SPEAKER_00: I can take you through SpaceX because it's actually the thing that attracted me to the fund in the first place. I was doing my own small fund while still at Google, made friends with Sean Parker. And he was like, hey, come check out what we're doing over here at Founders Fund. That's the time when they were starting to consider investing in this ridiculous rocket company called SpaceX. I got to tell you, when we were looking at that, obviously, those guys knew Elon extremely well from the PayPal days, but none of the rockets had worked yet, right? And they'd all blown up. But we said, wow, this is clearly differentiated. We love things where

SPEAKER_02: it's not like huge amounts of competition. It's like, right. N-of-one companies, man.

SPEAKER_03: Where's the other ride-sharing app? Your food delivery service, dating app? No, this is one rocket company.

SPEAKER_05: This is an N-of-one company. And so as a venture capitalist, as a true venture capitalist,

SPEAKER_00: you love those because the upside is just unlimited, right? Yeah, it's harder to get the conviction and it's harder to make the bet. But when it's right, the upside is just gargantuan in those companies.

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SPEAKER_14: All right, everybody, welcome back to the program. Probably have heard of Founders Fund. They do things a little differently at their venture fund. Obviously in the name, it's explicitly Pro Founder, but they even let their partners start companies and they've got a very unique investment strategy. They often put a large percentage of their fund into just one of the portfolio companies. You know their portfolio, SpaceX, Palantir, Airbnb, Andrel, friend of the pod. Last time Brian Singerman was on, the program was back in July of 2017, episode 748. That was a thousand episodes ago. My Lord. Brian, welcome back to the program.

SPEAKER_17: Thanks for having me back, Jason.

SPEAKER_19: So you heard my little intro there of Founders Fund. What fund are you on now? And how has the strategy evolved over time?

SPEAKER_20: So we're currently on Venture Fund 8 and Growth Fund 2, investing out of those simultaneously.

SPEAKER_21: The strategy is always the same, which is always adapt or die and change up and everybody run their own strategy and figure out ways to make returns.

SPEAKER_23: So obviously we're in a return-based business, but you trust to hire partners and let them kind of figure it out for themselves. This is like different than many of the partnerships in Silicon Valley,

SPEAKER_25: where everybody gets together on Monday, you have to debate your ideas, you have to fight for your idea. Maybe they even have a vote. Should we do this? Thumbs up, thumbs down. And it's more like a, well, like a partnership where everybody has to have some amount of alignment. Why has Founders Fund chosen a different path here and how does it work practically?

SPEAKER_21: We have both of those, just to be clear. It's just that you can, we try and support all sorts of individuals and individual partners with the fund. Some people have a much more lone ranger strategy where they're kind of just going to go and make a lot of money on their own. Some people want to collaborate a lot with other people. Great. Both are totally welcome. We do often have debates about companies because even the people who are running their own deals, running their own strategy, they still want to collaborate with the team because it's an amazing team. And why wouldn't you want to do that? So we're trying to find people who can run deals end-to-end, run their own strategy, have a unique strategy, be a unique individual, but also ability to collaborate. So we don't hire very

SPEAKER_19: often. And so when you do add partners to the fund, how do you do that? Because you're the leader of the fund now. I wouldn't say that. All right. Who leads the fund then, or how does the fund work in terms of leadership and adding a partner? All of us kind of get together before we add

SPEAKER_00: somebody. So we can add, we add a lot of principals, associates. That's great. Find smart people who have unique deal flow or unique ideas on sourcing. Add them. Great. People that we get

SPEAKER_21: along with. Great. Add those people. For partners and above, we all meet with them. It's not like one person saying, oh, we're hiring this person. That's why I say it's not really a leadership model. It truly is a hire people who are good people, who get along with the team, who are unique, who have their own strategy, who we think can make us money and hire them. But we all interview

SPEAKER_25: anybody, partner level or above, all of us. So some firms don't have associates, researchers, and some do. You have young guns or up-and-comers at the firm, yeah? Yeah. And somebody, yeah. And so how do you pick for those? How do you select for those? And then what is the responsibility you give to, let's just use the term associate, I guess, or researcher, versus a partner? How does that line sort of overlap, not overlap? And how do you develop

SPEAKER_21: your own talent? I mean, maybe just check size, but I don't think you can be in this business and not do deals. So no matter who you are at the fund, you've got the ability to lead with checks. Right? The way that we work is different check sizes involve different votes, if you will, or different people, or whatever it is. But anybody, anybody can actually lead a deal in Founders Fund. And that's pretty important to us.

SPEAKER_41: Why is that important?

SPEAKER_21: Because there's no way to just learn about this business and do this business without being able to do that, without being able to lead the deal. You can help with diligence, but if you're going to be a good venture capitalist, you've got to be able to do a deal.

SPEAKER_25: It is the nature of what we do, is you place a bet.

SPEAKER_21: Indeed it is.

SPEAKER_25: And so it's like kind of playing poker. If you don't actually get to play a hand of poker, you don't get to place a bet, you're never going to learn what it's like to win or to make a bad decision or make a great decision, right?

SPEAKER_00: Indeed. And that's why we do it. I mean, the check size is kind of varied based on level, but everybody can write a check, basically.

SPEAKER_14: If you're, let's say, mentoring some folks who are new to the business, what do you tell them is important when placing a bet?

