Invest Like The Best
Episode 319 Find Good Quests
Invest Like The Best

Episode 319: Find Good Quests

Invest Like The Best

Episode 319

Find Good Quests

Trae Stephens is a partner at Founders Fund. We cover the importance of investing in firms that advance society, why the high-tech defense firms of the past became stale, and why disagreeableness is a valuable trait in founders.

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[00:03:17] - [First question] - Why Trae thinks most high-margin businesses are bad for society

[00:04:28] - What he would change to impact energy technology most if he was in charge

[00:06:18] - His investing focus on dynamism and mission-driven tech companies

[00:09:42] - Analyzing why relatively few people strive to make society-level advancements

[00:11:35] - What he’s done as a parent to enable his kids to develop passions

[00:12:41] - His most noteworthy adventures in his career

[00:14:41] - Founding Anduril and what it taught him about the tech industry

[00:18:40] - The cutting edge of defense technologies today

[00:21:29] - What Shyam Sankar of Palantir taught him about defense tech

[00:23:34] - Why some of the biggest defense tech companies have stopped innovating

[00:28:29] - What he and Anduril have learned about sales and scaling in the public sector

[00:32:12] - Where lobbyists and decision makers play in to defense tech business models

[00:35:22] - His take on Peter Thiel’s notion that competition should be avoided

[00:38:24] - The importance of being psychologically disagreeable when building a start-up

[00:39:54] - The origin story that stands out the most from companies he has interviewed

[00:41:12] - How he developed an investor mindset on his unorthodox path to the venture world

[00:43:57] - What he has learned from playing supporting roles and aligning with great leaders

[00:46:11] - Important but uncommon lessons about entrepreneurship

[00:48:21] - Venture investing lessons he’s learned from Lauren Gross

[00:50:00] - His first VR project and aspirations for the future of VR

[00:54:50] - The role of religion and spirituality in his business philosophies

[00:59:13] - Why he tries to capitalize on morality as opposed to sin

[01:03:57] - The kindest thing anyone has ever done for him

Find Good Quests

Introduction

Patrick
My guest this week is Trae Stephens. Trae is a partner at Founders Fund and Co-Founder and Executive Chairman of Anduril. Trae’s philosophy can be boiled down to finding good quests, which has led him to investing in businesses that work closely with the government on societally important issues. Clearly, that extends to co-founding Anduril, and I would highly recommend listening to my Business Breakdowns episode on Anduril if you haven’t already.

In this conversation, we discuss the importance of lobbyists, why the high-tech defense firms of the past became stale and how he hunts for disagreeableness in Founders. Please enjoy my conversation with Trae Stephens.

Businesses That Positively Impact Human Progress

Patrick
So Trae, I’ve heard you say in a couple of spots that most high-margin businesses, I think you were talking specifically about high-margin software businesses, but let’s just say high-margin businesses tend to have either no positive impact on society or sometimes even negative impact on society. Why do you say that? What is behind that belief?

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