The Crazy Story of Google’s 7 Angel Investors

0:00 Today, I'm tell you about сеven strangers. Who made the greatest investment of all time. I feel like I could rule the world, I know I could be what I want to. I'm putting my all in it like my day song on the road, let's travel next to the game. I'm just gonna st I'm gonna take you down a road here. Alright, so I've been down this rabbit hole, dude, for the last I wanna call it six hours preparing for this podcast. Because I just got obsessed with the

0:29 Random story and lore. of the first people that invested in Google. This is crazy. So this is the story of all the people who invested early at Google. And the the lessons from this are not about investing in Google. This was like, you know, 20 years ago. But How crazy.

0:45 the world of angel investing is and how much you can almost create your own luck. And I want to show you how these people created their own luck. Step by step. So first let me show you something. And if you're on uh iTunes.

0:58 Go to YouTube right now. You're gonna wanna see my little Pown I made for Sam. All right, Sam, check this out. Do you recognize this building? Just

1:07 Probably something in P downtown Palo Alto. What you're looking at. is one six five University Avenue, also known as The lucky office, also known as the Karma Building. Yeah, you might recognize a little better here when you see one of the companies that was started here. So Google was started here, before Google was started there.

1:26 PayPal was started there. Before PayPal was started there, Logitech was started there. After Google was started there, a company called Danger was started there, sold for five hundred million to Microsoft by the guy who created Android right after that. This office is legendary. Who's in there now? Well, it's had a little bit of a cold streak recently. And um it's kinda like Ed Sheeran says. Ed Sheeran believes that rooms have songs and he's like once

1:49 A studio has been mined by like four or five great artists. It loses its magic. It's there's no more songs left in the room. That's kind of what's happened to this office now. All right, I wanna take you through the first few people that invested in Google and how it happened. Do you recognize this guy here? Do you recognize either of these two guys? The guy on the left is Sergei. He's one of the founder. Is that Sergei or the other guy, Larry? Yeah, that's Sergey.

2:14 Sorry, and the guy on the right is that Eric Schmidt? It's not Eric Schmidt. Andy Bektelstein. Does that name sound familiar?

2:22 No. Maybe if you just look at these murdered out Guys, these murdered all red corvette from the early nineties here. This might ring a bell or two. What you're looking at Or some of the OGs of Silicon Valley. These are the founders of Sun Microsystems. Do you know what Sun Microsystems did? It was one of the first uh big companies, was it making microchips? Work stations, computers, basically. Okay. And they made their own chips also. They they ended up making ships, they ended up making their own operating system, they ended up doing a lot of things.

2:52 These guys were like the OGs of the OG. That first guy, the Indian guy, that's Vanode Kosla. So that's Vinod Vinod Cosla, there's Bill Joy, there's Andy. And then there's Scott McNeely. All right, so these are the four founders of Sun. Dude, by the way, for the record, they look dope. They look dope as hell. Corvette and the flex, that doesn't exist anymore. And I think it's fantastic. I think this is great. First of all, they're all on cell phones. Guess what? Cell phones hadn't been invented yet. So I don't even know what they're holding. There's like a corded phone that gets running into their car with a little, you know, like the spiral cord. Anyways, these guys are awesome. So

3:25 And he wakes up one morning and he's got an email in his inbox. And it's from two Stanford students, Larry and Sergey, the founders of Google. And they're pitching him uh on an idea for a new kind of search engine. You know, the way that search engines worked at the time was there were these Uh Ass Jeeves, there was Alta Vista, there was Yahoo.

3:44 And all of these companies back in the early nineties, they were You know, search engines that had some combination of Manual curation. So they had like editors picking what goes up front for people. Wh what how do you find what you find? Or you would search and it would just try to match the words that you're typing to the website. And these two PhD students said, Hey, we have a new way of doing this.

4:04 Called pay drink. And what PageRank does is it basically says this is genius insight. The genius insight was of Google was that instead of just showing you what our editors say is the right answer when you search for murdered out red corvette. Instead of s just giving you a a word batch for it. We're gonna show you a link.

4:24 To the website that other people are linking to. Social proof, right? So if other websites are linking to your website, that means your website's probably pretty good. And the more important those websites are, so like let's say the Wall Street Journal links to you, that matters more than if Sean's website links to you. And they had this i insight that they could create better search results this way. They said, we'd like to show you. And so he says. I'll see you tomorrow morning, eight AM. He sees them, they pull up in a parking lot.

4:50 He's in his uh Uh the story says Porsche, so maybe one of these is a Porsche. One of those is a Porsche. Okay, great. So as you can tell, I'm a car guy. One of those po is a Porsche. That's Andy's car. Larry and Turkey show up, they have a little laptop. And they are trying to show him a demo of Google. And they show him they say search for something, he searches for something

5:07 And the results come up and it's magic. The results are way better than you would get out of a traditional search engine. And they start telling them their their thesis and what they're gonna do and how they're having they're thinking about raising money to go actually turn this into a company. And he says guys There's a lot of things we could talk about right now.

5:24 But I think it's easier if I just give you money. And he goes back to his Porsche and he comes back. With a checkbook. He writes them a check for a hundred thousand dollars and he writes it out to Google Inc. And they're like Google, uh they're like, Hey, uh, we haven't even incorporated the company yet.

5:40 And he goes. Doesn't matter. And they go, but what about valuation? He goes, Guys, this is the best idea I've ever seen. Take the money, start building. And he leaves it, gets back in his Porsche. Drives away.

5:52 And he doesn't even know how much of the company he's just bought because he didn't even agree on a valuation, a number of share price, none of that. She invests the money. He walks away. He invests at a ten million dollar valuation. Google today is like Multiple trillion dollars, right? So we own two percent.

6:06 He owns two percent of this company. He doesn't even realize this at the time'cause they haven't decided on evaluation. He's so excited about this company. And uh if you remember the four levels of luck, he's basically has that luck f uh favors the prepared mind. He knew when he saw this company that this was he goes, This is the greatest idea I've ever seen. And um And this is the guy who created Sun. At the time, he's the he's like the man, right? This is like if Elon saw something and invested in a company.

6:33 He's like, no, this is the best product I've ever seen. And this is the guy that made Tesla and uh you know SpaceX is building rockets. He's like, No, no, no, this is the shit. So Andy does that, and he's so excited, he goes and he tells the next guy. In our story. And this is the next guy. Do you know who David Sheraton is? He's another OG, like Cisco or something like that. Or Zoo one of these like big things that I don't even know what they do, but they have a huge building. Arista network. Okay. He also invested in I think VMware that sold to Cisco for seven hundred million dollars.

7:03 So I I took the screenshot off of Google, it says the quiet billionaire. Oh, I forgot to say Andy's nickname is the Golden Boy. Well David Sheraton's nickname was he was the billionaire professor.

7:14 This guy's a professor on uh at um at at Stanford. But he's super wealthy, like a multi billionaire. He's also on many lists as the cheapest billionaire, the top 10 cheapest or most frugal billionaires you'll ever meet. Uh a little quote from him. on it. They were like, dude, you're a billionaire. Why don't you like you ride your bike everywhere. You don't even have like a fancy car. You still live in this old house that you lived in before you got rich. What's the deal? And he goes.

7:40 Honestly, I kinda hate the idea of living like a billionaire. He goes, I'm actually pretty offended. by that sort of thing. You know, the c type of people that live in houses with thirteen bathrooms and so on. Something's wrong with those people. And this is David Sheridan. He gives away tons of money. So he's given away, you know, tens of millions of dollars to universities, to schools, to education, to philanthropy, but he himself just rides around like a doofus with a bike helmet out on his old bike and he just that's how he lives his life. And he's great. So can we can we just say really quick that the professor billionaire Type.

