In this episode of the NFX Podcast, Keith Rabois and James Currier examine the rule deviation behind some of technology's greatest startup feats — PayPal, Square, Yelp, and even Apple, Tesla, and SpaceX. They discuss: - The 5 People You Spend the Most Time With: It's easy to be a contrarian. It's hard to be right. What are the environmental and psychological factors needed to really think for yourself? - The Extreme 1% of the Bell Curve: A framework for rule deviation that leads to invention, not replication. - Being a Founder is Like Chewing Glass: The 3 biggest factors Keith cites that made the early PayPal team so strong, going on to create YouTube, Tesla, SpaceX, LinkedIn, Yammer, & more. - Counterintuitive KPIs that Transformed Yelp, PayPal, & Square: The non-obvious (even ridiculous-at-first) KPIs that changed their trajectory. - & much more Read the essay - www.nfx.com/essays
James Currier:
So Keith, thanks so much for joining us on the NFX Podcast. And you and I have known each other for over a decade now. You and I've hosted some parties together for Founders at your house. We've had you talk at the NFX Guild in the past, and we've connected on more than one company where we're co-invested.
So you've got this powerhouse background, man. You've got so many great inside stories from some of the most influential companies in the world, and so many aha moments, so many Eureka moments that you were there because you're a product person, because you're a business model person, you're a person who really looks at your mental models. And whenever we talk, I always love hearing about some of the insights that you're able to glean through all these experiences over the last 20 plus years of doing these startups. So today I'm hoping we get to unpack your brain a bit for the benefit of Founders.
I've got one question to ask you, fill in the blank type of a question. So everyone we have on this podcast has unique ability to see things that others do not. That's kind of what we're all about. And you are certainly in that camp, by far. So is there anything about you that you've noticed that allows you to see things that others do not? Some way of thinking, some way of learning that lets you have that superpower?
Keith Rabois:
That's a great question. I mean, I think you're right. Certainly to be an investor, one has to by definition, see things that other people don't see and appreciate them before other people do, or it's very difficult to be a successful investor. I'd say that's mostly true of Founders. I think it's a whole lot easier to build a business when you see the world differently at first, and allow yourself to build traction, momentum, develop it, accumulating advantage, before the rest of the world realizes that you're on the right track.
Keith Rabois:
Where it probably derives from, is being surrounded by a lot of people growing up more on the political side, both in New Jersey and then at Stanford with people who were pretty left wing, and never really being a leftist myself, always forced me to think for myself. Because by definition, all of the stuff I heard from my parents and all of the stuff I heard from my professors and most of my classmates, I just intuitively thought was wrong, but I had to re-derive some first principles and for reading history and finding my own sources, my own set of philosophies.
Keith Rabois:
And so that probably translated into other fields later, even though it wasn't intentional. It wasn't like, I'm going to go think differently about politics and then I'm going to apply that kind of thinking to the business world. That was a byproduct a decade later, not an intentional strategy at all.
James Currier:
Yeah. That's interesting. We have very conservative senators with very liberal daughters and sons and then you grew up in a liberal family and didn't naturally accumulate that type of perspective. And I can see how that would force you to start to just re-examine everything and make sure that you're questioning everybody in what they're saying.
Keith Rabois:
Yeah, and I think that's where it started. I certainly remember as early as sixth grade, my parents were kind of the anti-Nixon protestor types, anti-Vietnam war. They had a lot of friends and colleagues and they were involved in various organizations from the 1970s. And then I remember when Ronald Reagan was running for president in 1980, the perceived wisdom among my parents and their friend crowd was, Reagan was evil, he's going to blow up the world. He was anti-Semitic and we were Jewish and blah, blah, blah.
Keith Rabois:
And he got elected and some of the hostages came home from Iran, and the world didn't blow up. In fact, it probably got better and the US got safer [inaudible 00:03:40]. And so you start rethinking everything, once the whole philosophy that you've been taught proves to be invalid.
James Currier:
Got it. Yeah. So you grow up feeling comfortable, not seeing the world as others do. You almost probably develop an affinity for seeing things differently. I remember talking with Stan Chudnovsky when we were building one of our companies and the board said, "We've got to build a really great technical system," and he says, "Well, the way everyone would do it is this way. So that's definitely what we're not going to do." And he and I, and obviously you, feel very comfortable starting from that perspective.
James Currier:
Keith, you call yourself a contrarian, a misfit. You've called yourself those things in the past. What do you think the basic principles of a contrarian are?
Keith Rabois:
I think the ability to think for yourself. At the end of the day, that's what it comes down to. It's on any topic, being able to derive a set of views, independent of what other people around you think. And that's very difficult to do truthfully because everybody's influenced by the five people you spend the most time with. There's lots of studies about this. So, if you're a VC, you're influenced by other VCs.
Keith Rabois:
For example, both Khosla Ventures, where I worked and now Founders Fund, we consciously don't spend too much time on other VCs, because the average VC returns over the last 40 years are not very good. So if you spend all your time with average VCs, you're going to start thinking like average VCs. Khosla, we'd be very differentiated in that respect and then Founders Fund, our offices in the Presidio, we're geographically removed from other venture firms. It's a very concert strategy to be outsiders, so that we have a differentiated perspective.
Keith Rabois:
I apply this to all kinds of parts of my life. I have that kind of a philosophy of the anti-FOMO person. I coined this, I don't know if I coined it, but I certainly borrow this phrase and appropriated, called JOMO. I run my life about joy of missing out. So the more things I've missed, the happier I am. So I look at Instagram and miss all these things and it makes me more happy. So you tend to apply it to all kinds of parts of your life, not just business.
James Currier:
That's fantastic. And when you look at a view at companies, do you often decide if an idea is consensus and actively avoid that idea?
Keith Rabois:
Absolutely. I mean, Peter obviously wrote a book about this, Zero to One, where he talks about secrets, and basically what secrets does the founder have or team have, insights about the world that everybody else thinks are wrong, but prove to be accurate? I think we apply that, not surprisingly, at Founders Fund pretty seriously. So one of the questions we always ask ourselves is what are other people just factually wrong about, or what are they going to be blind to? And if you don't have a compelling answer to that, we're very unlikely to actually offer to invest. It is a first [inaudible] screen.
