Investing Billions - E278: What Separates the Top 1% of GPs

Episode Date: January 8, 2026

What if the most powerful investment strategy isn’t optimization but making one truly great decision each year? In this episode, I talk with Joshua Browder, Founder and CEO of DoNotPay and a solo pre-pre-seed investor, about how momentum, conviction, and first-belief investing create outsize outcomes. Joshua shares how DoNotPay became a profitable, dividend-paying AI consumer company with a team of 14, why he focuses on backing founders before they look credentialed, and how acting decisively on binary choices can matter more than years of incremental improvement. We also explore why grit beats IQ, how momentum keeps startups alive, and what it really takes to be a founder’s first believer.

Joshua, I've been very excited to chat. Welcome to the How Invest podcast. Thank you so much for having me. So tell me where Do Not Pay sits as a business today. So Do Not Pay has been around for a while. I like to think of Do Not Pay as an AI consumer champion. And what I mean by that is we've helped millions of people fight back against big companies and the government. The very first use case 10 years ago, I started it as a freshman in college, was helping people get out of parking ticket.

And today we have over 100 areas of consumer issues that, we help people with, such as getting people refunds, canceling subscription, all of the areas where big companies know that people don't have the time to fight back. So do not pay as a subscription business. Consumers pay us on a monthly basis and then they get access to all of our services. And we have hundreds of thousands of customers and it's a very small team of only 14 people at this point. We are venture-backed. So it's a series B company. But given the scale of the business and the efficiency, we're actually profitable. So about a year and a half ago, we started doing dividends for our shareholders, and we were one of the first VC back companies to do that.

And interestingly, one of my friends in Silicon Valley said, a company like Google would never pay a dividend. You shouldn't pay a dividend. And we paid our dividend. And actually, I think a few months later, Google paid their first ever dividend. So very exciting. And I still run it every day. And I also do a lot of exciting investing, which I'm excited to discuss with you. When we last chatted, you said that a company should exist to make money, which sounds extremely non-controversial, but in reality, you see venture capital plowing billions of dollars into companies before they get profitable. To your point, Google just recently started paying dividends. Why do you have this paradoxical belief? And isn't that in friction of growth and market share

and all these other things that startup should ascertain? I arrived in the U.S. and Stanford in 2015. And at that time, there was Snapchat was the big winner and the big inspiration for everyone. And of course, we all watch the social network. And so all of these social media companies kind of perpetuated this myth that it's okay for companies to continually lose money for a long period of time. And then you saw Uber and other companies like that do the same.

And I think really it is a myth because Facebook at the Series A was profitable. And a lot of the best businesses actually do, and I'm seeing this now with companies that I was the kind of first believer in that are now doing quite well. They're actually great businesses. And so I think it's more of a myth.

and people realize about whether you should be losing too much money. And it's best to have a good business. What about network effects and economies of scale and all these things that you're supposed to gain as a venture-back startup, which is the reason you lose money as you're gaining these scale economies? I think that for network effects, particularly with social networks and marketplaces, it makes sense to go a little longer with kind of scaling. For enterprise software businesses, at least on a kind of gross profit basis,

they should be profitable. You're also a solo GP investing out of your fourth fund at Browder Capital. Tell me about the story of how you became a venture capitalist. So I started my business by accident because I got a lot of parking tickets and I similarly became an investor by accident. So three and a half years into Stanford, I took a program called the Teal Fellowship where they, I'm sure many of your listeners are familiar with the Teal Fellowship, but the summary is that they pay top 1% young entrepreneurs between the ages of, say, 16 and 20,

it used to be $100,000, now it's $200,000, to take a two-year break from college and start a business. And I'd already started my company, Do Not Pay, but it was more of a project during college, and I wanted to make it a serious business. And so three and a half years into college, I took the Teal Fellowship. And for me, it was transformational because I was really surprised. It was my dream to go to a place like Stanford from the UK. I grew up watching the Stanford YouTube videos on iOS app development. But I got there, and I actually, Actually, a lot of my classmates wanted to go work at Google and Facebook. And now I have some family members there.

