We Study Billionaires - The Investor’s Podcast Network - TIP458: Why Billionaire Charles Schwab Invested in Kalshi w/ Luana Lopes Lara

Starting point is 00:00:00 You're listening to TIP. My guest today is Luana Lopez-Lara, the co-founder of Kalshi. Kalshi is the first federally regulated exchange where you can trade yes or no on the outcome of events. And I don't just mean financial or economic events. You're about to see what I mean. In this episode, you will learn what Kalshi is and why it's a very unique company, how events trading works, what it took to get Kalshi approved by the Commodity Futures

Starting point is 00:00:26 Trading Commission or CFTC, the first company of its kind to do. do so, why billionaire Charles Schwab personally invested in the company, why Luana and her co-founder Tarek decided to create the company in the first place, and a whole lot more. We don't often discuss things like commodity or derivative trading on this show, so it was a big learning lesson for me. I suspect you'll find Kalshi to be very interesting regardless of what style investor you are. So without further ado, here's my conversation with Luana Lopez-Lara. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most.

Starting point is 00:01:05 We keep you informed and prepared for the unexpected. Welcome to The Investors Podcast. I'm your host, Trey Lockerbie, and today we have a very special guest. We have Luana Lopez Lara, the co-founder of Kalshi. Welcome to the show, Lara. Thank you so much. I'm super excited to be here. I'm super excited to talk to you because this is certainly something we haven't covered

Starting point is 00:01:34 at all on the show, and that's because you are pioneering something totally new. So that's always really exciting to talk about and for me to learn about, and I'm sure for our audience as well. So let's kind of lay out what exactly you have done here. You have done something pretty remarkable and it seems like you guys have a very bright future. So we wanted to cover it. Tell us first of all what Kalshi is and what you're setting out to do. Of course. Thank you so much for the kind words. So Kalshi is a financial exchange that allows people to trade on the outcome of events. We have developed the new asset class called event contracts that lets you trade directly on the outcome of events. So the same way you trade

Starting point is 00:02:13 stocks, bonds, or crypto, now you can trade the outcome of events directly. Some examples of contracts you have live right now are things like, will a recession happen this year, how high will inflation get, or what will Biden's approval ratings be by the midterms? The novelties that were the first regulated exchange, were regulated by the CFTC, the Commodity Futures Trading Commission, that is allowed to do this. So how does it work, right? The way that it works, is that you can buy yes or no positions as to whether an event will happen. And the price is from zero to one. So let's say, will inflation be above 1% this month?

Starting point is 00:02:49 You can buy yes or a new position and the price is from 0 to 1. And because the price from 0 to 1, the market price pretty much becomes a probability of it happening. So let's say the market's trading at around 20 cents. It means the market believes there's 20% chance that inflation will be above 1% this month. And because this is a market price, it's a very accurate prediction of what the market's thing will happen. So that's another very exciting thing about our markets that we become pretty much the best forecasters for the events that we offer. And you offer way more than that. I mean, I'm seeing things like Chicago high temperature on June 7th, moon landing before 2025.

Starting point is 00:03:27 You have Seattle rain today or not. I mean, you have all kinds of events, not just what people might typically think of as a, you know, an economic kind of. events. So before we dig in more on that, you covered something there I want to really highlight, which was the CFTC regulation. So this is a big deal. I mean, this is a really big deal. And I think that's important to kind of not just brush over because you spend a lot of time achieving this. And so, first of all, for those who don't know, walk us through what the CFTC is and what it does and why everyone before you has failed to do this. That is a great question. The CFTC is, commodity futures trading commission. So they are the U.S., the federal regulator for derivatives

Starting point is 00:04:10 markets, the same way that the SECC regulates securities trading the CFTC regulates derivatives, commodities like grain futures, and things of the sort. And under the regulation, under the laws, events are considered commodities. So the types of contracts we offer event contracts are technically derivatives on commodities under the law. So it means we're regulated over the CFTC. So the CFTC regulates our markets. Historically, yes, people have not been able to do what we were doing now. And I think the answer is a lot, I guess, unsexier than people think it is. I think that it was really about grit and patience.

Starting point is 00:04:47 We wanted to do things the right way because we really saw this as the only way to see event contracts really reach its full potential and become a mainstream master class like stocks and now crypto and things like that. And for us, we needed to do the right way and do it regulate it. because that's the way you get real money into the system. You get brokers, market makers and institutions and things of the sort. So we really saw this as the only way to bring our mission at Kauci to reality. And we went through it.

Starting point is 00:05:16 It took us two and a half years to get regulated and to be able to launch and get our markets through. And I think the people that tried to do this before, they tried to move fast and break things and not do these things the right way and have customer protection the right way in regulation. And they ended up failing. And for us, we just really had the grid. of working it through. But it was definitely a very, very hard death.

Starting point is 00:05:36 My co-founder loves to say that it's like you're climbing a mountain and you think you're getting close to the top and then you realize a mountain is twice as tall and you keep going and it just keeps doubling and doubling because we pretty much had to work through all the concerns the regulators had with all the regulation around it to things like manipulation and gaming and the hedging utility and how these marks would actually work to be able to launch them.

Starting point is 00:06:03 But now we really got the setup that allows us to try to get event contracts to be a mainstream asset class and really reaches full potential. So looking back, definitely the right decision to go through this part, for the regulated path. Well, that's why they call it sweat equity, right? So what you just described there with the mountain brings up maybe another metaphor that I've thrown out there before? You, I don't know, called 60-something's attorneys to figure out how to do this.

Starting point is 00:06:30 and all of them were like, you're crazy, go away. For me, what I'm kind of curious about is how much you knew this was going to be an uphill battle and how much you could expect it might take years to achieve. And my analogy or metaphor was essentially going on a 20-minute car ride that turns into a three-hour car ride. Like those are the worst because you're like, you know, sitting in traffic for hours. And had you known it's a three-hour drive, you'd probably be totally cool. But I'm kind of curious if that's what it was like, not knowing it would take so long,

Starting point is 00:06:57 or did you have a pretty good idea just from all the counsel you took on? early on. Yeah. So as background, I'm not a lawyer at all. Probably the opposite of that. I was a computer science and math major in college, and so is my co-founder. We didn't really know the regulatory landscape at all, but we did from the beginning understand the regulation was the key piece to getting this to work out.

Starting point is 00:07:19 Both, I guess, me and my co-founder, we are very, you know, motivated and a little paranoid people. So we're like, we need to get the best counsel can. How are we going to understand this? We know nothing about the law, nothing about finance regulation. So we started calling a ton of lawyers and all of them, one after the other. Like, it was 65 lawyers in a day telling us that it wouldn't work. The CFTC had said no to this before.