James Currier:
Yeah. Got it. And you said that Khosla Ventures often avoids being like every other VC and Founders Fund... You moved from one to the other and I know you wrote about how that was the most difficult business decision you made in your life. What have you found to be different at this point about being over at-
Keith Rabois:
So traditionally, on a scale of spectrum of all VC funds in the world, Khosla Ventures and Founders Fund are closer cousins than where they're apart. There's a lot of consistency in terms of the kinds of companies, the ambition of founders, we want to invest in. Some of the differences are, at Founders Fund, we're very multi-stage. So we invest from seed. I love to lead seed investments. We do series A and series B, pretty common in venture, but we also lead growth rounds.
Keith Rabois:
So we'll invest $1 million in a company and we'll invest $200 million in a company, and we'll do both all day long, and go back and forth. That's very common at KV. KV was mostly a seed series A, occasionally a series B investor, so a higher ownership mentality, buying a lot of [inaudible] down with other people's money over time, which is a very conventional, very traditionally successful venture firm model.
Keith Rabois:
A Founders Fund we're high conviction investors. So we have concentrated positions over 17 companies across the portfolio where we had more than $200 million invested in a company. That's very different. Second and probably most acute difference is we don't do Monday partner meetings. Well, now nobody does Monday partner meetings, but at the time, Founders Fund was pretty unique in not having an assembled partner meeting. We have a way of approving investments, but it's based upon a set of approvals that are custom and unique to each company. We never have everybody in the same room sit for a presentation of company and then vote on an investment. So that's pretty different. So effectively, it means that I have Mondays, or I used to have Mondays available, to meet founders and work with portfolio companies, sitting in an insular meeting debating investments.
James Currier:
Got it. Very smart. And in that you're a contrarian and a misfit, it doesn't just apply to your investing,. It applies to your life and whatnot. Are there other ways that you feel like it expresses itself in the rest of your life as well?
Keith Rabois:
I'll give you some examples from the sublime to the ridiculous. So the most sublime stuff, I have a sort of set of views about politics of the world. We'll skip over that for a second. Let me give you some ridiculous examples. So I started maybe seven or 10 years ago, I had like six very different ideas about the world that were kind of considered crazy, even among my friends and family. And I set about basically proving this.
Keith Rabois:
So one I've always believed in, but it's becoming a little bit more normal, is that the more stress you have in your life, the better. The healthier you are, the wealthier you are, the happier you are. There's a great book I now recommend called The Upside of Stress by Kelly McGonigal out of Stanford, that sort of proves this. But when I started thinking this way 20 years ago, there was no research that really validated this.
Keith Rabois:
Secondly, on the really ridiculous side, I actually don't believe that stretching is good for you. If you're very athletic, I have a whole set of reasons why one shouldn't stretch before playing sports. We can talk about that. Another one that's become very conventional, but at the time when I was growing up was very differentiated, I've always believed that sleep is magic. That the more you sleep, the better you're going to be at your life, the healthier you're going to be, the more successful, and it's sort of always organized my life, for 40 years, around sleep. So we try to get eight hours sleep. Now there's a lot of research post 2009, that confirms the benefits of sleep and the major disadvantages of lack of sleep. So that's no longer contrarian.
Keith Rabois:
You want to kind of have a fun, silly one to close with. I happen to be a fan of Apple Maps. I hate Google Maps. There's a long story behind this and I can give you lots of examples why, but fundamentally half of my friends definitely think I'm crazy on this topic, but you can wind me up a fair amount.
James Currier:
Yeah. Those are great examples. And also you had mentioned the politics, and we don't need to go there if you don't want to, we can edit this out later, Keith, but I'm just really interested, because I felt like we are a community in Silicon Valley of contrarians or people who are trying to think differently than the larger world and come up with new things. And yet we've created an environment that might be hostile to people like Tim Ferriss or Peter Thiel who felt like they wanted to remove themselves from the community. You stay here, despite your political views. How do you feel about that ecosystem that we're in and your role in it and what could be done?
Keith Rabois:
Well, I think the ecosystem it's fairly close minded, despite what people like to think about themselves. And you're right. There are a lot of people who are conservatives or Republican or whatever who are all, if they have the luxury of success, locked out. You named a couple of examples, I can certainly think of others, and there's more on the way. But what I do for a living, I felt the best place I could be was at the center of the ecosystem of startups and founders. And I wanted to work with the most interesting, most ambitious founders. And at least as of now, there's a high concentration of them in Silicon Valley.
Keith Rabois:
So I felt it would be professionally negligent of me to leave, even if I could find other places that I would be more comforting. But that said, if you're contrarian, as you're talking about, I grew up in a anti-war household that loved George McGovern and somehow managed to escape that. I went to Stanford, which was incredibly leftist, borderline socialist or communist when I was there, and survived that. Then went to law school, which is full of left-wing professors. So maybe to some extent, I might go crazy if I was sitting around with conservatives all day. I don't know what I would do.
James Currier:
That's right. You're comfortable in that role. Yeah. That feels natural. That's great. That's great. That's good. So do you think that we should and could have more contrarians, or by definition, does that ruin the situation?
Keith Rabois:
It's hard. Jeff Bezos has a great quote about this. It's easy to be contrarian. It's extremely rare or difficult to be contrarian and right. So the consensus has a lot of truth to it. So you can mint artificially more contrarians, but unless they're seeing things that are insightful on some predictable basis or in some domain, it's not really adding that much value. I do think extending the debate talk, the window of debate is actually helpful in just validating the truth. But the challenge of being a contrarian is not being contrarian. The real challenge is the Venn diagram overlap of right and different.
James Currier:
Right, right. And do you think it takes a misfit to launch a Falcon 9 for instance, to do something super ambitious like that?
Keith Rabois:
Yeah. I mean, at the time, your friends are going to tell you you're crazy. I mean, I've talked about this from an investing standpoint. When I make a new investment, I really want half of my [inaudible] VCs to think I'm quite crazy and laugh at the investment. I don't want a hundred percent to laugh necessarily, because then maybe I'm actually missing something, not them, but if none of them are laughing or 20%, then I'm probably not taking enough risk and it's probably not a differentiated enough investment. So, I really do consciously think about when I hear a pitch like, A, what are the people going to miss and why? And then B, is this going to sound ridiculous to a reasonable set of smart people? Because then I know I'm taking enough risk and the fact that I'll be compensated for being right, if I'm right.
James Currier:
And was there a time, just speaking of crazy, was there a time when you were running one of your companies where you thought yourself, this is crazy?
Keith Rabois:
If I ever felt like what we're doing is crazy, I certainly would have lobbied very aggressively and hopefully persuasively to whoever was making the final decision that we shouldn't be doing X, Y or Z. I do think there's definitely the times at many companies I've been involved in, the world thought we were crazy. So for example, back in hip hop days, Red Herring, which at the time was the centerpiece of Silicon Valley technology consensus opinion, ran this cover story on PayPal called Earth to PayPal.
