20VC: Lessons from Alfred Lin and Ron Conway | Why the World Does Not Want Your Startup To Exist and How the Best Founders Fight It | How To Build Moats and Defensibility Against Large Incumbents with Tarek Mansour, Founder & CEO @ Kalshi

Welcome back to 20VC with me, Harry Stebbings. And today I'm joined by a friend and a phenomenal founder in the form of Tariq Mansour. Now this is a fantastic discussion between two friends. It's a lot more conversational and natural than most of our shows. But Tarek, for context, is the founder and CEO at Kalshi, the first regulated exchange where you can trade directly on the outcome of events. Tarek has raised funding from some of the best, including Alfred Lyn at Sequoia, Ali Partovi at neo, Ron Conway, Charles Schwab, and Henry Kravis, to name a few. Before founding Kalshi, Tarek worked at the likes of Citadel, Palantir, Goldman Sachs in various different roles. And I want to say huge thank you to Alex Diehl and Ali Partovi for some amazing question suggestions today. They really did help me put this schedule in place. But before we dive into the show today, I want to talk about an incredible tool that I use every single day. Notion. Now, I am the worst for having 50 tabs open and constantly hopping between an endless array of tools. Do you feel me? Are you with me? Well then Notion came into my life, providing one tool to do it all with everything from seamless project management to easily organizing 20 VCs company information. A fascinating stand on note. Notion Usage More than 70% of companies who start using Notion stop using two plus other tools and so Notion can even save you money given how many other tools it can displace. Notion has a worldwide network of millions of users creating templates, tutorials and new inspiration. The product's getting better and better every single day and you always have the support you need. Learn more and get started for free at Notion. So take the first step toward an organized, happy team today again at Notion. So and speaking of foundational infrastructure like Notion, there Angellist has been a key partner for me in managing my investments. I just love using the Angellist platform because it abstracts away all the complexity and operational burden of fund management. Whether you're running SPVs, a traditional venture fund like me, or a rolling fund, Angellist has you covered. I'm also super excited about their new product, Angellist Stack which is purpose built for founders. With Angellist Stack, you can create a fundraising ready startup in just a few clicks. AngelList handles your company's incorporation, banking cap table and fundraising process all in one single place and this allows founders to focus on building. If you're a founder, you can launch your company@stack.angellist.com 20VC whether you are a founder or a funder, you're in great hands with Angellist. And finally, from websites and online stores to marketing tools and analytics, Squarespace is the all in one platform to build a beautiful online presence and run your business. There are three things for me that I just love about Squarespace. First, mobile optimized websites. All websites are optimized for mobile. Content automatically adjusts, so it just is really beautiful on any device. Second, email campaigns. Squarespace makes it super easy to grow and engage your audience with Squarespace email campaigns. Say what? No other provider needed. Amazing news. Finally, SEO tools. Squarespace takes the guesswork out of SEO so you'll get found in search by more people more often. And if that wasn't good Enough, go to squarespace.com 20VC for a free trial. And when you're ready to launch, use the offer code 20VC to save 10% off your first purchase of a website or domain. But now I'm so excited to hand over to the one and only Tariq mansour, founder and CEO at Kalashi3210.

You have now arrived at your destination.

Tarek. I've heard so many good things.

We met before through obviously Alex at.

Deal, but then I spoke to Alfred at Sequoia. I spoke to Shreyas who I had on the show. I spoke to Ali Partovi. I feel like I know you incredibly well already. Thank you so much for joining me.

First, Tarek, super excited, really excited to do this.

So I want to start with a little bit on you. So tell me, how did you make.

Your way into the world of startups.

First and then how did you come to found Kalshi most recently?

