
We’ll have to learn a thousand hard lessons, most of them centered around the idea that if you want to make something really great, you can’t think about making it great for everyone. You have to make it great for someone. A lot of people, but not every person.
…specifically, higher multiples can imply greater speculation (and are thus suggestive of a bubble). When one looks at the average multiples in tech (see figure below) across private rounds, IPOs, public market trading, and even our own team’s investments, there is a significant departure (250%+) between the average private rounds other funds are leading (20–25x) and public market trading (5–10x). I pulled this data in mid-2015, so with public multiples trending lower now, the divide is even greater.