And they tell me, now they want to be in like private equity and VCs. And so even a very entrepreneurial place like Stanford, there weren't that many people that I could turn to with issues that I was having with starting my business. And the kind of question I always have is, always have is how do you convince a 35 year old to work for you as a 19 year old? And how do you do that? it all comes down to aligning their goals with the company's goals. So they're not working for you, they're working for the company? Yeah, so, and everyone has different goals. And you have to change your recruiting pit to base on the Canada's goals.

So if it's a 21-year-old fresh college graduate, it should be all about their personal growth and how the company will help them. If it's someone who's a bit older, it should be about stability. And all of the kind of, the company will be around in five years and all of that stuff. Anyway, going back to the Teal Fellowship, I found these amazing 19 other people in my class of teal fellows who could give me advice on these very issues. And I thought, this is truly amazing.

I want to get more involved. And I was very lucky because at the time, they were looking for people to help select the next year's class. Peter Thiel was an amazing entrepreneur investor, but he's very busy. And so they have this tradition with the Teal Fellowship that every year, the current fellas help select the new ones. And they're on the ground as entrepreneurs, so they can kind of tell what's real and what's not. So in 2019, I started interviewing future to your fellows to help decide the next year's class. And so I did all these interviews. I probably interviewed close to 100 people that

year. So it's like these 10-minute back-to-back interviews. And there was one person that I interviewed that instantly struck me, struck out to me as one of the top people I've ever met, both in the interview process and perhaps in my journey so far. And that was someone called Adam Gilt. And I was instantly convinced that he was going to do incredible things. And at the time, he had just incorporated his business a few weeks earlier. And I knew that he was going to do good things. And I thought I have to get involved in some way. And so he was living at L.A. at the time, I was based in San Francisco. And so I invited him and he slept on the floor of my office just because he needed a place to stay when he was coming to the city. And I took him to

Unami Burger, which is a burger restaurant in downtown San Francisco. And I said, I really want to get involved with what you're doing. Is there any possibility that I can invest? And he said, yes, I'm doing my first ever round of fundraising in the kind of pre-preseed. If you're in, I'd love to have you. And the problem was I didn't have any money at the time to invest. My company wasn't paying dividends yet. It was before the Scout Fund mania that you see in the VC land today. But I did have one source of money, which is that when you win the Teal Fellowship, as I mentioned that they give you the 100k and that just hit my bank account. And so I thought this is the most fitting use of the prize money to empty my bank account and invest it in him in the pre-preseed.

So I put it all into him and now the company is worth over a billion dollars. So I thought this is going so well, I should keep this going. And so I decided to raise funds and I've kept that strategy of being the first believer to people who are more illegible to the market than me because I'm a founder and entrepreneur on the ground and be their first believer and go all out to help them. And then they become more obvious later on. What mistake did you make on your thesis on investing at Adam and what did you guess correctly? I could never have imagined. I've only had a positive experience because it's gone well so far. You can never imagine just how big someone will become. And today it's publicly discloses a kind of unicorn company. But I think one day it could be the sky is the

limit. And so my biggest mistake was he has exceeded even my own wildest expectations. And what's gone well so far is obviously the investment. Even that investment alone, I have this investment philosophy that life really comes down to one big decision a year. And that investment alone is enough to retire just personally. But obviously, I keep doing this because I love it. And how can I make more decisions like that? Because it was a kind of gutsy move at the time to empty out all my savings to put it into this guy. Tell me more about this one decision a year is what what's important. How do you distill that? How do you act on it? And what makes you feel that that's true? People spend too much time over-optimizing for the 5% on the margins. Can I be like

