I hope your Thursday is going well. Welcome back to another episode of Ask Ash, where I interview WatchMojo Founder & CEO Ashkan Karbasfrooshan and ask him questions about various topics, ranging from covering what is going on in the news, to giving career advice to students and entrepreneurs.
On this day, August 19, 2004, Google went public at $85 a share with a market cap of $23 billion. Today, $GOOGL is worth $2,708 with a $1.81 Trillion market cap. Google is one of the most influential companies in the world. I wanted to get Ash’s thoughts on Google now, and how he considered buying Google in its early stages, but never amounted to doing so, and also some of his takeaways from that experience.
You alluded to considering to buy Google and then not doing so in your Anti Portfolio article:
While at Mamma, I supported the CEO and CFO and worked on many competitive landscape analyses. It was clear that even the then-in-beta Google was a company unlike any other … from 2002-04 I had accumulated roughly $100,000 in a ragtag assortment of second-tier digital media stocks including search and directories … new media darlings … and a mishmash of penny stocks because – why not? One thing I used to get a rush out of doing was making a get-to-go long (buy) a stock right before it announced earnings. Would the market be positively surprised? Oftentimes I was right, sometimes I was wrong. That gave me a bit of a rush … I would just hold the stock for a long time and hope it would get back in the money. I stopped that practice as it was a bit reckless and akin to going to the casino and playing blackjack.
By the time Google filed to go public, it was a machine … The company IPO’d in 2004, and my plan was to convert all my holdings – $100,000 – into Google stock. But, in the days leading up to it, my then boss mentioned that at $85/share, Google was overpriced. I don’t put that much stock in a company’s share price, but rather, its market value … I felt it would be the premier media and tech company of the 21st century but my boss’ word of caution stuck with me. But, I was unmoved and intended to sell my B & C players for the mother of all stocks: Google … I simply didn’t get a chance to place an order. If my memory serves me right (you can read this, I rather not!), the stock opened at $98 and it never presented the dip I was hoping for. The stock crossed $100 … which created this mental block thinking “well I could have had it for cheaper.” Google grew its core search business and expanded into a myriad of different markets – via smart acquisitions like Android and YouTube, which in 2012, I referred to as the best M&A deal of all time in digital media.
By 2005, IGN Entertainment bought AskMen. Then months later News Corp’s Fox Interactive Media bought IGN. I got married and caught the entrepreneurial bug and proceeded to divest of my stocks and RRSPs (The Canadian equivalent of 401Ks) to fund the ongoing, money-losing operations of WatchMojo. One silver lining is that I effectively made a parallel bet on Google: betting the WatchMojo farm on YouTube in 2012, which paid off as YouTube moved from the pariah to the belle of the ball.
But, I remained on the sidelines.
You discussed the lessons as an investor, but any takeaways as an entrepreneur?
Trust your instincts.
With products, services, etc., you are ultimately solving for a user’s want or addressing some need. But very few people will see what you see, or worse will see obstacles and reasons not to pursue it. It’s good to heed advice when driving off a cliff, but while a fraction of people are entrepreneurial, even fewer are entrepreneurs (ie. willing to risk their own capital, invest their time, energy, sanity, and so on). The challenge is to stay committed but be flexible and open-minded. Naturally, if you are wrong, eventually you need to listen to your head and common sense … but that means a bit of patience and dedication.
You can’t put a price on Value, Quality, Market domination
If you are looking for bargains, you will likely not own the best stocks, fund the best projects or acquire the best businesses. I always told my team – even when insolvent and money-losing – to pay for quality.
Don’t Dwell on the Past
Admittedly, I struggle with this. But, you can’t always get bogged down on sunk costs (i.e. historical prices). I see this in M&A, too. If a company looks to buy a business at $100M and then it grows to $400M, you may not want to pull the trigger but to someone else who sees a billion-dollar business, they may happily pay $500M. There’s much psychology regardless of the stage of M&A.
Timing matters for sure, but if something has a positive, bright future, then the past is moot.
Lastly, if you want to submit questions to Ash directly, you can do so by clicking the link here: https://watchmojo.com/suggest/AskMojo%20-%20WatchMojo’s%20founder%20Ash