November 9, 2020

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

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 6^th 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

decision making, decisions, show notes, startups, talent, time management
Notes By EWerbitsky