Portfolio managers want to be right on average, but everyone is wrong three times a day before breakfast. So they relentlessly seek new information sources; consensus is rare, since there are always contrarians betting against the rest of the market. Tech cares less for dissent. Its movements are more herdlike, in which companies and startups chase one big technology at a time. Startups don’t need dissent; they want workers who can grind until the network effects kick in. VCs don’t like dissent, showing again and again that many have thin skins. That contributes to a culture I think of as Silicon Valley’s soft Leninism. When political winds shift, most people fall in line, most prominently this year as many tech voices embraced the right.
wow, lots to unpack. Good explanation of the 'AI all the things' hype where the world thinks 'huh'? It is also an expression of the underlying assumptions of tech startups and VC funding. Dissent, noisiness make VC funding feel more bet like than as we are all chasing this there must be something to it. The 'herdlike' should be a giant red flag in the middle of Sand Hill Road. In contrast the portfolio managers have a different approach to risk, and accept being wrong most of the time simultaneously. (Vgl the statistic that Federer is all time greatest tennisplayer while winning 54% of points. That's the level of beating the odds needed to stand out.)