Wrap-up 2023
Annual predictions, best books, and weblog housekeeping.
As is custom, I’ll start off by reviewing last year's predictions and making a new set for the following 12 months. To begin: what did I get mostly right?
ARKK is up 50% on the year. As of today it's up 74%.
A big narrative in tech is "zombie venture firms". With this month's news about OpenView shutting down, this seems to be just getting started.
We do, more or less, have a soft landing. Still incomplete, but so far it's looking way rosier than it did at the start of the year.
Hype around ChatGPT is somewhat more muted by the end of the year, but it’s still a major topic in tech and startupland. This is a wishy-washy prediction but I'll at least give myself partial credit for this one.
Self-driving gets sneaky good while no one is paying attention — it becomes relatively common to see one in several major cities. Definitely happening!
Michigan football will win its 3rd straight Big Ten championship. 〽️〽️〽️. Not another word about Connor Stallions, please.
And what did I get mostly wrong?
Startups for the most part are able to raise, albeit on tough terms, and there are relatively few major startup blowups in 2023. This was not nearly pessimistic enough, and continues a multi-year trend of me being far too positive about capital markets for startups and technology. When will I learn?
Three of the following seven public SaaS companies will get taken private by Vista or Thoma Bravo or similar: Twilio, Blackline, PagerDuty, Box, Alteryx, RingCentral, Zuora. I almost completely struck out until this week's news of the Alteryx take-private. And I missed Splunk, Qualtrics, New Relic, Software AG, Duck Creek, Micro Focus, EngageSmart, and a few others.
The FAANGM company that has the best year will be Amazon. Partial credit on this one, as AMZN is up 79% on the year which is ahead of all the others besides Facebook. But most people would point to Meta (+183%) or Microsoft (+56% and clearly an enormous AI beneficiary). Nvidia was completely off of my radar. By the way, my *worst* trade of the last twelve months was selling Meta at below $100 because I was so exasperated with their “metaverse” bets. Whoops!
Musk’s Twitter experiment more or less goes well, financially at least. Wrong, wrong, so wrong.
BTC hovers between $15k and $25k all year and for the most part is not a major topic of public discussion. Could argue for partial credit here, as the price stayed mostly between $20k and $30k through mid-October, but now BTC is pushing up against $45k and people is talking about it again.
In general, 2023 was even better for publics and way worse for privates than I was expecting. But overall I think I did meaningfully better than last year. Improvement!
And now, without further ado, eight predictions for 2024
Technology and software growth rates won't necessarily re-accelerate, but they'll more or less hold steady which will be enough for multiples to re-rate higher as pessimism deflates. Public SaaS stocks as a whole will appreciate 20-30%. See In Like a Lamb, Out Like a Lion.
In contrast to public markets, the main themes of private markets are fire sale acquisitions, down rounds, and venture capital firm blow-ups. The only quarter that feels "back to normal" is Q4.
Two of the four of Twilio, RingCentral, BigCommerce, and Okta are taken private. ServiceTitan and Databricks will both go public, but Stripe will not.
Two longs and a short: TOST, PYPL, and AAPL.
The average 30 year mortgage rate ends the year below 5.5%. The inflation rate at the end of the year is zero or negative.
Joe Biden wins reelection by a comfortable margin, but Kamala Harris is not on his ticket. (Bonus points: Pete Buttigieg is).
"San Francisco is so back, baby" is a major theme in the second half of the year. Miami and Austin recede significantly as tech hubs.
The winner of the Big Ten football championship will be.... Oregon.
Reading material
The best books I read this year (in no particular order besides the first one) were:
Secrets: A Memior of Vietnam and the Pentagon Papers, Daniel Ellsberg -- my book of the year
Lessons from the Titans, Davis, Copeland, & Wertheimer
Colorless Tsukuru Tazaki and His Years of Pilgrimage, Haruki Murakami
Every Man for Himself and God Against All: A Memoir, Werner Herzog
And my favorite articles and blog posts were:
Altimeter's Brad Gerstner on Macro, Tech and Startups, Elad Gil
Declining Returns in Software & Defensibility, Arda Capital
Large language models are having their Stable Diffusion moment, Simon Willison
CFOs Are Killing My Deals!: How CFOs are thinking about software purchases today, OnlyCFO
I'm so sorry for psychology's loss, whatever it is, Adam Mastroianni
Society's Technical Debt and Software's Gutenberg Moment, SK Ventures
The Elements of a Good Apology, Dave Kellogg
Blog wrap-up
Subscriber count increased by 55% this year and pageviews were around 11,500 (+65%). I published 16 pieces (including this one) compared to 19 last year. 2024 is a great year to shoot for two a month, if I don't run out of things to talk about.
The post with the largest response by far was Founders & suicide (mostly in the form of private texts and DMs, rather than public comments), but people also seemed to like my brief list of short ideas, so I will definitely be revisiting that format in 2024.
Once again, I'd like to thank you so much for reading, commenting, liking, and sharing. I don't quite know where this thing is going, but I find great joy in the process of putting finger to keyboard, and I sincerely hope that you've gotten something out of it as a reader.
Awesome write up as always!