Bijan Sabet of Spark Capital on why he invested in Twitter and Tumblr
Adam Rifkin stashed this in Venture Capital!
Tomio Geron of Forbes writes about Bijan Sabet's use of his intuition to know what to invest:
When investing in consumer Internet companies, many investors look at the founders, the market or the company’s early traction or plan. But there’s also a certain gut instinct, or attraction that Sabet–as a user himself–had to companies like Twitter and Tumblr. ”Tumblr had a 20-year-old (founder David Karp), and they’d just launched a product with no meaningful metrics,” Sabet says. “I fell in love. We invested in Twitter when it had 11 employees and a couple hundred thousand active users. I became an addict. That guided our instincts.”
With these kinds of companies there’s something you can’t get out of your thoughts, Sabet says. He felt this even when these companies were relatively small:
“It immediately grabs your attention and you can’t get it out of your head,” he says. “As you use, it become more obvious why it’s so powerful. When I first joined Twitter, I was blown away by the ease of it. But I didn’t have many followers. But as I started using it more, it had an interesting small community then. As each day progressed, the value increased exponentially. It’s not like on the first day, the clouds parted. But it was the kind of thing where I couldn’t get it out of my head… The question we asked is could we imagine these things getting massively large? That was the leap of faith we were willing to take.”
Very few people are willing to take the leap of faith that a product can get massively large.
It's great to see someone believe in their instincts.
It also makes me wonder why there are so few (consumer Internet) products that can get massively large.