Tech Brew Ride Home - (Bonus) Office Hours With Garry Tan

Episode Date: February 6, 2021

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On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. all Brian here. Once again, this is just a sampling of the office hours episode with Gary Tan. Going forward, all of the office hours episodes will be available exclusively on the Ride Home Plus feed. And this one is going to cut off halfway through, as I said. So if you want to hear

the whole thing, subscribe at tech.comcast.com. Tech. There's a link in this show's notes. But because I need to use this episode as a calling card to do some promo for the Ride Home Plus, feed, and also because I want to goose our YouTube numbers at the same time, if you want to see the full half hour, you can watch it on our YouTube page, the whole thing. I don't cut it off. Search for TechMeme podcast on YouTube and scroll down to the bonus interview episodes section and watch the video. Or if I remember, I'm going to put a link in the show notes directly to the video. But this is a one-off for future Office Hours episodes. Please subscribe to the Ride Home Plus feed. Welcome to another weekend bonus episode of the Tech Meme Right Home. I'm Brian McCullough.

Actually, specifically welcome to our second ever office hours episode, this time with the great Gary Tan. Not much to say about this one other than I do want to point out that it was recorded back in mid-December after Gary and I got hooked up at the most recent Web Summit. Otherwise, enjoy some pearls of wisdom from one of the most successful investors of this generation. All right. A good video. Someone just told me I was their favorite ASMR VC. Mm. You know what?

Let's consider ourselves recording. Your people's favorite ASMRVC, does that make you feel good? I'm not sure. I'm not sure about that. Because I mean, you know how people are always like they hate the sound of their own voice? Like, what do you think your voice sounds like? I mean, I can't stand it, but now I can stand it after doing YouTube for about a year. Yeah, I guess you kind of get used to, you know, until you start to do audio stuff all the time,

you don't really know what your voice sounds like otherwise. But, all right, my first go-to question might not be applicable to you because it looks like that you were, like working as a software engineer even when you were in high school. Like, have you ever had any other job like flipping burgers or anything like that? Or have you just been in tech the whole time? That's hell of funny because that's what my dad literally told me when I was 15. that he wishes that my first job was flipping burgers. But, yeah, I mean, tech gave me my shot.

You know, we didn't grow up that well off. And tech gave me everything I got. So I am true believer, like, you know, is there a clear mirror here for tech? You know, I am Star Trek for the next generation, tech optimist on where this stuff can go if properly thought through. Well, so that might throw a spanner in my second go-to question, which is what's the worst job you've ever had?

Like, could you even answer that? I worked at a bad startup. Yeah. And it's not even on my LinkedIn. It was that bad. It was the summer after the dot com bust. And I was a Stanford computer science, you know, as a student. And it was, I think, between my junior and senior year.

And so the dot com had already, you know, dot com boom had busted. I found an internship at a B-to-B startup that never shipped and never signed a customer and was just burning investor money for that whole summer. So it was a good exercise in knowing what bad startups look like. The good converse to that is who, if I pressed you, was the best boss you ever had? Oh, man. You know, the funniest thing is that now he actually works at. initialized capital with me. So Andrew Sather, I don't know, it's a toss-up. I work with two of the

people who are some of the best bosses I ever worked with. Jen Wolf, who's our COO, gave me my first design job. And then before that, Andrew Sather created adjacency, which was the first e-commerce, the design firm that created the first Apple e-commerce store for Steve Jobs. So I got to work with him when I was 16 years old and he gave me my first coding job writing Pearl in 1998. So both of them in various ways I've learned a lot from and that's part of the reason why I get to work with them day to day now, which is very fun. Is that a fun thing to eventually go back and give your previous bosses become their bosses? Well, my favorite thing about working with people is the best people are self-managing.

