3 - too expensive (Apollo, Apple, Intel)
3 - bad idea
1 - small market (eBay)
1 - no traction (Lotus)
1 - big incumbent (Compaq)
2 - rookie team (Google, Paypal)
2 - no reason (FedEx, Intuit)
1 didn't understand (StrataCom)
If the reasons are to be trusted (take them with a grain of salt), then they may have learned to i) be more competitive on expensive deals, ii) give "bad ideas" more thought, and iii) not dismiss rookie teams.
If the rule that kept them from investing in Apple and Intel also kept them from investing in Webvan and Pets.com (and a dozen other costly failures) they might think on balance it's a good rule. You'll note there's no page on their portfolio for "bad investments we didn't make".
I entirely agree. From their perspective though, it's more important to pick the hits than avoid the losers (within reason). An investment in Google while they were in a garage could happily pay for a dozen Webvans.
For those curious about eBay financing, check out the book "eBoys: The First Inside Account of Venture Capitalists at Work" http://www.amazon.com/eBoys-Inside-Account-Venture-Capitalis... (the book is 10 years old, likely to be available at your local library).
It was definitely not a slam-dunk idea, and even Benchmark partners felt uneasy about financing an online classifieds site that would be easy to replicate and invite large players to compete in case there was a valid market (Yahoo! indeed made a move at eBay with Yahoo! Actions priced at $0 listing fees, since Yahoo! had other sources of revenue).
While Meg Whitman was being recruited for the CEO role, she browsed the dinky classifieds site and was not super-impressed - Benchmark guys basically bought her and her family air+hotel to at least sell her on California prospects, if not eBay's future.
That book is a great read. Terrific look not just inside Benchmark but the late 90s VC world and some of the big startups from back then.
One of my favorite bits is the aforementioned sell job to get Meg Whitman to join (I believe Meg doesn't the credit she deserves for taking eBay from a tiny startup to a huge business). I remember laughing out loud when the Benchmark folks discuss Meg's kid having a crush on one of the VC's kids. Every little bit counted and they pulled out all the stops.
I absolutely love that they publish and maintain this. When I pitched them on Shopify I said that I'll show up on their website one way or another. Thankfully they decided they wanted to keep us out of the Anti-Portfolio and invested :-)
Hey, I love you guys and think you're going to take over the world. Signed up Shopify to do fundraising for my nonprofit (your terms are generous with the nonprofit discount), and was part of the team that recently did the Auctionhouse App for the Shopify Fund.
Love what you guys are doing. If you ever want feedback from someone using/viewing your service from many different fronts, drop me a line.
If anyone's considering Shopify, go for it -- amazing amounts of functionality without any difficulty configuring it, super fast to hit the ground running on a project that needs ecommerce, and tons of power under the hood if you want to expand. One of my favorite services I use.
Is this supposed to be a sarcastic article? It seems to me they're just documenting how stupid their decisions were. Is it inside joke? I feel like I am missing something.
