Uncapped #2 | Keith Rabois from Khosla Ventures

All right, Keith, thanks so much for doing this.

I appreciate you making time.

Pleasure to be with you. I know you're busy. I know there's a lot of flying.

Going on, and I'm committed to talking.

Fast to keep up with you during this podcast. Ask the questions as slowly as you like. I will. Very fast though. Okay, so the first thing I wanna talk to you about is the whole idea of investing in outliers. And I saw you recently talk about something that resonated with me where you're like, you know, the top 15 basis points of people. Those are the founders that like make the companies that matter both to the world, probably also like to venture returns. The question I have is how do you marry that with being like a very early stage pre-product market fit investor. And maybe to put a little bit more context around it, we all kind of know what great looks like when you meet a fully developed founder like the Collisons or Brian Chesky. Today, I think anybody could walk into the room with them and be like, this person's amazing. But you operate for the most part at the very early stages. And so just talk to me about what makes great. How do you know what great is at those early stages? What's inside your brain as you're saying.

That, talking about pre-product market fit investing? Well, the reason why I think it's wonderful to be a pre-product market investor is very few people can do it. So like, as you point out, as companies grow up, as Founders mature, many, many investors can figure out that these people are excellent. This company's excellent, the p&l's amazing, Etc. So in Venture, the returns are mediocre across the Venture industry. So the only way to produce great returns that are impressive to LP is, is you have to have an alpha, you have to have a comparative advantage, competitive advantage of some sort. And so mine is to find founders when they have nothing but a keynote deck. Because there is nothing else for people to go on. There's no other, there's not maybe even a product. They can't even look at the product. There's almost surely not product metrics and absolutely not financial metrics. So I think this is the most amazing thing for me because what other investors do except throw up their hands and kind of barf. So they wanna compete, like, you know, kind of a Peter Thielism, compete where there's no competition. Truthfully, there's virtually no competition on a keynote deck and founders for undiscovered founders. Once you've created, you know, X billion dollar company, you're gonna start your next company? Sure. There's competition. You're gonna start another company. I'm sure there'll be competition to investing around, but you were talking about people starting their first company from scratch and they just have a keynote deck and a co-founder. That's awesome because almost nobody else wants to do what I do. So then the question is, can you do it well? Like it's kind of that you have to be contrarian to write and not just bet on people, like, but you also have to be right, you know, a reasonable fraction in an early stage investment call 40%. Yep. 40% is pretty much Hall of Fame, you know, Ted Williams kind of stuff. If you can be that accurate. So then the question is, what are you looking for? And to me, the best I can describe it is every founder that really succeeds has a superpower. And that superpower is something like they're in the top one to 10 basis points in the world on some trade. So they're the most tenacious person you've ever met in your life. They're the most disciplined person you've ever met. They're the smartest person. They're the greatest salesperson. It can be anyone.

Yep.

But they have to have a trade.

And it has to match the company.

It ideally matches the company. if you can match it to the company, then it's like so set up for success. That's like, please take my money right now. You know, do not pass go. Don't, don't meet with my partners. Here's the check. Yeah. If it's just the trade without necessarily directly matching the company, it's still probably a pretty good investment, actually. It's like how many dollars at what price? But if it absolutely matches 100, like, lean in, lean in, lean in. The other possible alternative is a Venn diagram overlap that you never see. And I'll give you a couple examples. Two traits that don't usually go together in people. So I remember When I first started working with Max Lovechain in late 2000, Reed Hoffman said to me to prepare me for my first one-on-one meeting with Max that Max is a world class technologist and a world class strategy, business strategist. And he's like, there's five of those people or less in all of Silicon Valley. And this is amazing. This is December of 2000. So before Max was famous, before PayPal was successful, we were complete mass. But Reed exactly nailed Max's combination of superpowers is those two traits don't go together. Jack Dorsey, another very successful founder, Jack actually can do three. He's actually a pretty good technologist. He's a world class design and has world class design taste, and he's a very strong business strategist. So you marry three traits that don't go together. That's another reason to invest. But those are the only two in my experience is like you have to have that. If you think about it, it's even globalize this. It's not about founders. It's about anybody who succeeds in a competitive industry, you're a professional athlete, you want to be the best NBA player of all time, you almost surely have some abilities, some traits, some body composition that's very different, or you want to be a world class DJ, there's a reason why, or in politics, there's a reason why Donald Trump has been elected president of the United States twice despite a lot of people hating him because he has superpowers. And you can actually, I've spent the last couple of years trying to isolate his superpowers because I was like, I want to understand, like, why does he keep winning despite the role? So I think there's two. One is he understands marketing, and that's easy to say, but very rare. And I'll give you an illustration, a very specific illustration. Trump actually cares about what his supporters look like. Now, that sounds crazy if you think about politics. You're like, wait, wait, why do I care what my supporters look like? But then if you turn, turn both our brains on our marketing, we're going to cut a commercial for any one of our companies. If Nike was going to cut a commercial for some new, you know, product, would they care what the athletes in the commercial look like? Of course they would. Yep. So Trump has instincts about what central casting looks like and how that becomes aspirational for other people. And he just applies that to politics. And no other politician I've ever met has been that strong and that instinctive and it pays dividends.

Is it instincts or do you think he could articulate?

No, he can definitely articulate. When he first met me, he was very specific about, oh, you need to, you know, you look great, do this, this, any more supporters that look like you. But But you think about it, like of course, if we were launching a consumer product, that's the first thing we would think. Like if we were gonna have a product hero shot, like let's, if I was promoting this sweater, and I was like promoting my Jack Archer brand pants, of course I would care what's the model, what age is the model, you know, even sometimes nationality and race, like all these things go into any marketing campaign that any company in Silicon Valley uses. He just applies it to politics. The second thing, and this explains some of his partnership with Elon, is he just asks a lot of why questions. Why, why, why? And most people in politics don't. There's a consensus in politics that this is the way you do things. This is the way you set a budget. This is the way you do it. And he just doesn't accept that. So he keeps probing, like, why? Well, why do we have this deal?

You know, why do we pay this money to these people? Why, why, why, why, why?

And usually the answers aren't that great. That's like a key hallmark of like a beginner's mind, I feel like, 'cause the people who just keep asking. And they ask it six times. So what makes Elon exceptional is it's not the one or two levels of why? It's like, why, why, why, why, why? And so you get deep to the quote unquote metal. And usually, as you do, you find out there's some mistakes or some things that can be better. And not always, sometimes there's a Darwinistic evolution of really good ideas and they're sound, but I bet you in politics that's less than half the time. And so what Trump's very good at is, and this is unsettling to a lot of people who've made their career in politics, is unsettling the people who've built this consensus. And as he probes, you're like, you know what? This makes no sense. And then, of course, you have to find a better solution. And Elon's, you know, , it's been phenomenal over 25, 30 years at finding better solutions. But the first thing is to find out what's wrong, what's broken, what can be better and why, and then try.

