Return and Ridicule

I am going down to Princeton today to talk to Ed Zschau’s class on entrepreneurship today. Ed asked me what I wanted to talk about. I told him “return and ridicule”.

I have found that return and ridicule are highly correlated over the years. We have made more money on things that were highly ridiculed than on any other cohort. When I see people laughing at ideas and companies we have backed, I smile. It means we are going to make a lot of money on that investment.

I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.

The same logic applies to starting companies. If you start a company in a market everyone knows is going to be big, then you will have a ton of competition. If, however, you start a company in a market everyone is laughing at, you won’t have too many competitors.

This notion also plays into Clayton Christensen‘s framework for disruptive innovation. Many of the most disruptive technologies started out as what Clay calls “toys”. The PC is a great example of that. PCs came out of the homebrew computer movement. Geeks were building computers in their garages. And everyone thought they were nuts. But from that came the Apple Computer and the IBM PC and we were off to the races with personal computers.

Chris Dixon has a great post about hobbyists. He likes to look at what the next homebrew computer club type activities are these days. When I saw Chris yesterday he was talking about drones and asteroids. I laughed. He grinned ear to ear. Chris knows that it’s good to be ridiculed.

So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illquid investments. That is a recipe for disaster. Momentum investing works in highly liquid markets (sometimes). From what I can tell, it almost never works in private markets.

Better to invest in laughing stocks. Becuase she who laughs last, laughs best.

#VC & Technology

Comments (Archived):

  1. David Smuts

    Great commentary Fred. This reminds me of a wise quote form Ghandi:”First they ignore you, then they laugh at you, then they hate you, then they fight you, and then you win” :-)David

    1. fredwilson

      i love that quote too

    2. Mac

      Thanks, David. You just brilliantly summarized my (and many others) path to marriage. ๐Ÿ™‚

      1. David Smuts

        too funny!

      2. Aaron Klein

        My marriage was an 8 year sales cycle. We met when I was 14 and she was 12. I knew I wanted to marry her the second time we met. Took her a while longer.But it was well worth it. ๐Ÿ™‚

        1. fredwilson

          Oh man. That’s great stuff.

        2. takingpitches

          Cute story. Sounds like you both won!

          1. Aaron Klein

            I know I did. ๐Ÿ˜‰

        3. ShanaC

          how did you know at 14?

          1. Aaron Klein

            Hard to say. But it was abundantly clear she was the one. Let’s just say I married way, way up… ๐Ÿ™‚

          2. Donna Brewington White

            As you know, I think the world of you Aaron, and yet I do agree with that last sentence.

          3. Aaron Klein

            You’ve seen the evidence in person!

        4. Mac

          Thanks, Aaron, I appreciate you hitting all my points. Nice demonstration of iterating and pivoting. Continued success.

    3. Vasudev Ram

      Good quote. I’ve used it a few times. So did/does Red Hat, as well as others.BTW, “form Ghandi” should be “from Gandhi”.The version I’ve heard is without the “then they hate you” part, though I wouldn’t be surprised if that is true also … envy and all that … :-)Also, using full stops (periods / dots) in the quote, instead of commas, makes it better, IMO – see below :)First they ignore you. Then they laugh at you. Then they fight you. Then you win. — Mahatma Gandhi.

    4. Steve Adams

      Except everyone knows X% of the time they are right. The stress comes from not knowing if this is a time they are right or not.

  2. William Mougayar

    I love this reminder which typifies most USV investments & your beliefs.I heard this great quote from another entrepreneur this week “The best strategy is one that hasn’t been tried before.”The ones that see things that others don’t (yet) will carve a new path and own it, but the trick is to give them enough staying power to work on it.And Vinod Khosla echoed this last week in an interview with Erick Schonfeld at Mobile Demo. He said: “If you pick a road too early, it will only lead to one place. The way to address new areas is not have a plan, but to do lots of experimentation & exploration.”The road to success is not a straight line; it’s wavy initially before it gets straightened on the way up.

    1. leigh

      I’m not sure the BEST strategy is the one that hasn’t been done before, but it definitely is the one you are going to learn the most from. Just as you know though especially in Canada, it’s the one that will have the trouble getting any funds….

      1. William Mougayar

        Glass half full or half empty, Leigh? Stay positive!!

        1. leigh

          That wasn’t a glass full or empty comment, it was a statement of fact. I say build it without funds personally. So probably i’m the biggest optimist of them all. ๐Ÿ™‚

          1. William Mougayar

            I think you’re doing well with your new company & I know you will be rewarded by your hard work, patience and perseverance.

        2. Cam MacRae

          Put your engineering hat on, old boy: the glass is clearly too bloody big.

          1. William Mougayar

            OK!

    2. btrautsc

      I love this thought process, but it is so counter to the typical vc road these days (as the pendulum swings from consumer to enterprise). we’ve been lucky enough to work cheaply, hire efficiently, and ‘be like the cockroach’ that we’ve stayed alive with shifting plans, but I don’t think many companies can do that – especially in the current climate.I’d like to believe that with a great/ interesting/ unique product with a relatively unclear path to buku bucks or a sexy exit, you could walk in and get investment most places – but it seems like most* investors want to know the exits to that path (if any substantial money is on the table).I guess for those of us who choose to go vc route, pick those who’ll pack a lunch, because this bus may be on the road for a while.

  3. LIAD

    Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.

    1. fredwilson

      yup

    2. ObjectMethodology.com

      But can you recognize them when it counts?! You had one of those people apply for a job and you passed on her because she ordered a drink early in the day.

    3. Jim Ritchie

      Can’t remember where I got this, but I used to have this posted above my desk when I was managing a team of 30+ hard charging sales and field engineers. We were known company wide for always upsetting the apple cart. We also happened to be the most successful region in growth and profits every year in a very successful technical software company in the 1990’s. When we got a new Sr. VP of Sales and he commented that he did not like my list I knew it would be a struggle to work for him. Turned out I was right and on to a new job in the same company within months.Traits of People Who Changed the World- Committed- Determined to make a difference- Focused- Passionate- A risk seeker- Made lots of people mad- Creative, quirky, peculiar- In the establishmentโ€™s face, flouted chain of command- Irreverent, disrespectful of the existing order- Thrived on chaos- Asked forgiveness rather than permission- “Bone honest”- Flawed- Tuned into followersโ€™ needs and aspirations- “Damned good” at what they did

      1. Donna Brewington White

        That list sounds about right. Major kudos for being to lead a group like that…herding mountain lions.

  4. LIAD

    …a corollary is that early stage VC investment (specifically from larger firms which require partner unanimity) can be more an invalidation than a validation.When it comes to startups – ‘if you aren’t standing on the edge you’re taking up too much room’

    1. James Ferguson @kWIQly

      I really like that

    2. Dave DeStefano

      I feel that if people don’t take that risk, there’s no change to the status quo. “Nothing ventured, nothing gained,” I suppose.If people can’t take a concept or company seriously, it feels to me that it’s a potentially undervalued.

  5. William Mougayar

    And I like your use of a French proverb at the end, “Rira bien qui rira le dernier.”

    1. fredwilson

      can you translate for me?

      1. William Mougayar

        It’s exactly what you said “who laugh lasts, laughs best.”, but it is said “who laughs best is who laughs last.”

        1. fredwilson

          Thanks

      2. James Ferguson @kWIQly

        Laughs well who laughs the last. (literally)

        1. William Mougayar

          Slight correction: laughs “good” is more literal.

          1. James Ferguson @kWIQly

            Hmm are you sure as an adverb is it not always wellbien cuire – well cooked, bien fait – well done,as an adjective it is goodUn action bien – A good deed ???But I know I may be wrong !

          2. William Mougayar

            Both good & well will work, depending on the context. Eg:Bien, tres bien, assez bien Good, very good, rather goodBien cuitWell done#offtopic #frenchdistraction

          3. James Ferguson @kWIQly

            #frenchdistraction – Until i married I loved nothing more !

          4. William Mougayar

            Which explains your command of its language, foods & wines ๐Ÿ™‚

          5. James Ferguson @kWIQly

            Sadly enjoyment != command ๐Ÿ™‚

          6. William Mougayar

            (It’s bonne action)

  6. Dave W Baldwin

    Good lesson to remember.

  7. LIAD

    One of Peter Thiel’s initial investment filter questions is :’what is something you strongly believe which nearly no one else agrees with?’Super interesting question. I’d love to hear your answers.

