The Exchanges

Q I totally get you there. It's interesting how both have changed. One final one, because this is important, actually, and it's like, you know, I've had many a great miss, but tell me about your biggest miss, and then tell me how did it impact your investing mindset today?

A Yeah, obviously, as you said, we've had lots of misses, and any category-defining company that's out there we're not a part of, we consider a miss. One of the ones that comes to mind is DoorDash. We had a chance to invest pretty early on in the business, even after it was kind of obvious that it was And we love the founder. We obviously thought it was an amazing experience. One of the things that held us up, yes, it was an amazing experience, but it was more expensive. You're maybe paying 10 dollars more on a 30 dollar basket order. And so while it was working and it was growing, we just didn't know how deep it was going to go in the market and at what point maybe they were going to hit price sensitivity. And obviously the market was much bigger than we thought. Classic mistake. But I think one of the realizations I had as well is when you just see the bottoms up velocity of a business and every market growing and every cohort growing. The chances that right around the corner, you're going to hit some TAM wall is very unlikely, and you actually need to listen to the bottoms up data sometimes in these new markets for it to tell you kind of how far they run, and if your instincts that they're going to end early, you're probably wrong.

AI assessment note: “One of the ones that comes to mind is DoorDash.”

Q you beforehand, I emailed many of your founders, and every single one of them responded, which is the first time ever that has happened, and I would tweet that if you were on Twitter, but you're not. But I do want to start with a little bit on you. So tell me, how did you make the way into the world of venture and come to be at Thrive Today?

A Actually, I grew up pretty far from it. When I was younger, I was very focused on being a doctor, and I was on my way to med school, and I had this realization that I just knew very little about how the world worked. I got anxious about the idea of actually becoming even more narrow and focused over the next decade, going to medical school, residency, and all the things that followed from that. Deferred my decision to go to med school, ended up applying to a lot of places last minute, which Fortunate to get a job in private equity at Blackstone. Spent a lot of time regulating industries like healthcare and financial services. After a few years, I started to get a bit disillusioned with, even though these were amazing businesses and doing really well by all, you know, objective measures, they were investing so little into the future, and they're really relying on either the regulatory capture they had or the inertia of the market to continue to propel them forward. And don't get me wrong, they were amazing businesses, but I just left a little bit in Less inspired. And around this time, Josh, who's the founder of Thrive, was starting to think about Oscar Health, and we'd known each other from school, and I started spending time with him and the team unofficially around this, and I just got so inspired by the problems, the spaces, and the ambition of the team, which reached well b…

AI assessment note: “Josh, who's the founder of Thrive, was starting to think about Oscar Health”

Q I'm sure you've read a frightening amount of books, so I'm slightly nervous about this one, but what's your favorite book, and why?

A Yeah, to your point, it's hard to pick. One of the most actually formative books I read was How Will You Measure Your Life by Clayton Christensen. I read it, actually, when I was a senior in college, and it was a time I was doing this career exploring, and it just gave me a lot of language and frameworks for how to think about making that Decision and the words for it. And then also actually reread it recently as we have two young children, as we were having children, because he really emphasizes on all the traps, high performing people might fall into as they have a family. And it was just, just a really thoughtful way to lay all those things out.

AI assessment note: “One of the most actually formative books I read was How Will You Measure Your Life”

Q I'm sure you've read a frightening amount of books, so I'm slightly nervous about this one, but what's your favorite book, and why?

A Yeah, to your point, it's hard to pick. One of the most actually formative books I read was How Will You Measure Your Life by Clayton Christensen. I read it, actually, when I was a senior in college, and it was a time I was doing this career exploring, and it just gave me a lot of language and frameworks for how to think about making that Decision and the words for it. And then also actually reread it recently as we have two young children, as we were having children, because he really emphasizes on all the traps, high performing people might fall into as they have a family. And it was just, just a really thoughtful way to lay all those things out.

AI assessment note: “One of the most actually formative books I read was How Will You Measure Your Life”

Q What does venture look like in 10 years, do you think? Do we have 10 tigers? Is every asset manager going to get, you know, ten billion dollars a year in?