SPEAKER_54: To me, the most important thing about being an up-and-coming venture capitalist is figure

SPEAKER_00: out who you are. Figure out how you're differentiated. This business is crazy packed right now, as you know. There are so many people in this business. There weren't 20 years ago. Now there are. And so you, it is really important, whoever you are, whether you're the most senior partner or just starting off in your career, to eventually try and figure out who you are and what differentiates you. Like, what is that intersection between what you are really good at and what makes money, right? Like, and figure that out and go do that. So we love people who can like, who are unique, who can lean in on something totally different than the rest of us can't lean in

SPEAKER_21: on, right? And so that, that figure out who they are, that become the best at what they do.

SPEAKER_25: And so that is a differentiator, I guess, is a way to say it in the space, because you have so many people running around with checkbooks. The founders have to, at some point, make a decision who they want to be in business with the next 10 years. So what is it that founders look for in your experience in their investors?

SPEAKER_00: Totally, totally depends on the founder, right? You've got some people who are interested in like a venture cap, somebody who can mentor them, somebody who can really help them, somebody who's got a lot of operational experience, right? Like somebody who can help them with that. You've got some founders who have that down pat, and they're looking for somebody to strategize with. You've got some founders who are looking for a specific Rolodex, right? Like a specific connection that they need for their business. You've got some founders who are just looking for capital. I mean, it really does vary. And so that's why it's so important to have a differentiated partnership in terms of what everybody's strengths and weaknesses are. Because there's very few really good companies. Let's just be clear. There's lots and lots and lots of companies in the world and very few that matter to venture capital. And you've got to find those and win those, right? And it's not going to be the same person finding and winning every single deal. So you've got to be really differentiated and you've got to have, be the kind, you know, have the kind of partnership where the really good founders want to work with one of you,

SPEAKER_05: at least.

SPEAKER_25: Right.

SPEAKER_05: Right. For whatever reason.

SPEAKER_25: Yeah. They might say, hey, this person did the SpaceX investment. They understand hardware. They understand, you know, manufacturing. I'm doing something that's related. Totally. It's like adjacent, I guess, to SpaceX in some ways. So that gave your firm a massive leg up in,

SPEAKER_23: I'm sure, according Palmer Luckey. Yeah.

SPEAKER_00: Absolutely. Right. And so it's, and then different people like a lot of consumer experience, different people have a Rolodex, different people are really good at global macro, right? Different people have a lot of ton of operating experience, right? Like it's, we really do try and have a variety and a, you know, a group of really smart, collaborative, differentiated people at the fund.

SPEAKER_25: What have you learned about your own risk-taking and betting when you started in venture capital and I don't know how many bets you've been involved in, but I'm certain it's over a hundred

SPEAKER_64: now. Yeah. So being involved in, let's call it low hundreds of bets here over a decade, over,

SPEAKER_21: I mean, how long have you been doing this now? Almost. Let's see. I've been at founders fund for 16 years. So I've been doing venture capital for 18 years. Are you using AI tools every single

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SPEAKER_25: your tickets. So you've placed hundreds of bets. Now, when you look back at the first, you know, portion of your career, and then you look at how you do it now, what's changed? What were the leaks in your game? What were the things, the mistakes you just kept making and that you corrected as you

SPEAKER_70: moved on? I love it. That's because that's the adapt or die question, right? And so, by the way,

SPEAKER_00: that is why we have junior people making investments, you know, with small checks, because like, you've got to learn. That's the only way to learn, like the poker analogy, like how to do this. And so for me, I learned that what I'm really good at is just founder picking. I am not an operator. I'm not the fanciest Rolodex. I'm really, really good at picking founders and then the ones that want to strategize. So I'm the one that you want to go with if you don't need operational help, right? If you, you know, already know how to run a company, but you really want somebody to like get into the hairy nuts and bolts on strat, right? Like I'm pretty good at that. And I'm pretty good at making, you know, founder bets. And then I just have the tolerance to go all in on those bets, right? Like if I see an awesome founder and I've hung out with the awesome founder and strategize with them, I'm willing to put a large portion of the fund into those companies. And I don't think that that's a standard thing in venture capital. Like most funds have, oh, 3% of fund checks, 5%. I mean, one of the things that we've done really, really well over the years is 20% of fund checks. You know, our third fund, we put 33% of the fund in Palantir, you know, we've done those bets historically. So that high conviction, unique strategy to

SPEAKER_25: founders fund, you know, putting some extraordinary large percentage, double digit percentage,

SPEAKER_19: sometimes, you know, 33% of an entire fund. That's the highest one, but yeah. Yeah. I mean, SpaceX was 11%, I think in my notes.

SPEAKER_00: Something like that. It was, it was 11, then it grew to 15% of that original fund. But then we put

SPEAKER_25: SpaceX in almost every fund. And this is something you and I have talked about, which is when you have a winner, you know it, like it is, it becomes clear over time. So take me through SpaceX, Palantir, Airbnb, Andro, whichever ones, you know, you want to touch on here,

SPEAKER_19: take me through each of those and how your conviction grew over time. So that pushing more and more capital into those bets became like a no-brainer for you. Yeah. Or was it a no-brainer? I don't know. You tell me.