    1. James Ferguson @kWIQly

      People are beginning to agree but for what its worth, I spent more than a decade arguing a problem that the best engineers controlled buildings very badly precisely because they were the best.So consider a fine control company for example Honeywell, Siemens and there are many more.They produce the best product and they know theoretically exactly how to control a building. When they ship a commodity product it can be applied to solve any control problem (just like a well-designed programming language). But because it is a commodity it is sold “one size fits all”. Expertise is needed to control buildings and it is not delivered with the product. Users unaware of this shortfall (configuration) assume they have bought the best from the best so they have the best solution – Not true!Now consider what the World Council for Sustainable Business Development have started saying http://www.c2es.org/docUplo…The single greatest factor in influencing adoption is:`Personal know-how — whether people understand how to improve a building’s environmental performance and where to go for good advice.’PS its great when such companies signup for your services ๐Ÿ™‚

      1. ObjectMethodology.com

        Hey, you’re the guy in HVAC right? I need to talk with you in private about a cooling product. How can I get in touch with you?

        1. James Ferguson @kWIQly

          Hi ObjectMethodology,Very happy to hear from you – james at (not surprisingly) kWIQly.com

    2. Ryan Frew

      That was one of the two questions that applicants had to answer for the 20 Under 20 Thiel Fellowship program.

    3. fredwilson

      We need to amend the second amendment to reflect that not all firearms are muskets anymore

      1. kidmercury

        #downvoted

        1. fredwilson

          Double downvoted

          1. kidmercury

            sold entire accumulation of upvotes, cash them in for downvotes, applied

          2. falicon

            Do two down votes equal an upvote? ๐Ÿ˜‰

        2. pointsnfigures

          #upvoted kid’s down vote and for the record it was Fred not Andy that brought up guns first.

          1. fredwilson

            With tongue planted firmly in cheek

      2. ObjectMethodology.com

        This is your blog Fred and you can do what you want. But, I say don’t start that shit again! You’re alienating your community with that stuff. Quit wasting our time and your money on that. We’ve given you the answers.

        1. fredwilson

          I guess you don’t have a sense of humor

          1. ObjectMethodology.com

            I guess you havn’t been reading my posts. I have a great sense of humor.

        2. James Ferguson @kWIQly

          Rick – If you feel that discussing access to lethal firearms and the consequences is “wasting our time” – I question if you can name anything felt universally more important.

    4. falicon

      Money is an abstraction that often becomes a distraction from achieving true happiness. It should never be the goal itself but rather one of the many tools used to achieve a goal.

      1. falicon

        I’ll throw a 2nd one in for good measure (spoiler alert: I have a million answers to your question…guess I’m not as ‘normal’ as I think)…anyway….”Google has solved search. There is nothing new or interesting that can be done with search. People don’t use search anymore, they just Google. If something is newsworthy or interesting, it will find me.”The truth is that Google is only good for certain types of searches (albiet popular types)…they are especially horrible at site search (and don’t seem to care about improving there at all)…there are so many things that have yet to be explored with search (AI is one that personally interests me, but there is also a lot that can/should be done in visualization of results)…when given the option, people actually use site search every day (there is an average of about 100 queries a day originating directly from avc.com content alone and has been for at least the past year)…and finally, true news and information does not care if you consume it or not; it is not seeking you out and never will (what is finding you is the content that the people with a given interest/agenda are pushing towards you and you allow). You get that which you seek.

        1. ObjectMethodology.com

          How did Google get where they are? How is Google doing all the things they are doing? Why is Google ahead of others who have the same ideas? MONEY !!!!!!!!!!

          1. falicon

            They solved a problem really really well…then they figured out how to monetize it really really well.

          2. ObjectMethodology.com

            They were in the right place at the right time for search. But, thought they got some money when they were starting out? Are you saying they didn’t have to pay rent to live somewhere or to buy food or to buy computers or to buy clothes? All of those things, while not taken into consideration by most fledgling startups, constitute having money to spend. That money while not on the books is still MONEY making something happen!.I’m all with you, Kevin, that it would be nice not to need money to get things done. But, I’ve always done things on the cheap. Starting on a shoestring it’s called. And I can tell ya’ without money you’re not doing a startup or anything else except looking for money.

          3. falicon

            Started in 1996 as a research project (and had some grant/funding in that form)…then became a ‘real’ company and got an initial seed investment for some servers and things around 1998…didn’t begin to turn a profit until 2001…hasn’t stopped raking in the dough since!Yes you always need money to start/do stuff…but generally money isn’t earned on potential, it’s earned/rewarded on action and results…until your ‘new’ thing has a history or action for which money can follow, you’ve got to be covering your ‘get started’ costs from something else (in the case of Google it was in the form of academic research – in the case of gawk.it it comes from the money I make in my ad tech startup)

          4. ObjectMethodology.com

            The whole “I’m not in it for the money” thing has left society missing out on many products/services. You’ve just reinforced my point that everyone should be in it for the money..Google got *money* via a grant then in a seed investment. Then they raked in the dough. Money, money, money. I’m telling ya’ it’s all about the money.

      2. btrautsc

        Time, access, options. That is what money delivers. Dependent on what makes you happy, you have time, access, or options to utilize.

        1. falicon

          It’s a great tool – provides a ton of options and freedom (I would rather have it than not) – but it’s just a tool not a goal.

          1. btrautsc

            exactly. great wisdom

      3. ObjectMethodology.com

        We’ve discussed this before and I thought your most recent falicon blog post showed you had learned. Money makes this world go ’round. Sad but true.Money has to be the goal. It is a game of our society that we can’t get out of. With money as the goal you are making the things you really want happen along the way. Without money you stay a peasant and not many peasants are helping other peasants get out of poverty.

        1. falicon

          I’ve generally failed when money is my focus, and I’ve generally thrived when it’s simply a by-product or part of the process.Don’t get me wrong, I generally make a profit in almost everything I build (eventually)…I just don’t believe in starting things simply to make money, and I don’t think just trying to make money is a smart direction or goal…the trick is to figure out how to make money *as* you are working towards the real goal. That’s what I focus on within each of my projects.For example, gawk.it is just now barely into the black after the initial ten months or so of being slightly in the red. I didn’t build it to make money, I built it to fix some search and discovery issues that bothered me…once I was able to prove that it can already solve some of those issues, I was able to figure out a few ways for it to start to make money (even if only on a very very tiny scale right now). As it makes more money, I can hopefully scale/grow it more and build up that self-feeding cycle more and more…but at the end of the day it’s still *all* about fixing search and discovery problems, not the money it can make…

          1. awaldstein

            Build something where the transaction is the soul of the community.Kickstarter is changing the world and honestly what it provides is a focused transaction and decent analytics on the page. The net provides the rest.

          2. falicon

            That is the ideal.Kickstarter is a great example…the money part is crucial, but not really the goal…the goal, I think, was to help more artists achieve their goals…they just figured out an amazing way for everyone to win while achieving it. #brilliantHopefully we all could figure out a path like that towards our own goals. ๐Ÿ˜‰

          3. ObjectMethodology.com

            OK, so then are the founders and others giving away all the profits after simple living expenses? Nope! You’re experiencing euphoria based on a dream.

          4. Dave W Baldwin

            I don’t see point of argument with @falicon. Yes you have to live. At same time, it is easier to do that while producing Gawk vs. his first project.Point I’d make is how many Angels fund what becomes party time for slick project pushers. Finally, google has a hand in many big things which will come to fruition oner the next 5 years… And they still won’t be finished.

          5. falicon

            There is never a point in arguing with me (literally or figuratively)…but it’s a good way to pass the time none-the-less. ๐Ÿ˜‰

          6. Donna Brewington White

            You don’t know how much hope this gives me for my (as of last week) 18 y.o. son. The one I wanted you to do the voomly for. You see, he’s a knowitall paininthebutt who can defend his case with Perry Mason finesse (regardless of how implausible) but I think that someday he could be another Kevin Marshall. If I can live long enough to see it.Edit: I neglected to add that he may be a genius.

          7. falicon

            You are too kind! Though I’m very happy to be me, here’s to hoping he’s at least 10X more than I ever will be. :-)BTW – I am always happy to answer questions or pitch in on stuff if he gets into programming and wants some help…voomly or not.

          8. Donna Brewington White

            Thank you. I will so take you up on that.

          9. ObjectMethodology.com

            We’re not arguing. We’re discussing things. I have no reason to argue with Kevin. I value his opinion and input.

