Venture Stories: What Jd Ross Thinks About Basically Everything

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Key Takeaways

  • Always ask yourself how the opposite of your opinion might possibly be true  
  • When picking co-founders, try to find complements – not people exactly like yourself
  • “I think all the value of life comes from deep friendships, deep relationships, and deep work…that is where fulfillment comes from”
  • Pay attention to your first idea – it’s usually the best
  • Check out Long Barry’s Bootcamp for fitness advice
  • A book Jd recommends – The Rise and Fall of Civilizations by Carroll Quigley

Intro

Mental Models

  • Jd recalls a talk from Charlie Munger, Warren Buffet’s right hand man at Berkshire Hathaway, about mental models which really got him inspired
    • “For me, it was helpful because I’m not very smart, and so having patterns for making me smart is helpful”
    • “Mental models help me make sense of the world”
  • Charlie Munger and Warren Buffett commonly use the “always invert model”
    • After asking themselves why they should invest in a company, they ask themselves why they shouldn’t invest
    • “What if the opposite was true, I’m going to try and defend the opposite of what you just said. It allows you to uncover some interesting ideas.”

Cities

  • “There are going to be so many more cities in the future than there are today
    • “In 30 years from now, you’re going to have half a billion people moving into cities that don’t exist yet, mostly in Africa and Asia”
  • “Cities are the engine of economic growth and innovation
    • “They basically never die, you can literally nuke a city and within 50 years it’s right back and going”
  • Ross thinks residents of a city should have more equity in the community
    • Cities can help make residents richer and should be owned more by the people
    • Hong Kong is an example of a bad city because it’s owned “basically by 9 families”
    • San Francisco is another example of a bad city
      • “Something like 80% of people can’t afford to live there and have to commute in”
  • Ross spent two years in Africa and was surprised by how much Chinese money was going into the country
    • “They are saddled with debt, they will need to default or have an inflationary debt crisis to get out of it. At the end of the day, China is going to own huge swaths of the infrastructure of Africa”  
      • “I think the Chinese will run all the factories. They run middle-management, there’s no local development. There seems to be no intention to do it.”
    • “I think charter cities are a tool and a way for people to help themselves”

Why Jd Believes in Capitalism

  • “I want something that you can do better than me, and I’m excited to give you my money in exchange, and you’re excited to take it”
    • “You’re happy and I’m happy”
    • When Ross first started working at Opendoor, they paid a woman to clean the homes that Opendoor owned
      • The lady was spending about 18 hours a day cleaning dozens of homes
      • She then started hiring people to help her. She now has 50 full-time workers working for her across the U.S. and is doing great
        • “That’s capitalism in its best form”

Opendoor

  • Opendoor lets people buy or sell their homes right away online
    • Founded in 2013, the company now has 1,200 full-time employees
    • Most homes in America are the same and can be easily valued
  • When picking co-founders, Ross says to find complements, not people exactly like yourself
    • “I think a lot of co-founder problems happen when areas of expertise tend to overlap.”
    • “You need to have really clear ownership and mandates”
    • “People who are really great, only want to work on things that are great”
  • Ross was 23 years old when he co-founded Opendoor
    • Two traits that have helped Ross succeed in business:
      • Building mental models (taking complex problems and breaking it down into simpler ones)
      • The ability to place the mission over himself
        • “When mission comes first, everyone can win”
  • When a company is at 30-80 people it is in the “band of brothers phase” where “everyone is having a good time”
    • “Around 80 people, that is where things start to crack”
      • “You start hiring very quickly, the average age of an employee is usually 2 months”
      • During this phase, it is important to maintain culture by having a strong onboarding process, and having experienced employees teach the values of the company to new hires
  • Look to hire people who have a “hulk mentality”
    • “As things get harder, do you back down and quit, or do you get stronger?”
      • The harder you beat the Hulk, the stronger he gets. Be like him.

Lessons From Traveling

  • After spending over 4 years at Opendoor, Ross took a sabbatical to travel the world to think about what he wanted to do next
    • “I don’t think I learned anything”
    • “I learned that the voice in the back of your head telling you do go out and see the world is wrong”
    • “You need to shut it up by going out and doing it, but I definitely didn’t learn anything from doing it”
    • “I think all the value in life comes from deep friendships, deep relationships, and deep work…that’s where fulfillment comes from”

Your First Idea Is Your Best Idea

  • Your first idea is often your best idea, since you’ve been thinking about it for the longest
    • “Find everything that goes around that first idea and talk to all the people who are doing things that touch on that”
    • “Read as much as you can about that area, the theme is there but the answer isn’t yet”

What Jd is Currently Thinking About

  • Ross is currently thinking about housing, health care, transportation, and education
    • “Those are the major areas where everything else has gotten cheaper, but those four things have gotten much, much more expensive”
      • “If they hadn’t, everyone in America would feel fantastic”
  • “Building more housing would be helpful, we have tons of land in California” – but there are several obstacles for doing so:
    • There are little to no property taxes, so California often goes bankrupt anytime there is a recession
    • There are also environmental groups that file lawsuits on new developments because they believe it will affect the environment

Is Ross long or short on the following…

  • San Francisco: “I’m long the Bay area and very long Oakland”
    • Here’s something interesting Ross recently learned from a real estate friend – One signal he looks for when determining if any area will take off? – Where Hasidic Jews and gays are moving.
      • “And Oakland has an influx of Hasidic Jews and gays…that’s how you know an area will undergo large amounts of development”
    • Oakland is right across from San Francisco so it’s hard to imagine that there won’t be a huge amount of capital going into Oakland
  • Politics: “I’m very long local politics and short national politics”
    • “America has 7 cultures and we are going to clash”
    • “Donald Trump’s election made people far more politically aware and I think that will trickle down locally, much more than trickle up nationally”
  • Education: “Homeschooling will be a very long term trend”
    • “People who are homeschooled outperform in basically every dimension. They outperform on standardized tests, outperform on personal happiness, and it’s much cheaper.”
  • Fitness: Long Barry’s Bootcamp
    • “It’s rooted in science. High-intensity interval training just makes your body better”
    • “Your resting heart rate is going to go down, your VO2 max make will go up, you’re going to sleep better, it is just a perfect workout”

How To Tell Better Stories

  • “I think humans are tool builders and storytellers”
  • The first thing you should look at is how many people retell your story
    • “One of the most important things we decided with Opendoor, is that we had to cut through the clutter”
    • “Whatever the three-word version of Opendoor was, it had to be something someone wanted to listen to, even if they couldn’t care about startups that day”
      • “Elon Musk is amazing at this”
        • “We are going to launch my car into space, whoa!”

A Book Recommendation

  • The Rise and Fall of Civilizations by Carroll Quigley
    • “Great book” that convinced Ross the world was nearing the end but things were fixable, if people started doing things to build a better future

These notes were edited by RoRoPa Editing Services

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