Starting point is 00:07:42 You can't prove certain core principles, which is how the CFTC regulates things. But we kept going and kept pushing because we really believed in how good these contracts can be and how good prediction markets can be. And we ended up finding one lawyer that had worked to the CFTC before Jeff Benman. and he really started working with us and started helping us understand the whole thing. It was a lot of like, I think people usually think it's like,

Starting point is 00:08:05 it was just a bunch of lawyers and Tarek and I were like, Tarik's my co-founder, more hands-off. But not at all. We were the ones reading regulation, doing analysis, writing memos, and doing a lot of things to get this through. But yeah, it was, we did not know it was going to be this hard. I think we thought in the beginning we would be able to get it done

Starting point is 00:08:23 in like around six months. It ended up being five times that. But yeah, looking back, we'd definitely not change that. I think obviously fewer lawyers would probably have understood it a little bit better the amount of time, but also we'd probably not have done it. So I think it was the right setup. We were naive in the right way. What were some of the early wins over those two and a half years that kept you going? Because I'm sure at some point it felt indefinite, right?

Starting point is 00:08:48 Like how long is this really going to drag on? And especially with regulatory things, it was just unknown and uncertain and undefined. So what were some early wins that kept the momentum going? That is a great question. I think for us, a lot of the early wins were about just proving, like moving a step forward with the regulator. So they would have, for example, a list of concerns. We would work through the list of concerns, talk to them, and then they would come out

Starting point is 00:09:16 with another list of concerns. And for us, if the second list of concerns came and they were indicating progress and that we were going in the right direction and we were convincing them what we were saying versus just like, no, this is not something we're willing to understand or work on further. It was something that gave us the indication that we keep going. I think both of us are very stubborn people. And if we get a no or somewhat of an indication of a no that we don't really understand why it is a no or it doesn't really sound like a no and you don't really understand why we would keep pushing, I think internally we would say, unless the CFTC tells us, do not come to talk to us again.

Starting point is 00:09:56 We never want to see you again in front of us. And we're never going to let you do it. We're going to keep trying. And for us, it was really counting the mini, the tiny wins. It's like, oh, this one question out of like this huge list has gone away. So it means we're making progress and we're going the right direction. I think it was very much looking back. It was a little crazy for us to do that and keep pushing.

Starting point is 00:10:18 But definitely what got us here. Were you building along the way, I mean, throughout, were you building the platform where did that kind of seem futile just not knowing the future and whether you should spend your time on such a thing or not? So we had to build it because a lot of the process is actually proving to the CFTC that you can build the exchange and you can build the surveillance systems and you can build your customer support and all your or your operations of the company. And that was pretty much a strong part of the application.

Starting point is 00:10:45 And to start a new asset class from scratch, even things like service. surveillance that I think a lot of people take for granted in an exchange because most exchanges actually use off-the-shelf solutions. For us, we needed to build from scratch because there are no like surveillance for event contracts are there. There are no like policies and procedures around this that you can just buy. I think there's a law for options and other things like that. But for us, everything we needed to build from scratch and the regulators wanted to know that we could do everything. We could build the systems. We could do the exchange. We could build infrastructure. We could have like even funnily enough, it was before. the pandemic started. It was 2019 and we already had to do like our business continuity plan that included a pandemic planning and things like that. So when we got regulated and we got ready to launch, we were, we had everything ready because the CFTC checks every single thing that you're doing. Can you define surveillance as you're describing it here? What do you mean by that exactly? Right. Surveillance means looking at the activity in the exchange and trying to see if there's anything suspicious or some bad activity happening. So in the world of securities, for example,

Starting point is 00:11:52 you could think about surveillance catching insider trading and things like that. In the world of the CFTC, you can think about things like, I don't know, wash trading or collusion and things like that. And what we need to do is to ensure our markets are like safe and integral and then and surveillance is a big part of this because we need to look at all the data and make sure that no bad things are happening. And if there's some indication they're happening, talk to them, kick out compliance procedures and things like that. But really, the goal of surveillance is to make sure everyone's trading on safe markets. Now that you've done this, and it took two and a half years and you've built this model, it's one, in one way you could look at this and say, wow, you guys

Starting point is 00:12:31 are way ahead of the pack now because you've just put in all this groundwork and you've gotten the approval. On the other hand, you've created the playbook and you've kind of proven this concept, if you will. So does that mean, I mean, I mean, any of these bigger institutions could come out and just replicate, or is the competition, you know, harder to come by? Right. So we can think about competition in two different ways. I think you can think about startups in a way or like companies trying to get regulated

Starting point is 00:12:58 as an exchange and going from there and then the bigger players. I think for startups, it's not that CFTC has a list of rules and you need to meet all the rules and you're automatically approved. The CFC is a principles-based regulator and you're going to need to work with them and make sure you prove to them that you can comply with all the regulations, all the core principles, which is what they call the principles and the basis they have for regulation. And it's a very time-consuming, very hard process for every exchange. There's why there's only, I think, 16 exchanges like this in the U.S. On the bigger company scale, I think it is obviously they don't like CME,

Starting point is 00:13:35 like the Chicago Mercantile Exchange, if they want to, the biggest derivatives exchange in the U.S., if they want to come into the space, they don't need to re-get regulated. But, you know, But I think what really sets us apart there is like how much we know the market, how fast we are at creating these markets. I think usually exchanges take around two years to create a new contract. For us, it takes around the day to create a new contract and really have the setup. Like we're direct to consumer. You don't need a broker to access us and all of these things that make, I think,

Starting point is 00:14:02 our value prop a lot stronger. And again, they also need to work with the CFTC to get the contracts through. Every contract you need to work with the CFTC to get it through. But in general, the way that we think about, about compliance, competitors is that we want competitors to come in to really help grow the space. We say that for Kaushi to be as big as it can be and as successful as it can be, we need event contracts to be successful first and then we have to win in the space. But event contracts need to win first.