          10. fredwilson

            Proving once again that less is more

          11. ObjectMethodology.com

            “I’ve generally failed when money is my focus, and I’ve generally thrived when it’s simply a by-product or part of the process.”I think you’re mixing in sitting around hoping money comes along – with – I make money so that I can use it to get things done.”I just don’t believe in starting things simply to make money”Yep, you are mixing in the wrong point. No one ever makes money to simply make money. At the least they make money to get the satisfaction of having made money. The satisfaction is what they are after.”For example, gawk.it is just now barely into the black after the initial ten months or so of being slightly in the red.”Slightly in the red? Have you accounted for your living expenses, your programming time at market rate, all the time at market rate of the people who have spent testing or helping you in some way, the interest the money you’ve spend on it would have made, etc.If you figure out a way to build stuff without money. Let all of us know. Because, if you do, we can save the world my friend the whole world!

    5. kidmercury

      lol where do i begin!!9/11 was an inside jobevolution is an incomplete theory, human beings were most likely created by extraterrestrialshuman beings are essentially a slave species ruled by extraterrestialsthe universe operates on a cyclical basis, there are cycles to everything. everything! understanding of cycles can make prediction possible time travel is possiblewe live in an interdimensional universethere were pre-historic civilizations on planet earth far more advanced than ours today

      1. David Clarke

        “kidmercury is rational” ๐Ÿ˜‰

      2. Chris Mack

        Now go build a startup ๐Ÿ™‚

        1. kidmercury

          i’ve been working on my business since 2005. i half jokingly call it the business plan that saves the world.

          1. Dave W Baldwin

            …and that is an ok goal…

      3. ObjectMethodology.com

        “9/11 was an inside job” – duh. (Disqus removes blank lines between paragraphs, hence a dot)”evolution is an incomplete theory, human beings were most likely created by extraterrestrials” – But anyone not *of* earth is extraterrestrial..”human beings are essentially a slave species ruled by extraterrestials”.I don’t agree with the slave part..”the universe operates on a cyclical basis, there are cycles to everything. everything! understanding of cycles can make prediction possible”.Yep.”time travel is possible”.Nope, dimensional control is possible. Time is just a concept..”we live in an interdimensional universe”.Yep.”there were pre-historic civilizations on planet earth far more advanced than ours today”.Nope it was just us.

    6. ShanaC

      derivatives are a fundemental part of the economy that long term keep prices for all sorts of things stable and we should be using them more, not less, in the wake of the 2008 crash

  8. kidmercury

    “So many folks in the venture capital business are sheep that just want to follow the herd.” #brutal #diss #ouchi generally agree with this post, as contrarian investing is where it’s at. one early stage natural resource investor i admire, rick rule, likes to say that you are either a contrarian or you are a victim. though i think in bubbles you can be a sheep and you can be wrong and still make money if your timing is correct.one of the big problems with the internet is that it is no longer contrarian. this is part of why valuations are still too high IMO.

  9. takingpitches

    Paul G had a nice essay last year about this too. Here is a quote:โ€ฆ”Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as โ€œtoysโ€ often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. Itโ€™s cool; users love it; it just doesnโ€™t matter. But if youโ€™re living in the future and you build something cool that users love, it may matter more than outsiders think. Microcomputers seemed like toys when Apple and Microsoft started working on them. Iโ€™m old enough to remember that era; the usual term for people with their own microcomputers was โ€œhobbyists.โ€ BackRub seemed like an inconsequential science project. The Facebook was just a way for undergrads to stalk one another.”

    1. takingpitches

      The money quote:Itโ€™s cool; users love it; it just doesnโ€™t matter. But if youโ€™re living in the future and you build something cool that users love, it may matter more than outsiders think.

  10. William Mougayar

    btw, This is a ridiculous post ๐Ÿ˜‰

    1. JimHirshfield

      Ha ha ha…so he’ll definitely get many returns!! (IOW, tons of comments)

      1. William Mougayar

        Lol. xComments is to blogs what xMoney is to investments.

        1. JimHirshfield

          Sometimes comments are the ridicule part of the blogs

  11. takingpitches

    A ship in harbor is safe – but that is not what ships are for.

  12. James Ferguson @kWIQly

    Why ignore ridicule ?Ridicule is a means to censor…โ€œAll censorships exist to prevent anyone from challenging current conceptions and existing institutions. All progress is initiated by challenging current conceptions, and executed by supplanting existing institutions. Consequently, the first condition of progress is the removal of censorship.โ€ โ€• George Bernard Shaw, Mrs. Warren’s Profession.More concisely…โ€œWithout deviation from the norm, progress is not possible.โ€โ€• Frank Zappa.

    1. William Mougayar

      I like that Zappa quote.

      1. James Ferguson @kWIQly

        Great – sadly not mine ๐Ÿ˜‰

    2. Abdallah Al-Hakim

      Nice Zappa quote that nicely summarizes Fred’s post!

    3. Dave W Baldwin

      Can’t go wrong with Zappa.

      1. pointsnfigures

        Just don’t start quoting Zappa’s Bobby Brown or Broken Hearts are for Assholes!

        1. Dave W Baldwin

          ^ up voted

    4. ShanaC

      Good play choice.

    5. Roy Liu

      Just a variation of G.B.Shaw’s “Therefore all progress depends on the unreasonable man.” argument.

      1. Vasudev Ram

        Yup :)Full form:The reasonable man adapts himself to the world. The unreasonable man tries to adapt the world to himself. Therefore, all progress depends on the unreasonable man. — George Bernard Shaw.

  13. Jeffrey Hartmann

    I like this perspective Fred, I totally feel that the ‘toys’ of today become the 800 lb Gorillas of tomorrow.About Momentum investing, I feel that it actually can work sometimes in the later stages of a private company that is doing well. Yet it is a complete disaster for early stage. When a company has a more solid footing and is making great traction on their goals, going with the momentum can give you solid returns (but not incredible ones). I think momentum investing is for people who don’t want to get their hands dirty learning about opportunities when they are early and very risky, and they really miss out on the opportunities to get the target percentage of ownership that will really make the big money. Obviously too, there are still plenty of bad deals to be had at the latter stage so its only a little less risky then being there at the early stage.I think early stage investors have more opportunity to really shape outcomes, can shepherd the founders to paths that minimize risk and increase return probability, and starting a relationship with a company early in my opinion can lead to a better alignment on what you want as the goals for the company as an investor.

  14. JimHirshfield

    “invest in laughing stocks” – love the double meaning.

    1. fredwilson

      Yeah. I wrote it, then read it, took in the double entendre, and then knew I was done

      1. Patrick Campi

        This is a T-shirt… or an invite to a group party… “Come join Fred Wilson’s Laughing Stocks for a few cocktails…”

  15. Greg Clayman

    FWIW I think Dixon is dead on re: drones and asteroids. We can soon expect drones of every size, shape, and pricepoint for personal, corporate, educational, and government use. And astroid miners are literally sitting on a pot of gold. Although perhaps more lucrative is the idea of harvesting hydrogen and oxygen to turn asteroids into orbital fuel stations for private space flight. We’ll be there before you know it… ๐Ÿ™‚

    1. fredwilson

      Yeah. That’s what he told me yesterday

    2. kidmercury

      i’m bearish on asteroid mining. the costs are going to be too high if fossil fuels are the primary energy source to get there. i think the economics of deep sea mining are much better.

  16. awaldstein

    The ridiculous as a step to the sublime sounds right to me.

  17. Ela Madej

    Ha! This is so true. I told myself that from now on I will be only focused on riduculous projects. They are also more fun to work on ๐Ÿ˜‰

    1. Kirsten Lambertsen

      Fun!

  18. Ji Eun (Jamie) Lee

    Love this: “Better to invest in laughing stocks. Becuase she who laugh lasts, laughs best.” Another takeaway is that an entrepreneur has to have no shame, no fear of judgement. So entrepreneurship has to start from within, with no shame, then she’d best grow some teflon tough skin.Thanks!

    1. Kirsten Lambertsen

      “…she’d best grow some teflon tough skin.” Yep. Nothing builds character quite the way entrepreneurism does.

  19. Carl Rahn Griffith

    This book is a fascinating analysis of entrepreneurs, inventing and risk-taking…http://instagram.com/p/Yf2o…He’s an ex banker/economist but opted-out a few years ago, disillusioned with the esoteric world of the money-markets and money/money products making money, to become a writer and study the economics of the real-world and the people who actually ‘make’ things. It’s an excellent read.

  20. SallyBroom

    I think you should have Frank Sinatra’s “They all laughed” playing to accompany the reading of this blog ๐Ÿ™‚

    1. fredwilson

      I will do that Sally. I hope you are doing well.

  21. Peter Fleckenstein

    The Crazy Ones”Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.” Steve JobsAnd here’s the original video with Steve narrating:http://youtu.be/8rwsuXHA7RAHave fun at Princeton Fred. Let us know if anyone in the class was ridiculed. We want to meet them.