SPEAKER_00: It was for most of the ones that you just said, right? And so, you know, there's others where it's a little bit trickier, but space, I can take you through SpaceX because it's actually the thing that attracted me to the fund in the first place. You know, I was doing my own fund, my own small fund, while still at Google, made friends with these guys, made friends with Sean Parker. And he was like, hey, come check out what we're doing over here at Founders Fund. And they were, that's the time when they were starting to consider investing in this ridiculous rocket company called SpaceX. And I got to tell you, like, when we were looking at that, obviously those guys knew Elon extremely well, you know, from the PayPal days, but none of the rockets had worked yet, right? And it had all blown up. But we said, wow, this is clearly differentiated. There's, we love things where

SPEAKER_02: it's not like, you know, huge amounts of competition. It's like, right. And of one

SPEAKER_03: companies, man, right? The ride sharing app, your food delivery service, dating app. No,

SPEAKER_05: there's one rocket company. This is an end of one company. And so as a venture capitalist, as a true venture capitalist, you love those because it's the upside is just unlimited, right? Like,

SPEAKER_00: yeah, it's harder to get the conviction and it's harder to make the bet. But if it's when it's right,

SPEAKER_10: the, the upside is just, is gargantuan in those companies. Right. And so because if it's end of

SPEAKER_78: one, they're going to get there and they're going to sweep the table. If the table can be swept,

SPEAKER_85: if there's a market there, we saw with Airbnb, we saw with Uber, we've seen it with SpaceX. Yeah,

SPEAKER_00: absolutely. And so we got, that was an example of like, wow, we know how good this founder is the market yet does not know how good this founder is turns out to be the greatest founder in the history of the world, right? Like number one, maybe number two, jobs, maybe like, you know,

SPEAKER_93: I mean, you could put Bezos jobs. Yeah. You can put a couple of these guys in there.

SPEAKER_00: Yeah. But it's, it's rare that you have a founder who's done it multiple times, right? Like, and so maybe jobs, there you get like jobs and Elon. And so then we just were willing to be like, you know what? We are going to bet on this founder in an end of one company where the market is gargantuan when it works. We got the conviction, lots of people, you know, lots of people who, I remember a, I'm not going to say the name of the LP, but we had one LP who passed on a founder fund too, which is now one of the greatest venture funds in history. And who passed

SPEAKER_96: on that, who right after we made the SpaceX investment, literally wrote us a letter being

SPEAKER_82: like, oh, we were new. We were so right to pass on you guys. That deal had hair all over it. Something like this, right? Oh, gloating, a gloating LP. Yeah. Gloating about passing on us,

SPEAKER_05: right? And so seriously, we have it framed. I mean, where is the, I just have to pause for a second

SPEAKER_40: here of how deranged that is. It's unbelievable. You're invited to participate in rarefied air.

SPEAKER_19: Like what we do is a very unique pursuit. And then you have this need to tell the people who are in the arena, making crazy bets and putting their careers on the line. Ha ha. You're going to fail.

SPEAKER_40: Like, I mean, that's like saying to somebody going to the Olympics as they're walking on the field, like you're going to break a leg. No, I don't mean break a leg. I mean, like you're going to

SPEAKER_104: literally fall on your face. Like what is the upside? It was, there's no upside. And me and you

SPEAKER_00: have learned to not take bets when there's no upside. Right. And so they hadn't learned that yet. I don't think that they currently have jobs. Right. And, and we are still here. I've known you now for, gosh, those 17 years. Right. And we're still here doing this. Right. And so, because we don't do that, there's no, you are exactly right. There's no upside in doing something like that. They did it. And Founders Fund 2 is the, one of the greatest funds in the history of venture capital.

SPEAKER_25: And so as time goes on, you have to do a gut check on some of these. Airbnb was like an interesting

SPEAKER_19: one because again, nobody saw that the founders didn't even see it. They didn't think they were going to figure it out. They, they were struggling with it when they went to Paul Graham were like, this isn't working. You know, I've had both of them on the program and they, you know, were questioning this. So maybe you could talk a little bit to dealing with founders when they're doing something truly unique in the world and their own conviction and, and this, the role of capital and the backer to the founder and keeping the dream alive and staying focused because you,

SPEAKER_40: you can, if you're doing something outrageous like Airbnb or SpaceX, I mean, that some founders could get shaken as well. And you've got to be there with them. Yeah.

SPEAKER_54: Totally. And I, let me, so that the Airbnb one is another extremely interesting one,

SPEAKER_00: totally different than the SpaceX one. Um, and so I'm happy to talk about that too. On the Airbnb one, we were going through again, one is a common theme with us is what is an N of one company? What are the companies that have the ability to just be the only game in town and Airbnb, the reason why we made that investment and the reason why they went with us. And by the way, that was a, we put, we striped that investment across three funds. We put $150 million in, you know, we put a hundred million out of a $500 million fund, right? Like, and so, but the reason why they went with us on that is because they did know this was going to work. And in that case, in the Airbnb case, what they wanted, uh, I don't know how to say this properly is to somebody who was, who was just going to like, let them do it, right. Be able to write that big of a check and get the hell out of the way. And not many people can do that. I got to say, like a lot of people in this industry, especially if they write a large check are going to be like, Oh, I need to be involved. Right. We didn't even need to take a board seat. Right. Like I think

SPEAKER_25: I was an observer nine figure check and not vote that takes true conviction. And you said before, you got to meet the founder where they are. That's right. Some of them want your strategy.

SPEAKER_78: Some of them want your operations skills. Some of them want the capital and get out of the way.

SPEAKER_25: Absolutely. Let's not screw this up. And I think it takes a certain amount of humility and listening to be able to determine that. Yeah.