All right, you just stole another question. What is the quality that most makes you want to work with people? I mean, smart gets things done. I know that's two qualities, but when those two are in combination, it's really quite magical, actually. Because you meet a lot of smart people. They have amazing ideas, but then there's no outcome. And then on the flip side, there are people who get things done,

but maybe they do a lot of activity, but it's not the right activity. And the combination of those things is actually quite magical and sort of the minimum set to success. Well, this is sort of along that same line, but is there a quality that you found most of the successful people you've worked with have had in common?

Other directedness. What does that mean? So empathy is half of it, right? Some people are incredibly empathetic because you can sit down with them and they understand you and where you come from, but then they're not, you know, they might like let that wash over them, right? Other directedness is sort of like empathy plus bias to action.

So being able to not only feel the problems and feelings of the person sitting across from you, but then to be able to markedly improve that person's situation consistently in all interactions, which is really important and sort of the core to servantly. leadership, which I think is underplayed, especially in tech. I heard you tell a story once about going to dinner with Peter Thiel. I think you were working at Microsoft at the time, and he wants you to come work for him. I guess maybe Palantir was starting up or something. Anyway, long story short, he offers to write you a check on the spot if you'd come join him,

and I think you turned him. Now, can you tell that story? Yeah, absolutely. I mean, I was 22, 23 years old, knew nothing about technology other than how. how to build it. And friends of mine was starting a company with Peter Thiel is about the time he wrote the $500,000 check to Facebook. So he was well known. I had had him come to speak at Stanford a bunch of times. So it wasn't like I didn't know who he was. Everyone knew he was a great founder. And he said, how much a year do you make? I told him it was 70 grand. He wanted to write a check for that amount

to get me to quit my job because it was just to bring it down to zero risk. And I said no. I didn't really know anyone who was working on B2B enterprise software for the government. It wasn't hot at the time. You know, all of tech press was sort of, you know, the Wall Street Journal and, you know, I didn't read on Time magazine about, you know, selling B2B software to the government. That was a big lesson. The big lesson I think there was all the interesting things that are actually happening in the world are happening in small teams of people who trust

each other who are super capable, deciding to go work on a real problem. And most of the hot things that you hear about are basically the thing you should have worked on nine to 18 months ago. There's sort of the second or third hand retellings of things that are going to be the future. And possibly you missed it. Then again, like just as often as that happens, you know, that someone can emerge with a far better product or solution, even for something that is, far along and has a lot of competition. Like DoorDash, I think, is a good example of that. Right.

So I believe you turned him down, so I guess he stayed at Microsoft. But when a young person comes to you and says, all right, I want to get into tech, should I go for a small team, a startup, or should I go to an established company, or should I go to the best team out there? Like, what's your usual advice? I mean, if you have a choice, you know, go to a team that is growing fast that has product market fit. And then if you can get a seat on the rocket ship, you don't ask, you know, what function or what role. You just find a way on it.

And then you'll learn a lot more. And that's the tricky thing about startups is that, you know, probably nine, you know, nine out of ten of them are just not going to make it. And so it isn't enough to say, I want to work at a startup, let me find any startup that will have me. The better path is to find the startup you believe in that has the smartest possible people there. And in abstraction, that's the best thing you can do short of having a crystal ball. What's the number one way that you see founders screw up their startups? I mean, the number one thing over and over again is just not making something that people actually care about at all. That's by far in a way the number one reason why someone would not make it.

Is it because it's something they care about but no one else does? Is it because they're trying to guess what people care about and they get it wrong? Like, how are they swinging and missing? Yeah, they're often just guessing and getting it wrong. and they're not thinking through how what they're doing could actually be materially better, fast, or cheaper at the point of purchase, like at the point where a customer decides.

And then often what they don't realize is how high that bar actually is. The bar is often, you know, 10 times higher than if you just have a conversation with someone about it and you ask, oh, do you have this problem? We can solve it with X, Y, and Z. If you have a conversation, they're going to say, in front of you,

They want you to like them. There's all these interpersonal aspects. They're going to say, oh, yeah, I totally want that. And then you'll run off and build it. And then when it's time to put your credit card in here, they're not going to do it. That's the trick is believe the actual close, right? Believe when the money hits your bank account, then you know they care and they want it. And even then, the first war is how do you get them to give you money at all?