  22. jason wright

    what is the psychology of the ridiculed?

  23. Meredith

    The contrarian in me wants to argue against this contrarian position ๐Ÿ˜‰ but I can’t – we need crazy ideas

  24. Kirsten Lambertsen

    Was Etsy ridiculed in the beginning?

    1. fredwilson

      By many in the investing world and the ecommerce world. But not by the sellers and buyers

  25. Matt A. Myers

    Over the years, since I was 11, I’ve been watching and learning people’s behaviours online – and adapting and developing for those in mind, including for what my own preferences are – design, use, and otherwise.Since that young age what I’ve been working on has taken a natural evolution, and these plans have grown large, however they’re all connected to the same understanding of business and psychology – working within patterns / a framework that resonates with Clayton’s disruption theory. I have a very solid model planned out now, I’ve just not the resources to fully create or execute on, yet. I don’t think anything will stop me – though I’ll wait to see if someone punches me in the face.I’ve been told by many over the years that I need to focus on smaller plans, be less ambitious. I just can’t though – and it is a single thing I am focusing on, a holistic vision, where there’s just too much synergy and “disruptive benefit” from the bigger plan (the whole ecosystem) that will lead to beating out competitors – assuming with execution of equal quality or more efficient than their own.The people who have said to focus on less to me though are right in one way: It is very difficult to get something going that is so ambitious – though I think now I’ve done the majority of the roadmap work required, and is soon time to focus fully on execution, building the foundation for what will become a good-sized company.I know most of you don’t know what I’m working on, and only a couple know closer to the full scope, though I think around end of summer I can be more open, and I’m sure I’ll reach out and pick your brains for thoughts on it all. Perhaps I’ll do a series of blog posts explaining my reasoning and theories in depth – perhaps I’ll have to in order to gain the interest of investors, though the ones I’m hoping for would understand with seeing basic overview – and then hopefully be able to add value with guidance, though I guess that potentially moreso comes from a board of directors, advisors and mentors.The part I struggle with most, mostly being on my own for getting work done and only smaller limited funds coming in at a time to outsource other work, has been moving things at a fast enough pace so I can be properly ready to talk to investors. It’s mostly been the lack of money to hire full-time people that has been the cause of my time delays, though my projects have still all moved forward, my thinking and theory and plans have evolved, they are more clear to me now, and I’m better learning my weaknesses – which are still a pain in my ass, at least until I can hire people to fill those gaps.Something that’s kept me going, moving forward, has been focusing on self-development, self-improvement – always learning, always trying my best – realizing and acknowledging I’m always trying my best – along with finding new ways to improve, and noticing behaviour patterns that I could do better without. These all take time, though I’ve had time, and it’s important time to take. A friend of mine recently said to me life is a platform, to which I replied that I want to make it a playground. I want to make the world a playground, though in which I am working on something meaningful and practical – and I want everyone else to have that same opportunity, experience.The goal of my projects – business and otherwise – is to build community, and I’m getting good at that. It’s my 30th birthday this Sunday, and I’m having a birthday dinner celebration this Friday and have 20+ confirmed coming to it – from people in the yoga community that I’m close to, to crazy-brilliant-hilarious university professors I almost on a daily basis have tea with.I’ve come a long way. A year ago I’d hated my birthday since I was about 6 years old – and this year I’m excited about seeing a whole bunch of great / awesome people all at the same time who’ve supported me over the years, and being able to thank them and give them all at least one hug each. ๐Ÿ™‚

    1. pointsnfigures

      Happy Birthday. 30 is fun. Go get em.

      1. Matt A. Myers

        Thank you! I’m planning to have fun – balanced out with stress from work of course … work hard, play hard, and all that. ๐Ÿ™‚

    2. falicon

      This is great! First – happy early birthday ;-)Second, I feel you on the ‘focus’ stuff – people tell me that all the time (not because of trying to do something too ambitious but rather because I do and enjoy a massive variety of things — I am a reg. & complex person who can not be defined by only one interest; so that is how I spend my time, focus, and energy as well).For your situation, my advice is not to give up on the large ambitious vision, but to simply break it down into as small and manageable parts or steps as possible. Everything works one way or another at scale…it’s the journey to scale that contains most of our challenges…and that journey is filled with tiny wins and improvements and additions day after day after day (I imagine much like you experience in Yoga — you don’t start out teach a class, but over time and with continuous improvement and work you can get to that level).One of the really interesting things I’ve been learning from my Kung Fu classes and then also coaching the various youth sports that I’m involved in is that it’s better to point out or teach only one or two things at a time for someone to focus on…this gives them a chance to really absorb and improve and lay the ground work for whatever the next thing is for them…I think in building products (and especially ambitious companies) this is also key. It’s good to know the overall clear goal, and as the leader or teacher it’s great to have a master plan to be executing against…but for everyone else, it’s prob. going to be achieved/received/consumed best in bite-sized chunks…

      1. JLM

        .Hand to hand combat training is always useful when coaching youth sports.The Moms are very aggressive and sometimes a choke hold is the only solution to a discussion about playing time that wanders off the game board?JLM.

        1. falicon

          In Kung Fu I’m the beginner who is learning that the more I learn, the more work I have to do before I can be any good at all…as a coach (currently baseball and track this season), I’ve learned not to tussle with those moms…kung fu or not they aren’t going to lose when it comes to their babies! ๐Ÿ˜‰

          1. JLM

            .There are two classes of Southern women with whom a smart man does not tangle:1. Women whose fathers played for the Longhorns — even 3rd string on a Darrell Royal team — and whose child is on your youth football team and is not happy with the amount of playing time that Little Bubba has been getting; and,2. Women who are involved in any manner with a debutante ball.You are tickling the dragon’s tail and unleashing forces with a power that is not comprehensible by a simple minded man.These are women — fueled with decades of deviled eggs, cornbread and fried chicken — who could teach Sarah Palin the advanced course in skinning — coaches.On the other hand, when you have managed to please one of these same women — which is rationed and may happen once or twice in a lifetime — your life will be all honey and peaches.This is a pro tip.JLM.

          2. LE

            “2. Women who are involved in any manner with a debutante ball.”What did you think of that movie “The Help”?

          3. JLM

            .You know that is a “true story” — bit of embellishment — and I know folks who lived in that town. They don’t actually get it.That was the Old South and it is still going on in many ways.Loved the story. Great movie. Love Emma Stone.JLM.

          4. LE

            I watched this (Kung Fu starring David Carradine) in real time when it was on TV. This was the biggest deal at the time among our age group. You can’t even imagine. It’s essentially what popularized the entire martial arts movement in this country it was a real watershed event. Back then lessons (in Shotokan Karate) were $10 per week. I remember getting the key to the dojo which, as a kid, was a really big deal.http://en.wikipedia.org/wik

          5. falicon

            I watched/loved it as a kid too (I’ll be 39 in about a month)…the style I’ve been studying for about a year now is Wing Chun (Bruce Lee’s 1st style; actually developed for a woman orig.; no belts; focused on speed and efficiency)…so many great lessons in every part of it (mental and physical). Highly recommend it for anyone that can find/get to a school near them -> http://en.wikipedia.org/wik

    3. takingpitches

      Happy birthday! I think you’ll have a number of virtual well-wishers at that dinner table from this blog as well

      1. Matt A. Myers

        Thank you. ๐Ÿ™‚

    4. ShanaC

      happy birthday ๐Ÿ™‚

      1. Matt A. Myers

        Thanks Shana. ๐Ÿ™‚

    5. Richard

      fing a talented partner?

      1. Matt A. Myers

        That’s certainly an option. I’ll be more ready for that by end of summer, though money might come easier and first.

    6. Donna Brewington White

      Happy Birthday, Matthew. You are just crazy enough and passionate enough to be onto something. Maybe those people who want you to focus more want to see you have something concrete that can be monetized while you continue working toward the big goal. But, I can’t read their minds. If patience is a virtue, you are a saint.

      1. Matt A. Myers

        Thank you Donna.Not sure I qualify as a saint – I just do lots of yoga a lot of the time … ๐Ÿ™‚

    7. Dave W Baldwin

      Happy birthday! Did the 50 this month. Your maturity and patience will take you far.

  26. Tom Labus

    Chaos- Where brilliant dreams are born.Before greatness you must look foolish to the world

    1. Richard

      speak mandarin?

  27. Paul C. McTaggart

    Fred, thanks for this timely post!When you have smart people, people who’ve had great vision in the past rip your idea to shreds for being crazy & outlandish..it hurts. In those dark recesses of the night when you are working away on this ‘laughable idea’ you start to question your own resolve.My start-up Dental Departures has been battered, bruised and laughed at for believing that people can receive the same quality of care when the visit a global dentist.Everyone pursuing a ridiculed vision suffers the path of a tortured soul. It is only history that will vindicate our vision of the future. People will look back and marvel at how those courageous souls could have ever wondered their idea was crazy.

