What do Skype, Hotmail, Twitch, Tesla, SpaceX and Bitcoin have in common?
A lot of the early “investors” in Bitcoin found it through a well-timed Silk Road drug habit, or because they were looking for a way to stick it to the man, hide assets in a divorce, evade taxes or just putter around with an interesting type of internet money to see how it worked.
But among them were some people actually investing.
Venture Capitalist Tim Draper was one of the investors.
Bitcoin may have been one of his most lucrative investments, but the reasons he first bought into it are actually quite similar to many of his other most successful investments, Draper said to Crypto Finder.
The “other” category
“A lot of venture capitalists talk about all the risks that can happen to a business,” Draper says. “I don’t really do that.”
“I say if this succeeds, how big is it? How much do people care about this? Is it something that does a lot of good for society and builds a great business around it, or is it something that’s sort of ‘meh, no one really cares,’ so even if it’s successful it’s going to be another whatever, social network or whatever”
“I’m looking for those things that are really out there, a little maybe odd; things I’ve never thought of… those are the extraordinary entrepreneurs I’m looking for. If you go through all the data from the 30+ years I’ve been in the venture business, you find out that the category that has made the most money was the category we called ‘other.'”
Bitcoin definitely falls into the ‘other’ category.
Another thing it had in common with all of Draper’s best investments, he says, is that it came as something of a surprise.
“All the best ones were a surprise” Draper said.
“You know Hotmail? They came to us with an entirely different business, then they changed their business to free web-based email. It was the first thing anyone had really given away for free anywhere. They said ‘well, it’s so cheap why don’t we give it away for free and make up on…