Back in 2011, Marc Andreessen famously wrote that “Software is eating the world.” This thesis has helped Andreessen Horowitz become one of the largest and best performing venture capital firms in the country. It’s hard to say that anything has changed in the past seven and half years to rebut this idea.

I wrote a few years later that “software is eating investment management.” Zero-fee index mutual funds, negative fee ETFs and $30 a month financial planning all point toward this thesis playing out as well.

Software can do a great many things. I would argue that the one thing that software has proven best at is helping create markets. The vast majority of financial market transactions today take place electronically. One of the first great Internet companies was eBay, which by definition, is a marketplaces. Amazon, the world’s second largest company by market cap, went from being a online retailer of books into essentially a giant marketplace filled with all manner of sellers (and buyers).

If one were to look at the current batch of so-called Unicorns, many of them are in one way or another, in the business of matching buyers and sellers. Uber (and Lyft) bring together passengers and drivers. Airbnb brings together people with space to rent and travelers. Postmates and Instacart match delivery people with the food you order. I think you get the idea.

Bringing together buyers and sellers is ideally suited to software. That is why we are seeing markets being developed in assets, using the term loosely, that were previously opaque and expensive to transact in. An article in the Economist talks about how the world of wine investment has become increasingly institutionalized:

In tandem, the wine-investment world has developed an infrastructure that echoes other financial markets. It now has its own exchanges, like Liv-ex or Cav-ex, offering instant quotes, indexes and settlement services. Various firms specialise in managing wine investors’ cellars, often referred to as “portfolios”. Brokers help buyers find the rarest stocks. Asset managers now offer to “educate” neophytes by providing tailored advice.

We are seeing this occur in other areas that one would previously described as being collectables but are now being described by their backers as alternative asset classes. I am sure I am missing some but this would include sneakers, trading cards and even classic cars. Interestingly maybe the biggest market, or the one with the highest price tags, art still remains largely untouched by online marketplaces.

Just because a marketplace gets established does not mean it will work out. Peer-to-peer lending came upon us with a great deal of hype and hope. I think most would agree that the P2P lending experience as been a disappointment. The same is likely true of equity crowdfunding as well. We still haven’t seen a major company jump out of the pack.

Software is enabling us to interact with so more people, in so many different ways, thta sometimes you have to just pause and say wow. The establishment of these new, novel marketplaces is a perfect example of this. Investors however need to take a big step back. Just because you CAN invest in something, where we use the term ‘invest’ loosely, doesn’t mean you SHOULD. The more ways there are to invest, the more important it is to know what you own.