A No, I think there's going to be different styles, and it's going to evolve based on people are going to leverage the strategies that they've used to win in their own games to try to compete. You know, obviously, there was SoftBank, and there's Tiger, and the people will come, and they'll use the strategy. SoftBank came with lots of capital, making big ambitious bets, and focused on these capital-intensive industries. Tiger came from the public world, and, you know, betting in high-quality assets, passive Investing style, being really friendly with founders. I think we can kind of start to see it. Maybe the Blackstone start to come to this world and they just offer to buy these companies outright. And so I don't think it's going to be one dominant strategy as much as people are going to take what they're good at, what helped them succeed in their other category and try to fit it in this technology world. And the reality is technology can get so broad that everyone's going to find their own way in their own niche. I mean, I think from our standpoint and how we'll be competing 10 years from now is for the builder mindset. That's what private is core. We're not financial investors. And as I talked about, some people are really good at that. They can do the risk adjusted models. They can price it to a three X and we know how to do that math, but that's just not our lens.

AI assessment note: “No, I think there's going to be different styles”

Q you beforehand, I emailed many of your founders, and every single one of them responded, which is the first time ever that has happened, and I would tweet that if you were on Twitter, but you're not. But I do want to start with a little bit on you. So tell me, how did you make the way into the world of venture and come to be at Thrive Today?

A Actually, I grew up pretty far from it. When I was younger, I was very focused on being a doctor, and I was on my way to med school, and I had this realization that I just knew very little about how the world worked. I got anxious about the idea of actually becoming even more narrow and focused over the next decade, going to medical school, residency, and all the things that followed from that. Deferred my decision to go to med school, ended up applying to a lot of places last minute, which Fortunate to get a job in private equity at Blackstone. Spent a lot of time regulating industries like healthcare and financial services. After a few years, I started to get a bit disillusioned with, even though these were amazing businesses and doing really well by all, you know, objective measures, they were investing so little into the future, and they're really relying on either the regulatory capture they had or the inertia of the market to continue to propel them forward. And don't get me wrong, they were amazing businesses, but I just left a little bit in Less inspired. And around this time, Josh, who's the founder of Thrive, was starting to think about Oscar Health, and we'd known each other from school, and I started spending time with him and the team unofficially around this, and I just got so inspired by the problems, the spaces, and the ambition of the team, which reached well b…

AI assessment note: “Josh, who's the founder of Thrive... I started spending time with him and the team”

Q So when you think about asset allocation, you think about the different buckets you have there, early growth, incubation, as you said, taking companies private, public, many different kind of vehicles and mechanisms that you do. How do you think about asset allocation across the different stages, and what does portfolio construction look like for you today, say, with the new two billion dollar fund?

A Yeah, we don't think too hard about Portfolio construction. Again, there's one rule at Thrive, and that's to be a part of category-defining companies with multi-decade tailwinds. We've divided our funds early in growth, and that's more of a mechanism for us to kind of think and drive and focus our conversations as we talk about opportunities. And our lens is that the lines are really blurring across the board. You know, was investing at Stripe at three billion, an early stage deal or a late stage deal. And so we think about where the most exciting opportunities are We remove a lot of the restrictions and the ideas of how do we price this deal or think about this deal, and more about are we backing category-defining companies, multi-decade tailwinds, and if we're right about that and we're in the number one, we're just so early in a lot of these innings that a lot of these things will continue to compound for a long period of time.

AI assessment note: “Yeah, we don't think too hard about Portfolio construction.”

Q Can I ask, do you worry about a loss of focus? Because I, I'm the same as you. My job is to be in the world's most transversional companies, period. People ask me what I invest in, I say unicorns. And, uh, like, but LPs go, oh, lack of folk. How do you respond to that?