5% better here? And they spend so much time thinking about that. But really, the best decisions are binary. Should I have invested in Bitcoin in 2015? Should I have done the owner investment? Should I do all this type of stuff? Should I start my fund? And those are the decisions that really count. And so I try and always take a step back and think about, I should spend more time on binary decisions versus optimization style decisions when investing. And that's really what pushed me to start my fund. Actually, that in and other self is an interesting story. There was an investor, there was another company I invested in that did quite well with my own money. As you may know, when safes convert, all of the investors in a company get kind of this disclosure about the round

kind of converting. And you can see who invested when and how much. And there was an investor that was coming into the downstream round. He saw my kind of thing on the schedule of purchases that I got into this other company quite early, in any case. And he said to me, wow, you're going into this really early. If you ever, I would love for you to kind of show me more of these. Please, you know, I want to con-invest with you. And I said, and I was doing a phone call with him. And I just decided at that split second, I said, well, I'm starting a fund.

If you're interested, I'd love to have you as my LP. There was no kind of just even thoughts of a fund before this phone. call. I decided on the phone call and he said, well, I'm in. I'd love to invest 200k in your first fund. And that's how I got started with my fund. So that was another decision where it's just a split second moment that kind of changed my trajectory. So interesting. I hear what you're saying at the same time, I wonder how almost these impulsive decisions, what kind of hit rate you have on that. And how do you marry making these kind of impulsive or in the moment decisions with good thought process and good rationale? I would say you kind of look for the upside.

in someone. And so my business model with my fund is really being the first believer to people that aren't credentialed. And you might think, well, that's teal fellows. And I do see a lot of teal fellows because I still interview them to this day. A prospective teal fellows sometimes make even better investments because they're earlier. But now the teal fellowship is the establishment. And oftentimes the entrepreneurs I get, I back become teal fellows later and it becomes this kind of post facto narrative. But really, I'm trying to back people that I believe will do amazing. things and they have the skills to do that. But they really take none of the boxes that even the young people funds look for. And I like to have this thing, it's better to create your own

momentum than chase the hype of others. And so I think about when I'm deciding to invest in these people, how can I bend the world to make it a success versus is it going to be a success or not? And that can involve various different things to create momentum. Oftentimes they're not from San Francisco. So I say, move into my spare bedroom, move to SF. I joke with them that their evaluation doubles the second they move to San Francisco, which is probably true. If they're not even a U.S. citizen, I say, well, the 01 visa for extraordinary people exist. Let me put your visa on my personal credit card as a gift. Let's get you the O1 visa and just get them in the momentum thing. And I say to the entrepreneurs, it's your job to build the product. It's my job to help

with everything else. And so for me, it's not really about a prediction decision. It's about can I push them in the right direction? It's almost an operationalization of Dan Gross's pioneer. That's right. I would say the difference is. is there's a lot more depth. It's a one person accelerator. So I go all in on one person at a time and then they get momentum and then I get them the institutional seed. Someone comes in and takes moral responsibility for the company and I move on to the next one. It's like Y of one. And because of the one person, it's a lot more depth than any potential accelerator. I mean, YC now is like hundreds of people every year and there's a lot of dilution on terms of the effort and there's only

so much that they can do for you. But with me, I go all in and I, and I, I go all in and I, And the people I introduce them to, I say, this is my one. You should really meet him. And I only have one spare bedroom as well. So yeah, a force constraint. You're meeting these people so early just to give content. You're meeting them pre-accelerators. It's literally, I think, probably some of the times they don't even have an incorporated company.

Are you looking just for IQ and grit? Are those the two variables? What other variables are there? IQ, I think, is overrated. So there's this myth now that these Olympic math medalists in high school make amazing founders and there's so many resources from a lot of different funds. If only we can have someone on every college campus to just get these Olympic math medalists. And there's this myth that there's like these special people who are just born special and are just so special that you just have

to catch them. I think IQ is important. You definitely want above average. They know how they need to know how to play the game and build their business. But what you said about grit is much more important. Being an entrepreneur and I can speak about my own kind of experience is like eating glass someday. It's like amazing other days. But some days, of course, there are. is always the temptation to give up. And unless they truly have a connection to the problem and have some sort of chip on their shoulder that they can't give up,