    1. William Mougayar

      “Everyone pursuing a ridiculed vision suffers the path of a tortured soul.” Nice quote. Worth a tweet.

      1. Paul C. McTaggart

        Thanks for the tweet ๐Ÿ™‚

    2. ShanaC

      why would people laugh – I keep feeling I should be a medical tourist. And if you can get me a vacation and a tooth extraction at the same time, why not…(oddly I do need a wisdom tooth extracted ๐Ÿ™ )

      1. ObjectMethodology.com

        “oddly I do need a wisdom tooth extracted “Do you have some string and a heavy door?

      2. Donna Brewington White

        stupid spam bot — targeted a mod

      3. Frederick Baltazar

        anything else ?

    3. Monk

      Look forward to tha day when the laughs becomes toothy grins courtesy of a visit to the global dentist…

  28. scott crawford

    Nice. Reminded me immediately of this ad from the Copywriters Hall of Fame: “They laughed when I sat down at the piano, but when I started to play! โ€“”http://marchingagainstphili…

    1. LE

      I love that ad. You know friends laughed when they heard that I did a porn video. But then they saw the video.

    2. Richard

      direct response advertising has alot! in common with mobile ads. I enjoyed a year in this space, inspired by john caple.

      1. Donna Brewington White

        I can see how similar concepts are involved.

  29. JLM

    In Q4-1776, the British with their Hessian allies arrived in Long Island Sound with over two thirds of the British Army and one half of the British Navy’s warships looking for a fellow named George Washington who was the military leader of what would become the American Revolution.Gen Washington had organized an army for the Colonials which had already inflicted a pretty good pummeling on the British regulars at Bunker Hill outside Boston. The Battle of Bunker Hill would go down as the largest British casualties in a single day in the entire war.The 15 British Generals commanding averaged 48 years old and had on average 30 years of military experience. The Brits were undefeated on several continents.The 23 American Generals opposing the Brits averaged 43 years old and had on average 2 years of military experience. They had not yet won a single battle in the Revolution.It is reported that before the Brits landed on Staten Island the commanding officers (led by brothers Gen Howe commanding the Army and Adm Howe commanding the Navy) had a boisterous dinner at which they laughingly debated whether to execute the rebels — it being a foregone conclusion that the Brits would prevail on the battlefield.It was a dicey issue because GW was related to the King and only Kings are allowed to hang their relatives. Nonetheless, the consensus was that Washington would be hung.Initially, in fact, the Brits kicked the Continentals across Long Island, Manhattan, Harlem, New Jersey until Washington was hunkered down on the far side of the Delaware hoping the river did not freeze and allow the onslaught to continue.Of course, Washington did not sit idly by and was already planning what would become one of the most critical battles in the history of warfare — a double envelopment amphibious crossing of the ice flowing Delaware and the defeat of a Hessian regiment encamped in Trenton followed by a slick sidestep and the capture of the Brits HQ in Princeton.Game the fuck on!The American Army and its leadership was the object of scorn, ridicule and laughter before its first definitive encounters with the most powerful military forces on land and sea.Our Nation — our great Nation — was the most improbable undertaking in the then history of mankind based on the exceedingly silly notion that men, individual men, had rights which came from God and not Kings and whose very lives were to be more important than governments.They laughed at us then but they are not laughing now. This is what is in the DNA of America — we are capable of anything.God Bless George Washington — a guy who was ridiculed and laughed at by his “betters” and who simply got the job done.This is from whence the American entrepreneur and American entrepreneurial zeal has been born.JLM.

    1. fredwilson

      JLM dropping a history lesson as only he can and inserting the F bomb to boot. I am going to channel you today at Princeton. I love your passion.

      1. Tom Hughes

        During the battle of Princeton — legend has it — a cannon ball flew through Nassau Hall, the main building (at that time the only building) of the University, and decapitated the portrait of George III that was hanging there. Only a legend, but an auspicious beginning to a university that sides with underdogs!

        1. JLM

          .The Americans shelled the Hell out of Nassau Hall which was housing American prisoners in the basement. This is the same Nassau Hall which exists on the campus today.http://www.revolutionarywar…What a historic site.JLM.

      2. pointsnfigures

        The same could be said for how to carry out a small unit attack. Capt. Dick Winters devised it on the ground behind Omaha Beach on D-Day. Now they teach it at West Point. Sometimes using intuition and prior knowledge and applying it to new situations works great. Most of the time you will make the right decision. Some call it following your gut-but it’s your brain rapidly compiling learned data and recreating it in a meaningful way causing you to act appropriately.

        1. JLM

          .Most folks will not recognize Dick Winters as the main character of Band of Brothers.Of course, I used the “fire & maneuver” technique enough times that I have run out of fingers and toes.It is like a “pick and roll” at the top of the key in basketball. Works almost every time.JLM.

          1. Dave Pinsen

            What a great miniseries that was.

    2. LaVonne Reimer

      Okay, I’m going to come at this underdog team concept a different way although for the life of me I can’t find a way to slip in a bit of natural law theory or an F bomb! One of my investors in my first startup sailed, like me. Big difference is he had a better boat and it was based in Rhode Island. At a time when my team and I were feeling pretty beaten up by bigger, better-funded players, Ron decided to do the Newport to Burmuda race. His team were all buddies, minimal professional racing experience and they didn’t even have matching shirts or caps but they were a team. Were frankly a bit intimidated by competitors all decked out and looking oh so smart. Even more so when they found themselves on a different tack than anyone else but that they had reasoned was the best combo of wind and currents. In the end, they were first in their class and had the amazing experience of pulling up to the end where one of those other pro teams lined up along the dock all in matching uniforms to salute them! I used that story with my own team. In the middle of feeling like the laughing stock, each participant executed on their role and in that sort of alignment that makes sailing a musical thing!

      1. JLM

        .The wind does not care about the pedigree of your boat, just your point of sail.Sail on. Well played!JLM.

        1. LaVonne Reimer

          ๐Ÿ™‚

      2. JLM

        .Deep thinking alert.In sailing, as in landing a small airplane, there is a “slot” — into which the vessel at the coaxing of a fair sailor or flyer — slips in which everything comes into perfect balance.In a sailboat, the rigging begins to sing, the pressure comes off the wheel and the boat — heeling over obediently — seems to sail itself in perfect balance with nature.In an airplane, the plane seems to float, the air is smooth and the sight picture goes into slow motion. The plane will almost literally land itself.In life there are similar fleeting moments when things come into balance:1. the grandeur and warmth of your family and its all encompassing love forces your face into a contented smile that cannot be resisted,;2. some happening in your professional life goes so well that you really don’t care whether you will ever be on the Forbes 400 List;3. you make order from chaos and the notion of order pleases you beyond all understanding;4. you are sitting in church listening to a great sermon and realize God is speaking directly to you and you and God at that fleeting moment, are OK with each other; or,5. your grown children look at you and say — “Dad, you are not nearly as stupid as we always thought you were. You’re OK. Can we borrow the ski/lake/beach house this weekend?”In that moment, the world is your oyster. Enjoy it.Just like that sailboat or airplane, you have fallen into the “slot” and just like them it will be fleeting but REAL.Enjoy it. Revel in it. Remember it when lying in your bed trying to get to sleep. It will be fleeting.JLM.

        1. fredwilson

          Your children sound like mine ๐Ÿ™‚

          1. JLM

            .Does not surprise me inasmuch as you have lured My Perfect Daughter to the Big Apple and she says she is NEVER returning. They can be so cruel sometimes, no?But then they are perfect also.JLM.

        2. Teren Botham

          Wonderful, JLM,, this goes straight onto my evernote for my frequent reading..i thank the cloud technology now ๐Ÿ™‚

        3. Vasudev Ram

          > It will be fleeting.Zen.

        4. Vasudev Ram

          >In sailing, as in landing a small airplane, …Never done sailing, but I found the concept of tacking fascinating, when I came across it: It actually allows sailboats or ships to sail almost directly _towards_ the wind. Seems counter-intuitive, but since it works, it has to be true.http://en.wikipedia.org/wik…I read an explanation of how that works, somewhere; it has to do with physics and the resolution of forces.

