The Two Jobs of “Drift Signal”
Why I’m separating current ideas from long-term research
Welcome to Drift Signal. I’m Nicolas, Head of Research at Vsquared Ventures, and this is my personal newsletter on markets and macro.
May and June turned out to be unusually busy. I spent much of the past two months on the road, speaking at a series of gatherings across Europe and the US:
🇫🇷🇺🇸 It began at Odyssey, the annual retreat hosted by entrepreneur and venture capitalist Kevin Ryan, which this year was hosted near Paris.
🇬🇧 From there I travelled to London for a private dinner on UK tech sovereignty, co-hosted with Will Dufton of Giant Ventures and energy analyst Alex Chalmers.
🇬🇷 I then headed to the Greek island of Syros for a retreat organised by Demetri Kofinas, whom some of you may remember from my appearance on Hidden Forces last December.
🇺🇸 I then spent a week in the US, visiting New York, Detroit, and Chicago, including the Reindustrialize Summit with my Vsquared colleague Herbert Mangesius and a dinner in Chicago on hard asset investing and transatlantic cooperation.
🇫🇷🇨🇭 I wrapped up this stretch in Chamonix at the inaugural Aperture Capital Retreat, where I gave a keynote on “The Return to Atoms” and moderated a discussion on programmable finance with Lucia Gallardo of AreaTech and Patrick Prinz of Recoveris.
There is also recent work elsewhere that may be of interest:
In Currency of Power, Marieke Flament and I have continued to examine the emerging contest between US and Chinese monetary systems, and the broader fragmentation of global finance. Recent essays and interviews explore China’s push to build an “electrostate” through energy and infrastructure exports, the US move towards a “Pax Silica” anchored in dollar-based stablecoins, and the growing role of capital flows, regulation, and sanctions in shaping monetary power. We also revisit these themes with guests including Sir Howard Davies, Neha Narula, Michael Pettis, and Jess Hoversen, and in a recent retrospective argue that the global monetary order is already being rewritten in code rather than treaties.
In The Deep Brief, my colleagues Herbert Mangesius, Benedikt von Schoeler and I have focused on Europe’s position in deep tech and industrial renewal. One recent piece, co-written by Herb and me, looks at the European battery sector through the lens of industrial learning, arguing that while first-generation Western ventures struggled, they have also left behind something more durable: trained engineers, accumulated process knowledge, and a foundation that can support a second wave of scale. Another, by Bene, argues that Europe already holds many of the ingredients for stronger venture and growth investing, including strong historical returns, deep scientific talent, and rising structural demand from defence, energy, and industrial reshoring. The gap today is less about capability than about scale and allocation; the opportunity lies in closing it.
In today’s edition, I return to Drift Signal itself and the question of how it should evolve. Over the past months I have been revisiting both the format and the purpose of this newsletter, and what role it can play at this stage of the tech cycle.
The result is a simple change in direction: a return to shorter, structured essays alongside a longer term research framework on the shift now unfolding across energy, industry, and finance.
1/ I started writing this newsletter almost 10 years ago, in 2017. My inspiration for the early editions was my friend Vivek Wadhwa’s travel notes. At the time, he used his newsletter simply to keep people across his professional network up to date with what he was doing, where he was travelling, where he was speaking, what he had recently published, and the occasional interesting, not yet fully formed idea that he wanted to share, partly to keep a record and partly to invite feedback. Many of my early editions were much like Vivek’s. Usually there was a central idea, but the main point was to share news about me and my work.
2/ Over time, though, I began to feel I was on firmer ground and probably had more ideas worth sharing. The format started to evolve, and at some point I decided to make a clear distinction between current news at the beginning of each edition, interesting links at the end, and the main idea, which I thought deserved fuller development, in the middle. That is when I settled on the 10-section format I still use today. I like the rather artificial discipline of a fixed structure because it forces me to examine an idea from different angles and build a more complete argument. For many years, that was the shape of my newsletter: a rough idea developed in 10 points, while longer essays were published on Medium.
3/ Then, from 2019 onwards, Substack entered the market, and following Azeem Azhar’s example, I became one of its first users in Europe. At that point I decided to stop writing long essays on Medium and turned the newsletter itself into a collection of essays. I kept the 10-section numbered format, with a few exceptions, but I removed any limit on length. As my confidence grew, I wrote more. The newsletters became longer, and I used the ten sections to explore ideas in depth. That is simply how I think and how I write.