SPEAKER_00: Yeah. And that venture capital is a pure upside maximization game. Let's just be clear. Like you're not going around for your two X's or there's really no difference between a company going to zero and a company two X, right. You're it's just a pure upside maximization game. And those are one, when you find these top tier founders and you just, they believe in themselves, you believe in them, and you know how to like, let them do it, let them use you for what they want to use you for, right. Let them use you for your strat, let them use you for your Rolodex, let them, let them dictate how you can best do the company, not the other way around. Um, and by the way, this is why I do sometimes think that entrepreneurs don't make the best venture capitalists. I mean, sometimes they do. I mean, Peter Thiel. Um, and sometimes they don't, um, because a lot of entrepreneurs just by their nature are like, let's dive in, let's do this. Like I'm an operator, right? Like, uh, I want to help operate this. And that's not the right strategy in my, that's not my right strategy, right? We are just really good

SPEAKER_121: at getting out of the way and letting them build these end of one companies.

SPEAKER_25: And placing the second, third, fourth bet. I mean,

SPEAKER_121: we do that well too.

SPEAKER_25: That is, I think, you know, the thing I've learned from you so much in, in talking to you, I think at some point you said to me, like, you can't overpay for one of these companies. And now that's a dangerous statement to make and apply without thoughtfulness, but it's also true. So maybe unpack that for a second.

SPEAKER_00: Well, let's just be clear. We are, we are still price discipline. It's just that when you see one of these companies and you have high conviction, it's less important. Like for instance, I just met like on Airbnb, you know, we paid, we did the, uh, round, I think it was like one and a half billion. Like, you know, if we had not done it, uh, if we had only said, Oh, we're going to go to 1.35 or 1.4, whatever it is, and no higher than we would have lost billions of dollars. And so, I mean, we, you still have price discipline and used to, but you don't, when you see one of these comp, one of these high conviction companies that you're

SPEAKER_121: going to write a large check into, you just win the deal. Yeah. And that's the most important part.

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SPEAKER_25: When you're trying to win a deal like that, what is the approach? What is the technique to letting

SPEAKER_85: the founder know you're serious about being their partner?

SPEAKER_00: Yeah. The founders just have to get to know you. I don't see any other way around that. The best founders of the best companies, they're not going to just pick a... They've got choices as you correctly pointed out at the start of this. Maybe if you're dealing with a completely unknown company, completely unknown founder, sure. That's a different story. But if you're dealing with a company that is at the stage that Airbnb was and we made the investment, I mean, they've got plenty of choices. And so I think the smart founders, the best founders get to know you as much as you're getting to know them. And then it just becomes clear. Nope, they want to work with us. I mean, it was the same with the Stripe Round and the same with all of these amazing companies that it was just clear that they wanted to work with us as much as we wanted to work with them. And so we are always, always happy for one of these companies, just like repeatedly grab dinner, repeatedly grab drinks, like spend real time, strategize, let them always give the founders a chance to ask you more questions than you ask them. Because again, this is about upside maximization. This is not about imparting your will or VC prognosticating or gloating or whatever. This is about making money and letting those guys are going to be the ones making you money. And so you've got to let them pick you.

SPEAKER_25: So to recap, in terms of making money, which is, you know, how we judge venture capital firms by

SPEAKER_100: returns, there is a scoreboard, there is a scoreboard in what we do, it may take 10 years to for the score to update. I mean, that is a weird lag. But there are ways to kind of get an idea when

SPEAKER_138: things get marked up, etc, revenue of companies, of course, but what makes money an outlier company

SPEAKER_25: that could sweep the table and then maximizing your ownership in it getting that third, fourth bet in So clear. I mean, I literally after we had that conversation, I don't know, it's maybe maybe it was back in 2017, when you were on the program, and I interviewed, I just looked at our portfolio

SPEAKER_78: construction, we're seed stage, but I said, you know, there's spray and pray, Ron Conway, Y Combinator. And

SPEAKER_25: you know, it's people maybe say that's derogatory. But it's true, you know, at that early stage, you're the chance of hitting a unicorn, you know, you probably got to get between 50 and 100, 150 bets. And then there's consolidating, you know, into the winners. And these were considered different pursuits in

SPEAKER_19: venture. And I looked at it, I just was like, huh, my next fund, I'm going to try to do both in the same fund. Absolutely crazy. But we're going to have 300 names. And then I'm reserving half the fund for the top 10 names. And then I told folks, don't be surprised if one of those gets 20% of the fund. So 300 to one. And you know what, most LPs do not understand what we're doing. And I'm like, huh, but then some do. And they're like, got it. But so you know, this is like one of the weird things about bet

SPEAKER_142: sizing, and fund strategy, LPs actually don't understand, in many cases, what we do do that?

SPEAKER_00: Sure, but I don't know that that matters. The thing I love the thing I love about our LPs and LPs in general, and I'm always good talking to one of our LPs, and we choose them because we love them, is like, they also care about returns. Right. And so they're not sitting there trying to tell the best LPs, just like the best VCs don't try and tell a founder, Oh, this is how you should run your company. No, the best LPs are like, Oh, that's unique. Great. Make me some money. Right. And so they're not trying to necessarily like, tell you how to run your firm, or they don't even want to for the best funds. They're just like, the best ones are just like, Yeah, look, would love to hear about portfolio updates, because we love companies. We love startups. We love investing the stuff. That's why we're doing this. But otherwise, figure out the strategy and make us money. And so the best LPs really do that is how they feel like they're just like, Great, you guys do you for instance, you know, I mean, I mentioned before that we've put SpaceX in multiple funds, we don't really think through reserves in a fund, we think through make put most money into best companies possible at best price possible. And maybe that's one of our own companies. And maybe we've invested a previous fund, but great. So we'll put it in the next one, like founders on two owned 10% of SpaceX or whatever that didn't stop founders from four founders from five founders from growth, founders from growth to, you know, from investing in SpaceX, right, they all did, because it was still a really good investment, even if previous fund is out of money.

