David Rosenthal: belief

Transcript context

…Why is it that in less than two years, Benchmark's stake grew 100,000%? Why did eBay appreciate so quickly? To put a finer point on that, they invested at a $20 million pre-money valuation. By the next spring, the company was worth $21 billion. I think there are a few things. The simple answer to that question is, the world and the financial markets woke up to the power of the Internet, and what heretofore was a secret hiding in plain sight right in front of everybody's faces that like, hey, the Internet is this incredible enabling technology, and you can build real businesses that make real money on the Internet, was not something that most people believed until then. Now, other people in Silicon Valley did, of course, believe that, Kleiner Perkins being chief among them. But there was another non-consensus from a Silicon Valley perspective aspect to the eBay deal that Benchmark was willing to see and exploit that nobody else did, which was that the external facing aspects of this company did not look anything like the kind of companies that Silicon Valley backed. But if you just looked at the numbers, it was working. This was already working. The outward factors made it look like there was a ton of risk investing in this business, but it was already de-risked. It was already working. From the outside, it looked like this UI sucks, no one will ever use this, and also, it's not a real business of people selling Beanie Babies. They were getting laughed at, so a super non-consensus from that perspective. Sidebar, the first business enterprise that I ever did in my entire life was selling Beanie Babies on eBay.…

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