Michael Saylor is an American entrepreneur, inventor, author and the CEO of MicroStrategy. He combined his passion for technology, business and computer science to create a strong place for MicroStrategy. He became a Bitcoin believer in March 2020, and tells us about his monetary thesis and why Bitcoin is the best Store of Value.
Interview Date : 8th December 2020
What do you consider as your primary business?
Selling enterprise and business intelligence is our primary business. I myself am a technology entrepreneur as well and have always been very interested in creating new businesses. In the 1990s, I bought several .com domain names such as “Hope” “Courage” “Wisdom” “Strategy” “Angel” “Alarm” “Speaker”, and “Voice”. I bought my name, Michael, and my nickname “Mike”. I bought them because I thought these domain names would make good digital real estate to put a business on. We commercialized one of them, Alarm.com which we spun off. Today, it trades on Nasdaq with a market cap of $4.7 billion. Angel.com was sold for more than 100 million dollars. Eventually, I sold the domain Voice.com for 30 million dollars – it’s the largest amount anybody has paid for just a simple domain name in the world. So, I have always been interested in digital scarcity, technology, and tech investments. I have been a big tech investor in Apple, Amazon, Google, and Facebook from very early on. I learned a lot about their business models for my role as a technology investor. All that along with continuing to run MicroStrategy as the CEO throughout this time.
How did you think about domain names as scarce digital assets?
Everybody in the world is taught to spell the word “Hope” if they learn English. Thus, the value of a domain is a function of which language it’s in. The language that has most business on is English, and the most traffic on the internet is also in English with the dotcom domains. If you own a word that is easy to spell and remember with positive connotations, like Apple, Amazon, etc., it will be very useful. If you own such a word, you can put a business on it. The logic of this is if a billion people see the name and they can remember and spell it, surely, they will be able to type it. If I have a company name that has a difficult name with no positive connotation, people will have a harder time remembering it. Thus, you much rather have it called something simple like “hope” or “wisdom”.
Another important factor is the dotcom domain. If the word that you own is not on the dotcom domain, it falls off in value. People have a harder time remembering it if it was dot io, dot org, or dot tv. Moreover, if the word is too long, it falls off in value too. If 65%~ 80% of the money on commerce around the world is in English, and if you own one of the 1000 most important words in the English language, you can treat the domain as a business. For example, imagine what Apple would pay to get Apple.com today. If you own that word, then you are owning an asset similar to digital real estate. It’s like owning a block in Manhattan, the biggest city in the world except if you own a precious domain name, it’s like owning the central block in every city in the world.
What do you think about Other Ethereum and its DeFi space?
I didn’t invest in Ethereum. If you ask me “Is Ethereum risky?”, then the answer is “yes”. Ethereum is not Bitcoin, and it is much riskier than Bitcoin because it is complex. I think you can’t lump them together. When you create software or a crypto network, you have to decide what you are designing it for. Ethereum is designed to be much more functional and complex. Thus, there are many more attack surfaces which means hackers have more surface areas to hack it. There are many more moving parts, so it can break more easily. Would I invest money in Ethereum? No. Why? Because it’s risky. . All the other crypto coins are akin to venture capital experiments, and they have a much greater risk to them. Some will succeed and some will fail. The more complexity there is, the more functionality there is, the more attack surfaces there will be. That’s why I think one of the key benefits of Bitcoin is that it’s simple and it’s hard to change. Also, it’s not that functional. For Bitcoin to be successful, it doesn’t need any additional functionality anymore as it is already complete. The most important feature of a crypto asset network is immortal sovereignty. Immortal sovereignty means that it needs to be bulletproof, has to last forever, and it needs to function outside the constraints of a nation, state, or company. Moreover, the indispensable function application of immortal sovereignty is a store of value as value is energy, and energy is money.
Would you consider diversifying your assets?
It’s a lot riskier if you invest in a hundred different crypto networks than putting it in the one which is the least risky. You might very well lose 99% of your money if you diversify. Diversification is selling winners to buy losers. For example, if you own Amazon stocks, why would you diversify that with other retail company stock? Amazon destroyed 15000 retail companies. If Amazon is going to destroy all the other retailers, I will lose all of my money if I diversified. It’s less risky to buy the winner. The same theory applies to Google and Apple. Apple became so successful that it generated 150% of all the profit of the mobile phone industry. In other words, Apple made money and every other company in the industry lost money to compete with them. So, if you were to diversify and sell Apple stock to buy something else just so you don’t have all your eggs in one basket, you would be selling the winner to buy the loser. Instead of having a million dollars in Bitcoin, I would lose value by storing it in fiat. That isn’t diversification.
How do you feel about being called the CEO of Bitcoin?
Bitcoin has thousands of CEOs. I am one of them out there advocating. I am doing those things that I can do under my domain, but the CEO of Grayscale, the CEO of Coinbase, and Binance, Square, and Paypal are all advocating too. There is one CEO talking about Bitcoin every morning, there is another one in the afternoon, and I assume there is probably a CEO talking about Bitcoin in Japan just like there is one in Korea and Germany. That’s the way it should be. So, I am one of many but I think there is a swarm of CEOs, and that’s what makes it insanely great. There are so many passionate leaders everywhere thinking about space and advocating, and I am happy to be part of the team.
Do you think you might be influencing the market movements with tweets?
I don’t, and nor do I try to influence anything and anybody. I focus on the long term, and I don’t think it is possible to figure out what price will do in the near term. I don’t even worry about it. For me, the short-term is 3 years, the mid-term is 10 years, and the long-term is 100 years. The market will do whatever it’s going to do. When we bought Bitcoin, I was prepared to be wrong for 3 years if I had to be. However, I thought it was the right thing to do at the right time.
How did you feel when you did the first Bitcoin purchase?
When I first purchased, I was relieved, and I felt like the world would be a better place. I thought my company would be more successful because I think about Bitcoin as “hope”. I own hope.com and I have turned it into a Bitcoin information page. When you have Bitcoin, you have hope, so I was happy.
Interviewer , Editor : Lina Kamada
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