Power to the People: My Investing Focus 2022
Two and a half years ago I joined Lightspeed and laid out how my investing focus mapped to communities and sectors I care about. I’ve been so proud to watch it come to life through investments in:
- Players driving financial inclusion through fintech + retail investing such as Trading TV, Stori, and Flink (including Lightspeed’s first investments in LATAM);
- Companies shepherding in the new asset classes of NFTs and Crypto like Hawku, Fan Controlled Football, and Everyrealm;
- Startups creating career mobility and learning opportunities like Forage and Outschool, as well as supporting our existing investment in Flockjay;
- Creator economy-driven businesses including Outschool, and 3 others that are TBA;
- Companies creating innovative multicultural products, including House of LR&C, Honeylove, and another that is TBA.
I’m especially excited that 36% of the teams I’ve invested in have a female founder and 43% have a Latino or Black founder. In total, nearly 60% of my investments have a (VC-backed) underrepresented co-founder on their team, representing 45% of the individual co-founders and 71% of dollars invested.
The theme that ties nearly all of these investments together is driving the economic empowerment of individuals. Whether aimed at retail investing, the creator economy, career mobility, or crypto, these investments are about helping the proverbial “little guys” get that bag 💰, so they can live out their dreams.
A Record Smashing Year
The year 2021 was when individuals really began to stand up, recognize their worth, and demand that their voices be heard. Records were set in nearly every major economic category:
- Retail investors accounted for 25 percent of trading volumes, an all-time high — and not all of them were trading meme stocks like AMC or GME.
- Massive unemployment caused by the pandemic (14.8% in 2020) was followed by record resignation rates of 3% per month, as individuals took more control over their career trajectories.
- Cryptocurrencies’ market caps peaked (nearly $3T) and NFT volumes ($4.4B daily peak) set new records, democratizing the spread of capital.
- The creator economy reached a new milestone (50M participants), as people left careers that didn’t reward them in search of ones that would.
The psychology behind the individual
By empowering individuals you can move markets, usher in new eras of the web, and change industries. To understand how this happens, it helps to understand the psychology that drives individual consumers and their approaches to acquiring wealth.
When it comes to money, everyday individuals have different sets of beliefs and behaviors than institutional or accredited investors. Many people feel financially powerless. They struggle to keep to a budget, and believe they need to keep their heads down just to earn enough money. At the same time, they may also feel the urge to ‘ball out’ on payday even when they can’t afford to.
They can be more emotional about their savings and investments, more prone to loss aversion behavior, and more likely to sell when markets drop and buy when they’re high. They’re more likely to rely on non-proprietary sources of information, use meme trading as a form of entertainment or an excuse for socializing, make investment or gambling decisions based on social proof or signal, and feel confused when faced with overly technical financial terms.
They sense power in collective action and bargaining for their compensation, while being wary of traditional financial or government institutions. In short, they feel frustrated and overlooked, and desire a new social contract where everybody has the chance to build wealth.
What most of them want from their wealth-building experiences is to feel like part of a community. They want real-time learning opportunities so they can make informed decisions, while also having other investors they can turn to when they have questions. They want to feel an emotional or cultural tie to their investments and to be valued for their contributions. They want to feel excitement at each step in the wealth building journey, and to have access to alternative products and information previously only accessible to the wealthy and their gatekeepers.
My 2022+ Focus
So in 2022 I’m excited to update my investing focus to be all about the economic empowerment of individuals — across crypto, Fintech, the creator economy, and career mobility — as well as encouraging diversity and expanding to regions like LATAM.
Here are the top trends I’m watching that will shape how the individual builds wealth and makes moves in the coming year:
Economic Empowerment through Crypto, NFTs, DAOs
- Regulation comes to crypto
- DAO tooling will take center stage
- Web2 → Web 2.5 (decentralization won’t takeover)
- Democratization of capital & removal of gatekeepers continues
- Crowd and community investing through crypto
Economic Empowerment through LATAM surging
- Tens of Millions will open their first bank account
- Startup entrepreneurship as a career will emerge
- Loans and investments no longer only for the wealthy
Economic Empowerment through Career Mobility
- The Great Resignation Rages On
- The Global Salary Gap will Decrease (for knowledge workers)
- K12 Teachers will Become Small Business Owners (micro learning)
- Polyamourous work will continue to rise
- Pseudonymous <> Known working relationships will be put to the test
Economic Empowerment through Creator Economy
- Rise of Finfluencers & Copy Trade Platforms
- Every creator platform will launch an NFT
- Creators will dabble and drop creator coins
- Creator tipping will go mainstream