8:10 I think of all the billionaires, they might be one of the best. Maybe your favorite? I think I thought Criminal Billionaire, like Silk Road type shit was good. Those are cool. Those are cool, but they're not aspirational. Like I want to be friends with them. But like the aspirational one is the Professor Billionaire, you know, the guy who started Renaissance, the big hedge fund professor billionaire, Ed Thorpe, uh was a professor billionaire. Those are the best billionaires. But what about I thought you love like the Just the ruthless tycoons. The the ruthless.

8:39 They're fun to read about. They've got great stories. But if you could be anyone You'd want to billionaire. You w the professor billionaire is great. So Andy tells David Sheridan, he goes, Hey, you gotta talk to these guys are at Stanford. He starts, uh, he meets the guys, he also writes a check in the same round. Again, like hundred, hundred fifty thousand dollars. So he he puts it in. Okay. So now And was he a billionaire when he made that deal, or was he just successful? Not a billionaire, but successful. He had started a company called System. He had uh and eventually he does create Arista Networks, which is a multi-billion dollar company.

9:08 But at the time was like, you know, let's call it probably had tens of millions of dollars. And he is really rich now. I just Googled them. Holy crap. Yeah, like ten billion plus, right? Twenty billion. Like closer like really rich, like top one hundred rich. Yeah, he's b him and Andy, both of them. They they both are now.

9:27 So uh he this guy's made this guy ended up making over a billion dollars just off his Google Shares. Okay, so he meets David. Now Who's the next person that finds out about this little little company called Google that's started by these two students uh on campus? Well, David goes to a holiday party. And at the holiday party He meets another person.

9:45 Do you know who this guy is? Yeah, Ryan Conway. Ron Conway uh this is gonna be a little bit of a long session because Ron Conway is a goddamn legend. And I kinda knew Ron Conway was the man. I've actually met Ron Conway before and I just he just has this presence, he's got a bit of an aura about him. But is he like a forgetful professor type? 'Cause like where he's like always taking notes and he's like always moving and doing stuff and he forgets stuff. So like this picture he's got this leg uh yellow legal pad when I met him, he also had the yellow legal pad and he was furiously writing notes. And we were just at like a lunch Uh, we were on like a lunch with the mayor and he was just writing like copious amounts of notes and he was just like always on the move. He was moving. And uh if somebody asked him a question, he would just somebody came to introduce themselves and he's like, How can I help you do what you're doing?

10:29 And he was just like get to the ask. Like what's your ask? If I could do it, I'm gonna do it. And then he would jot down a note on his yellow legal pad. Cool, I'll make that introduction. And like literally like seven minutes later, the introduction was made. This guy moves at a different speed. You know, like in the mafia when the godfather has a wedding, his daughter's wedding, everyone in the town can come and ask him one favor. He's like that. Every day. Exactly. I uh uh you said is he also like that forgetful professor? I think he's more like

10:54 He's more like Santa Claus. He's like Saint Nick after with like a triple expresso. And so he's just moving. Okay. So okay, so Ron Ron Conway goes to this holiday party. And the way he tells the story is he goes Uh, I get to this party and I'm in a tuxedo and I goddamn I hate being at a tuxedo. I'm so uncomfortable. And I just see uh I see David there. Uh he's also in a tuxedo, and I go up to him and I go, David, let's talk about something else because I'm so uncomfortable with this tuxedo right now.

11:20 And he goes David had invested in in his fund. And he goes, David, the deal is you invest in this fund. Cool, I'll invest your money, but you gotta be telling me what you're seeing and like you gotta be my eyes and ears on the ground. He goes, David, what are you seeing at Stanford? What's exciting right now? It goes, Oh I just inv I just invest in these um Two PhD students that are doing the search engine thing, and he had invested in Ask Jeep, so he knew, okay.

11:43 Um search engines big deal. If somebody says there's a new searching that's better than Ask Jeeves, I got I'm interested. I wanna check it out. So he asked David, can you arrange for a meeting? And He tries to get this meeting.

11:56 And he kinda fails. They they're like um They're busy, they're like, look, we're not taking angel investors, we want VCs. But they go, but maybe You can actually help us, uh Get a V C.

12:09 Was Ron uh a legend then or a legend in the making? Legend in the making. Got it. Are you w do you want do you want the quick backstory on Ron? That's pretty insane. Yeah. All right, so he uh Ron Conway starts off as an entrepreneur. He starts this thing company called Altos Computing. So he's also making computers like Sun. And he ends up taking a public

12:27 And then they get their ass kicked, the personal computer comes out, the PC, and the PC starts kicking their ass, they end up selling the company, but they do well. And his early investor was Sequoia. So he goes to Don Valentine, who's like the guy who created. The OG of OG investors and and Don's like All right, Ron, what do you want to do next? What's the next company you're gonna start? He goes, honestly, I never want to manage a thousand people again. That was that was night a nightmare. I don't know what I want to do, but that's not it.

12:52 And he goes, uh That's a bummer. Like, you know, my my hope is you're ready to start a new company and I was ready to write the check. But if not, maybe you'd be a good investor. How about I recruit you to Sequoia? Why don't you come follow me around for a couple of weeks, see if you like this investing thing. So he follows Don uh follows Don around. And he's like, Hey, this is he goes, Hey, I think you could be pretty great at this, but you know what you should do? You should do this thing called angel investing. This new thing. And angel investing at the time was actually a term from Hollywood. It was about investing in movies. I think they called it super angel or something. Wasn't it like even like a different term? He became a super angel, but like it started with a just angel investing. He goes, You know what, you don't even have to start your own V C fund. You could just invest your own money. Just small checks, ten, twenty K checks and then hey

13:32 When you see something cool, you bring it to me at Sequoia, right? And so he tells him we should go do this and Ron decides, all right, I'm gonna start angel investing. And basically he he starts angel investing his own money. Very quickly he decides he's he's like I've made one great decision in my life. And it's in nineteen ninety four. He's like all right.

13:48 I could just be an investor. He's like, but if I if I'm competing competing against guys like Don I have no advantage, right? They've been doing this. They're just more skilled, more experienced than me, they have a better brand than me. And um they just know that game inside and out. He goes, but what can I do to differentiate? He goes Well What if I actually just start investing what if I pick a niche and he goes.

14:09 The and so Don's like, Okay, is your niche gonna be hardware, computers, just like you just did with your company? He goes, No, all I know is I hate hardware. So what's the opposite of hardware? Software. What's this new thing? The internet. And at this time, by the way, the browser hadn't even been invented. Like Mark Andrees is still a student at University of Illinois. He hadn't even graduated yet. But he's like I think there's this thing, software, we needed it for our computer for our hardware. And there's this new thing called the internet. Fuck. I'm all in on the internet.

14:36 And he just decides, he's like, look, it's a thing that's at zero. So he goes, the beautiful thing is there are no experts. So I can't be behind because this thing just started. So I'm gonna go in this thing at zero. I'm gonna get to watch it grow. And by the time you know, this thing's four years, five years in, I'll be the expert. He goes, that's the greatest decision I ever made in my life. He goes, by the way, it's now twenty twenty five. I'm still All in on the internet. He's like, I s this this thing, I I thought this thing was small then. He goes, I still think it's early days. And so he he goes on on the internet. Now Around nineteen ninety nine, he's been angel of investing. He raised a fund. He raises a fund for twenty five million dollars from other people to be uh the Silicon Valley you know, angel investing fund.

