John Doerr is a billionaire that acquired most of his wealth by doing the right choice at the right time. Even though he had been right most of the time, he had timely seen potential in companies, this one passed opportunity is the one that is ‘a weight on his heart’ ever since.
John Doerr says that he had an opportunity to make a giant investment in Tesla back in 2007, and he didn’t. He is regretting it ever since. This investment would’ve brought him a giant leap in numbers on his bank account.
“The conventional wisdom was that venture capitalists thought not to invest in electric vehicle companies and not new car companies at all.” – Doerr says.
A Billionaire Says That Investing In ‘Crazy Elon’ Was The Right Decision He Should Have Made 15 Years Ago
The chairman of the Kleiner Perkins capitalist firm, Doerr, also says that at the time he had a choice whose back to cover and he chose the wrong person. This choice happens to be completely devastating, since it caused Doerr around $10 million.
“We had the choice of backing a brilliant car designer by the name of Henrik Fisker or an ambitious, slightly crazy entrepreneur by the name of Elon Musk with Tesla and we made the wrong decision.” – the saddened Doerr adds.
Back in 2008, Kleiner Perkins had two chances for investing. One was Elon Musk’s Tesla, and the other was Fisker Automotive. They’ve decided to put as much as $10 million on the latter company, and as a result, lose it all. Just five years after the investment, in 2012, the company filed for bankruptcy.
The owner of the bankrupt company, Henrik Fisker, then decided on a very fishy move – to open a new automotive company, with the same logo and same brand name, as the previous time. This company is still functioning today, however, it is far behind Tesla in any view.
During the same time, in 2007, Tesla didn’t look so good. It was a company in transition, the co-founder Martin Eberhard just stepped down as CEO. Musk was in a process of becoming one, and the situation did not look so good for the company. One year Musk was in the process of becoming the CEO. Around the same time was needed for the production of the first Tesla to happen. They produced the first Tesla in 2008, five years after the company has been founded.
At the moment, Fisker Automotive is gone, and Tesla has a value of around $1 trillion.To give you a better view of this, back in 2007, Tesla’s stock market price was around $1 per share. Now that is up to $300 per share. So, by investing $10 million back then, he would have had $3 billion now.
For those who don’t follow the stock market, but know that the price per share was higher – please do not be confused. Yes, Tesla’s price per share was closing to the $900. However, the company completed a 3-for-1 stock split last Wednesday the 24th of August, and brought the price down to $300.
Companies that have high share prices usually tend to do these splits whenever the price reaches a certain number. Over the years, it has been rationalized that many potential investors are more likely to invest in a company if the stock price is not very high.
“That’s probably the worst investment decision of all time,” Doerr says for Bloomberg Wealth referring to his decision not to invest in Tesla. “I don’t obsess on these regrets, but I won’t ever forget.”
John Doerr is far from being in a bad position in life. Even though he missed the Tesla train, he still has a part in Amazon, Google, and Twitter.
Doerr wants to think of himself as a person that can look in the future and sense the good opportunities. As such, he instantly ‘clicked’ with Jeff Bezos when he first met him.
“We were both kind of computer science geeks.” – Doerr says referring to the first meeting with Bezos. “He had a vision, which is true to this day, that if he had the broadest selection with the most affordable prices and the best customer experience that flywheel he could get to grow by obsessing on the customer.”
The billionaire adds how amazing Jeff Bezos’s business plan is, how detailed it is and how strictly he follows it. He says that he believed in Amazon as well, however, he didn’t expect it to grow to what it is today.
Amazon’s worth today has a value of about $1.4 trillion. It is in 5th place on the list of the largest companies by market cap in the world, one place behind Google.
He confesses that he has made some ‘lucky investments’ as well. Most times he looked for a company with a business plan and clear vision, however, he sometimes made exceptions. One of those exceptions is the above-mentioned Google.
“The Google partnership was controversial within and within the industry. It was a $100 million valuation of a company with no revenue. They had no business plan, and the founders had no business experience. It was an epic idea and became a company.”- Doerr says. “I said, ‘Larry, how big do you think it can get?’” – Doer recalls asking the co-founder. “Without blinking an eye, he said, ’10 billion dollars.’ And I said, ‘Surely you mean market cap, right?’ He said, ‘No, I’m talking revenue.’”
Now, more than a decade after, Google is essential for every internet user. It is the most popular search engine and last year it had a revenue of $56 billion.
https://www.youtube.com/watch?v=Lqlb2dLYFQA