I think it's interesting. They're both the same, but originally from Lebanon. And I show up to MIT in Lebanon. I was like, the math nerd. I was really smart, really good at school. When I get to mit, I was like, holy shit. Like, I'm actually at the very most pretty average. And I got like super pumped. I was like, holy shit, I have to outwork everyone. I need to beat everyone. And then the thing that became kind of okay, like, what do I need to do next? Is like, I need to go to Goldman. Because that was a cool thing to do at the time. I go to Goldman and I loved it. I just like loved trading. And then I found myself at night, everyone was kind of thinking about how do we trade this and how do we pitch this to a client? And I was in this kind of thing called Equity Exotics desk or you bundle Exotics and sell them to clients. And I wasn't thinking about how do we trade them. I was thinking, why on earth are we even trading these things? We did these things in 2016 where people wanted to hedge themselves against Brexit or get exposure to Brexit. And what we would do is we would take a bunch of option swaps, put them in one bundle, and then sell it to investors and set it as a good proxy for what they're actually looking for and then sell it for 40% premiums. I was like, how is anyone even buying this? That question was seated. It was like, why is there no exchange where you can just trade directly on events? And then after that, it went all downhill where every single interaction I had with a person, I would think about it. It's like, oh, people forecast about the future, they're speculating or they like worried about a certain future event. And it was similar with Luana. Until we're like, okay, we need to build this. I don't think we're going to be able to live with ourselves if you don't build this. And so, yeah, that's how we got into Kalshi and the startup world. 1.

I love that as kind of an idea origination. But you mentioned kind of coming from Lebanon being the maths nerd. I think everyone, and this is such.

A deep first question.

So we're all a product of our history. What are you running from and what.

Are you running towards?

Tarek?

It's a great question. Actually. Nobody asks that on a podcast. Personally, I think it just like, tends to be very related to parents. My dad was really absent and I think there was this kind of constant need of like, where is he and what's going on and why is he not there? And then to my mom and I attributed a lot of things to her. She was a great parent, but she was very strict when it came to excellence. It was truly one of those things where, like, you come back and you're excited about having achieved 98%. She is just focused on the 2%. She was like, where is that 2%? I think she just like, would push us to be at 120% of the way every single day. Like, the 120% was very consistent. Everything we did, I think that drive and that sort of need for 120% that doesn't leave you.

Your mother, I'm sure, is not a subscriber. As much as I would like it to be as big a show as that.

I'll send it to her.

Do you think that's good parenting? And when you think about leadership today, I often think actually about parenting as being kind of a core tenet of being a great leader and the right way to teach people. Do you think it's good parenting and do you take anything from that in terms of teaching your team?

I think it's a great question. Honestly. I think if you want to achieve outlier results, you need some sort of outlier. I'm going to call it imbalance. You need some sort of outlier unusual thing that is part of your history. Something. I'm not trying to make a kind of fully journalistic statement, but I think there's a strong correlation between those two things.

I totally agree.

I mean, listen, how old are you, Tarek?

I'm 26.

Okay, you're 26. I'm 26 too. We've both done relatively exceptional things for our age if we're going to inflate our own egos enough. But I think we've both given up a huge amount of life that other 26 year olds have not. And I think going to your question, on balance, I fundamentally do not believe you get to where we get to unless you give up and sacrifice. I'm sorry, you can't have both worlds. In my mind, I want to hear your thoughts on the balanced life. If one's going to operate at this level, can one truly be balanced and how do you think about this?

I think that's a great question. So I think founders tend to have one category where they're extremely spiked and a lot of other categories where they're just like really abysmal. And founders that basically find that something to build or something to do that really heavily uses that attribute where they spike end up actually these outlier results. And the reason I say this is because a startup is intrinsically something that the world does not want to exist. Sounds like a counterintuitive statement, but actually the world does not want your startup to exist. The de facto state is for your startup to just not be in any kind of market you're ever going to go. It's either there's a shit ton of competitors, thus the pressure is for your startup not to exist, or there's no one in that market, which means there's something wrong in that market. Right.

I'll pose a different view. Okay, let's have a debate. Yours.

I like it.

It's not that there's this ton of competitors and it's not that there's a problem in your market. It's you foresaw something in your market that other people did not see. You saw an expansion of financial products that people wanted to bet on that other people did not see. Market creation through kind of mindset, innovation. I always ask like, what do you see that the world does not see? So I think yours sits in the middle.

