Invest Like the Best with Patrick O'Shaughnessy
· Gokul Rajaram
[00:00:00] S1: Yeah, do stuff. Everywhere else, you can just BS your way without doing stuff. So at Square, we established work projects where even for Corp Dev, our work project was give me one company that Square should buy, and analyze the company, and tell us why we should buy it, and tell us what the synergy should be. So the best candidates had to do that. Every function needs to have a work project that you need to put them in a room without AI and get them to do the project, get them to do the work that is ideally very similar to the work they're going to do. For product managers, we would take a product we were thinking about and we would just say, "Here's a product we're thinking about. Figure it out. Should we build it?" The first and most important thing you want for these kinds of things is, especially for customer-facing roles, they need to take the voice of the customer. In other words, they need to justify the why. The best PM candidates rejected the premise completely and they did it in a beautiful way. They went and talked to 10 customers on the street. So brilliant. They said, "I talked to 10 customers. They were all Square users and we found that none of them want this Premium Insights product. So we don't build it. We're going to build this other thing instead." It was amazing. That's what you want to see. You want agency. You don't want people to just say, "Give me what to do and I'll do it." You want people to reject the premise or question the premise in the first place. "Square should not buy a company." That would be great. Why? Tell me why. And so that's the kind of thinking you're looking for.
· Patrick O'Shaughnessy, Gokul Rajaram
[00:00:00] S0: What was Tony's thing? [00:00:00] S1: DoorDash had the best work project ever. He would give people either $10 or $20 and ask them to acquire a thousand customers. A thousand customers for DoorDash consumers. And literally some people would say, "I'm not going to take this challenge. I'm not ready for it or something." And great, if they literally opt out of it. And then some people would take it. Nobody even came close to acquiring a thousand or even a hundred, I think. But the goal was to see how many different things they were able to try in the course of a few hours. Someone went to the gym, printed flyers out and gave it out. People tried all kinds of things, but it was a brilliant way to just filter out people who didn't want to do stuff. [00:00:00] S0: Is there any other advice that you would give the person building the career? We talked about evaluating, and be a builder, and all these sorts of things. How should one think about managing a career in the AI era?
· Patrick O'Shaughnessy, Gokul Rajaram
[00:00:00] S0: Is there any other advice that you would give the person building the career? We talked about evaluating, and be a builder, and all these sorts of things. How should one think about managing a career in the AI era? [00:00:00] S1: Stay at every job long enough to have impact. Over the last 18, 24 months, I've been seeing this phenomenon of job hoppers or job optimizers, I call them, who stay at a job for 12 to 18 months and then they move to the next job. And then they start 12 to 18 months and move to the next job. That is one of the biggest red flags as a hiring manager that I see because I don't think you can achieve anything of value. You can't have any impact on a company in 12 to 18 months. I think it takes minimum three to four years to have impact at a company. So my top advice is, stay long enough to have an impact, build a network, have fun. From the moment you start a job, don't be thinking of what my next job is. Once in a while, maybe one job, it didn't work out amongst a series of jobs. Okay, you left in 18 months. But if I'm seeing two or three jobs back-to-back, immediate red flag. You’re doing yourself a massive disservice and you won't even know. The problem is you'll get rejected, you won't know what happened. It's that people want people who stick around and build. Who's going to hire you if they see that's your behavior? So I think it's very short-term thinking. You've got to build something of value and that comes with time.
· Patrick O'Shaughnessy
[00:00:00] S0: So much of the theme here has been identifying a superpower, having one in the first place, evaluating one, matching it to a problem with a leader and so on. With your investor hat on, and your new firm Marathon, how do you assess the capacity or existence of a superpower in a person? How have you learned to do that well?
· Gokul Rajaram
[00:00:00] S1: The most important thing I look for is founder authenticity. Three of the four companies I've worked with – Google, Facebook, and DoorDash, all started in colleges. And they all started as a way to, just a toy problem almost, that the founders are curious about. And they started with an authentic curiosity. "Can this be built?" It got built and it started. And similarly, with Jack and Jim, they started solving a real problem. So my first question to every founder is, "Tell me your founding story. Why did you decide to start this company?" The founding story, in my opinion, expresses why they chose this problem and ideally should touch on what their superpower is and what compelled them to work on this problem. I've had many people work with me or for me, who have gone out to start companies with the only reason being, "Well, I have my buddy and we both want to start a company together." I really advise them not to do that because just going out and starting a company because you want to start a company with your friend is the wrong reason. So I want to understand, is there an authentic lived experience that they've had in their life that compels them to work on this problem? Dylan from Figma, if you talk to him, he's seeped in design. He thinks about the design of things. He thinks about how to make things more compelling. It was very clear that he had a vision for what this thing could be. A good example is a company called Faire. It's a B2B marketplace. Max Rhodes, the CEO, worked for me at Square. And Max, when he left Square, he actually tried many different ideas and turns out, and none of them were authentic to him and to Faire. Turns out the idea that it worked was Faire. When he was an undergrad student, he had an umbrella company that he created. And this umbrella company, he was trying to get distribution for it in local retail. It was extremely hard for a brand. How do you get local retail? And there's so many of them. How do you go in and pitch to them? So he realized that that problem is the one he wanted to focus on – other manufacturers who wanted to get access to local retail.
· Patrick O'Shaughnessy, Gokul Rajaram
[00:00:00] S0: Are there any other questions that you love to ask in a first meeting learning about a company other than tell me your origin story? [00:00:00] S1: The other one is idea maze. Tell me about how you navigated the idea maze. Yes, you want to tackle this problem. Because again, this is a classic product thing. You started the problem, but then there are many different solutions, many different ways to solve it. Why did you choose this way versus the other way you could have chosen? I will basically try to throw them off course or off kilter by asking them five, six other ways to solve the same problem. Understand if they are students of either history or the industry, to say why this problem could not be better tackled in this way. So I want to understand that they have studied alternate approaches, historical approaches to solve this problem. I think a good example is the Collisons, I think, bought a book on payments and they studied exactly why all the payments companies did what they did, and how they failed and how they succeeded. And I think the best founders are students of history in that industry. And they understand why all the prior companies took the decisions they did, and ideally stand on the shoulders of giants to be able to build this company.