Starting point is 00:14:29 So if we have more and more people coming in and helping push the space forward, that's actually very good for making event contracts mainstream and reaching our goal. And then we're very, very excited to compete with people on actually being the way. winner exchange in the space, but a competition will be good to really make the pie grow. So creating those contracts in a day, as you just mentioned, I mean, from my limited framework, what I'm kind of hearing you talk about is like product development, right? And you're kind of, given the wide range of products on this site, meaning like markets or however you want to describe it, what does the process look like to qualify a market or

Starting point is 00:15:06 qualify a product to bring to market, if you will? So for example, you know, Seattle, brain, let's say. So are you guys batting things around like that over a conference table and saying, I think that would be a good market. And then someone says, okay, let's try it. Like, how does that work? How do you come up with these? The way it starts is, I guess, the simplest way for product development to start, which is user requests and user feedback of we want to trade on this market. We think this market would be big or a lot of just like internal research, but 90% of our markets come from users, user requests. And then he goes, and then we do sit down at a table and debate whether we actually,

Starting point is 00:15:43 our markets team are like U.S. debate champions. They were like Yale debate clubs like champions in the United States or something. So really exactly sitting down and debating whether we think the contracts can indeed be that good and can be compliant and all those things. And if it passes the initial discussion, then it goes through like a compliance process on making sure the markets are not easy to manipulate, making sure there's economic purpose and hedging utility, making sure the rules are clear and we have a good Oracle. And if we need data partnerships and licenses, they are in place, and all of those things

Starting point is 00:16:17 that for all the exchanges takes around two years. For us, it's just that we've gotten amazing at this operation for the past two years. And nowadays, we're able to do it very fast. But in general, this entire compliance procedure for most exchanges takes around. Like for most exchanges, like product iteration like this takes around one to two years. If you look around like Bitcoin futures, when they started and things like that. For us, because we just worked so hard on the operations and we really, this is our product, as you said. Like our product is not the interface.

Starting point is 00:16:47 It's not the API. It's not the app. Our product are the markets. And we take this to core. Really bring like product development procedures into market. And we were able to work on this really operations for the past two years. and nowadays we were able to get it to very fast. But other exchanges take a lot longer. All right. So now I want to talk about how this works and then more importantly, why people

Starting point is 00:17:08 should care or be interested in such a thing. So as you mentioned earlier, there's two sides to this trade. Either you're saying yes or you're no and it's something binary. You know, the outcome has to be something kind of seemingly quantitative and binary. And you said it's basically one cent to a dollar. I'm not that good at math, but what I'm seeing here, some of these are going from, you know, the yes is 95 cents, the no is 8 cents. So it looks like it's trading even where it goes a little bit over a dollar in some instances. What is causing that is a dollar sort of, you know, a rough range or walk us through the pricing, how this works, what the odds are involved, and everything you think of on the mechanics. Yeah, of course. So I guess I'll

Starting point is 00:17:48 start by the prices. So the prices go from zero to one. And the mechanics is that if you were buying one side, let's say yes at 60 cents, it means there's someone, buying the no at 40 cents. So whenever the number is summed to $1, the trade is executed because it means that you guys agree on a price and it's going to match. However, the prices that you see on the website, they are the prices that you can buy at the moment. So they weren't executed yet. So basically, you can think about it as people saying, I would like to buy at this price, but no one is really going there and matching it. So let's say a 958 market. It means you can buy a yes.

Starting point is 00:18:26 If the yes price on the website says 95 cents, it means you can buy a yes right now for 95 cents, which means there's someone trying to buy the no for five cents. On the other side, there's a no that you can buy for $0.8, which means there's someone trying to buy the yes for $0.22. So if you agree that you're willing to buy the yes for, if you're willing to buy the yes for $0.95,

Starting point is 00:18:50 you are going to have a trade with the person that tried to buy it. at five cents. It's a central limit order book like any other exchange. So basically people say the prices they would like to buy it. And whenever the price is summed to one, a trade executes. So the prices you see on the website are the ones that haven't executed because people are not willing to take the other side at the moment, but they're resting there, waiting for someone to want to take it. Okay. So how long are these products listed? Is it up until the date of the event or is there, you know, once we've locked in certain amount of trades, it closes out and you're in for it or, you know, you're locked in.

Starting point is 00:19:28 No, it goes up until the close date or the expiration of the close date that's dated on the market. So, for example, the moon landing market, which is will we land on the moon by 2025, this market's open up until we land on the moon or the earliest of us landing on the moon or the end of 2025. And at that point, the market's closed and we wait for settlement. And that's when who is right or who's wrong is determined. Before that, you can trade between the same way you trade the stock. So you can, for example, buy a yes for 40 cents, sell it for 60, buy it again at 62 and then sell it for 80. There's really just the normal trading mechanics like any other asset class out there.

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Starting point is 00:24:04 Sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. Okay. So I could buy a yes, let's just say for 95 cents. And then I could turn around and sell it to somebody else for 98 cents and just

Starting point is 00:24:31 collect a little bit of a premium that way? Absolutely. I should also mention, let's go kind of more into the why now because the 95-8 I was referencing is tied to the 30-year mortgage rate, which is speculating that it will be under 5.09 from June 3rd to 9th. This is kind of interesting. And I think people can understand this because it's part of their everyday life typically is the mortgage, right? And so what exactly is happening here? If I were wanting to buy a home and I thought this interest rate would go beyond 5.09, what would be my incentive here?

Starting point is 00:25:06 What would I want to be doing with this product? Yeah. So like any derivatives market, our goal is to allow people to hedge or allow price-baseding in a certain market. So hedging means, let's say, with the mortgage example, with the mortgage example, you're going to buy a house, you're afraid of the mortgage rate being above, let's say, X percent or 5 percent or something like that, let's say. What you do is you can come to Kaoshi and buy that it will be above that number.

Starting point is 00:25:36 So that if it is above that number, you are losing money in your real life and in your mortgage and in your financial planning, but you're making money on the contract on Kaoshi, which allows you to hedge that risks that you have in your day-to-day life. And we really see this with all of our contracts. So we see a lot of people trying to do this for interest rates. They think that if interest rates go up, they have like student loans, side to tend the 10-year treasury note or they're trying to refinance a home and they have a lot of risk associated with interest rates going up. So while they go, they come to Kaushi,

Starting point is 00:26:07 they buy a contract saying that interest rates will go up and they are protected in case they do go up by the contract on Kauci. The other side of this is really the price-based value, which is pretty much the forecasting value of these markets. Or let's say you're planning on buying a home and you don't know how the mortgage rates are going to evolve in the next year, you can come to Kaoshi and get that information because the market price for where the mortgage rate will be is the best work for what the mortgage rate will be in the next year, in the next month, for the different timeframes that we offer contracts. So the second side is really this price-based,

Starting point is 00:26:43 that every person can come and have access to the best forecast in the world for free. And our goal is hedging and price-pasing are exactly what Wall Street does, That's what big companies do with their grain futures or things like that. And what really Kalshi is about is bringing these things to everyone. If there's a big company, Fennheuser-Busch is able to go and hedge the price of barley going to high, you should be able to hedge your interest rates going up because you're going to be, you have risks associated to this. So our goal really is democratized access to hedging and price-pasing and have small businesses,

Starting point is 00:27:19 people, everyday people, just being able to make money on these things hedge. go from there. So on other platforms that roughly remind me of this kind of thing, there's a lot of gamification involved and there's like these kind of dopamine-driven events, you know, to kind of keep you engaged on the platform. I'm not seeing any of that on this. And I'm kind of curious, is that part of the regulation piece? Because it's not gambling, technically, it's really, you know, trading these derivatives and it's a kind of a more traditional approach to finance. Was that in consideration just not gamifying it or only gamifying it up to a certain point? That's a great question.

