Finding Over-Looked Talent and the Horizontal Perspective with Keith Rabois on Pod of Jake

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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

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
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Notes By EWerbitsky

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