Mary Maker has had an amazingly fruitful career as an Internet pioneer. As a technical analyst at Morgan Stanley in the 1990s, she became the most influential analyst in the sector,
and Dale. In 2010, Meeker relinquished that job to become an investor with Kleiner Perkins. She picked winner after winner, invested in companies like
Maker and her team left Kleiner in 2018 to found a new company, Bond Capital. But it may be best known for its series of over 20 creative research reports on Internet trends. The first, in 1995, warned that online investors were likely to “swing” between betting on growth and worrying about valuation. This is true more than ever.
Maker recently agreed to discuss what she was doing via email and how she views the world. The interview has been edited.
Baron: Where has Bond been investing lately?
Mary Maker: Some of Bond’s recent investments include Ironclad, which works in contract management software; Saildrone, which manufactures autonomous marine drones; Retool, which makes software for developing applications; The multiverse, a platform for training and apprenticeships; Stord, a software platform for warehouses; and Genies, a provider of tools for creating avatars.
What do you think of Web3, non-fungible tokens, cryptocurrencies, and blockchains?
There were nearly 300 million global buyers of the cryptocurrency, which has a market capitalization of nearly $2 trillion. Consumers and investors voted with their money. Also, software developers’ time and focus has shifted to crypto and blockchain at an extraordinary clip. These are core technologies, like mobile and cloud over the past decade.
More than 4.3 billion people spend about four hours a day on mobile devices, up from about 100 million people with little use less than 20 years ago. In fact, people are already living in digital worlds, and they want instant and frictionless payment systems, digital currencies, and new applications unlocked using the blockchain. In the physical world, money is printing at rapid rates and inflation is rampant – another reason why consumers are excited about decentralized digital currencies with a limited supply. Most cryptocurrencies will fail – but the ones that win should win a lot.
You are insured.
We have entered the fourth fastest/best/cheapest computing revolution of the last half century. We had the PC in the ’80s, the desktop internet in the ’90s, and the mobile internet in the 2000s, and we’re now in the age of cryptography and blockchain. The past tends to be a precursor and each new revolution rises faster than the previous one. Generational changes are accelerating in the world’s largest markets – financial, healthcare, government and education -. The Covid-driven remote work has spurred unprecedented entrepreneurship and mobility in America. New offerings in older markets – such as NFTs – are developing at rapid rates, often reimagined by a new generation of creators who get paid directly for their efforts, with limited intermediaries.
How do you feel about private market valuations?
While the pace of innovation is exceptional, a lot of capital has been put to work quickly, especially over the past 18 months – in a lot of companies and with high valuations. As with the historical pattern, a high percentage of these companies will fail to meet expectations. Too much money, too fast, at many similar companies can make it more difficult for winners to build competitive moats, and rush out. It is worth noting that a lot of money can sometimes kill.
But you still believe in the project model.
The traditional business of venture capital in America has been very effective over the past half century. Those with experience in the early days of building companies can attest to how hard it can be… and also have a deep understanding of the fragility of a startup and the amount of effort that goes into 24/7/365 to help winners thrive. The good news is that today’s young tech entrepreneurs – as a class – are exceptional. The bad news: The time needed to gain a competitive advantage has been shortened.
What macro issues do you worry about?
It’s a long list. Permanent long-term quantitative easing with abnormally low interest rates. Particularly high rates of inflation. The US government’s account-to-revenue and debt-to-GDP ratios are at their highest since World War II. Benefits account for 16% of America’s GDP with Medicare and Medicaid at 6%. That’s up from 9% and 3%, respectively, just two decades ago. There is war in Europe with increasing global turmoil. We have a cultural and political divide. We have an ineffective education process from kindergarten to college. We are starting to receive signs of recession.
But you are still in it.
America remains the best country in the world. At some point, these (and other) growing challenges will come home to settle down, and we will all be judged by how well we anticipate, adapt, and respond. Investors need to be particularly thoughtful pickers and smart portfolio managers.
write to Eric J. Savitz at [email protected]