A Two things. One is that actually, I think if you have that one lens, as you just talked about, Harry, about only investing in category defining companies, it actually drives a ton of focus. You are less distracted about trying to talk to every financial services company, because that's what it says your fund does, or every series A company, because that's what it says your fund does. And you're really focused on where can you identify and the signal around finding the founders, the opportunities, the markets that are really at the edge of Creating a new market, blowing the market open, and we think that just drives tons of clarity and focus around our conversations, because it's so easy as an investor to get caught up in, you know, you can make money on this deal, or it's a good return, or it's the best that we've seen recently, and that just doesn't enter the conversation, because that's not the threshold, that's not the mission, that's not the focus of the firm. With that lens, actually, we think it drives a ton of focus. The second thing is, I think it's natural, LPs, to think that way, because I think historically, investing was much more financial than it was Product and technology-based. We're just seeing technology transform what it means to make a great investment, and it's less about what the P&L tells you, and it's much more about the combination of market and team an…

AI assessment note: “if you have that one lens... it actually drives a ton of focus”

Q What does venture look like in 10 years, do you think? Do we have 10 tigers? Is every asset manager going to make me a ten billion dollars a year in?

A No, I think there's going to be different styles and it's going to evolve based on people are going to leverage the strategies that they've used to win in their own games to try to compete. You know, obviously there were SoftBank and there's Tiger and the people will come and they'll use the strategy. SoftBank came with lots of capital, make ambitious, big ambitious bets and focus on these capital intensive industries. Tiger came from the public world and, you know, betting in high quality assets, passive investing style, being really friendly with founders. I think we can kind of start to see it. Maybe the Blackstone start to come to this world and they just offer to buy these companies outright. And so I don't think it's going to be one dominant strategy as much as people are going to take what they're Good at what helped them succeed in their other category and try to fit it in this technology world. And the reality is technology can get so broad that everyone's going to find their own way in their own niche. I mean, I think from our standpoint and how we'll be competing 10 years from now is for the builder mindset. That's what private is core. We're not financial investors. And as I talked about, some people are really good at that. They can do the risk adjusted models. They can price it to a three X and we know how to do that math, but that's just not our lens.

AI assessment note: “No, I think there's going to be different styles and it's going to evolve”

Q What did you take away from it? What trap do people fall into?

A Where were you like, Oh, one of the things he really talks about is short-term reinforcement versus long-term reinforcement. And so when you are investing in the life of your child, you might not see the fruits of labor for 12 or 18 years versus when you're working on a deal, you know, get the pie of closing that deal or the next candidate or doing the next thing is reinforcing. And so high performance people are really attracted to feeling like they're driving success where maybe it doesn't feel like you're driving success because you're, you don't, you're not seemingly making objective progress with your children, your family or relationships. So putting that all in perspective and really thinking about putting the right seeds in the ground for what you want long-term as you kind of reflect back on your life.

AI assessment note: “one of the things he really talks about is short-term reinforcement versus long-term reinforcement.”

Q So when you think about asset allocation, you think about the different buckets you have there, early growth, incubation, as you said, taking companies private, public, many different kind of vehicles and mechanisms that you do. How do you think about asset allocation across the different stages, and what does portfolio construction look like for you today, say, with the new two billion dollar fund?

A Yeah, we don't think too hard about Portfolio construction. Again, there's one rule at Thrive, and that's to be a part of category-defining companies with multi-decade tailwinds. We've divided our funds early in growth, and that's more of a mechanism for us to kind of think and drive and focus our conversations as we talk about opportunities. And our lens is that the lines are really blurring across the board. You know, was investing at Stripe at three billion, an early stage deal or a late stage deal. And so we think about where the most exciting opportunities are We remove a lot of the restrictions and the ideas of how do we price this deal or think about this deal, and more about are we backing category-defining companies, multi-decade tailwinds, and if we're right about that and we're in the number one, we're just so early in a lot of these innings that a lot of these things will continue to compound for a long period of time.

AI assessment note: “we don't think too hard about Portfolio construction.”

Q Before we move to your personal style of investing, how do you respond to the people that say it's momentum investing? This is the wild west, slinging term sheets by email. You know, Kareem, you're a smart guy. Yes, a hundred million bucks. Go. Which some of my founders have had. How do you respond to the momentum suggesting suggestion?

