A fantastic article in Fortune Magazine this month - "The Temptation of Facebook," talks about the early days of the social media giant.
Of most interest is the story of Mr. Peter Thiel investing $500,000 into the company in 2004, at an effective valuation of $4.9 million.
Given that the estimated market value of Facebook is now north of $20 billion - for those doing the math at home, that represents a 1,000x return - a short 6 years later, Thiel's investment surely falls into the category of one of the greatest of all time.
Now, as a passionate Black Swan acolyte, Thiel's investment does not offer us lessons, but it is chock full of wisdom nuggets, like:
1. Run With the Right Crowd. Thiel is part of the famous PayPal Mafia - former founders of PayPal and their friends that travel in the rarefied Silcon Valley air of next generation Internet ideas and technologies. Through this professional and personal networks, Thiel sees a lot of deals. Most of them are duds, but a few are world-beaters. Like Facebook, LinkedIn, YouTube, Digg, Yelp, and Six Apart.
2. Scalability is Next to Godliness. No doubt Thiel's cat-bird seat as CEO of PayPal in the late 1990's allowed him to "get" instantly the scalability power of the Facebook social media model. Yes - tt is painfully obvious in retrospect, but give credit where credit is due. Thiel acted on what he saw and felt.
Or, to paraphrase Batman, it is not who we are inside that counts, but what we do that defines us. And makes some of us rich beyond belief.
3. Get Lucky. In many ways, the new religion of our age is luck. Books like Outliers, the Black Swan, Fooled by Randomness, and the Age of the Unthinkable profess on it. Successful technocrati like the PayPal mafia toast to it. Aspiring entrepreneurs who seek their name in lights pray to it.
And the average man unwilling to step outside of his box gets none of it.
Peter Thiel, in investing in Facebook in 2004, channeled the Romans and their famous ode to luck - "Fortes Fortuna Adiuvat", "Fortune Favors the Bold."
The question, of course, is will you?
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