Starting point is 00:27:55 The way we think about it is the gamification is, it's kind of what you said. It's really about the UI and not about the asset class itself. If you think about trading stocks, right? Robin Hood is, people think it's very gamified. But you can, you're buying stocks. They're the same way you can go to your Schwab account and buy stocks. So it's not about the asset class. It's really about the UI and the UX and the things around it.

Starting point is 00:28:20 We really take a lot of responsibility and making event-concations. contracts, which is full, like, their full potential and making sure they become mainstream and they're very safe and they grow in a sustainable in a good way. That's why we took the very long and hard regulatory path. And for us, it's really about making sure the customers are safe. We're really building Kalshi for the next, like, 100 years. Exchanges like CME have been around for 200 years. We want to view Kauce for the next 100 and the next 200.

Starting point is 00:28:47 And for that, customer protection is very important. We can't have our users be confused. We can have our users doing. things that they don't understand or just bad behavior showing up in the platform. So it's not a regulatory thing. It's a really internal thing to the company that we're building for the long term. And to build for the long term, we can't view a UI that's gamified or not take this very seriously and event contracts very seriously, which is what we do and our mission and what

Starting point is 00:29:14 we want to keep doing. And unlike Robin Hood, you don't currently offer margin or leverage type trading. And I imagine this goes to the customer protection. aspect, or is that because this is technically in beta and you're still proving a concept and eventually things like leverage will come into play? Yes, we don't offer margin trading at the moment. I think it's, our decision is that it is a new asset class and I think it's a lot safer for people to start for event contracts to grow and for people to start trading, start

Starting point is 00:29:44 understanding how the asset class work and things I got. We have no margin, without margin in the environment and then go from there. I think we really see this as the way to start. But yes, it is rooted on customer protection. It's rooted on, we're viewing for the long term, so we want to do things the right way. Is there a, I don't know, big data is coming to mind? Is there like a big data piece of this where people will come to this platform for information, you know, to see where the market thinks these things are going, whether they're trading on it or not,

Starting point is 00:30:16 but they're using them as indicators? And who would be doing something like that in your opinion? and what is the use case for something like that potentially? Absolutely. So I am a huge market and data geek, as I told you, computer science and math. And that's one of the reasons I like finance the most when I started going into the industry. I really see Kaushi's future as also being this like data and forecasting hub where people can come and have access to unbiased forecasting data. I think one of the powers of Kau shis that it forces people to put their money.

Starting point is 00:30:51 where their mouth is. I think there's a lot of people out there that just, you know, make money on being radical and inflammatory and just saying things like you saw with inflation, like people saying it's going to be crazy hyperinflation. People saying it won't be anything. And they have no skin in the game. And because of that, you really get the market, the Kalshi forecasts to be people they're putting money behind their beliefs. They just pull more effort. They just do more research. And they're penalized if they're not doing, if they're not correct. So the market ends up being the best forecast for what's going to happen. I really see in the future, people instead of going to, I don't know, the weather channel

Starting point is 00:31:28 to see if it's going to have a hurricane in Florida, they'll come to Kau Shit to see what the market, unbiased with like real skin in the game, collection of lots of people are thinking about it. The same way with inflation that, I mean, a lot of the economists got completely wrong and didn't think if inflation gets where it is. And our markets actually, they got it right. Six out of the past seven months, our markets predicted inflation right. So if you were at Kalshi, you would not be surprised by inflation, even though it seems like the Fed and Janet Yellen and all of these are very surprised by inflation. If they checked Kashi, they wouldn't be.

Starting point is 00:32:00 So I see as we grow, really this data component is like what really can have impact on every single American because it's just better data for everyone. I think one of my goals with Kashi is to make, I mean, America and the world a little bit more data-centric and being able to, instead of making crazy comments and being super-sighted and having bias information around is people just have, you know, unbiased, good data that they can look at and prepare for the future and make their opinions and go from there. I really see this as long-term after we become hopefully the New York Stock Exchange for Events, long-term, that's how we change the world. It just that what you just say kind of begs the question of like who is the authority at the end of the day. So if the weather, for example, if the weather channel saying it's going to rain X percent and the market's saying no, it's going to rain Y percent, but it rains. I mean, it's kind of interesting to know, you know, where to take your information from and who the authority is, what the source of that information is. Like another example would be COVID cases in China. Well, there's a lot of speculation about how accurate that really is. So you're like, who is the authority in that case to win out on that bet? And what, you know, who is the ultimate, what's the ultimate adjudication of something like that? Yeah.

Starting point is 00:33:15 And that is a lot of, that was one of the biggest parts of the compliance process. The markets go through before they go live. A lot of our markets, for example, are based on government data, like inflation. It's based on CPI, interest rates, obviously based on the feds. You touched on a great point. Like Chinese, I think we have the Chinese COVID markets. I think for those, the Chinese expectation of the expectation of Chinese COVID cases or things like, for example, look at supply chain, right?

Starting point is 00:33:43 Like how crazy I guess because Shanghai was in a lockdown. So it is actually the biggest, one of the biggest parts of our market creation framework and our compliance process there to ensure that every market has an Oracle or what we call a source agency that is universal, that is very reliable. And if needed, we have to be in data partnerships with them to make sure that people that work on the data cannot trade on the markets to have any like manipulation incentive or anything like that. It is one of the hardest things about working on prediction markets. I think that a lot of the prediction markets that tried to launch and exist before, they had trouble with this. But for us, we really take it to core.

