I don't think the geography is the best parameter. Think of it this way: if something was contrarian in all other aspects, would you prefer it in the Valley or outside? Can you say that about other parameters?

Contrarian investors try to do what most investors don't. Don't most VCs invest primarily in companies that are nearby, meaning Silicon Valley proper and maybe the larger peninsula? Which means a contrarian would invest outside it. Maybe way outside it. Like Kansas.

Well, I was just trying to explain why that might not need to be the case. You can be contrarian and focus on the Bay Area. And that in fact might be smarter.

This resonates so strongly with me, and I'm so glad you posted it. It reinforces the framework I've been using myself for the past few years and perfectly articulates what I've been trying to explain to myself even.

I can add even one more I personally follow. The standard way most tech companies put capital to work is hiring or aqui-hiring tech talent.

My own experience tells me that's too risky since I've worked with far, far more overvalued people than undervalued. Therefore, I reinvest the profits of my tech business into companies that have steady and real return on equity (e.g. Wells Fargo). Imagine that: A tech company that invests all retained earnings in a boring bank! :)