The Logan Bartlett Show
EP 62: Keith Rabois (Partner, Founders Fund) Lessons from Peter Thiel & Reid Hoffman, and Why He'd Never Invest in a Remote-First Company
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- Founders with exceptional qualities and a strong ability to navigate challenges have a higher chance of success in venture capital.
- Successful founders are trending older, with an average age increase of about five years in the last five years.
- Founders Fund's brand is defined by its reputation for courage, conviction, and directness, attracting extraordinary founders who align with its values.
Deep dives
The Importance of Extraordinary Traits in Founders
When evaluating founders, it is crucial to look for extraordinary traits that set them apart from the average entrepreneur. These exceptional qualities increase the probability of success in a highly competitive venture capital landscape. While domain expertise can be valuable, it is not a deciding factor in investment decisions. Instead, founders with a clear roadmap and a strong ability to navigate the challenges and potential pitfalls of their industry are more likely to stand out.
The Shift Towards Older and More Experienced Founders
Recent trends suggest that successful founders are trending older than in the past, with an average age increase of about five years in the last five years. The cause of this shift is still unclear, with various hypotheses being proposed. It is challenging to pinpoint a specific reason for this change as multiple factors, such as cultural influences, enterprise-focused businesses, and non-consumption markets, contribute to the age shift. However, the exact cause remains a descriptive observation rather than a prescriptive strategy for investor decision-making.
The Role of Brand and Decision-Making at Founders Fund
Founders Fund's brand is a bottom-up evolution, driven by its reputation for courage, conviction, and directness. The firm's willingness to fund unconventional ideas and take contrarian stances on investments has become a defining trait. While there is some intentional shaping of the brand, it primarily emerges through the collective actions and behaviors of the team. The firm aims to attract extraordinary founders who align with its values and who possess unique traits that can lead to breakthrough success.
The Importance of Grooming and Developing Young Investors
Venture capital is a challenging business, and successful outcomes are relatively rare. Founders Fund emphasizes the need to groom and mentor young investors, recognizing the long-term nature of the industry. The formula for success as a future great VC is elusive, but qualities such as angel investing experience, CEO respect, and extraordinary traits can serve as valuable indicators. The firm seeks to bring in talent that can ultimately replace current investors and contribute fresh perspectives to decision-making.
The Importance of Alignment with LPs
One of the main ideas covered in the podcast is the significance of alignment with limited partners (LPs). The speaker highlights how their investment strategy, which focuses on producing significant returns and being light on management fees, resonates well with LPs. The alignment is based on the idea that the speaker's company only makes substantial money if they generate real carry, which is directly linked to delivering real returns to LPs.
Lessons Learned from Influential Figures
Another key point discussed in the podcast is the speaker's insights gained from working with influential personalities in their career. The speaker acknowledges the importance of implementing the ambition and vision of strong-willed founders, emphasizing the need to understand their goals and absorb their thought processes. Additionally, the speaker mentions specific lessons learned from notable figures such as Peter Thiel, Reed Hoffman, Max Levchin, Jack Dorsey, and Vinod Khosla. These include finding undiscovered talent, the benefits of focus and time negotiation, leveraging metrics and dashboards, the significance of tenacity, and understanding the impact of technology breakthroughs.
Keith Rabois is a prominent Silicon Valley investor and entrepreneur. He is currently the CEO and founder of OpenStore, and a partner at Founders Fund, a venture capital firm co-founded by Peter Thiel. Prior to this, he served as the COO at Square, a mobile payments company founded by Jack Dorsey, and was also part of the so-called "PayPal Mafia," a group of individuals who co-founded PayPal or worked there in its early days and went on to become successful entrepreneurs and investors. Throughout his career, he has been involved in the founding and growth of many successful technology companies, including Yelp, LinkedIn, and YouTube. In Keith's second appearance on the podcast, he discusses topics such as his dislike for OKRs, his aversion to investing in remote-first companies, and his experiences working with Peter Thiel, Reid Hoffman, and Jack Dorsey.
(0:00) Intro
(1:14) Welcome back, Keith
(5:35) Hating OKRs
(10:03) On making decisions
(14:09) Not believing in remote work
(17:33) Social Issues in the Workplace
(19:00) What is the role of a VC?
(22:08) Thinking about what can go right
(29:35) The "why you" in a potential investment
(34:28) Fitting the founder to the story
(37:59) The most successful founders are trending older
(43:21) The firm brand at Founders Fund
(47:57) Lessons learned from Keith's only five bosses in his career
(55:48) Thoughts on AI
(59:36) Artificial Intelligence in China
(1:03:23) What is your most contrarian view today?
(1:06:56) On Elon & using Twitter
Show Notes:
https://twitter.com/rabois
https://www.youtube.com/watch?v=6fQHLK1aIBs
https://delian.io/lessons-3
Mixed and edited: Justin Hrabovsky
Produced: Rashad Assir
Executive Producer: Josh Machiz
Music: Griff Lawson
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About the Show
Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes.
Executive Producer: Rashad Assir
Producer: Leah Clapper
Mixing and editing: Justin Hrabovsky
Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA
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📸 Instagram - https://www.instagram.com/theloganbartlettshow
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🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow
About the Show
Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member.
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