I am routinely solicited for my technical opinion on new and interesting technologies and companies developing them. 90% of the time, my answer is

Potentially undervalued companies

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2024-08-31 04:30:05

I am routinely solicited for my technical opinion on new and interesting technologies and companies developing them. 90% of the time, my answer is “I don’t know” but it continues to concern me that aspects of technical feasibility are evidently not legible to financial types (and vice versa). This information inefficiency impedes the capital allocation efficiency of the deeptech/hardtech sector, resulting in pain both for feasible underfunded companies and infeasible over-funded companies.

Rather than complain about it, I’ve drawn inspiration from the (probably apocryphal) origin story of Lloyds of London, in which cargo shipping insurers faced a similar problem with the implicit guild knowledge of which ships and captains were riskier than others, and how to price them. Then, as now, there was well-justified opprobrium directed at individuals who were overly critical of their colleagues – all of whom risked their lives while sailing!

Likewise, I’m in no rush to throw stones, I would prefer to encourage everyone to converge more quickly on efficient capital allocation towards using new technology and hardware to solve real world problems at scale.