gen(Z)eralism and what software eats next
MFM.01
Hi! Molly here, on behalf of Moth Fund. To kick off the new year, I’m going to be using this newsletter to share topics I’m interested in and actively investigating as they pertain to predicting and betting on the future. I’m coining it the MFM: Moth Fund Memo.
Best case scenario it’s a changelog of thoughts and ideas. Even better case scenario it’s a bright light and conversation spark with fine folks like yourself. Thanks for your support and looking forward to the year ahead!
Molly’s Memo
As a newly-minted investor, I’ve been thinking a lot about where I see the world going and how I plan to play my tiny part in making that happen. A big reason why Moth Fund’s thesis is to invest in exceptional, high-agency young people as early as possible is because unfortunately, I don’t have a magic eight-ball to tell me what the future holds.
But what I do know is an exceptional person when I meet one. I like to say that MF is sector-agnostic but in no way person-agnostic — I’m uninterested in investing in anyone but people who I’m positive will mold the future to their liking. Hearing how they’re thinking about things feels like it provides me a peek into what’s to come.
Which is why I’m sharing what I’m learning as I go — starting with three trends that keep coming up as I’m thinking about investing in early-stage tech startups over the coming year:
Gen Z are well-positioned to realize huge business outcomes solo/with only a tiny team. This is because Gen Z are overwhelmingly generalists equipped with the best software tools the world has ever known. The need for specialists has rapidly diminished as software continues to gobble up and consolidate legacy roles and departments (e.g. Rippling eating up HR and IT). Additionally, in a world where distribution is the greatest differentiator since CAC costs don’t seem to be coming down any time soon, Gen Z is at an advantage by being significantly more hype-cycle/distribution/social media literate. As Chris Dixon put it: “On relatively little capital, Instagram got to 100m users. Then, Whatsapp got to 500m. Eventually, a solo entrepreneur will get to 1B users.” My money’s on that person being Gen Z and that many of the next billion-dollar businesses will be helmed up by <10 person teams
Skill generalists push software tools to become more general-purpose — we see this play out when users stretch the bounds of tools like Replit, Figma, ChatGPT, etc. This is the force that will increasingly empower small teams to accomplish more without increasing headcount. An interesting side effect is that as a result, the value of difficult-to-teach skills like strategy, taste, and editing goes up. This cycle as a whole can be understood as apps coming before infrastructure, while smart companies like Figma build both at the same time
Trade and craft sectors will increasingly be penetrated and verticalized by software (shipping, logistics, machinery, etc) as the 35T boomer wealth transfer picks up steam and gobbles up generations of legacy small businesses in America
If you have thoughts or happen to have read anything interesting on any of the ideas above, please send them my way!
Best stuff I’ve read on what’s ahead
Investing: Aashay’s Newsletter
Fantastic forecasting and reflections. Especially liked The Hype Cycle of a Venture Career, 4 Questions on AI, and Startup Software HeuristicsSaaS: Buck on Software
Excellent analysis. Big fan of Vertical Aggregation, The Wrong Bet, and Category VelocityAI: Colah’s Blog
Excellent AI explainers. Loved Neural Networks, Manifolds, and Topology and Deep Learning, NLP, and Representations
Perspective from the past
"Paperwork Explosion" was an IBM ad created by The Jim Henson Company in 1967 to extol the virtues of the MT/ST, one of the first word processors. Simply incredible.
Last note
I’m hosting a launch party to celebrate Moth Fund’s first close on Saturday, January 14th in San Francisco. Books will be exchanged, good food will be served, and interesting conversations will be had. I might even wear wings :) Reply to this email if you’re in town and would like to join in on the festivities!
spot on