I love that. But there's one thing I do think it sits in the second category because regulatory wise it wasn't allowed. So then you're in a situation where like anyone with a reasonable. I think we were naive and honestly pretty nuts three years ago. Anyone with a reasonable mind would be like, okay, we're not going to go and try. The government does not allow this. It's been decades of people trying it. I think we're persistent and stubborn enough to just make it happen. And I think this is where that spike helped us achieve the sort of outlier outcome regulatory wise where Even companies like CME, who's been there since 1848, hasn't been able to achieve. I would still put it in category number two. And again, the point I'm trying to say is you need to have an outlier attribute that allows you to pierce through a specific market.

Do you believe in work, life balance? And for those today, I don't because.

The law of equal exchange. I think there's like a lot of the work smart type thing. I mean I think sure you should work smart, but that's conditioned on you working hard first. Like you don't just show up and start working smart. You need to work very hard first and then you can figure out how to optimize your workday and work smarter. But you just need to work very hard to achieve a lot of results. I mean, I just don't see any way around it.

Have you changed how you work over the years? What I mean by that is like.

Now I actually take very few calls.

And I try and do everything by email. I actually have teams that obviously help me with email now as well. But how I actually work has changed a lot. Has your style of work changed?

Yeah, I think so. When I first started Kalshit, it was fully brute force. No process, no system, nothing like Ofana Luana, it was just 100% brute force where it's like, oh, we need to do this, we're going to pull three all nighters and we do it and then we just like constantly. Brute force, brute force, brute force. It got to a point where like physically it was really taxing and I got to a point where it's Become very tiring. And I would still do that now if I'm convinced that it's the right thing. But now as I'm kind of starting to see, okay, the company has grown, the company has matured now I think my role, like, it's going to be the cliche thing where you need to delegate a little bit more, you need to do a variety of different things, but, like, there's just so many things to do in a day that if you're just brute force to it, it just does not become the optimal solution. I do think it was the optimal solution when you're first starting a company, but right now it's like if you don't actually pause first, you can just like throw yourself into work and then do it. Now, at the very least, I pause and I prioritize before. And if you don't do that prioritization thing, the brute force thing is a greedy algorithm. You're just taking whatever comes before you and then you solve it. Pausing and prioritizing is pretty important.

Can I interrupt you and say at that moment of prioritize, how do you determine what your next step is? Is it, we will lose $10,000 if we do this? Is it we'll lose two weeks of engineering. How do you determine what dictates your next step?

That's a great question. I love Elon's, which is like, does this get us to Mars faster? But I think broadly speaking, if I were to kind of distill it into. Into one or two things, it is usually around expanding the category somehow, which is still kind of the same thinking as what we had initially when we started the company, which is like, okay, we have this ecosystem that's events. My mind is always going into, like the ecosystem. It's not number of users, it's not revenue, it's not financials. Is this next step basically helping us bring more people into the ecosystem or expand the ecosystem, bring in a new market, bringing something else. And the reason I think about the ecosystem, not the company Scalpshi, is because right now we're the only ones. I mean, we basically pierce this regulatory thing and we have have pretty strong regulatory modes. But I'm very focused on this asset class becoming as big as crypto and then stocks and something else over time. And that's really kind of the framework. It's like, am I expanding the asset class? And if I'm extending the asset class, everything will trickle down afterwards.

You mentioned the regulatory moats that you have and also kind of the crazy nature of going after them. Some would say it's naive when you started and naivety is often posited as a superpower. I'm intrigued. Do you think of naivety today as.

A superpower or do you actually think.

Of experience as incredibly helpful and poignant?