15:16 uh S V Angel, if you've heard of it. And actually at the time it was called it something else, Angel Investments or something like that. But Yeah, he decides I'm gonna invest in Silicon Valley companies. He raises twenty five million dollars, the dot com boom hits, it's getting hot. He raises the next year another hundred seventy five million and his his approach is just spray and pray. He's investing in anything and everything that he sees. And so he's made like two hundred fifty investments. By the time the dot com bubble.

15:39 And when it burst, he's like, Oh shit. And they go to him, his his he's only working with like four or five guys and they're like, Hey, what's our strategy? Like the markets crashing. He goes, our strategy is we don't invest anymore. Like our strategy is I think it's over. I don't know I don't know what to do. Like there's just no there's nothing to invest in now.

15:56 And so um he's he's like but my hope is that One of these deals that we did Early on. Is a winner. And basically what he says is that when that dot com

16:06 Bubble burst. Eighty percent of our companies just went to zero. But luckily. He had Google. And he had invested in Google along the way.

16:14 And Google carried him. Okay, so how did he end up investing in Google? Because remember, they didn't want an angel investor, they wanted an institution. Well, the thing about Ron Conway is that Ron Conway is known. for being just extremely generous. So even if he's not gonna invest in the deal, he's just like I'm gonna help the founder. And he his uh philosophy was, and a lot of people say this, but he actually did it. His philosophy was All I do is I am us in service of the founder. I'm just gonna help as many founders as I can and money will be the byproduct. Like money has to come if I help enough great founders. Money has to show up. And um Paul Graham basically calls us the r the Ronco principal.

16:49 And he goes, uh Paul Graham describes this, he goes, I he goes, I noticed one of Ron Conway, he goes, I've never heard one instance of Ron Conway behaving badly to any founder. And that's incredible because this guy's investing in like thousands of companies. He goes, in fact, I went looking for examples to has anyone had an experience where Ron Conway treated you poorly or didn't act in your best interest? He goes and instead I just got this outpouring of people being like, No, you know what? He had nothing to gain from s a situation and he just went above and beyond. And he goes so Paul Graham hears this and says.

17:19 You know what? Actually, maybe there's something to this. Actually, I've heard about a couple of other investors that are like this. And he goes, Maybe this is not just like a Funky coincidence, maybe there's a bit of a strategy, which is Uh so much of Angel Investing is getting invited into deals.

17:34 And if your reputation is just one where You just always act benevolently. Then It's actually not just like a act of generosity or charity. You're actually building a reputation that's gonna get you into the next deal, the next deal, the next deal. And that's exactly what happened here.

17:48 And so Ron Conway Who by the way Just side note, go to S V Angels website. If you were trying to research this company, what would you what would you pay attention to? Uh, which companies they invested in.

17:58 And what do you see there? Uh, Pinterest, Coinbase, Facebook, Open AI. Snapchat. Twitter, Ripley, Reddit, Octa, Anthropic, Square. Every hit company is on this list. Yeah.

18:11 Silicon Valley Company is on this list. Paul Graham when he's airbnb, Brex Checker like everything ever. Like literally every every Paul Grab did a talk where he interviewed Rod Conway and he goes All right. Uh if you need to remember one thing from this, I'm gonna say a bunch of words, but just remember this. One one sentence. Ron Conway is the man. He goes, I was gonna do an intro talking about the hit companies you've invest in.

18:35 And then I realized it's actually shorter to to write down a list of the hit Silicon Valley companies that you missed. And he had three. It was like he missed Salesforce. He missed uh Kickstarter and he missed um one more. I forgot which one it is. And he's like, it's insane the number of hits that you've invested in. And he goes, um and the funny thing is that Ron doesn't even spend i like uh I don't know if you know about his like investing style. But it's exactly the same as Y C, which I find fascinating. Which is why? He just like a hundred thousand dollars into every single thing. He meets you and in ten minutes he makes a decision.

19:07 And he if Ron says it's usually three to five minutes and then he'll just decide on on the spot in three to five minutes. Y C has a ten minute interview and then they make their entire decision off ten minutes. So the two best Pickers. The two best Angel investors.

19:21 In the history of Silicon Valley Both. Make all of the decisions in under ten minutes. Isn't that insane? And so w how much does he invest?

19:32 Initially it was investing like, you know, twenty five K and then it became a hundred K and then became two hundred fifty K. I I'm not sure if that strategy would work now because there's so because I think that then in the two thousands and nineties and things like that, there If you had the gumption to be one of the people who like threw your hat in the ring and like got a meeting and did this I think that the because the barrier to entry was high, because there was a higher ratio of like freaks Doing this shit.

19:56 Cool that there's a lot more noise, but I I don't so I don't know if that would work now. Let's look at their list here. Anthropic, that's recent. Open AI, that's recent. Hugging face, that's recent. Like these are the big If I said one of the best companies in the last four years, you know, that to be invested in, open AI anthropic. Hugging face, like these would be in that list. Yeah, you know, he's in Uniswap. Which is was the big one in the crypto phase, like you know.

20:20 Yeah, five years ago or whatever. I think this still works, but the trick to making it work is not just that they make snap decisions, right? Like His decision, uh, you know, his process was basically they're like, What's your thesis? He goes, I had no thesis. He goes.

20:34 I went into Angel Investing when there wasn't even really a word. He goes there was no thesis that you could have at the time. I just All right, the internet's cool. And then he's like I He goes, I I realized one mistake pretty quickly. Which was that. The more I try to judge a you meet a founder and they have a idea They have a personality and then there's a market.

20:54 And basically if you try to blend those together You try to make a decision off the the mix of the idea, the founder, and the market, you lose. If you love the founder, but you hate the idea. You also lose because Airbnb I didn't love the idea.

21:08 But I love the founders. So what does he pick? One of those three, or just the person? He's just like, I just pick the founder. He goes, and I what I do is I'm like, I'm just gonna invest in the founder. It's the founder's job to figure out the idea and they'll change they often they change the idea. And he goes. And by the way, I'm not just investing in this founder for this company. I'm investing in this founder for life because I realize that the best founders start multiple companies. Yeah, so for example.

21:29 He put uh one of his fur first uh employees at and when he started doing this was his son Topher. And his son's thirteen years old. And his son makes his first investment at thirteen in a little company called Napster. And he's like, Oh, I heard about Napster, but I don't know about this shit. Topher, go use this thing and tell me if it's amazing.

21:45 Topher comes back the next day, he's like, Dad. This is the craziest thing I've ever seen. I can get any song. I can download anything. This is changing the game. I'm downloading bits of the song from other people around the world. It's the m like this mind is mind blowing, this decentralized thing. And he's like, Cool. All right, let's go invest in this thing. He he goes and he meets the founders. Oh, he had already met the founders. That was his diligence.

22:05 And he invests in sh uh Sean Parker and Sean Fanning and he's like, Cool. Anything you guys do from here on out, I'm in. And so Napster didn't work out. But Sean Fanning's fourth or fifth company ended up being a hit. Napster didn't work out, but Sean Parker's next company was Facebook. And he's like, I totally didn't get Facebook. I didn't know how social networks would make any money. It seemed like

22:25 College kids, you know. Posting pictures of their drunk. You know, escapades. Like didn't seem like something that was gonna be money, but Sean Parker's in and I just I've decided Sean Parker's a founder that I want to back. And so I invest in Facebook too.