Starting point is 00:34:26 Like, for example, we use a lot of government-based data sources. We're getting to all the agreements with the private ones to make sure they're very universal, very respectful. and things like that. But it's a challenge. And I think as we grow, things will hopefully get easier. But people can rest assured. It's very clear how we're going to settle the markets. The government, the CFT, review all the markets and review that they are hard to

Starting point is 00:34:47 manipulate or universal enough and things like that. So as I mentioned earlier, there's a wide range of markets or products on this website on your platform all the way to something like the Oscars. Like who is going to win best picture, things of that nature. So why on Earth, how did that make the short list of markets? That is not something that would have come to mind for me, at least for like an initial launch of a platform. How did you determine to go all the way from to that end of the spectrum into entertainment as opposed to moon landing, COVID cases in China, mortgage rates, Oscars? Yeah. For us, we really don't see it as like a

Starting point is 00:35:26 category-based thing. We see it as like, where are the biggest events? Where are the biggest news? why do people have the most risk associated to? And interestingly enough, well, entertainment is one of the biggest industries in the world. And the movie industry is massive. In the music industry, we also have Grammy's markets. He's also massive. And there's a lot of people with a lot of risks associated to this. There's obviously the studios that are running for things.

Starting point is 00:35:49 There's like Netflix and, I don't know, Apple TV employees that are working on movies and maybe their job is on the line because of this. It's generally just a massive industry that right now, if you work on, it or if you're a company on it or if you're even selling merchandise associated to a movie or like Spider-Man, you have no way to hedge it. And for us, it's really about, okay, well, the farmers and the agricultural, the agriculture industry has a lot of ways to do this. Why is it not there for other industries?

Starting point is 00:36:19 Why is it not there for science? Why is it not there for entertainment and go from there? For us, it's really about understanding these risks. And for example, for the Grammys, it was actually very interesting conversation we had internally because for the Grammese, it was really about for us, the influencers, right? There's a lot of influencers on TikTok, on Instagram Reels and stuff like that, that they are pretty much living off music and trends and things are going on, and they have absolutely no way to hedge or do anything related to that.

Starting point is 00:36:47 And the discussion internally was, well, but are they going to come hedge? And then one of the people internally, they were very, very fascinated about this. They went around, found 10 influencers that they were like, oh, my God, yes, because I'm preparing all of these videos about Grammy's content and all of these things that I'm putting weeks and weeks into this. So for us, it's really about finding these niche opportunities on hedging and price-pasing and bringing markets to them and help go from there. And obviously, it's a cultural mark, right? Everyone watches the Oscars this year with the slap and things like that. So also interesting for that point.

Starting point is 00:37:21 That's kind of reminding me of this quote I heard from Jimmy Fallon who said he got out of the movie business because he'd have to wait like two years from film. it to it being released to know if it was any good or not. And a lot of these actors, to your point, they are, a lot of the revenue is tied to the performance of the movie, right? They'll get some initial fee up front, but then a lot of the points come from the revenues that come in after the fact. So if you're Jimmy Fallon and you're waiting to see if this movie's any good, you could buy that this movie's going to tank, you know, has some insurance, whether it tanks and at least you're collecting some income. So fascinating stuff. Where do you think we will be like five years from now as far as the markets you have today versus where this is all going?

Starting point is 00:38:02 We want to keep adding markets that are in the news, that are relevance to people at that time. I don't know what's going to be happening in the next two years. We try to have some longer term markets like inflation, like moon lending, interest rates that are a bit more longer term. But for us, it's really about bringing markets that people are interested in. They have risk associated to. They have a lot of opinions on and opinions around. And we just want to keep doing that and growing the platform and growing the use case and really getting event contracts to be more mainstream.

Starting point is 00:38:32 I think our goal five years from now is that if you're like turning on your CNBC or your Bloomberg TV, instead of saying we believe the feds are going to do this, they're like, well, the markets think this are going to happen. And people on the streets when they are, oh, wow, I'm going to travel to Miami this next week for a vacation. I'm going to ensure the weather. and I'm going to buy that it won't rain all the time and rain. I will buy that it will rain all the time so that if my week is ruined, I will at least have some money from my hedge and go from there. So for us, it's keep growing the number and the quality and the markets that we're offering, but also just growing it with the users, getting more users,

Starting point is 00:39:11 making sure we're getting the use case across and things like that, and education and all of that. Now, the only issue I would highlight there is that if I know anything about markets, they are sometimes irrational, right? And so, you know, while they're mostly efficient, not always. And so I'm kind of curious, you know, if I sign on this platform and I see that, hey, this is a really widespread, like something's 99 to 1 or something that this thing is really going to happen. That is influential, almost, I would argue, more so than a stock price because you're seeing sort of the other side of the trade in like a very limited way. So that market being an indicator is somewhat scary in a way because it just, you know, as Jim O'Shaunas say, would say you win by the arbitrage of human behavior. And so if humans are all in this herd mentality moving towards something that is really wrong, ultimately, then of course someone benefits on the other side. But if people are using it as indicators, there might be some

Starting point is 00:40:06 issues there, no? Well, what I think is interesting about the, I guess your first point about the difference between the pricing here and pricing in stocks is that events have like a true fair value. There is an actual probability that is true to, to, to, to, you know, to, you know, an event to whether it would be a yes or no. Versus stocks, there's no real, what is this company worth? Like, how much is Tesla worth or GameStop? And there's no real bounds. Like with events, there's a real probability.

Starting point is 00:40:33 So if people start shooting a market up to 80, like, let's say it's at 70, it goes to 80, it goes to 90 very fast, there is a lot of incentive for people on the other side to be like, wow, there is an insane amount of money to be made because I know, based on my research, that the fair value is 60 cents. So you can buy the other side. And you actually, there's a lot of research around prediction markets, around elections, actually, that people try to manipulate or like buy a certain candidate to see the price go up. And you just see so quickly the other market participants buying against that and bringing it back to fair value.

Starting point is 00:41:08 Because because there is a fair value in these markets, you really have a lot of very clear opportunity to bring it back to fair value. Because in the end, events have an end date where if you're right, you make money. So there is this fair value. There is this like settlement inside. It's not like stocks that if they're up forever, like maybe they will be. You don't know. You can predict. And I think that's what's actually very cool about these markets is that you do have

Starting point is 00:41:31 opportunity to combat like this type of like attempted manipulation on the market itself. The markets themselves ensure you're always around fair value, always around forecast, because otherwise there's just free money to be made. And traders are amazing in finding free money to be made. And there's a lot of research that comforts up. When I was kind of clicking around on here, one thing I was interested in, and was the volume of the trades happening. And it's not so clear.

Starting point is 00:41:55 You do see these kind of gray bars, these kind of bar charts that give you, I think, some impression of if, hey, it's been a big day of trading or not. But I'm kind of curious, how liquid are these markets currently maybe compared to where you see them going soon? We're seeing a lot of markets with like hundreds of thousands of dollars of liquidity. And that's really a lot of progress from where we were a couple months ago. A couple of months ago, I think we were the tens of thousands. and now we're like on the hundreds of thousands.