It's a very interesting story. Sometimes being naive can just lead you to disasters. And it does, often. I remember I had a conversation with Justin Mateen, the founder of Tinder, when he first he came in late to our seed round and then we had like, I think a five minute conversation. He said, I want to invest, I want to do the whole round. I was like, okay, you can do the whole round. You can do. Maybe I'll see how much he's like, as much as I can. I really want to do it. Then we did it and then like, I think a month later I just called him and like Justin, like talk to me for five minutes. I think you barely understood the business. And what was that? He was very clear. And I think by the way, Justin has an incredible early stage track record. It was just phenomenal. He just, he said like there's two things that were there. It's like you're really smart, you're going to figure something out and then you're extremely naive. And he says that that combo is usually like very strong. If you're naive and you're not, you don't really know what you're talking about, then it's bad. If you're very smart and you're naive, the naivety is not coming from like a lack of understanding or lack of deep thinking. It's coming from a lack of experience. And those two types of naivetes are different, like lack of understanding and lack of deep thinking. That's bad. Lack of experience tends to be very good because experience, what it does is like you can learn it. If you have high slopes, you can learn experience, but you're also not carrying all the baggage and sadness and difficulties of, of life or any industry if you're in startups.

But yeah, carrying the baggage of life. I totally agree with you. Does that impact how you hire? Like do you look for these high slope, high gradient learning machines but who are very young or do you actually look to complement, no offense to your lack of experience with 45 year old logoed execs?

I think regulatory wise, definitely the latter. Now have to say we tend to try to focus on people with a lot of experience and wisdom. I really mean this in a good way. That still have a little bit of like childish fascination aspect and there's a lot of those people, there's a lot of people that like feel like they've got it figured out and now I have my wisdom and experience. And then other people, they could be at the end of, they could have retired already. But they constantly have this sort of childish fascination with new things like what is this? Or what is this like new crypto thing? And those types of people are like, tend to be extremely good people to have in an organization.

What are your big hiring mistakes?

Yeah, I mean if I said no, I'd be lying. So I think the ones that tend to be difficult are the ones where I basically over index. Especially when we first started on. I've always been very big admirers of raw intellect at mit. I would really admire people that just can come and crank a piece of code at in order of magnitude less time than anyone else. And I think we over indexed on this a little bit earlier on. I mean I think it was really about like, okay, what are the smartest people to get into the company as young founders? We definitely over indexed on that. And I think that led to the worst. I think the biggest sort of hiring mistakes, the one that tends to be particularly painful is self awareness. I would say people who are not self aware tend to be very difficult to manage. They're very difficult to talk to. Even kind of like the exit tends to be painful as well. Kind of the whole thing tends to be. And so those are the ones I really kind of thinking back, I was like, okay, this was a big hire.

When a person was, we've mentioned kind of mistakes in hiring and maybe raw intellect, but lack of experience. When you think about insecurities in leadership, what do you think your biggest insecurities in leadership are today?

Yeah, so I think as a leader there's something at the company I always worry about like I'm more respected than liked. Which oftentimes if you ask a lot of like founders, they say that's great. A lot of people prefer to be respected over liked. But I would say that's an insecurity of mine. So I sometimes think like, okay, maybe like it would be nice to be more like that.

Why do you think that is?

I think I tend to be harsh sometimes. Like it's hyper rational.

Do you want to change that? Do you want to have more softness?

I think I'm working on that kind of working the balance. I don't want to reduce my intensity. That's not something I want to do. But at the same time I think there are Some things that can be mitigated and easily managed by, like, becoming softer or becoming kind of more intentional about communication, communicating things. And I think that's a positive thing.

Ali Partovi told me it was particularly that intensity that made you so good at hiring engineers. If we think about building that team of engineers that you have done so well, what do you think makes you so good at hiring engineers? And where do you think most founders make mistakes?

I would credit a lot of it to the vision more so than myself, to be honest. I just think we're building something pretty cool. It is one of those really long moonshot ideas, and I think that tends to be really attractive as a value prop for an engineer that wants to solve really hard problems and build something meaningful. And then two, I think it just, like, compounds. I mean, I put a lot of time early on in, like, creating an interview process that is actually interesting, that people enjoy kind of going through. And I think that helped they create a little bit of variety around campuses because, like, oh, this question at Kalshi is really fun, and how do you solve it? Can you solve it? And things like that. Once you have a really, like an amazing engineering team, really smart people, like, that also attracts more and you get sort of the compounding effects.

