Winning the Degenerate Economy: Masters in Business with Howard Lindzon
From Masters in Business
Howard Lindzon•Founder, StockTwits; General Partner, Social Leverage
Executive Summary
Howard Lindzon recounts the early investment in Robinhood by his fund, Social Leverage, driven by a thesis of near-zero customer acquisition cost, a stark contrast to incumbents.
Lindzon discusses the creation of StockTwits and the 'cashtag' ($AAPL), and his recent return as CEO to the company he founded 17 years ago.
He expresses a bearish outlook on the traditional venture capital industry, arguing its success was largely a product of the Zero Interest Rate Policy (ZIRP) era.
Lindzon analyzes the rise of the 'Degenerate Economy,' characterized by the gamification of finance through zero-day options and meme stocks, noting that options trading drives ~90% of Robinhood's profits.
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Concerns Raised
The sustainability and societal impact of the 'degenerate economy' and the gamification of investing.
The venture capital industry is fundamentally broken and was artificially propped up by the ZIRP era.
Private market valuations are often disconnected from public market realities and fundamental business metrics.
Opportunities Identified
Investing in the infrastructure that powers the 'degenerate economy,' such as the app stores (Apple, Google).
Brokerage-as-a-service APIs (like Alpaca) that enable a new wave of fintech applications.
Identifying 'trends with no friends' — stocks with strong upward momentum that are not yet widely followed.