To build the solution. It's sort of interesting cuz I always felt like during Lattice, I was like, it's weird how we're like pretty mechanical and we try to really inspect all these other things, but then when it comes to hiring, it's just like people take this past, like, yeah, I like the guy, you know, this felt good. And I think the same is true in venture where people are like, this founder's spiky, you know, like I liked their vibe, like I feel good about them. And it's sort of like most people.

Think they're a better than average driver. I would think most people think they're a better than average picker of people. Yeah, most people are much worse. Not many. Right.

Yeah.

Most people are much worse. Your brother happens to be really good at it. Right. But there's very few people I actually think about, I've thought about, you know, I've been in venture and tech, I guess, combined for 25 years now. And so I've met a lot of people because it, if I start, when I started my career, a lot of people who built Silicon Valley were kind of at the end of their career. So I have like a long, you know, perspective of like 50 years combined of like people at the end of their career and now through the people in the beginning of theirs. I can count on like one hand the number of people who consistently can identify founder talent from the very beginning. And then your brother's one of them.

He definitely is. And I feel like, well, and you are too. I mean, you've done it many times. And I feel like so often the lack of willingness or ability to get specific with understanding this thing that is like sort of like the center of the venture craft. And it's just like, I'm gonna go off my feelings. And so I guess one of the things I'm trying to learn is I like start now doing this, you know, more and more professionally, obviously, is how do you go from this feels good, I'm trusting my instincts, to being really excellent at it? You kind of talked about like, are they really world-class and excellent at something? But maybe to like make it concrete, you and Vinod obviously have both, you know, this is two people who really know what they're doing on this. When you guys both meet a founder and, you know, you're trying to decide if this person was good or great, like, what is some of the language you use to sort of like, what is your discussion? Like, how do you talk about Is this person 99- 99.5- 99.9- 999? Like how do you- yeah, it's a.

Great question because the node is actually two things and one of the reasons why he's been so extraordinary. He's a technology investor and a people founder investor, and that's rare. So he understands the implications of new technologies better than most. And so he can make technology driven investments too. I can't do that. I don't wake up in the morning and read about some new technology and.

Say, oh my God, I'm going to.

Find a way to try that. You don't even try that. You don't even think that way. No, because there's so many people that are better than me at seeing a new technology and figuring out all the implications to it. but there's people like, I'd say Vinod is extraordinary at that. Someone like Mark Andreessen is probably pretty good at that. That can be a great way to be an investor if you're better than.

Other people at understanding technology breakthroughs and what the implications are. Can I ask one more quick question? Do you need to be afraid of not understanding a market then, or do you, are you just like, I'm just.

Going to be horse blinders if this person's amazing? I don't care what this market is. I will learn along the way. I think it's kind of interesting, at least Let's divide venture investing into three components. There's meeting the right people, sourcing sort of thing. There's definitely the assessment, evaluating. There's the winning, 'cause some things are competitive, some things aren't actually. And then there's the, can you increase the probabilities of success or the amplitude of success by being like a consigliere? I think in areas I know better, I actually can probably help more on the consigliere piece, like financial services, payments, whatever. I can probably be more useful to a founder after I start working with them because I have seen where a lot of bodies are buried. By the I tried a lot of things by hand.

You just mentioned the only thing to help, you just said by being a consigliere, is there nothing, do you think that's basically all that matters from a.

VC to help a company or do you believe in some of the other stuff too? I think for the best founders, being a consigliere is like 99% of the value. So when I pitch a really world class founder, why take my money as a partner? It's like, yeah, I'm gonna be someone when everything's a mess, who can give you feedback that occasionally is useful. And the really best founders actually ask for conceptual frameworks, not answers. so like, for example, my friend Max Rhodes at Fair will always start the question with, I'm debating X versus Y. Do you have a conceptual framework for navigating that? And, you know, the answer is sometimes yes, or like someone I remember when I first started working with Patrick Callahan in 2013 or so, we would sit down for brunch on a Sunday and he'd come with a list of five to 10 questions. And I would go to bed really early the night before to make sure I was very well rested. I'd be like in bed by nine o'clock because I knew he was going to only ask the questions that he was like debating or struggling with, because if there were easy answers, he would already have executed them and they would never raise them. And then if you go through the five or six, I would start laughing and like hysterically because I'd be like, oh my God, I can't wait to see what's next because they're increasingly the level of difficulty. But on the five or six, if I could make his eyes light up twice. Yeah, you feel it. It'd be like the most home run meeting ever because he's, it's like coaching Steph Curry. Right. You know, like Steph Curry knows what he's doing. He's very good at what he does. But a coach can occasionally, you know, light up and, and, and, and allow the person to reflect on it. So I think that's what The real goal is, is to be a good consigliere. And sometimes I describe it by metaphors like a cartoon mirror in a haunted house. So sometimes what you're doing is exaggerating the positives or the negatives and playing it back because like the forest and trees kind of thing. So I'm exaggerating what I see and saying, is this really what you want?

Sorry to stay in this little Eddie of the conversation, but do you think that your experience as a COO where you did that kind of work with founders was actually more aligned to being a VC in some ways than being a CEO?

Yes, I think so. I think because I never really want to be the visionary and for the most part, and I'm mostly trying to help someone execute their vision. So you don't have this proverbial conflict. Like when I first entered venture, people like had this, you know, kind of concern that people talk about when successful, you know, executives become VCs that they're going to try to control. And it's like if you're a COO, you've never really been in control. You never wanted to be in control. Like I partnered with someone like Jack Dorsey or I partnered with someone like Reid Hoffman or part of someone like Max Levchin or Peter Thiel. They had very strong will and very strong vision.

Closer to being a board member than this.

Yeah, it actually is a good platform. You know, I hadn't really double clicked on this, but as you think about hiring for here, if we do hire ex-execs, I think it's better to possibly better to hire the number twos than the number ones. Because you don't really want to ever get in the way of a founder's vision, at least in my view. Like when I choose to invest in a founder, it's because I believe this person is compelling, has these traits, and will be the CEO forever. or as long as their health, their family, whatever their obligations will allow for, or I won't invest personally. As a fund, other partners here may invest where they think we're going to change the CEO at some point. We do a lot of deep tech investing. Some of the deep tech emerges from universities. Not all of those professors want to be a CEO of a large organization forever. So we do have a reasonable number of our portfolio companies where we do change and add a CEO, but that's not for me. It won't be my investment. I will not be the cheerleader or the point person for those kinds of investments. back to where you started, though. Actually, interesting enough, Vinod and I have worked together as VCs for seven years now, just over seven, and he was also on my board of Square. Interestingly enough, I don't know if we've ever, ever really disagreed about a Founder's ability, maybe Shades of grades between, like, maybe I grade A plus and he'd say A.

