Smart People Make Dumb Decisions

[MJ DeMarco]

Smart People Make Dumb Decisions

This article entails several "smart people" (and rich) who declined investment opportunities in AirBNB when it was a young company. A mere $150K would have been able to grab 10%. AirBNB is probably a $25 Billion dollar company now.

https://medium.com/@bchesky/7-rejections-7d894cbaa084

In June 26, 2008, our friend Michael Seibel introduced us to 7 prominent investors in Silicon Valley. We were attempting to raise $150,000 at a $1.5M valuation. That means for $150,000 you could have bought 10% of Airbnb. Below you will see 5 rejections. The other 2 did not reply.

The point is, just because some seemingly smart people reject something doesn't mean you should give up and say "oh well", better give up and sell some TeeSpring shirts instead. Of course that also applies here to the opinions we give out... they are in fact, opinions based on a personal experience. Just because Fastlane User X says "That ain't FASTLANE!!!" doesn't mean it's time to give up and update your resume.

Smart people make dumb decisions.

 

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[16thCylinder]

Seen this happen on Dragon's Den (UK's Shark Tank) a number of times where the potential investors get it completely wrong and end up kicking themselves.

 

[M&A]

Similarly, the third founder of apple sold his 10% stake for 800$ had he kept it he would have been in the top 3 richest in the world but who knew what apple would go on to achieve.

He lives in a trailer park now........

 

[Vigilante]

You can't live retroactively in the past. I know a guy that bailed on Best Buy after being one of the first few employees. His "stock" would be worth dozens of millions. Cashiers at Wal-Mart were given options from Sam Walton during Wal-Mart's early days. Simple forward looking calculations have those options worth millions.

You can't use the lens of history to judge a decision made in a fleeting moment as smart or dumb, because you don't know what all the variables were at that time.

I sold a house I built from the ground up into somewhat of a dream house, because I had drawn up new house plans and purchased a 16 acre tract in the countryside to build a mini-mansion. Then, the bottom fell out of the economy, and the mini-mansion still sits today as blueprints. Was it dumb? Nope. Variables happened that were unpredictable at the time. History might call it dumb. Armchair quarterbacks might scoff at the self inflicted misfortune.

That wasn't even my worst blunder along the way.

You can't live in the past. You can't live with regret. You can't examine someone else's journey, and speculate how it might have turned out differently for them, or for you. It's pissing in the wind. It's a worthless exercise.

All the scars, all the steps, all the wins and losses, all blend into the kaleidoscope of who I am today. The overnight success story that was 20 years and 20 defeats in the making.

The downside of great risk can be great failure. I don't measure people (anymore) by how mightily they fell, but what they did with the shards of their shattered lives and how they bounced back. Winners get back up again.

 

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[NuclearPuma]

You can't predict the future...

I considered buying some bitcoin long before the bubble when I was in college.... oops. I would be in a totally different place if I had... could have made nearly 100x return....




Sent from my SAMSUNG-SM-G900A using Tapatalk

 

[Vigilante]

Lets play the opposite.

I met a guy that was one of Amazon's first hires beyond Jeff Bezos and his wife. He was hired as a book packer. His skill set was that of a book packer.

Fast forward to today. He's a retired bazillionaire. Was it smart? Nope. The stock went through the .com boom, where it rose and split and rose and split. While working for a paycheck, and due mostly to external forces, lightning struck for this guy.

His intelligence was not a factor, but you could look back and foreshadow his genius for picking Amazon (he needed a job), for sticking around (he needed a job) and for cashing out (timing and external forces).

You could make the case that I am talking out of both sides of my mouth, and I guess to a degree I am. I don't believe in luck. However, when what we are talking about is the collateral fallout from either great success or great failure, you can't necessarily attribute degrees of intelligence to being near the lightning strike.

 

[MKHB]

You can't live retroactively in the past. I know a guy that bailed on Best Buy after being one of the first few employees. His "stock" would be worth dozens of millions. Cashiers at Wal-Mart were given options from Sam Walton during Wal-Mart's early days. Simple forward looking calculations have those options worth millions.

You can't use the lens of history to judge a decision made in a fleeting moment as smart or dumb, because you don't know what all the variables were at that time.

I sold a house I built from the ground up into somewhat of a dream house, because I had drawn up new house plans and purchased a 16 acre tract in the countryside to build a mini-mansion. Then, the bottom fell out of the economy, and the mini-mansion still sits today as blueprints. Was it dumb? Nope. Variables happened that were unpredictable at the time. History might call it dumb. Armchair quarterbacks might scoff at the self inflicted misfortune.

That wasn't even my worst blunder along the way.

You can't live in the past. You can't live with regret. You can't examine someone else's journey, and speculate how it might have turned out differently for them, or for you. It's pissing in the wind. It's a worthless exercise.

All the scars, all the steps, all the wins and losses, all blend into the kaleidoscope of who I am today. The overnight success story that was 20 years and 20 defeats in the making.

The downside of great risk can be great failure. I don't measure people (anymore) by how mightily they fell, but what they did with the shards of their shattered lives and how they bounced back. Winners get back up again.

Well said, after all it is a process not an event; case in point:

My 100 shares of Supergoddammit.com went from $1.00 per share to $100.00 in a year.

• Sidewalker (Event) - I just made 10 grand I didn't have before..."Whoo hoo Vegas baby."

OR----

• Fastlaner (Process) - That original 100 bucks was discretionary and I don't want to pay effective tax rate on the gain (35-45%) so...let it ride.

 

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[theag]

http://www.bvp.com/portfolio/antiportfolio

One gem:

BVP had the opportunity to invest in pre-IPO secondary stock in Apple at a $60M valuation. BVP's Neill Brownstein called it "outrageously expensive."

One more:

"Stamps? Coins? Comic books? You've GOT to be kidding," thought Cowan. "No-brainer pass."

Another:

Jeremy Levine spent a weekend at a corporate retreat in the summer of 2004 dodging persistent Harvard undergrad Eduardo Saverin's rabid pitch. Finally, cornered in a lunch line, Jeremy delivered some sage advice "Kid, haven't you heard of Friendster? Move on. It's over!"

And another:

Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”

 

[Chitown]

Smart People Make Dumb Decisions

This article entails several "smart people" (and rich) who declined investment opportunities in AirBNB when it was a young company. A mere $150K would have been able to grab 10%. AirBNB is probably a $25 Billion dollar company now.

https://medium.com/@bchesky/7-rejections-7d894cbaa084



The point is, just because some seemingly smart people reject something doesn't mean you should give up and say "oh well", better give up and sell some TeeSpring shirts instead. Of course that also applies here to the opinions we give out... they are in fact, opinions based on a personal experience. Just because Fastlane User X says "That ain't FASTLANE!!!" doesn't mean it's time to give up and update your resume.

Smart people make dumb decisions.

F--ckin' A right I have! Dumbass decisions!

 

[MKHB]

F--ckin' A right I have! Dumbass decisions!

That goes to show you it's not the event but the process.

Like real estate, it's easier to buy a beach house at 200k and ride up to to 400K, than it is to buy at 400K and ride it to 1M.

It seems that once you get a bargain your forever holding to the past and what it cost before.

I struggle with that.

 

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