馃攳
I funded Coinbase in 2012. Making 6000x on my best startup investment yet - YouTube
Channel: Garry Tan
[0]
eight years ago i met a founder and
[2]
invested three hundred thousand dollars
[4]
into his company
[5]
those shares are now worth over 2.4
[8]
billion dollars that company was
[11]
coinbase which investors have now valued
[13]
at more than a hundred billion dollars
[15]
it's the best investment i've ever made
[17]
you might have heard
[18]
of my 200 million dollar mistake i said
[21]
no to being a co-founding engineer
[23]
at a 40 billion dollar company don't
[25]
feel too bad for me
[27]
i did say yes to being one of the first
[29]
checks in a 100 billion dollar startup
[32]
silicon valley is crazy this is my story
[36]
of my two billion dollar success let's
[39]
get into it
[50]
coinbase is now worth a reported 100
[53]
billion dollars
[54]
or more on the secondary markets by the
[57]
time you're watching this
[58]
who knows where the price will be in
[60]
march of 2012
[61]
brian armstrong sent me 0.05 bitcoin
[64]
using his new startup called bitbank
[66]
his idea was pretty simple make a clean
[69]
well-lit place for people to buy and
[71]
hold bitcoin
[72]
while a lot of startups pivot the idea
[74]
stayed the same
[75]
this whole time for them the only thing
[77]
that really changed was bitbank ended up
[79]
changing their name
[80]
to coinbase when it got that .05 bitcoin
[83]
in 2012
[84]
bitcoin's total market cap was under a
[87]
billion dollars
[88]
today bitcoin's market cap is over a
[91]
trillion dollars
[92]
that fraction of a bitcoin was worth
[94]
about two cents then
[96]
today it's worth about 2500 bucks a
[99]
moment later
[100]
right after i got that .05 bitcoin i got
[103]
an email from brian
[105]
he had built this prototype and got it
[107]
online he had been coding like crazy the
[109]
past few weeks
[110]
he asked do you have any tips on finding
[112]
co-founders and do you know anyone from
[114]
your community who might be interested
[116]
it's funny to think back on that because
[119]
anyone who would have joined back then
[121]
would be a multi-billionaire today
[123]
here's what i wrote back
[125]
the hardest part about finding
[127]
co-founders is you probably already know
[129]
the right people
[130]
but they might be doing other things
[132]
you've got to show these people
[134]
why this could be or already is much
[137]
bigger than
[138]
anything that they're doing right now
[140]
it's about transferring your belief
[142]
in this market and this product to
[144]
others you already know your future
[147]
co-founder
[148]
but you both just don't know it yet and
[151]
right about that time i was reading
[152]
thousands of yc
[153]
applications for the summer 2012 batch
[157]
i remember brian and i had voted
[159]
infinity in the application review
[161]
system paul graham built
[162]
that click of a mouse guaranteed an
[164]
interview at y combinator for them
[166]
honestly i'm really thankful that i was
[169]
a really small
[170]
part of something that was a pivotal
[172]
moment for coinbase and honestly y
[174]
combinator
[175]
even if brian didn't have a co-founder
[177]
just yet
[178]
you've got to remember even in 2012
[180]
bitcoin was a very fringe idea still
[183]
brian was a solo founder building on
[184]
something brand new
[186]
at the time basically no one i mean no
[189]
one
[189]
believed in bitcoin i found out about
[191]
bitcoin originally on hacker news
[193]
here was the very first mention of it on
[195]
that website in 2009
[198]
if you read those comments they sum up
[200]
how most people thought of it
[202]
not likely cool maybe it's useful
[205]
or i just don't get it that is what
[209]
made brian so impressive today it feels
[212]
like bitcoin is much more well known
[214]
but at that moment very few people had
[216]
any understanding of it
[218]
let alone believe that it could be
[220]
useful to society
[222]
as hard as it was for a founder to
[224]
believe it was even harder for
[226]
investors to believe most people said no
[229]
but i didn't this investment is likely
[232]
to be one of the best calls i've ever
[234]
made and maybe ever
[235]
will make here are the reasons why i
[237]
said yes when most people said no
[239]
first i was primed for the problem i
[242]
knew
[243]
how hard and terrible the experience was
[245]
to buy bitcoin already
[247]
after i read about it on hacker news i
[249]
tried to buy it on the first website you
[251]
probably could buy it on
[252]
which was mount gox it was a terrible
[255]
experience
[255]
and while bitcoin had captured my
[257]
attention it was that
[259]
bad design and horrible user experience
[261]
that felt so wrong
[263]
and i knew that that couldn't be the
[265]
thing that brought bitcoin
[267]
all the way next i was primed for the
[269]
idea
[270]
i believe that fiat currencies might
[273]
fail
[274]
because in 2005 i had also been an
[276]
engineer working on software for peter
[278]
deals hedge fund
[279]
clarium capital management one of the
[282]
books they made us all read to train up
[283]
for the role was the dollar crisis by
[286]
richard duncan
[287]
that book had primed me for the madness
[289]
that happened in 1971.