SPEAKER_25: Yeah, you are making that continuation bet. Based on, you know, one of the great things about our industry, and what we do is it is based on inside information, you do have information asymmetry.

SPEAKER_40: Now you can't do that in public markets, because retails participate.

SPEAKER_156: I don't invest in public market stocks.

SPEAKER_40: Yeah, but we can. And in fact, the whole name of the game is to have information asymmetry, you're on the board, even if you're just an advisor of Airbnb,

SPEAKER_158: even if you're just getting there with the founders regularly. Yeah,

SPEAKER_40: yeah, if you're if you're hanging out with Brian and Joe, and they're like, yeah, you know, Europe's taken off. That's incredible. We didn't know if Europe would

SPEAKER_25: work, but we got more in Paris. You know, I was like, ah, yeah, we should probably make a bet here. And then we should probably get back here. Yeah. So let's talk a little bit about Sean Parker. Okay. You know, Sean's been out of the game, uh, you know, doing philanthropy and all kinds of interesting stuff. But man, this is one of the sharpest minds. Absolutely. In our industry, brought Zuckerberg to the Bay Area. When did you first meet Sean Parker? 2007. 2007. Tell me about your impressions of him and his unique genius in the world.

SPEAKER_00: You know, I love talking about Sean. And I will say this, like, I owe Sean a ton. And you know, Sean, when I when I will say this, when I joined Founders Fund, I'd become friends with Sean, I didn't know who the other guys were. You know, I was just like, Oh, Sean is amazing. Yeah, I want to, of course, I want to join with him. And so my first meeting with Sean, it was almost like a scene from

SPEAKER_21: the freaking movie because we started dinner at 9pm. And we went until 2am. It was just nonstop. But he is just one of the most brilliant. And I know a lot of smart people, right? Like I've met a lot of smart people through my work through whatever. And Sean is just the one of the probably maybe the

SPEAKER_00: smartest, right? Like Sean was the best example of a proactive venture capitalist, I think maybe in history, there's reactive, which is somebody like me, it's like, I'm open to anything. But I'm not like sitting there going like, Oh, this is how the world should be. And finding Sean would be like, Oh, this is how the world's going to look like, I need to go find the best company says, Facebook. Oh, man, the world is shifting to, you know, streaming music, Spotify, right? Like, and he was just had this like unique ability to just know what the world was going to look like, and find the best company that was going to do that. Otherwise, the best proactive VCs have to start the company.

SPEAKER_129: If it doesn't exist, let's talk about that. You've allowed founders. Again, this is very

SPEAKER_25: non traditional and startup studios. As the concept goes, they've all essentially failed or stalled. They've had a very mixed bag of results. Why? When you start a company, you need a CEO. Pretty hard to get a CEO for hire. We all know that. And why would a founder who's absolutely extraordinary or Palmer, lucky whoever, why would they join a startup studio, but or join a startup studio company? So you have that exact example. Let's talk a little bit about how you've tried to make this work. And if it is in fact working and when it works and when it doesn't.

SPEAKER_121: Yeah. So I don't know how to start a company. I won't be starting your company. However, remember,

SPEAKER_00: our mandate is returns. And sometimes, right? Not all the time. And because you don't get many of these things, right? Because it's a lot of work. Sometimes if I just generate returns just to start a company, right? If one doesn't exist. So Trey and Palmer, you know, we were the first investors in Oculus, right? And that's how we got to know Palmer, right? We invited him to one of our, you know, let's get together with all of our portfolio founders and hang out and play paintball kind of events. And he met Trey at that event. And then they were both, you know, being like, oh man, nothing really good exists in defense. This is really important. Boom, founding of Andurl. And I don't think you do this every day, right? But you do this when the time is right, when you, when the energy comes together. And again, it is important. It is an important part of generating returns. Not everybody can run that strategy. I cannot run that strategy. Sean can, Trey can,

SPEAKER_178: and they're Peter can, right? And therefore we can do it.

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SPEAKER_25: hire developers smarter, visit lemon.io slash twist. Let's talk a little bit about maybe founders who

SPEAKER_85: are challenging to work with. Uh, there's a famous, uh, four quadrant chart that, um, one of the founders

SPEAKER_25: of Sequoia made, which is like how agreeable a person is and how competent they are. And you draw four quadrants incompetent. You obviously don't want an agreeable or a disagreeable incompetent person, but you have competent, agreeable, competent, maybe hard to get along with the character of founders who actually do change the world and pursue these outlying things. Does that track with you

SPEAKER_182: that they can be challenging to work with? And then, you know, if so, what's your approach to that?

SPEAKER_00: Yeah, of course. And remember our, the reason those kinds of founders love us, and we love those kinds of founders. And here's why we don't claim to know more about their company than them. We don't claim to try and run their company. So those kinds of founders that you're talking about the, the very competent, but disagreeable or whatever it's, as long as they're like still a good person, maybe they're a disagreeable strategy that, you know, we don't, we don't go over the line. We don't ever invest in people who are doing anything like illegal or anything like that. Right. And so, but as long as they're on that other side of the line, and they're just like unique or disagreeable or something, but they could be doing something amazing that nobody else has done before. We love those kinds of founders and they tend to love us. And honestly, that is where so many of our outsized returns have come from, are those kinds of

SPEAKER_33: vendors because we don't tell them what to do. We don't tell them how to run their company. We let them dictate how to best use us.