And is that because you both read it the same at the, at the outset, or do you talk, do you talk it through? Do you still, even when you're similar, do you talk about it, or we.

Do discuss it, but it's interesting just Generally what happens on like a partner presentation level is a company will come in, present, and there'll be the five MDs here plus the rest of the investment team. And then after the founder finishes, we'll discuss like should we invest and why. Vinod and I have had very different opinions on whether we should invest at what terms, at what price, in which companies. But I can't recall a specific founder where we didn't have the same reaction, which is really fascinating because like seven years times partner meetings, 50 weeks a year, hundreds. Whereas like, I definitely can remember very specific illustrations with some of my partners, like Samir, who's a very good investor, or David Wyden is a very good investor, where we did grade very differently. And, you know, one of us might have been right, the other one might have been right. But interestingly enough, then and I, like, seem to have the same constellation of assessment.

I guess maybe the last thing I'm just would be interested to tease apart is besides this concept of We got to find the thing they're world class at. Is there any other, is there anything else that's happening concluding at the same read as Vinod?

On the founder level, no, but then we may discuss like the market opportunity, the business opportunity, the angle, the initial entry point. Cause like usually inertia is the worst thing for a startup early stage, right? The world doesn't like you, doesn't think it needs you, and you've got to invert that. Like you remember this at Lattice, like you have to create momentum from scratch. And that's the most important thing by an order of magnitude a founder does is invert inertia literally in a physical sense, like the world, you know, it's Rust stays around, body of the rust stays around, you've got to create the momentum and you have limited time, limited energy, capital, people to do that. Those kinds of discussions, Vinod and I certainly can have different views about like, oh, this market makes a lot of sense, or he may see an angle to enter a market that's better than what I would do or more insightful, or where I'm actually struggling with an answer or vice versa, or I may believe in this current founder, their approach actually will pay dividends and he may not see it. But if you believe in the founder for reasonable size investment, that can still make sense. So let's say I brought in a founder tomorrow that Vinod thought was stellar, but he thought the market was stupid or the approach was dumb. For $2 million, we almost surely still invest. For 10 million, we might not. And for 20 million, we almost surely wouldn't. So it depends on the size of investment, how much you can just go with the founders, right? they're great, they're gonna figure this out.

Yeah.

Versus like there's line of sight to something that seems interesting. I wanna talk about decision making now.

Sort of more generally, which is like, you know, on some level, like a VC firm is sort of just like a, you know, the whole product is decision making on some level, you know, at Founders Fund, I've seen people talk about how, you know, decisions kind of often will get bubbled up from junior people or how you have to like, like a $1 million check, a 5 million, a 10, et cetera, you know, and whatever it is, there's, there's a way that decisions happen there. There's, you know, some way it happens at CoSla. First, I'm curious about like, you know, if you could talk about a little bit of those differences, but then maybe at a more fundamental level, like, how important is the way venture funds make decisions? Like, is that a very important part of, you know, a venture capital firm's activities, or is it just sort of like a, an auxiliary thing, but it's not really like the main show?

Well, I think the biggest difference between, like, let's call it sales is, you know, sales to something you want all your customers, right? Like in a target market, you have as many customers as possible. Assessing or decision making in venture is the key ingredient for, for a fund that has a brand, for a fund.

That can win enough good opportunities.

A fund that has like a good deal flow, let's say.

It's just eliminate the source.

Assuming you see in reasonable fractions, then it's about decision. Then it's like about decision making. And like, let's put this way. When I have sleepless nights, they're 90% about work and 10% everything else in my life. They're mostly about making the wrong call. Like, and I've talked about a few of them publicly on podcasts where you know, X versus Y, and then I could lose sleep for a decade.

And you worry more about past bad passes?

Well, you try to figure out why so you don't replicate the mistakes. Let me give you a tangible example I'll talk about publicly because it is one where rarely I made a mistake and was able to learn from the mistake and then apply it to a second company. I've talked about this previously. I basically assigned term sheet to lead the seed round for Robinhood. And then they came back to me after. We had like at least a handshake, maybe a signed term sheet and said, would you, we want you to join the board. And this is like about my first year as a VC. So I didn't have like as much authority myself. So I went back to my partnership and we had a discussion about, you know, should I join the board? And the answer was no internally, which makes sense. You could literally add a VC like KV or any competitor of ours. You can't join the board for every seed company. So I went back and said, you know, I can't do this. I'm sorry. And they're like, well, we really want to make other choices then because, you know, you won't be as involved and blah, blah, blah. Whether or not good decision. Anyway, so run up, not investing.

Dang.

Three years ago, and obviously, probably in an early while. That's tough. Um, so all I would have done is mess it up probably. But in any event, you know, with hindsight, like an insanely good position. 2 million at 20 post or something. Okay. So yeah, like, we don't have a lot of late sleep. We can quickly calculate the Robinhood setting. We can look it up after that. In any event, two, two or three years goes by, and my friends at Fair are raising a seed round. um, Jeff and Max had worked for me, at Square, you know, they were entering YC, so they were getting some attention. They obviously was set up for me to lead the seed round, but they came back with the same condition. You must join the board. And I'm like, I'm not messing up.

I've got burned this one before.

So what I did is, and now the statute of limitations has passed. I said yes without consulting my partners. I'm just like, I'm not going to tell anybody. I'm just going to jump on the board. And so it turns out to have been a very wise decision. And like the rationale for actually not telling my partners was obviously I got burned before, but like, you know, like, I try to be intellectually honest with my partners here. That's why we have a great, like, relationship, and we all work well together. And it's based upon trust is Max and Jeff were close friends of mine. We were soccer buddies before Square, worked at Square. I was like, they're gonna text me 24 7 whenever they want. I'm gonna meet with them whenever they want. There's a formality. So the incremental joining the board for them is, like, meaningless. And so I really felt that intellectually, honestly, that, you know, I'm gonna meet. If Max asks for a meeting on Sunday, I'm gonna meet with him on Sunday. If he calls me Monday night at 10 p.m. i'm definitely gonna you know, talk to them. So there was no real drag coefficient in terms of effort where typically a board member, there is more. So I felt like, you know, I'm just going to do this. And then of course it's worked out well. The company's great, you know, very happy and everybody here is very happy. But it was, it's rare when you can take the very specific lesson and apply it and not make the same mistake.

