Last week I mentioned a series of tech stocks that I thought are basically overvalued, played out, with no room for the average investor to get a meaningful piece of.
You could pay $20 or so per share for a Square, Box or Snapchat, with Box and Square market value not too out of whack. Or go for the $150 to $950 per share range of Apple, Facebook, Amazon or Google.
Yet none of these in my view are likely to deliver the kind of home run 10x plus return that getting in on an Uber or Spotify at startup would.
For the past decade I’ve been advising and helping private companies, startups, get going and grow. Before that I was an investor and board member of a startup that Google acquired which today is Ad Sense. The CEO of that company ended up owning something like 1% of Google stock.
More recently, Google acquired another company I advised that did streaming music…
I’ve always been close to the startup scene, dorm room level ventures, and even advised a solo entrepreneur in college to a win at a national entrepreneur contest among all universities.
Having been in the industry since 1995 my global network is broad and deep, first name basis with some of the leaders in the industry who have defined the Internet and mobile industries. From San Francisco to London and beyond…recently I keynoted the Ad:Tech conference in Shanghai, where I got to see the ground-level startups in China. A swing through London showed several promising ventures just starting there also. Today to win in tech you win globally. And you win by being early. Wouldn’t you like to have been an investor in the first round in Facebook? Ask Sean Parker how he feels about being there…
Which brings me back to the observation: If you look at tech news there are a handful of highly-valued companies such as Uber, Airbnb, Spotify, Stripe, etc.
I see a potential acceleration in the “service-ization” of many industries, similar to what Uber did to the taxi industry (took it over) or Spotify with music in the all you can eat model (vs. downloading). Mobile-first disruptors who will likely be started in the colleges and dorms, garages and shared apartments, the entrepreneurs I enjoy working with.
In light of this coming tsunami I believe the best place for outsized returns could be in these startups. With that, after consulting with leaders in Silicon Valley I am excited to announce the formation of appleseed.