4/ Recently, I started to revisit older editions and wondered if there was a way to return to these effective 10-paragraph essays while still making room for longer work. I decided to pause new editions for a few weeks to think this through, and I’ve now found an approach that feels right. My aim is to use the old, shorter format again to explain new ideas as they arise, while also building out what I see as an important framework for investors: the shift from the age of semiconductors, computing, and networks to the age of renewables, batteries, and electrification.
5/ What do I mean by that? Subscribers will know my late cycle investment theory, which says we are in the maturity phase of the age of semiconductors, computing, and networks:
I know this view still unsettles some who see AI as the start of a new tech shift. But I would argue it has held up, both in my own tracking (see here, here, and here), as shown in past editions, and in the work of others, including Jerry Neumann in Colossus’s AI Will Not Make You Rich and Sameer Singh in The Wrong Kind of Bubble and, more recently, The Great Reset.
Another implication has also held up. If that earlier age is ending, then a new one is beginning. Over the past year I have gathered enough signals to think it is driven by electrification. That is why I describe it as the age of renewables as the key input, batteries as the defining product, and electrification as the core driver of value creation across the economy in the decades ahead.
6/ Why does it matter for investors? I see at least four ways to build an investment case around this:
First, if you assume the age of semiconductors, computing, and networks is now mature, that changes how you judge tech companies and how much you are willing to back them.
Second, if you think a new age is forming around renewables, batteries, and electrification, it changes how you allocate capital across industries and geographies. It points to areas such as China, commodities, and early winners in these fields across the world.
Third, we are living through a transition in which both ages overlap. The AI build out, still part of the semiconductor, computing, and network cycle, is also driving a surge in energy demand and helping set the stage for growth in renewables, batteries, and electrification.
Fourth, there is still AI itself. If, as I believe, it plays a role similar to lean production in the 1970s, then there is money to be made in AI, but likely in ways that differ from what many expect today.
7/ Why does this deserve our attention? Something dawned on me recently. This is the first and only time in our lives that we are going through a techno-economic paradigm shift with Carlos Perez’s Technological Revolutions and Financial Capital in hand. The book was published in 2002, before its framework could really be tested against a full paradigm shift. At the time, it could not yet be used in a practical way at scale. Today, however, we have had enough time to analyse the book, which gives us a rare chance to use it as a guide, compare past shifts, and apply it to present conditions to make better choices about where capital should go.
8/ Which brings me back to Drift Signal. How do I bring together the old 10-paragraph format with the work of building an investment framework for this current shift? The answer is simple:
First, I am moving back to weekly publishing. Over the past month I have come to think there is an unspoken rule here: if you publish regularly, it needs to be weekly. Anything less and readers do not stay as engaged, even if they do not read every edition.
Second, I will alternate between two formats. One week will be a free edition, built around a 10-paragraph argument on a current topic, along with news about my work and links I find useful. The next week will be a longer, paid edition. These will develop the thesis of the current shift. Each will look at a historical episode from an earlier paradigm shift, then, behind the paywall, draw out the parallel with today and the investment lessons that follow.
9/ This framework is not fixed and it is not meant to be treated as settled truth. It is a way of sorting signals as they come in, across markets, policy, and technology, and of checking whether they continue to support the thesis over time. Some parts will hold up. Others will weaken. That is expected. The aim is not consistency for its own sake, but better judgement as the cycle unfolds. I will continue to adjust it as new evidence appears, and I will note when the data does not fit the model as clearly as expected. In that sense, the value of the framework comes from how it performs in practice, not how neat it looks on paper.
10/ I will also continue to publish under other banners, including The Deep Brief as Head of Research at Vsquared Ventures, and with my colleague Marieke Flament on the emerging monetary order in our newsletter and podcast Currency of Power. As for Drift Signal, the plan is simple. Through July, I will publish weekly 10-paragraph essays, all open and freely accessible. From August onwards, I will alternate between a free 10-paragraph edition on current ideas and a longer paid edition that develops the investment framework for the current paradigm shift, and that is when paid subscriptions (currently paused) will resume.
I am grateful for your continued support and look forward to the next stage of this work.
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From Normandy, France 🇫🇷
Nicolas
We went to Syros last summer with our family for a couple days. A gem of an Island!0 Great food and no crowds.