then they're going to give up and it will be a bad investment. And so one of the things that struck me about Adam Gild was he originally started owner.com for his mother. His mother's had a dog walking business that was destroyed in the pandemic. And he started it because she needed to get online. She couldn't, people wouldn't just show up for the physical dog walking. working business anymore. And he was the difference in making it between a failure and a success

so his mother could afford her livelihood. And that is the type of kind of chip on the shoulder mission that I look for. This is not related to Adam, but maybe other ones, they maybe have something they really want to prove in their childhood or something like that, where they won't give up. And actually, if I index all of the people that I've met over the past 10 years, including people, I've interviewed thousands of prospective Keelfellas, literally over a thousand now over six years. And friends from the Bay Area, friends from Stanford, I can't tell you a single person that if they were honest and they never gave up, they didn't achieve some level of success. Now, of course, it varies. But. And you're saying not only on that company, but within a

decade post. Or are you saying specifically on that company? If you've been considering futures trading now might be the time to take a closer look. The futures markets has seen increased activity recently and plus 500 futures offers a straightforward entry point. The platform provides access to major instruments, including the S&P 500, NASDAQ, Bitcoin, natural gas, and other key markets across equity indices, energy, metals, Forex, and crypto. Their interface is designed for accessibility. You can monitor and execute trades from your phone with $100 minimum deposit. Once your account is open, potential trades can be executed in two clicks. For those who prefer to practice first, Plus 500 offers an unlimited demo account with full charting and analytical tools.

no risk involved while you familiarize yourself with the platform. The company has been operating in a trading space for over 20 years. Download the plus 500 app. Trading and futures involves the risk of loss is not suitable for everyone. Not all applicants will qualify. No, I think the next company or something, they achieve some level of success. And typically with the company, it's a surprisingly high hit rate if it truly is their life's work. So the number one thing I look for is, is it their life's work?

And do they have a chip on their shoulder to never give up? And then beyond that, a lot of people ask me, how do I pick? And I have this quote from the Supreme Court. You know it when you see it. And I think it was related to pornography. And so you can't exactly quantify it, what it is, but there's some general heuristics, which is that I look for a top 1% skill that they've exhibited during their kind of teenage years that make them demonstrate an extraordinary ability to execute.

And different generations of entrepreneurs have different ways to prove this. So I started coding around age 12. So this was in the kind of early 2000s and 2010-style era. And back then, the most exciting thing in 2010 to like 2013 was jailbreaking. So like selling themes for gel-broken iPhones and software on the city app store, which is the unofficial app store and things like that. Then the next generation, maybe like Adam Guild's generation, and there's an entrepreneur called John Andrew, who was his first investor with Wonder,

they really focus on Minecraft service. And you would see with, actually, with both of them, they were making, in some instances, six figures every month, renting out Minecraft service. Then the next generation, like WOP, WHOP, which is now publicly disclosed to be close to a billion dollar company, I think is $800 million. They were doing sneaker bots. So bots to snag sneakers before everyone else. Now you're in the Roblox generation. And actually, maybe the joke is we've skipped all of this intermediate stuff. Maybe there are 13-year-olds on X now who actually have serious MRR for SaaS products.

So maybe now they don't even do anything in between. They just go straight to the staff. And there is not that they have an idea, it's that they're able to take an idea from beginning to execution to money in the bank. That entire life cycle shows that grit, shows that innovation, shows a lot of the traits that will make them successful as an entrepreneur. And I look for them being exceptional in something. So that can be engineering.

I was lucky to back the first engineer, sorry, the youngest engineer at Amazon. when he was 16, and obviously he's a top 1% engineer for his age, in my opinion. But it can also be distribution, like the WAP founders or Adam Guild, who have more experience breaking through the noise in a very crowded world. And that can sometimes be even more important. Yeah, Peter Thiel now calls himself a distribution maximalist. Yes. Last time we chatted, you said that startups are momentum machines.