Keith Rabois:
And Peter never forgot this. Actually when we celebrated our IPO, he held up the cover, and when we celebrated our acquisition by eBay, he gave another speech holding up the cover. So, we definitely were considered to be weird, odd misfits at the time, but internally, I'm not sure. I actually thought we were... Well, I never thought were misfits, but I don't think were wrong.
Keith Rabois:
Same thing. I think the companies that I was involved in, I think were making, for the most part, quite wise decisions. And whether the world appreciated it or not, that wasn't the key criteria, fortunately, at most of the companies I've worked at.
James Currier:
Got it. And speaking of just quickly PayPal, it's a long time ago, but when you look back, what were some of the things you can put your finger on today that created such a mafia, that created such a flowering and sort of a Cambrian explosion of entrepreneurship coming out of that one company. What were some of the elements that you feel were there?
Keith Rabois:
Yeah, the number one, credit goes to really Peter and Knox for recruiting. They had a philosophy of hiring and finding the right people. Ultimately sourced a huge fraction of PayPal network through their personal networks. Peter, through his connections at Stanford, and Knox, mostly hired engineers out of either his high school experience in Chicago or the University of Illinois.
Keith Rabois:
I used to [inaudible] in Chicago or the University of Illinois and it really brought the two teams together and mixed them. So they deserve most of the credit because they identified people with high potential at scale and mixed everybody together. Once we were in the building, then I think there was a set of management philosophies that were very different at the time that may have enabled us to be successful with this company [inaudible 00:00:16:24], but then subsequently.
Keith Rabois:
So for example, we didn't really believe in general managers. So Peter was adamant that we were going to hire people whose skill in life was managing. We were going to promote the best person in each domain and each discipline to lead that discipline. So for example, the best engineer would become VP of Engineering, the best designer would be design team, the best product person would be product team, best finance person would be CFO, and that led to a building of craft, an appointing of craft in a sort of a meritocratic feel because everybody knew that their boss was actually pretty damn good at what he or she did. And you didn't have this de-moralization of, "Well I'm [inaudible 00:00:17:00]" asked by, of course, a person who has no clue of all I do, or what I'm doing, or why it's so important. So I think that was pretty fundamental.
Keith Rabois:
And then third thing that was pretty important was they thought it was a hard business. It was very challenging. There was a lot of obstacles, a lot of people and enemies that didn't really like us from Visa, MasterCard, to federal and state governments at different times, eBay, et cetera. So it's sort of a trial by fire situation. And I think like the metaphor of war, you definitely bond with people in that kind of environment, and you get to see who's really good under pressure and stress and who actually doesn't thrive under those circumstances.
Keith Rabois:
So when people subsequently went to start their own companies, I think a lot of us had perspectives on how would this person do as a founder because being a founder is... Peter and I talks about it all the time. It's like chewing glass, et cetera. Not particularly fun, it's very painful, it requires a lot of self actualization and initiative. And I think we had pretty good insight into who was likely to thrive in that environment. And that's why I think some of the companies did really well [inaudible 00:02:06].
James Currier:
Got it. And I think it would also be fair to say that you guys are exiting those companies five, six, seven years into the Internet, which was a pretty prime time to start exiting and start new companies.
Keith Rabois:
I think with benefit of hindsight that's clearly right by the time that you go. So PayPal went public in 2002 and Silicon Valley's meet their winner was 2000 and 2003, maybe four. And so when we exited PayPal and were investing or starting new things in 2003, four or five, and [inaudible] talk about, most people didn't think that there was another wave of consumer innovation that was likely to be successful. We happened to believe that which is why we started all these companies, funded each other's companies, et cetera. And history will record that as being right but it wasn't obvious at the time.
Keith Rabois:
The reason why I think actually the PayPal network became more essential to Silicon Valley was there's a vacuum. Most of the traditional networks in Silicon Valley weren't doing a lot of interesting things since 2001, two, three, and four. They were afraid and fearful, and so people came to us because they didn't really have a choice. We were writing checks and willing to work on companies, joining companies that became the next generation. But there wasn't clear visibility into there was going to be another generation of innovators.
James Currier:
Got it. Yeah. That makes total sense. And you founded a lot of companies. Not only have you invested in so many, but you founded a bunch. I'd love to hear a time where you threw out the rule book and it either blew up in your face or it went incredibly well. What are some of these stories? You and I have talked about some of these things. I'd love to bring some of these out for the other founders to hear.
Keith Rabois:
In most fields, seriously... So I was a lawyer and the same thing is true in law. The art in most fields is understanding the rule of you do well, precisely, and then knowing when to deviate. It's knowing when to deviate and I remember learning this. This is going to sound very crazy, but I remember being kind of a whip. Kind of a annoying high school student, and be sitting in English class and reading some of these great works of literature that we read sophomore, junior year and noticing that some of the best authors of all time would occasionally violate grammar rules. And I'd be a little crazy kid and be like, "Well why does my paper get marked up when I do this and so-and-so famous author gets away with this?" And the correct response by my English teacher was, "Well when you master all the rules you get to violate them." And there's a bit of truth to that in Silicon Valley too, that deviating from rules doesn't make much sense, per se. It's knowing why you're deviating from the rule.
Keith Rabois:
Now if you obviously follow the rule book you're not going to create an iconic company from scratch. There is no rule book that tells you how to build the next SpaceX or Tesla by definition. And so you need to know what rules you're going to change. That's why I don't like the phrase best practices. Best practices just lead you to [inaudible] the replication of something else. You can borrow best practices, but you need to know where you're intentionally not following "best practices" or you'll just be in the middle of Doppler which is not the goal.
Keith Rabois:
My other example, in 2003, I got LASIKs and I was so hesitant to get LASIKs for lots of obvious reasons. In fact, my colleagues would always laugh at me because I'd schedule appointments and then cancel them last minute for like six months. There's a terror about somebody playing in my eye with a laser. And I remember what finally convinced me. I went to this doctor who's quite good. A surgeon, eye surgeon, and he did all these tests on me for an hour and a half. And he walks in the room and he looks at me, and he smiled and said, "I want to tell you something you've never been probably happy to hear before, but you're right in the middle of the Doppler." And he's like, "There's nothing that will go wrong with this procedure. This procedure was made for you and your eyes. And the only possible thing that could go wrong is if I screw up."
