Moneyball author warns tech companies are ‘in another bubble’



The author of best-selling books including Moneyball and The Big Short has said valuations on tech platforms like Snapchat are “in another bubble” and overvalued by venture capitalists.

Asked about Snapchat’s valuation of US$19bn financial journalist Michael Lewis said it was worth that because of venture capitalists investments “until they try to sell it”.

Speaking at the Adobe Summit in the US overnight he said of a deal between his publishers and Facebook, where he was expected to pen a piece for the social network every day: “No one could explain to me how it would help sell the book. I was expected to write for Facebook for free? That seemed crazy to me.

“I got bored of it after three hours, the book took off and I don’t need Facebook after that.”

On the state of the tech industry as a whole he added: “Its another bubble and the whole thing feels very frothy.

“I feel more agnostic about these tech bubbles than I do on the financial shenanigans on Wall Street.”

But he said the bubble did have “pleasant side effects” of  “encouraging entrepreneurship”, adding: “We live in a society that entirely depends on people taking risks they shouldn’t take. We’re paying people to fail.”

In the wide ranging interview with Fortune magazine editor Alan Murray Lewis admitted he owed his success as an author because he was too “lazy” to compete with other journalists for stories, and had to find his own.

Talking about what attracted him to the real-life stories described in his books he said: “An interesting story is a combination of a riveting personality and a peculiar situation.”

He pinned his laziness on his father, quipping: “My father told me often that the motto on the Lewis coat of arms was ‘do as little as possible, and that unwillingly, for it is better to receive a slight reprimand than perform an arduous task’.”

He also said the Moneyball story, where one of the poorest professional baseball teams achieved success by recruiting unfashionable and overlooked players based on big data, could revolutionise the way other businesses recruit.

“If you lined those players up against the wall none would guess they were professional athletes, they’d think they were software guys,” he said.

“But that was the point. They were undervalued by the market because they were misshapen. They could see through the way people looked by using the data to see what they actually were doing on a  baseball field.

“I though this isn’t about baseball – these guys are corporate employees and more examined than any others. They’ve got stats attached- if those people can be misvalued because of the way they look who can’t be?”

Alex Hayes

Alex Hayes is a guest of Adobe at the Summit event in Salt Lake City. 


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.