[291]
that was the year that richard nixon
[293]
took the united states off the gold
[295]
standard
[295]
you can no longer trade your dollars for
[298]
gold at that time
[300]
dollars which were already the reserve
[302]
currency of all other central banks
[304]
suddenly became a fiat currency
[306]
printable
[307]
at will 25 of all dollars in circulation
[311]
today
[312]
were printed just in the last year in
[315]
2020
[316]
thus bitcoin as louis pasteur once said
[320]
chance only favors the prepared mind i
[323]
feel
[324]
very lucky to have been prepared for
[325]
this idea when it came
[327]
finally brian was a builder and
[330]
personally i love funding builders
[332]
it was very powerful for brian to be
[335]
able to build that first version of
[337]
coinbase
[338]
and secure it himself with physical
[341]
banks you protect
[342]
physical money with physical bullets but
[344]
with internet money
[346]
you protect it with great software
[347]
engineering and secure systems
[350]
we knew brian was an engineer and head
[352]
of anti-fraud at airbnb
[355]
which itself had just reached
[357]
billion-dollar startup status
[359]
and we knew anti-fraud at airbnb was
[362]
actually like being part of the special
[363]
forces
[364]
i just knew that brian had been put
[366]
through the paces by hackers
[368]
daily it takes that kind of builder to
[371]
walk away from that kind of opportunity
[373]
to show you what the real future will be
[376]
that's what brian did for me here are
[379]
the key lessons
[380]
for you from the coinbase story first be
[383]
contrarian
[384]
and right can you find something that is
[386]
fringe but
[387]
ultimately right is there something from
[389]
history or psychology or
[391]
first principles bottom-up thinking that
[393]
can help you justify your crazy idea and
[396]
why it's going to take the world by
[397]
storm
[398]
sooner or later every crazy idea will
[401]
have its day
[402]
but only if it has a truly compelling
[405]
pitch
[406]
second be a builder the more you can do
[409]
the less you leave to chance and the
[411]
more people will want to fund you
[413]
join you or use your product or service
[415]
do those things yourself
[417]
to the extent you can i made a whole
[419]
video about this called roll your way to
[421]
a startup unicorn
[422]
link in the description to check that
[424]
out finally
[426]
it's clear how powerful and useful it is
[428]
for founders to be able to send
[430]
a super compelling email remember
[433]
when brian sent me .05 bitcoin
[437]
it was worth only 23 cents but he
[439]
literally sent me free money
[441]
it got my attention and it showed me
[443]
brian was serious about building
[445]
something genuinely useful that i could
[447]
use
[448]
in the end i was incredibly lucky that i
[450]
got that email
[451]
i got to meet brian and that i had the
[454]
chance of
[455]
funding this company for that i am so
[458]
thankful i'm also really thankful for
[460]
all of you watching right now
[462]
there are so many businesses that need
[465]
to be created and the reason why i'm
[466]
putting these videos together
[468]
is to help make that happen i hope these
[470]
videos are helpful to you
[471]
and i hope you'll take a moment to click
[473]
subscribe and hit the bell icon to get
[475]
notifications for
[477]
whenever i post be well and i'll see you
[480]
next week
[498]
[Music]
[503]
you
Most Recent Videos:
You can go back to the homepage right here: Homepage