Learning from spectacular failures and outsized wins
Outsized wins and spectacular failures are the perfect instruction manual for what to do — and what never to do. Sometimes seemingly minor mistakes end up leading to multi-billion losses. In this article, we analyze such cases so that our readers and our own team don't repeat them in the future.
Underestimating Equity Incentives: Why did NVIDIA Turn 80% of its Team into Millionaires?
In 2025, NVIDIA became the most valuable company in the world. Its market cap exceeded $5 trillion, and 28,000 out of 36,000 employees have a personal net worth above $1 million. One of the key causal factors behind this success — for both the company and its people — is equity-based team motivation that turns every employee into an investor.
As a result, NVIDIA has built an "army of co-owners": people don't just "go to work," they show up to protect and grow their own capital, which they accumulate over years through stock. This is a radically different psychology from a team that lives purely on salary. Investors and founders who underestimate the importance of a large, well-designed equity or token pool for the team are effectively cutting their own future returns.
3 Anti-Examples of Ineffective Incentives:
- WeWork — the classic case of a founder who built a personality cult and extracted hundreds of millions for himself while giving almost no meaningful equity to key employees. People left in droves, and the prevailing mindset was: "I work here as long as they pay me."
- Yahoo — In its early years, Yahoo was giving engineers far less equity than Google, Facebook, or Airbnb. As a result, employees left for competitors where their equity packages were 2–3x larger.
- States with zero private property — the USSR, North Korea, Venezuela. When people don't own what they create and don't participate in the upside from growth, the same pattern emerges: motivation disappears, quality collapses, innovation dries up, the system falls apart.
If you take care of people, everything else takes care of itself. — Jensen Huang, founder of NVIDIA
Market Cap per Employee, 2024
The Venture Paradox: Those No One Believed in End Up Building What Everyone Else is Chasing
Being countercultural is not a risk factor — it's often the main predictor of explosive future scale. Looking back, we see that the most powerful companies weren't born out of consensus; they emerged from resistance to the system.
Example: Uber looked like pure counterculture: a service that breaks the established rules of the taxi market, ignores traditional licensing, and operates "on top of" regulators. In 2009–2010, the overwhelming majority of investors saw Uber as a fringe idea. The founders, Travis Kalanick and Garrett Camp, were not graduates of elite universities, had no high-profile exits, and did not fit the image of "manageable, fund-friendly" entrepreneurs.
Travis has said he faced dozens of rejections. In their public anti-portfolio, Bessemer Venture Partners openly admit they passed on the deal. Other funds also declined for reasons like "regulators will shut this down," "the taxi lobby is too strong," "you can't scale this legally," "the idea is too risky." At that moment, Uber was trying to raise just $1.25M at roughly a $5M valuation.
The result: Uber grew into a company with a market capitalization of around $180B.
This is a textbook example of a systemic error many investors make: they reject a startup not because the economics are weak, but because the project deviates too far from industry norms. The cost of that mistake was 36,000x of missed upside and one of the largest startups of the 21st century.
If something is truly revolutionary, investors won't believe it at first. — Elon Musk
Global Uber Usage Rates, 2022-2023
Blindness to Scale: Fear of a High Valuation vs. The Reality of Exponential Growth
Many investors think in terms of linear math: "If I enter at a high valuation, my upside shrinks." But the investment market is nonlinear and follows a power-law distribution, where 1% of companies generate 99% of returns. When a company is truly on track to dominance, the entry valuation stops mattering. The difference between investing in Facebook at a $50M or a $200M valuation is almost irrelevant when the final outcome is $2T.
By focusing on current metrics instead of the probability of a future monopoly, investors become blind to the nonlinear dynamics of growth — and this is exactly where the biggest opportunities are lost.
3 Examples of Missed Opportunities:
- Coinbase — A classic crypto anti-example. In 2012, Brian Armstrong was emailing investors about a $500k round with a $10M cap for a young Bitcoin exchange. Bessemer partner Ethan Kurzweil replied with a line that has since become legendary in their anti-portfolio: "There is no question you could answer that would make me want to invest in Coinbase."
- Apple — Bessemer had a chance to buy a pre-IPO stake in Apple at about a $60M valuation and considered it "outrageously expensive." Today Apple is a multi-trillion-dollar company, and that "too expensive" deal effectively translated into tens of thousands of X in missed returns.
- Bitcoin / Ethereum — Investors — from retail to hedge funds — systematically viewed BTC as "too expensive" at every new order of magnitude: at $0.10, $1, $10, $100, then $1,000 and even $10,000. Every time, the belief "I'm too late, the price has already run too far" deprived them of another two or three orders of growth.
To catch a monster, you can't act like an accountant — you have to act like a hunter: sense the moment, see the scale, move through fear. The best funds behave exactly this way — that's why they end up capturing thousands of X, while others argue about entry price and then regret missed deals for years.
Don't focus on how to divide the pie. Focus on how to make the pie grow. — Ray Dalio
Confidential information: the exact point where DeflationCoin is currently positioned
Overrating Diplomas and Underrating Hunger, Insight, and Personal Risk
Most successful companies were created by people the industry initially considered "the wrong type." The absence of an Ivy League diploma says absolutely nothing about future success. In many cases, elite universities produce fragile minds — people who are great at explaining but poor at acting and taking real risk.
Example: The founders of Canva, Melanie Perkins and Cliff Obrecht, graduated from the University of Western Australia. It's a perfectly ordinary Australian university — not Ivy League at all. Melanie has said she received 100+ rejections from investors because they didn't fit the "ideal founder" stereotype.
As a result: Melanie and Cliff built a company with a $40B+ valuation. The cost of that mistake: more than 4,000x of missed upside and one of the most successful SaaS startups of the decade.
The statistics are telling: out of roughly 1,500 global unicorns, only about 25% have founders from Ivy League schools. Around 75% were built by people from regular universities — or with no elite education at all. In reality, unicorns are born from ambition, hunger, and persistence, not from a diploma.
An Ivy League education gives you the dangerous illusion of competence. — Nassim Taleb
Eight Ivy League universities — yet only one alumnus has founded a crypto project ranked among the global top-10. Justin Sun, founder of TRON, is a graduate of the University of Pennsylvania.
Four Key Takeaways From This Article
- Underestimating equity incentives leads to a team that works for salary, not for capital — and that robs the company of its ability to grow into an empire.
- Ideas that seem too bold, crazy, or "inappropriate" in the moment are far more likely to become the foundation of giants than safe, consensus-approved projects.
- Fear of "entering too high" blinds investors to exponential growth trajectories and inevitably leads to missing deals with billion-dollar outcomes.
- Education and status are weak predictors of a company's greatness. Far more often, the decisive factors are the founder's hunger, insight, and personal risk — and ignoring them is a fundamental mistake.
These four principles — deep team motivation, countercultural thinking, the ability to see scale, and true skin in the game — are exactly what we are building DeflationCoin on.
DeflationCoin
The mathematical root raised to the power of infinity symbolizes perpetual deflation — a mechanism through which the supply of coins continually decreases over time.