Jay Hoag - Keys to Successful Growth Investing - Invest Like the Best with Patrick O'Shaughnessy Recap

Podcast: Invest Like the Best with Patrick O'Shaughnessy

Published: 2025-06-17

Duration: 46 min

Summary

Jay Hoag discusses the evolving landscape of growth investing, emphasizing the importance of macro factors and the untapped potential in consumer internet businesses amidst the current focus on SaaS and AI.

What Happened

In this episode, Patrick O'Shaughnessy sits down with Jay Hoag, co-founder of Technology Crossover Ventures (TCV), to explore the changing dynamics of growth investing. Hoag reflects on the significant impact that macroeconomic factors, such as regulation and tariffs, have on technology investing today, which he considers a new focus for the industry. He articulates how these elements were not a primary concern during his earlier career and underscores the challenge of navigating this complex landscape.

Hoag also shares his contrarian perspective on the current investment climate, particularly the prevailing emphasis on SaaS and AI. He argues that there remains substantial opportunity in consumer internet ventures, which many investors have overlooked. By focusing on this niche, he believes investors can uncover promising private opportunities that others are missing. Hoag’s insights reveal a potential shift back towards consumer-based models, challenging the market's current trends and highlighting the need for a broader view in investment strategies.

Key Insights

Key Questions Answered

What are the macroeconomic factors affecting technology investing today?

Jay Hoag highlights that macro factors such as regulation and tariffs have become pivotal in technology investing, a shift from the previous focus on purely technological advancements. He notes that understanding these elements is crucial for investors today, as they can significantly impact global trade and investment decisions. Hoag admits that many, including himself, are still grappling with the complexities introduced by these macroeconomic factors.

Why is there a contrarian opportunity in consumer internet businesses?

Hoag argues that while the current investment landscape is heavily skewed towards SaaS and AI, there are underappreciated opportunities in consumer internet ventures. He mentions that many investors have moved away from consumer-focused strategies, making it challenging for founders in this space to attract venture capital. This creates a unique opportunity for contrarian investors willing to explore these neglected markets.

How has TCV evolved its investment strategies over the years?

TCV has significantly transformed its approach to sourcing investments, evolving from traditional cold calling to utilizing AI-powered tools to analyze millions of companies. Hoag emphasizes the importance of technology in identifying potential investments, stating that their methods now include a comprehensive analysis of over 11 million companies, which enhances their ability to spot promising opportunities.

What challenges do consumer-focused ventures face in attracting investment?

Hoag points out that the dwindling number of venture investors who specialize in consumer internet is a significant challenge for founders in this space. He notes that the shift in focus towards SaaS and AI has left fewer resources and expertise available for consumer ventures, making it harder for these businesses to secure necessary funding and support.

What insights can be drawn from the current market conditions compared to the past?

Reflecting on past market conditions, Hoag notes that while there are always similarities to previous periods, the current emphasis on macroeconomic factors is distinctly different. He suggests that understanding these changes is vital for investors looking to navigate today’s complex environment, as they can influence investment strategies and opportunities significantly.