Keith Rabois:
And so that led me to realize that I should go forward with the procedure which turned out to be a good decision, but that's how you kind of have to think about the world is you don't really want as much [inaudible] calendar. You certainly don't want to be the middle of the Doppler. You need to be at the extreme one percent. And then it's consciously choosing those things where you want to do differently. So I mentioned some things we did differently at PayPal. Management philosophy, hiring philosophy, we hired different people, different backgrounds than was standard in Silicon Valley, management promoted them differently, et cetera. We used a different distribution strategy, we talked about.
Keith Rabois:
So you always want to consciously violate some of the rules, but it's a very intentional strategy. Just like Apple violates lots of rules like its closed platform. But [inaudible] for 20 years of arguing that you shouldn't build a closed platform, et cetera, et cetera. There's lots of intentional... They're secret. They don't let people talk to each other in the company that work on different teams. That's very unconventional. They don't actually use metrics for the most part to measure themselves. All of those three things would violate most of Silicon Valley norms, but they're very indispensable to Apple's success, and there's a reason why, I think, the most valuable company, certainly the most valuable technology company today.
James Currier:
Got it. So when you were running companies and your management teams, you guys could decide which rules you were going to violate and which unique things to do. But When you're an investor, you kind of have to take the set of violations that the founders are bringing. Do you ever get that wrong? Do you ever say, "Oh, you can't violate that way. You should violate it in a different way." Or?
Keith Rabois:
Well, I definitely ask the question, "What are you doing differently and why?" Sort of like what are the secrets and et cetera? What's special about this team and this founder, and why are they likely to have unreasonable success? I mean, if you think about it, it's a heroic, almost ridiculous, assertion to have two kids that proverbial [inaudible] and say, "I'm going to change the world." Raise your hand. "I'm going to change the entire financial services world. I'm going to change the entire real estate. I'm going to change this entire whatever." That's kind of ridiculous in some way.
Keith Rabois:
So you need people who can take on ridiculous ambition and where they have the spark and you look at them and say, "You know what? There's some shot there. They might actually be right." And you kind of feel that like, "Wow, I've never met somebody like that before. Maybe they could change the world." And that's what you really want to feel, especially early in the company's trajectory as ambassador. So you can have a dialogue about, "Well, what rule do you violate? Why?" And that allows you to understand how the person's brain works and the calculations they're making.
Keith Rabois:
The bad version of that conversation is they don't even realize they're violating the rules, or they don't understand the reasons why they're deviating. It's not a very thoughtful, conscious decision. That's usually a disastrous recipe for a mess, because you don't want to be violating all the rules. You want to select the least. There is a Darwinisticly evolution of how humans behave, and you want to tap into some learnings from history. You're standing on the shoulder of a giant sort of thing. And so if you're trying to reinvent everything, that probably means you're not really successfully reimagining anything. And you're probably also creating a mess on the backside of your reinvention. So there's a great dialogue to have to filter out how savvy and insightful someone can be.
James Currier:
Got it, got it. Now in the past, you and I have talked about some of the metrics that you would use to measure the business. I think you told me a story about Yelp having discovered a metric around the number of messages amongst the Yelp elite in their local areas as being a key indicator of what was going to happen in the future in each of the cities where Yelp was expanding back in 2004, 2006. That stuck with me. Can you tell that story? And then are there other stories of other companies you've been working with, whether it's Opendoor or PayPal, or the other ones that you've founded or helped start?
Keith Rabois:
Absolutely. So I remember this was probably the second board meeting that I joined [inaudible] the board of Yelp, and I remember Jeremy Stoppelman was finishing his presentation to report back. And he basically gave this vision of that Yelp was really building this social product, which not everybody appreciated it and it's fine. And it's a different social product. It wasn't the viral social product, standard friends through email or whatever. So he was setting this up and framing the vision of the company and he had some pie charts. And I look across the table and I said, "Okay. Well, if you're building a social product, what's the key metric that'll tell you whether you're right or wrong? Is it working or not? Is it getting better?" And he looked up and down and he said, "It's the unique number, the number of unique messages, one-on-one personal messages from one meeting member to another." And personally, at the time, I thought the answer was ridiculous, but that job would be the key metric for the company.
Keith Rabois:
But very quickly thereafter, certainly within three to six months, I realized he was actually right that that was the key predictor for whether we were building a true community. And whether people were attending events because they want to be part of the community, whether they would craft reviews because they wanted to be part of the community, whether they [inaudible] because they wanted to be part of the community. So he was totally right. It was very, extremely counterintuitive at the time, but that's also a good example of, as an ambassador board member, I can ask questions about it and [inaudible] whether he's right. But he was much more right than I ever would have been because why? It's his company and why he was successful at it versus if I had started it, it would have been a miserable disaster. Hopefully once in a while, I was able to help him craft a couple of things correctly, too. There is a few things things that... There's a lot of it I helped with.
James Currier:
Asking good questions is often easier and more productive than trying to actually come up with a solution.
Keith Rabois:
It's such a great technique as a board member. I think 90% of the times a board member ask you a question, it's the right way to go. And a series of questions. And if somebody were in law school so it's pretty native to people who requires... It's sort of the Socratic dialogue kind of stuff., But a probing set up questions can get you to a better answer in a way that's more constructive than a standard debate.
James Currier:
Yeah, agreed. Agreed. Are there other examples of metrics that you thought were incredibly powerful that helped you realize that either an Opendoor, or Yelp, or PayPal was working or something else?
Keith Rabois:
Well I'll give you the famous PayPal example. It's been told occasionally publicly, but I think it's worth double-clicking on because it's so instructive is nobody really believed that eBay was a target market for PayPal. In fact, so there was an official list of top 10 target applications for PayPal, and eBay was not on the top 10 list. And there's documents that still exist, actually, at the top of the list.
Keith Rabois:
And then, well, David Sacks noticed was there was 54 sellers on eBay, which is a very small number actually. At the time, eBay had hundreds and thousands of sellers, but 54 is a curious small number. But there's 54 sellers who had hand-typed into their listings, " Please pay me through PayPal." And David noticed that. And the first reaction, by the way, of PayPal executive team from day one was, "Oh my God. Why are these people using PayPal?? And we should get rid of it because that's not what we're supposed to be doing."
Keith Rabois:
David came into the office the next day and said, "A-ha. I think I found our market." And then, therefore, started to invest in productizing what was manual labor for the sellers. So we created a PayPal logo that they could insert as opposed to type, and then we created an automated way to insert the logo. I suppose you could manually do it to be in the listings. These sellers had lots of listings. It basically became both the market for the company [inaudible] as well as the guiding light for the product strategy for two years.
