the covid lockdown

post covid euphoria that culminated with ZIRP

post ZIRP market crash

Russia starting ww3

AI discovery

now entering in a sixth cycle that should have a life of its own.

We're mid-www3, transitioning to a god-knows-what type of equilibrium, away from the civilized world we've had for the past fifty years.

Whatever the equilibrium outcome, the short term looks more like a survival game rather than a long-lasting development mindset, and requires extra sets of muscles - alertness, flexibility and quick adaptations adding tension to an already-strained system that was designed for the realities of the 20th century under peaceful conditions.

AI has become a mainstream thing, way beyond nerdy discussions

not a singular driver though - we also have hyper growth in space, EV, robots, biotech

overall technology is more advanced than a year ago, moving at super-high pace and still at 3-5% of the upside the next years opportunities present.

startups riding the wave today, and pushing for building sustainable business, are just part of an incipient movement.

Yes - there will be competent ones and less so, opportunists and long game players, folks chasing hype and glam and fundamental followers - always have, always will be.

No - you cannot fake it behind 8-10 years cycles anymore, nor numbers or just value-add with BS and/or with noisy Linkedin platitudes chasing engagement.

Yes - you can grow super fast if you are able to find the right waves and unlock sweet spots.

No - you cannot skip steps into building a fundamentally solid economic foundation that should generate sustainable economic rents.

If your startup objective is to get rich quick, you can join the VCs working the markets and understand the rules of how to tag along - you’re just a tiny part of their game, not the game.

If however you’re about your own game, taking time to focus on sustainable value creation, there’s multiple other ways to build meaningful stuff, starting with the fundamentals of a company, customers, markets and so on.

The overlap between the two is diminishing as the VC business is under a lot of pressure to remain competitive in their own game.

the economic crisis and war will lead to un-employment, which will force folks to find different avenues for making a living.

middle class Europeans, who by definition are entitled, cheap and very risk averse, will add a tech product on their trials for building passive income, as a hedge to the usual apartment rentals or airbnb gigs on the side.

financial costs of trying to build a startup are as low as ever

tech is affordable and easy to put together, you don't really need an engineering team to do an MVP and validate PMF.

Even the EU politicians kind of figured there's something there - it’s arguably still outside their comfort zone and beyond the required narrative for getting elected, but Draghi’s report was a turning moment for European bureaucracy to take tech startups seriously. Current economic crisis is an accelerator.

Yes - USA means access to a whole lotta smart money, single-language customer base, and an environment with more risk takers, better suited for startups. America remains the easiest way to grow fast and become a millionaire out of nothing - even though, arguably, with the same odds as playing the lottery.

No - US is a more competitive market than Europe, has become more woke than the EU, with more political instability, highly polarized and charged, unhealthy lifestyle, violent and more expensive than Europe at the top i.e SF, NYC.

Is it the only way though?

Europe looks increasingly like a safer and saner choice in spite of its never-ending multitude of problems - it is by far a superior place to live more decently and build, even with the war which will likely deteriorate local quality of life in the short term.

It is a litmus test for a federation most Europeans love and support yet badly managed from within.

Zooming out, everything in history converges and diverges in cycles - this is one of those turning moments in the books, and sadly we’re up to a bunch of leaders which public exposure reveals them to be mostly incompetent, meaning there’s many unforced errors adding to a game difficult to play to begin with.

It ain’t over yet, but we’re in for period of turbulence that’s going to get uglier than what we see today.

will unite more Europeans people than ever (hopefully)

will see an extra emergency push on European tech advancement, a driver that could translate into economic surplus.

The war is a serious PMF moment that enables fast scaling, doubled-down by vertical and horizontal moves adding complexity and outer tech layers supporting the war economy i.e. robotics, quantum, cyber. Not negligible - many second order effects by intersecting verticals i.e health & defence, logistics & defense etc.

it will be interesting to follow whether European customers will also vouch with their wallets the increasing American/European tech divide. Europe remains a fragmented, multi-language, multi-cultural market that makes it easy to find entry points arbitrages and hard to provide the economy of scale premises for an emerging VC-funded tech startup.

the Chinese tech influx and how the European politicians will deal with it - if ever - now that China is a proxy part of the Russian war. Europe is full of cheap Chinese industrial tech and I expect an increased penetration as most of the European market is price-sensitive, which is the Chinese selling point - Chinese are great at selling while Europeans are slow to protectively react.

Crossing the chasm from experiments to serious growth business is still the most difficult part for startups and the series A dealings crunch that we’ve seen in the past 18-24 months will likely perpetuate this year i.e. local early-stage startups have stricter traction requirements, leading to fewer deals and a barbell market favouring proven players over speculative ideas.

The official American narrative is that their economy grew 4.3% this year but notably it’s just Twitter talk as the official institutions were instructed to cancel releasing public numbers while public polls indicate sentiment support at very low levels. Also notably, this past week, more than two-thirds of this year's tech IPOs have been trading below their listing prices.

Out of a bunch of Euro candidates, interesting to follow whether the European darlings Revolut and Stripe will jump into the public markets arena - my guess is they won’t, they’re well-capitalized and have long-term oriented investors who both understand cycles and are fit to ride them.

A special note for the secondary market - the past years lack of liquidity events led to many VCs not being able to justify their existence beyond paper money.

Being dependent on IPOs as a sole way to pay DPIs within 8-10 years is a vulnerability that the buy-side market needs to solve - already secondaries are not perceived as a distress signal but as an organic event that will make the market overall more liquid and flexible. On point, both Stripe and Revolut have had secondary events, a couple each, recently.

At the top, folks just copy a16z’s playbook, and forget that doing something poorly is worse than not doing anything. Seems straightforward but it’s not, and the output level is really low as many went d2c producing content since it’s so easy and accessible - any kid could do it, right? Exactly!

And btw, as a side, I know many people disillusioned at social media VC heroes acting very different in real-life settings. Point is, there’s a reason for the good marcom professionals getting paid the big bucks - the need for excellent marketing and standing out is real as it’s as competitive as ever while the social media slop is INSANE, each cycle brings newcomers chasing engagement by selling the afore-mentioned attention for free - add to it AI content, which is 70%+ of Linkedin posts, all this slop is a proxy to a journalism profession that finds it hard to distinguish between professional values and how to make money.

And remember, the social media job is to make you angry, happy or frustrated - if it doesn’t, the poster is doing a poor job. You are hardly informed by a mass of sentiment-driven content - rather what the algo feeds you, trapped in an echo chamber, and harder than ever to distinguish signal out of noise and what’s real and what’s not. And one of the reasons for which intel products like Nordic9/Sunday CET matter. 😀