how to win by riding waves you didn't make.
looking at the AI vibe coder wars, you'd think infrastructure would matter. StackBlitz spent seven years building WebContainers—an entire browser-based operating system that can run Node.js without a server. Replit built their own containerization system, their own collaborative editing engine, their own programming language. Years and years of infrastructure, of real computer science.
lovable doesn’t give a fuck. lovable showed up six months ago with what appears to be claude sonnet, a text editor, and the programming equivalent of thoughts and prayers. today? they're neck and neck — despite a categorically inferior team / product.
VCs tell founders that startups need to have good product, good leaders, and good coverage. but 11x was able to go from zero to $10m in ARR with:
while every product in the AI SDR category is hated by their users, it’s still entirely possible that the category will survive if the next AI wave bails them out.
if LLMs get just 10x better at writing emails that don't sound like they were composed by a Victorian ghost trying to sell you timeshares, the entire AI SDR category will print money. Including 11x. especially 11x, because they were there first, because they were there loudest, and because when the tide rises, it lifts all boats—but it lifts the boats that are already in the water a hell of a lot more than the ones still being built in dry dock.
welcome to the age of levered beta, where being smart is overrated and being early is everything.
what’s beta? does it have to do with alpha?
in investing, "alpha" is your edge—the returns you generate above the market through skill, insight, or probably insider trading. it's Warren Buffett reading annual reports in Omaha. it's Renaissance Technologies' PhD army building algorithms that nobody else understands. alpha is hard. alpha is rare. alpha is what every founder thinks they have when they put "revolutionizing" in their pitch deck. if the market is down 10% and you’re only down 5% — you have alpha.
"beta" is just correlation with the market. when the S&P goes up 10%, your beta-1 portfolio goes up 10%. no genius required—you're just along for the ride.
"levered beta" is beta on steroids. you're not just riding the wave; you're surfing it on a rocket-powered surfboard you bought with borrowed money. when the market goes up 10%, your 2x levered beta portfolio goes up 20%. when it goes down 10%, well, that’s a problem for future you
the thing about alpha is that it's zero-sum. for every investor who beats the market, someone else has to lose. It's musical chairs with money. but beta? beta is abundant. beta is democratic. beta doesn't care if you went to Stanford or if you can't spell Stanford.
for the last decade, Silicon Valley has been obsessed with alpha. build something nobody's built! disrupt an industry! be so innovative that VCs write fawning blog posts about your genius!