James Currier:
Got it. So that was a very small signal in a sea of data that David Sacks had the skill and the acumen to understand. This could actually be a scalable platform because it was already hundreds of thousands of people who want to do transactions here. They're being underserved clearly as these 54 have indicated. And let's make that easy. Let's reduce the friction on that and see what happens. And you reduced a little bit of the friction and it really took off. And the next two years you just kept doubling down on that. And that's what...
Keith Rabois:
Created a HTML button that could be easily inserted, and then created what we called auto-insert where you can auto-insert it in all your listings. And that was basically the history of PayPal right there. There's other examples too. I remember thinking... So back when I joined Square, we were just launching and so we'd shipped about 10 or 20,000 Square into the world, and we started to grow. And we weren't doing any marketing. Mostly just didn't have money to do marketing. At the time we raised our Series A, but that was it. And so we didn't have real money to spend on data acquisition.
Keith Rabois:
But I remember I used to sit next to Jack and we actually did have a fairly refined dashboard for each company. And I remember Jack pointing to his computer my second week there. Or my third week. Second week after we shifted squares and noticing day by day, we were adding more users per day. We were fairly consistent trying to five days. Start up spreading to five days. Very statistically significant. But in any event, it was that base and it was growing a little bit each day. And he said, "Why is this happening?" And I paused because under the standard set of rules it really shouldn't have been happening. We weren't doing anything to create this growth.
James Currier:
There was no viral mechanism. It's not that you were tracking. There was no giant PR thing that was happening.
Keith Rabois:
I mean, we had had a spike in PR announce to the company that this has happened. That was not in this dataset. So I thought about it for a few minutes and I formulated a hypothesis. And it was really only a hypothesis given the constraints. So I said, "A-ha. Maybe this is a function of people seeing Square in the real world, the actual device."
Keith Rabois:
People seeing squares in the real world, the actual device, and some fraction of them that see it, sign up, because it's the only thing I can think of that could explain this. So once you have a hypothesis, then the next question is, "Well, how do you validate that? How do you test it?" So if true, there should be a ratio for every new square we shipped, and every new customer, and every transaction in the rate of growth. Turns out there's a perfect relationship, it's exactly 1%.
Keith Rabois:
So for 1% of all transactions on let's say day zero, we have 1% of signups the next day, new signups, and they just were perfectly consistent. This is amazing. We now have an actual viral loop in the railroad. David Sachs actually, I explained this story to David many years ago and he wrote a blog post that combines a hip hop story, the square story and it talks a little bit about [Byrd] in his blog post. So you can read about this, but it was really not an epiphany.
Keith Rabois:
Then once I realized that then there was a lot of topics that occurred to me, I thought, well, we should do X, Y, and Z differently because we have this new, this observability we've been in the real world that's causing growth, but it was not at all obvious, this almost never works. It's a very rare example and this actually work.
James Currier:
Right where you basically have people using the product and through word of mouth, like with an Uber, you're waiting for, you're getting out of the bar, someone calls an Uber, you get into the Uber with them and you said, " How did you do that?" He says, "Let me show you the app." And that's with word of mouth sort of hand to hand combat if you will. It grows by word of mouth in the real world.
Keith Rabois:
It is the [inaudible] appeal to the device, yes, the consistency of the device with the names, they can remember, you see the square, square, member signup but it worked, it worked for like 18 months. There were things later that you changed the equation a little bit, but fundamentally 18 months where we definitely would not have had enough money that we could have raised just to grow on paid acquisition. Honestly, it's not the highest margin business, your paid up cycle is a little long. So paid marketing at best is [inaudible] for Squared it really can't be the primary driver.
James Currier:
Yeah. Got it, got it. Those are great examples. So do you have a kind of mental checklist I'd love to dig into some of the mental models that you like to use when you're making decisions. You have a mental checklist or approaches for decision making?
Keith Rabois:
Yeah, I mean, I think everybody does. I mean, you kind of have to, if you're making decisions, whether as an executive, you're making decisions all day long every day. Or as an investor, you're pretty much making decisions one way or the other, which [inaudible] meetings to take. It's not core quoted investment decision it actually accurately is, so absolutely have a set of mental models for a whole bunch of different topics. How to hire, what companies would like to invest in, et cetera, et cetera, et cetera.
Keith Rabois:
And actually that's mostly how I work with founders, post-investment. The really great founders don't ask you, "Should you intervene?" That's a pretty rare way to [inaudible] a question. What they actually say to you, and this is almost verbatim will be, "What's the best conceptual way to approach this problem? Can you give me a framework for deciding between A and B?" So I try to focus on how do you frame an approach to solving a problem and then that's nice because it scales you can-
James Currier:
And so what are some of your favorite ones that you find yourself repeating more often than not?
Keith Rabois:
Yeah, so I gave a whole lecture at Stanford sponsored by Y Combinator in 2013 on how to run a company. It's about how to operate and walk through a lot of philosophy, conceptual frameworks on when to delegate when not to delegate, how to think about different organizational structures, et cetera. [inaudible] transcripts of it if you don't like watching a full, boring YouTube lecture, reading a transcript is actually pretty [inaudible] a slide especially.
Keith Rabois:
Secondly, framework of when to hire someone with experience versus when not to, when to hire someone to help with [inaudible 00:36:06], when to promote versus later somebody... I tweeted my favorite investment formula. So I try to distill things. I don't use the Peter Telian, like two by two bread very often, but if you're [inaudible] a lot it's got some pretty good frameworks in there as well.
Keith Rabois:
I only have one two by two grid I ever used, I try to develop these. And then I have my former chief of staff who's now a principal of Founders Fund bellion, has a set [inaudible] that tried to instill some of these so that founders can read these, he's like call bustles from Keith and it gives you lots of different topics he's written really excellent stuff that a lot of founders really appreciate. So I highly recommend those as well.
James Currier:
That's great. Those are great resources. Thanks for doing that. You've also said that every problem is a leadership problem?
Keith Rabois:
I thought about it, well, I didn't actually try this. This is a Stripe philosophy, but when I read it not surprisingly, makes a lot of sense. It's like the Netflix version of the same is every problem straight a context problem of like, when people make poor decisions or decisions that you don't agree with, it's probably because they don't have the same context that you have. So you want to give people as much information transparently as possible so that the rest of the organization make the same decisions as the CEO will.