The second war is how do you keep them forever? and that second part is even harder. What truth about like human nature or like human behavior? Do you think venture capitalists understand that maybe other people don't? Like, and I'm even talking about like either the behavior of founders or the behavior of markets. Like what do what do the best VCs intuitively grok that other people don't? Shoot. If you ask the opposite question, I would, there are a lot of things VCs don't seem to get.

All right, then do it. Do the opposite. I think the thing that I'm most scared about in venture capital period is that it takes so long to figure out if someone is good. And then the credentials necessary are relatively daunting. So I actually think that people just generally rely on credentials way too much. Like they're just pattern matching. And then the pattern matches A, wrong, and then B, I mean, potentially bad for society. That's what I worry about when I think about venture capital.

It's like when Sand Hill is very, very good at funding, basically the, like frankly, people like my background, it's like worked as work, went to Stanford, worked as a startup, fast-growing startup, you know, have a network. It's like, you know, I'm from central casting is what I realize. You take all the boxes, boxes. Yeah. And that, I think, is now that I meet a lot of things. founders, and now that I spend a lot of time and ideas and I have hundreds of millions of dollars to deploy, that's what keeps me up at night, because the system has a lot of capital. There's a lot more capital coming in. In fact, the public markets are going to force feed hundreds of millions,

if not billions, of additional capital into a system that is already using antiquated and probably wrong measures of which teams are going to succeed. So that's what keeps me up at night as a VC. There's too much reliance on the resume and not enough reliance on first principles and direct experience with markets and teams. Well, this is sort of kind of a resume question, but what's the greatest resource an entrepreneur can have to be successful? And that's different than asking skill. Like, okay, be smart or whatever. I'm saying resource. Like, what is it, you know, having a lot of time, having, um,

passion for any actually i'm putting words in your mouth what's the greatest resources successful entrepreneur can have behind them i guess my time from white combinator taught me that um i don't know i don't have a good word for it it's a mix of formatableness plus plus stick to itness um it's not enough you know babe ruth for instance you know i don't know if he did this or not but um you know in what what was it game three world series against the Cubs, he walks out and he points at the stands. And, uh, you know, a lot of people do that, right? Um, but the reason why we're talking about that story today, many, many years later in a game that I don't even actually totally understand, but I remember that

story and we tell that story over and over to each other because that is what we need. It's like, you know, the thing about founders is they are able to go in and point to the stands and And the ball actually goes there. And that's a miracle. And, you know, I don't know. It's tough because it is a mix of privilege and luck. But then also the thing that you have control over is whether or not you quit. And whether you do the smart things to, you know,

maximize your chance of putting the ball in center field for the home run. These are broadish, but also simple. What do you think the biggest narrative or story in tech is right now at the start of 2021? What is going on with the public markets right now? It's a little bit crazy, right? I mean, I think the public markets are leading even the late stage private markets, which for some time people said were really crazy. They're not looking crazy right now.

They're looking like they were prescient. And so the next year or so will be a wait and see game because you, you know, as you saw, people even couldn't figure out the right price for the IPOs. And so, you know, in an unprecedented fashion, you know, watching Roblox say, we're not going to price our IPO right now. We need to see what happens is a little unprecedented. And so I think we're all checking. I'm checking my stocks app every day just so that I better understand. what's going on with the macro picture. And the reality, though, is like early stages unchanged, I think.

But the late stage, it matters a lot for quite a lot of people in our portfolio. What's the most overrated played out or whatever narrative in tech right now? And that's where I'm going to cut it off. Again, if you want to hear the rest, either watch it on the YouTube page or subscribe at tech.comcast.com.