A I mean, obviously the velocity's picked up and the prices have escalated. My view is if you're in the right company, it doesn't matter if you're in at the wrong time. So this could be above cycle relative to kind of how things have gone. We worry less about the timing that we hit in, the velocity that kind of comes in. Obviously we want to compete and we want to be there, but part of it too is back to the focus point. Because our lens is so narrow, we're rarely meeting a company for the first time when it's fundraising. We're spending time thinking about what are the real category shifts? What are the real market opportunities happening? And being very proactive about it. So we take the time to get to know founders, markets, opportunities. So we're in a better position when maybe that term sheet comes across. Surprisingly, it's not the first time that we're hearing about the company. You know, we think as long as we're in the right names, we pay less mind to the time and the Cycle and momentum of investing.

AI assessment note: “we think as long as we're in the right names, we pay less mind”

Q Can I ask, do you worry about a loss of focus? Because I, I'm the same as you. My job is to be in the world's most transversional companies, period. People ask me what I invest in, I say unicorns. And, uh, like, but LPs go, oh, lack of folk. How do you respond to that?

A Two things. One is that actually, I think if you have that one lens, as you just talked about, Harry, about only investing in category defining companies, it actually drives a ton of focus. You are less distracted about trying to talk to every financial services company, because that's what it says your fund does, or every series A company, because that's what it says your fund does. And you're really focused on where can you identify and the signal around finding the founders, the opportunities, the markets that are really at the edge of Creating a new market, blowing the market open, and we think that just drives tons of clarity and focus around our conversations, because it's so easy as an investor to get caught up in, you know, you can make money on this deal, or it's a good return, or it's the best that we've seen recently, and that just doesn't enter the conversation, because that's not the threshold, that's not the mission, that's not the focus of the firm. With that lens, actually, we think it drives a ton of focus. The second thing is, I think it's natural, LPs, to think that way, because I think historically, investing was much more financial than it was Product and technology-based. We're just seeing technology transform what it means to make a great investment, and it's less about what the P&L tells you, and it's much more about the combination of market and team an…

AI assessment note: “only investing in category defining companies, it actually drives a ton of focus.”

Q What does venture look like in 10 years, do you think? Do we have 10 tigers? Is every asset manager going to make me a ten billion dollars a year in?

A No, I think there's going to be different styles and it's going to evolve based on people are going to leverage the strategies that they've used to win in their own games to try to compete. You know, obviously there were SoftBank and there's Tiger and the people will come and they'll use the strategy. SoftBank came with lots of capital, make ambitious, big ambitious bets and focus on these capital intensive industries. Tiger came from the public world and, you know, betting in high quality assets, passive investing style, being really friendly with founders. I think we can kind of start to see it. Maybe the Blackstone start to come to this world and they just offer to buy these companies outright. And so I don't think it's going to be one dominant strategy as much as people are going to take what they're Good at what helped them succeed in their other category and try to fit it in this technology world. And the reality is technology can get so broad that everyone's going to find their own way in their own niche. I mean, I think from our standpoint and how we'll be competing 10 years from now is for the builder mindset. That's what private is core. We're not financial investors. And as I talked about, some people are really good at that. They can do the risk adjusted models. They can price it to a three X and we know how to do that math, but that's just not our lens.

AI assessment note: “No, I think there's going to be different styles and it's going to evolve”

Q Before we move to your personal style of investing, how do you respond to the people that say it's momentum investing? This is the wild west, slinging term sheets by email. You know, Kareem, you're a smart guy. Yes, a hundred million bucks. Go. Which some of my founders have had. How do you respond to the momentum suggesting suggestion?