Keith Rabois:
The Stripe version is obviously the right person doing the right things you're going to get the right answers.
James Currier:
Got it, and one of the things I've heard also is along with the problems that we think we have, boiled down to recruiting problems. Which I guess then translated as a leadership problem.
Keith Rabois:
Yeah, there are [inaudible] like I happen to like sports or used to like sports, right now it's hard to watch sports, but fundamentally sports is a lot about putting the right players in the right position. Someone may thrive as a second baseman who would be terrible as a first baseman, and part of the art is putting people in the right places so they can thrive.
Keith Rabois:
And understanding that occasionally it will be wrong and maybe the right answer is to try and moving them around. And Steve, for example, the best pitcher of all time started as a starting pitcher. He might've been a pretty good starting pitcher, but he wouldn't have been a first ballot Hall of Famer as a starting pitcher, most likely. So someone had the epiphany that maybe he should be our relief pitcher in a closer and the rest is sort of history.
James Currier:
Yeah. Yeah. I mean, I think one of the things that I thought you said so well, is you said that the team you build is the company you built.
Keith Rabois:
Yeah. So I've learned this from [inaudible] on my board at Square, and he said this and at first honestly I found it a little surprising, because typically people in Silicon Valley think about technology and technical advantage and IP, and then they think about distribution of attitudes and distribution strategies and network are fast. They often forget the people and the way he expressed it, it was just so simple. I cut through the clutter and it was one of those things that every minute you think about, it gets more and more powerful and insightful. So now, for a boss, this is, he'd probably mentioned this to me eight or nine years ago. Now I think about it every day. The team you build really is the company and with the right people you might have a phenomenal company, but a lot of people have an unmitigated disaster and most companies are somewhere in between.
James Currier:
Yeah. This plays a little bit into this debate that is coming up more and more about remote versus being in Silicon Valley. Traditionally, if you look at the total returns in tech, 85, 90% of all the returns have been in this Silicon Valley area, but increasingly with the revoked technologies and people say stuff like, "Look, now I can go hire the best people no matter where they are."
James Currier:
How do you come down on that? When you think about, the company is the people you hire.
Keith Rabois:
I think it does depend upon the company and what the company's both vision [inaudible] how near is it and what skillsets you need. So for example, the benefit of being co-located is mostly extemporaneous conversations, dialogues that wouldn't have happened by scheduled meeting. So, I'm in the office late at night, I'm in the office on Sunday afternoon, it's some random individual of the company, who probably doesn't even report to me, walks up to my desk and says, "Hey, Keith, I've got this idea." And I look up and I say, "You know what? That's actually pretty interesting, not exactly what we should do, but what if we tweaked it this way or worked on it, that could be a pretty good idea." And some of those ideas are really 10X ideas. Those are very difficult to schedule like by meeting, by fiat, by calendar and by remote.
Keith Rabois:
So that said, some companies have a very linear roadmap. It's very obvious with the value proposition, it's very obvious what you need to do, what the sequence is, and the innovation cycle isn't required or in small [inaudible] time. But I work pretty well remotely.
James Currier:
Got it. So maybe with a B2B company or an enterprise software on that end of the spectrum, and then a consumer thing on the other end.
Keith Rabois:
Yeah. But it's the step function innovation that I do worry about remotely how [inaudible] happy having watched it hit by a lot of really good ideas came from spontaneous meals together or spontaneous late nights, almost like borderline fool around like over a drink or pizza. Somebody has a definition, it got filtered out over the pizza and beer, but pretty good ideas too. In the same thing as Square in my experience, some really good ideas happen in random time intervals. And so I do think that we'll use some of that innovation for the companies that meet that set function, innovation, and want to consistently compete on that basis.
James Currier:
Got it. So as you're looking, your investment portfolio over the last two years, some of the companies are more remote, some of them are less remote, or do you find yourself just saying, "Look, if you're under 30 people, I want you all in the same office because we need an innovation curve that's going to give us the 10X, which will lead to the 100, the 200, the 400X returns on the investment? Or are you staying in this area, I'm okay with remote because of its nature, its linear nature?"
Keith Rabois:
I think in some areas I'm okay, not necessarily thrilled, like say for example [inaudible] and there was a co-founder, we have a previously relationship with the CEO and was going to open an office where he or she has a network. Okay. I can buy that. So for example, one of the companies that I've been involved in for years now, its doing really well, its called Fair, F-A-I-R. They've always built their engineering team in Canada because one of the three co-founders lived in Canada, but he's a co-founder and so they've been able to see other engineering there at half the cost, less entitlement, all the benefits. But that works because he has a very senior preexisting relationship with those other two co-founders. [inaudible] Now, interestingly enough, a lot of product innovation actually does [inaudible] office, is from the CEO on down, but it may have worked, but that's really rare circumstances.
Keith Rabois:
Secondly, I think a lot of people are trying remote for the first time right now and they're finding it's not that bad, but remember there's a lot of the existing relationships for the companies that are suddenly switched on remote because of COVID. And I do wonder about what would those conversations look like and how high fidelity would the debates and dialogues be if there was no preexisting relationship from the real world before that had to go remote.
Keith Rabois:
So for example, I see it [inaudible] five plus four days a week, the ending moderately affected actually. There are some differences, there are some things that are better, some things that are worse, but one of the reasons why I believe that they've been moderately affected is in almost every case, I know the executive team and the other board members quite well, sometimes measured for decades, often measure for years. And so the social cues and various things that are more difficult that they gain from a conference call, there may be other ways and preexisting relationships they all set that versus joining a new board from scratch, with people I've never worked with before, whether they're investors or [inaudible] or a team.
Keith Rabois:
So we'll see how that sorts out as me and other people start making investments where there's a whole new [inaudible] from scratch that's remote-
James Currier:
Set of relationships, the whole new set of relationships that are outside the existing-
Keith Rabois:
Outside the existing framework I work with a lot of, I have fortunately, a lot of great people. I enjoy working with a lot of investors from other funds that serve on boards and some of us have worked together [inaudible] a decade plus some of us are social friends, so there's a lot of preexisting relationships that we're tapping into on resume board meetings that I think make them significantly more constructive than if we were just throwing together a random assembly of people and say, "Okay, now make this work."
