This is an interesting perspective. It is from Fred Wilson’s annual what-happened-this-past-year post:

But here is the thing about speculative frenzies – they are generally directionally correct but off in their order of magnitude. And they finance the trend that they are directionally correct about. It may be the case that Tesla’s market capitalization is too high, but that allows Tesla to raise $10bn without diluting more than a few percentage points. And that $10bn will go towards accelerating the conversion of the auto industry from carbon-based fuel to renewable energy. And that is a good thing for society.

When I first read this my mind immediately went to tulip mania. Was that directionally correct? Did tulip bulbs ultimately rebound and maintain their value over the long-run? I actually don’t know.

But if you think about the dot-com bubble, that was directionally correct. Sure, infamous “companies” like Pets.com never ended up going anywhere, but the idea of tech and the internet becoming dominant was absolutely right.

Fast forward twenty years and you can be sure that many people are now buying their pet supplies online, along with pretty much everything else. Sometimes we simply overshoot and get the timing wrong.

This is perhaps a good thought for all of us to consider as we welcome 2021 and say goodbye to what was one weird and terrible year.

Being directionally correct means that it’s okay for there to be bumps, mistakes, and speculative frenzies along the way. They are expected. What matters is the path forward.

Happy new year, everyone.

This week it was announced that Social Capital Hedosophia II -- a special purpose acquisition company associated with Chamath Palihapitiya -- will merge with the real estate startup Opendoor, effectively taking the company public. Without going into all of the details, SPACs are kind of popular right now. They're a way to take companies public without going through the traditional IPO process. And Chamath is clearly a believer in the approach, as he has gone ahead and reserved all of the symbols from "IPOA" to "IPOZ" on the New York Stock Exchange. $IPOB is what will be merging with Opendoor.

But SPACs are not the point of this post. The point is that I have written a lot about Opendoor over the years on this blog. (Here are those post.) And I'm pretty sure that, on a number of occasions, I have referred to it as one of if not the most promising consumer-facing real estate startup. So in my view this announcement is a pretty big deal for both the company and for the industry. As Chamath puts it in the below investment thesis, "real estate is the largest, undisrupted form of buying/selling in the US worth more than $1.6 trillion annually." And it's only a matter of time before that process moves online.

This is an interesting perspective. It is from Fred Wilson’s annual what-happened-this-past-year post:

But here is the thing about speculative frenzies – they are generally directionally correct but off in their order of magnitude. And they finance the trend that they are directionally correct about. It may be the case that Tesla’s market capitalization is too high, but that allows Tesla to raise $10bn without diluting more than a few percentage points. And that $10bn will go towards accelerating the conversion of the auto industry from carbon-based fuel to renewable energy. And that is a good thing for society.

When I first read this my mind immediately went to tulip mania. Was that directionally correct? Did tulip bulbs ultimately rebound and maintain their value over the long-run? I actually don’t know.

But if you think about the dot-com bubble, that was directionally correct. Sure, infamous “companies” like Pets.com never ended up going anywhere, but the idea of tech and the internet becoming dominant was absolutely right.

Fast forward twenty years and you can be sure that many people are now buying their pet supplies online, along with pretty much everything else. Sometimes we simply overshoot and get the timing wrong.

This is perhaps a good thought for all of us to consider as we welcome 2021 and say goodbye to what was one weird and terrible year.

Being directionally correct means that it’s okay for there to be bumps, mistakes, and speculative frenzies along the way. They are expected. What matters is the path forward.

Happy new year, everyone.

This week it was announced that Social Capital Hedosophia II -- a special purpose acquisition company associated with Chamath Palihapitiya -- will merge with the real estate startup Opendoor, effectively taking the company public. Without going into all of the details, SPACs are kind of popular right now. They're a way to take companies public without going through the traditional IPO process. And Chamath is clearly a believer in the approach, as he has gone ahead and reserved all of the symbols from "IPOA" to "IPOZ" on the New York Stock Exchange. $IPOB is what will be merging with Opendoor.

But SPACs are not the point of this post. The point is that I have written a lot about Opendoor over the years on this blog. (Here are those post.) And I'm pretty sure that, on a number of occasions, I have referred to it as one of if not the most promising consumer-facing real estate startup. So in my view this announcement is a pretty big deal for both the company and for the industry. As Chamath puts it in the below investment thesis, "real estate is the largest, undisrupted form of buying/selling in the US worth more than $1.6 trillion annually." And it's only a matter of time before that process moves online.