          1. JLM

            .”Beating to windward” is how a sailboat sails into the wind by taking alternative port and starboard tacks — about a 45 degree cut across the wind direction.Easy stuff really and the most fun while sailing.The ability to “tack” or “come about” is the mark of a good sailor and crew. The pilot or skipper — handling the tiller or wheel — has to alert the crew and then turn the boat abruptly on its keel and get the sails filled again immediately while milking the boat’s momentum to ensure it keeps moving.Great fun.JLM.

          2. Vasudev Ram

            >Great fun.I can imagine ๐Ÿ™‚

        5. Vasudev Ram

          Wow, reading your comment again in full, reminded me of one of my favorite books, The Navigator, by Morris West.Links:http://en.wikipedia.org/wikhttp://www.goodreads.com/bo…It’s too difficult to describe the book in a blog comment. Best is to check it out. I think it may be of interest to many in the AVC community.

      3. Donna Brewington White

        Great story, even without the F bomb.

    3. takingpitches

      We were born disruptive!

      1. JLM

        .People ponder from whence comes the notion of American exceptionalism — you had to survive the ocean voyage, you have to beat the Brits, you had to deal with the Indians and the bears.It was simple survival.In addition, we were the first people to suggest that maybe we had rights from God rather than Kings. Silly notion for its times. Crazy idea given the environment.Then we had those Founding Fathers — truly exceptional men.We can’t help ourselves with that disruptive, free DNA in our veins.JLM.

        1. Vasudev Ram

          What the Americans did to the Red Indians was wrong, though.

          1. JLM

            .What we continue to do indeed. America has a lot of ‘splaining to do about the Indians, slavery and other considerations. We are not without our shortcomings.Washington refused to kill British prisoners which would have been quite unremarkable had he decided to do so. He was left with almost 12K Hessian prisoners at the end of the Revolution.What did he do?He gave them Ohio and as they left to claim their land he said — beware of the Indians over there.This decision alone pushed the western frontier of the US over 500 miles. The Hessians cleaned up the Indians. Hell, they were professional soldiers.This is why there are towns like “Steubenville” and the streets are clean in Columbus and you can still get great beer, pretzels and schnitzel in Ohio.BTW, the King had promised Cornwallis Ohio if the Brits prevailed. Go figure.That George was one shrewd dude.JLM.

          2. Pete Griffiths

            “…cleaned up the Indians.”!!!!

          3. JLM

            .A particularly poor choice of words and remarkably insensitive.I have no excuse and apologize to all my Indian friends everywhere but particularly at Foxwoods Casino.JLM.

          4. Pete Griffiths

            What a great response. Thank you.

          5. Vasudev Ram

            Didn’t get the bit about “the streets are clean in Columbus “

        2. Pete Griffiths

          “…we were the first people to suggest that maybe we had rights from God rather than Kings. Silly notion for its times.”Excuse the nitpick but I don’t think this is right. There had been plenty of precedent, for example the British Bill of Rights of 1689 which directly influenced US thinking.

          1. JLM

            .Fabulous comment. Thank you.The big distinction is that the British Bill of Rights of 1689 — taken in concert with the Habeus Corpus Act of 1679 and even the Magna Carta were all, in essence, negotiations with the monarchy as to rights that the monarch would grant to the people.The Americans — the Revolutionaries — said “screw the King”, these rights are “unalienable” and are granted by God, not the King.That is the big — BIG — distinction. The rights were not granted by the King, they were granted by God. And they were unalienable.The second big point is that having been granted these individual rights, the Revolutionaries then pooled their collective interests to form a government which was for, of and by the people — not as subjects of a King.For its times, it was — well, “revolutionary”.The King showed how revolutionary it really was as he sent two thirds of his Army and half of his warships to put down the rebellion — or, to correct their thinking on an intellectual level.I doubt that there has been as large an intellectual disagreement — maybe the fall of communism — since then.JLM.

          2. Pete Griffiths

            I completely agree. Whilst there was lots of precedent and democratic ideas had been evolving since the Greeks (no king!) the US took it to the next level on what was to be a huge and important country.One interesting point is how many of the Revolutionaries considered these inalienable rights to be God given or whether they were rights of man. My understanding is that the two positions coexisted then as they do now.

        3. M. Edward (Ed) Borasky

          Now we have to deal with bears *and* bulls! ๐Ÿ˜‰

      2. Donna Brewington White

        We will we will disrupt you.Now this is going to be playing in my head all day.

        1. takingpitches

          ๐Ÿ™‚

    4. Dave Pinsen

      “Initially, in fact, the Brits kicked the Continentals across Long Island, Manhattan, Harlem, New Jersey…”I’m reminded of that history all the time. I live along Washington’s retreat route (there are little blue signs marking it).

      1. JLM

        .The history of NJ in the Revolution and its critical timing is really unique to even the rest of the country.I love being somewhere completely developed and trying to imagine it at the time of its historic importance.Have you been to Morven — where the NJ Governors used to live? It figured prominently in the Revolution.JLM.

    5. Cam MacRae

      I think you’ll find Washington’s lineage can be traced to the Tudors, not the House of Hanover.Great riff otherwise.

      1. JLM

        .I do not know my English Kings well enough but Washington was related to Kings Henry I, II, III — Windsors, I think?JLM.

        1. Cam MacRae

          As I understand it — and there is every possibility that I understand it wrong — his ancestors received their lands from the Tudors. That passes the sniff test because it explains the whole Welsh thing.I’ve not heard him associated with the Plantagenets before now.You can get from the Tudors to the House of Stuart and then all the way to the Windsors with a bit of gymnastics.

          1. JLM

            .The American land grants received by Washington and his wife are very well documented and came from George III through the entire “Virginia” colonial scheme.He and Martha Custis, his wife, were among — if not “the” — wealthiest folks in the Colonies.His connection to the Windsors is out there and is well documented — research only.In any event, hanging Washington would have been quite an awkward matter given his position in life and society.It took someone of that stature to create a new country. I’m glad he did it. It has worked out very well for me thus far.Thanks, General Washington.JLM.

          2. Cam MacRae

            The royal warrants aren’t under contention (services rendered and all that), only whether Washington was related to George III in any meaningful sense.You can trace his lineage back to a royal house no problem. Mine too. I read somewhere that every single US President can do similar, and that the candidate with the most drops of blue blood *always* wins. Including Clinton. Mull on that for a moment ๐Ÿ˜‰

          3. Cam MacRae

            You got me interested. Via the university library I found an abstract for a paper (printed on actual paper!), that states Washington was a descendent (15 generations) of Edmund of Woodstock. If true, that links him to both the Plantagenets and the House of Capet.

          4. Cam MacRae

            Interesting. She’s taken a slightly different line: Edmund of Woodstock was Edward II’s half brother, therefore uncle to Edward III. Pretty much the same result — lets face it they were all having it off anyway.(To get from there to the House of Windsor requires those gymnastics).

      2. Vasudev Ram

        All this talk of English royalty reminds me of the Jean Plaidy novels. My mother and sister used to practically drool over them ๐Ÿ™‚ Out of curiosity, and because they were in the house, I read some of them too. Interesting stuff, full of tales of royal intrigue, in and out of bed …http://en.wikipedia.org/wik… (real name of Jean Plaidy)

        1. Cam MacRae

          My bias against romance is probably inhibiting my enjoyment of some good royal fiction.

          1. Vasudev Ram

            Heh, interesting point. I don’t like the sickly-sweet kind of romance novels either (though got to confess – sort of guiltily ๐Ÿ™‚ – that I did read many Mills and Boon novels – again, courtesy of my mom and sis. (I’ve tried out a lot of things in life …) But the Jean Plaidy novels are not only about romance. IIRC (it’s a while ago now, read them when I was a teenager or in my twenties), they are also about royal politics (politics is not something I’m into, but I read about it now and then), intrigue (ditto), talk about the environment of those times (houses, places, things, customs and the way people lived in those times, etc.), so overall, I found them interesting.Georgette Heyer’s novels of the Regency period are lighter in nature, and very funny, though in a somewhat subtle way (though after you’ve read a novel or two, the trend is clear – but I still like them).http://en.wikipedia.org/wik…Her first novel:http://en.wikipedia.org/wik…- Vasudev

  30. jmcaddell

    “Laughing stocks” is one of the best neologisms I’ve heard in years.

    1. JLM

      .+10 for “neologisms” alone.Well played.JLM.

      1. jmcaddell

        ๐Ÿ™‚

    2. fredwilson

      It just came to me. I wrote it subconsciously.