Starting point is 00:42:23 Our goal is obviously for these to be extremely liquid, as hopefully as liquid as other derivatives or as stocks. And we really see one of our biggest challenges as a new exchange is building liquidity. So that's really our strategies like starting with retail. After retail, we're going to have hopefully broker integration so that people can go through their Schwab account or their interactive broker account and trade on Kaoshi and being able to bring liquidity providers at around that same point in time

Starting point is 00:42:52 so that you really match hopefully an increase in demand with an increase in supply there and go from there. In the next year or so, we really want to at least be on the millions of tens of millions of liquidity. And more longer term, we wanted to be as liquid as any other asset class. Now, I heard you mentioned Schwab just there. And from what I heard, Mr. Schwab himself is actually an investor in Kalshi. So walk us through that story.

Starting point is 00:43:17 There's a number of other impressive people at the cap table, Sequoia, Y Combinator, a few others. Talk to us about the Charles Schwab experience, so that's really interesting. Right. So right after we got the regulatory sign-offer, when we got the license, I guess, to be a DCM, which is a designated contract market,

Starting point is 00:43:38 we went to raise our Series A, and Sequoia went to lead our Series A, and we brought Alfred Lynn into the board. And interestingly enough, Alfred actually, his PhD was around statistics and he was actually around prediction markets and exactly what we do. So he was like extremely excited from the start. He was like one of the biggest challenges he gave us even before we raised around was Alfred Dota's we needed to figure out regulation. And we were like, yes, we know that.

Starting point is 00:44:07 That is what we're working on. And when we actually got the regulatory sign off, we raised around from them. And then after getting Sequoia, I mean, Alfred is an amazing operator, right? He's been amazing at investing in companies that were really category-defining, like Airbnb DoorDash. So we really wanted his type of operator mind and also the way of thinking about this very new type of companies, very new type of product and really category-defining companies and product. So we decided to have Alfred on board. And then after that, we wanted to bring people that would give us the most knowledge we could about finance and about Silicon, Valley and how to build the best of both roles in terms of a company, a company that is

Starting point is 00:44:51 Silicon Valley Bayes and like in nature very fast, but also very stable, secure and with customer protection at its course. So we went to find this angel swing best. And I think Schwab was obviously one of our like top people that we wanted to have in the cap table. I'm sure that everyone can imagine why. And he was very, he was very excited about it. He told us it was very similar to and he was starting his company and how he saw the potential for Kaoshi. And we were very, very, extremely excited to have him on board and we still very close to him. And other people we brought into the cap table were Henry Kravis, which I'm sure needs no introduction.

Starting point is 00:45:29 And Ron Conway on the Silicon Valley side, that's also invested in almost every single successful startup in Silicon Valley. So we really, at the Series A, try to bring all the brains that we could to help us in this very hard mission we're going through. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform.

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Starting point is 00:48:47 Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income fund fund's perspective at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. It's just nice to hear that someone who's 84, like Charles Schwab, is as excited and invested and interested as he is. I think that's part of the secret, right, is that these guys are typically doing just what they love to be doing and they probably do it for fun. They certainly don't need to do it for money. That kind of brings up another question. You were on the Forbes 30 under 30. It kind of begs this question of mentorship and, you know, besides Charles Schwab, anybody else that comes to mind as sort of a mentor to you since you're so early on in your career. Yeah, so I think in the company, I like to divide it, I guess, into the investor side of things and the co-worker, like the co-workers, not co-workers, co-founders, I guess my co-founder, but also other founders, for example, in the YC batch that we were in. So in the founder side, we are very close to a lot of other founders around our stage. And I think it's less about mentorship, obviously, but it's a lot about like sharing experiences and where you're going through. And you're going to realize that a lot of things. that you're going through, they just went through last month, and that's how they dealt

Starting point is 00:50:05 of it. That's the mistakes they made, and that's how they solved it, and the problems you have they might be having soon. So you really try to stay close to the community and learn and just learn from them as much as we can. Also to Tarek and I around, you know, like being better co-founders and managers, if the company works out, which hopefully will to be a huge, hopefully under billion-dollar company, will have like thousands and thousands of employees and we need to become great managers, great leaders. And we have a lot of investors. I think Ali Partovi from Neo, he is probably the closest investor I have to me,

Starting point is 00:50:38 and he's been a mentor from the very start of the company, strongest and biggest personal mentors. He's also an investor in the company. I met him through that, but he is just fantastic. So Ali Partovie is probably one of my biggest mentors. So if we are using this platform as an indicator, a lot of what we talk on this show about is macroeconomics and, you know, one topic as of late is whether or not we're in a recession.

Starting point is 00:50:59 So if I go to your website, I actually see that the, it seems like the highest performing market, dollar-wise, is are we in a recession by Q2-2020, which is right now? And we're seeing yes at 93% and no at 10%. So there you go. You got your answer. We're going by the market. You know, I'm also looking at some of the other outperformers. Obviously, price of oil is up there.

Starting point is 00:51:22 How many number of interest rates hikes will there be? You know, some of these are kind of obvious, but it kind of, kind of curious about the markets that do perform better than others. And are there sometimes surprises in that? Yeah, we have, we actually, when we started the company, we thought most of the, we thought it would be concentrated in specific categories. So we're like, what category is going to be? Is it going to be economics, financials? And what we learned very quickly, it's actually what's closest to in the news and closes top of mind. So whatever is like front page at whilst your journal was all over CNBC, that's usually what's going to concentrate the most volume.

Starting point is 00:52:02 So I guess some examples of this, the Omicron wave at the end of the year, at the end of last year. Interestingly enough about the data point again, our markets were predicting the Omicron wave before Thanksgiving. They were already predicting we were going to hit another wave that would be a lot bigger than all the other ones. But the Omicron Wave, all of January, the most important markets and the ones of the most volume were the COVID-related ones. So it's really about what's top of mind, what people think, what people think they have like better opinion or edge on. It's very correlated to what's in the news.

Starting point is 00:52:34 Yeah. And on that point about COVID, one of the other top performing markets, it seems, is whether or not we're going to return to March 2020 COVID levels. And it's a 63 to 39 yes to no, which is a little bit concerning as well. So I hope that one's particularly wrong. But, you know, it is trending in that direction. All right. So now I want to shift gears a little bit. and talk about future billionaire Luana Lopez-Lara. So you mentioned earlier, you studied computer science. You're wearing an MIT sweatshirt for those who are listening and can't see. You studied computer science at MIT. How on earth did you fall into starting this company and getting to where it is today?