But so basically your kind of view is once you get past, you know, a threshold where relative to your fund size, you see enough, you can win enough. Decision making really is like the main thing to get better at.

Oh yeah. Like so for example, there's one that we should have done here. It's a very well regarded private company called three to five billion on paper, where we had a relationship with the founder from his prior life. And we collectively decided not to not to invest. And then we recently, it's about five years ago, I was here at the time and we were recently talking about how do we miss this? Cause they came into presented and for whatever set of reasons, we didn't invest. So we actually pulled up our partner meeting notes from 2018 and read them to see what did we do wrong? Why did we miss this? And so we tried to learn from poor decisions if we can.

When you're meeting some of these early stage things, a lot of times you're on one end of the spectrum, there's what you just described at Fair, these are your friends, you're sure they're good. There's a lot of other situations where you just don't have the time where a deal is moving quickly, it looks pretty good, but you're not 100% sure. In my head, what I assume is you must have some gradient where you've got some deals where whether it's ramp or fair, the day you do it, you're like, I know this is good. And then you must have some deals where the day you do it, you're like, I'm actually just genuinely not sure. You mentioned before that 40% is a stellar hit rate. Do you think of your job basically as a function of, I need to do A certain cross section of these very sure and not so sure things, no matter what. Or if you had a smaller fund, would you only do the things you were very sure about? And then you kind of have to like move down the stack as a result of like the situation you're in. Like, how do you think about this?

I think it's a fascinating question. 90% of the best stuff I've ever invested in as an angel or as a VC, I was dead sure of. So I think the implication to that is if the fund were smaller, if you had, if your job, less money.

If you ran a $100 million seed.

Fund, you would probably only go for the, I'm pretty damn sure. So like, for example, when, I think Lawnsdale has told this story publicly that when they started Palantir, I was the only person who thought it was a good idea. Literally other than the four co-founders, I was like, this is so smart. Like, boom. Airbnb, like instantly, Brian will tell you, like, I, three minute after his monologue, three minutes in, I was like, this.

Is the coolest thing since sliced bread.

Which, by the way, that's a good example of a hard one that a lot of really smart people have. Everyone has, everybody else, like, was totally wrong. There were people who thought they were cool, interesting founders, like Paul Graham talks about this publicly, but nobody else thought it was a good idea. I was like, no, literally this is the coolest thing since YouTube. And I was like three minutes after, I was like, we need to, I need, we, Kevin Hart, Javon and I need to invest now. So I knew it right away. YouTube literally took like less than the barbecue where I found out about it. Like Javon had actually literally walked me into his bedroom to show me every video at the time, literally every video that was uploaded to YouTube. And I was like, I want to invest right now, like period. Um, so like usually like I've had that instinct of like, wow, at the.

Time for the really, really best stuff. Have you ever gotten shocked by something that you weren't budgeting?

Yeah. That turned out to be amazing. Occasionally, but then obviously didn't think it.

Was that not good because I wouldn't have invested. Maybe ask differently. If you looked at your whole, if every day that you invested, if you said, okay, put the, the day you.

Wired the money, put this in a quartile for yourself. Do you think that you would accurately predict how good each basket was? Mostly, yes. So at least barbell wise, like the top stuff, yes. And then would there be some stuff actually, maybe at the tail that would surprise you? So that would be a a little bit interesting to actually study. Like actually force the discipline of ranking one to 10. Like how good is this on day one? And then, you know, five to 10 years later, looking at the stuff that really had high conviction, RAMP was a very high conviction instant, like they started projecting their notes and you have DAC just notes in like a couple of minutes and I was like in total sales mode, like instantly, like boom. Same thing. I'll tell you a funny story about this company most people don't know, but it's really phenomenal in Europe called Trade Republic. It's like a better version of Robinhood, but for Europe and it's phenomenally great company. But I didn't even want to take the meeting. I was like, Europe, Robinhood for Europe, blah, blah, blah, blah, blah. So my colleague at Founders Fund, Matthias found this company in Berlin and he's like, you need to meet them. And I kept trying to avoid it. Like literally, do I really have to do this? Do I really, you know, kind of thing. And anyway, we sit down on this conference room in Founders Fund in February or March 2019. and founder Christian sits over there and three slides in. I was like, oh my God, this is the coolest thing ever. And so I went the rest of the meeting in full sales mode. Like full, like, yeah, you know, I can help with this and this and this and this. Okay, I walk out of the meeting. And so I'd only been in founders fund for about a month. I walk out of the meeting and like Matthias kind of taps me on the shoulder. He's like, what happened to you? And I'm like, what are you talking about? He's like, you didn't even want to take this meeting. and like, you're in love with this thing. I was like, you just found the best founder in the history of Europe.

Wow.

And I knew like three slides in and he will be the best founder.

In the history of Europe.

Wow.

That's crazy.

Yeah.

I mean, as I'm listening to this, I'm think what was going through my head was connecting back to, you know, as an individual investor, you have some comparative advantage and you just need to like get yourself into that zone of genius as often as possible. And what I was thinking about is like as a fund shape, you also have comparative advantages. And so, like, you know, as we were talking about that, I was thinking, well, it's actually in some ways a comparative, there's a disadvantage that comes from being large, which is that, like, you know, you just, you've got some constraints. And so, like, you know, that would say maybe to me as a smaller fund manager, I should, you know, what I would take away from this conversation is just like act when you have more confidence. You must have some huge advantages from being, like being a big fund too. I'm curious what you experience is like the comparative advantages, not from you as.

An investor, but from Khosla as an entity and the size. So let's talk about, I'll give you a concrete one, which is related to AI, which is very, you know, important topic. I am certainly not a master of AI, not an AI investor per se. Since I've come back to KV, I've made two and a half, like, significant AI based investments. And the only reason I had conviction and confidence to pull the trigger on two of them was we at KV are very expert at AI. My, I have like these three partners here, who know AI really cold, Vinod, Sven, and John Chu. And so what I feel I can do is if I find a founder who's in the AI space, I can run my normal Keith algorithm through the founder.

Yep.

But I can then get air cover from my technical colleagues, Vinod, Sven, and John, who know AI, and can ensure that this product is differentiated, that this is the best approach to solving this product space through AI, and that there's nothing better out there. Two of the companies I invested in, I never would have been able to. with high conviction lead a meaningful round. Like I might have let a seed round, but I definitely would have let a series A or B without Jon's fan and Vinod's involvement. So I get the leverage. Same thing in health, like we have some people here who really understand digital pharmaceutical and, you know, actual all versions of healthcare. And so if I find something interesting in health, I run it by one or two of my colleagues and then I can still apply my normal Keith, is this founder amazing? But I also know I'm not making a mistake.