A I mean, obviously the velocity's picked up and the prices have escalated. My view is if you're in the right company, it doesn't matter if you're in at the wrong time. So this could be above cycle relative to kind of how things have gone. We worry less about the timing that we hit in, the velocity that kind of comes in. Obviously we want to compete and we want to be there, but part of it too is back to the focus point. Because our lens is so narrow, we're rarely meeting a company for the first time when it's fundraising. We're spending time thinking about what are the real category shifts? What are the real market opportunities happening? And being very proactive about it. So we take the time to get to know founders, markets, opportunities. So we're in a better position when maybe that term sheet comes across. Surprisingly, it's not the first time that we're hearing about the company. You know, we think as long as we're in the right names, we pay less mind to the time and the Cycle and momentum of investing.

AI assessment note: “we pay less mind to the time and the Cycle and momentum of investing.”

Q I do have to ask, because kind of aligned to the pricing element is the deployment speed element, and Tiger You know, I've done many things for this ecosystem. Compressing, you know, deployment timelines is one of them. How do you feel about the compression of deployment timelines and bluntly the speed at which you're having to make a decision when meeting founders today?

A We know there's a lot of complaints about Tiger investing. We think it's natural and totally inevitable as technology investing goes from this niche asset class venture that was small group of people to actually being a good business. And so every asset manager is going to come compete in space. Because it's not about they like tech or they think tech's interesting. It's just a good business now to be investing behind. And kudos to Tiger and the team. They're really smart and they're finding their own way to kind of compete in market. And that's on speed and friendly terms to founders. And I think a lot of investors are complaining because they haven't had to really compete as much before. There's just been a ton of passive success in the industry. So many funds enjoyed success because they happen to live in the epicenter of the greatest boom of entrepreneurial success the world has ever seen. It was a totally different game back then, and I think the competition looked different. It was kind of the man with one eye, king of the blind, or however that line goes, and if you were somewhat good, you cleaned up in the market back then. It's just a different game now, because you're kind of seeing competition from lots of different lenses, and it's broken from this niche category into a much larger one. From our standpoint, it doesn't bother us too much, because we've always been co…

AI assessment note: “From our standpoint, it doesn't bother us too much, because we've always been competing.”

Q has what you thought mattered changed over time? You know, I used to spend far too much time on products, on market sizing, on pricing, and then actually literally now I become much more of a psychologist and just spend all my time literally on, like, the childhood of the founder and their vulnerabilities and their fears and their ambitions and very much in depth there. How have you changed?

A Yeah, I think similar to you. I came in back to the story, really excited about the thesis, this second industrial revolution we're living in, the early innings of tech transforming every industry, and very much my mentality and focus around engaging companies on the product, the market, strategy, recognizing and feeling more viscerally all the things that go into building a company and building a team and a culture and how to align it and organizationally how to build the sequencing and the strategy. I find I spend way more time in that, hopefully because now maybe I'm a bit more qualified to have Perspectives, but then you start to realize, too, once you kind of product market fit, the real important thing to really focus on is, hey, how do you align and get a team and build to get them all to row in one direction, not just to build a good company or a great company, but an exceptional company that stands the test of time, and that's really hard, and so that's where I found that, you know, I've started to spend a lot more of my time in versus, to your point, a lot on the market and the thesis.

AI assessment note: “I've started to spend a lot more of my time in versus... the market”

Q has what you thought mattered changed over time? You know, I used to spend far too much time on products, on market sizing, on pricing, and then actually literally now I become much more of a psychologist and just spend all my time literally on, like, the childhood of the founder and their vulnerabilities and their fears and their ambitions and very much in depth there. How have you changed?

A Yeah, I think similar to you. I came in back to the story, really excited about the thesis, this second industrial revolution we're living in, the early innings of tech transforming every industry, and very much my mentality and focus around engaging companies on the product, the market, strategy, recognizing and feeling more viscerally all the things that go into building a company and building a team and a culture and how to align it and organizationally how to build the sequencing and the strategy. I find I spend way more time in that, hopefully because now maybe I'm a bit more qualified to have Perspectives, but then you start to realize, too, once you kind of product market fit, the real important thing to really focus on is, hey, how do you align and get a team and build to get them all to row in one direction, not just to build a good company or a great company, but an exceptional company that stands the test of time, and that's really hard, and so that's where I found that, you know, I've started to spend a lot more of my time in versus, to your point, a lot on the market and the thesis.