Starting point is 00:53:13 Well, I think I should add something that's even more random before. So I'm from Brazil, but I used to be a professional ballerina before going to college. So that's very completely different. But from MIT to starting the company, studying computer science and math, I think from the beginning, I thought I wanted to be more of an engineer and, you know, viewing things. My dad is an electrical engineering. My mom is a math teacher. I thought that's what I wanted to do. But very early, I realized I liked the math side, a lot more than I liked the engineering side.

Starting point is 00:53:42 And at MIT, I talked to a bunch of my professors. And they were like, well, if you like math, you like statistics, you should try finance. We'll work there. So I worked at Ridgewater versus more on the. engineering side, that I went to Five Rings Capital, which is a small prop shop in New York, mainly doing quant research, and then I went to Citadel Securities to do trading. So I tried, I guess, finance industry from a lot of different angles from the more engineering side, the more trading side, research. And I love the finance industry. I think that it's a fascinating.

Starting point is 00:54:14 I'm very competitive person. I think it's fast-paced. It's intellectually challenging. And it's, it really is finance history and the world history just kind of like everything is about how economies are moving, in my opinion. So I was fascinated by that. And I was pretty very close friends with Tarek from the very beginning of college. And he was also very fascinated by finance. And we both started noticing in all of our work experience that most trading is actually based on events.

Starting point is 00:54:43 So he was a golden tax. He noticed that everyone was, it was 2016 when Brexit was, happening. So we're calling his exotics desk. That's where he worked. Like, I want to get exposure to Brexit. I want to hedge Brexit. How do I do that? Me, for example, when I was at Bridgewater, most of the trades that we were building systems for were around like we think European Central Bank will raise rates and we think inflation will do this. That's how we're going to come up with this very complicated portfolio of things and volatility swaps and things like that to be able to put this position in the market. And we started being like, why is there not a real exchange where you can

Starting point is 00:55:18 just directly put this opinion and directly hedge this and directly have exposure to this and why are only this very, very big players that can call their Bangor Goldman Sacks and do these things. Why is it not accessible to everyone? And that's when we really got like got the, I guess, the bug in our head and being like, okay, like now why doesn't this exist? We started putting, I think, two hours a day looking into this. And then it was like 12 hours soon enough and we started calling 65 lawyers in a day. And it was really, it was never, for me, never, about starting a company, I probably was going to go into finance and be happy there. But for me, it was, I just found this problem. And Tarek and I just couldn't get ourselves outside of solving it.

Starting point is 00:55:59 And we wanted to be the one solving it. So that's why we went through and started the company. I went from there. So for those wondering, this wasn't like a COVID project where, you know, most people were baking bread. You were starting this global exchange. Now, this has been in the works for long time and you have such a pedigree background and the expertise to execute on it. I want to touch on quickly the Bridgewater Citadel experience. Was there anything in particular you've picked up from being in that ethos versus like a Citadel ethos and seeing the comparisons? Is anything kind of found its way into the Calci ethos through osmosis? Bridgewater and Citadel could not be more different culture-wise. I think Bridgewater is very much slower-moving institution, at least

Starting point is 00:56:44 from the engineering point that I was in. It's a way bigger, slower kind of institution and processes and way bigger teams. And Citadel is the other side of the culture. It's a very matter of fact. There's no cult. There's no philosophy. There's no too much thinking. And it's more about you have results.

Starting point is 00:57:02 You're good. If you don't perform, you're out. And you're out very fast. And that's what a lot of my friends that stay there. It's like a very stressful environment from that perspective. And at Bridgewater, there's a lot more of the, there's a lot more philosophy and thinking about things from first principles. And at Citadel is more of a, we just want to win and perform right now. I think both of them have a lot of impact on how Kaushi is.

Starting point is 00:57:24 I think the transparency point at Bridgewater is something that I think is an amazing thing. And I think that's something we take to core. I think transparency and having everyone's voice heard and concerns heard is very important. I think especially at a startup really allows us to move fast. and both me and my co-founder, we have an insane amount of things to do every day. We can't be on top of every single thing happening in the company and making sure that we have everyone freely bringing stuff up and trying to solve problems themselves and being transparent about issues

Starting point is 00:57:54 is something that has really impacted how the companies work so far. And from the Citadel side, we are very much a performance-based company. We want people to perform. They have goals and they need to meet the goals. We want to win. And I think especially as I said in the beginning, It's, we welcome competition and we're happy to do that in a very competitive company and competitive people.

Starting point is 00:58:14 So we really take the performance and execution side of Citadel to our culture as well. Speaking of winning, is there any competition at the moment that keeps you up at night? There's no competition that keeps us up at night. But we have a lot of unregulated, like some crypto base, some unregulated offshore kind of companies that do try to do while we're doing. But nothing that keeps us up in night, nothing that's regulated. or doing things the same way and if the same strategy we are. No one is crazy as you.

Starting point is 00:58:43 Okay, got it. So going to another experience you had in early days was this Y Combinator experience that we didn't quite touch on, but I want to cover quickly what your experience was there because I've heard mixed reviews about Y Combinator, whether it's worth it or not, you know, whether it maybe just depends on the type of industry you're going into and et cetera. But what drew you to Y Combinator? What was the experience like and what were your biggest takeaways? Yeah, so Y Combinator is a startup accelerator in California.

Starting point is 00:59:11 A lot of amazing companies came out of there like Airbnb, Stripe, Dropbox, Reddit, and I think Twitch and others. And I think Paul Graham started a little couple of other people. Paul Graham is, I guess, very famous person. So maybe they'll turn on some lights for people. But yeah, so why we decided to go to Y Combinator. So as I said, both me and Tarek, our background is computer science. and math. We had no idea how to run a company, how that worked, hiring, raising, thinking about product, nothing. All we knew is like, I don't know, statistical learning theory and like

Starting point is 00:59:48 information theory and something like that. So for us, the way we saw it was like obviously a major step from just being two kids now in their masters trying to start a company to really like legitimize what we're doing. But more importantly, it was really about getting the help and the setup and the support we needed that we needed for the future for the next steps of the company and learn as much as we could. We had a very weird Y Combinator experience because while most people at YC, they're trying to, you know, build traction, build product, iterate very quickly, get users in and show a lot of like, you know, the hockey stick graph going up into the right at Demo Day, which is like the final presentation to investors. For us, our goal was try to start

Starting point is 01:00:35 getting the regulatory process kicked out. And so for us, it was very weird. We had weird goals. It was a lot harder to try to show our progress and things like that. But the lessons we got from there were invaluable, like, nonetheless. I think that we learned a lot about hiring. We learned a lot about company culture, about product iteration, user feedback, testing, all of those things that maybe, I don't know, maybe if we were other types of majors in college,

Starting point is 01:01:00 we wouldn't have needed why culminated it. But till today, we always ask ourselves, what would Michael Seibel say? He's the CEO of YC and it was our mentor in YC. And we're still very close to YC. They help us so much to nowadays. They always, all the partners are willing to get in a phone call with you at any point in time and things like that. So when people ask me, is YC worth it? I don't think how she would be where it is without YC.