How do you structure that interview process and how do you make it fun and different? Can we double click on that one?

We try to limit the kind of algorithm interviews and all that. We don't do many of those. It's either one. It is something that we're actually tackling today in the exchange, and we put a lot of time to, okay, how can we scope it out so that they go through, in the hour that they're talking to us, a similar problem that we've gone through a month ago or today or something like that, and, like, let's collaborate on it. So they have very direct exposure to kind of what's going on. And I think that's just exciting. Like, it gives them a little bit of inside school, like, inside view on what's going on. And then the second type is more kind of just like mathematically difficult, interesting problems. The question that we ask a lot is basically, it has to do with an elephant, and it has to do with the mathematical constant PI. And the person has to relate these two somehow. It's a pretty tough mathematical problem, but it is a pretty elegant solution. And the whole thing, it's like you start with an elephant, you end up with PI.

You mentioned kind of choosing, working at kalshi over a B2B software company. When we spoke before, you said B2B is a Ponzi scheme. As generally an enterprise investor, my ears were pricked by this one. Why do you think that? And why is B2B SaaS a massive Ponzi scheme?

To be clear, I think there's a lot of amazing B2B SaaS companies, as we all know, they built amazingly interesting products and all of them are very useful to the world. One, I think there's going to be a lot of pain for B2B SaaS companies that are not solving a real need, that are solving something that is good to have. And I think that's the first thing that a lot of companies are going to cut. And I think that's going to be really difficult. But at a high level, let's assume the whole ecosystem is two B2B SaaS companies and one VC with a bunch of LPs. The VC basically does a million dollar round for each, tells them to spend a million dollars round selling to others very quickly. So they both sell to each other. They generate revenue. Because of that revenue. That same VC basically injects more money into them and tells them to repeat. So sell even more with the, grow even harder with all the money. So spend all that money really quickly, grow your revenue even faster. Revenue is still growing. Okay, now we're doing a series B, we're doing a series C, we'll do a series D. And basically like these companies, fundamentally it's a circle of companies that are selling to each other pretty massively. Obviously it's not two companies, it's thousands of companies with the same source, same pool of money coming from the top, which is essentially the ultimate LPs at the end. And so you basically got into a cycle where growth has been fueled by injection of capital pretty consistently until you get the B, the C, the D, E, F. And then someone is holding the bag. The ones that succeed is basically the ones that go all the way to IPO where they dump it on retail investors. And retail investors are holding the bag. The ones that don't are the ones that basically do a Series E, F and then that investor is the one that is left holding the bag when the tide shifts.

But do you not believe in the explosion of market size? And what I mean by that is I am in SMB, the CRM providers that sell to plumbers and sell to cleaning companies. And they're not in the circular economy of LP inflated ecosystems. They are in the national economy of labor and labor productivity. And those Are the winners? In my mind, when you have Dallas Ford Motor Company as your customer, that's a win.

I totally agree. And that's people are solving a real need. Ford is not going to buy it just because they're going to buy it. But within the ecosystem, which is what a lot of the companies that we've seen get built in the last decade, I would say, which are like very kind of startup heavy, like, let's sell to each other and everyone's selling to each other. Obviously there's an explosion, but that's all kind of very VC fueled. The ecosystem is very hyper, overinflated through a mechanism that is not too dissimilar to Ponzi schemes.

What would you like to change about Venture? The other way that I could ask is Tarek, help me be a better investor. What could I do to be the best investor for you?

The thing I would say, and this is going to sound cliche, but I truly feel like framework is like, can this person be my first call when shit hits the fan? And I know everyone says that, but like, it just doesn't tend to be true with everyone. We're lucky enough that I truly feel like I can call and other people on my board, I can call Ali Partovi literally anytime. It can be something like something personal that's really shitty just happened and I'm feeling pretty down and I can call Ali Partovi and he'll lift me up. It just kind of boils down to trust and building a relationship that goes beyond like, hey, give me the quarterly financials. And actually becoming friends with them, understanding that you're like, with them for the next few decades. They're kind of family at that point. And family is going to have pros and cons.

