The headline here is they made the investment. So it's not like they passed. They made the investment and their best case scenario they wrote was 400 million as an exit value. 400 million and now it's 140 billion.
Let me tell you about something that I've been thinking about and I thought it was really cool. And our friend Shiel just shares the best stuff. The most interesting man on X, the most interesting man I know actually. He does a lot of amazing stuff, but he shared something, so I got to give him credit. But basically I saw this Jeff Bezos quote and I want to know what you think about it. And he said something where he said, I think it's generally human nature to overestimate risk and underestimate opportunity. And then he went on to say, and so I think entrepreneurs in general would be well advised to try and bias against that. The risks are probably not as big as you perceive, the opportunities may be a lot bigger than you perceive. And so the interviewer was like, 'You seem really confident.' And he goes, 'Well, you call it confidence, but maybe I'm just accepting that human bias and I'm trying to compensate against it.' And I thought this was interesting.
I've been thinking about this. I saw this like weeks and weeks ago. And every time I've been thinking, I'm like, there's so many businesses or opportunities that I see where I'm like, I can't believe that that thing is that big. And I myself fight this as well. And where I think, this thing can't be that big. You know, I think I've said this multiple times for different products that I said that will never work. And it becomes huge. And even Jeff Bezos, by the way, he fell victim to this. There's this one quote where he was like driving packages. He says, 'When I was driving packages to the post office myself and taping up and typing up all the listings, I thought maybe if I'm lucky, maybe this can be a hundred million revenue company someday.' And so like everyone has this, but I saw this amazing thing where it was Shiel sharing a memo from Bessemer. So Bessemer is a VC. I think they're a fantastic VC, but they're a big VC. So they created this part of their website where they release old memos. And if you don't know what that is, a memo is where whoever wants to invest into a company who works at a VC, they make a memo justifying their thoughts. And then typically the partners like agree on it. They're like, 'Yeah, that was a persuasive argument. We're on board.' And so they did a cool thing where they released the memos from past deals. And they had this amazing deal or this amazing memo on Shopify. And this was when Shopify was raising $5 million at a $20 million valuation. The company was doing 5 million in revenue. And I want to show how bad Bessemer, who is a professional VC, I think they have tens of billions under management.
I want to show how bad they are at predicting stuff. So they said, these are quotes from the memo. They said in 2010, Shopify had $132 million in GMV, which would put Shopify in the top 50 online retailers. And so at the time that is how small the category was. Let's say the other numbers because that sounds like a big number, right? So they had 5,000, they had 10,000 customers total and they were doing 5 million of revenue themselves. So the 5 million of revenue, that's the company's revenue. And then all the shops on Shopify, their sales total was 132 million, right? That's GMV. Now, do you know how many customers they have now? I know that they add more than 10,000 paid customers every week. Now, I think there's multiple million customers. They have multiple million. And I believe so, the company is now worth 130 billion, I believe, at 120 billion. I believe they do something like close to a trillion dollars in GMV. So I can't even tell you what that math is. What the multiple? Yeah, they're probably doing this amount like the 132 million like every hour. Stupid. Yeah. Every hour. Yeah.
You're saying we underestimate the upside of these things. We underestimate the market size.
And the headline here is they made the investment. So it's not like they passed. They made the investment and their best case scenario they wrote was 400 million as an exit value. And so 400 million and now it's $140 billion. They said if all things work out, we think in four to six years this company could sell for $400 million and we will 20x our money. Something like that. 15x our money. Obviously that's wrong. The company's worth $130 billion. But they had all these other stats that were wrong. And in the memo, they even have updated quotes. So the person who wrote the memo will give you an update. And he wrote in the memo, he goes, 'A few months after we invested, Oracle had acquired one of Shopify's competitors for $500 million.' And I remember emailing Tobi, who's the CEO of Shopify, about how great it would be if someday maybe we can achieve that outcome, but I thought it was just a little bit too aspirational. And then he has this other line where he goes, some of the other employees and advisers at Shopify when we made our investment, they thought to themselves, you know, I think like this company at best is going to be worth around $50 million. And so the associate at Bessemer who made this deal, he goes, 'Look, Tobi, these guys are saying $50 million. Can we put something in the contract that says you are not allowed to sell the company for less than $50 million?' Because this guy was like, 'That's all it's going to be worth.' And Tobi was like, 'Dude, I'm not agreeing to anything like that, but I'll give you a handshake offer. I promise you I won't sell until at least $75 million.' And so it's just funny that this is like how small the best of the best, presumably, you know, top 1% are thinking about different opportunities that today are so obvious to us, but back then were really hard to predict.
