You Can Only Make Money By Being Right When Others are Wrong

I came across a wonderful 2013 post by Fred Wilson today. It's titled Return and Ridicule. He referenced it today in the context of cryptocurrencies, in response to a dismissal of Bitcoin/Ethereum as mere hype.

The following quote from the piece stayed with me:

I have found that return and ridicule are highly correlated over the years. We have made more money on things that were highly ridiculed than on any other cohort. When I see people laughing at ideas and companies we have backed, I smile. It means we are going to make a lot of money on that investment.

I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can't make money by being wrong. And you can't make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.

I've been having this same realization over the last year. I wrote about it here. It's something that I will continue to keep in mind.