Evaluating and accelerating talent with Ali Partovi, Founder/CEO of Neo

Hey there, you're listening to Paradigm Shift, a podcast about people building the future and pivotal moments in their journey. We're super excited today to have Ali Partovi on the show. Ali is the CEO of Neo, an accelerator and VC fund based in Silicon Valley that's invested in 100+ companies like Vanta, Ramp, Replit, and more. Ali also has an unparalleled track record as a founder and angel investor and has the war stories to confirm it, which we'll get into. He's the co-founder of LinkExchange, iLike, Code.org, and now of course Neo. He's also an angel investor in companies like Airbnb, Dropbox, Facebook, Uber, and Zappos. We're super thrilled to have him on the show today. Welcome, Ali.

I'm so excited to be here. Thank you.

Amazing. So we want to cover like 3 broad topics, 3 or 4 broad topics. The first is the early days. You have like a very impressive story around your birth and kind of your immigration story. So I'd love to like dig into that because I'm sure there are a lot of insights and unique stories from that. So you were born in Tehran and your family fled to the US during the Iranian Revolution. I know that was No small feat. I'd love to hear like a little bit about maybe for the audience, like a bit more about the story and then any like insights that you took away from that experience that have stuck with you today.

Sure. First to clarify, I'd say the people who fled during the revolution were the lucky ones or the smart ones. We stayed back for 5 years through the revolution and the subsequent war with Iraq. And things got much, much worse before we were able to leave. Um, if, you know, I was 7 when the revolution happened, I was, you know, old enough to remember it clearly. Um, I mean, it was in some ways not unlike things like the George Floyd protests we had in this country a couple of years ago. I remember going with my parents to like the demonstrations. There was a period of that country, there was a period of real exuberance that this was going to usher in a constitutional democracy and a lot of people Wanted that. My, that was definitely the direction my parents preferred. And, you know, and so it was really heartbreaking what, you know, seeing how things unfolded and seeing how in the, in the passion of a, of a revolution, how, you know, people who are unscrupulous can seize power, you know, you know, in spite of the will of the people, so to speak. I think people, different people deal with trauma in different ways. For me, I think it made It made me stronger. It, I mean, to this day, if anything bad happens in my life, I always have this feeling of I can get through this because I've gotten through other things before. And so, I guess surviving tough times for me is not something that has left me weaker. I'd say it's just made me feel more resilient and more grateful for what I have. The things that really I mean, I would say I was quite privileged. So I had a very loving family, my mom and dad. I had a twin brother, which meant I was never alone. And my dad was a professor, so we were surrounded by academics. So, you know, I only can realize looking backwards that all my friends were like nerdy math and science, you know, kids whose parents were like incredible professors. And so I grew up in a much more intellectual environment than most kids. And our dad got us a computer when we were about 9 years old and taught us how to program. This is back in like 1980. And that was both a gift in terms of helping be an escape from the chaos and terror of living during a war, but also an incredible gift for brain development. And obviously kind of had no idea at the time, but it definitely is what set me off on a career that ended up being in the tech industry.

I think your point around resilience is a really important one, that it can be challenging times can be sometimes an opportunity or have a silver lining of giving you perspective on how truly challenging things can be. It might make day-to-day stressors look a little more approachable in that context. So you guys, I know you eventually did make it to the US, right? And I know there's an interesting story around that. I'm curious to hear more about that. And then when you got to the US, how did you eventually find your way getting into startups and software?

Yeah. So immigrating to the US as an Iranian, It's still quite difficult, nearly impossible thanks to the Trump Muslim ban, which hasn't really been lifted by, um, President Biden. The Muslim ban that, you know, we've had now for, gosh, it's been unbelievable, like 5, 6 years. It's really a thinly veiled Iranian ban. More Iranians are blocked than all other countries combined. I mean, these are grad students, these are college students, these are, you know, medical school students, you know, people who are coming here to study and Uh, or it's people trying to come visit their, their daughter for her wedding or to see the birth of their first grandchild and they're being blocked. At the time when we were immigrating, it wasn't, you know, it was different administration, but also very difficult to get into the U.S. In particular, you couldn't, you just couldn't apply for a visa to the U.S. from Iran because the, you know, terrible hostage crisis where the, you know, Iranians and the Like I mentioned in The Passion of the Revolution, had taken the U.S. embassy hostage. So there's no longer any U.S. presence in Iran. So we had to go to an intermediary country. We spent a summer in Italy traveling from city to city, trying to get a U.S. visa and getting rejected multiple times. And in fact, the, I think the 3rd time we got rejected was kind of like 3 strikes and, you know, you can't try again. And My mom somehow like managed to talk the consul in, this is in a small town in Italy called Trieste, to talk her into reconsidering. And she had to send it back to the State Department and ask for a special exception. And so we finally did get in as tourists, which has a 90-day limit. And we kept trying to extend that to stay longer. Uh, we enrolled in school and ultimately we were deported. And so, uh, in 7th grade, you know, so we again had this insane uncertainty of, are we going to have to go back to Iran or some other country? We ended up going to Canada and reapplying to reenter. I'd say, you know, the common thread here, and this is, you know, being deported was, you know, like maybe a week-long ordeal before we got back in. Well, what's, whether it's a day or a week or a year, the, the The terrifying part is the uncertainty of not knowing what the future will be and having very high stakes to it. And that was the same experience I remember having living in Iran during the war. Everything from just not knowing whether our neighborhood was going to be there the next day. But for me as a child, more importantly, not knowing when or whether I would see my grandparents and uncles and aunts and cousins who had all left 5 years earlier, basically for 5 or 6 years. It was just, well, we will see them someday, and we don't know how long we'll wait, but it'll just have to kind of be confident and bear with it. And that ability to stay calm in the face of total unknown, I think, is pretty valuable for life in general and in particular for life as an entrepreneur.

