Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
"Dave, thank you very much for your review of lessons learned these past 10 years and thanks to everyone for attending tonight and sharing this milestone accomplishment with us. Particularly want to thank Rocio Melgar and Melissa Welch for all of their hard work and energy in putting this event together.
Before I dive into my “Where Will be in 2019 predictions, I would like to share a couple of stories with you. First one about a very, very famous and successful entrepreneur and angel investor and secondly, the story of how I got involved with Growthink.
As many of you know, Jeff Bezos was one of the early investors in Google. Yes, that Jeff Bezos. Founder of Amazon.com. #33 on last year’s Forbes’ 400 with a net worth of over $8.7 billion.
Here is the backdrop:
In 1998 when Google’s offices were a Menlo Park, California garage - Bezos invested $250,000 of personal funds into the fledgling search engine.
When Google went public in 2004, that $250,000 investment translated into 3.3 million shares of Google stock. And a stock share position worth over $280 million!
While he does not disclose how many of those shares he still holds, at the current price of Google stock they would represent an investment position of over $1.5 billion.
So why did Bezos invest in Google? In his words, “…There was no business plan…They had a vision. It was a customer-focused point of view.” And he adds, “I just fell in love with Larry and Sergey.”
So, now my story. Before business school and before Growthink I owned an ice cream business on Cape Cod in Massachusetts. It was a very nice life. I worked 4-5 months out of the year, lived in a beautiful place (Cape Cod), and did work that was heck a lot of fun. At age 30, I was all set. I had a business, a car, a house, and a girlfriend.
But then, in the summer of 1999, my MBA classmate Dave Lavinsky called me with this idea for a company at the height of the Internet boom. If I just worked with him for a few short months, we would be able to aggregate positions in a bunch of rocket ship gazelle companies – soon to be know as “the next Googles.”
Seemed like a great deal, So, I sold the business, the car, the house, broke up with the girlfriend, packed my bags and headed, Jed Clampett-style – not to Beverly Hills, but to Venice to start Growthink with Dave.
And here I am, 10 years later. With an amazing wife and 2 beautiful children!
And timeless truths remain:
First of All, Think Long Term. Even though Google has been the fastest growth company in the history of capitalism, it was still SIX YEARS from Bezo’s original investment in the company to liquidity. Overnight entrepreneurial successes simply do not exist. While certainly all of us would have liked to have had a Google in our lives by now, as Saint Augustine once said, Patience is the companion of wisdom.
Secondly, Get in Early. Sure, it would have been great to get into Google in 2004 at its IPO price of $85/share, as the shares are up over 500% since then. But Bezos, after adjusting for stock splits, got in at EIGHT CENTS PER SHARE!
The beauty and the allure of entrepreneurship is the opportunity to be a part of something VERY, VERY big very, very early. This is how great fortunes are made.
Third, Invest in People. At the time of Bezo’s investment, there were a large number of very well-funded and successful search engines already on the market. Remember this was 1998 not 1994. Yahoo, Alta Vista, Lycos, Excite, Infoseek to name just a few.
But Bezos was attracted to Page and Brin as people, as technologists, as leaders.
Lesson – we overcomplicate business. Great, talented leaders drive and build businesses. Everything else is secondary.
Fourth, Take Your Shot. For every Jeff Bezos who invested in Google, there are stories of dozens that were presented with the opportunity that did not.
This of course does not mean that the probability of having a Google-like success is anything but very low, but it does mean that it is far greater than the ZERO percent likelihood of success of those that don’t swing the bat.
And Finally, Get Lucky. As hard as it is for many to accept, having fantastic, great luck is a key variable in success.
Success IS assured with thoughtful, disciplined, day-in, day-out hard work. And with hard work as the given, magical success sometimes blooms.
And in the spirit of great luck, let me make my 2019 predictions:
PROBABILITY of 100% - On October 22nd, 2019, if Jay Turo is still of this earth and of animate form, he will be 51 years old.
His 2 sons, Jay Jay and Teddy, now 3 and 2, will be entering their teenage years. Dave Lavinsky’s son Max, whose conception at that particular time and place in 1999 was the magically unpredictable act that led to the founding of Growthink, will be entering his senior year in college.
Growthinker Tristan Sigerson, who started as an intern from UCLA and whose youthful cheer and spirit lifts us daily, will be 36.
Growthinker Jeff Jones, our VP of Business Development, who loves to flaunt his youth and athleticism at us 40-somethings, will be 40 himself.
Only my mother, who traveled here from West Boylston, Massachusetts to be with us tonight, will fight this trend, as she will still be celebrating, as she has for as long as I can remember, her 39th birthday.
Let’s all take a short pause here and reflect on how old YOU will be in 10 years. Does it impart you with a sense of urgency? Of dread? Of disbelief?
PROBABILITY of 90% - The NASDAQ and Dow will be trading at, respectively, above 10,000 and above 30,000.
Why – really quite simple – even getting to those levels will mean a return of less than 5% annually from 1999 to 2019. It points to how poorly the investment markets have performed in the last 10 years. The NASDAQ in particular has performed terribly, down almost 50% from where it was 10 years ago.
In short, all of us in the worlds of technology and entrepreneurship must have a deep and abiding FAITH that in the next 10 years all of the amazing technological progress we have seen and are sure to see more of will result in investment return.
PROBABILITY of 90% - The Fear of the Rise of China Will Be a Thing of the Past – America Will Still Lead the World.
Are you as tired of me as hearing about how China will catch the United States and then surpass it? There is very, very little chance that a society with no free press, with a monolithic educational system, with a totalitarian government, will EVER lead the modern world.
Lest we forget – we live in the information age. This is the age of software. All GREAT software companies – have you noticed – are AMERICAN companies? This is not by accident. Our freedom-loving, creative society is BUILT to birth great technology and great idea companies. Sure, America has problems, but compared to the problems and limitations of every other country and society in the world, we are still by far the most likely place for the companies and ideas that will shape the 21st century to be born and to grow.
PROBABILITY of 90% - The Cloud, The Cloud, The Cloud
Following up on the above, cloud computing will transition from not just being a business model or a business sector, but will become business itself. Even today there really isn’t such a thing as a technology company and a non-technology company – it is a 20th century legacy misnomer. Everything is technology and soon all of it will be run on the ether.
And we will interact with it with via devices and implants and virtual reality machines that today we can only imagine.
PROBABILITY of 100% - Growthink will be a publicly traded company and will have a market capitalization of greater than $1 billion.*
Let me put this bravado in perspective – as a grizzled consultant, as an MBA, as a risk-taker that has been well-trained to see sell all sides of the story, I am very much aware of the challenges and the probabilities.
But as a CEO, as an entrepreneur, I know the power of faith and commitment, that positive momentum is simply force positively applied. Quite simply, by sticking to our original principles – thinking long term, getting in early with charismatic and dynamic entrepreneurs, taking a LOT of shots, and being open to magic in our lives and our professional endeavors, success is assured.
Thank you, enjoy the rest of your evening, and see you in 2019!"
*Do note that as much as all of us would like it to be this is not an investment guarantee. It is, however, a statement of great confidence in the Growthink business model, in our team, and in our growth prospects.