So I have a bunch of follow-ups on this because this is a subject I've literally been thinking about. I'll tell you why I was thinking about this simultaneously. But let me first just, let's start with a little bit of humbling. So here's a list of products that I was totally wrong about. Meaning they were already working. So forget the scenario of, ah, that'll never work. But like, yeah, that's working, but that's probably small, probably niche. Okay. So here's products that I personally was wrong about over the last 15 years. Calm and all the meditation apps. My buddy Alex was doing it. He was in my peer group, who's in our mastermind group. And I was like, that's cute. You know, that's cute. Like, I hope, you know, I don't really understand what you're doing here. Maybe you'll make some money. It'll be like a job. I didn't really fully understand it. The meditation is now like, there's multiple meditation apps that are billion-dollar companies. That seemed implausible at the time. He was also really successful already. Yeah. And he, yeah, exactly. So I didn't doubt him. I thought he was awesome. And I didn't even think like it wasn't going to work. It's like, oh, it'll work. But it's just small. It just seems like too small of a market.
Okay. Other markets I thought were too small. On Snapchat, my username has the word test in it still to this day because I was like, 'Yeah, cool.' Like, but this is never going to be a thing. You know what I mean? This is just like a goofy kind of sexting thing. How big is the market for that? Another one, Airbnb. So I met the founder of Couchsurfing before I heard about Airbnb and we hung out at my office and I was like, 'Wow, Couchsurfing, what a crazy idea. Go sleep in someone else's house and they're in the extra, you know, couch or air mattress that they have.' All right, cool. So Airbnb comes out and I'm like, 'Wow, great. You're trying to be Couchsurfing. How ambitious of you?' And I think Couchsurfing topped out at like $50 million or something like that. Like maybe it was maxed at like 100 or 200 million. And you know, Airbnb today is like a hundred billion dollar company.
Dude, I read that I think in America, one out of every $30 spent on travel is on Airbnb. That's a cool stat. I like that. That's insane, right? It's insane. Absolutely insane. Yeah. In America, one minute out of every day for every entrepreneur on average is spent listening to our podcast. I bet there's like a number like that. That's true, right? Yeah. Like they said it in like one of their pitch decks, but it's just absolutely astounding that you and everyone else, me too, thought that it was just Couchsurfing, but it's just, it's not 10 times better. It's not 100 times bigger. It's 10,000 times bigger.
Uber was another one. Black Uber was like black car limos. I was like, cool, rich people in San Francisco. Who takes black cars? Small idea. I don't understand why, you know, the founder of StumbleUpon is like doing this, but okay, whatever. I guess rich guys just lose touch and they just start working on niche things that nobody, no, it's going to be too niche. Another one, Musical.ly. I remember we were at the office trying to build social products and Morgan, this guy who worked with me, he was like, 'Hey, my daughter loves making these lip-sync videos on Musical.ly.' And it was actually maybe even a different thing besides Musical.ly, but the idea of like you record yourself on video and then there's music mixed in and you're kind of lip-syncing and dancing. You make the little dance videos and I was like, 'Okay, cool, Morgan, but can we get to work now? Like we're trying to build the next big thing here and like, you know, stop distracting us with this.' And you know, has anyone ever just like showed you a briefcase full of cash and then you like accidentally kick it into the gutter? That's what we were doing. Okay, so those are things that I was totally wrong about.
Well, hold on, let me tell you one more. Alex Lieberman shared a DM that he got from the founder of Cursor. So Cursor is a company that in two years or something like that grew to $10 billion and the guy emailed Alex Lieberman asking for advice or like what I should do. It left him on read. Yeah. Left him on read. Hey, we all miss. In fact, Bessemer has a part of their website called the anti-portfolio. Have you ever seen this? No. They were the first VC I think that did this. So they created, if you go to bvp.com/anti-portfolio, it basically just says honoring the companies we missed. And it's just like Airbnb, Apple, eBay, Google, like it's all the companies they had the opportunity to invest in but passed for varying reasons. And they just like humbled themselves with this. So this is like the opposite of the, hey, let me show you our memos of how smart we were. This is like, you know, the other side of the coin. And for anybody who's like worth a damn in business, your anti-portfolio is going to be much bigger than your portfolio, which is just a bizarre situation. If you're any good and you're in the game for any like decent amount of time, your anti-portfolio is much bigger.
All right, so I've built a few companies that have made a few million dollars a year and I've built two companies that have made tens of millions of dollars a year. And so I have a little bit of experience launching, building, creating new things. And I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at, what my skill set is, is researching different ideas, different gaps in the market, and reverse engineering companies. And I didn't invent this, by the way. We had this guy, Brad Jacobs. We talked about him on the podcast. He started like four or five different publicly traded companies worth tens of billions of dollars each. He actually is the one who I learned how to do this from. And so with the team at HubSpot, we put together all of my research tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies, and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks. And so if you want to see my framework, you can check it out. The link is below in the YouTube description.