Yeah, that's amazing. I mean, just dealing with that uncertainty and stress is so much of it that you have to experience as an entrepreneur. So thinking about your entrepreneurial story, one thing that strikes me is you've seen a lot of different waves, right? From the dot-com wave, and then you saw the big bull run from the— I guess you saw the GFC and then the bull run of the last 10 years. And now we're sort of in this new inflection point with AI. I'd love to talk a little bit about what that early dot-com wave was like for you. And you were kind of at the heart of a lot of it with LinkExchange And Yahoo, and you worked with like a lot of people that are like almost like household names in the tech world today. So maybe you can just take us back to that and share a little bit about what that was like as a young entrepreneur and what are some lessons that have stuck with you from that time?

Obviously things were different, but I'd say the essence, a lot of things were the same. We were just out of college. I'd say Tony, Sanjay, and I were all We had in common that we were all smart. We were all bored at Oracle and just felt like we had day jobs there that we could have probably done with our hands tied behind our back and didn't feel like we were maximizing our potential. And the emergence of the web browser and just the explosion of creativity was so exciting. I was also financially insecure. And so there was definitely this aspect of Wanting to make a lot of money and be able to take care of my parents and so on. And that's not how I'm motivated today, but if I'm being honest, that was definitely a common part. And there was this excitement that like so much opportunity, that like so many different ways you could reapply this new technology and combinations that no one had thought of yet. And we wrote the first ad server on the internet, not a particularly glorious contribution to the tech world. You know, most people don't love ads, but it was still kind of neat that a few guys, like just a few years out of college, wrote something that didn't exist before. And the lesson that I took from there that has definitely been the most important lesson of my life is the importance of people and the importance of surrounding yourself with people smarter than yourself. And I, I think we were somewhat lucky that our, not just the original founding team, but some of the early people we had were truly brilliant. Alpha Lin, for example, was at the time, he was a grad student at Stanford getting his PhD and he was working for us like 3 or 4 hours a week at nights. He'd like show up at 1:00 AM and he was basically our finance guy and like doing our books and eventually became our CFO. And even in a In the role, you know, like doing the books is not the most strategic role in a startup, but just the presence of somebody as brilliant as him, as hardworking as him, as driven, as competitive, it lifted everybody's game. You know, it just made others want to push themselves to do their best work. And so I realized, like, you know, in every role in a company, if you have people who are A players, it lifts the whole organization. And so I became obsessed with hiring people smarter than myself. And, and I realized the first 5 or 10 people that you hire at a startup really are what determines how successful it'll be. And that's definitely also informed my subsequent career as an investor. But yeah, the other names that were connected with LinkExchange, Scott Bannister, we acquired his company, so he wasn't there from early on, but he's gone on to do unbelievable things. He essentially came up with the idea of the search ads model. Which he gave the idea to Bill Gross, who then started what became Overture and Yahoo Ads. Max Levchin was a contractor at our company who left to start PayPal. And, you know, through him we were connected to Luke and Reid and, you know, all the early PayPal folks. So yeah, there was, I think what was just amazing about that time was all these, you know, young, smart, hardworking people trying to figure out, you know, like how to make a dent in this world. I think there's a lot of commonality to right now and the explosion of creativity and potential and new combinations that people have, trying things no one's tried before with AI and LLMs is quite similar, I think.

I'd love to talk a little more about people and what you've found differentiates the best people. I mean, this is a very hard thing to do, right? Like I have to hire for my role running a startup, and it's very, very difficult to make good decisions identifying talent, recruiting talent, hiring talent. There's so much uncertainty. I struggle with it. So I'd love to hear your advice or thoughts on what are some common threads you've observed when someone's not yet proven, right? We're talking about all of these great people before they became Obviously great. And so like, how do you know what makes someone exceptional?