What did you mean by that? So at the pre-preseat, when the company is on life support and it incorporated a week ago, there's only three reasons why I think they fail. And it's very simple. They run out of money, they run out of hope, or co-founder disputes. Co-founder disputes can be managed. YC has done a very good job about educating the ecosystem or investing and things like that. So I'm less worried about that.

And you can kind of tell if they hate each other, at least initially. Running out of money is also not really an issue at my stage of investing because I give them kind of enough speed that they typically almost always raise some downstream funds. is the running out of hope that's the biggest thing. And so the number one thing that I do for the entrepreneurs I back is every week I want them to feel like they're making serious progress and it builds over time and it's like an escalator of momentum and credibility. The first step on the escalator can even be they decide what the name of the company.

If they get a top tier name and domain name, that's a great first step. Then they build their product, getting kind of a test version of their product out and then getting their first customers and then it becomes a snowball where they make their first hires, they raise more money, they raise more money. And one day they become a unicorn and they have 300 people working there. And the snowboard is just going so fast down the mountain that it can't be stopped. And so I really think it's all about momentum. And when I'm evaluating, I'm like, can I give them enough momentum to make it a big outcome? How does the role of the founder change pre and post momentum? Is it a fundamentally different role?

Yes. And I saw this with my own journey with Do Not Pay. free momentum, you want a kind of product expert, someone who's solving a real problem and amazing with the product. And that's a very important skill to have even throughout the life cycle of the company. Like Dylan Field is still in the weeds with Figma and he's making an amazing product today. But after kind of you have the product, it becomes much more about building an organization. Can you hire a lot of people? Can you raise a lot of money? Do you know the exact things to say to investors and people kind of have to scale themselves to building an organization. Do you believe that the founder should always be at the helm of CEO and these

founder-driven startups as they scale? Or do you think there's a room for Cheryl Sandberg in certain situations, the COO, and how does one know? I think if the founder's heart is in it, they are always the best person running the company, at least nominally as CEO. The question is, if their heart is not in it, then of course, if there's an expression, if the jockey is not interested in riding the horse, then the horse should get a new jockey. So, It's up to the founder. I think that if the founder, and it truly, they believe it's their life's work, they should always be running their company. So it's up to them. But of course, if they don't want to do that, then someone else can come in. I think when someone else comes in, it's kind of a salvage situation. You're kind of picking up scraps. And so it's best to focus on the ones where there is this true alignment. So whatever the founder wants, really. That's kind of the linear Tim Cook to Steve Jobs, where Steve Jobs created this compounding machine. And Tim Cook is the professional manager. that could only do so much. There's no asymmetry left in the company. Yeah, but there are

counts for examples, like Uber, I think, has done very well, although that's controversial, I guess, in my circles. Microsoft as well. Yes. There's a lot of people who kind of read a lot of books and like study the public markets and apply those to their day-to-day operations. For me, it's just about, you know, moving them out of my spare bedroom and getting them a seed round so that they can be a success. And I'm really a tactical thinker on a day-to-day level. You brought up this concept of founders doing their life's work. Distill that into a couple examples. Give me a sense for what that even

means. There's an entrepreneur I backed who their family is from California and they were impacted by the fires and insurance and things like that. And they started an incredible insurance company to automate insurance based on their personal experience. Something like that. So it can be from

their family, it can be from their life experience. For me, I'm the type of person to wait on hold for four hours to save $20. So I'm Mr. Do Not Pay. and I look for that level of connection with the people I back. And there's two things. So it's connection to the problem

and that's important and then connection to wanting to build a big outcome and that can be for a variety of reasons. Maybe they hate their sibling and they just want to like do more than their sibling. There's all sorts of reasons people want to build something big and I don't mind what the reason is. I hate to say maybe their parents weren't that nice to them.

Who knows? But they have to have like this delusional sense of never wanting to give up. plus a deep connection to the problem. I need this ego attachment to winning. How do you suss that out in interviews and when you're deligencing a startup? How do you figure out that psycho-analytical aspect of a founder?