James Currier:
Yeah, I agree. It's funny, I'm sensing a growing sort of religiosity about remote that's coming from a certain segment of the founders and I think in part it's in reaction to a religiousness around VCs, only investing in Silicon Valley over the last 20 years. And so-
Keith Rabois:
Yeah. I remember when we started, knowing the rules, I think there are some advantages to being co-working with [inaudible] with Apple, Amazon basically. But knowing when to violate those rules again is pretty hard. [Inaudible] has done phenomenally well for the only company from the very, very beginning. I remember a Katie when we let this [D Brown00:00:45:56] and there was some debate about it, but it is very clear that its due on a very specific strategy. It was very thoughtful and very intentional and how differentiated value proposition and it reinforced some of the value proposition. But it's been anonymous [inaudible] so I think it can work, but I think it's a conscious decision to make it work and being very attuned to what one's changed derivatively to support that structure.
James Currier:
It's interesting what I'm hearing so often from you today as I have in the past, is just we've got these playbooks, but they can become too formulaic and each company is individual, each time is individually, each market is individual, and you have to make the right decisions for every new circumstance in order to make things grow really big and do really-
Keith Rabois:
Every successful company has a custom group, culture, distribution, product, and when it really works its because maybe constantly they're just [inaudible] they tap into each other, like they reinforced each other and so there is no prescribed formula. There are prescribed trade- offs. I think one of the other things is people [inaudible] is consciously highlighting trade-offs. [Inaudible] reader. There is a natural reaction of humans to look at options and looking at what you're not doing and saying, "Oh my god. That'll be magical. Everything will be perfect." Usually nothing's perfect. There is no free lunch and there's trade offs.
Keith Rabois:
So one thing I try to do is find different numbers like, yes you can do that. Just know that the following two or three things may not be ideal and so make sure that you really care about one thing you're going to achieve versus the trade offs you're going to sacrifice. And that's where you also see founders actually swoop back and forth among strategies, and distribution strategies and organizational [inaudible] they've realized that they need to tune. One of the disadvantages about these decision making trade offs. Some of the more savvy founders I work with actually will ask me that question point blank, saying, "How will I know if this isn't working the way I want it to? What should I be looking at, looking for?"
Keith Rabois:
What should I be looking for? In advance that would be the signal that things are a little bit a mess before they are ready.
James Currier:
Yeah. Maybe the superpowers of the founders and are boiling down to what things for them aren't painful, that would be painful for another set of founders, and so they can balance in a different way than other people?
Keith Rabois:
They can, and they should also be pointed out, they also should be complimenting themselves with people who find things they find painful to not be painful. That's a great way to, not force me to do things I don't want to do, I'm not very good at, I hate to do. Find someone who likes to actually do those things, because it turns out there's enough people in the world that, probably for everything I don't like to do, there's someone who actually enjoys it, and is quite proficient at it, and I can be very happy doing what I like to do and find someone who wants to do the other stuff, and then we can both be both one plus one equaling three, but also be more intellectually and emotionally satisfied.
James Currier:
Yeah, and if the company in general has that capability, then the competition won't and you can excel. When someone works with you, Keith, after a few years, what do you think that they feel like they've been learning from you? What's that experience like? Boy, now that I've been working with Keith for four or five years, I've learned this. What's the thing you think you bring to people when you're coaching that they might've gotten elsewhere?
Keith Rabois:
What's really important to me. I think it's easier in a company as an executive to have people learn by osmosis. Watch, shadow, and pick up various things, when you're talking about what they learn. As an investor, it's more challenging. It's very difficult to bring people with you in a fully immersive way all the time. There's a lot of constraints on that. So it's harder to teach as an investor and hence maybe harder to scale a venture fund because of that. So as an executive though, you can work with people quite closely, and what you want them to learn is like, one of my colleagues worked for me for six years or worked with me for six years, used to say it was like the raboid bootcamp, which is like a lot of early feedback, like what's not working and why.
Keith Rabois:
And then people can learn independently, learn through osmosis. Not everyone learns though osmosis really well, some people prefer to learn through osmosis actually and some people just really don't like it and are taught like specific principles. But the most important things, I think, that people will pick up the best are what makes my brain work? What are the underlying principles? Sometimes they actually can extract it in a more succinct, powerful way than I can, which is really amazing to watch. I have definitely had interns and former colleagues and direct reports who could explain back to me, my answer or my philosophy, better that I've articulated it before. It's surprisingly insightful to hear yourself thinking, and someone will communicate it better than you have or would have. Then you look outside your brain and you realize that's the right way to describe it.
Keith Rabois:
Also, occasionally I'll borrow, I'll see something, or a way of expressing something, and kind of steal it. Someone might say something in a microcosm, and also realize that, wow, that's actually extractable to all kinds of problems. We're going to apply it across the organization. I'm going to talk about it on podcasts, et cetera. So sometimes it's also learning from them, having an eye on what they're doing or saying that's interesting or different, and realizing that it might be something that actually is leverageable for everybody, a lot of people.
Keith Rabois:
Your platform because you are running an organization, or platform because you have Twitter followers or whatever, to scale that philosophy, which actually works both ways. But ultimately, the number one skill that people have observed, former deputies of mine have gone on to do interesting things on their own is they hold the business equation in their brain, that every business is like an equation in my view, and that's what the word strategic means, is that you understand the connection between the variables, X times Y times G equals success. The reason why it's important to hold all these in your brain is sometimes the right move is not to try to force X to be greater, because you actually move the X to, it's to actually change the Y. Let's talk about a tangible, conceptual approach, take an enterprise software company. Often enterprise software companies have issues with cell velocity, right? We're not selling our customers.
Keith Rabois:
Well, there's an interesting set of questions there, which is are we targeting the right customers? Are we targeting the right decision maker? And are we pricing the products correctly? Are we framing the value proposition correctly? Is the product actually the right product? There's a set of six or 10 questions, and the art is knowing how they all relate to each other and knowing what order to change the dial. Take CEO for example, actually has a feel for how, an intuition for how these all connect and which ones might toggle when I'm not happy with results.
Keith Rabois:
So I think the first step for a founder is to write out the business equation, because every business equation is different for each company and understand the weeding of the variables and then try to get the variables into the right places and then figure out if you're not happy with results, where to and in what order to. Most of the people that I've worked with closely can do this after a year, or three years of working together, they do it quite well, and it's actually a surprisingly rare skill, other people point this out to me, "I met so and so and not surprisingly, he or she can do this."
James Currier:
Nice. That's a good way to say it. Is there a myth of a founder archetype, Keith? Is that archetype static? What I want to get at here eventually, how you think about the founders that you choose to work with and one of the things you've said is that the good founders will not ask you about, "Should I do A or B," they should ask you, "How should I think about this set of decisions?" That's a founder archetype or a behavior that you might find in the archetype you're looking for. Do you have a founder archetype that you've articulated for yourself or not yet?
