5 ms·

I dont think he won the first bet did he? Airbnb, Palantir, Dropbox, Uber, Spacex, and Pinterest together are less than 200 bn and falling. All still pretty goo

by iamsb 7y ago

I dont think he won the first bet did he? Airbnb, Palantir, Dropbox, Uber, Spacex, and Pinterest together are less than 200 bn and falling. All still pretty good companies (not you Uber), doing interesting things though. bet 2 - I have not done the calculation, but just stripe puts it way beyond the 27 bn figgure. bet 3 - plenty of good companies in that batch. Razorpay was valued at half a billion dollars in last round. Overall seems like he was right. https://www.ycdb.co/batch/w15 https://www.ycdb.co/batch/w15

iamsb 7y ago
bet 3 - gitlab was in that batch and is alone worth 2.7 bn, so yeah total batch valuation is well north of 3bn.
virgilp 7y ago
Uber: 50.73 bln Spacex: 33.3 bln? Airbnb: 35 bln? Palantir: 26 bln ? Pinterest: 10.4Bln Dropbox: 7.44 Bln They are far from $200bln, so he certainly lost the first one. Might have won the other 3 though.
- JohnJamesRambo 7y ago
  To me, the outcome is just another example of the power of diversification and that we really don’t know anything about which stocks or companies are best. Stripe alone made Bet 2 worth it.
  - stereolambda 7y ago
    I'm inclined to read it as early opportunities having the highest average growth potential. Big companies are more likely to be already around their actual ceiling.
- jbverschoor 7y ago
  20% off. I’d say that’s a pretty decent guess in 5 years.
username90 7y ago
It checks out if you move the much larger valuations in bet 2 to bet 1 as he really underestimated the companies in bet 2. Things are a bit random, so I'd say he arguably won the bet in spirit even though he didn't do it according to his own exact rules.
- AznHisoka 7y ago
  Aka he lost the bet :)
  - username90 7y ago
    Sam Altman's bet isn't interesting in itself, as it looks today the market was significantly undervalued in 2015. Even Sam Altman's pretty aggressive estimations undervalued it, he just guessed wrong on which players would become big. So it definitely wasn't a bubble.
    - ghaff 7y ago
      And over 10 years ago, people were joking about bubbles in the context of companies like Facebook. https://www.theguardian.com/technology/blog/2007/dec/19/herecomesanotherbubblesong https://www.theguardian.com/technology/blog/2007/dec/19/here... Whatever is to come with e.g. the decreased interest in the public markets for loss-making companies with no apparent path to profitability, the last 10 years have apparently not been a bubble for any reasonable definition of the term.
  - wpietri 7y ago
    Definitely. If we get to wiggle things in retrospect, then we're not talking about the bet itself, but the set of all bets that 5 years later somebody on HN would see as plausible wiggling of the terms to match current conditions. That's surely a lot of bets, among which we'd expect to find several winners.
raverbashing 7y ago
I suspect the mistake in Bet 1 was betting on Pinterest rather than Instagram or WhatsApp (though IG had been acquired at the time of writing)
dweekly 7y ago
Bet 3: GitLab, Atomwise, Razorpay. So yes, I suspect he won that one.
scottlocklin 7y ago
Bet 2, 3 are (more or less) bets that VC will continue to overvalue companies in the presence of cheap credit. Bet 1 is what the rest of the market thinks. Altman is a decent VC, so no surprise he'd "win" 2 & 3.
wpietri 7y ago
Regarding the first bet, VC Fred Wilson talks about something related in item 2 of his "What Happened in the 2010s" post: https://avc.com/2019/12/what-happened-in-the-2010s/ https://avc.com/2019/12/what-happened-in-the-2010s/ He starts out: "The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part." That slice of startup-land is always what felt most bubbly to me, WeWork being the biggest example, where even SoftBank admits losses of something like $9 billion. In contrast, Bubble 1.0's biggest loser was WebVan, at $1.2 billion. (And as a side note to some of the discussion: that there are successes this time around doesn't prove it's not a bubble. E.g., Amazon and Google made it through, but it was still a bubble back then.)
- Alex3917 7y ago
  > The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part. The issue is that the value of money has been decreasing each year for the last decade. I don't remember anyone predicting that this was going to happen as far back as 2010, although it was already obvious that it was happening by 2013 or so. That's why you'd be hard pressed to name a single VC-funded tech startup that was founded within the last five years, because these days VCs are just funding small businesses and not startups.