I don't think there's a single answer to that. And I would be foolish to try to say, here's this checklist. On the positive side, the good news is you've been interacting with people hopefully since the day you were born. And so it's something you have a lot of reps, a lot of pattern matching deep in you. And so it's as much as anything about being intentional about tapping into your, you know, your sense of people rather than— we tend to suspend judging others in polite, you know, society. You don't hang out with a bunch of friends and take mental notes of who's got what strengths and weaknesses, or someone makes a slip, you don't file that away as a, you know, as like a, you know, ding against them. In a professional scenario, it helps to be a little more intentional and really pay attention to who are the ones who are, whether intelligent or creative or, you know, more competitive, more hardworking, more reliable. And, you know, there isn't a single set of traits that everyone must have these traits. In fact, diversity of traits is quite important for a team. You know, you can have somebody who's, I mean, I'll think back to, you were talking about LinkExchange. Tony Hsieh was an insanely creative person. He would You know, just come up with crazy ideas. And I use crazy in the sense both out of the box, but oftentimes truly crazy. He wasn't super reliable. He wasn't super good at follow-through. If he was the only person, it wouldn't have been great. We had other people like Alfred, who's incredibly reliable and follow-through to, you know, like he would die before letting something drop. And each person might have strengths and weaknesses that complement each other. What I will say though, it's about tapping into being intentional and practicing evaluating people. And when I was, it must have been 24 is when I realized there was this skill that I seemed to lack of being able to assess people. And I say I felt I lacked it because we were trying to hire executives like VPs and directors, and our VC at the time, Mike Moritz, joined us in interviewing candidates. So like, Tony would interview the person, I'd interview them, Mike would interview them, and then we'd get into a room and Tony and I were just like twiddling our thumbs. Like, I don't know, they seemed okay. I imagine, you know, we'd be like mumbling, nothing to contribute. And Mike had only met with them for 15 minutes and he had this like just piercing diatribe about how bad they were or how great they were. And so I felt like I want to develop whatever skill that guy has, and it just takes practice. There was shortly or after that time, I think it was maybe 6 months later is when I first met Paul Graham because I was considering acquiring ViaWeb, his company. And I had investigated them from across the country and flown out to Cambridge to meet them. And I was actually, I was making it a practice to assess their people from afar. Like I was reading all their bios and thinking these people are just brilliant.

Brilliant.

Trevor Blackwell and Ross Morris and so on. And I remember talking to Paul about this and I asked him, how do you have, you know, just, we were comparing philosophies about hiring people because it was something I was really, you know, truly was obsessed with at the time. And Paul said something that I'll always remember because it goes to your question. He said, you know, whatever role you're hiring someone for, see if you can say, I guess, I don't know if there's still a way to figure of speech. If you're hiring a salesperson, you want to be able to say this person is a sales animal. Maybe today you would say beast. I'm not sure, but it's not so much an objective set of things, but just check with yourself. Is this person the apex of what that role could be? And if they're, are they a coding animal? Are they a sales animal? Are they, whatever the role is, do they feel like, oh my gosh, they are just bringing it at a next level. It's more about making sure you're not compromising or lowering the bar or settling for somebody who is merely on paper looks adequate. And so, yeah, so I don't know if this is helpful, but it's more about the intention of just raise the bar, try to keep searching until you find someone that really blows you away.

It does feel like there's a certain, like, this ability to do the craft and the skill component, and then also like a drive and intensity and, you know, like a softer component. And that's, I think, sometimes easy to overlook, but my takeaway is that that's equally, if not more important in some cases. Ashish, I think you had a question.

Yeah, I think it's clear, and we're going to talk more about Neo. It's clear that you have like a, you've developed, as you said, and you've honed this ability to identify or You know, outlier talent. But I think you also have this skill that you probably developed, which is like getting in front and meeting with and exposing yourself to amazing people, right? Because I know you met Mark Zuckerberg when they were just like super, super early, maybe like a dozen people, or correct me if I'm wrong, but super early. You have Code.org where you're reaching, you know, tens of millions of bright young people. I know Neo has an extremely diverse pipeline, which we can talk about. So Is that, is the, I'm curious to hear like what you're doing in terms of like getting yourself in front of the right crowds. And is there some intentionality there too? And like, would you have any advice to other people who are like looking to put themselves in front of more diverse audiences?