Keith Rabois:
I think there's three comments. I think there are attributes of founders that tend to thrive, but not an archetype. So for example, you would not want Elon to be running Airbnb, and you definitely wouldn't want Brian Chesky to be running SpaceX. So, I think it depends on what's the company trying to achieve, what's the hardest challenge, or really core challenge for that company. Does the founder have world-class insider challenge at those set of skills. So I think it matters what's the product, what's the market, what's the competitive landscape, what's the best possible founder and founding team for that specific set of problems? So that's always critical. There would be times where, literally, I don't know if I should invest in a founder because they're working on, "Oh my God, this is the perfect problem for you."
Keith Rabois:
It's just so obvious that they have world-class abilities at tackling the single biggest source of friction and then there would be other challenges in other companies, maybe they wouldn't be perfect for, and there would be some that are perfect for everything, but that is pretty rare. Third answer though, I think there are more essential casting, quote-unquote, "Keith Founders", where it's very clear when someone needs them as an angel investor, another investor needs them, I need them, where they were just like, "Yeah, you should work with Keith," there is a set of people that instantly communicate in very efficient, extremely productive way, but I think that's the least important. Most important is this founder going to be highly unlikely and greater to succeed in this problem because of something about him or her, and then find the right partner for him or her maybe and if not, I'll go find a partner or a partner at Founders Fund that might be a better fit.
James Currier:
Got it. So you actually just take the time to think about that personality fit as you think about decisions?
Keith Rabois:
Yeah. I think there's a way... It is like a lot of people talk about, it is like a marriage and it's a certain longterm relationship that goes through trials and tribulations now, and you want someone that A, counter balances you a bit. You don't want to change, or not thought about or describe, so if I'm super stressed as a founder, the last thing I want to do as a board member is out stress. I actually want to comfort you and relax you a bit, and then there are times when I think founders may be too connected, and I may crack the whip a little bit. That's the time when you want to actively push a little bit, so it's understanding the founders' psychology, their framework, and being like a cushion for them, and then sometimes being more demanding, and it's not always obvious to me, when things are going well, actually find them more demanding, when things are going badly I actually probably want to be more supportive paradigm. So I think it's not just a personality fit, can you be constructive dialogues where one plus one really does equate to three.
James Currier:
Right. And so what are those things about people that you won't give up on? What makes for great raw material? Because you could be an Elon personality, you could be a Brian Chesky personality, but still there is some commonalities that you get a sense of and that the Founders Fund people say, "Oh, this guy's going to love Keith and Keith's going to love him." What are those things?
Keith Rabois:
Tenacity, relentlessly resourceful, programmed for relations better that I form relations, tenacity, fast learner. Very quick pick up speed. Fairly patient in explaining things, meaning, I like to explain this once and expect that people immediately crack it. There's probably nothing that frustrates me more in life, socially even more so that professionally, is repeating myself. It drives my friends and partners crazy. So you have a conversation with me once, I'm never going to forget that conversation, I can recycle conversations I've had 30 years ago easily. It drives me crazy to repeat myself. People who tend to have really fast pick up speed. People who are ambitious, definitely. There's ambition and ambition, there are different levels of ambition.
Keith Rabois:
We would never fund or find somebody from Founders Fund that doesn't have some level of ambition, but I tend to like the outrageously ambitious people, borderline a little crazy. When people say Keith Founder, needs implies often that Keith can deal with craziness. People who want to change the world or think Steve Jobs apple commercial about think different. There's a bit of truth to that in a founder. I've certainly worked with and worked for a lot of people that fit that DNA, so it doesn't bother me, expect that that's part of what makes the person super impressive is that they see the world differently, and occasionally have very strange reactions to the world, and that isn't a problem for me, I can work with that, and that's not for everybody. The people who really want to walk through the walls, you know walk through that wall one way or the other, that's basically the most important and then the IQ and horsepower to understand why they're walking through that wall.
James Currier:
Right. To understand the playbook and understand where it deviate, that sort of thing. If you're thinking about these Olympic Athletes that are out there trying to change the world and are highly ambitious, the difference between number one and number 20 is actually fractionally small. What's the sense that you have that what happens differently for that number one person, because that's the business that we're in, right? We're looking for that monster outlier?
Keith Rabois:
It's actually one or two things, it's either they are outrageously really good at one dimensional, and I mean outrageous. We'll talk about this, isolate this one dimension, I have never seen somebody who's ask people, they are in the top 10 basis points on tenacity or something. Really world-class on one key dimension or they are extraordinary in that sense or a thinking about another model that sometimes works. It's the compounding, just the rate of learning across many things, it compounds, it's small gains times 365 days in a year times X years. It's actually one of the hardest things to do as an ambassador too, because what you're ultimately doing when you meet a founder, especially for angel investment, is project not what this project capable of today, what is this project going to be like in 10 years?
Keith Rabois:
And that's what really growth question, and so you're looking for sustained rate of growth, but sometimes you have to make decisions on the history of the founder, there a judgment call on a 20 minute, 40 minutes, 60 minute meeting on the rate of growth over the next 10 years, you're applying a line on one data point, which is mathematically impossible. So that's what you're trying to do though, so the more data points you have the better, it's a whole lot easier for me where I meet a founder that I've known before, versus worked with a company I was involved in, pitched me at some point in your life, drawing that line is actually an easier goal, realistic goal for me is what's that look like. Part of the slope on one initial meeting, that's almost like a fool's error, you cannot do it. So for example, the easiest way to make a mistake, would be to say "Okay, great. I'm going to fund a space company, I'm going to fund the next Elon."
Keith Rabois:
But lastly you want to try and do that, is to go look at Elon today and try to retrofit today's Elon or today's Max Levchin or whoever, into what you're trying to fund today, because neither Elon or Max looked like what they do today when they were 22, and what you're really trying to do is find out someone who looks like 22 or 24 year old Max Levchin, not the 40 year old.
James Currier:
With a compounding rate of growth.
Keith Rabois:
Exactly. That's the other thing, is either if they're not the single best in the world at something dimension right away, they have some compounding rate of growth that looks absurd, and then you work with them over five or 10 years. You just along for the ride and get to watch.
James Currier:
I think it's very well articulated as always Keith and I really appreciate you spending time with us. It was a great day today and thank you so much.
Keith Rabois:
It was an absolute pleasure.
James Currier:
Yeah. Yeah. We'll see you soon.