In VC, you’re paid to make decisions. At least once per fund, one of those decisions needs to be right. Conviction is the root of those decisions. This is one point of real consensus in the Draper family.

Pops proposed to my grandmother, Phyllis, after 3 days. Talk about conviction! He was on a cruise ship at the time. He’d recently returned from the Korean War, where he’d narrowly, very luckily avoided dying. He wasn’t about to waste any time moving forward with his life. Interestingly, Phyllis wasn’t supposed to be on the market. She was wearing another man’s engagement ring; her fiancé just wasn’t on the boat. That didn’t matter to Pops. He proposed anyway. It worked out; my grandmother stayed with Pops for the rest of her life.

High-conviction decisions usually have some friction. The world will present obstacles, often via the people you respect the most. When I was going all-in on Bitcoin, my grandfather told me that I “shouldn’t be the first Draper to go to jail”... so, naturally, I did it anyway.

I see conviction in VC as the strong belief that ________ won’t stop growing. This company won’t stop growing, this market won’t stop growing, these people won’t stop growing.

You build this conviction over time. Years into your business relationship, you still believe in the founders and the founding team. The big goal is to build such enduring conviction that you’ll never want to sell this asset. The whole job is predicated on finding those companies that you’ll never want to sell (and the people who run them) because of who they are, because of the people who work with them, and because of the mission they’re on.

Pops phrased it this way: “Sometimes you think you want to sell something because the price seems high, and you’re worried that it might go down. Remember why you invested in the first place. If none of those things have changed, then you shouldn’t sell unless you need the money. And even then, you’re never sad if you sell half.”

In the 1950s Pops believed the technology industry wouldn’t stop growing. He learned all about this new industry, established a firm belief in that industry, and invested based

on that. He built conviction, kept making decisions based on that conviction, and kept deepening his conviction over the course of his career. He spent as much time as possible with the people who were putting in the blood, sweat, and tears in that thesis area, which he believed was undervalued and misunderstood, and he kept reinforcing the core decisions he’d already made.

One of the hardest things in VC is sustaining your conviction (and not doubting yourself). Your windfalls are big, few, and far between. You’ll feel tempted to re-make decisions. A little voice in your head will say things like, “Well, I already made that decision, so I should be making new decisions.” You’ll feel tempted to change your mind and try making more bets based on different decisions.

But the best approach is to make a small number of decisions—and use those as the foundation for many others. I wish I’d realized this sooner than I did.

Humans always want to create new decisions for themselves. But the best investors know that if they were right about something, then they don’t start being wrong about it! Sometimes you should look at your portfolio and just say, “Hey, instead of making a new decision—that old decision is crushing it. Let’s double down.”

Enduring conviction is the trophy you get at the end of a decade of early investments. Warren Buffett is amazing as this. He knew from the beginning that investing wasn’t a one-time decision: you build up your ownership over time.

My Conviction about Bitcoin

My biggest high-conviction move to date was going all-in on Bitcoin. At that time,
in 2011, the entire sector was called “the Bitcoin space”—there were no other notable cryptocurrencies.

Boost VC became the first fund to focus on founders building in that category. Since
then, we’ve supported more than 100 crypto companies through Boost VC, including Etherscan, Wyre, Unstoppable Domains, Keep, Ripio, Aragon, Polychain, and many others.

It started with a stroke of luck: I met Brian Armstrong; he pitched me Coinbase and sparked my interest in Bitcoin. Sitting across from me at Red Rock Coffee, he said: “Someday the world will be on one financial infrastructure. I believe Bitcoin is that infrastructure, and Coinbase is the gateway.”

I didn’t invest then and there. I followed the trail of breadcrumbs that Brian started me on, exploring the industry and the people whose blood, sweat, and tears were all over it. Wow! What a world!

After that legwork, I had only a few days left to make my decision about Coinbase. The moment that tipped the scales happened when I was sitting on the toilet. Absentmindedly, I started flipping through an issue of The Economist that had been lying beside my toilet for a year and a half. I saw a headline—something like “Is the Bitcoin Bubble Bursting?”—and I thought “That’s crazy. This magazine has been
here for a year and a half. But I’m here now, thinking about Bitcoin, weighing the idea of investing in Coinbase.”

I became convinced that “the Bitcoin space” wouldn’t stop growing.

That night, I called Brian and said I was ready to invest. That was the best investment I’ve made so far. But I should have taken my conviction even further than that. The day the Coinbase wire came through, Brian called to thank me for investing and to get me amped up (a smooth move for any founder). In that same call, he said, “Other investors are matching their investment in Coinbase, putting the same amount of money into Bitcoin.”

In my head, I’m like—you gotta be kidding me, man, I just gave you a bunch of money, and now you want MORE money??

So I didn’t do it, but I wish I had. That would’ve been an even better investment than Coinbase.

Hot Takes

Often, the best investments come from the loudest debates among partners. Founders will present a counter-intuitive or contrarian concept; someone will LOVE it, and someone else will HATE it. Those are the startups striking a nerve. Those are the startups doing something IMPORTANT!

Good investors have hot takes about when conventional wisdom is wrong, and that unlocks the potential for conviction in unconventional ideas.

• Imagine investing in Uber when conventional wisdom said, “Don’t get into a stranger’s car.”

• Imagine investing in video games when conventional wisdom said, “Being good at video games makes you dumber and less appealing to colleges.”

• Imagine investing in SpaceX when only the government was allowed to make rockets.

• Imagine investing in Tesla when the best electric car was a golf cart that could only run for an hour on a charge.

• With Benchling, the conventional wisdom was, “The life sciences industry won’t adopt new technologies.”

• With Plangrid, it was the same thing: “The construction industry is too big and slow to move over to software; it’s all pen and paper.”

• I invested in Bitcoin when only governments were allowed to issue currency. It’s not that I liked fintech —I didn’t. I liked the rebellion against the legacy system.

  Early stage investment often takes understanding when conventional wisdom splits from the truth.

  The ability to see these unconventional points of view is so important that we’ve been experimenting with ways to test for it during our interview process at Boost. When we were hiring our first associate, I bought him a box of sports cards and said, “Find me the 15 best cards in this box.”

That night, he went through all the cards, sorted them, and made a presentation of the 15 best cards. He said, “These 5 are the obvious best. These 5 are the next tier down. And these 5 are my hot takes.”

I asked him about one of his hot takes: a quarterback most people would’ve ignored completely. He said, “I watched him in college. This guy’s explosive and dynamic, the way most people aren’t. He’ll be an enduring player. He’ll be awesome.”

This maps to venture. You don’t invest purely based on your hot take, but if you don’t have a hot take, you probably won’t invest. The founders you want aren’t the obvious best. They aren’t the next tier down from being the obvious best, either. They’re undervalued. It takes an eagle-eyed talent scout to spot them. Those are the bets you’re trying to make.

Think about it logically for a second. If the idea was an obvious “GOOD IDEA,” it should’ve been funded by the government, big corporations, or one of the biggest venture capital funds.

The earlier you are in your early-stage venture career, the less likely you are to see the obvious best or second-best. You’re going to see the leftovers of the leftovers—the people who haven’t gotten support from the massive VC firms like Sequoia and A16Z, from FAANG companies, or from the government. You’re at the bottom of the food chain fielding the little guys. But that’s where the most lucrative returns are, those are the companies that change the world. The companies no one sees coming. You’re looking for the leftovers of the leftovers that just might change the world. They need your belief!