by iamsb 7y ago

iamsb 7y ago

bet 3 - gitlab was in that batch and is alone worth 2.7 bn, so yeah total batch valuation is well north of 3bn.

virgilp 7y ago

Uber: 50.73 bln Spacex: 33.3 bln? Airbnb: 35 bln? Palantir: 26 bln ? Pinterest: 10.4Bln Dropbox: 7.44 Bln They are far from $200bln, so he certainly lost the first one. Might have won the other 3 though.

JohnJamesRambo 7y ago
To me, the outcome is just another example of the power of diversification and that we really don’t know anything about which stocks or companies are best. Stripe alone made Bet 2 worth it.
- stereolambda 7y ago
  I'm inclined to read it as early opportunities having the highest average growth potential. Big companies are more likely to be already around their actual ceiling.
jbverschoor 7y ago
20% off. I’d say that’s a pretty decent guess in 5 years.

username90 7y ago

It checks out if you move the much larger valuations in bet 2 to bet 1 as he really underestimated the companies in bet 2. Things are a bit random, so I'd say he arguably won the bet in spirit even though he didn't do it according to his own exact rules.

AznHisoka 7y ago
Aka he lost the bet :)
- username90 7y ago
  Sam Altman's bet isn't interesting in itself, as it looks today the market was significantly undervalued in 2015. Even Sam Altman's pretty aggressive estimations undervalued it, he just guessed wrong on which players would become big. So it definitely wasn't a bubble.
  - ghaff 7y ago
    And over 10 years ago, people were joking about bubbles in the context of companies like Facebook. https://www.theguardian.com/technology/blog/2007/dec/19/herecomesanotherbubblesong https://www.theguardian.com/technology/blog/2007/dec/19/here... Whatever is to come with e.g. the decreased interest in the public markets for loss-making companies with no apparent path to profitability, the last 10 years have apparently not been a bubble for any reasonable definition of the term.
- wpietri 7y ago
  Definitely. If we get to wiggle things in retrospect, then we're not talking about the bet itself, but the set of all bets that 5 years later somebody on HN would see as plausible wiggling of the terms to match current conditions. That's surely a lot of bets, among which we'd expect to find several winners.

raverbashing 7y ago

I suspect the mistake in Bet 1 was betting on Pinterest rather than Instagram or WhatsApp (though IG had been acquired at the time of writing)

dweekly 7y ago

Bet 3: GitLab, Atomwise, Razorpay. So yes, I suspect he won that one.

scottlocklin 7y ago

Bet 2, 3 are (more or less) bets that VC will continue to overvalue companies in the presence of cheap credit. Bet 1 is what the rest of the market thinks. Altman is a decent VC, so no surprise he'd "win" 2 & 3.

wpietri 7y ago

Regarding the first bet, VC Fred Wilson talks about something related in item 2 of his "What Happened in the 2010s" post: https://avc.com/2019/12/what-happened-in-the-2010s/ https://avc.com/2019/12/what-happened-in-the-2010s/ He starts out: "The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part." That slice of startup-land is always what felt most bubbly to me, WeWork being the biggest example, where even SoftBank admits losses of something like $9 billion. In contrast, Bubble 1.0's biggest loser was WebVan, at $1.2 billion. (And as a side note to some of the discussion: that there are successes this time around doesn't prove it's not a bubble. E.g., Amazon and Google made it through, but it was still a bubble back then.)

Alex3917 7y ago
> The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part. The issue is that the value of money has been decreasing each year for the last decade. I don't remember anyone predicting that this was going to happen as far back as 2010, although it was already obvious that it was happening by 2013 or so. That's why you'd be hard pressed to name a single VC-funded tech startup that was founded within the last five years, because these days VCs are just funding small businesses and not startups.