Software is Eating the Markets

Software will eat financial markets, cut out middle men, and turn investing into an experience from which consumers get more than a financial return. Still, only a relatively wealthy subset of consumers participate in financial markets; for software’s impact here to be truly revolutionary, it will need to increase access and participation in the ma... See more

In San Francisco, owning a Ferrari wasn’t nearly as cool as owning pre-seed shares in Stripe or Uber. In some ways, startup equity behaved more like a Veblen Good -- one that paradoxically sees more demand as the price goes up -- than like an investment.

Additionally, with bonds at all-time low rates, investors can make a rational argument that they should actually diversify into more interesting asset classes like art, trading cards, real estate, and sneakers, which are now more accessible due to Reg A+ and the businesses the regulatory change has enabled. It’s hard to measure the impact of “fun” ... See more

Like angel investments in the Bay Area, when you add social and experiential value to other asset classes like stocks, sneakers, and cryptocurrencies, price is divorced from hard math and becomes more emotional.

One of the reasons that angel investing in the Bay Area was such a status symbol is that it was fairly exclusive.

But while each new form factor or delivery method for music stole share from the previous generation, new forms of video and video games increased the size of the overall pie.

When angel investors wrote checks into startups, they were really buying two things: an asset with a potential financial return and a status symbol.

We are in the earliest innings in this space, but I’m now more bullish on crypto than ever before because it is both an inflationary hedge and a way to empower new forms of ownership in a world that is trending towards everything becoming an investible asset.

We will see more products that make owning stocks feel like owning a piece of the company itself over time, whether from existing startups or new entrants. One idea would be to create a digital equivalent of AmEx’s “Member Since ‘00” card for stock ownership. I would love to show off the fact that I’ve owned Shopify since $89 and SNAP since $20 wit... See more