SPEAKER_25: If you're going to take on, you know, something that's going to challenge incumbents, I hate to use the word disruptive, but that is actually disruptive. Sure. You might, you know, ruffle a few feathers. If you're Elon doing SpaceX, you know, the Russians who are putting satellites up might not be so happy about having a competitor. If you're Airbnb and the incumbents who are, you know, selling hotel rooms, they might get a little tweaked. If you're Uber, whatever, if you're new bank, you know, a lot of these companies, incumbents might not be too pleased with their aggressive entrance into, into the market. And so you have to, you have to be there with them and guide them sometimes if they need help. But other times you just got to be like, this is a war and this is a wartime CEO. So be it.

SPEAKER_00: I love my role. What I tell founders, my, I want my role to be is founder consigliere. So you, you just said like, that's, that's what I don't want to, I don't need to be on the board. I don't need to tell you what to do. It's like, I'm your consigliere, like come to me during wartime

SPEAKER_125: stuff when you really want to chat about some of the hairy stuff, right? Like otherwise you've got this on operations. I wouldn't be investing in you if you didn't.

SPEAKER_85: That happened with Airbnb. I mean, they were, you know, this is like something that I, you know, I witnessed firsthand at a couple of companies, you've got lawyers saying like, Hey, you're bending

SPEAKER_78: some rules here. This is like a little dicey. And they always give you the same advice. Like just,

SPEAKER_25: they're all about minimizing risk, but a lot of times winning is about taking risk, you know, and pushing the envelope a little bit, maybe take us to that. Maybe with Airbnb,

SPEAKER_194: there were people who said like, Hey, you just shouldn't do this. You shouldn't be allowed to do this. How do you get over that objection? Yeah. I'm going to sound like a broken record,

SPEAKER_00: but remember, venture capital is upside maximization. So sometimes if you're an investor who's like, Oh, maybe don't take that chance. Cause we don't want this investment to go down. Honestly, I don't ever think about that. I just don't think about that. It's like, Oh, great. Yes. If, as long as it's legal and as long as, you know, playing within some guidelines, it's like, okay, yeah, take that risk. I'm all about it, right? Like we are all about the founders who also want to take that risk with us, right? Also want to take those risks to maximize upside, not just be like, play it safe and, you know, double my money, right? Like you need, as a venture capitalist to find the upside, maximalized investments period. And so a lot

SPEAKER_196: of times that comes with, you know, the risk of ruin, let's call it the risk of ruin. Perfect.

SPEAKER_125: I am very much okay with the risk of ruin. Like, let's just be clear. Whereas in exchange for the upside maximization that we get from these companies.

SPEAKER_199: Yeah. I mean, if you're going to take on, I don't know, you know, a country like France that might be

SPEAKER_25: very protectionist unionist, whatever. It's like, okay, we're going to take on France. What if we lose? Okay. We get kicked out of France. I mean, this happened. I remember when Travis was, you know, he just told me, well, no, we've won when London and Las Vegas fall, when you're able to order an Uber in Las Vegas or London, and then, you know, it's whatever number of years later, and Dara just

SPEAKER_100: signed up the, the taxis in London. This is after five, six years ago, they were trying,

SPEAKER_201: they literally were trying to ban Uber from existing in London. And now you can call those awesome London taxis.

SPEAKER_111: It's funny that you brought up Sean, because think about what he, he defined that.

SPEAKER_02: Yeah. It's like, oh, right. Once the regulators say like, oh, you can't do it, but it's like, it wins anyway. And now the Spotify exists and it's a legit company. It's like, you've won.

SPEAKER_25: Let me ask you a hard question. You got, uh, not that any of these have been easy, but I want to go for two, two hard ones here, regulation in the United States and the regulatory environment.

SPEAKER_83: You're watching very big companies like Apple do very anti-competitive things. They, they block

SPEAKER_25: iMessage. You got the app store, you know, 30%, you know, Google, where I think you're an alumni of, you know, has the, the Android store is like some on the margins, things that in that duopoly are anti-competitive. Right. And so do you think Lena Khan should be blocking more of this M and A and attacking these companies based on bad behavior, or are you free market, let it rip. If Apple wants to squeeze too tight onto the app store. Well, then somebody create a better apps or a better phone. What are your thoughts?

SPEAKER_00: My thoughts are that I don't VC prognosticate and I am not a global macro or a policy expert. And so I tend to focus on what I know that I'm better than everybody else at and not focus on that stuff. And so, you know, a lot of that stuff changes with politics, right? Based on who's the head of these organizations. And, you know, we're going for in a game where these companies span generations and they're not, uh, specific on politics. And so for me, what I don't like doing, I will say this, I don't like crying about the game. Right. So in other words, like, okay, let's say you're in a, let's say you're in an environment where that is the political environment, where they're going after these companies. They're not going to let these acquisitions happen. Right. It's going to be tough to get an exit other than going public yourself. Right. Because great, play that game, play that game and win it. Right. And so to me, it's like, regardless, because that's going to change, like it'll change in the next administration, you know, maybe like who, who knows, right. Part of adapt or die is play the game. Don't cry about the game. And so we love the founders that don't cry about the game. Like here, let me take you through somebody who I think is a winner on this, right? Like Dylan, right? Like for Figma. Okay. They blocked the acquisition. Dylan's still going to have an amazing company. He's still building said company. He's not going to sit there and going like, oh, wine wine. This didn't happen. No. It's like, okay, that's the, that's the current situation. We're building this company to be bigger and better

