(LINK) The Great Public Market Reckoning – AVC

The Great Public Market Reckoning – AVC:

I believe that we have seen a narrative in the late stage private markets that as software is eating the world (real estate, music, exercise, transportation), every company should be valued as a software company at 10x revenues or more.

And that narrative is now falling apart.

If the product is software and thus can produce software gross margins (75% or greater), then it should be valued as a software company.

If the product is something else and cannot produce software gross margins then it needs to be valued like other similar businesses with similar margins, but maybe at some premium to recognize the leverage it can get through software.

But we have not been doing it that way in the late-stage private markets for the last five years.

I think we may start now that the public markets are showing us how.

In general private market pricing is tough but there are some guidelines. However what happens is that along the way valuations just get silly – founders and VC’s are both to blame.

To put it even more simply than Dan and Fred – the silliness is coming to an end.

Expect Southeast Asia to feel it next.

(LINK) Neither, and New: Lessons from Uber and Vision Fund – Stratechery by Ben Thompson

Sounds like Ben is shifting his stance quite a bit.

Will be interesting to see that change.

Neither, and New: Lessons from Uber and Vision Fund – Stratechery by Ben Thompson:

Going forward I plan to be a lot more skeptical about other tech startups that interface with the real world and the attendant drag on margins that follows; I am not saying that the category isn’t viable, and technology truly makes these companies different than the incumbents in their space, but they are not necessarily tech companies either.

(LINK) Asia Tech Review: September 9 2019 | Revue

Always a fan of Jon and his writing.

We got to hang again for breakfast – always a good chat. I think we need to do a breakfast meetup. 😉

Asia Tech Review: September 9 2019 | Revue

I like this part in this week’s newsletter:

And finally… on the future

Visiting Singapore always gets me thinking. This week it was triggered by Bloomberg’s ‘Sooner Than You Think Event’ – as the name implies it is focused on current companies, tech and trends that will impact the future.

It didn’t take long to notice how so many of the faces on stage for interviews were people who I had met/got to know years ago when their companies were much smaller. Now they are the big guns, and I can think of countless others who weren’t at the show but fit that bracket.

Southeast Asia and tech are on such a growth spurt that it propels founders and startups. That’s not a bad thing at all, but it is quite something to see familiar faces consistently on stage at events, on TV interviews, or managed by large entourages such has been their rise.

The last five years have seen so much growth that it is impossible to imagine what the next five or ten will bring. Putting aside the tech and business models, I can say with certainty that many of the biggest companies/founders of the future are already active in the region today. That may sound obvious, but it is easy to lose perspective. (I’m not alone in thinking this.)

A recent report from Golden Gate Ventures – an investor in tech startup, of course – predicts “at least 700 anticipated startup exits between 2023–2025.” While, in the here and now, a new report from Preqin shows an increased interest (and activity) in Southeast Asia from global investment firms.

I’m not in the business of predicting numbers, but it is clear it’ll be a heck of a ride. That applies to tech anywhere in the world, but I do think it’ll be even wilder in Southeast Asia where the region is moving upwards despite challenging global conditions.

(This is also why I joined The Ken, I believe we need more analysis and thoughtful commentary. Shameless plug over.)

I think that the growth in the SEAsian tech scene over the next 10 years, even with a possible slowdown, will be much bigger than the last 10 years.

Singapore will continue to be a factor and the center of the SEAsian growth story.

Pretty amazing to see the folks that are becoming big players in the scene.

Also fun to he hear and be a part of it all.