Human history is not a story of continuous progress but a series of discrete jumps, where a limited number of major changes have shaped the world as we know it. Everyone loves looking toward the future, imagining the unimaginable. However, the fact that a handful of outliers account for almost all progress and returns does not mean they should be the only focus in decision-making. Quite the contrary - alpha may be easier to find in what remains unchanged.

The False Opportunities

Even during the 90s Asian financial crisis, when people collectively saw no limits to asset prices and then witnessed the subsequent crash, losses were not created equally. The most severe losses did not come from overpaying for prime assets but from buying sub-prime assets at prime asset prices. For example, houses without direct beach access or city views were sold as if they had those premium features. Their locations might have seemed similar, but those critical distinctions made all the difference - akin to a winner-takes-all mechanism, albeit to a lesser degree. When madness kicks in, people rush to get in at all costs and make these mistakes.

Another commonality is that, unfortunately, those who fall into this trap are not the super-rich but those just hitting the bar. Along with paradigm shifts in technology, waves of fake opportunities emerge. What’s worse is that these fake opportunities are disproportionately presented to and funded by outsiders, while those with true outlier potential remain strictly exclusive to insiders.

Becoming an insider takes capital, time, and/or the ability to spot other insiders, which is no easier than spotting winners themselves. Contrary to popular narratives, investing in futuristic opportunities, especially during market hype, is a convenient way to become someone else's alpha.

The Timeless Principles of Due Diligence

A common belief in the early startup ecosystem is to believe in founders and invest as early as possible. A derivative of this belief is the disregard for due diligence - some argue that there’s almost nothing to diligence early on and no time to do it anyway.

The excitement and FOMO around catching the next technological trend are understandable. However, the timespan of world history and the timespan of human life are vastly different. Technological advances may be a mere blink in world history but could take years in human time. Within those years, opportunities go through various stages, including false starts, such as the AI revolution in the 80s. Every major opportunity moves through different phases of readiness, each with distinct risk-return profiles, and this will remain true in the future.

When it comes to investments and commitments, rushing is a trap - one that has nothing to do with execution speed. Even for groundbreaking opportunities, the rationale for not waiting for more proof points is often weak, especially during market hype, where opportunities are frequently valued at exit-level valuations.

Take Apple as an example. Post-iPhone success in June 2007, there was as much, if not more, growth in the following years. The first believers did well, but latecomers also secured great returns with vastly improved risk-reward trade-offs. They never had to worry about living in a world where the iPhone did not succeed.

Investment success relies on two dimensions: risk and return. Being future-envious kills both, as it necessitates unnecessary risk exposure to baseless narratives and high valuations, which weigh on expected returns even for those that ultimately succeed.

The Schlep Blindness

Betting against FOMO during market hype may be a source of alpha, as mentioned earlier. Betting on schlep blindness may be another.

If one had to choose between investing in IBM or British American Tobacco in 1975 and holding for the next 40 years, most would have picked IBM, assuming that British American Tobacco would be left behind in an increasingly tech-driven, health-conscious world. IBM believers did well, with a cumulative return of 43 times their original capital. However, British American Tobacco investors didn’t just do well - they did exceptionally well, with a cumulative return of over 4,000 times their original capital.

We can’t carry today’s knowledge back to 1975, but countless similar examples lie right under our noses. I once met a tile shop owner during COVID, and to my surprise, his brick-and-mortar store had grown bigger and increasingly profitable every year. Some of his tiles cost over $1,000 per sqm and were in high demand.

It turns out that the things people ignore can be sustainably profitable, while the things people enthusiastically pursue often burn to ashes in no time.

The Time-Tested Ideas

Any experienced property investor knows - always paint the walls white. Jokes aside, there exist timeless designs, colours, and styles. Similarly, some ideas are timeless, too.

Over time, I’ve come to a scary realisation: the world has a finite number of good ideas. The same ideas get discovered and rediscovered. In startups, I’ve seen countless variations of vendor financing repackaged as a "new" concept. In investment management, value and momentum are rediscovered repeatedly by different people.

If we come up with truly novel ideas that do not exist in any form, they may simply be bad ideas—ones already washed away in the ocean of history. This is where Balaji Srinivasan’s idea maze framework becomes especially relevant. In the world of ideas, success isn’t just about executing on a set vision but also about understanding the category’s history and the context of past failures.

Surely, it is possible to find a new path in the idea maze, but more often than not, new paths lead to the graveyard. Instead of fixating on being the first to discover a brand-new path, it is far more achievable to execute time-tested ideas in a different industry.

Final Thoughts

The best opportunities don’t always come from chasing what’s next - they often lie in understanding what has always worked. True alpha doesn’t just emerge from predicting the future but from recognising what doesn’t change and applying it in new ways. Whether it’s due diligence, ignoring hype, or leveraging schlep blindness, the key to sustainable success is finding value in the unchanged.