So I think the reason people like me to do interviews is because I'm very cynical and I can catch all of the things that other people don't catch. And so when I interview, I did not just heal fellowship, I interview for other programs as well and help up my friends with their different programs and events. and someone might have all the credentials.

So they went to a top school and they even have a top VC firm that back them and they have all of the, they worked at the, okay, they went to a top school, they worked for a top company, they have a top VC firm that back them. And I go through everything, and I think that they're not real.

And it's the little things that you kind of pick up on, and so it could be to do with work ethics. So when I meet an entrepreneur, I say, let's meet, let's meet 10 p.m. tonight. like 10 p.m this Saturday and they'll say well how about on Tuesday and it takes like a week to even schedule with it and so and then you meet them and it's like I go through the product and if they're post launch sometimes these entrepreneurs they do actually have a few thousand in monthly revenue I say show me your metrics and they say I don't have that on my phone what type of serious

entrepreneur doesn't have the stripe app on their phone so the best ones they just know it they're like go through everything like know every detail and it's really about their attention to detail and their work ethic and you can kind of build up signals with kind of what they're doing. So in another way,

it wouldn't disqualify them from being a middle management employee at a Fortune 500 companies, but it's disqualifying when you're trying to be a founder. You need that edge. Yeah, and I back first-time founders. And so sometimes they can be 28

or they can be 18. It's not like this age. That's another thing everyone gets wrong about young founders. They think it's about the age. Really, it's about the grit of being a first-time founder. And the reason is,

If you back an 18-year-old high school dropout, the first thing they'll do is they'll build the product and they'll get customers. If you back a 10-year-old middle manager, they've been a middle manager at Google for 10 years, the first thing they'll do is I hire 10 people, and those 10 people will probably hire five people each as well, and it'll be an endless scheme of hiring. And so it's really about the first time kind of grit and hustle with low lifestyle burn. You invest, I think you called it pre-pre-seed. I don't know if that's a technical turn that you use, but pre-precied.

How do you think about portfolio construction? How does that differ from, say, a seed fund or a Series A fund or other types of funds? Every fund I want to get better. And I'll go through my journey and how this led to what I want to do with my fourth fund. So my first fund was $2.5 million. And it was really just about finding smart people I know and giving them $100K. There was no portfolio construction or anything like that. And it was really just heel fellas and my classmates at Stanford.

My second fund, I said I want to diversify the deal flow. I want to build kind of these embedded networks beyond Tiel Fellowship and Stanford. And I started hosting my own events and getting really ingrained with different communities. My third fund, I said, okay, I'm going to start focusing on ownership now. My second fund was only $7.5 million. And so if I did 100K into a great outcome, it would more than return the fund. And I wouldn't have to worry about that. And I saw that actually with Prepared.

It was my first kind of DPI exit, where I put 5% of the fund, $350K, quite a small check, and it returned more than half of the investor capital of the fund when they sold to Axon for $800 million a few weeks ago. But my third fund, thank you. My third fund, I said, I'm going to really start focusing on ownership because that was a $13 million fund. So I started really trying to get 5% plus ownership into the company I was investing in. And I really did two types of investments for my third fund. I did these like $110K at 2.2 style investments.

I was buying like 5% of the company for $100K. And then the second one, second type of investment I made was like reserve style investments where, like, I put in 15% of the committed capital of my third fund into owner at the Series A, which was a great investment because it's now a unicorn. But I realize that the opportunity cost of reserves is huge. That is like 20 precedes. And so I realized that the value creation on the preseeds side is so high that I should spend all of my time. doing these like super first believer style checks. And so for my fourth fund, I have no reserves. The average entry price across the entire fund so far I'm six months in is five million evaluation. And I think that that's really the way to go.

