Mary Meeker has had a surprisingly productive career as an internet psychic. As a technology analyst at Morgan Stanley in the 1990s, she became the industry’s most influential analyst, championing
and Dell. In 2010, Meeker left that gig to become a venture capitalist with Kleiner Perkins. She picked winner after winner, investing in companies like
Meeker and his team left Kleiner in 2018 to form a new company, Bond Capital. But she’s perhaps best known for her series of more than 20 iconic internet trending research reports. The first, in 1995, warned that online investors risked “choosing” between betting on growth and worrying about valuation. It is truer than ever.
Meeker recently agreed to chat over email about what she’s been up to and how she sees the world. The interview has been edited.
Barrons: Where has Bond invested lately?
Sweet Mary: Some of Bond’s recent investments include Ironclad, which offers contract management software; Saildrone, which builds autonomous marine drones; Retool, which makes software for application development; Multiverse, a learning and training platform; Stord, a software platform for warehouses; and Genies, a provider of avatar creation tools.
What is your opinion on Web3, non-fungible tokens, crypto and blockchains?
There have been nearly 300 million global buyers of cryptocurrencies, which have a market capitalization of nearly $2 trillion. Consumers and investors voted with their wallets. Additionally, the time and attention of software developers has been shifting towards crypto and blockchain at an extraordinary rate. These are foundational technologies, like mobile and cloud over the past decade.
More than 4.3 billion people spend around four hours a day on mobile devices, up from around 100 million with negligible usage less than 20 years ago. Indeed, people already live in digital worlds and they want immediate and frictionless payment systems, digital currencies and new applications unlocked with blockchain. In the physical world, money is printed at rapid rates and inflation is rampant – another reason consumers are excited about decentralized digital currencies that are in limited supply. Most digital currencies will fail, but those that win should win big.
You are a believer.
We have entered the fourth fastest/better/cheaper computing revolution of the past half century. We had the personal computer in the 1980s, the desktop internet in the 1990s, the mobile internet in the 2000s, and now we are in the era of crypto-blockchain-metavers. The past tends to be a prologue and each new revolution progresses faster than the previous one. Generational shifts in the world’s largest markets (finance, healthcare, government and education) are accelerating. Covid-driven remote work has catalyzed unprecedented entrepreneurship and mobility in America. New approaches to old markets, like NFTs, are evolving at a rapid pace, often reimagined by a new generation of creators who are paid directly for their efforts, with limited intermediaries.
What do you think of private market valuations?
While the pace of innovation is exceptional, a lot of capital has flowed in quickly, especially over the past 18 months, across many companies and at high valuations. As has been the case in the past, a high percentage of these companies will fail to meet expectations. Too much money, too fast, in too many similar ventures, it can make it harder for winners to build competitive moats and escape. And, it’s worth remembering that too much money can sometimes kill.
But you still believe in the venture capital model.
The traditional venture capital industry in America has been very successful over the past half century. Those with experience in the early days of starting a business can attest to how wild and woolly it can be… They also have a deep understanding of the fragility of start-ups and the amount of 24-hour effort /24/7 that helps winners thrive. The good news is that today’s young tech entrepreneurs, as a class, are exceptional. The bad news: the time it takes to gain a competitive advantage has been shortened.
What macro issues are you worried about?
It’s a long list. Long-running perpetual quantitative easing with abnormally low interest rates. Particularly high inflation. US government expenditure-to-revenue and debt-to-GDP ratios at highest levels since World War II. Rights to 16% of US GDP with health care – Medicare and Medicaid – at 6%. This represents an increase from 9% and 3%, respectively, just two decades ago. There is war in Europe with rising global unrest. We have cultural and political divisions. We have an inefficient kindergarten to college education process. And, we are starting to get signs of a recession.
But you are still there.
America remains the best country in the world. At some point, these growing challenges (and others) will come home, and we will all be judged on how we anticipate, adapt, and respond. Investors must be particularly thoughtful selectors and shrewd portfolio managers.
Write to Eric J. Savitz at [email protected]