3 votes

Bitcoin: Return and Ridicule

Stumbled on this article today, and want to share it here as quote of the day:

"you can only make money by being right about something that most people think is wrong"

The article reminds me of Ron Paul's constant reminder to us that if we are not having fun in the Revolution we are not doing it right! :)

I would add, if you cannot make/save money while DESTROYING the system we all hate so much, mainly the FED and it's buddies, then it simply cannot be maximally FUN!

So without further ado, here is a great little article by Fred Wilson:

http://www.businessinsider.com/return-and-ridicule-2013-4?go...

I am going down to Princeton today to talk to Ed Zschau's class on entrepreneurship today. Ed asked me what I wanted to talk about. I told him "return and ridicule".
I have found that return and ridicule are highly correlated over the years. We have made more money on things that were highly ridiculed than on any other cohort. When I see people laughing at ideas and companies we have backed, I smile. It means we are going to make a lot of money on that investment.
I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can't make money by being wrong. And you can't make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.
The same logic applies to starting companies. If you start a company in a market everyone knows is going to be big, then you will have a ton of competition. If, however, you start a company in a market everyone is laughing at, you won't have too many competitors.
This notion also plays into Clayton Christensen's framework for disruptive innovation. Many of the most disruptive technologies started out as what Clay calls "toys". The PC is a great example of that. PCs came out of the homebrew computer movement. Geeks were building computers in their garages. And everyone thought they were nuts. But from that came the Apple Computer and the IBM PC and we were off to the races with personal computers.
Chris Dixon has a great post about hobbyists. He likes to look at what the next homebrew computer club type activities are these days. When I saw Chris yesterday he was talking about drones and asteroids. I laughed. He grinned ear to ear. Chris knows that it's good to be ridiculed.
So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illquid investments. That is a recipe for disaster. Momentum investing works in highly liquid markets (sometimes). From what I can tell, it almost never works in private markets.
Better to invest in laughing stocks. Becuase she who laugh lasts, laughs best.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Bitcoin rides waves of uncertainty in the market.

As long as there is turmoil in the market people will seek out more secure places to store wealth, such as gold, bitcoin, or whatever form best suits their needs.

Jen had known associations with pandas in college.

Vote for Sue. It's the right thing to do.

Don't worry. Bitcoin is a fad.

Don't worry. Bitcoin is a fad.

...just like the internet...

*snicker*

You can make $$ in Bitcoin like you can in any stock

Propped up by suckers and leeched on by The real vampires

Great subject to your comment!

Troy, thanks for the great one-liner in your comment's subject... I missed the point in the body though...

I would argue that many of the people "propping" up the Bitcoin system, both technically, and intellectually in debates and educational articles are people with great skills and insight.

Some of them will be speaking at the 2013 Bitcoin conference:

http://www.bitcoin2013.com/bitcoin-2013-panelists.html

Can you perhaps point to the "suckers" and "Vampires" you speak of?

Then we could have an actual debate/discussion on the topic.

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]