Investor Stories 458: Anti Portfolio Lessons: Netflix by Mail, Palantir at the Wrong Price, and the Cost of Price Sensitivity (Madera, Bussgang, Orlovski)
Three veteran VCs expose the painful reality of anti-portfolio decisions, sharing war stories about passing on Netflix when it was just DVD-by-mail and Palantir due to price sensitivity. The episode reveals how even sophisticated investors rationalize misses on companies that seemed logical to avoid at the time, offering rare transparency into the decision-making frameworks that can make or break billion-dollar opportunities.
Key takeaways
- •Write 15-page detailed notes on deals you pass versus 5 pages on investments to create better decision-making frameworks for future opportunities.
- •Price sensitivity can be the killer of generational returns - missing Palantir and other unicorns often comes down to valuation concerns that seem rational in the moment.
- •Even winning a deal on Friday doesn't guarantee anything - term sheets can fall apart and opportunities can slip away between verbal commitments and signed docs.
- •Focus on documenting why you passed rather than celebrating wins, since the misses often provide more valuable learning for pattern recognition.
- •Accept that high-risk investing means most deals will fail, but the real regret comes from missing the outliers due to overthinking rather than fundamental flaws.
Listen to full episode
Best moment
VC admits passing on Netflix when it was just Blockbuster by mail
Netflix is one that I passed on. I know. And my wife likes to remind me of that one frequently. But in my defense, when we did first look at them Palantir is another one, by the way. When when we first look at Netflix, it really was blockbuster by mail, CDs, DVDs by mail. And there wasn't really great feedback as to how renewable this service was. I mean, intuitively, we thought it was, but it wasn't there wasn't really a lot of data to look at. The Palantir story is probably a little bit better. Peter Thiel introduced me to, Alex Karp, CEO of Ballantir, early on,
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