SPEAKER_210: than ever. Right. So huge respect to somebody like that. You have to accept reality, right? And the game on

SPEAKER_78: the field is a game on the field. Dylan got a bad beat. 20 billion dollar valuation. They just cut it to 10, but he's still in the game. He's still building the kids. And who cares if he builds a 50,

SPEAKER_82: 100 billion dollar company, then like, this is like, this is like the Stripe thing, right? It's like,

SPEAKER_00: yeah. So Stripe took a, you know, raised around and, you know, less than what it was previously trading at. So what? At the end of the day, if Stripe is one of the most valuable companies in the world, then amazing. Right. At the end of the day, if Figma just keeps building a bigger and bigger and awesome company, so what? You don't cry over that stuff. You just play the game and you win.

SPEAKER_213: And this is, I think what you'll learn after you've had maybe two decades, maybe three decades,

SPEAKER_25: you and I have been in the field for a while. You've seen the boom bust and you've seen Clinton go to Bush and Obama and Trump and Biden. You know that these things are transient. The great companies build through Zerp and crashes and dot-com crashes, great financial crisis. And in fact,

SPEAKER_40: you and I benefited in terms of timing as investors. We started our career when things were,

SPEAKER_50: let's face it. Biggest boom cycle in history, right?

SPEAKER_25: Yeah. I mean, pretty easy to be good at this game if you do that, but you also then need to have some self-awareness. Correct. Let's talk about self-awareness. What are the things that now you've added to your quiver? Are there things that you're working on right now and you're asking yourself, you know, do we need to change this or that? Because right now people don't believe in venture capital. People think this is like a broken asset class, yada, yada. The fees are too high. The carry is too high. There's never going to be exits again. I don't know that I've lived in a moment in my career where people were so down on venture capital. So what's your take on sort of like the state of venture capital now and how you're thinking about strategy at Founders Fund going into the next era because too much money raised, too many competitors, all these late stage people coming in and doing weird distortions that we then have to deal with, whether it's Masa coming in and making big bets or the Tigers and

SPEAKER_138: the Kotus doing all this crazy betting during Zerp. When you look at our game on the field, what are you thinking about?

SPEAKER_44: Yeah. So I will tell you, this is an analogy that'll go with this. When I started doing this,

SPEAKER_00: when I started doing this at Founders Fund, so call it, you know, the year around early 08, what percentage of companies then do you think were social networking, photo sharing, chat related that I saw? And I, by the way, now my first year of doing this, I saw 1200 companies. I met with 1200.

SPEAKER_221: Mobile, social, local? Most.

SPEAKER_00: All of them. How many, what percentage of companies were mobile, social, local?

SPEAKER_82: It had to be 80. It was 60, which is a crazy number. Crazy number. Yeah. For one, one field. Okay. 2023, what percentage of companies had, and it is a little bit unfair,

SPEAKER_21: but what company percentage of companies had AI or LLM in their pitch deck by page two?

SPEAKER_229: Oh, it's gotta be above the 60% number seven. Close to a hundred. Close to a hundred. Okay.

SPEAKER_00: It's by definition was the least contrarian possible thing you invest in, right? And so we just take our strategy of like, okay, we're just gonna invest in the best thing, put a lot of money in open AI, call it a day. But one of the things that we've started to do really, really well is okay. If everybody's chasing after this stuff, let's go for things that we still believe in, right? But that are not necessarily that, right? So we hired Joey Croke, right? Like best crypto investor in history. He's amazing, right? And he's doing all, you know, the best crypto stuff because crypto is less hot now. Fine. Great. Take the best assets and invest in them. You know, I don't do very many deals now. What I do, I try and sink my teeth into one. You know, the one that I'm just doing, you know, very well, we're doing Ohalo

SPEAKER_77: with Friedberg, right? I think you do a podcast with him or something.

SPEAKER_54: Yeah. I think I've met him. Not AI, not AI. In fact, it's just, but it's a space that's ridiculously important. It's bioengineering. It's, you know, gene editing, right? It's like food,

SPEAKER_00: calories. It's ag. It's, it's, it's going to be one of the most amazing companies on the planet, not AI. Right. And so we try and find these things with amazing founders. That part doesn't change. And in fact, I think, I think I was the worst at this job during COVID because I didn't meet the founders in person. I couldn't. Right. And so it was bad. Right. But now that we're back, right? Like you spend time with these founders, you find people, you know, well, who are doing things in, you know, contrarian spaces that in three years will not be contrarian, right? Like the, the, the bioengineering for ag will not be contrarian in three years. He is the best in the

SPEAKER_25: world at that easy, no brainer investment. Right. So tell me about, um, heat leaving founders fund and going to, uh, Khosla. I saw that. And he was kind of like, I want to have a different experience, like people arguing over stuff every Monday in a meeting. And then I looked at it and I was like, yeah, that that's a difference between the funds. But I also thought, well, is he going to just take over Khosla? That sounds to me like the session planning. What do you, what was your take on that?