22:40 All right, so bringing it back to Google. All right, so bring it back to Google. He goes to the Google guys, they're like, Hey, we want a V C but they're like, All right, we will let you in if you can go get a Sequoia. Because Paul Graham asked him, they go he goes, You know, when you invest in Google, did you know like this is a huge company? He g there's gonna be like An all time company. He goes

22:59 You know, you could never Think of a company as like a trillion dollar company. He goes, but I did think it was gonna be really, really big. And I went all in trying to get this investment. And he goes. Why'd you go all in? And he goes, Well, because they had three things. He goes, First Super smart geeks.

23:13 That's criteria one. Two really determined. Three, do they do something that surprises me? For example They're really smart geeks, but they're also really charismatic. Or the real the he goes, but that wasn't the case for them. It wasn't the case for Zuck that they're really charismatic.

23:28 He goes with Zuck, it was that um early on he was talking to me about like getting into th getting three hundred million users. And he's like, no service had three hundred million users. So the fact that Zuck had figured out like yeah, we're gonna connect Everybody. And he's like, Oh shit. Okay, the uh just the fact that this guy is saying things like that

23:46 It is a level of ambition that's not really you know, common and guess what? I wasn't surprised when he turned down a billion dollars from Yahoo because all he wanted to do was rifle focus on a product that would actually reach everybody. So with Google, he goes, they were super strategic. They he goes, they they told me they go, You can ha you can be in if you want if you can get Sequoia. He goes, Okay, uh That's great. Sequoia's great. But why Sequoia? They go not just Sequoia.

24:09 We need Mike Moritz. He goes, Well okay, Mike's great, but why Mike? And he goes Because Mike is on the board of Yahoo. And what we're gonna do is we're gonna build the best search engine. And right now Yahoo has a deal with Alta Vista. Alta Vista powers all of their search.

24:23 So we want to cut two mega deals. We want To be the default search engine on Yahoo and Once we convince Mike Morris that this is awesome, he's on the board of Yahoo, he'll get us the meeting. And then we want to do the same thing with AOL.

24:36 Do they have like a product at this point? They had a product, they had users, and and he talks about that. He's like, you know, basically he's like I saw the searches, the results were better. And they had early users that were like the people who used it used it all the time. So it wasn't like they had a ton of users. But it's the same thing as Facebook. The people who used it used it like crazy. And and so he and so they go, We want Sequoia and we want Kleiner Perkins. He goes, Well, you know You can have either or they don't usually like to do deals together. He goes We want Sequoia and we want Kleiner Perkins because Kleiner Perkins, John Dorr's on the board of AOL or has a relationship with AOL. We need that deal too. So they were cocky and smart and

25:11 Strategic. Yeah. They they knew what they needed and they were like we're gonna It's like an algorithm. It's like that's the output we need, so then we need to find the path to that. Well, I r I I I read uh stories of them, the Sergei and Larry retelling the story and they were like we were full of ourselves. We thought we were the best and we were pretty good. Yeah we we acted like it. Well there's stories of both, right? At one point they tried before this, they tried to sell the tech.

25:33 For a million dollars. Yeah. And uh this is when they were like, Oh, it's just an algorithm. And then they had sort of Gotten bigger and bigger. So anyways, so he goes, um So he goes, I basically

25:44 So from the time that that guy David Sheridan tells about this Company at uh at this holiday party. He goes, I called them for five months straight. Every month I called them. And finally I got my audition. And at that audition, they go, You're in if you can get Sequoia. So he starts working the phones, he gets them a meeting. Sequoia's in.

26:01 And Kleiner Perkins is in. Oh actually there's one little thing before that. He goes Hey guys, I'll leave this myself, ten million dollars. And they go, No, we don't want you. He goes, Okay, fine, I'll go get you Sequoia. So he goes and he gets him Sequoia and the client purchase it, but they're negotiating. They both want to do the deal. They both want to do the deal at unprecedented numbers. They're trying to do it at like a seventy five million dollar valuation, which at the time

26:23 was like bananas to do a seventy five million dollar evaluation. But they they were They believe that search was already like a big deal and they thought this was the new search thing. But they can't agree who's gonna get the deal. They don't wanna share it. And Larry and Sergei get frustrated after a month of back and forth to Larry and Serge are like, dude, forget this. We don't wanna be fundraising Ron

26:42 You said that you would do this thing ten million yourself. Uh was that bullshit or is that real? He goes they go, You you said you could make that happen. Could you actually make that happen? He goes, I can make it happen. This is Friday. He goes I'll have it by Monday if you want it. And they go, um All right.

26:56 He goes. But Honestly, guys, do you want do you want that or do you want them to share the deal? They go our first choice we want them to share the deal. But if if they can't get their shit together, we'll do it with you. And again, Ron Conway badly wants this deal.

27:09 But it he does what Paul Graham calls the most generous act in the history of Silicon Valley. He calls Sequoia, he calls Claire Berkins, he goes, Guys Um They're not bluffing. If you don't have this thing done by Monday, they're doing a deal with me to do all ten million. But they want this with you guys. That's what they truly want. You guys gotta figure this shit out.

27:27 By Saturday morning They've agreed we're gonna do this and they carve out Ron a little allocation. Because he put that deal together. Yeah, he he he gets the two hundred fifty K. So That's how Ron Conway gets in on this deal.

27:41 One last little Ron Conway thing'cause it just You said something about like mafia. And um here's Ben Horowitz from from Andreessen Horowitz descrip he wrote a whole blog post called Ron. And in the blog post about Ron, he says Ron is not an investor. Ron runs a network.

27:57 And in Ron's network, everybody who's a node knows you are important. And there's a certain code of behavior that you have to have. He goes. To get into the network, you must have a relationship with Ron. No, I say relationship. That means not not just I've met or I know. More on this later.

28:12 He goes two, you must answer when called. Ron makes sure that his network matters because he ex it demands extreme reliability. If he calls you to participate, you must participate when called upon. And he goes three, that keeps you in what I call good standing with Ron.

28:28 Which is You must remain in good standing with Ron to remain in the network. If you do not act when called upon, or you do not act well in terms of y y you have some kind of bad behavior with founders. Ron will light you up and take your ass out of the network. And he goes, No matter what deal you're in, it is more costly to be out of Ron's network than it is to, you know, try to get it get one up. And because of that, he is ensured that Silicon Valley works.

28:51 So people like this guy that much, huh? All right, listen to this story. So Alfred Lynn, who ends up Have you ever heard that name Alfred Lind before? Zappos? Zapos? Yeah, he he ends up being like the number two guy at Zappos, I think. Before that, he had started this company. He's like and he tells the story. He's like, yo So we had this company It was honestly it was on the brink of failure and he's like it end it didn't end up you know, he's like it w it looked like the company was gonna fail. And me and my co founder were talking, we're like, all right. Have we tried everything?

29:17 And they're like, Well, there's one investor we haven't talked to because we don't really know him super well, but like Ron did invest in our company early on. And they're like, We we had this deal if if with this big company, this Fortune fifty company, it fell apart. And like There was no way if we lost this deal, the company's dead. So he goes.

29:34 I didn't know Ron at the time and his investment was really small, which is why we hadn't reached out to him yet. We've we first went to our big investors, but we struck out. So he goes, we had nothing to lose at this point. So at eleven PM, I wrote Ron an email that said, Hey, you don't really know me. But I'm an executive at a company you're an investor in. And we need a meeting in person with the CEO of this Fortune fifty company. We need the meeting this week, and if you can't make it happen

29:56 Hey, that's totally okay, I understand. But we may be going down. And I'm sorry. He goes.

