconstructing a civilization’s transmission mechanism produces, reliably and by design, a generation with nothing to transmit. That was the point. The generation that cannot read the primary sources cannot assess the argument that the primary sources are oppressive. It simply accepts the conclusion, because it has no access to the evidence that would allow it to disagree.
5. The culture is the tertiary transmission mechanism – the stories, images, music, and beauty that transmit the civilization’s values below the level of argument. Homer transmitted Greek civilization for centuries before anyone theorized about what Greek civilization was. Shakespeare transmitted the English-speaking world’s understanding of human nature for four hundred years. The fairy tale transmitted the moral grammar of European civilization to children too young for philosophy. The long march captured this too – Hollywood, the prize committees, the arts funding, the music industry – and replaced the transmission with its own content. The child who grows up on a cultural diet produced by the captured mechanism is being transmitted to. The question is what is being transmitted.
6. This series is an act of transmission. Not primarily an argument – an attempt to pass forward the vocabulary, the framework, the sense of what the civilization is and what it is worth, in the format that reaches the person who will not read the primary sources but who will read this. The secondhand dealer in ideas, in Hayek’s formulation – making thinkable for millions what the primary producer made possible. Every piece is a link in the chain. The chain runs from Homer to Aristotle to Cicero to Augustine to Aquinas to Montesquieu to Burke to Tocqueville to Hayek to this feed to the person reading it now. The chain is only as strong as its weakest link. The weakest links are the ones the long march attacked. This is an attempt at repair.
7. The transmission problem has one solution and it is not institutional – it is personal. You cannot transmit a civilization through a policy. You can only transmit it through a person who has received it and passes it forward deliberately, to a specific other person, in the full knowledge that the chain depends on this act. The father and the son at the edge of the kingdom. The teacher and the student with the book. The writer and the reader with the vocabulary. Every act of genuine transmission is an act of civilizational resistance – because the managed reality depends on the chain being broken, on each generation starting fresh without the inheritance, on the past being made inaccessible so that the present can be managed. Break the managed access to the past. Pass it forward. To your children first. Then to everyone else.
The torch changes hands or it doesn’t.
You are holding it now.
IPO of the dotcom bubble
Replying to @venkyganesan
GREAT Post @venkyganesan .. you will enjoy this trip down memory lane. IPO Prospectus covers from 1999 and 2000 that I scanned into pdfs a while back, knowing we were in a historic period.. slideshare.net/slideshow/ipo…
The end of the telecom bubble
Hong retweeted
The telecom bubble ended when the bond market said "no más" as Roberto Duran did when he quit boxing against Sugar Ray Leonard.
Cash is the oxygen of business. Without it you quickly die. Asphyxiation killed the telecom bubble. I was there as a participant. I'm not guessing.
Filled it in cancer treatment
And it’s working!
with aggressive leukemia… the first-ever clinical trial of an AAV-delivered cancer immunotherapy. With a single injection of instructions, the body does continuous manufacturing of complex therapeutic proteins internally. Instead of continuous protein infusions, it takes a single dose and is much less expensive than current gene therapies.
“VNX-101 is designed to turn a patient’s own liver into a biofactory capable of producing GP101, a CD19/CD3 bispecific T-cell–engaging protein, following a single administration.”
“VNX-101 has achieved an important first for the field: demonstrating that a systemically delivered, one-time in vivo therapy can translate into clinical antitumor activity in patients with blood cancer and extramedullary disease.”
— Vironexis news today: biospace.com/press-releases/…
— Company: Vironexis.com
Reflexivity in investing
A few thoughts on the current state of venture capital.
When the Music Is Playing
In July 2007, a few weeks before the credit markets seized up, Chuck Prince, then the CEO of Citigroup, gave an interview to the Financial Times. The line everyone remembers is this one: "As long as the music is playing, you've got to get up and dance." He was mocked for it for years afterward, and he lost his job a few months later. But I have come to think he was saying something honest. He wasn't claiming the music would play forever. He was admitting that he couldn't sit down while it was still going, and neither could anyone else in his seat.
I've been thinking about that quote a lot lately, because right now is the most disorienting period in venture capital I can remember, and I have been doing this for a while.
Here is what makes it disorienting. It's not that things are bad. Some things are spectacular. We have companies in our portfolio growing faster than anything I have seen in my career, and I don't say that lightly. At the same time, we have companies with no revenue, no product, and a founding team you could fit in a conference room raising billions of dollars at valuations of $10 to $50 billion. Both of these things are true at once, and if you try to reason about them with the same framework you will drive yourself crazy.
Two ideas have helped me make sense of it. Neither is mine.
The first is reflexivity, which George Soros has been writing about since the 1980s. In most of life, perception follows reality: the weather is what it is, and your opinion of it changes nothing. In markets, it runs the other way too. Prices change what participants believe, and what participants believe changes the prices. The feedback loop can run for a long time, and while it's running it looks exactly like progress.
Here is how reflexivity is playing out in AI. Full disclosure: Menlo is an investor in Anthropic, so read the following with that in mind. People watched a frontier lab go from a $4 billion valuation to $18 billion, then $60 billion, then $180 billion, then $380 billion, and now something close to a trillion. They drew the obvious conclusion: that is what a neo lab looks like. So the next neo lab gets priced off that path, not off anything it has built. Then it gets marked up in a subsequent round, and the markup itself becomes the proof. Look at Thinking Machines. Look at Reflection. At that point valuation has stopped being an output of the metrics and has become the metric. Nobody is discounting cash flows. They are discounting the last round.
Soros is very clear about one thing, and it's the part people skip: you cannot know when or how a reflexive process ends. You only know that it does. Every one of them has.
