alt Hacker NewsI actually think the opposite approach might be the most optimal one, at least from a monetary perspective. That is, be on the cutting-edge of something, but be willing to bail out at the moment its future starts seeming questionable. Or even more specifically, maximize your foothold in it while minimizing your downside.
Bitcoin is a good example: if you bought it 15 years ago and held it, you're probably quite wealthy by now. Even if you sold it 5 years ago, you would have made a ton of money. But if you quit your job and started a cryptocurrency company circa 2020, because you thought crypto would eat the entire economic system, you probably wasted a lot of time and opportunities. Too much invested, too much risked.
AI is another one. If you were using AI to create content in the months/years before it really blew up, you had a competitive advantage, and it might have really grown your business/website/etc. But if you're now starting an AI company that helps people generate content about something, you're a bit late. The cat is out of the bag, and people know what AI-speak is. The early-adopter advantage isn't there anymore.
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> That is, be on the cutting-edge of something, but be willing to bail out at the moment its future starts seeming questionable
Counterpoint, I sold all my Bitcoin in 2011 when Mt Gox got hacked and the price plummeted 80%. Would have done it again after their 2014 hack too if I had any left.
> Bitcoin is a good example: if you bought it 15 years ago and held it, you're probably quite wealthy by now
But you just said bail the moment it's future starts to be questionable. If you follow that you would have never held it for 15 years.
Ah yeah, the beauty of hindsight knowledge.
But you can't be on the cutting-edge of everything, and there are opportunity costs.
> be on the cutting-edge of something, but be willing to bail out at the moment its future starts seeming questionable
The problem is this leaves you undifferentiated from every hype chaser in Silicon Valley. Our world is littered with folks who went to coding school, traded Bitcoin, did something in the metaverse and blogged about AI. That jack-of-all-trades knowledge can be useful. But only if you’re making unlikely connections. Having the same cutting-edge familiarity as every tech journalist doesn’t that make.
Better: develop deep knowledge and expertise in something. Anything. Not only does this give you some ability to recognize what expertise looks like from afar, it also lets you dip into new topics and have a chance at seeing something everyone else hasn’t already. That, in turn, gives you the ability to be a meaningful first mover.
Maybe - but that's also a style of life definition, isn't it. I did not care at all about Bitcoin, and I'm still pretty fine. I even think, sitting Bitcoin out was better for me, because who (vrosdly speaking) cares about it today (besides speculating with it)?
If you bought into NFTs when they were hot you would have lost money. Not every new tech is worth investing immediately.
Except that strategy gets you killed through a thousand paper cuts.
What would have you done when the Bitcoin fork happened 50/50? Would you have gone int ICOs? Which ones? Etc…
There’s simply too many “new things”, so by trying to get exposure to them you’ll be massively in the red.
Let’s say you get into 1000 “new things”, and you strike it lucky and hit BTC. You’d had to buy BTC in early 2013, hold it over the whole period and sold at the historical maximum for you to be at break even.
If instead of buying 1000 “new things”, you’ve put your money into the S&P you’d be at +250% by the same time.
Yeah it looks reasonable when you only pick success stories for your examples.
If you sold the farm to get in early in the Metaverse, you're totally hosed now because that was a dead end. The idea of digital real estate was as terrible then as it is now.
How do you know what not to invest in then? Bitcoin wasn't the only cryptocurrency fifteen years ago. It wasn't even the first digital currency. If you hop on every bandwagon, you'll go broke far more then you become wealthy. Just look at all the people who poured money into NFTs or digital real estate in the metaverse or Dogecoin or whatever.
It's easy to say "well of course I would have invested in Google in 1999" but there was nothing in 1999 to say that Google was going to be as big as it was. Why not Lycos or Dogpile or AskJeeves?
How many people dedicated their careers to Flash, only to have it die at the hands of Steve Jobs and HTML5? It's not just about bailing out: lots of folks had to start over because taking advantage of the opportunity means actually investing real time and money. "As a tulip bulb producer, I would have simply stopped producing tulip bulbs when it started to seem questionable." https://en.wikipedia.org/wiki/Tulip_mania