Sean McGuire, when we just did a podcast the other day, just said something that really resonated with me on this, which was basically the analogy was that, you know, in math or chess, if you're, you know, 98th percentile, you can't tell the difference between 99 and 99.5. You can't tell the difference between people above you, but if you're 99.9, you can tell the difference in people below you. And I thought that was really interesting. And this would be the equivalent is like, you would know like a, you know, in AI, you might know like.

A charlatan from a reasonable person when you see it, but you wouldn't know world class, right? Exactly. Nearly very good. So even when we, post investment, one of the areas we do add value at KV on AI companies is people are building out AI teams. Or they need their first leader of a true AI leader to build out an AI function. I can't do that. I don't know how to assess, is this really the right person? I can look at some credentials and things like that. And then triangulate, seems directly right, directly wrong. But if this is a really important company for us, I will have either Sven or John of Renode interview the candidate. And then therefore get the benefits of both because they can grade 99.9, 99.5, 99, 98, where I can't. Are you able to use the fund.

Size itself to your advantage too in any cases? Like the best example to me right now at the moment is like the way Thrive is using their fund size to your advantage in a very effective way. There's other things where some funds are, you know, not doing these sort of like we do premium assets and that's the end of the story. I've seen others using, you know, their fund size to do like new products and offerings and things like that. But I'm curious if you experienced the relatively larger fund is an advantage directly.

The way we think about it at KV, where there is a real advantage is because we like to back bold investments, bold ideas, ambitious founders, and really early is not all the things we invest in are going to move to being appreciated by the consensus.

So you can take it through multiple rounds.

We can take it through multiple rounds and toll. you want to have an inflection. Like this is a good Peter Keel point is you don't want to stay contrarian forever. Like to be really successful, eventually you need consensus that this is a good product, good, you know, good thing to adopt, good thing to pay for. So you want to convert contrarian to consensus and then take advantage of that momentum that in between step, there may not be investors that really appreciate you until you get, you know, somewhere down that curve. So having a lot of, you know, a fair amount of capital, if we have conviction about the opportunity, that's better or as good as when we first led. We have conviction about the founder and the team that's as good or better than when we first made an investment. We can double down, triple down. Now, at some point, we're going to want you to prove that there's a real there there that the world wants this. Eventually you have to get to the world definitely will want this and appreciate it. And then other people's money is great, but we can definitely do that.

And we do it frequently. Which I guess also aligns to you.

Guys doing more sort of hard tech investments. Yeah, deep tech. Like the milestones are different. the milestones that other people not that financial investors can appreciate are going to be further out. So you need to be able to fund or be able to partner with people that have the same criteria, which is a skill in and of itself, like knowing, knowing who to partner with to finance a certain type of round. Totally. Yeah.

Do you worry just broadly speaking about like the, like venture as an ecosystem or asset class as like things have gotten so big, like there's so much money now, you know, when I was, you know, running Lattice during like Zerp times, like we had all these crossover funds, they kind of went away, but now it's like now like the sort of blue chip funds founders are big and there's, I think, more dollars coming in than out of venture for a while now. Does this give you any anxiety? Do you think this is a problem or?

Well, it could be a problem. I think there is a scarce number of founders who have the traits that can build a iconic company. Founders. That's the scarcity. Founders is the scarcity. Now, what's interesting in AI world is for any given company, they may be more capital intensive. So you could, say there's still going to be 15 companies and 15 founders in any given timeframe that have high potential, but the consumption of capital at OpenAI is off the charts.

Definitely.

And it doesn't mean it's bad, but if AI companies have that pattern, then a lot of venture capital can still funnel into the barrels, the proverbial barrels as founders.

Do you think that the application layer where a lot of this investing is happening now outside of the models, do you think that the, do you think the capital consumption is going to be high or low?

It should be moderately low. Yeah.

In theory, that's what it seems like it should be. And I often will meet these companies that like raised a seed and now they're profitable and like everything's fine. But then I'll see a lot of the like the current sort of leading app layer companies have all actually raised like quite a lot of money. And so I'm not sure what's going to end up happening because like they.

Will have more competition from each other. So I can't quite tell how it's going to play out. Yeah, I think at the application layer, it's dangerous to raise too much capital. I think there's reasons why at the foundation level model innovation or things that are closer to that. infrastructure layer. There's real good reasons like founders walk in and ask us for 30, $50 million. And, you know, before AI, we would say, you know, no, and say that's totally unreasonable. But then the AI founders at the foundation level, like have really good reasons why it's like, I actually need to spend $30 million or I can't get to this milestone. And so we definitely have to think about it. And therefore we have written a lot of those checks in AI. But then what happens, I think there's a distortion at the application layer is They read about their call, you know, their competitors or colleagues or whatever friends running these AI companies are like, I should get that valuation too. And so they walk in like, I want $50 million because someone's over here, but they're very different businesses, even though.

They both have the label AI on them. I mean, one of the interesting things that this connects to, you know, we talked about you need to be contrarian and right. It's obviously sort of like how money is typically made. I think there is sort of an unspoken prevailing wisdom right now or prevailing thought right now, I should say. That we might be in a moment where you can be consensus and right in a lot of areas. And a lot of people are behaving as though that's true. And so the way that I see that expressed is there's a lot of ideas that make a lot of sense. You take AI times whatever industry times pick a vertical, pick like a department at a company horizontally, whatever, there should be something in X. And so I'm gonna like bet on one. And a lot of people that make the bet, a lot of companies are now competing for, you know, those verticals. I think that's part of probably why people end up raising a lot of money is cuz they're in this like, you know, 11 horse race for something that seems consensus right? Do you think that it's possible to have moments in time where there's a lot of money to be made and consensus right things, or is that a mirage?

In the history of venture capital, there's usually these three-year windows where that's true. Like the first three years of the internet, there are windows where that's true, but over 50, 60 years, that's usually not true. So then the art is knowing the valuation, your entry price really matters. So you need to be right, but you also need to get paid correctly for the risk you're taking on. And so the problem is if you treat all AI companies like their foundational model companies or robotics or something. Even if you pick a really good company in a vertical, it might not.

Be a 10 billion dollar company.

You may, yeah, you may not make that much money. Like you enter at 400 million, it's a two billion dollar company. You know, it's not terrible, but it's not going to return, it's not going to return a meaning, it's not really return a fund. And so you have to be disciplined about the price to, especially series B and up, maybe an A plus or minus, you get it right, it's probably good enough. See, definitely. make the right call companies epic, you know, it's not, it's not going to really matter. But I do think that the discipline about we'll pay 100 million post or whatever versus 200 million does matter in the consensus right world.

