Thread by @jspeiser

How 1 mistake cost me $200,000,000

And 2 takeaways preventing a repeat in the future

A 🧵...

It was 2008, and my ad-tech company was at the peak of its’ success.

Things were going great and my partner and I were invited to a private entrepreneur retreat called the Summit.

1/15

The Summit Series had just launched by 4 guys, @bis, Jeff Rosenthal, @brettleve and @RyanBegelman, and was in its early stages.

They needed a few dozen young founders to fill out one of their first events in Mexico.

2/15

Tony Hseih, RIP (Zappos), @gc (Uber), @tferriss (5-hour workweek), @JamieSiminoff (Ring), @lessin (FB, Slow Partners), and a handful of other awesome people flew down.

3/15

We spent the days mingling, and exchanging ideas, management techniques, and VC/PE raising tips. It was a great way to get new perspectives and ideas from other founders going through similar things.

4/15

The first night there, I sat next to Garrett Camp at dinner, at the time he was running StumbleUpon, a website that randomly served up new sites for you to visit (he sold it to eBay for $75m and then bought it back years later for $0)

5/15

At dinner, he shared his pitch for a new company he was incubating called Ubercab, at a valuation of around $5m. His idea was a way for rich dudes to get limos/town cars on demand,

6/15

of course at the time most of us were using Blackberries, so the software was clunky, GPS inaccurate, and he had no drivers signed on yet, nor any app downloads. Classic chicken/egg dilemma.

7/15

He thought the total addressable market size at the time was $4b, and best case Ubercab could take a piece of it. Worst case Ubercab remained a small 10 car service for a 100 clients in San Fran.

8/15

I struggled with how big a startup this could become, not just because of the chicken/egg issue, but how many rich dudes were actually going to use this instead of their limo guy or a cab. It seemed super niche.

9/15

What I didn’t account for was Garret’s ability to attract incredible talent. Recruiting @travisk was critical, as without an insanely perseverant leader, Uber never would have pushed the boundaries so far.

+ their ability to expand the TAM to almost $400b!

10/15

Now, my typical angel investment with my biz partner Alex, was $50,000 back then, which would have yielded $200M+.

Pretty amazing, and sickening at the same time. 🤢

11/15

The takeaway:

It was a hard lesson on why you always bet on the jockey and not the horse with startups, because as Steve Jobs said “ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.”

and in this case billions.

12/15

FFWD 13 years later, when @theSamParr and I make our angel investments, we spend more time on understanding the founder, his/her passions, motivation, experience and network, than the current idea being presented.

13/15

Companies pivot, get attacked, hit brick walls, and evolve, sometimes drastically, but the founder is the only constant through it all. Betting on the right one makes all the difference in your investment outcome.

14/15

Bonus takeaway: since angel investing has so much asymmetric upside, always fund your friends, colleagues, and close network in which you truly believe. You never know where the next @Airbnb, @Hubspot, @Doordash, may be lurking.

15/15

if you liked this thread, and want more stories about startups, making and losing millions, real estate and more

like it, and follow me here: @jspeiser