      1. jmcaddell

        This post is making me think, pertinent to my Mistake Bank work, that these “laughing stocks” are a type of mistake – that is, by the standards of society at that moment, they are silly or nonsensical. “No one needs a computer that barely creates a biorhythm program!” But that is a snapshot view. The prescient innovator says, “Hey, wait a minute… I need that and so do some of my friends.” And they can envision a future where, because people evolve and technology evolves, that many many people might need that thing. He/she cares about the moment (“Is this interesting or useful to me?”) but sees ahead through the course of time, to what the idea could be, and works to achieve that vision.It doesn’t always work, of course. Most of the time, it doesn’t. But great things and big returns, as you write, Fred, don’t come any other way.

  31. William Mougayar

    Reminded me of my favorite (anonymous) quote: “Do not reason away your vision.”

    1. Tyler Hayes

      Never heard it. Love it.

  32. Aaron Klein

    If I had a nickle for every time one of the big enterprise software players ridiculed our technology for investment advisors…Let’s just say the advisors prefer to send us their nickles directly. ๐Ÿ™‚

    1. LE

      “big enterprise software players ridiculed our technology for investment advisors”The reason someone is ridiculing though is important. If because of jealousy then that’s one thing. But sometimes people ridicule because they know something that you don’t (fool at the table).

      1. JamesHRH

        Ridicule often shows lack of customer focus – think IBM before Gerstner.’People buy IBM b/c we are IBM” = opportunity.

      2. Aaron Klein

        The response from our customers seems to validate our point of view, but I definitely don’t want to sound arrogant. We still have work to do and things to learn. That will always be so.

  33. pointsnfigures

    Contrarian investing. Similar to contrarian trading (which I used to do all the time). Last night I spoke to a marketing roundtable and told them the exact same thing about investing-in trading you can get out-there is no way out in startups.I agree a bit on laughing stocks-but sometimes there are iterative businesses that no one else sees that can be big. Google wasn’t the first search engine. Facebook wasn’t the first social app.A lot depends on the education it takes for the target market to accept it. If they can pick up the business and use it easily without a lot of handholding-I agree, invest in a laugher. If it takes a lot of support and education-maybe not.At the core though, invest in jockeys and not horses. Good jockeys can bring a laughingstock home.

  34. Tom Labus

    I hope the Rockets win a few games against OKC.They’re fun to watch.

    1. kidmercury

      i’m rooting for the spurs out of the west. love their boring ass style of basketball. in today’s league of extreme athleticism they are running a contrarian strategy!

      1. JLM

        .Haha, I like them for the same reasons. When you make the least possible number of movements, then you have longevity. I love their game, calm and age.JLM.

        1. kidmercury

          that is why paul pierce is my favorite NBA player. a master of efficiency. his biggest talent is a remarkable sense of balance, so with the slightest move he can throw his opponent off and get a clean shot. it’s an ugly style of basketball, but he’s going to be playing effectively till he’s 90.

          1. JLM

            .Agree completely.Him and Duncan.JLM.

          2. fredwilson

            Spitting the truth!

      2. fredwilson

        I like the Spurs but love KD. From the great school in Austin Texas

  35. RudyC

    If that’s the case then $$$ would be pouring into my company then…lol…we’ve been ridiculed, laughed at and looked down upon 4 years…can’t wait to open..

    1. ObjectMethodology.com

      Well, I see you passed on the opportunity to tell us about your biz. That’s not good. ABS !!!!

  36. andyidsinga

    this is an awesome post ..also love the chris dixon post.one of the things i struggle with is that i actually want to build some toys …and when i describe them to people they dont just brush them off as toys because they are, well, wait for it > toys. so usually they just have a glazed over look and think im a little nuts.

  37. LE

    “I am going down to Princeton today to talk to Ed Zschau’s class on entrepreneurship”Lest anyone think that there is no advantage to going to a name school or for that matter a good school vs. online learning. And the resources and people that they attract as well as people who can help the students (and that the students can make contact with).Ed Zschau:http://en.wikipedia.org/wikhttp://commons.princeton.ed…Remembering back in college when I had to get people to come in and speak (in an entrepreneurship class) how easy it was to do given the school and the contacts they had which pointed me in the right direction. The mere fact that I was calling from that school was a door opener. For a project I was doing I was also able to get to do an extensive interview in the home for several hours of the former governor of my state (PA) at the time. For the Governor for example it was a simple quick call to one of his supporters which opened the door immediately……..

    1. ObjectMethodology.com

      “Lest anyone think that there is no advantage to going to a name school”Yes, but it’s an artificial advantage. Proven by the numbers of wealthy people who dropped out of college (or got an honorary degree) and the people who have gone to a lessor college and gone farther than others.Don’t get me wrong. Education is great. In today’s knowledge worker age life long education is a must. But, you don’t need to go off to college when education can be delivered via the internet.

      1. Richard

        But, look at the management teams of the s&p 500…

        1. ObjectMethodology.com

          Right, I agree that there is an advantage. But, it’s *created* with smoke and mirrors. Not by ability or skills of the graduate. The only way to know for sure would be to eliminate the school name from a job application and test everyone who applys. Then after, compare test results with school name..I’m convinced that delivering education via the internet is better than brick-n-mortor. Also, I think it’s the student not the school that makes a good graduate. BTW, I taught school for about seven year.

    2. Richard

      yep, theory and reality are a fork in the road

  38. LE

    I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.My spin on this is a slight variation. You make money by transforming something with effort. In your mind you see something and what it can be and you put the time into making that happen while understanding why others are not.One example I will use is real estate. A piece of real estate all nice and ready to rent will be priced according to market conditions and you won’t make much on it. A dump either in a nice neighborhood or an out of the way neighborhood is where you will make some money. By taking something that scares away more bidders and requires you to put in the effort to rehab (with the accompanying risk) to make something happen.Things that are turn key (ready to go) are rarely opportunities. Things that are hard to do and take effort present opportunity….

  39. LE

    When I see people laughing at ideas and companies we have backed, I smile. It means we are going to make a lot of money on that investmentI wonder how many people who end up pitching Fred study his blog. This all goes back to the “effort” that people are willing to put into something. Which most are not they want the easy way.From this statement (oft repeated on AVC) we can deduce that it’s probably a good idea to mix into your pitch at USV that many people are laughing at your idea to get them more interested in what you are doing. Or to perhaps make your idea slightly off so the USV partners can fix the idea and understand why others don’t want to invest. Aha they say! (Opposite of selling domains where the game is to make someone feel that someone just showed up yesterday and wants the same domain name. You’d be surprised how often that bluff works.)

    1. fredwilson

      That is good advice

  40. LE

    The same logic applies to starting companies. If you start a company in a market everyone knows is going to be big, then you will have a ton of competition. If, however, you start a company in a market everyone is laughing at, you won’t have too many competitors.Would like to point out (this will be obvious to some people) that this is specific to the type of things that are generally discussed on this blog and in the startup community. I fear that many people will associate “business” strictly with perspectives like this where there is an entire world of other opportunity out there that they don’t even know exists.I often see many examples of people opening up niche businesses with little competition and failing because there isn’t enough demand. And they have to create the market.Let’s use a restaurant as an example. You can open up a Vietnamese restaurant or you can open up a Sushi or Italian restaurant. There is a group of people who will always be around to patronize a sushi/italian restaurant. Not only that but they are regular repeat customers. Otoh, at least in every place but a major city, Vietnamese restaurants don’t have anywhere near the traction. A good way to make money is simply to find something that others are doing and do it better and grab and establish yourself by chipping away at the existing customers already in the market. This of course is not the type of business that VC’s are interested in. But it’s a great way to make money…..

  41. ObjectMethodology.com

    “It means we are going to make a lot of money on that investment.”Are you sure it means you *are* gonna’ make money or that you *may* make money? HealthRMS is a perfect example of being laughed at but didn’t make money. I started making healthcare software ~12 years ago when doctors said they would *never* use computer based records systems. Along the way I was ridiculed for wasting my time so shelved the ideas more than once over these past years.Now today emr/ehr is big but I’ve still not made any money. I been steam rolled by big players with lessor products. I’ve had a few people try to steal the software or buy *me* to get the IP. I’ve also had a guy try to *help* me into selling the product for cheap.I’m just wondering if ridicule ensure’s you’re gonna’ make money or if it just means the opportunity exists?

    1. ShanaC

      i would say there is a difference in ideas versus stock…

  42. ShanaC

    Depends on what kind of laughing stocks – if it were penny stocks, I would laugh for other sorts of reasons…

  43. Richard

    fred, was there one person who called mobile as the innovation of the past decade earliest? same for cloud computing?

  44. Roy Liu

    But the first half of Gurley’s observation is just as critical as the 2nd half, i.e., you have to be “right”, whatever the definition for “right” is…I would postulate that the odds of being wrong and ridiculed are higher (or at least as high) than being right and ridiculed….although presumably that’s why VC’s get paid all the coin, to be able to suss out that one investment scenario of “right” + ridicule….