Part of this is underestimating the size of markets. And the other, there's many things here. The other part is not understanding math because 10,000 times or 1,000 times, whatever, that's actually, it's really hard to estimate. And so like to put it in really simple terms, I remember working with my financial advisor and there was like this line item for $250,000 in 18 years. And I was like, 'Griffin, what is this, man?' He goes, 'Well, that's, I just baked in like college expenses.' And I was like, 'But I'm not going to pay for all four years upfront, or are you thinking we're going to have triplets? What's the deal here?' And he was like, 'No, I just took the trailing 20-year growth rate of college education, and I assume that they're going to go to like a top 75% like cost school, and I just applied that number to the future.' And that's just what it came out to, $250,000 a year. And I was like, it's just, it's really hard to understand what like 5% growth is per year or whatever it is.
And a really good way to understand this though that I'm trying to like get beyond the math is I've been really obsessed with Thrive. So Josh Kushner, and one of the reasons why I'm into it is you hosted this event and we had the founder of Oscar come. You had Mario come and I thought he was like the most impressive, smartest guy there. And so I was like going down the rabbit hole. I'm like, 'All right, you partnered with Josh Kushner and Josh Kushner is now leading all these amazing things.' And Josh Kushner recently invested in OpenAI at a $250 billion valuation which is astoundingly expensive. That's just, that number is hard to comprehend. And someone was questioning Josh Kushner and he was like, 'What I learned was in the real estate days,' you know, his parents are real estate tycoons in New York City. He was like, 'I've learned that you can't really overspend on Park Avenue real estate.' So Park Avenue is on the Upper East Side. That's where like the Louis Vuitton store, the Tiffany store. He was like, 'There's just been so many examples where someone said in the fanciest part of New York City that this building is way too expensive. But when you buy the best, typically it's never too expensive. Like there's always going to be someone in 10 years who wants to pay more for it.' So my logic is I'm going to find the Park Avenue of startups. So OpenAI, Cursor, whatever it is, and I'm willing to spend what people think is a crazy amount of money. I don't care about the valuation because I just think that those will outperform the other ones and I've been really trying to like embrace that even though it's very challenging to like actually do that. Do you understand?
This is Michael Saylor's argument about Bitcoin. So his argument about Bitcoin is basically that of all the digital assets, Bitcoin is digital Manhattan and there's only 21 million blocks. That's the real estate. That's the land. You want to get as many of the 21 million as you can at basically any price because this is digital Manhattan and over the next hundred years that's all that's going to matter is basically like how much of that did you own, you know? Not, I shouldn't say that's all that's going to matter, but basically you don't look for the third best thing. You buy Manhattan, right? Like you don't go try to figure out what's going to be the seventh thing because it's cheaper right now. Like no, no, the move is always you buy the Manhattan thing and you just plan to hold it for over the long haul when you know it's a scarce rare asset and like that's the whole thing with crypto is like it's a scarce rare asset which is conceptually that is way easier to understand than 1,000x.
You know, like because I see Manhattan real estate, I'm like, yeah, this is like bumping, this is great. Then it goes to the next stage which is having the courage to believe that your opinion is right. And so like for example, someone like you who's in the Bitcoin or was or is in the crypto industry and you do believe in it, it's like, well, if you really believe that to be true, why aren't you borrowing every dollar you can to do it? And that is where courage comes into play and that's really hard to buy into this concept. So I say I buy into this concept conceptually but I'm not truly acting on it, at least not in a 100% type of way. There's also other factors. So for example, I have a very funny goal. My last goal on my annual goals is just, it just says avoid ruin because my life is great. And so actually like one key thing at all times is avoid ruin, like do not do extremely dangerous things, take care of my health and don't make disastrously risky financial investments that like even if I believe, even if I have conviction, even if the upside is there, I really just don't need to, I just don't need to risk ruin at any given time. I think it's the Kelly criterion, just do not risk ruin, keep yourself in the game is always important. So like you don't need to borrow every dollar even when you have conviction, right? There's like, there's, but I think that's what separates not all the best. So I don't think Buffett has ever like risked, you know, he famously has said, 'Don't risk what you have for what you don't need' or something like, or 'Don't risk what you need for what you don't want' or I forget exactly the quote, but it was like needlessly risking things.