Well, some of those examples are blind luck. You know, I being connected to Facebook is really, I mean, I cannot state more how it's in spite of not deserving it. You know, in that it was really due to my twin brother who not only got introduced to them, but, you know, really kind of advocated. And I was not a fan, to be honest. Like, I remember him telling me about this company he just met and me saying, this sounds more like an online fraternity than, you know, than a real business. And it was at the time, I think less than a million users and only in colleges and You know, if it had been me, it would probably have been a pass. So I remember them, you know, so I actually wasn't the one to meet with them at that early stage when it was 9 folks. Hadi met with them and he passed on to me, look, Ali, it's not about how many users of the business. If you met these people, he said, this guy Mark reminds me more of Bill Gates than anyone I've ever met in my life. And we're investing in, like, we'd be betting on him. And so, you know, this was, I guess, 2004. You know, at that time, my brother, who was also a successful startup founder, we had definitely talked about this mantra of betting on people and investing based on people. So that was definitely very top of our mind even back then. With Neo, I would say it's really about putting in the effort, putting in the hours, not, you know, not being too precious about You know, rolling up your sleeves and, and, you know, going out there. Like we, we now have a presence of sorts on campuses all over North America, but that's not by accident because when, when starting it, myself and a colleague, Albert Nate, traveled around, you know, to dozens of universities, like flying around the country, meeting students, taking red eyes. I mean, I, I'd be like, Talking to Stanford students, you know, till late into the night, rushing to a red-eye to go to, you know, Houston to meet with Rice students and then Austin to meet with UT Austin students. Actually, no, the UT Austin student met me at the Houston airport, if I'm not mistaken, to, you know, Nashville and, you know, to meet with Vanderbilt students and so on. Uh, I was traveling around a lot and actively, you know, meeting and evangelizing and interviewing students. So the students that we selected to be the first cohort of Neo Scholars then told their smartest friends, you should, you know, be part of this next year. And, and they told their friends and it's kind of, you know, it's now in its, uh, almost 7th year. Um, you know, this is, I would say we now have a talent pipeline, but it's based on a, you know, Compounding kind of return on investment of effort. So things don't come easily if you just kind of sit back and wait for them to happen to you.

I'd love to ask one or two questions about people and then we can jump into NIO. There's a lot we want to talk about NIO. So in terms of the people side, I know you met Marc in 2004 and you decided this is a guy we want to bet on and he reminded your brother of Bill Gates. Do you remember what about him gave you that feeling?

Again, so this is quoting my brother. I didn't meet Mark at that meeting. I met him, I forget, at some other thing later, maybe a year later, but it was, you know, like paraphrasing my brother, it was his intensity, his scale of ambition, you know, and I would say from my very first meeting, just the Confidence. And it's, it could be little things. One, one factoid that stuck out for me, you know, was we were just, uh, I remember comparing, you know, kind of life stories and I asked him where he grew up. Turns out he grew up not far from where I grew up, uh, in Westchester, New York. What high school did he go to? You know, I went to a school called Hackley. He went to, I think he was going to Scarsdale High School. And then he said, uh, in, I think in junior year, I decided the public school, this is one of the best public schools in the country, but I'm not getting a good enough education, he said. So I decided I wanted to switch and go to boarding school and I went to Exeter. And just that, that leap of logic right there, like most high school kids are insecure, you know, to death. And the one thing they would never ever want to do is leave the Leave the herd, leave the kind of comfort of being surrounded with their peers and send themselves to boarding school. You know, that was, I remember being stunned at somebody having that level of just independence and self-confidence and sense of wanting to chart their own trajectory and not held back by the insecurities that I think hold back 99.9% of people. So yeah, it's an interesting thing. I mean, I don't want to glorify or adulate too much. Each person has positives and negatives, and I think even in that very sort of vignette, there are elements of both what makes him great as well as some of the things that people complain about Mark today.

Yeah, but that is a pretty incredible story and thing for him to have said and done. So we have to ask you about Steve Jobs before we I know you've had some very interesting interactions with him where you were in this conversation with him where you were trying to sell one of your companies to him and it ended up not working out, but you had some challenging interactions with him. We'd love to hear a little bit about what he was like and what do you think made him great and any sort of things you learned from watching him operate?

