Garry's Channel: How I turned $300k into $2 billion

Eight years ago, I met a founder and invested $300,000 into his company. Those shares are now worth over $2,400,000,000. That company was Coinbase, which investors have now valued at more than a hundred billion dollars. It's the best investment I've ever made. You might have heard of my $200,000,000 mistake. I said no to being a cofounding engineer at a $40,000,000,000 company.

Don't feel too bad for me. I did say yes to being one of the first checks in a $100,000,000,000 startup. Silicon Valley is crazy. This is my story of my $2,000,000,000 success. Let's get into it. Coinbase is now worth a reported hundred billion dollars or more on the secondary markets. By the time you're watching this, who knows where the price will be?

In March of twenty twelve, Brian Armstrong sent me 0. 05 Bitcoin using his new startup called Bitbank. His idea was pretty simple, make a clean well lit place for people to buy and hold Bitcoin. While a lot of startups pivot, the idea stayed the same this whole time for them. The only thing that really changed was Bitbank ended up changing their name to Coinbase. When it got that 0.

05 Bitcoin in 02/2012, Bitcoin's total market cap was under a billion dollars. Today Bitcoin's market cap is over a trillion dollars. That fraction of a Bitcoin was worth about 2¢ then. Today it's worth about $2,500. A moment later, right after I got that point o five Bitcoin, I got an email from Brian. He had built this prototype and got it online. He'd been coding like crazy the past few weeks.

He asked, do you have any tips on finding co founders and do you know anyone from your community who might be interested? It's funny to think back on that because anyone who would have joined back then would be a multi billionaire today. Here's what I wrote back. The hardest part about finding co founders is you probably already know the right people but they might be doing other things.

You've got to show these people why this could be or already is much bigger than anything that they're doing right now. It's about transferring your belief in this market and this product to others. You already know your future co founder but you both just don't know it yet. And right about that time I was reading thousands of YC applications for the summer two thousand twelve batch.

I remember Brian and I had voted infinity in the application review system Paul Graham built. That click of a mouse guaranteed an interview at Y Combinator for them. Honestly, I'm really thankful that I was a really small part of something that was a pivotal moment for Coinbase and honestly Y Combinator. Even if Brian didn't have a co founder just yet.

You've got to remember even in 2012 Bitcoin was a very fringe idea still. Brian was a solo founder building on something brand new. At the time basically no one, I mean no one believed in Bitcoin. I found out about Bitcoin originally on Hacker News. Here was the very first mention of it on that website in 02/2009. If you read those comments, they sum up how most people thought of it.

Not likely, cool, maybe it's useful or I just don't get it. That is what made Brian so impressive. Today it feels like Bitcoin is much more well known but at that moment, very few people had any understanding of it. Let alone believe that it could be useful to society. As hard as it was for a founder to believe, it was even harder for investors to believe. Most people said no, but I didn't.

This investment is likely to be one of the best calls I've ever made and maybe ever will make. Here are the reasons why I said yes when most people said no. First, I was primed for the problem. I knew how hard and terrible the experience was to buy Bitcoin already. After I read about it on Hacker News, I tried to buy it on the first website you probably could buy it on which was Mt. Gox.

It was a terrible experience and while Bitcoin had captured my attention, it was that bad design and horrible user experience that felt so wrong and I knew that that couldn't be the thing that brought Bitcoin all the way. Next, I was primed for the idea.

I believe that fiat currencies might fail because in 02/2005 I had also been an engineer working on software for Peter Thiel's hedge fund Clarium Capital Management. One of the books they made us all read to train up for the role was The Dollar Crisis by Richard Duncan. That book had primed me for the madness that happened in 1971.

That was the year that Richard Nixon took The United States off the gold standard. You can no longer trade your dollars for gold at that time. Dollars which were already the reserve currency of all other central banks suddenly became a fiat currency, printable at will. 25% of all dollars in circulation today were printed just in the last year in 2020 thus Bitcoin.

As Louis Pasteur once said, chance only favors the prepared mind. I feel very lucky to have been prepared for this idea when it came. Finally, Brian was a builder and personally I love funding builders. It was very powerful for Brian to be able to build that first version of Coinbase and secure it himself.

With physical banks you protect physical money with physical bullets, but with Internet money you protect it with great software engineering and secure systems.

We knew Brian was an engineer and head of anti fraud at Airbnb which itself had just reached billion dollar startup status And we knew anti fraud at Airbnb was actually like being part of the special forces, I just knew that Brian had been put through the paces by hackers daily. It takes that kind of builder to walk away from that kind of opportunity to show you what the real future will be.

That's what Brian did for me. Here are the key lessons for you from the Coinbase story. First, be contrarian and right. Can you find something that is fringe but ultimately right? Is there something from history or psychology or first principles bottom up thinking that can help you justify your crazy idea and why it's going to take the world by storm?

Sooner or later every crazy idea will have its day but only if it has a truly compelling pitch. Second, be a builder. The more you can do, the less you leave the chance and the more people will want to fund you, join you or use your product or service. Do those things yourself to the extent you can. I made a whole video about this called roll your way to a startup unicorn.

Link in the description to check that out. Finally, it's clear how powerful and useful it is for founders to be able to send a super compelling email. Remember, when Brian sent me 0. 05 Bitcoin, it was worth only 23¢ but he literally sent me free money. It got my attention and it showed me Brian was serious about building something genuinely useful that I could use.

In the end, I was incredibly lucky that I got that email, I got to meet Brian and that I had the chance of funding this company. For that, I am so thankful. I'm also really thankful for all of you watching right now. There are so many businesses that need to be created and the reason why I'm putting these videos together is to help make that happen.

I hope these videos are helpful to you and I hope you'll take a moment to click subscribe and hit the bell icon to get notifications for whenever I post. Be well and I'll see you next week.