SPEAKER_00: And maybe, and remember, I, I love Keith and I always loved Keith. Yeah. And so like, but there's different, you know, founders fund the person, right? Like there's not one right answer. And maybe in some ways it's better for him at Khosla, either way, it doesn't matter. Like, I love Keith. We still work together. We still are going to do a lot. The reason why Keith was at, you know, we got Keith, the founders from the first place, we were doing all sorts of deals with him. And I'm like, Oh, let's, let's get him on board. But you know, understood it's, he's going by, you know, with the note that no, no problem. We're still going to work with Keith really well.

SPEAKER_121: I still think Keith is a phenomenal investor and yeah, we're still both going to make a lot of money.

SPEAKER_189: Yeah. But that's the session planning in your mind. Right. That sounds to me like,

SPEAKER_250: I have no idea. I was like, wait a second.

SPEAKER_78: It is amazing that Khosla is his age and still so sharp. He was at the,

SPEAKER_00: one of the few, one of the only ones, one of the only ones that that, that's that, that's that sharp. That's still in the game. That's still top tier in the game at this age. It's unbelievably amazing. Right.

SPEAKER_78: Why wouldn't you look at that? I mean, I look at that and I'm like, that's who I want to be. I want to be 70 something years old, like Khosla and be posting on Twitter X, be like making bets,

SPEAKER_253: being mixing it up with people. Yeah.

SPEAKER_75: You know, here's what I'll say about that.

SPEAKER_00: Yeah. I've only met the note in person a couple of times, but I will say this. He does not care about what's popular and the right way to be in the right way to do things. And what's like the proper thing to support. And he is not, he is the opposite of a virtue signaler. Okay. And that's one of the reasons why you last in this game. Like, I'm sorry, you do not last in this game, virtue signaling. You last in this game, being who you are, figuring out what you're better at than everybody else and leaning in on that. And he just has that in spades and is unapologetic about that. And so certain types of founders just will only want to work with him. Certain types of founders will only want to work with me. Certain types of founders will only want to work with Peter Thiel. Vinod has that in spades, right? Keith has that in spades, right? On the operation side. And therefore, yes, very bullish on all the people who are, don't spend time virtue signaling, but spend their time just leaning in on what they are the best at.

SPEAKER_129: You've done well, got a ton of money. You'll be, you could retire anytime. You think you're going to go as long as like Vinod, do you see like an end to this? How do you think about that?

SPEAKER_00: I hope so. I think, I think here's, here's what I think about this. There's certain parts of this job that you don't like in certain parts of this job that are just always going to be amazing. And I think if you can figure out a way, like I think Vinod has, right. And Peter has, and all these guys who are legends have is you figure out what you love about this and just keep doing that stuff. Right. And it'll fit in. Right. I am never, ever, ever going to get sick of having dinner with Friedberg, having dinner with Chesky, having dinner with Slingerland, right. Having dinner with these guys. Like I see no reason to ever stop doing that. Right. So you figure out how to make this, what you're the intersection of what you love and what you're good at. And you just, there's no reason to ever stop doing that part of things. Right.

David Friedberg: Yeah. There is a Japanese term for that. Like what you love and what you're good at.

SPEAKER_78: What is the term? Ikigi is a Japanese concept. I-K-I-G-A-I. Japanese concept, discovering your purpose through exploring the intersection of what you love, what you're good at, what the world needs and what you can be paid for. And.

SPEAKER_265: I think you just figured out the name of my next company, but like, I didn't even know that.

SPEAKER_78: Yeah. Ikigai. And it really is like a beautiful concept and people will, who are like career

SPEAKER_25: coaches will, will kind of work on that. And I've talked to Elon a lot about this, like what he loves to do and what he doesn't like to do. And I remember the early days, you know, when he, this is pre SpaceX and when he was just starting to work on Tesla. And it was like,

SPEAKER_78: we were just, we're lamenting chores. He's like, I just got to do so many fucking chores and the chores piling up and piling up. And I was like, why don't you get people to do chores? Right. I'll source that. And he was like, they don't do it properly. Right. And I think part of his journey was, you know, when you're as good as he is and exacting is he's now built a bench of people who can do those chores for him that maybe he doesn't want to do, but that's a decade or two decade

SPEAKER_25: process of being able to say, I love doing engineering challenges. And you and I both, you know, lucky enough to know Elon. And, you know, when I've been with Elon in meetings, I just watch him love the engineering and the product challenges. Right. That's his like, that's his circle. What he's like uniquely good at the world. And then like, just peeling back from that, like the stuff you don't like, it's so important in venture. It's the same thing. Like you, you like hanging out with the great founders. It's probably really annoying. I don't know if it is for you or not. I was talking to Saks about this. Like the number of first meetings

SPEAKER_270: is just arduous and painful. Like the sourcing of companies and dealing with your deal flow.

SPEAKER_121: I can't do that anymore. It's exhausting.

SPEAKER_249: I used to be able to do it and I can't anymore. So you surround yourself with people who can do it

SPEAKER_23: really, really, really well. The first level sword. Yeah. All right. Listen, Brian,

SPEAKER_25: thank you for taking the time. I appreciate you. Anytime man. This was fun. If you say anytime, I'm booking you for one year from now.

SPEAKER_100: Okay. Let's do it time. It's going to be yearly because five years in between. I mean, we get to talk to each other socially, but it's got, we're going on a regular one-year calendar.

SPEAKER_121: Let's do it. Let's do it. Let's do it next January.

SPEAKER_25: Okay. Perfect. All right, man. There you have it folks. Brian Singerman from Founders Fund, one of the great venture capitalists of this generation, and we'll see you all next time. Bye-bye.

SPEAKER_274: Thanks, J. Cal.