That's all very interesting. I wish I had more experience to be better able to judge whether my thoughts hold water. I'll be interested to talk to you further about all this… the 2nd & 3rd paragraphs above are great (though I had to go look up what a Thunder Lizard is). I think this is the first time I've seen some of what I think acknowleged as being an explicit part of an investment thesis: 1) that you can't put your finger on value, and 2) that you should invest in passion. I know it'll never be that simple, but to have those two as more-or-less guiding principles is, I think, sensible. The whole argument is that if you don't, the abnormal distributions wont follow.

Thanks for taking the time. I find all this fascinating.

I think he was really onto something, as are you in this post. If we knew what it looked like (ie the big winners) all of this would be a no-brainer. I started in VC working for Bill Hambrecht at H&Q VC in San Francisco. My first week on the job he said to me that — in the 20 years he had been investing in technology companies (about 400 of them) — he had come to realize that, as often as not, his biggest winners initially looked like they would fail, and those he was sure had the most promise, did fail.

This business isn't about following trends (or herds), but it's also not about hunting “Thunder Lizzards'. It's about investing in people that are passionate about transforming something, changing it, doing something better than it has ever been done before. Back those often enough, and abnormal distributions will follow.

That's all very interesting. I wish I had more experience to be better able to judge whether my thoughts hold water. I'll be interested to talk to you further about all this… the 2nd & 3rd paragraphs above are great (though I had to go look up what a Thunder Lizard is). I think this is the first time I've seen some of what I think acknowleged as being an explicit part of an investment thesis: 1) that you can't put your finger on value, and 2) that you should invest in passion. I know it'll never be that simple, but to have those two as more-or-less guiding principles is, I think, sensible. The whole argument is that if you don't, the abnormal distributions wont follow.

Thanks for taking the time. I find all this fascinating.

I think he was really onto something, as are you in this post. If we knew what it looked like (ie the big winners) all of this would be a no-brainer. I started in VC working for Bill Hambrecht at H&Q VC in San Francisco. My first week on the job he said to me that — in the 20 years he had been investing in technology companies (about 400 of them) — he had come to realize that, as often as not, his biggest winners initially looked like they would fail, and those he was sure had the most promise, did fail.

This business isn't about following trends (or herds), but it's also not about hunting “Thunder Lizzards'. It's about investing in people that are passionate about transforming something, changing it, doing something better than it has ever been done before. Back those often enough, and abnormal distributions will follow.

I specifically enjoyed the fact that Larry and Sergei had no idea what their concept was worth. The idea probably was probably worth less than one million at that time. The implementation and monetization has been of course, PRICELESS.

Hi, I just found this post and this blog from the business leaders at another blog, Anyway, WOW, is all I have to say, That was a really good article and I needed to read that.

The article really hit home with me, Thanks !

Joseph

That’s great, thanks. And thanks for reading the other posts too, I just read your two other comments.

Terry

Wow… thank you. What a nice way to wake up! Irreverent is the best praise. I’m glad that comes through, I spend most of my time thinking silly things and making stupid jokes that no-one understands…

Thanks again,
Terry

Dan Hodgins
Vancouver Canada
Second-time entrepreneur and recent university graduate

Thanks! :-)

Terry

Thanks – that’s interesting. And thanks too for taking the time to comment!

Terry

It remids me of an interview I saw with Larry David, co-founder of Seinfeld. This was well after Seinfeld (think Altavista) was the massive success.

Larry said that when he started writing his new series (think Google) he had no idea it would work (think Google trying to sell for $1 mill). It was format different enough to be risky.

I thought – wow, if a guy with so much trak record under his belt still feels all the risk, the risk never does go away.

The series (curb your enthusiasm) of course was a success.

Regards,
Kevin – Sydney Australia

http://www.fluidinfo.com/terry/2007/11/02/powerset-hampered-by-limited-resources-oh-please/

I’m not sure if I understand you. Regarding Google, I’m only saying that at some early point no-one, including the founders, could see anything like the true value in what they were building. I certainly agree that it required multiple things to happen, as you list, before the potential value began to be apparent. But I wasn’t trying to describe the kinds of things that are necessary for the value to be recognizable to VCs.

In any case, thanks for commenting, and thanks for your encouragement and support. You were right about Eric! :-) But that would have been too early and the wrong path for me. Hopefully I’ll get there one day too.

Terry