30:02 He goes. Two minutes later, this is eleven PM. Two minutes later, Ron writes back In a way that I now have learned is Ron Style. It's immediate email short and it's all caps. Am on it.

30:13 All caps. By the next morning, Ron had done it. We got an eight figure contract with that company that led to a nine figure contract all because of this desperate email. And eventually our company got acquired for eight hundred million. We were on the brink of death. Ron didn't know us from Sam and he saved our ass. Dude, the takeaway from all of this San Francisco's amazing. Now it's cool to shit on it because it is very frustrating. It's a very fr I've lived there for ten years. It's super frustrating.

30:36 But I've missed out so much not being there and just like What people don't realize is San Francisco's only like what eight hundred thousand people and if I had a guess, Ron Conway lives in like Pacific Heights marina area. And just like walking around that area You feel it and you hear these like weird conversations. And just being able to email someone and just be like, I'll meet you at the coffee shop five blocks away, that's special, man. Just these types of interactions are special. So check this out. So You said like I don't know if that approach would work'cause now there's so many more companies and that at the time when

31:06 There's very few people starting companies that might work. So They ask him. This was kind of like when he was in his peak uh investing uh time. They go, H so how do you invest? He goes I only take meetings that come from my network. So he goes, I will get five pitches a day.

31:21 So I see thirty a week. Thirty deals come to my desk a week. Every single one is from a referral of a founder or investor that I know well that knows me and knows what to refer to me. He goes, I will invest in one out of thirty every single week. He goes of the five that I get per day, I'll turn down two or three just via email, no phone call. The rest we'll invest in and I'll invest in uh you I'll make my decision within five minutes of talking to the founder. They go, Well, what are you looking for in that founder? He goes, I'm looking for three things insane twenty-four-seven desire to work. He goes, I can tell when I'm talking to a founder if they wish they could just spend all of the time working on this. And they view everything else in their life as like a nuisance or an obstacle in the way of doing this.

31:57 It goes d have they warned their wife or girlfriend like hey I love you. But I'm all in. on this thing and I'm gonna be gone and I'm gonna be doing shit. Um and like this is this is it. This is my thing and I'm doing this because that's the first thing I look for.

32:12 He goes. And when I he goes, if I could feel it, then I know it's gonna be infectious to other people because they're gonna have to recruit badass other people. He goes, lastly, can they communicate why this matters? He goes, You know, Zuck, it's not like he had like this crazy charisma or personality. But when you talk to him It's the feeling we got when Amjad from Replit was on the podcast where this like this

32:31 It's like oh shit, this is kind of bigger than I realized and this is like your life's work. This is kind of This is gonna change everything, isn't it? And they sort of distort your reality to believe that this shit is even bigger. than you could ever believe. Next week we're going to hang out with uh with Jimmy Mr. Beast and I always have this feeling. Every year we go to do this event with him. We hang out with him. We stay we literally like stay at his house.

32:54 And When you're there. It's like what he's doing is the most badass, important, crazy shit that any human being could be doing. And then you leave and you click a video like three weeks later, it's like Th these friends are putting their hand on these chocolate bars and whoever takes their h hand off the last gets like half a million dollars of chocolate bars. It's like wait, this is just like a dumb video. But when you're there, it's not a dumb video. It's fucking everything. And he's able to like make you feel that way. So that's kind of what he describes. And the last thing he talks about is he goes, rifle focus on the product. He goes

33:24 I invested in Square. And all Jack Dorsey ever wanted to talk to me about was the product. He goes I invested in Twitter, same thing. All they talked to me about was the product. I invested in uh Facebook, all Zuck One talk about the product. He goes, Pinterest. Pinterest, I didn't really get it's like this pinboards, like scrapbooking. I didn't really understand it because I met the founder Ben.

33:42 And he goes, Oh, he's talking about this product? He goes, Then I met his his head of product or his like kind of his m one of his Core guys. And I met him three times and every time he was wearing the same shirt. And I go

33:53 Hey, do you wear the shirt? Like Often he goes, I wear the shirt every day. And you know what the shirt is? It's a shirt with a circle. And the just the inside is just this word focus. And he goes, This guy literally every day

34:06 Where's this shirt that just says focus in the middle of it? This guy was ex Facebook and then he was at Pinterest, and this guy was just absolutely obsessed with. All we need to do is focus on the product. Oh, there's a meeting. Oh, we got invited to speak at this event. What are you talking about? I don't want to go there. He goes to the point of being rude, these people just want to focus on the shit that they're focus on their product. That's it. So he he did Google, he broker the deal. Who are the other people? I want to next guy.

34:35 Who you see? I see uh Shaquille O'Neal Shaq. Not a chance. So Shaq is sitting at the fence. That doesn't even make sense. But's he even famous then? Of course. Shaq's famous. This is the nineties. Um Shaq is a is an NBA sub star at this time. Shaq is in a hotel, in a fancy, I don't know, four seasons or Ritz Carlton, sitting in the lobby.

34:56 And he was this is Shaq telling the story. He goes I see four distinguished gentlemen. Is this your Shaq voice? We have a lower guards. He goes, and what he says, he goes, The gentlemen don't know who I am.

35:15 But their kids do. And their kids are like, Oh my God, it's Shaq. And they run up to him. And the cool thing about Shaq, if you've ever seen videos of Shaq, Shaq is Like a giant kid. He's super playful. He's super good. He's super good to people that see him. He doesn't he's not like one of these celebrities that's like sunglasses had on trying to like push people away at all times, getting annoyed when you get into space. It's so a Shad goes.

35:36 I'm doing my job. Babysitting? And so he just starts playing with the kids. He's just babysitting while they're having a meeting. At the end of the meeting. Ron Conway comes up to Shaq and goes

35:46 Thank you so much for playing with my my grandkids. And it's uh it's like start chit chatting. He goes, Yeah, we were just talking about this investment that we're doing. You know what, you should invest in this company. It's one of the best companies I've ever seen. It's called Google. Shaq gets a meeting with uh with with I think I think I guess it's with Larry and Sergey.

36:03 He goes, Yeah, it was an accident. He goes, I've doing my job, I'm babysitting and then he goes I asked him he goes, I have a meeting with them Sounded good. I put in some money. I forgot about it. Years later, Google goes public. He t he doesn't even realize that he's invested in Google.

36:17 He reads in the newspaper that Shaq has m Shaq is in the S one. Shaq's gonna make a killing off of this. He goes I'm Shaq. What? And so he goes and he remembers it's and so Shaq turned and he's like, Yeah, I wish I invested more. Shaq turned like you know a couple hundred grand into you know 100 million plus off of his Google investment. Way really no nobody knows how long he held it, but uh you know, it's pretty insane. So Shaq is the next one. Do you know who this is? Yeah, R I P. R I P this is um I don't know actually how do you say her name? Susan Susan Blast name is a Polish name, yeah, I forget. Susan W. So Susan it's a

36:57 Ends up. Getting in on the action early with Google, but I don't know if you know the story how. I know that she had a garage and they wanted to work there and did she like give them a free place to stay and work there and got like a little bit more equity? Yeah, kind of. So Uh her sister

37:14 And was dating Sergey. And Ann says, My boyfriend needs uh office space and Susan Wasn't wealthy at the time. She was like a mid level like marketing manager at some company. And her and her husband had just bought this house and then uh They were feeling a bit of the pinch about like kind of

37:31 the the home and they're like, you know what, what if we rented out our garage? So they put up an ad saying we'll rent out our garage and it's like, Oh, actually my boyfriend needs a space So the Google guys rent out a garage for seventeen hundred dollars a month. And they start working out of her garage. And she just sees them working there day and night. And she sees she she hears updates just because she's bumping into them. She quits her job, she ends up being employee sixteen at Google. And so that's how she became a billionaire was by quitting her job to go work for the company that was working out of her garage at the time. And she ended up being up until recently when she passed, she was the YouTube CEO.