But my brother John, who I'm visiting in Missouri, he's not into startups and he was like, 'Why do you, why are you still doing this? Like why don't, don't risk anything?' I was like, 'Well, I don't really risk anything.' But he's like, 'But do the really successful, like the Elons, risk everything?' And I was like, a lot of them I think do. I think that like there are like the 10 out of 10, the best of the best, the crazy Elons of the world, I think that when they say, 'I was sleeping on couches,' I think you don't really want to believe that because their friends are billionaires or whatever. I've been around enough of these. Yeah, it's a really nice couch. But I've been around enough of these like crazy, crazy, like 1% of the 1%, the freaks amongst the freaks. Some of them I actually do think don't avoid ruin. Correct. I just don't think that's wise.
I don't think it's, I don't think a lot of them are very wise. I think they're great achievers, but they're not necessarily, I don't think they're wise and I don't want to do that. But don't you agree with that though, that like, have you, who have some people do definitely take it to that extreme, right? Like there's levels, right? So like Buffett actually has been very concentrated at many times. I think, you know, recently had 50% of his portfolio just in Apple stock, right? So like that's a very concentrated thing and he believes in concentration but concentration is not the same thing as like, you know, risking ruin in a way. Even somebody like Elon, you know, the ruin for him isn't losing his money because he's a money-making machine, he's an achievement machine. At any given time he could have, even if he had lost it all through SpaceX and Tesla and whatever, he'd be rich again in 10 years and I think he knows that deep down too, right? So like the risk of ruin for him might be reputational, right? There's a great leaked email where OpenAI is talking about their path forward and this is like when Elon eventually got like sort of kicked out, left the project of OpenAI, right? He's a co-founder, he put the first $40 billion in, but along the way they realized they need a lot more money and the leaked email basically shows the brainstorming that they were doing. Sam Altman, Greg, and Elon. And basically Elon's idea was, so they all came to the realization, holy [__], this is like, this kind of works, but we need way more money. Like this is going to need way more money to train these models. Like we're talking $100 million plus just for a single training run. Like let alone operating the business, operating the project and paying all the salaries on.
And now it's for what? Like servers or something like that? Like literally the GPUs and the compute and the electricity to train one model and then you're not going to stop there. You're going to train a better model, right? So once they realize, [__], we need 100 million and we're a nonprofit. This is not going to really work. Who's going to just, Elon's giving us this but like, are you, Elon, are you just going to give us like billions? That's probably not going to happen, but that's where this is going. And so when they realize that, they're like, we need a way forward. So Elon's suggestion was let's make OpenAI a part of Tesla. Tesla will be the commercial machine and then we'll take some of that profits as R&D and put it into OpenAI. We'll fund it that way. Now Sam and Greg didn't like that because they're like, well yeah, but then like you control everything and we're just kind of like you little [__] and we don't really love that idea. So what if we, and they were exploring other ideas. So they had a Microsoft idea which is what they ended up doing. So he's like, 'Microsoft is really interested in giving us, you know, potentially like multi-billions of dollars and free compute, but then, you know, we'd have to work out a deal of what's in it for Microsoft.' And then Elon basically replies being like, 'Ew, like lame being a part of Microsoft.' You know, that was like in his reply basically. He's like, 'Why not Tesla?' And then Sam Altman, then there was like an email that referred to Sam has been exploring the idea of an ICO, to do a token launch and like what if we find, like it was during the crypto heyday and they're like, ah, I guess like you could just raise a ton of money for kind of nothing, like a promise, if you just do an ICO. And Elon's reply is basically like, 'I am against the ICO. It is like, I think reputationally disastrous and I will not be a part of the project if you guys pursue that path. Like I will take my name off this project because even if that would succeed, I just do not, like I don't think the risk is worth it.' And so it's interesting, right? Because like the guy is willing to risk, you know, certain things, all of his money, but not necessarily others, right? Like he, you may not all, there may be other risks.
It's weird that, well, not weird. I mean, it's just like intriguing that he thinks the ICO thing is the risky thing, but not like the political thing or not like...
Well, he did with the political initially. He was saying, 'I won't endorse a candidate and I won't be donating to them.' That was his initial stance because same thing. It's like the Michael Jordan, you know, oh, you like my opinion on this? Sorry, no comment. Republicans buy shoes, too. Yeah. And like one of the great lines in history. And so additionally, Elon did have that stance. He got pushed over the edge, you know, due to a number of factors that maybe only he can truly describe. Some people think it's because his companies were getting like overly regulated and he just was like, we can't do SpaceX and Tesla if there's this much regulation. Some people were basically pushing back on capitalism or attacking him. So like, you know, it's unclear what all the motivations were of why he decided to then throw his weight into it, but when he did, he throws all his weight into it. But he initially did not want to take that risk because it seemed unnecessary. You know, you only take as much risk as you see necessary. What's cool about Elon is once he sees it's necessary, he's willing to do it whereas most people will still dillydally or hesitate to do it, which is the gap that I was talking about. You know, it's like courage is a hard thing.
