Invest Like The Best
Episode 115 If You Can’t Sell Them, Compete with Them
Invest Like The Best

Episode 115: If You Can’t Sell Them, Compete with Them

Invest Like The Best

Episode 115

If You Can’t Sell Them, Compete with Them

Keith Rabois has a storied and diverse background as an investor, entrepreneur, and executive. We cover his idea that every world-changing company needs a "secret" and an "anomaly", some of his biggest contrarian views, and advice he would give people early in their careers.

[00:01:35] – (First Question) – A look at his investing philosophy

[00:03:16] – Favorite examples of his own investment history

[00:04:40] – 7 Powers: The Foundations of Business Strategy

[00:05:07] – Understanding what is anomalous in a given investment

[00:07:07] – How much a secret needs to be protected within a business

[00:11:51] – Why accumulating advantage with data is of interest to Keith

[00:15:12] – Digital health companies and ideas that he finds compelling

[00:16:17] – Nuance around financial services that investors should be mindful of

[00:17:56] – How do they evaluate managers ability to recruit talent

[00:19:36] – How similar are the roles of entrepreneur, board member, investor, etc that Keith has had in his career

[00:24:02] – Ways that Keith is a contrarian, including his feelings on “lean startup.”

[00:27:04] – Is problem identification a specific skillset

[00:28:29] – Objection with experimentation/iteration

[00:30:02] – Bad ideas in venture

[00:31:36] – What he likes about Apple

[00:31:51] – Creative Selection: Inside Apple’s Design Process During the Golden Age of Steve Jobs

[00:32:26] – Interview questions for identifying great talent

[00:35:41] – Elements of good design

[00:37:14] – Impact of platforms on opening new opportunities

[00:38:42] – His take on valuation in the early stage environment

[00:40:33] – Advice he would give people early in their careers

[00:43:58] – Do high growth companies get beat by established larger businesses

[00:45:25] – Popular narratives that he thinks are just wrong

[00:48:22] – His thoughts on how people should learn, balancing experience vs information gathering

[00:50:00] – Other investors that are taking a unique approach to investing

[00:51:57] – Reflecting on the entrepreneur as a client model of private equity

[00:55:04] – Books that he recommends that is least known

[00:55:18] – The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It

[00:56:30] – Kindest thing anyone has done for Keith

If You Can’t Sell Them, Compete with Them

Introduction

Patrick
My guest this week is Keith Rabois. Keith is currently an investment partner at Khosla Ventures but has a story and diverse background as an investor, entrepreneur, and executive. He's worked in senior positions at PayPal, LinkedIn, and Square, has led investments in companies like Stripe, YouTube, Palantir, and Airbnb, and started the company Opendoor, which aims to transform the process of selling a home through technology. One fun fact about Keith is that he may have the most impressive list of bosses that I've ever seen, which we discuss during the episode. We cover a lot but one thing we kept returning to is business strategy. Keith's frameworks for gaining and building strategic advantage helped me clarify my thinking on the topic. And his examples of contrarian thinking will hopefully make you question some commonly held beliefs, please enjoy our conversation.

Patrick
I thought we would begin with a really interesting Paul Graham quote that you referenced as a succinct summation of your investing and entrepreneurial strategy. Paul Graham said, "If your technology is better, but potential customers are too set in their ways to switch, use it yourself and compete with them." So maybe using Opendoor or something like that as an example, talk about why you think that's a good summation of your history?

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