38:03 Exactly. So she she had worked on AdWords for a bit. And then when the Google she was a big advocate for like, hey, we should acquire G uh YouTube. And when they acquired YouTube, they were like, Hey, you were a big champion for this deal. She ends up becoming the CEO of YouTube for many years, um before she passed away. I think that sister of hers started twenty three and me. Correct. All right. This is uh

38:28 D I don't think you know who this is. No. Oh yes, I do. I do. Pair. Yes. Oh wow. That's a that's a deep pull for you to know this. So this is Peggeman. Um now He did not actually invest in Google, so I'm cheating a little bit. But this is part of you said

38:43 Well my takeaway is the magic of Silicon Valley. Here's more of the magic of Silicon Valley. Okay, so this guy's story Is crazy. He um him and this other guy Last name Amidi. I forget. I think it's like Samid Amidi or something like that.

38:58 A meanie. Pers two Persian guys. So first Persian guy Starts a rug shop. In Silicon Valley, right in the heart of Palo Alto. Is selling luxury Persian rugs.

39:09 And right above his uh like right next to his his rug shop, there's also some office space. And so he um he ends up renting out office space to the founders of I think it's uh like PayPal or something like that. PayPal's ear early um U early uh founders were there. Um there was a couple of others and so

39:29 He ends up uh in he's like He's selling rugs to these people, he gets to know these people, and then he realizes like wow, Google Umgarious uh like immigrant or Persian guy Persian guy like hey my friend come here come here come here my friend exactly you want some tea let's have some tea and they have a tea tell me about yourself tell me about yourself he becomes friends, he's right next to them, he's selling them rugs, he's selling them office space But he's like Dude, um

39:55 These companies, you know, made a killing and so they start taking their rug money And they start investing and become angel investors. And they don't know anything about technology really. But they're like Let's just invest in the people that come in to buy the rug if they seem interesting. And so how does Peggy Uh factor into this.

40:12 Pagan cold calls. This guy. And he's like, Hey, I'm coming out to Silicon Valley. And He's like

40:18 Can I give a can I have a job with you? And the guy's like, Well, have you ever sold rugs before? He's like, No, he's like, Have you ever sold anything before? He goes, No, but I could learn. And he goes, Listen, man, I uh how can I give this job to somebody who's got no no experience? He's like He plays on the the Persian side and he says, like, How could you turn me down? You haven't even met me yet. Just meet me. And so he agrees to meet him, he hires him. And um so he ends up becoming

40:42 Uh basically like a a rug salesman for this guy. And he over the next fifteen years, his English improves, his confidence improves, he becomes A BD's top rug seller. In in his best year, he moves eight million dollars worth of rugs. That's insane. That's absolutely insane.

40:59 One of his first Out of a storefront Palo Alto. Dude, uh You know Six hundred thousand dollars of rugs.

41:09 A month or you that's so many dollars for the rugs. So along the way is that what is that, twenty grand a day of rugs? Yeah. And this guy's living he he comes to Silicon Valley, he lives in an attic above a yogurt shop. And then becomes a rug salesman. And that guy ends up becoming one of the greatest investors in Silicon Valley. And here's his trick. So he's like. He he meets somebody for he starts selling rugs, and one of the guys who walks in is this guy, Andy Rubin. Andy Rubin comes in, he sells him a five thousand dollar Persian rug. And during the negotiation, he's like so impressed with this guy. He's like, Man, you're a great negotiator. What do you do? He's like, Oh, I'm a businessman. I got this company. And he's like, Tell me about it. He's in he's got this company called Danger. Remember, I told you one of the companies in the lucky office, company called Danger.

41:56 And these guys made do you remember the T Mobile sidekick cell phone? That's Andy Rubin made that. Yeah. His next thing he made. Became Android. And so the Android's Pro prolific. And then now he's since done deep mind or some type of a uh like w he went. He went and became like the he a head of mobile for like the big Chinese manufacturer or whatever. And then I think now he's doing like an AI thing.

42:18 Um so he's like And so he's talking to this guy and he goes to his uh he goes to his boss immediately and he goes He goes, We gotta invest in this guy's company. He goes, Cool, what does it do? He goes Couldn't tell ya. It's something technology, super complicated. I don't know anything about it.

42:31 But I'm telling you we gotta invest in this guy. He goes He goes, Are you sure? He goes, listen, if this guy was selling red balloons, I would invest in it. This guy's gonna make things happen. And so he goes, Okay, they write a four hundred thousand dollar check. into uh into danger. And along the way, he ends up becoming like a partner in their investing as he makes money from his commissions. He takes every dollar he has, basically two hundred thousand dollars, and he buys into like their partnership to be investing in startups.

42:57 And they invest in all these different startups. So he meets Joe Lonsdale. No way. After he'd done Palantir, Joe's buying rugs, whatever, he gets introduced to him. And he goes Joe, I would love to show you a rug.

43:09 Um He's like, Cool, I'll come into the shop. He goes, No, no, no, no, brother. Let me bring the rugs to your house. So he brings like a hundred rugs to Joe Lonsdale's house. And his tricky is he's like you learn a lot about a person when you go to their house, much more than if you meet them for coffee or they come into your shop. And at the time Joe Lonsdale would have been in his mid twenties, right? Yeah, he's very young. And he goes and he meets him and he's But he's in that Persian rug game.

43:34 He's in that person rug game already and he's like He's like doing this next company at a par, which by the way recently sold for a couple of billion dollars. And at the time he's like Love this guy, love Atapar, Joe Lonsdale, we gotta invest in this thing.

43:47 And he ends up investing in Adipar. He ends up investing in Dropbox because one of the co founders of Dropbox is also Persian. And so he's speaking in Farsi, he's like chumming'up and he's like, Come on, please let us in. He ends up doing that. He ends up investing in AppLoven, which is now a hundred billion dollar plus company. I think so too. I think so. Yeah, he's Iranian or uh some somewhere from that area. And so there's like this whole mafia that gets created off of this rug shop. How insane is that? Dude, do any wasp Wanted to relate with me?

44:19 Hey, let's talk about baseball and hot dogs and cows. Like where's my watch that? Dude, okay, I'll give you some credit. You one of your best investments Now Is this company you told me about that I totally didn't get. 'cause I was like, dude.

44:36 What are you doing? You're just putting nicotine pouches in your mouth while we're doing the podcast? Yeah, I always have one in. And I was like, what the hell are you doing? And you invested in this company called Lucy that was making like a nicotine gum or pouch at the time. At the time it was a gum. And it kinda just wandered around for a little while. Didn't even seem like it was gonna take off. But now this shit is taking off. Dude, I think Lucy's gonna end up being like a five hundred million or billion dollar company.

45:01 You invested early on in that'cause you were you were pouch bros with these guys. Yeah, I I did twenty five grand into it. And I um when I did it I um I was just like, Oh, you started Soilant and our mutual friend is Josh and Josh says you're g you're cool And nicotine is uh addicting? Yeah, like I guess. Cool, sounds sounds good, I'm in. And so I invested twenty five thousand dollars. I think I only had

45:24 A hundred thousand dollars saved up. So that was like a bill for me. So hopefully and then I like m message them and I'm like, What's happened to you guys? I haven't heard from you in like six years. What's going on? And then they recently hollered at me and it turns out It's going really well. Yeah, it's going amazing now. Um shout out to John Coogan and and the crew there. Okay, so let me finish out the story here. Did you know that Bezos invested in Google?