Where do you think founders go wrong when fundraising? You're an angel investor today. Why do you think they go wrong? I often think when they take angels, they try and squeeze angels down to their minimum. Minimum check Karakin for 10. And then it's not worth your time to help at all. But everyone says yes, still massive mistake. Give fewer people more.

I see this a lot. I mean, I think probably two things, I mean, especially in this environment, raise too much, too early, unnecessarily. Like I see these seed rounds where like, oh, we can raise two, but we can raise four. It's a great. Why would you raise four and just raise. And it's largely similar valuations. The violation wouldn't scale proportion. Obviously variations can proportionate raise 4, but the variation logic is the same or scaling subline community. So they're kind of getting diluted extra. It's like, okay, with 2 million, it's giving it that much Runway. What is 4 million getting you more? Buying you more team members. That's just a bad thing outright before you kind of figure out what you want to build, et cetera. And so consistently, I think in the good case scenario, these companies regret having done more because of extra dilution. The second thing that ties to Angels, I think there's just a lot of need and want to go to these super Angels. Like, I got the founder of $100 billion Company X on my cap table, and I got this. This is great. But these people will barely ever answer your calls, and they won't be in the ground with you. So I just think more meaningful. Angels bought into the vision. I just feel like people don't focus on that as much.

You know, when I was younger, I always used to just say, yes, you're right. I disagree with you on the raise size. And I disagree with you because I feel that fundamentally, it's very rarely the first V1 that actually hits. Even when it does hit, the data can be slower than you think. Most often post launch, the numbers are never as good as you think. Fundamentally, if you operate like you have 2 million but have 4 million, yes, you'll be more dilution heavy, which sucks from a founding perspective. But the leverage that you get going into future fundraisers and the mental luxury that you have in terms of knowing if it doesn't hit the first time, you can have a second go. I would always favor the second. I would always favor the four. As I said, it's worse for dilution, but I think for company build, it's better.

I probably agree that if you can have the mindset of a 2 million raise, even if you raise 4 million, that's the ideal outcome. So I definitely agree that's the best of both worlds. I do think that is an extremely difficult thing to do in practice. The gun to a founder's head thing is actually, I think, a pretty understated force.

Talk to me about that. I've never understood this companies, and I.

Love this from Sequela, the crucible moment, which is like when they go to a crucible moment, which is like, you need to act and you need to do things the right way or you might die. Those are the moments where oftentimes, when you go back to stories about how companies were built and how their legacies were built are like, those are times where people went into their A game, and they've just, like, fueled the business to greater heights. I think the issue with raising more is it's really hard to create this false sense of urgency without it being real. And I think with two to four, what ends up happening? On average, people hire more people get a little bit more comfortable, they feel like they have more time, when actually 2 to 4, you should hire the same team. Business is still the same. You have more money, but the business is still the same. Your biggest problem is basically, again, figuring out what you want to build, and you should do that as fast as humanly possible, no matter what. So the more constraints you basically put on yourself, the more you can put yourself in a situation where you can actually, like, be in those crucible moments. And I'll give you an example. Like, Airbnb in 2020 went through a crucible moment when Covid basically slashed their revenue. I mean, literally slashed their revenue to nada. And they came out of this significantly more efficient company with a bigger tam ripping through that moment. And, you know, it. I mean, they had to fire. I think I forgot, but I think it was like, 25% of their team, and they had to do a bunch of restructuring, cut a bunch of business lines that were kind of working, but not really working. They got suddenly imposed a bunch of constraints, and they're like, if we don't figure this out right now, we may not be the company that we want to be. And look at Airbnb.

How have you stayed mentally and financially lean and constrained with, bluntly, a lot of capital injected into the company in a relatively short amount of time?

