February by D’Ornano + Co.: is the Tech investing glass half-empty or half-full?, the importance of a new form of due diligence, building strong revenue models in AI, and why the Tesla recall matters

This is our monthly newsletter dedicated to Tech x Investments.

Dear all,

As we set in 2023 and take a broader perspective on investing in Tech - in its widespread acceptance in which Tech is much larger than pure “Technology” but an enabler of growth and transformation, I want to raise the following question: How optimistic do we want to feel at this point?

To provide a tentative answer, let’s look at that Tech investing glass in both ways: is it half-empty or half-full?

Let’s start with half-empty first.

We have now seen, almost all 2022 stats being out there, that the last twenty-four months have been characterized by over-investment and a loss of discipline. The pandemic fostered a wave of innovation to deal with a new paradigm in which remote was the new normal in many aspects of our lives, and that resulted in numerous “factor-driven” investments in which the strength of unit economics, which in most cases tell the truth when looked at correctly, were forgotten in a context of a record level of dry powder, free money and intense competition amon…