45:45 I heard that. Did he invest in it because he was getting a lot of traffic from it, or why? I'm not sure. There's he's I've I tried to find it. Could not find Like any of this backstory here. But Bezos invested two hundred fifty K pretty early in Google as well, which is kind of wild. It's the same way that, you know, Microsoft also invested in Apple and kind of saved Apple from failure at one point in time. Like there's these stories of these people that you think are kind of Enemies or competitors.

46:09 But actually at at a key point in time invested in each other. I just thought that was kind of kinda cool. All right, I want to sh share with you. Let's see, do I have anything else? Oh, there's one other hilarious story from this whole thing. Uh Rod Conway was like They go, Did you know that Google would make you know, so much money would be the essentially the most profitable Money uh best money machine man has ever made.

46:30 And he goes, No, he goes, I still have Google's first slide deck, ten pages, ten slides. And it was all about the product. It goes the last slide, which is always like the financials and the projections, it just said Thank you. He's like, dude, where's that s where's your financial slide? And they go, Uh, we we have no idea. And he goes, Okay, love it. I'm in. But how crazy is this like wild

46:52 world of like Meeting people at a party or the lobby of a hotel and hearing about this thing and doing this deal. Isn't this Isn't this crazy? But that's how it still is, isn't it? It is. Like it's just that you don't get out.

47:05 You know, you still live there, but you don't get out. Like during during the Tony Robbins episode on our pod, he he has this phrase he says, which is proximity is power. And he just talks about like literally just being close to the action. Is It's like this most underrated thing you could do, just being as close as you can.

47:22 To the people you want to be around, to the people you wanna be like because whether it's You hear a thing, you meet a thing, you start to do the same habits and lifestyle of those people. Proximity is power and like that's the crazy thing about Silicon Valley is like proximity is power principle. I moved to where I moved because of family reasons, but if I could live anywhere I think Palo Auto would be the place. I think I I dearly loved San Francisco, but I got pissed off at it because of the crime. But Pal Auto is like pretty amazing. We

47:49 Do you ever think that you'd rather be there? I mean you're you're An hour north of S F. Do you wish that you were an hour south? No, I mean S F is now where the action is, but uh So th the question would be, do I wish I was still in the city?

48:05 And the answer is I definitely would have I definitely know I would make more money if I lived in SF. Like It seems like it's a more expensive place to live, but actually I know I would make way more money because There's just the serendipitous bumping into people's. It's just a much big headache, though. It's such a headache. But Yeah, exactly. Making money is not the only criteria. So like, you know, family wise, it's much better to be in the verbs for me. So

48:27 Lifestyle wise, I'm happy with this choice, but damn, when I hear these stories, it does make me wish I was back in on the action. Like I went and hung out with my friend Luke and Palo Alto. And we he was uh we went to his house and he was like, You wanna take a walk? And I was like, Yeah, let's take a walk. And we walked around for probably two, three hours. And in that two, three hours, he was like, that's the garage where Google started, and this is this, and that's uh Zuck's house, actually, and this is this person's house. Then we bumped into like Somebody he's like, Oh, that's where the founder of Cora is

48:53 And then we go to a we go to the Starbucks, it's like a little coffee shop there. And like I get recognized by five people that I you know, I just sit in my house all day, but there's people who listen to the podcast and then they start telling me what they're up to and they're doing a cool AI company. And then you leave the coffee shop. And we just pop into our friend's um, you know, like V C shop and we he's having a meeting. He introduced us to those founders. And so I'm like, Oh man, dude, the amount of serendipity I had in crazy hours just now was crazy.

49:17 And you don't you don't really get it until you Until you experience it. And so if there's like one takeaway from anybody who's who's like, you know, listening to this, I would say My two big takeaways was number one, proximity is power. And like literally just Show up and being there.

49:32 Being in the heart of the action for whatever scene you want to be in, how much that matters. And the second was the Ron Conway principle of How do you just act so benevolently that your reputation is the product you're actually building? You're not building a portfolio, you're building a reputation. The reputation builds the portfolio. And the third one? is the midwit meme aga strikes again where it's like

49:53 So the two Best. Early pickers. of startups ever in the history of Silicon Valley. Both make their decisions based off of just

50:01 Do they feel like these people are fierce founders and they could figure that out in less than 10 minutes? And then here you have people that are doing market analysis and segmentation maps and tons of due diligence and and this and that. And they have thesis on on all these different markets. And it's like, dude, the best people be amazing judges of people and they're making their decisions in five minutes. And then they spend the rest of their time just helping people. It it's so exciting to hear these stories. How much do you think that each of these investors made? Like

50:27 Uh, I guess like if you and what was the first evaluation? So the first valuation was ten million. The next round was at seventy five pre. So Ron Conway.

50:38 This is now a decade plus ago, I think twenty twelve. They asked him. They were like, Ron, how much did you they were they were like first were you scared off by uh the valuation? I mean seventy five pre Today is a high valuation for a series A company. And you know, Google uh obviously now it's obvious, but like nothing's obvious at the beginning. Nothing's that obvious. And he goes, Which by the way, no that's worth$150 million today. So that's a a shitload of money. Like, how am I ever gonna So this company has to sell for a billion dollars?

51:04 Right, right. They're like, did this valuation scare you off? He goes, No, I think that's crazy. He goes, Companies are binary. He goes, a company it's w the investing we do, a company is binary. It's either a huge win or it's a zero. I just let the market figure out the the valuation and then I invest. Once I haven't decided to invest, I let the market decide the price. He goes, Yeah, we did great. He goes, For every dollar invested

51:25 We got four hundred dollars out. Um and this was back in twenty twelve and they go And they go, uh is that The peak valuation or that's the current valuation, he goes The peak valuation of Google is far in the future. And it's he he knew, right?

51:40 'Cause this is, you know, twelve years ago and Google has since, you know You know, I at least tripled in in value since then. Um, so it it's a pretty pretty wild return. Now I don't know how much guys like Shaq and others got. So Ron got in at the 75 million round. The guys like Andy or David that I mentioned at the beginning of the professors. They got in in the ten million dollar round, right? Which is just just wild. So, you know.

52:02 A hundred thousand dollars became over a billion dollars for each of those people. And the crazy thing about pricing is like um So Google was started I think thirty years ago, right? Thirty uh twenty eight years ago. And The I don't what are they worth? A trillion or something or two trillion? What's what's what's crazy is that the company is like the equiv the equivalent of that would be investing in a company today and trying to convince yourself that it will be worth six trillion.

52:29 Do you know what I mean? Like it's really two point three trillion dollar company today. So in thirty years, uh double that or triple that. So like it's it it's it's incredibly hard for the brain to think if I invest in this company, maybe one day it could be worth a trillion dollars. That's like an inconceivable thing to think about. And so that's why angel investing is a mind fuck. Like to think like you'cause you think like oh this is worth a hundred million now. You gotta sell for a billion and the founder's like no man, it's like one trillion. Like those the the the the math behind all of this is very, very, very challenging to even like wrap your head around. Yeah, totally. Uh and and even when it's staring in the face. I think I've told the story before, but I remember sitting in a a conference room in Silicon Valley um in twenty maybe

53:12 Fourteen, fifteen, something like that. There was some point in time where I was telling this guy, I was like, Yeah, I came out Silicon Valley. I applied to two places. The place I'm at now. And the other place I applied to was Stripe. There's only two jobs I'd ever applied to in my life. And I didn't get the stripe job. I got rejected. I blew the interview.

