A year back everyone was enamored with Chamath’s one pager memos. He was the SPAC king. His tweets got numbers similar to Elon’s. He gained like a million followers in a year and he proudly bragged about it on his podcast. Everything he wrote was getting viral. He was blocked by Marc Andreessen way before Marc blocked the rest of Twitter. People wanted to know what companies he was interested in. SPACs took off thanks to the success he was having. He was on top of the world.
And there was a spike of people sharing similar one pager bullet point memos on Twitter. People started sharing their one pagers on reddit too.
This is pretty standard, if you see a successful person do X, you try to imitate him and copy X. You attribute his success to X. You have seen ‘This Y person did X, here are 6 learnings on how they did it.’ threads blow up on Twitter too. People can’t stop consuming them. Similar to videos of morning routines of successful people on Youtube/ Instagram reels. We all feel if we copy this X thing, we will become successful. And people not just copied his memo style, they also copied his trades. Instead of doing their own DD, they outsourced it to Chamath.
People believed his one pagers. Thought that those one pagers had a strong correlation to his fund’s performance. What they never asked was if he was just making shit up. It is impossible to predict the performance of a company even one quarter down the line. He was sharing numbers for 2025. I am leading growth for the transport business unit of an ondemand company, and we probably do more than most ride hailing companies in India. Ours is a mature business. Even I can’t predict with certainty what our numbers will be next week, forget a quarter down the line. Forget 2025. In a world full of covid uncertainties, monetary policies that are changing every quarter, no one can predict 2025. But no one cared. Because they were making money.
One year later, his SPACs have tanked, and he has stopped tweeting as much as he did once.
Every day you now see people tagging him and making fun. Is he a genius? Is he a con man dumping all his SPACs on retail?
A year back he was in Celebristan. People put him on a pedestal. He could do no wrong. He was the SPAC king, remember? He went on Bloomberg, defended the small time trader? He was the actual Robinhood defending people against Robinhood. People used to put his quotes/ clips on r/WallStreetBets. Everyone wanted to hear what he had to say.
One year later, his SPACs have tanked. The performance of his SPACs is the same as the portfolio of a r/WallStreetBets trader. So now he is treated the same as every other trader. Trader, not investor. People think he is a conman. He is part of Freshmenistan now, exiled from Celebristan.
If you see the arc of Cathy Wood, you will see similarities. Man, I am getting good with my puns.
Instead of judging his intentions, what fascinates me is how the curious case of Chamath is another case of classic mimesis at play.
Yes, he did pump his investments. That is what all investors do.
Web2, Web3 it does not matter. Someone is always the bag holder. He is not a saint, nor a fraud.
It was idiotic to think of him as a philosopher warrior fighting for the masses. Just like how people had started doing the same with Chris Dixon.
Now that the markets have turned and people are not buying the narrative of growth stocks anymore, and the multiples have constricted, he is the scapegoat for everyone to pile on.
Read Wanting by Luke Burgis to understand more about scapegoat mechanism. The irony is that Wanting is the book Chamath recommended too in the All in Podcast.
Question: How long will it take for web3 investors to do the same to Chris Dixon now that the crypto market has tanked.
Most advice is for self and the same goes for this post.
2 years back I used to read a lot of investment books. I came up with an investing framework myself ; a khichri of all successful investing frameworks I had collected from like a dozen books I had read. I used it to value Muthoot and proudly shared my thesis on Twitter.
A friend who works in this sector DMed me and told me why I was an idiot. The model was too reductive. I did not even understand how gold loan NBFCs work. I could not just put numbers on an excel sheet and decide whether to invest or not.
Why did I love my excel so much? Because it made me feel smart. More competent than I was actually at stock picking. It was easy for me to collect a bunch of data and put it on an excel. Going deeper on a company is far harder. The funniest part is that if I had actually pulled the trigger and invested, I would have felt very smart. Muthoot really did well. But not because of the reasons I had in my excel. I read A Random Walk Down Wall Street later and realized that I was not a polymath, but an idiot. Since then I have invested mostly only in indexes. I still do occasional investments in specific stocks, but it is such a small part of my portfolio that I don’t care. Same with Crypto.
I am not stupid to compare myself with Chamath. He played a different game and I am sure made billions dumping his SPACs on retail. His actual product was not the one pager that he wrote and the investments he did [that led thousands/hundreds of thousands retail investors to burn their money], but the game he played in the SPACs market.
Chamath is an important case study on mimesis. And also how we confuse correlation with causation when it comes to succesful people.
P.S I think Chamath is super smart. And he fits the model I have of people who I think will be super successful. And he is certainly one of the best orators out there. I don’t think he was a hero a year back. Nor is he the villain that people think he is. He is just a capitalist.