I funded Coinbase in 2012. Making 6000x on my best startup investment yet | Summary and Q&A

TL;DR

This is the story of an investor's $300,000 investment in Coinbase that is now worth over $2.4 billion, highlighting the importance of being contrarian, a builder, and sending compelling emails.

Key Insights

• 🗯️ Coinbase's success highlights the importance of being contrarian and right, finding fringe ideas that have long-term potential.
• 🍧 Being a builder and having the ability to do things yourself increases your chances of success and attracting investors.
• 💌 Sending a compelling email can capture the attention of potential investors, showing seriousness and usefulness of the product.
• ❓ Prior experience and knowledge in the industry can significantly influence investment decisions.
• 😮 The rise of Bitcoin and the success of Coinbase challenges traditional notions of currency and showcases the power of cryptocurrency.
• 🗯️ The investor's missed opportunity in a $40 billion company serves as a reminder of the importance of making the right investment choices.
• 🖐️ Y Combinator, an early supporter of Coinbase, played a pivotal role in its success.

Transcript

Read and summarize the transcript of this video on Glasp Reader (beta).

Questions & Answers

Q: What was the initial idea behind Coinbase?

Coinbase started with the simple idea of creating a clean and easy-to-use platform for people to buy and hold Bitcoin.

Q: Why did the investor believe in Coinbase when others were skeptical about Bitcoin?

The investor had prior experience with the difficult process of buying Bitcoin and believed in the potential downfall of fiat currencies. They were also impressed by the founder's background as a builder.

Q: What advice did the investor give about finding co-founders?

The investor emphasized the importance of showing potential co-founders why the startup could be bigger and more successful than their current endeavors. It's about transferring belief in the market and product.

Q: Why did the investor decide to invest in Coinbase despite Bitcoin being a fringe idea?

The investor saw the potential in being contrarian and believed that every crazy idea will have its day. They also had a deep understanding of the history and principles behind Bitcoin.

Summary

In this video, the speaker shares their experience of investing in Coinbase eight years ago, which turned out to be a highly successful investment. They also reflect on a missed opportunity to be a co-founding engineer at another company. The speaker discusses the early days of Coinbase, including receiving 0.05 bitcoin from Brian Armstrong and providing advice on finding co-founders. They highlight the skepticism surrounding bitcoin at the time and explain their reasons for investing in Coinbase. The speaker emphasizes the importance of being contrarian, being a builder, and sending compelling emails. They express gratitude for the chance to fund Coinbase and hope to inspire and assist others in creating successful businesses.

Questions & Answers

Q: How much did the speaker invest in Coinbase, and what is the current value of the shares?

The speaker invested $300,000 in Coinbase eight years ago, and the shares are now worth over $2.4 billion.

Q: How much is Coinbase currently valued at?

Coinbase is currently valued at more than $100 billion.

Q: What was the original name of Coinbase, and when did the speaker receive bitcoin from Brian Armstrong?

The original name of Coinbase was Bitbank, and the speaker received 0.05 bitcoin from Brian Armstrong in March 2012.

Q: What was the market cap of bitcoin in 2012 and what is it now?

In 2012, the market cap of bitcoin was under a billion dollars. Today, it is over a trillion dollars.

Q: What advice did the speaker provide to Brian Armstrong about finding co-founders?

The speaker advised Brian that the hardest part about finding co-founders is often knowing the right people who might be doing other things. It is essential to convince them why the opportunity is bigger than what they are currently involved in and transfer one's belief in the market and product to them.

Q: How did the speaker become familiar with bitcoin in the early days?

The speaker first learned about bitcoin on Hacker News, and they mention that it was a fringe idea at the time. Most people had little understanding or belief in bitcoin's usefulness.

Q: Why did the speaker decide to invest in Coinbase when most people said no to bitcoin?

The speaker had firsthand experience of the poor user experience and difficulties in buying bitcoin, which made them realize the need for a better solution. Additionally, their understanding of fiat currency and its potential failure, coupled with their belief in Bitcoin, led them to invest in Coinbase.

Q: What made the speaker impressed with Brian Armstrong and his ability to build Coinbase?

The speaker was impressed by Brian's role as the head of anti-fraud at Airbnb, a billion-dollar startup. This position required dealing with hackers daily, which demonstrated Brian's skills and determination. The speaker recognized that it took a special kind of builder to walk away from such an opportunity and create their vision of the future.

Q: What are the key lessons from the Coinbase story?

The key lessons are to be contrarian and right, finding something fringe but ultimately correct, to become a builder and do as much as possible yourself, and to send compelling emails that demonstrate seriousness and usefulness.

Q: What does the speaker hope to achieve with their videos?

The speaker hopes to inspire and assist others in creating successful businesses. They believe there are many businesses that need to be created and hope their videos can help make that happen.

Takeaways

The speaker's investment in Coinbase turned out to be highly successful, showcasing the importance of being contrarian and having a deep understanding of a market or idea. Being a builder and taking the initiative to do things yourself can increase the chances of success and attract funding and support. Finally, the power of sending a compelling email cannot be underestimated, as it can grab attention and demonstrate the seriousness and usefulness of a product or service. Overall, the speaker encourages viewers to pursue their ideas and create businesses that can make an impact.

Summary & Key Takeaways

• Eight years ago, the investor met the founder of Coinbase and invested $300,000, which is now valued at over $2.4 billion.

• Coinbase, now valued at over $100 billion, started with the idea of creating a user-friendly platform for buying and holding Bitcoin.

• The investor passed on a co-founding engineering opportunity at another company worth $40 billion, but believes saying yes to Coinbase was the best decision.