The challenge across investment classes

August 26th, 2021

I missed out on investing in Instacart, relatively early on. A buddy of mine did not. Another buddy also passed. If you fast forward to today, Instacart (even prior to covid) was valued at $7.9b and now $39b in the last round. That is an insane multiple.

So what went wrong?

At the time, when I saw it, I liked the idea and the convenience. Very early the proposition was about getting a red bull or a couple of items to you fast. Then in New York it enabled delivery at supermarkets which was less common at the time. We even used the service a bit.

What I didn’t like, is I couldn’t see a long term sustainable business model. The discounted delivery fee wouldn’t pass on, consumers wouldn’t pay for an increased margin on products.

The knowledge, that yes they could improve the operation as they scaled, they could find new ways of generating revenue (like advertising) and their team could execute brilliantly – was in the back of my mind. However, not enough to press go.

In evaluating I was thinking like a value investor, not a growth investor. It was clear from a growth perspective they could grow significantly and ideally solve some of the challenges with scale. A growth investor would have gone yup lets do it.

That’s not to pass judgement on my investment lens. It’s just for that investment, at that time, with the type of capital it was the wrong one.

It’s also a lens that has limited my opportunities with Crypto, I’ve mostly struggled with seeing the big picture and where the real tangible value would be created, or created through exchange.

And for me personally, I invest resources through Nudge, board positions, early stage investment, late stage and then income, retirement and a fun account. This is a primary function, resource allocator.

Swapping investment lens in each scenario has taken some work, to sit and define how I should be thinking about investment allocation in each scenario. What is the most appropriate way to evaluate each of these. But a fruitful exercise. It’d be insane to take a crypto investment lens and apply that to retirement investing. The defining of that has been immensely helpful, to hone my own thinking and to help in swapping context.

The mental short cut is to entrust your funds to experts who will make those judgements. Find an expert in Crypto investment, evaluate them, their lens, knowledge of the space. And back them. That’s why index funds are so valuable to investors, for the same reason. You can always change at a later date when or if you want to get more involved.

Extrapolating that out to other areas, it’s the same as hiring a personal trainer, rather than figuring everything out, get someone who knows the road and makes the calls based on your own results or progress.

One Response to “The challenge across investment classes”

  1. Late stage secondaries | bwagy, the blog of Ben Young Says:

    […] is the third in my recent posts about investing (100 Companies, Investment lens, what I’ve been up to). More about the discoveries I’ve made the past 18 months or so. […]

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