So yeah, the story you're talking about is one that's become probably the thing I'm best known for, sadly, is because I posted on Twitter about how I totally jeopardized my company's acquisition by fucking up this, my one meeting with Steve Jobs. And it wasn't only one, I had a few other calls and meetings with him, but I'm not sure that I'm in a position for me to kind of comment on what he was like or what made him great. I mean, my main focus on what I could have been doing better in that meeting. You know, this was, like I said earlier, it was an epitome of a high-stakes kind of situation where our, we knew our company had real challenges and selling it to Apple was kind of a Hail Mary, like chance at pulling a rabbit out of a hat to turn it into success. And so Though I said earlier that resilience is all about being calm in the face of uncertainty, I was not calm. I wish I could say I was calm. I was definitely an impetuous, anxious, really impatient person. And had I been calm, I think everything would've gone much, much better because he was very interested. He said, we want to acquire your company. And he basically said he had to leave the meeting and he'd pass, he'd delegate the negotiation to Eddie Hughes. Eddie's awesome, and I'm sure we would've figured out something. I interceded to kind of try to find out what the number, what range he's thinking, and try to like start the negotiation exactly the opposite of what he just said he wanted. So, you know, he said that I'll leave Eddie to negotiate, and I was trying to kind of find out. I was so anxious as to how it'll do. And he, basically offered to acquire us for the same price of our fundraise 2 years earlier. So we had raised money at a $50 million valuation pre-launch. We had launched, we had something like 50 million or 100 million users and quite a bit of accomplishments at this point, but he was kind of offering to buy us at the same price as our original fundraise. I wanted to press for 2x or 3x that price, which I think is totally legitimate to do as you're negotiating. But I was also hoping to trick him into thinking we had a competing offer, and that was idiotic. And so I said it, the way I said it is, first I said, I think we're worth 3 times that much. And then I changed my tone a bit. I said, actually, I know we're worth 3 times as much. And I said it in a way that I was intentionally hoping he would think we had a competing offer. And he picked up on that and called me out on my bullshit. And, you know, later he straight up called me a liar. And, um, it was super, super painful to me, but it was painful because there was truth to it. You know, it was painful because it made me think and realize, you know what, like, I wouldn't trust someone if I detected these things myself. And it made me wonder, you know, being a CEO of a struggling company, it just comes with moral hazard because your job is to make everyone think how awesome your company is when you actually know it has deep issues. And so it's not easy figuring out like how close to the line you can get without— where is the line that you shouldn't be crossing? And it made me realize I'm probably in other interactions more often than I'd like to admit, probably also kind of doing things to kind of trick people into thinking how good our company's doing. And they're probably also aware of it and just— Too polite to call me out on it. And so I was really realizing, I wonder if other people have the same view of me. That's not something I'm proud of. And they just, you know, this one, this person at least had the, you know, had the, you know, fortitude to say it straight to my face. And so I took that as a favor, you know, where others might have the same opinion and say it behind my back. And so it definitely made me Really take stock of, I need to change and be much more serious about maintaining a sort of high-integrity approach, even in situations where it's not to my benefit. Yeah, with respect to him, I guess I would say it takes some courage to say direct, blunt feedback to people. And I don't think it's necessarily coming from a place of cruelty. From him, I think it's just more a place of not being worried about trying to please everyone and just instead being direct. And so I guess I'd say I respect that. I know lots of other stories of, you know, people that were scarred from interactions with him. So, you know, I can't speak to that. In my case, the story, this definitely scarred me as well. I mean, I would have like a recurring You know, uh, like it would pop into my head every single week and I would relive the experience and think, what if I had said this, then Steve Jobs would have said that, and then I would have done this. And I've replayed it, you know, literally every week for 10 years in my, in my mind, but not because he did something mean. It was because I had messed up and I, you know, uh, wanted to figure out if there was a way for me to undo my own mistake.

Yeah. What an incredible story. I mean, about Steve's, like, I think he's showing, coming off as brash, but also kind in a way that he's being honest with how he's actually feeling and the introspection you showed and the way you handle that feedback. Yeah, it's incredible. I would love to transition to Neo. I'm super excited to talk about this. I know Zane is too. I'm sure you are as well. We actually have a lot of Kind of connected nodes with Neo, which I'm sure is common these days given the scale you're operating at. We had Andrew Millich on the show. He's CEO of Skiff. We love Skiff.

I love Andrew.

Yeah. Amazing, amazing person. Amazing team. They're crushing it. We, and clearly you guys are onto something. I know you recently announced you raised $235 million in funds. You shared some of the names. They're incredible. Reid Hoffman, Bill Gates, Satya, Sheryl Sandberg, like literally the who's who of the technology world. This is on top of the $500 million in AOM you already have. And then finally, we were just talking before we went on, a former YC founder wrote this really thoughtful LinkedIn post. He's starting a new company and he was explaining his decision of evaluating whether he should go with YC again or go with Neo. He ultimately decided on Neo for a bunch of I think fairly compelling reasons, a combination of kind of smaller community, more, more better fit, better advice for his company, better terms. So you guys are onto something. I think it's very interesting, but I'd love to hear like about the founding story of it and the vision of it and like how you guys are seeing yourself kind of in the accelerator kind of VC world.