Is your instinct that we are in one of those three year windows right now?

Like I think the vertical, I think you can apply AI successfully to a lot of verticals and, you know, whether it's hardcore AI, there's like versions of AI, like how innovative it is it. But the demand for intelligent acts that replaces human errors or human costs or human scalability issues, those are the three biggest ones, is very real because humans do make mistakes. They are expensive and they're hard to scale.

Okay. I want to go over to tech and the government and politics and sort of like this sort of new moment in time we're in that I think is extremely interesting. I would say outside of AI, the other place that has a lot of like, heat and excitement is like deep tech, which is great, I think. A lot of this probably is related to the fact that, you know, tech and the government are involved, some of it. The causality arrow goes both ways here, of course, and as these companies have gotten more important, the government's taking more notice. So maybe before we get into some of the specific questions, tech and the government are like friends all of a sudden, and there's like a relationship now. What's most surprising to me in some ways is that like that didn't exist over the last 10 years. It's not like tech was some underdog for the last 10 years. So I guess why has this shift happened so dramatically? You could say it's a new administration or whatever, but why are we in this situation now where tech all of a sudden has this not just a voice, but a loud voice in the news?

Well, I think there are two reasons. One of them may be less negative than the other. The first one is at the end of the day, the Democratic Party in the United States for the last 15 years basically has penalized and stigmatized successful people. Just read your average Bernie Sanders speech. That's the representative voice of the Democrats is if you're successful, you've stolen money from someone like Robert Reich, who used to be labor secretary, posted basically a simplified version of this last week. He's like, basically the only way to be a billionaire is to steal money from people inside of trading or inherited.

Which is obviously completely false.

But that's the prevailing view in the Democratic Party. Paul Graham wrote that essay that was like, how people get rich, and it's like, that's not how any of the people- no, of course. None of the people we know, literally none of the people we know. None. None. Like, Vinod came over here, we're like, like $40, like from India. Like literally he couldn't afford to eat anything except McDonald's. So that's how people get rich in the United States more often than not. In Europe, you still have to follow one of these formulas actually, interesting enough. But in any event, there's a lot of excitement intact because no longer are people who are building stuff and creating value for the world and transforming the world in positive directions being demonized. And so I think that is a very refreshing change. And so that's positive. Second thing is like, the reality is the tech world was very skewed in bias against, let's say, conservatives and conservative ideas and spending a lot of time money, demonizing conservatives and conservative ideas. And Trump particularly. And so I think a lot of people are on their apology tour. Like, you know, Mark Zuckerberg spent 400 million promoting Biden. Arguably, it was more important in electing Biden than any other person. Rita Hoffman, it's not even public, like how much money. So there's a lot of people who have business interests. that you just can't be that one side in politics. Like no Fortune 500 company in history has ever been that biased. Google, like 98%, I think, of all employees gave money to Democrats. So a lot of this is like, oh, we need to get back to closer to equilibrium because it's just not going to work out well for us to be so partisan. So that dialing back is definitely driving a lot of this too.

So now that the relationship is closer, what's going to change for tech companies? If there's so many of these companies some of them, the most important companies we've talked about, but, you know, like Anduril, SpaceX, OpenAI, like Airbnb to some extent, like a lot of these most very important companies, like the government matters. I mean, Uber too, like, you know, sometimes it's local, state, federal, but like kind of the more important the company is, the more the government seems to matter.

Well, what's happened in the last 30, maybe 50 years in the United States is more of what you do in your life is dictated or constrained by law regulation. It's just like over the last 100 years, it's hard to do a lot of things. you know, you're basically suffocated by law and regulation. So any company needs to navigate that. And sometimes you're right, it's much more local than federal, and sometimes it's much more federal than local. But you're going to see tech companies having to, you know, sort of navigate a world that is just more constrained and navigating through a constrained world actually can be very opportunistic. One of the reasons why I actually like investing in heavily regulated spaces is having been a lawyer, I feel like I can kind of, in my own brain, do the probabilistic assessment of risk reward, and most other VCs kind of have to outsource it to, like, some lawyers. And so I like heavily regulated spaces. But I think the world, it's interesting enough. I know, you know, you've been talking publicly about having kids and stuff. It's about the only thing you can do in the United States without, like, the government's permission is have a kid. Like, there's literally almost nothing else you're allowed to do.

It's actually shocking when you have your kids, like, it's like, oh, I didn't even need permission. In some ways, the situation that we have now with the government is like almost all positive for tech. I wonder, are there risks to being this close? Like in some ways we were kind of just like la di da, we're over here in Silicon Valley or, you know, wherever we are, we're doing our thing. The government's just like not thinking about us. And now it's extremely spotlighted. You know, it's like at the inauguration, it's like, whoa. Everybody's there.

Trump's talking about it. Is this perilous in any way? Oh, I think it is actually. I think it's not accidental that, you know, Silicon Valley is about as geographically distant from DC as possible. And, you know, it's like a feature, not a bug.

Yeah.

So I think innovation and a cleverness and disruptive thought in some contrarian, you know, ideas are better and more fertile in areas that are not touched by the government.

It's like the government wouldn't know how to regulate, like crypto or AI, like in the nascent days. And the closer you are, the, I would imagine it's like the sooner they're going to want to be involved with a lot of these things. And I worry that that kind of regulation early is very stifling.

It's very, it's very stifling. And also, you know, there's things like you study in political science about regulatory capture. Incumbents can use the government more easily than a startup can. So if you have a disruptive technology to some incumbent, it's more likely the, the larger institutions are going to take advantage of government access to curtail your opportunity.

So it's very, I think it is very dangerous. A lot of these VC firms now, it's not just like, you know, there's like some like middle person, like a lot of the VCs, it's not like there's a constricting area in the middle. There's the VC firm now has people in DC that are powerful. And at the same time, a lot of these, these, you know, same VC firms have gotten very large, gotten very influential. Do you think that this leads to these firms transforming or playing a different looking role, or will they still just be VC firms that, like, have a deep connection to the government the way that, like, JP Morgan always has or something like that?