53:28 And he goes, Oh, actually I goes, I'm investing in Stripe right now. And I go stripe now? It's not like an angel investment anymore. He goes Yeah he goes Yeah it's a three billion dollar valuation. And I remember just thinking, like, what a dummy. Like, you know you're three billion, what do you think this is gonna turn into? Like Three like I thought the game of stars was to create a billion dollar company. So hearing that one was already at three It's already three X overvalued. It's like Oh what are you hoping it gets to ten billion and you triple your money? Like n nuts.

53:56 And now it's you know a hundred billion dollar company. I would have thirty X my money even then. And it was so obvious, like Anybody I knew used Stripe. It was so obvious Stripe was the best company in Silicon Valley at that time. And I talked myself out of investing in it because I just couldn't fathom the numbers, right? Uh it just didn't make any sense. It's because you think in absolute numbers. So I remember one time I my when I first started my company, we were spending thirty thousand dollars a month and I met with the CEO of like a billion dollar company and I was like, Can you believe this? I hired two people and we went from spending eight thousand dollars a month to thirty thousand dollars a month. How insane is that? And he was like, Dude

54:32 Like I spent you know, uh three hundred million a year. Like you these aren't he he was like, you can't think of this as an as an absolute number compared to your real life. It this is just a a number on a spreadsheet, and it doesn't matter how many zeros are behind it. You just are these zeros going in and you're getting more zeros out. That's all you have to think about. Don't think about this in terms of like a real number Uh, and when he told me that that kind of like shaped how I how I viewed a lot of things. You you need to do like the casino thing. You try to take your cash, trade it for these chips that are different colors you're not used to. And then just try to make the chip stack bigger versus if you look at a you know a hand of blackjack you're playing and that that that's a month's rent or whatever it is, right? It's like a insane it all of a sudden you just start making different decisions. I remember like even uh It's not even the absolute number, sometimes even relative will screw you up.

55:20 Because um I remember investing in Tesla when Tesla was like a at like a five or six billion dollar valuation. And uh or I invest even before that, I think it got to six or seven, something like that. I'd made like three times my money. And I remember looking at the market cap of the

55:35 biggest car company I could think of at the time, I think it was like GM or some Ford or one of those one of those companies. And it was like a twenty six billion dollar company. And I remember thinking like and I looked up how many cars Tesla was selling and how many cars they sold. It was like n you know, Tessa sold like nothing compared to them. And I just remember thinking, okay, okay, the ceiling of this is like a thirty billion dollar company. Like, cool. So like if I ride this out. And if if Tesla became the most valuable car company in the world

56:00 It would be A thirty billion dollar comp No that would be thirty billion to be like a five X from here. Or I could just take my winnings now and go and enjoy them. I don't remember the exact numbers, but I remember that twenty six billion was like where the the car companies were at. Tesla today Is Not only is it today like a

56:16 one and a half trillion dollar company or whatever it is. So it's Now it's a one half trillion dollar company. So I was off by like You know, more than Ten X. I was off by like Mm-hmm.

56:26 Two orders of magnitude, basically. On top of that. Tesla is worth more than Then the next one Like ten car companies in the world combined.

56:37 It's like the whole idea of like it will be number one, it it it broke like it breaks my brain, right? Like Tesla is literally worth the all of the next six car companies, they're worth like a I think it's like I don't know, like six hundred billion or something like something like that. It's like a Uh oh no, the big six are four hundred and seventy seven billion.

56:57 Tesla is one point. Three trillion. Right. So it's It is just Mind boggling what these things call. It's hard. It's hard to understand. I mean, didn't I tell you the the when I was trying to understand what a trillion dollar a person worth one hundred million dollars compared to a person worth one trillion dollars, which is what Elon will be in three or four or five years. If you have a hundred million dollars, you're like ungodly rich. Okay, but the equivalent of those two compare of those two, the gap is the same as a hundred million and ten thousand dollars.

57:23 Right. Isn't that insane? So like When I think of a hundred million dollar person, I think you're one of the richest people I've ever met. Dude, my I think my inve there's this great quote about happiness. It's like I have talked myself out of happiness a thousand times, but I've never once talked myself into it. Right. I've never thought it's like I've never thought my my way I've thought my way into unhappiness a thousand thousand different ways, but I've never thought my way into happiness.

57:47 Um I don't know if I buy that quote exactly, but I get the the premise of it, which is like We could very much talk ourselves out of things or into unhappiness. I think investing is very much the same. I've now realized, like, especially in technology investing. This may not be true for value investing. But for tech investing where you're The whole game is like Find the one or two psychos and the one or two like breakout categories that are gonna just break the entire game as the power law and these things are gonna become worth not a billion dollars, not ten billion dollars.

58:16 But like a hundred billion or even a trillion dollars each. I think it's back to the like Make a five to ten minute gut based decision. on the like quality of the founder. Or the overall space like the internet in ninety four.

58:31 Crypto, you know, in in the in the early twenty tens, mobile, uh now AI, right? It's like just Oh, is the s the smartest person I know is doing something in AI, that's enough. I don't need to like The more I think, the worse my returns will get. is sort of what I've realized when it comes to to tech investing because it is all about the breakouts. And the breakouts are not things that you could just linearly

58:52 Yeah, figure out. We had Shield on the pod the other day and he's like, Yeah, I invested in Bitcoin early and NVIDIA early. We're like, Wow, you're so smart. He's like, Yeah, I invested in Bitcoin because I thought it was gonna become this other thing and I invest in NVIDIA because I thought about I thought it was gonna win in uh crypto mining. So he's like, you know, even in the ones he was right, even in the Profe professional investor. With amazing returns. Who picked the right two things to bet on of the last

59:15 Fifteen years. Bitcoin and NVIDIA. He got it absolutely right. He did it even for the wrong reason, right? Like it it's like God damn it, what what are you supposed to do in this? This was a great podcast. That was a great story. Um

59:27 We should it would be fun. I would love to do a series where we get the first employee or the first investor. in or one of the first in legendary companies to come and and talk. So like Google, Facebook Um read it. I think that's the hack because getting the founder obviously is great. It's super hard. And they're also getting they're also like still running the company and have to say certain things and like they've they've been so media trained. And like the statue of limitations can be like past it. So it's like if it's ten years old, it's like look

59:57 No one's gonna get mad at you if you say that you guys like Uh, call the competitors that pretended to be a customer just so you can get like fake information. You know what I mean? Like it's we're past that. It's so you could actually reveal a bunch of stuff. Paul Graham asked Ron Conway, he goes. Oh, you've been doing this now for like you know, you were a founder and now you've

1:00:14 Invest all these legendary founders. What's changed? And he goes He goes, we drank way more back then. He goes, What? That's the thing you're gonna say? He goes Yeah, he's like every day. Around like four PM.

1:00:27 We had this woman, Donna, who would like Push a cart around the office with booze and we would all drink. And he's like we he's like we literally taught like work hard, play hard at the same time. Like Let's do this. He's like, there was crazy shit going on in this in our company. And he's like, That's just what we did. He goes, Now I go to these companies. They don't do that at all. They're much better about segmenting it. They do play hard, but they like Happy hour on Fridays after work. Like not like

1:00:52 All the time during work, crazy shenanigans going on. Dude, that was great. Is that it? That's it. That's the part. I feel like I can rule the world, I know I can be what I want to I put my all in it like my day's off On the roadless travel never looking back

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