Today, 6 years into it, I would say we're building Y Combinator 2.0. We're building something that'll be I think the ultimate launchpad for the next generation of startups. When I started Neo 6 years ago, I definitely absolutely did not intend or, you know, I actively intended not to compete with Y Combinator and viewed it as charting a slightly different approach. The common parts were that I focus on mentorship and community and the idea of, you know, the common conceit is that you can identify incredible potential in young talent, And you can nurture and kind of cultivate and help support people towards maximizing their potential. And so whether it's finding brilliant students in universities or people a few years out of college and also bringing them together with diverse role models so that it's not just seeing, you know, white and Asian men or whatever the, you know, kind of prevailing majority is, but seeing people who No matter who you are, finding somebody who looks like you and that you can connect with who's successful, it does so much to help somebody aim higher when somebody else who's already successful believes in them and when they can see that there's, that it's possible. So yeah, so the original kind of operation of Neo is, was, and still the bedrock of it is what I call a mentorship community. So did not have an accelerator, but we did have this program to identify exceptional individuals and just make them part of a membership. So it was events and community and membership that was the essence of it. And Andrew Milik is a perfect, you know, kind of, I guess I have many vignettes and many different people to, you know, kind of follow, but he's a great example of somebody who I met when he was a college student at Stanford and You know, I remember going and meeting him outside CoHo at Stanford and talking to him about what he's thinking of doing after he graduates. And my approach to that relationship, really my approach to all relationships in NEO has been, I've had a mantra of make sure I'm giving more than receiving in each interaction and not, and like an extremely long-term view of trying to treat others the way I'd want to be treated. And so in his case, I was trying to help him brainstorm where to work. He had a passion for aviation, so I was introducing him to startups like Zipline, which I have no stake in Zipline at all, but, you know, I was spending time trying to find startups that were really cool and that fit his passions. In his case, aviation and autonomous systems were things he was passionate about at the time. He then ended up going to, um, Schmidt Futures. I stayed in touch with him and, you know, um, when he was finally thinking of leaving to start a company, I was one of the first people he reached out to. Or I think actually I proactively reached out to him because I was going to be in New York. But for me, the decision to invest in Skiff was entirely just anything Andrew Milik does, I'm going to back. It wasn't, you know, I mean, I'm also passionate about their vision and their thesis and so on, but it was, there was no question for me if this person starts a startup, I'm backing it if I can. And when he was joined by Jason, you know, All the better. The other part of the story that really goes to what's unique about NIO is when you hear about a typical VC firm saying they back a company, that means they write a check. Now the company has cash, company goes off and the rest is the company's job. In our case, we view the cash as merely the kind of starting point of aligning incentives so we can get involved and help build the company. And what I mean by help build, Specifically is recruiting star, you know, exceptional engineers to the company. And there are multiple people who interned at Skiff, or some of them are still full-time at Skiff that, that, um, that we introduced them to and, and sourced, screened, helped close. And for a young entrepreneur building their first startup who's never hired people before, you know, having an organization like us that systematically brings candidates that are fully screened and a good fit and helps you hire them is a major, major lift. And like I said earlier, I think it's the single most important determinant of what helps a company succeed or fail. So this is this aspect of identifying amazing people, betting on them, and then helping them hire amazing people. Those are the kind of core parts of Neo when it started. It's only been in the last year that we realized there was an opportunity to build a new accelerator, largely because we felt that none of the existing accelerators actually were a great deal anymore or attracting the Andromilics of today. So, um, you know, and so we wanted to create a program that was more attractive to that caliber of founder.

Would love to, um, hear a little bit about how, uh, you structure the programs. If someone's listening and thinking about, doing Neo. Part of it is the community, the mentorship, the access to talent, the capital, of course. But if someone did join, what can they expect?