Well, I think, you know, Goldman Sachs always has, like, as a classic example. And so I think maybe VCs or some VCs you know, adopt that as a differentiation or point of differentiation or, you know, a feature, part of their features, that sort of thing. We'll see how that plays out. Because again, I don't know if it's the best thing for early stage companies. So, for example, yes, some, like the next and rolls where your target customer is the federal government, like you're by far, then sure, like early investment in politics, politics makes sense for most companies. It's probably not great. So, for example, you know, when I'm in DC, people always ask me what they think about DC and I actually like DC, I used to live there as a lawyer. It's one of my favorite cities, but it's kind of like junk food for me because the next early stage 19 year old undiscovered talent is not hanging out in DC. The people that are hanging out in DC, and I talked about at a conference recently, is you run into Mark Zuckerberg or Jensen. Yeah. Like that's not useful for me as an early stage investor. It's interesting and fascinating, you know, and like maybe if I want to M&A one day, like a company that doesn't even exist. I'm not finding some undiscovered talent like in DC. So like you can get distracted with this junk food where I have to eat real meals, which, you know, great founders are probably everywhere else.

Yeah, it's funny that like hanging out with Jensen or Zuck would be junk food for you, but when you say it in that light, I guess it.

Really doesn't help you much. No, I need to find somebody who's never built anything before and has an.

Idea about how to actually disrupt NVIDIA or Meta. I also feel like there's been this transition where investors have been much more comfortable speaking about what they think about politics, where they're much more comfortable just sort of saying what they want to anyway. Like, I feel like there was a, there was like a guardedness. Like even 10 years ago when I was like starting Lattice, I didn't feel like investors were like expressing their thoughts. And now I think a lot more investors and firms and people in general are willing online to just like say what they think kind of fearlessly. You say what you think kind of fearlessly and like- Even before it was cool.

You did it before it was cool.

Yeah, totally. But you definitely still do it now. You say a lot about politics. I mean, you definitely were always willing to get at it with people online fearlessly. And maybe you were talking about politics for a long time too.

Not as much.

But I feel like lately you're really willing to like, you don't seem afraid.

To say what you think ever. I think as a VC, it's a little bit easier for one structural reason, which you remember from last, when you run a large organization, you represent a huge constellation of people. So I don't think a CEO should really be engaged in politics unless it affects the company. I'm kind of pretty strict about that. But as a VC, you don't represent a large constellation of people. you may only represent yourself or small partnership. We, you know, I have four MDs here, you know, four colleagues for MDs. So it's a very small insular group. So I think it's easier to express your voices. And then I think the culture has changed, though. You just watch Elon, you know, like, but I think he, as the best founder, you know, of the last hundred years, I think now it's, like, not debatable, but, like, as the most successful founder of the last hundred years, as he's engaging in, you know, Intellectual, it lets everybody do it. Yeah, it sets an example. Just like Mark Zuckerberg sets an example for founders in some ways. Steve Jobs set an example.

Everybody at Frank Chesky sets examples. I mean, Elon even set an example.

Not that he's better or anything like that, but he set an example for Zuck in some ways it looks like to me. I think people, like, you know, like emulating successful people in your field is a very common thing. Like if you're a great athlete, you look at like, if you know, you want to be the next great basketball player, of course you'd watch like Michael Jordan or Kobe Bryant or, you know, et cetera. Or if you're, you know, seven foot, you'd watch like Shaq or Patrick Ewing and stuff like that. So I think it's very normal to emulate people who are successful. And so as successful founders are more engaged in politics for their own reasons. I think that does create either, you know, a copycat mentality or a license to engage. But I don't think typically it's great for a founder of a large organization to be taking views on issues that do not directly affect their company.

Do you think it helps VCs?

It can. I mean, I think VC is interesting because it's a matchmaking exercise. pretty much put about a consigliere. Like I am not the right partner for every founder, even internally. Like sometimes someone will come to me, like that happened actually this morning. I met a founder. I think it's a good investment actually. I'm not sure I'm the best partner for him, but I think it's a good investment. So what I'm going to try to do is pair him with a different one of my partners who I think would be probably better for him. And so there's always this matchmaking exercise. So I think it's fair for founders to know, you know, who are you partnering with? You're partnering for a very long time. decade, et cetera. And does this person share either values or an approach to life or way of thinking that's either complimentary or suitable for me and my company? And so it does create like an alignment. There are founders who reach out to me very specifically because of, you know, my views on certain things and they want to work with me more than other people. And if they don't, great, there's other partners here, Venot included, who have very different views on sometimes, you know, sometimes publicly, that they compare with that might a better fit.

I'm actually also on that front, I'm just like, I'm happy that the language is now just in the ecosystem is very much back to, and I feel as with founders, but like, founders want partners. And I felt this during, like, I really valued my board members, like, and I got lucky. I have very good board members, but I really valued them. And there was that weird period where it became this sort of like feature to sort of invest without being a board member and that like companies don't need boards and all that stuff. And either some exceptional founders who are like at a point in their career where like, you Parker Conrad can kind of like get away with it because.

He'S, you know, like- Sure. People want like building companies are always a roller coaster ride. And having someone who's long for the journey, like just like it's a lonely job. Being a founder is very lonely. Yeah, totally. You know, the more you're friends with and no founders really, well, you actually feel that. I mean, I'm very close to a lot of founders I work with and I know them very well and I've worked with them for years and sometimes known them for like someone like Max Levchin for 20 plus years. and so you can actually tell their emotional state pretty well. And so having people that understand what you're going through and occasionally can give you like feedback, like sometimes actually it's counterintuitive feedback, like when things are tough, encouragement might be the right answer, not criticism. And then actually the best time to be critical is actually when things are going really well. So like understanding that dynamic with the founders you work with and board members are typically really good at that. The people who are say you can get the proxy for having other founders you talk to or stuff like that They often lack context, like context about like how the company's really doing. Who are these people that, you know, this founder's working with, you know, what's going right or wrong? And like board member has to have like some level of visibility, sometimes really good visibility. So kind of I can project, you know, sort of your emotional state and why it is what it is.

Yeah, I mean, I think a lot of times there's, you know, there's a, there's a misconception that like, oh, once you have a board, you have to be like buttoned up and you have to like share stuff in these calculated ways and they're going to kind of be a value. And it's like, it's the opposite. Like you can be much more real with your board I'm a member sometimes.

Than with your execs.

With your execs.

Like that's, you're always going to hate this. Because once you talk to some things about with an exact, I'll help break these.

Yeah.

Like you can't ever show any difference to an exact without like people like suddenly catastrophically moving in a different direction. And a really good, a really good board member, you can have a conversation with, you know, I'm not sure this part of our strategy is right or this part of the team or maybe we don't need this, maybe we don't need this team, et cetera. All of those conversations are really helpful to have someone to talk to. Some people are lucky. They have a great co-founder. But not all founders either have a great, have a co-founder at all.

Yeah.

Or a great one that's on, you know, same plane.