  45. Nikhil Basu Trivedi

    hope you have fun in Zschau’s class! Princeton will miss him dearly

    1. fredwilson

      Met him for the first time today. What a great person

  46. jason wright

    return can be measured.ridยทiยทculeNounThe subjection of someone or something to mockery and derision.VerbSubject to mockery and derision.Synonymsnoun. mockery – derision – taunt – scoff – jeer – mock – gibeverb. mock – deride – scoff – jeer – gibe – make fun of – sneer

  47. panterosa,

    Basically believe in and fund anarchy. I suspected you were an anarchist Fred..Anarchy is my theme this month. Cap over the windmill.

  48. Richard

    No better example than the great howard hughes

  49. ivanhoff

    It totally makes sense, but there is also a touch of survivorship bias in claiming the highly positive correlation between return and ridicule. No one remembers or tracks the “ridiculous” ideas that don’t succeedBy the way, this investing philosophy applies perfectly to public markets as well. In any given year, usually the best performing stocks are the ones that surprise the most, which means that they come from industries no one expects or understands. One of the most powerful combination of catalysts for a stock is simultaneously making new 52-week high while almost everyone hates it or ridicules it. In public markets, being a contrarian sometimes means staying with the underlying trend.

  50. Steven Cruz

    Hi Fred,I have tickets for Disrupt, but can’t make it to Tuesday’s. Any way there will be a live stream of your fireside chat ?

    1. fredwilson

      Don’t know but I bet they will

  51. Donna Brewington White

    Investing as an art form. I like it.

  52. Erik S.

    New trend in VC: Investing in the ridiculous.Returns will be worse than investing in a hungry monkey hanging around a banana stand, but by the time the limited partners figure that out, the managing partners will have moved on.Now, why does all this sound familiar? Maybe it is time for me to become a sheep rancher.

    1. fredwilson

      we have been doing it for a while and the returns have been fantastic

  53. Bob Labarre

    Fred, that is interesting commentary, but it may easy for you to say because you may be more inherently gifted than many to envision what people might like in the near future (e.g. Tweets, Zynga games). Additionally, some people are born into an era in which their interests and visions fortuitously coincide with the changing times, making them look like geniuses, wherein other brilliant people who were less birthday-lucky were relegated to the dustbin of anonymous fools. Malcolm Gladwell postulates that this is true in Outliers, his popular book from a few years ago. You mention the HomeBrew Club (circa 1975 in the Bay area), and Gladwell reminds us that Bill Gates went to one of the only Middle Schools in America with a Computer in 1968 (Gates was 13 years old). In the book, Gates agrees that he entered High School with more programming experience than all but 50 or so American kids in the Country at the time. So he could more easily forge on while others were laughing a few years later, confident in the knowledge to which he ‘alone’ was privy.

    1. fredwilson

      yup. i know its not easy to do this. but i still think its what you must do if you want to post great returns in venture

      1. Dave W Baldwin

        Regarding the drop in bucket from education update, you increased the chances of next Bill Gates.

  54. Mo Adham

    This is great Fred

  55. Pete Griffiths

    Couldn’t agree more.

  56. Ron Williams

    Asteroids are going to be big. In your lifetime. On drones: http://peaceeconomyproject…. โ€œIn Yemen, mothers used to say, โ€˜Go to sleep or Iโ€™ll get your father,โ€™โ€ he said. โ€œNow they say, โ€˜Go to sleep or Iโ€™ll call the planes.โ€™โ€

  57. Guest

    @fredwilson — Asteroids tech is no laughing matter.On Stanford Venture Lab, my team got assigned a “worst” idea and had to transform it into a good idea. The “worst” idea was asteroid mining.None of my team wanted to touch it — not the guy who worked at BaE Systems nor the MSc Geology……Apparently it was “crazy and impossible” and we should “do an easier project”………Nevertheless, I persuaded them so we shipped this:*ย http://m.youtube.com/watch?…A few days later, James Cameron and Google executives announced this:*ย http://www.space.com/15395-…Lesson learnt: embrace the seemingly ridiculous with your curiosity and problem-solving.ย 

  58. Cynthia Schames

    I LOVE THIS!!It’s why I’m obsessive about the market I’ve chosen to focus on: plus size women. There are over 100 million of us in America but we’re neglected by mainstream fashion industry, mocked or ignored by society.And that’s just wrong.The Pinterest Moms need clothes, they spend a lot of money when given the opportunity, and they crave respect and being treated like they matter. I know in my heart that if I kill myself executing an amazing product built for them, I’ll win. The ones who hitch their ass to this wagon, so to speak, will win big too.It’s not sexy, unless you consider owning and redefining an $18B market sexy. And I do.

    1. fredwilson

      the gotham gal bought plus sizes at Macy’s in the mid 80s. it was a very lucrative business for Macy’s at that time.

      1. Cynthia Schames

        Yes, I know. She and I had a good conversation about that, and about AbbeyPost, recently. Hopefully I’ll be part of the family soon ๐Ÿ™‚

  59. george

    Great Post: Solid words of wisdom! I like to equate those unique opportunities as imperfect markets/business models, niche segments with low competitive forces. Essentially, the ridicule creates a window of time to develop and price up products, before the competition can replicate and jump in.

  60. Vidhan Chandra Rana

    Nice post. Contrarian thinking.

  61. Derek Kerton

    Perhaps true, but I’m not so sure. I think having a crazy idea can give you a head start…until others figure out you weren’t nuts. Larry and Sergey were focused on search, when the whole industry KNEW that portals were the winning strategy. But it wasn’t long before Alta Vista, Infoseek, and others had similar search quality. But Google had the time to market advantage, some luck, and then executed well.So I would argue that execution is the one key you have some control over. The startup that has killer execution, even in a crowded market often wins. Wouldn’t you agree that execution can make the difference in both the laughable future winners, as well as the bandwagons?I think your love of outsider ideas is analogical. I don’t think it’s a scientific sample. Sure, there are cases of big wins, but most of the time, crazy ideas are just crazy.

    1. M. Edward (Ed) Borasky

      Google *also* had a patentable idea and solid computational linear algebra technology going for them. Let’s not overlook actual brilliance in the name of the pseudo-mantra “Ideas are a dime a dozen; execution is everything.” In Google’s case, the idea created immense value!.

      1. Derek Kerton

        Ideas ARE a dime a dozen. “Better search” is an idea, and anybody with a bad search result could have come up with the idea. A method to deliver better results, OTOH, is of great value. Excellent technology is execution, not idea.

  62. sachmo

    Drones will be big. In fact they already are.3D printing however is a fad. Everyone has jumped on the bandwagon.Been following the technology for some time.And as someone who uses a 3D printer regularly, as well as more traditional manufacturing techniques to build quick prototypes, I’d still rather have a vertical milling machine any day over a 3D printer… and I don’t see that changing in 10 years.Be careful how you define ‘everyone’ … and ‘ridicule’.Getting honest feedback is good too.

  63. Josh S

    “So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illquid investments. That is a recipe for disaster.”Since you’re ridiculing this, does it mean I should invest in it? :)Seriously though, good thoughts.

  64. jason wright

    http://online.wsj.com/artic…how to buy a bitcoin?Coinbase – “US bank accounts only”. for a borderless virtual currency? pants, and ridiculous.

  65. Donna Fedor

    Love your post…funny that I just wrote a similar one targetted at the connected health industry! It is similar to the quote about the unreasonable man altering the world by George Bernard Shaw and to Jeff Bezos’ comment about the willingness to be misunderstood (ridiculed) for a long time. Also reminds me of the value innovation book blue ocean strategy.It is a tough thing to do for most people, willing to go where other people are not and accepting ridicule that comes with it. You need to condition your brain and your corporate culture with alot of resolve and determination and a real commitment to experimentation as a strategy. This is far too outside what is reasonable for many people running companies and for most sources of capital.If you want to read my connected health blog, http://bit.ly/15LpmHu

  66. JLM

    .So far, everything I know about Lancaster, Pennsylvania is positive. Ya’ll are on a roll.Don’t screw it up, Sage.JLM.

  67. JLM

    .Hell, Sage, if you can’t bat clean up behind Dick Winters, you are not half the man I think you are. I bet you are already on Steven Speilberg’s To Do List right now.No hill for a climber.JLM.

  68. Donna Brewington White

    And all this time we thought it was just another one of the great tech capitals of the world.

  69. fredwilson

    At least you detected the humor I intended

  70. Donna Brewington White

    It wasn’t wasted.