AI assessment note: “started to spend a lot more of my time in versus, to your point”

Q I do have to ask, because kind of aligned to the pricing element is the deployment speed element, and Tiger You know, I've done many things for this ecosystem. Compressing, you know, deployment timelines is one of them. How do you feel about the compression of deployment timelines and bluntly the speed at which you're having to make a decision when meeting founders today?

A We know there's a lot of complaints about Tiger investing. We think it's natural and totally inevitable as technology investing goes from this niche asset class venture that was small group of people to actually being a good business. And so every asset manager is going to come compete in space. Because it's not about they like tech or they think tech's interesting. It's just a good business now to be investing behind. And kudos to Tiger and the team. They're really smart and they're finding their own way to kind of compete in market. And that's on speed and friendly terms to founders. And I think a lot of investors are complaining because they haven't had to really compete as much before. There's just been a ton of passive success in the industry. So many funds enjoyed success because they happen to live in the epicenter of the greatest boom of entrepreneurial success the world has ever seen. It was a totally different game back then, and I think the competition looked different. It was kind of the man with one eye, king of the blind, or however that line goes, and if you were somewhat good, you cleaned up in the market back then. It's just a different game now, because you're kind of seeing competition from lots of different lenses, and it's broken from this niche category into a much larger one. From our standpoint, it doesn't bother us too much, because we've always been co…

AI assessment note: “From our standpoint, it doesn't bother us too much, because we've always been competing.”

Q My question to you on that is, ok, with that in mind, and with ambitious young people in mind, how do you create an environment of safety where they feel that they can take these risks without the repercussions of, oh wow, we fucked up. How do you create that environment of safety, but also not too safe?

A The way we think about creating Thrive to be the most exciting place for young and ambitious people to bet on themselves is first having a small team and being flexible in our structure. If you actually think about Thrive, yes, we're a venture firm, and we've grown a lot from the forty million of fund at the time to managing more than ten billion of AUM, but we've really done it without any rules. We've been very opportunistic, and we've only really had one rule, and that is to be a part of category-defining companies With multi-decade tailwinds. The tailwinds being important, because if you have tailwinds for long enough, any market will eventually be large enough, and the one B under that rule is we want to be their best partner, and that's exciting and liberating for young people who don't want to be told how to do things, but want to make their mark on the world, and don't have to be slotted into a growth fund, or an early fund, or think in a certain way, or we benchmark and we invest in those ways. We do pre-IPO rounds like Zoom or Zillow in the public markets, or spinning Vimeo out of I see you're taking Collector's Universe private, took that company private, and we actually build companies as well. There's one goal, which is to be a part of these category-defining companies.

AI assessment note: “we've really done it without any rules. We've been very opportunistic”

Q My question to you on that is, ok, with that in mind, and with ambitious young people in mind, how do you create an environment of safety where they feel that they can take these risks without the repercussions of, oh wow, we fucked up. How do you create that environment of safety, but also not too safe?

A The way we think about creating Thrive to be the most exciting place for young and ambitious people to bet on themselves is first having a small team and being flexible in our structure. If you actually think about Thrive, yes, we're a venture firm, and we've grown a lot from the forty million of fund at the time to managing more than ten billion of AUM, but we've really done it without any rules. We've been very opportunistic, and we've only really had one rule, and that is to be a part of category-defining companies With multi-decade tailwinds. The tailwinds being important, because if you have tailwinds for long enough, any market will eventually be large enough, and the one B under that rule is we want to be their best partner, and that's exciting and liberating for young people who don't want to be told how to do things, but want to make their mark on the world, and don't have to be slotted into a growth fund, or an early fund, or think in a certain way, or we benchmark and we invest in those ways. We do pre-IPO rounds like Zoom or Zillow in the public markets, or spinning Vimeo out of I see you're taking Collector's Universe private, took that company private, and we actually build companies as well. There's one goal, which is to be a part of these category-defining companies.

AI assessment note: “liberating for young people who don't want to be told how to do things”