You either want to be really big platform like Thrive or A16Z and kind of double down when things are obvious or you want to be kind of bay of incorporation in the trenches. But there's no real room in between in this market. And so that's why I set the strategy I have. have set. I keep on thinking about this thing that you said, the one decision per year that matters, you seem to really have this distilled into practice. How do you go about looking for these decisions? How do you go about knowing that it's one of these potential decisions? And how do you practically apply that principle to your life? I could do a lot better job. I say this on a

podcast that is by one decision a year. But I get, like most of us, I get caught up in the weeds every day. And so I try and take a step back and I ask all the entrepreneurs, I back, And when I interview them, I say, what are your goals next three months, six months, one year? And so I try and do this for myself. I try and set quarterly goals, both in terms of business and in terms of life as well. And I think having intentionality around one's goals is really good. And I'll tell you one thing on the kind of entertainment side, I have a really good friend. And every quarter we say we want to do one really unique life experience.

And we set like a big quarterly goal for that. So I think setting goals is really important because it allows you to take a step back. two podcasts that really changed how I think about things fundamentally. One is Ryan Hoover, product hunt. I don't know if you know him, a great guy. And also, more importantly, a great thinker. And he thinks of everything like products, shockingly. And he tries not to do things that are just processes,

something that takes like 45 minutes. If he's doing it four or five times a week, he'll create a product on it, some kind of script or something to productize it, to save the space. Because I think one of the things that stays, that gets in a way of doing these big things, things is the short-term task, these highly urgent, highly non-important tasks that keep on compiling.

And I think coming up with these ideas and some of these ideas on what the next big thing itself needs to be done in a state of having energy and on a clear mind. There's a Chinese proverb, you cannot fill your cup until it is open. And then the second one, Dave Fontnot, from HF0, so they've productized this ability for their startups that go through their incubator. to really go into monk mode and focus all their time and energy on solving their number one task. And the way that Dave explained on my podcast with him is Sam Altman is very good at this. So Sam Altman was on an interview, and he was asked,

how do you go about allocating your compute between SORA, chat GPT, and other products? And he said, well, actually, that's a micro-optimization. I focused all my time on how do I get more compute. And then he corrected himself and he said, well, actually, now I'm more focused on energy policy. because energy policy is what's going to bring more compute, which is going to help allocate the compute. So it's not even, the reason I love that example so much, it's not that actually the optimization is a trivial thing.

It's probably 20, 30% compute could be optimized. It's that he's focusing on the number one thing. And the way that Dave puts it is the number one thing keeping businesses from solving their number one problem is their number two problem. It's not these like number 15 problems, which most people could see as distractions. It's the most important thing in the business, except the most important thing in the business.

And I've been thinking a lot about this and just the way that our brains are wired not to really focus on these power law decisions and how to go about operationalizing. So I'm also trying to operationalize that into my life as well. I'm a big fan of what Dave is doing with HF0. And it's interesting you mentioned that example about choosing which model because one of HF0's biggest wins is open router, which does exactly that. So actually makes the decision for people. But on the other hand, okay, the counter argument is you have to, so the goal is important to be big, but you do. have to think tactically. So maybe the goal for me when I first invested in Adam was I want to kind of be the first believer into these incredible companies and build a fund and all of this stuff,

but the tactic is every day there should be these small steps. So I think it's okay to think small if it's tactically, but the number one goal should be overarching. You truly have to start every day from first principles, which is what is the most important thing? Sometimes it's writing an email because you need that meeting. Sometimes it's the most short term thing that seems highly unscalable. And sometimes it's sitting back and spending 20 hours coding on a script. They'll save you 20 hours in the next month or whatever that. They'll save you 200 hours in the next year. There is no necessarily operationalizing principle that you could apply to every single situation. But it's so important to remember that even between the number one most important thing

and the second most important thing, sometimes there's a gap of 100x and it's counterintuitive. On that note, this is an absolute masterclass on pre-pre-seed. I learned new term today and how to build those businesses, how to build a profitable venture-scale business that distributes dividends, which blows my mind as well. Thanks so much, Joshua, and looking forward to continuing this conversation live. Thank you so much. That's it for today's episode of how I invest. If this conversation gave you new insights or ideas, do me a quick favor. Share with one person in your network who'd find a valuable or leave a short review wherever you listen. This helps more investors discover the show and keeps us bringing you these conversations week after week.