Luan and I have a scarcity mentality. We just don't really consider that we raised that much in our mind. We basically raised much less. We have, like, a certain roadmap for two years. We basically cap burned very aggressively. Like, everyone around us says, oh, you're not going aggressively enough. You're not growing the team aggressively enough. And I think we do have discipline around being frugal. I think it comes a little bit from this kind of immigrant mindset where you're kind of always worried things are going to shift and, like, money is not going to be there for long and all these different things. So I think it's working. The only negative is you get more pressure from everyone around you, from the team, from investors. Like, you have all this money. Why are you not spending more? Like, you get that pressure of, like, you're being too cheap or you're too frugal, and it's like, I'd rather be frugal and cheap than overspend.

Is that what you meant when you said gun to your head? And help me understand, as a vc, does that originate from us? Is this our fault?

No, I think the gun to the head is a good thing. If you have one chip on your shoulder so that you have very high motivation, ambition to make this thing succeed, you need, as you said, you need to make this succeed. You don't want to make this succeed. Two, you have a circumstance that is endangering number one and endangering it imminently. So it's pushing you to act with a very large sense of urgency pretty consistently. And I think those two together is basically gone to your head. Now. There are some founders that have it intrinsically. One example that I always think about is Travis from Uber. And that guy could raise $100 billion. He's just wired in a way that he has a sense of urgency. The gun is always his head. He's just like, we need to move, we need to move, we need to move like. And I think that's pretty inspiring. I mean, I admire how he built the company.

Before we move into a quick fight, you work with some incredible people. Alfred Lynn, Henry Kravis, Chuck Schwab and this was Ali Partovi. So credit to him for this. But he said, what's been your biggest one? Learning from working with the each of them.

That's very interesting. So probably pretty different. So Alfred is really good at pushing my thinking and I got to learn that over time. And no matter what I go to Alfred with, even if it's the right decision, oftentimes it is the right decision. Alfred just basically pushes back. Why he can even go all the way to say this does not make much sense. Even if he thinks it's the right decision, he just sees the reasoning is not super crisp and crystal clear yet. He's like, go and come back. And I really like that. It's constantly this exercise of like, am I really thinking about this extremely critically? Am I thinking about this decision as crystal clearly as I can? That's pretty awesome. I've been really enjoying that. I think I'm interacted more with Kravis than Schwab and they're actually very similar in variety respect. But I'll talk about Kravis real quick. He's just such a deep, long term thinker. We're talking like decades. It's not talking like next five years. It's like in the next 30 years and how this can evolve. In the next 30 years. And I really enjoy our conversation because I go back with a refreshed sense of long term. And when you think about it, every time you go through very difficult hardship, it's like zoom out pretty massively. Imagine yourself five years into the future looking back at this and you're like, this is just like a tiny blip and a tiny challenge. Oh, there was this tiny thing that we had to do at the time and it sucked. And I always have that perspective when I'm going through these things.

My great mentor told me to extrapolate yourself out when things seem bad and ask yourself, will I remember this in 10 years time? And 90% of the time you won't remember losing your CMO. It's like, oh, who are they? So I don't mean it badly, but you know what I mean. Oh, I remember that head of sales leaving. I do want to move into a quick fire. So I say a short statement and then you give me your immediate thoughts. So that's. Does it sound okay?

It sounds great.

Okay. So what's your favorite book and why?

I really like never split the difference. I don't know if it's my favorite book. I mean I like a lot of different but never split the difference. Just quite good. I like it. It's my negotiation.

What's your biggest strength and what's your biggest weakness, Tarek?

I think biggest strength is I can like get compulsively obsessed about anything that a next big challenge for the company that I need to solve and I'll do whatever it takes to solve it. I just dig into that wall no matter what. Biggest weakness. I tend to have a little bit more trouble with organization across different threads and I try to complement myself with a team, but I'm not as good when it's like a mult different things and checking the trains are running on, which is a little bit of an operation thing. It's less natural to me.

What's the hardest element of your role with Kalshi today?

The constant balance between company building and product building is probably one of the hardest. That balance is really difficult. I think doing product building and staying really close to customers and really understanding kind of what we need to do next and we need to build next and what are the customers concerns. Seeing very close studies is extremely crucial. As a founder, I want to do it as long as humanly possible, but at the same time starting to establish systems and processes and defining culture and communicating culture and values consistently across the organization. Also very important. I still don't have good structure. Dynamically and greedily try to allocate my time between the two. But I think that's been a challenge.

