The best companies have very bright futures says tech investor Geoff Lewis. He says that the way he always thinks about private company valuations is as a discount on the future versus a premium on the past. Lewis says that the future is bright for Lyft because only half a percent of the rides in the US today are shared rides so there is a lot of room to grow.
The Best Companies Have Very Bright Futures
The way that I always think about these private company valuations is as a discount on the future versus a premium on the past. I learned this from Peter Thiel who I worked with for many years. The best companies have very bright futures.
If you think about Lyft, for example, only half a percent of the rides in the US today are shared rides. The entire remainder of rides in the US are normal rides. So there’s a lot of room for a company like Lyft in the US alone to grow if they can even capture two percent of rides in the US.
There Are Some Dogs that are Going to Go Out This Year
I think there’s a pretty bright future for the good tech companies. Quite honestly, there are some dogs that are going to go out this year and they’re not going to do well. But ultimately, the great thing about technology is the macro tends to matter less in the long term for the really enduring tech companies.
You want to find these businesses that have these really durable revenue models that are going to be able to grow for many years going forward. It’s a hard hard thing to figure out.
The Trend for 2019 is the End of Trends
I’m personally very interested in new approaches to financing education and new approaches actually getting an education. I really do think the university and the college system is very broke and there are new financial instruments out there that can really help folks through education. We have some exciting stuff that we’ve been working that we will be talking about in 2019.
Beyond that, I’d say the trend for 2019 is the end of trends. We’ve gone through so many hype cycles in technology and I really think we’re in an environment where we just have to find one-of-a-kind things that don’t fit into any easy to categorize categories. I think that makes the job of being an investor a lot harder.
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