5 Startups That Looked Dumb—Until They Were Worth Billions

**Sam Parr** (0:00)
The headline here is they made the investment, so it's not like they passed. They made the investment, and their best case scenario, they wrote, was 400 million as an exit value. 400 million, and now it's 140 billion.

**Shaan Puri** (0:22)
Let me tell you about something that I've been thinking about, and I thought it was really cool. And our friend, Sheil, just shares the best stuff.

**Sam Parr** (0:29)
The most interesting man on X?

**Shaan Puri** (0:31)
The most interesting man on X? The most interesting man I know, actually. He does a lot of amazing stuff, but he shared something. But I got to give him credit. But basically, I saw this Jeff Bezos quote, and I want to know what you think about it. And he said something where he said, I think it's generally human nature to overestimate risk and underestimate opportunity. And then he went on to say, and so I think entrepreneurs in general would be well-advised to try and biased against that.
The risks are probably not as big as you perceive. The opportunities may be a lot bigger than you perceive. And so the interviewer was like, you seem really confident. And he goes, well, you call it confidence, but maybe I'm just accepting that human bias, and I'm trying to compensate against it. And I thought this was interesting. I've been thinking about this. I saw this like weeks and weeks ago. And every time I've been thinking, I'm like, there's so many businesses or opportunities that I see where I'm like, I can't believe that that thing is that big. And I myself fight this as well. And where I think, this thing can't be that big. I think I've said this multiple times for different products that I said, that will never work and it becomes huge. And even Jeff Bezos, by the way, he fell victim to this. There's this one quote where he was like driving packages. He says, when I was driving packages to the post office myself and typing up all the listings, I thought, maybe if I'm lucky, maybe this can be a $100 million revenue company someday. And so everyone has this, but I saw this amazing thing where it was Sheil sharing a memo from Bessemer. So Bessemer is a VC. I think they're a fantastic VC, but they're a big VC. So they created this part of their website where they release old memos. And if you don't know what that is, a memo is where whoever wants to invest into a company who works at a VC, they make a memo justifying their thoughts. And then typically the partners agree on it. They're like, yeah, that was a persuasive argument. We're on board.
And so they did a cool thing where they released the memos from past deals. And they had this amazing deal or this amazing memo on Shopify. And this was when Shopify was raising $5 million at a $20 million valuation. The company was doing $5 million in revenue. And I want to show how bad Bessemer, who is a professional VC, I think they have tens of billions under management. I want to show how bad they are at predicting stuff. So they said, these are quotes from the memo. They said, in 2010, Shopify had $132 million in GMV, which would put Shopify in the top 50 online retailers. And so at the time, that is how small the category was.

**Sam Parr** (3:03)
Let's say the other numbers, because that sounds like a big number, right? So they had 10,000 customers total, and they were doing $5 million of revenue themselves. So the $5 million of revenue, that's the company's revenue. And then all the shops on Shopify, their sales total was $132 million, right?

**Shaan Puri** (3:20)
And now, do you know how many customers they have? Do you actually know how many they have now?

**Sam Parr** (3:25)
I know that they add more than 10,000 paid customers every week now. I think there's multiple million customers.

**Shaan Puri** (3:33)
They have multiple million. And I believe, so the company is now worth $130 billion, I believe, at $1.200 billion. I believe, they do something like close to a trillion dollars in GMV. So, I can't even tell you what that math is, what the multiple is.

**Sam Parr** (3:49)
They're probably doing this amount, like the $132 million, like every hour, something stupid.

**Shaan Puri** (3:54)
Every hour, yeah.

**Sam Parr** (3:55)
You're saying we underestimate the upside of these things. We underestimate the market size. And the headline here is, they made the investment. So, it's not like they passed, they made the investment. And their best case scenario, they wrote, was $400 million as an exit value. And so $400 million, and now it's $140 billion.