There's just something structurally nice though about somebody who is in it with you, but also has like a lot of.

Other things they care about too.

Detachment is useful sometimes. Like if something really bad's happening, even with your exec or your co-founder, it's like if you're like, oh my God, the sky's falling.

And then you tell somebody else who's under the same building, they're like, oh no, the sky's falling on me too. It's just going to amplify the problem. It's just amplify. Right?

Like where actually, I think this is.

One of the reasons why I don't always recommend people pairing with younger investors. because young investors sometimes panic too. Like right now, like, they're closer to.

Being under the same stress.

Well, yeah, they are because their career's at stake, right? Like, so imagine, imagine one of my companies that we're counting on being successful has a really severe problem. Nobody here is gonna fire me if something goes wrong. So when you call me up and say, Hey, I've got this really severe problem. What do you think I should do? Like, I don't react emotionally because I know I'm just like, you're not worried about your job. I'm in like immediate problem solving mode. And if you call any of the founders I work with, that's the Like immediately, okay, what can we do about this? What are the options? Who should we talk to, et cetera, et cetera, versus like, oh shit, my partners are gonna be really mad at me. And I get in defensive mode or self-preservation mode, which is very natural. I saw this play out during COVID as an illustration. I mean, I already had this view just having been an executive and having worked with people in their own career path intersection as VCs, but during COVID You know, most founders were under severe stress right away. Like, what do I do? What does it mean? How long is it gonna last? Blah, blah, blah, like burns out of control. If you just took the same company with senior partners at the successful in VCs and non successful yet VCs, I think the quality of thinking and the ability to be like a smoothing function, like a cushion was just highly correlated with how successful is the VC.

Right. Versus if they were just getting started or if they were unsure, you're like.

I don't want any of my companies to fail. And I don't want any of our high profile companies to suddenly start, you know, underperforming. But if they do, you'll be okay. But if I, but if I do, all I'm gonna do is try to figure out, like, is there a solution to this? Like, what can we do about it? This is very much versus, like, worrying about, like, having to communicate at my Monday partner meeting. Like, oh, my God. Because if actually, if I did communicate at my partner meeting, and I would, the, the natural reaction by my partners here will be like, well, what else can we do to help? Like, you know, Keith, have you thought about this or that or talk to this person, or I saw this 20 years ago. And here's a possible answer versus like, oh, let's, you know, point fingers at Keith.

There's nothing worse than if you're anxious as a founder, your investors getting even more anxious about the same thing is like a nightmare.

No, and I hate, you know, sometimes on boards with VCs who do it, and I'll actually try to occasionally I'll run like kind of interference for the founder, like of like, you know, I'll try to- Send them off. Yeah, like send some, put it like a protective envelope around the founder. But sometimes they just ask for like a lot of data, even that's distracting. It's like, Oh my God, like my partner should be asking me all these questions. It's like, what's going wrong, blah, blah, blah. I'm like, the last thing you want to do is to track the founder with a bunch of data requests when they're trying to solve a problematic problem. But it's a natural evolution. Now that said, of course, you know, every VC is a young VC at some point. And so this isn't a one size.

Fits all, but I think you have to be judicious about board members that do amplify your own emotional state, which is not what you really want. Maybe a final topic that's, you know, somewhat got tangential to this yourself. You were an operator for a long time, very successful. You know, obviously Benoît liked as a founder of Sun Microsystems, same at Founders Fund, like they're rooted around foundership. Also, you've built companies as you've been a VC, you know, you've opened or open store, you know, the same thing happened with like Trey and Delian. Like it's like both of these places, like entrepreneurial investing is like sort of in the DNA. But you've also obviously worked with a lot of investors who are career investors and you've been on boards with people who are both types. Like now that you've been doing this for like more than a decade on lots of companies, many of which are very important. Like, what are your reflections about this difference and how it shows up?

And I think it's much better if you've built things or aspire to build things to be a VC. Firstly, you just understand things at a different level. Tactically, emotionally, you've just encountered problems and it's pretty native. Secondly, it gives you credibility to, which is useful. Like, why should I believe you? of, which is important. So you're right at KV, you know, many people here have built companies and want to build companies, et cetera. And we encourage it, founders fund, you know, think about the brand, you know, et cetera. And so I think that's better. Are there exceptions? There's not that many. If I think about like when I'm raising capital for my companies, like ones I built and or our highest performing companies are asking for advice, on subsequent rounds of financing. Who do I naturally send them to? It's almost always people who started their career building stuff like, you know, we compete, but also are friends with Roloff and Alfred. They both.

Yeah.

They both had real jobs.

Yeah.

And they remember, like, what it's like to have a real job, you know? And so they're top of my list often. And so I think that is pretty critical. Are there exceptions, you know, honestly? since 2005, I think there was an era where you could be a professional finance person and be a successful VC. I think Fred Wilson, Peter Fenton, kind of era. Since 2005, I can only name, I think one good investor who started their career after 2005 who didn't actually, you know, work as an entrepreneur at some point.

Who's that?

Moon.

Oh, yeah. Yeah.

When his track record's great, but I don't know of anybody else that I think is exceptional. that started the career after 2005. Jeremy Levine would be in the first category. He was also a great investor. He did do a startup, but not.

Like a high profile one. What do you think for the people? And maybe there would be some set of people who are eight or 10 or 12 years into their career who you wouldn't yet say they're Mamoon, but if you spend time with them, you'd be like, okay, they could be on track. When you think about what makes a Mamoon situation work, how do those people... Because there's a lot of, I think, well, Very, very capable people doing VC and who never sort of built a company and whatever. What does it take for those people to get there? How does that happen?

Well, I think you need to compare, ultimately, venture comes down to, and this is maybe summing up everything we've discussed, you have to have a comparative advantage. Like why me or why us or some combination? Why take my money or why take our money? And usually it's a mix of the overall brand and the individual and to match make exercise too. One way or the other, if you're going to be a non-founder, non-previous executive, you have to have a really compelling answer to that. So one of the ways some people solve it, including Mabum, is going after a vertical first that's not super popular. Like SaaS and stuff when he did Box and stuff, very non-consensus. And so you can create credibility, domain expertise, et cetera. That way, so you have a really good why. Like, okay, this is why you should partner with me. And so if you can develop that, that's hard to do. almost impossible to do in hot spaces because of that. But that's about the only formula I know is you bite off a vertical, you become like a true expert, you have success in that vertical has like, let's say legs, there's a wave there and you can ride that wave for a long time and then you can parlay that into maybe a broad, you know, investor.

Awesome. All right, I'm gonna let you go. Thank you for taking time. This was awesome.

Yeah. Cool. Awesome.