So a lot of the elements I just mentioned are elements we've had for a long time, but we just wanted to package them in a way that was, you know, like a little structured where there's a sense of curriculum and progress and also just better marketed in a, you know, like a A transparent deal, et cetera. But a lot of the essence was already kind of present before. And this idea of making a transparent structured deal might sound simple, but I'd say it's super important and it's truly genius. You know, I'd say it's the core of Paul Graham's genius in starting Y Combinator. Paul Graham is an absolute genius, and I would say Y Combinator Or the concept of the accelerator is one of the great ideas of this century. And I want to make sure that I have adequate respect where it's due for that. For us, we looked at it and said, how can we package the things we offer that both more intimate mentorship, access to one-on-one time with exceptional mentors, And this whole talent pipeline that I mentioned of helping with recruiting. These are unique things that no other platform provides, not just Y Combinator, but really no firm that I know will send you dozens of stacked engineers to join your team on a systematic basis. How can we kind of package these things in a way that is compelling? And also, what would the financial terms be in a way that That's worthy of the top founders that might be applying to our program. So if I had to kind of itemize some of the specific innovations, well, the most important and notable thing, and this is not so much an innovation, but kind of going the opposite direction, is keeping it small and intimate. I think other accelerators by choice have prioritized Quantity rather than quality. And it's, if you're funding, you know, hundreds of startups a year, more than 1,000 people a year graduate from Y Combinator. There's amazing benefits to that, but that's inherently also not, not as appealing to somebody who thinks of themselves potentially as one of the very, you know, uh, top people, a person like take Andrew Milik, one of the top graduates from Stanford. Might look at that and say, hmm, I'm, you know, like, I don't want to be just one of 1,000 people. And where they made an overt decision to focus more on quantity, we made an overt decision to focus more on quality and staying small. So our cohort size is just 20 a year. And then hand in hand with that is the mentor ratio. We have more than 20 mentors. So think about that, that like, you know, the ratio of mentors to to startups is better than one-to-one. I think we have as many mentors as Y Combinator has. I don't want to say that for sure, but if you look at their team page and our team page, the number of people involved, it's of the same order of magnitude. And when they're trying to, you know, support more than 10 times as many startups with the same kind of staffing. So, and then the other components. The, our demo day is not just about raising money. It's also about hiring. And so our audience is not just going to include investors who want to invest in your next round, but we'll also include top college students, recent grads in, you know, 1 to 4 years out of college who are interested in joining startups, who are there explicitly because they're thinking, I want to leave my job at wherever, Figma or Plaid or so on and join a cool startup. Let me see this demo day if there are any companies that match my interests. And so to be able to walk off stage, not only having interested investors, but also interested, you know, founding engineers is a very compelling package that I think, you know, second time and third time founders would be attracted to as well. And then lastly, our economic terms. Oh, actually, sorry, I skipped a very important one, which is that we pay for All of the cohort to spend an entire month in Oregon. We give each startup their own house for a month and serve breakfast, lunch, and dinner. We create our own coworking space. So they're all working under the same roof. It's basically like founder heaven where we take care of your life for a whole month so you can focus on your work and not just focus on your work, but also build real relationships with peers. All the other founders, like they become friends and really Close-knit. The mentors fly in and spend a few nights each. Some of the mentors, myself included, stay for the entire time, but the spare time of like hanging out with somebody after dinner, that's when sometimes like the most meaningful relationships are built. You don't get that via a Zoom academy of logging in once a week for office hours. So that's an important part. And then lastly, our economic terms. We wanted to have terms that are competitive with the incredible founders we try to attract could just raise directly around from places like Sequoia. In fact, Andrew Milik did raise from Sequoia at the same time as raising from us. And same for Matt Katz, who's another Stanford grad, or sorry, he didn't graduate, but Stanford student from a year or two after. Matthew Katz, I'm bringing up another name, interned at Skiff through us and then, you know, started his own company. He did the NEO accelerator despite having already raised a round from Sequoia. And so to attract someone of that caliber, our funding needs to be competitive with the options they can raise without us. And so we set up our funding to be an incredibly generous deal. That's not predatory. That's, I think, fair to us, but also extremely fair to the founders.

I mean, that sounds like an incredible package, like super intimate community, great mentorship, talent, the terms.

Thank you. I wish I was young again so I could go through it myself. Totally candidly, it is kind of like nirvana for nerds.

What are some common pieces of advice you find yourself repeating? to companies in the early stages. So 2 things YC does a lot, having gone through it, is they force founders to really hone in on what they're doing, like a one-line summary of what you're building, and then they drive a lot of focus around that. And they have you pick one metric and show progress against it in terms of growth to see if what you're doing is working. And that focus helped me a lot. I think it helps a lot of companies a lot. What are some similar things you find yourself repeating? I'm curious to hear if anything comes to mind.

We do both of those things. In fact, we have a weekly standup amongst the cohort. I mean, you know, it's only 20 companies, so it's, they're all in one meeting as well as other smaller group meetings, but they each will every week say their one-liner because every week it's like you can, iterate and practice and figure out how to say it a bit more, uh, with a bit, you know, a bit more succinctly or in a more inspiring way. It's a little funny because saying one line, obviously it's not about rote memorization or, you know, it's not about ritual, but it is about, you know, I'd say the essence of being a great CEO is helping others see your vision. It's you see something that everybody else does not see. You know, you see some future that you've imagined. Being able to help others see it with clarity, that's very difficult. And being able to do that in one sentence is particularly difficult. And so I'd say it's an extremely important skill and practicing it and just making sure people realize this is a skill. This is not just something you passively end up becoming accidentally good at, is pretty important. But what do I advise that's different? I guess a big part of what I try to push people towards is to aim higher and not be afraid of risk, especially for young founders. You know, I work with mostly people under 25 who are high performers who've never really failed in their lives. You know, it's people who got straight A's through middle school and high school and went to some great college, whether it's Princeton or, you know, Georgia Tech or Waterloo. Every one of the people I deal with, even if it's not top 5 colleges, they're exceptional high performers. And when you've come from that background, if you've not experienced failure, the fear of failure can actually paralyze you because it can make you kind of gravitate towards risk minimization and de-risking and this feeling of, let me find the path that has the lowest risk of failure. And if you do that, you're also minimizing reward. You're literally Like reducing risk and reducing reward. And it requires a real mental shift to say, actually, whatever skills got you here, from here you need to focus actually the opposite, focus on reward maximization, which means picking the path that maybe scares you the most and that might fail and it's okay. And to me, de-risking does not mean choosing the path without risk. It actually means go straight into the risk and overcome it. And it's easy to say, it's very difficult to do. And a big part of why I post tweets and stuff about my own failure stories is actually to reduce the, you know, to kind of reduce the terror of failure so that other people feel like, yeah, it's no big deal. I can take a bullet and survive.