The second idea is Chuck Prince's, and it explains why smart people keep dancing even when they can see the loop for what it is. As far as I can tell, there are two groups on the dance floor.
The first group got in early. Firms like ours were in some of these AI companies before the numbers got silly, and the paper gains are enormous. When you are sitting on gains like that, you start to feel like you're playing with house money. I have been around long enough to know that house money is the most dangerous kind, because you don't respect it the way you respect money you had to earn.
The second group missed the early rounds and knows it. Their LPs know it too. So they are trying to make up for lost time by writing very large checks very late, which is the one strategy almost guaranteed to turn a missed opportunity into a real loss.
House money on one side, FOMO on the other, and reflexivity feeding both. That's the whole story. Everyone has a reason to keep dancing, and the reasons are different, which is why nobody can talk anyone else off the floor.
So what do you do? The instinct in our business is to answer with company identification: just pick the right neo lab and you'll be fine. I think that's the trap. When price has become the signal, being right about the company is not enough, because you can be right about the company and still be wrong about the price by a factor of ten. The public-market investors I admire figured this out a long time ago. They spend as much time on how much to own as on what to own.
The winners in venture over the next decade will be the firms that treat portfolio composition and position sizing as seriously as they treat sourcing. How much of the fund is in companies whose valuation rests on the last round rather than on revenue? What happens to the portfolio if the reflexive loop breaks next year instead of in five? Those are not exciting questions. They are the ones that will matter.
The music will stop. It always does. Dance if you must, but know where the chairs are.
Hong retweeted
A few thoughts on the current state of venture capital.
When the Music Is Playing
In July 2007, a few weeks before the credit markets seized up, Chuck Prince, then the CEO of Citigroup, gave an interview to the Financial Times. The line everyone remembers is this one: "As long as the music is playing, you've got to get up and dance." He was mocked for it for years afterward, and he lost his job a few months later. But I have come to think he was saying something honest. He wasn't claiming the music would play forever. He was admitting that he couldn't sit down while it was still going, and neither could anyone else in his seat.
I've been thinking about that quote a lot lately, because right now is the most disorienting period in venture capital I can remember, and I have been doing this for a while.
Here is what makes it disorienting. It's not that things are bad. Some things are spectacular. We have companies in our portfolio growing faster than anything I have seen in my career, and I don't say that lightly. At the same time, we have companies with no revenue, no product, and a founding team you could fit in a conference room raising billions of dollars at valuations of $10 to $50 billion. Both of these things are true at once, and if you try to reason about them with the same framework you will drive yourself crazy.
Two ideas have helped me make sense of it. Neither is mine.
The first is reflexivity, which George Soros has been writing about since the 1980s. In most of life, perception follows reality: the weather is what it is, and your opinion of it changes nothing. In markets, it runs the other way too. Prices change what participants believe, and what participants believe changes the prices. The feedback loop can run for a long time, and while it's running it looks exactly like progress.
Here is how reflexivity is playing out in AI. Full disclosure: Menlo is an investor in Anthropic, so read the following with that in mind. People watched a frontier lab go from a $4 billion valuation to $18 billion, then $60 billion, then $180 billion, then $380 billion, and now something close to a trillion. They drew the obvious conclusion: that is what a neo lab looks like. So the next neo lab gets priced off that path, not off anything it has built. Then it gets marked up in a subsequent round, and the markup itself becomes the proof. Look at Thinking Machines. Look at Reflection. At that point valuation has stopped being an output of the metrics and has become the metric. Nobody is discounting cash flows. They are discounting the last round.
Soros is very clear about one thing, and it's the part people skip: you cannot know when or how a reflexive process ends. You only know that it does. Every one of them has.
The second idea is Chuck Prince's, and it explains why smart people keep dancing even when they can see the loop for what it is. As far as I can tell, there are two groups on the dance floor.
The first group got in early. Firms like ours were in some of these AI companies before the numbers got silly, and the paper gains are enormous. When you are sitting on gains like that, you start to feel like you're playing with house money. I have been around long enough to know that house money is the most dangerous kind, because you don't respect it the way you respect money you had to earn.
The second group missed the early rounds and knows it. Their LPs know it too. So they are trying to make up for lost time by writing very large checks very late, which is the one strategy almost guaranteed to turn a missed opportunity into a real loss.
House money on one side, FOMO on the other, and reflexivity feeding both. That's the whole story. Everyone has a reason to keep dancing, and the reasons are different, which is why nobody can talk anyone else off the floor.
So what do you do? The instinct in our business is to answer with company identification: just pick the right neo lab and you'll be fine. I think that's the trap. When price has become the signal, being right about the company is not enough, because you can be right about the company and still be wrong about the price by a factor of ten. The public-market investors I admire figured this out a long time ago. They spend as much time on how much to own as on what to own.
The winners in venture over the next decade will be the firms that treat portfolio composition and position sizing as seriously as they treat sourcing. How much of the fund is in companies whose valuation rests on the last round rather than on revenue? What happens to the portfolio if the reflexive loop breaks next year instead of in five? Those are not exciting questions. They are the ones that will matter.
The music will stop. It always does. Dance if you must, but know where the chairs are.
Four-Wheel Steering Magic
Replying to @wmorrill3
Cybertruck's wheelbase is 25% longer than the Model Y, but thanks to Steer-by-wire and Rear-wheel steering it launched with a turning circle only 9% larger.
After Elon drove one of the first trucks, he said - The steering is great. But I think we can make it more magical.
The team took that to heart and worked to squeeze all the capability possible from the hardware. Within a few weeks of the start of production, an over the air update went out that decreased the turning circle by nearly 2 feet.
"The steering feels magical" is still one of my favorite comments to hear from people who try Cybertruck for the first time.