Starting point is 01:01:25 Maybe if you're a second time founder and you know a lot about a lot of things, you don't need it. But for us, it was definitely an instrumental part of. how she's history and why we're here. But as I understand it, a lot of people, why Combinator, we're also telling you you're crazy up front. And so, even for a Silicon Valley startup, I mean, that must be really something, right? So I wonder if it's from this first principles, a mindset you came from with the Bridgewater experience, just, you know, a lot of people telling you know to your face early on and you basically saying, you know, these are really smart people telling me this is a really dumb idea. And yet here you are pulling it off. So,

Starting point is 01:02:02 I mean, kudos to you first and foremost, but also just kind of curious about where that sort of, you mentioned stubbornness before, but I mean, where does that come from, in your opinion? Yeah, that's a great question. Indeed, everyone told us we were crazy at every point in time. But I think for me, the stubbornness come from a couple of different things. I think from ballet, I guess. I've always learned about, you know, sacrificing and delayed results. And, you know, in ballet, you're like working very hard.

Starting point is 01:02:34 You're almost not eating and you're doing all these things because you want to accomplish your goals. And you really see this like delayed gratification and sacrifice to achieve bigger things. And I take this to my core to today. I think that if things are very easy to be done, they would already be done or they're not that important to be done. And I think that if you're willing to put on the work and you're willing to work hard than everyone else and you're willing to tackle the hard problems, you're going to

Starting point is 01:03:00 be able to make more change and make more impact than other people. I think that for us, it was especially tricky to be in Silicon Valley because there's this general culture of moving fast and breaking things and you see Uber that went unregulated and was able to figure it out and a lot of like crypto companies trying to do this. So there was always a lot of pressure of like, why are you trying to do this this way? Like you're going to take two years and a half to even know if people want your product. That makes no sense. And for us, it really went back to, this is what we wanted to do.

Starting point is 01:03:31 This is the mission. What do we believe is the right path to get there? And we try to not listen to too much noise. I think there's second values. There's so much noise about everything. And like these companies are doing amazing. And then next week, it's the, then things like that. So we just try to stick to first principles and do what it needed to be done for the company to succeed.

Starting point is 01:03:52 And at that point in time was for us to, you know, sit down and work very hard. and deal with the uncertainty and do the work that no one wanted to do. I'm glad you mentioned ballet. I mean, honestly, when I was doing the research, I was like, is ballet a sport? I need to know. It turns out it's an art form, but you would think it's a sport. I mean, just given the sacrifice you were mentioning and the hard work and like the athleticism involved, it's really remarkable.

Starting point is 01:04:17 I love that you were able to draw from that experience and put it into your own business experience. I think that's so important to bring that element into this thing. And another element I want to talk about is your co-founder, Tarek, who also was a professional athlete, as I understand it, before starting this company while, you know, doing his own education. So talk to us about how important it is to find the right co-founder. And specifically for you and Tarek, how do you complement each other? What's, you know, what's your superpower compared to his? How does it work? Yeah. So to start with the ballet thing, 100% agreed. I think I used to train 8 to 10 hours a day on top of normal high school things like math. in science. And until today, I think it really changes how I work with the team and how I see different challenges at Kaoshi. I'm like talking about Tarek and I, I'm extremely optimistic person. He's way more on the pessimistic side. They even call us like yin-yang here in the office of like how we

Starting point is 01:05:14 deal with things. And I think a lot of my optimism really comes from from ballet and being able to know if you work, if you work hard, things are going to work out and that kind of mentality that that is very much around in ballet. But about Tarek and I, yes, we are funnily enough from completely different parts of the world. He's from Lebanon. I'm from Brazil. We have very, very similar backgrounds. I do consider ballet a sport almost.

Starting point is 01:05:40 So I think it's both, as you said. We don't care what Google says. Yeah, exactly. Yeah, a sport in our form. And Tarek was an amazing skier growing up. It was a professional skier. And both of us were very into math. So I used to do like math Olympiads and stuff.

Starting point is 01:05:54 in Brazil and he used to do like the French math Olympiads and and things like that. I think when we really complement each other is not necessarily on our skills, but because we did study the same things and we're very similar that way. But it's really our personalities and our views on different things. I think that Tarek's very good at, I think he's actually the best that if he sees one problem that really needs to be solved, it goes very deep into solving that problem and just he'll figure it out. And I'm way more of like a breath kind of person.

Starting point is 01:06:23 and I like doing a lot of different things and trying to figure out and move them forward. So in terms of running a company, it ends up working very well together because I'm better at working with different people, making sure things are moving, and he's way better at finding one thing that needs to be solved and figuring that out.

Starting point is 01:06:39 Personality-wise, also, I'm very optimistic, as I said, he is more on the pessimistic, paranoid side. What I always say about co-founders is that the most important thing is to finding someone that you really, really like, because it doesn't matter, you're going to be with this person almost, I would say like 18 hours a day, 20 hours a day for hopefully a lot, a lot of years

Starting point is 01:06:59 and you need to be able to respect each other, admire each other, and trust each other blindly. And I think that we really have that. He's the best co-founder in the world. I'll definitely not be here without him. And I think he wouldn't be here about me either. So I think it's less about like complementing skills. I think it's more about just finding the right person to go on this crazy and extremely hard journey with.

Starting point is 01:07:20 Well, you can't have two blind optimism people because then, you know, nothing gets done right now. I'm kidding. So this has been great. Hey, Luana, I really appreciate the time. Congratulations on all of your success. It's very impressive. And I am excited to follow up with you and see where this platform takes you and takes the world, really. So congratulations again. And let's do it another time. Thank you so much. All right, everybody. That's all we had for you this week. If you're loving the show, don't forget to follow us on your favorite podcast app. and please leave us a review. If you want to get in touch another way, you can find me on Twitter at Trey Lockerby. And if you really want to up your investing game, I highly recommend you check out the investorspodcast.com or simply Google TIP Finance. And with that, we'll see you again next time. Thank you for listening to TIP. Make sure to subscribe to Millennial Investing by the Investors Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses, go to the investorspodcast.com.

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