That's really great insight. And I'm sure that the mentorship community, seeing other people who've done it and have come out the other side, hang out with your peers who can commiserate with you when you're terrified of your thing not working out. I'm sure all of that must be really helpful in mitigating that kind of natural inclination that people have. So we ask a bunch of questions to every guest on the show. The first one's around feedback. What's the most challenging or difficult feedback you've received and how have you processed it and incorporated it moving forward? I know you gave the Steve Jobs example, but this could be in addition to that.

I get challenging feedback all the time, so it's going to be hard for me to say what's the most challenging. I could tell you the most challenging feedback I received this morning, but going back over a whole year or a whole lifetime, I'm not sure I'll be able to sum it all up. So yeah, what comes to mind actually was literally this morning, somebody telling me that a reason that we had lost a deal was because we had been too pushy about it. And essentially I would say, Not believing that somebody would consider a different alternative to what we were offering. And like any feedback, I have to accept it as valid because if someone made a decision based on this, obviously it's how they felt. You know, in my case, I think it comes from a place of certainly enormous passion, but also actual confidence that I'm pretty sure the package— I mean, I just described 2 of the things we offer. I don't think there is any better experience out there or alternative out there for first-time founders. If there was, we would improve ours, but maybe not everyone sees it the same way, or even if they haven't gotten all the information they need to get to their own conclusions on their own time.

That makes sense. The last question is around superpowers. So everyone has a set of skills that feels like play to them, but work to others. And we find A lot of founders and investors like yourself learn how to identify their superpowers and they just lean in on that day to day. So I'm curious to hear what are some superpowers that you like to lean in on that you've found that drive outsized impact for you?

Is it just one superpower or can I say a few?

However many you think is relevant. Yeah.

I wish I was as creative as Tony Hsieh. Going back to the earlier story, I worked with this man who Really was intimidating how creative he was. I remember feeling, if you've seen the movie Amadeus, I felt like he was the Mozart to my Salieri. Like I thought of myself as a creative person and then next to Tony, I was just like, oh gosh, I'm, I'm not. But being around him has made me better at thinking outside the box, better at like looking for, are there paths or ideas that are overlooked?

So yeah.

Being able to like come up with an occasional, you know, pulling a rabbit out of a hat or coming up with a key idea that changes, changes things is something I take pride in myself in. You know, for example, like this year collaborating with OpenAI and Microsoft to make an AI track for our accelerator. This was something that in hindsight, incredibly obvious, but you know, to think of it as soon as ChatGPT came out and pursue it. You know, doggedly to be the, you know, the first firm to have that kind of collaboration is something that's been pretty unique for us. So that's one. Identifying talent. I mean, this is, I guess, a little bit— if there's a single superpower that I'd say has clearly defined my whole career's trajectory, it's been being able to see what makes somebody special and to see the potential in others. But then I'd say the The part that's probably more important is then the other part is cultivating that talent, which really is about giving. It's about putting other people's potential ahead of my own and about believing in others. And it's a funny thing to cite it as a superpower, I guess, but I did mention earlier that one of the most powerful things for a young person is the feeling that somebody else believes in their potential and that can drive someone to do things they didn't think was possible. So I think a lot about actively kind of providing that positive force for the people we mentor. You know, our company is named Neo after the character in the movie Matrix, and that's a movie about imposter syndrome. It's a movie about a hero who doesn't think he's the one, and he has these mentors who believe he's going to save the world and he thinks they're mistaken and is incredibly insecure and progressively they help him overcome that. And so, yeah, so for me, that's something I actually intentionally think about serving that kind of role to the next generation of tech leaders.

Amazing answer. And that all resonates from everything we've talked about. Ali, thank you so much for coming on. It's been such a pleasure to hear about your, your founding story and to learn about Neo. We're so excited to follow along and learn more about all the success that you guys have ahead of you. Yeah, thanks again.

Thank you so much, Anais Zain. Truly an honor to be with you.

Take care.