European Straits #239
Great piece Nicolas!
I covered some similar ideas in July last year.
I think micro-PE (replacing VC), especially in SaaS, will be a big trend. SaaS investors will have to evolve or risk dying out, since the alpha will not be there any more for pure VC plays
However, I also think that whilst we are perhaps entering the tail-end of this "economic paradigm" for computing and networks (i.e. their "Golden Age"), there will also inevitably be a new "great surge" / irruption - probably in AI, advanced materials, climate tech or some other niche (my view last year was that this might focus on AI-powered Biotech).
I don't think incumbent VC's are well-equipped to deal with this in terms of sector knowledge.
Our bet is that new niche players will emerge.
Glad to see you back Nicolas 😀
Excellent 👌 Article.
Congratulations on your return! I've been personally waiting it too long. =)
I hope we will receive your newsletter now more often, and I wish you lots of inspiration and creativity for writing.
Don't you think the industry is returning to its roots, and the most significant returns will happen in traditional verticals like deep tech, spacetech, biotech and not yet another B2C SAAS platform?
In the case of deeptech, there are SO many options for the founders to scale up their business in Europe, which are absent in other part of the world.
Welcome back Nicolas! I have been thinking about a similar subject although my guess is that we are actually on the verge of a tech recovery and therefore a new wave of disruption. Its possible that this will be led by established companies, after all today's giant companies are mainly tech businesses. I think your points are valid but there are other significant dynamics which also play a part.
For example, we have a vast pool of young talent in India, South Asia, Africa and the Middle East. So can the world capture the entrepreneurial potential of these people? There are also huge industries that are ripe for disruption - pharma, healthcare, and financial services spring to mind. So there is no lack of market opportunity. The world is wealthier and much of that wealth is in China, India and the Middle East. How will this connect with talent now that the US centred engine is in a new economic phase.
I read Zeihan as well. His list of technologies is very odd - satellite deployment is little more than a toy and personalised medicine is not a technology at all, just a medical way of trying to block innovation. However, I do agree that decoupling of the global economy could be a major barrier.
I genuinely don't know how this will play out. I agree its very unlikely that the model that prevailed in the long tech boom from 2001 until 2022 will re-emerge. But there are lots of dynamics at play here and I think enough money and talent will connect up to drive some form of entrepreneurial change.