If you could be CEO of any other company, what would it be and why?

I'd like to be a CEO of an airline. It's heavily regulated. There's a lot of interesting things to be done there. Innovation is really hard because of how regulated it is. I just like these types of businesses where like you have to really deeply think about how you can innovate within a number of sets of constraints. And it's a pretty tough, low margin business. Just seems pretty exciting, you know. Nuts.

No, I love it. Tara. I just like that would be a nightmare. It's like that's the hardest to go into. Low margin, low mps, shit. Regulatory service. Anyway, tell me what angel investor has been the most value add to you?

There's just been like a lot of them. Ron Conway, just outlier. Incredible. Henry Gravis. Super helpful. Justin Mateen.

I've never worked with Ron. What makes Ron so good?

He just fights for you. He doesn't just hustle for he, he fights for you. And it's not just about the economic incentive and what the ownership is. He'll just fight for. He believes in the mission, he believes in the vision. He's like, I'm going to put myself on the front line and you're a portfolio company. I'm going to be in the arena. I think when you go into the arena that's a different level. That's a different level of help.

I love that. What do you know now that you wish you'd known when you started?

Kalshi Wished I knew how difficult that whole regulatory path because regulators are like great at their job. They're doing it right. They're doing cautiously but like how difficult the industry is, how some of the bigger players can be monopolistic. Actually I'm happy that I didn't because that pushed me to basically get to where I am. It's a good thing. The one thing I'd say is like most people that look amazing and have done amazing things and you know, look, they have it all figured out. Authority figures, whether it's the President of the United States to CEO of Tesla, they don't have it as figured out as you think. They stumbled upon a bunch of different things and they just have a high ambition, high grade. But like they're like you. Actually they're like you. It's mostly they're very similar. They have their insecurities they have all these. And I wish I knew that earlier on it's like you trust the authority figures but you realize actually you can do anything with enough grit and enough intellect in this world.

I agree. Tell me, what would you most like to change about the world of startups?

I was discussing this with two of my good friends. There's this weird shift that's been in the last decade where you see before you admired founders, like there's a very strong passion for what they were building, building. When you think about obviously Sergey and I with Google, even Zoc with Facebook, they just were obsessed with the rebuilding, etc. I just feel like the ecosystem has turned a bit too financial. There's just like less passion towards what they're building. There's a lot of like, oh, let me raise a quick, like a monstrous round really quickly and try to exit very quickly. These are, I don't know, I just feel like there's less passion and less commitment really because the startup system has gone too mainstream. I think everyone now is founder and gets funded, etc. Whereas before you really needed to want it to be part of this. So maybe that's bringing back the whole like check on, like do you really want this? This is a tough path. It's not a two year long pat. Agree.

And that's what I hopefully will change in the next few years when tourists realize that it sucks not to be able to raise money and it sucks not to be able to fund companies and there is shit in this business. Tell me final one. Kalshi five years, time is 20:27. We're back on the show. Where's Kalshi then?

So I think we look a little bit like the New York Stock Exchange where you think about trading on events, you come to Kalshi and whether you're trading it via your brokerage account that's integrated on Kalshi, trading via API and you're a fund that's basically providing liquidity or trading across Kalshi and other assets. Or you're someone that just coming straight up to our app and trading events all across the world. But 2027, I think really about it like as event contracts becoming something that's as mainstream as crypto or stocks today, it's like a boring utility at that point, not new innovation.

Tarek, I can't thank you enough for putting up with my prime questions. I know we went totally off schedule, but I loved it. You're a star. And thank you so much for joining me today, my friend.

Thanks for having me. This was awesome.

Some very exciting times ahead for Kalshi.

And I love shows like that where.

It'S just very, very conversational.

Friends shooting this show, I want to.

Say a huge thank you to Tarek.

For being such a great guest on the show. If you'd like to see more from.

Us, of course you can on 20vc.com.

But before we leave you today, I.

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