
November 9, 2020
Finding Over-Looked Talent and the Horizontal Perspective with Keith Rabois on Pod of Jake
Check out Episode Page and show notes
Key Takeaways
- “The key principle of building a startup from scratch to success is to identify, recruit and obtain unrecruited talent” – Keith Rabois
- “Conventional wisdom breeds conventional results” – Bill Welch
- When starting a business, all details matter – eventually output catches up to the quality of the input
- If you want people to make smart decisions, they need to all have the same information
- The Horizontal Perspective – optimizing a system of variables rather than one variable
- Never asks consumers what they want – they don’t know! – use data
- People undervalue their time – it is the only scarce resource in your life and is unreplaceable
- To optimize your time, look for leverage – what can you say no to? What can you delegate?
- You become the average of the people you spend the most time with
Books Mentioned
- The Score Takes Care of Itself – a philosophy of leadership by Bill Welch
- Why We Sleep – Unlocking the power of sleep and dreams by Matthew Walker
Intro
Keith Rabois (Twitter @rabois) is a General Partner at Founders Fund and a Co-Founder of Opendoor. Keith previously served as a General Partner at Khosla Ventures, was COO at Square, and served in influential roles at LinkedIn. He began his career as a senior executive at PayPal and served as a Board Member from inception to IPO at Yelp and Xoom.
Finding Over-Looked Talent
- “The key principle of building a startup from scratch to success is to identify, recruit and obtain unrecruited talent” – Keith Rabois
- Keith looks for exceptional people that were maybe too odd or too weird for large companies
- When he transitioned into angel investing, Keith used a similar formula: what have other people missed?
- i.e. NFL parallel = drafting Tom Brady in 6th round
- “Conventional wisdom breeds conventional results” – Bill Welch
- Focus on people rather than product
- The value of finding a “barrel” – someone who just figures it out and gets it done
- There aren’t many of these kinds of employees
- You want to leverage them and increase their responsibilities
- “I try to find ways to work with people I find the most interesting and most ambitious” – Keith Rabois
Details Matter
- Philosophy – By doing every step perfectly and precisely, eventually the output catches up to the quality of the inputs
- This goes down to the font for a presentation or the way a receptionist answers the phone
- Quality inputs and decision-making can show up even in internal communications
- “When you see sloppiness anywhere then you have to probe everywhere. The more bulletproof the details are, the more you can trust people on the big decisions” – Keith Rabois
- But people will push back as they did with Steve Jobs and the Mac II – no one can see the inside of the machine, why make it look perfect?
- “Scrutinizing even the most mundane decisions leads to a culture of quality” – Keith Rabois
Transparency in Business
- If you want people to make smart decisions, they need to have all the same information
- You want to share information as widely as possible
- Different people come up with different ideas
The Horizontal Perspective
- Rather than optimizing one variable, optimize a system of variables
- Every business is a set of moves that add up to an outline at the end of the day
- However, you don’t always know the variable weights in the equation
- Example: What if you want to lower costs? – changing different variables has different effects
- cost of goods, tax rate, etc
Following Users Versus Listening to Users
- Keith never asks consumers what they want because consumers don’t know!
- Listening to users can mislead you
- Use statistics or data to understand your users
- But if you’re targeting a large Fortune 50 enterprise, you can’t really use statistics to optimize sales because there’s not enough of a pattern for statistical significance
The Most Limited Resource: Time
- People undervalue their time – it is the only scarce resource in your life and is unreplaceable
- To optimize your time, look for leverage
- What can you say no to? What can you delegate?
- Ask yourself what you most care about and do that
- Example: After hiring a personal assistant, Keith found he was able to do things he wanted 85% of the time instead of 70% – he wants to amp that up to 99%
- Minimize drag factors
- Always, trade money for more time
The Power of Good Company
- People become the average of the people they spend the most time with
- Keith’s friends reinforce these traits which are important to him: curiosity, fitness, professional ambition, being a voracious reader and having good sleep habits
- Sleep is the most important thing you can do to improve your life
- Good sleep improves performance, health, and lifespan
- Keith says sleeping eight 8 hours a day regularly is the most important thing you can do
- The better you sleep, the happier you are
The Genesis of OpenDoor
- Keith had the concept for OpenDoor in 2003 because he felt the real estate market was ripe for innovation
- It currently has a $4.8 Billion valuation
- He held off on the launch until he had the right people in place
- “A good idea needs to be in the right hands of the right quarterback”- Keith Rabois
Best People Keith Has Worked With:
- Peter Thiel – has a macro perspective on the world that is ten years ahead; he sees where the world is going
- Elon Musk – wills the future into being
- Reed Hoffman – taught Keith the value of time and how to use time to one’s advantage
- Jack Dorsey – understands business strategy and technology really well
- Max Levchin – is a technologist and business thinker with tremendous tenacity