The journey of a startup is rarely linear. At times, it's an uphill battle against skepticism.
Fitbit's story during its Series B fundraising is a testament to this truth.
Despite the potential they saw in their product, the wider investment community didn't share the enthusiasm.
As Seth Levine, co-founder at Foundry—the fund that took a leap of faith on Fitbit—told us recently on “Episode 001 of Contrarian”, the hurdles were seemingly insurmountable.
There was a general disinterest in hardware, disbelief in the wearable market, and an overall lack of vision for what Fitbit could become.
Before we dive in, catch the full episode here:
The Fitbit Conundrum
In the early stages of its existence, Fitbit confronted a significant obstacle: the skepticism surrounding hardware investments.
The age-old reticence towards hardware investments coupled with a disbelief in the viability of the wearables market were major barriers.
Investors and venture capitalists were hesitant to back Fitbit, with sentiments echoing thoughts of, "There’s no real market for this," or "It’s just another fad."
Fitbit faced rejection after rejection.
They envisioned a future where their wearable could be a game-changer, but the larger investor community simply didn't see the appeal.
"No one liked hardware, they didn't believe in the market... There's a bunch of things they just didn't get." Seth echoes a sentiment painfully familiar to many investors looking to disrupt the status quo.
The Birth of the Opportunity Fund: A Stroke of Genius
Faced with widespread disinterest, Seth, driven by a belief in the Fitbit vision, took a bold step with Foundry. They injected an enormous $10 million into Fitbit when nobody else would touch it.
The move wasn't just about funding a promising startup; it was a statement, an establishment of the 'opportunity fund' concept—before it became a mainstay in the investment world.
This fund was conceived out of necessity, driven by an urge to capture the potential that others failed to see.
The returns were astronomical.
That initial $10 million grew into hundreds of millions, illustrating that immense value often lies where others fear to tread.
Investment Intuition: How to Create Your Success
Investing is not for the faint-hearted. To be successful, you have to trust your gut in a skeptical market. Seth Levine's story with Fitbit is proof.
Trust Your Gut
Despite the prevalent skepticism surrounding hardware, Levine and Foundry saw potential in Fitbit. The most rewarding investments can be the ones that go against the grain.
Vision Beyond the Current Market Landscape
The disbelief in the wearables market did not deter Foundry. Successful investors will look beyond current market conditions and trends, visualizing the potential evolution and future trajectories of industries.
Be Ready to Lead
When other investors shied away, Foundry took the initiative to lead the Series B round for Fitbit. By being proactive and taking calculated risks, investors can position themselves at the forefront of potential industry revolutions.
Create Opportunities
Foundry's creation of an "opportunity fund" was born out of necessity and vision. It highlights the importance of adaptability and innovative thinking. Instead of waiting for opportunities to present themselves, proactive investors craft their own.
Diversify and Expect Varied Outcomes
Not every "rocket ship" takes off. By diversifying investments and being open to varied outcomes, investors can mitigate risks and increase the chances of backing a dark horse.
In the ever-evolving landscape of startups and investments, stories like Seth Levine's bold move on Fitbit stand as shining beacons of vision, audacity, and intuitive genius. In a world where many are content following the well-trodden path, Foundry's audacious bet underscores the significance of backing what you believe in, even when the tide of popular opinion runs contrary.
Levine's faith in Fitbit, despite the overwhelming skepticism, serves as an inspiring reminder that true innovation often requires us to see beyond the present, to challenge prevailing sentiments, and to have the courage to act on our convictions.
As history would have it, sometimes the most lucrative opportunities lie in the places most overlook. For every budding investor and visionary entrepreneur, this tale reaffirms the age-old adage—fortune indeed favors the bold.
