The Crazy Story of Google’s 7 Angel investors

Shaan Puri

Today I'm going to tell you about *seven strangers* who made **the greatest investment of all time**. "Sam, I'm just going to put my finger to your lips and say, 'Let me cook here,' because I got something for you. I'm going to take you down a road here." Alright. I've been down this rabbit hole for the last... I want to call it *six hours* preparing for this podcast, because I just got obsessed with the random story and lore of the first people who invested in Google. This is crazy. So, this is the story of all the people who invested early in Google. The lessons from this are not about investing in Google — that was *twenty years ago* — but about how crazy the world of angel investing is and how much you can almost create your own luck. I want to show you how these people created their own luck, step by step. So first, let me show you something. Alright, Sam — check this out: do you recognize this building?

Sam Parr

just probably something in downtown palo alto

Shaan Puri

**165 University Avenue** — also known as the *Lucky Office*, also known as the *Karma Building*. You might recognize it a little better when you see some of the companies that were started here. Google was started here. PayPal was started there. Logitech was started there after Google was started. A company called Danger was started there; it was sold for $500,000,000 to Microsoft by the guy who created Android right after that. This office is legendary.

Sam Parr

who's in there now

Shaan Puri

It's had a little bit of a cold streak recently, and it's kind of like Ed Sheeran says. > "Ed Sheeran believes that rooms have songs. Once a studio has been mined by 4 or 5 great artists, it loses its magic — there's no more songs left in the room." That's kind of what's happened to this office now. Hey, let's take a quick break to talk about our sponsor. **HubSpot** has put together a list of **200 AI business ideas**. These are business ideas that you could create using AI, and it's a list of 200 — they did a huge brainstorm. You can check it out if you just click the link below [link below] to get access to these 200 AI ideas. I'll give you an example of a couple of them. One is you could build an *AI dressing room*. So, let's say you go to an e‑commerce site and you want to see what something would look like on you. You can use AI to actually take a picture of you and show you what the clothes would look like on you, or what the makeup would look like on your face. It's pretty cool, right? Or AI tools for real estate brokers — maybe something that takes their listings and makes them more fancy, more beautiful, and attracts more buyers. So check it out: it's a brainstorm of 200 possible AI ideas brought to you by HubSpot. You can get it free in the link below. Alright, I want to 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?

Sam Parr

the guy on the left is sergei he's one of the founder is that sergei or the other guy larry

Shaan Puri

yeah that's sergei

Sam Parr

sergei and the guy on the right is that eric schmidt

Shaan Puri

It's not **Eric Schmidt**. It is a guy named **Andy Bechtelstein**. Does that name sound familiar? No. Maybe if you just look at these "murdered out" guys from... [sentence trails off]

Sam Parr

from the

Shaan Puri

Yeah, these murdered-out red Corvettes from the early 1990s... This might ring a bell or two. What you're looking at are some of the OGs of Silicon Valley — these are the founders of **Sun Microsystems**.

Sam Parr

do you

Shaan Puri

know what sun microsystems did

Sam Parr

it was one of the first big companies was it making microchips

Shaan Puri

workstations computers basically

Sam Parr

okay

Shaan Puri

And they made their own chips, too. They ended up making chips and their own operating system. They did a lot of things — these guys were like the *OGs of the OG*. That first guy, the Indian guy, that's **Vinod — Vinod Khosla**. There's **Bill Joy**, there's **Andy**, and then there's **Scott McNealy**. Alright, so these are the four founders of Sun.

Sam Parr

dude by the way for the record they look dope

Shaan Puri

they look dope as hell oh that's funny

Sam Parr

the corvette and the flex that doesn't exist anymore and I think it's fantastic I think this is great

Shaan Puri

First of all, they're all on cell phones—guess what: cell phones hadn't been invented yet. I don't even know what they're holding. They're just like a corded phone that gets run into their car with the little spiral cord. Anyway, these guys are awesome. Andy wakes up one morning and he's got an email in his inbox. It's from two Stanford students, Larry and Sergey, the founders of Google, and they're pitching him an idea for a new kind of search engine. The way search engines worked at the time was like Ask Jeeves, AltaVista, and Yahoo. In the early nineties, these search engines used some combination of manual curation—editors picking what goes up front—or they would just try to match the words you typed to websites. These two PhD students said, "We have a new way of doing this—it's called PageRank." What PageRank does is basically this: instead of just showing you what editors say is the right answer or giving you a simple word match when you search for something like "murdered-out red Corvette," they're going to show you the websites that other people are linking to. **Social proof.** If other websites link to your site, your site is probably pretty good. And the more important those websites are—for example, if The Wall Street Journal links to you, that matters more than if Sean's website links to you—the better the result. They had this insight that they could create better search results this way. They said they'd like to show Andy, and he replied, "I'll see you tomorrow morning, 8 a.m." He meets them; they pull up in a parking lot. He's in his— the story says a Porsche—so maybe one of these is a Porsche.

Sam Parr

one of those is a porsche

Shaan Puri

Okay, great. As you could tell, I'm a car guy. One of those is a **Porsche**—that's Andy's car. Larry and Sergey show up. They have a little laptop and are trying to show him a demo of Google. They say, "Search for something." He searches for something, the results come up, and it's magic. The results are way better than you would get out of a traditional search engine. They start telling him their thesis and what they're going to do, and that they're thinking about raising money to actually turn this into a company. He says, "Guys, there's a lot of things we could talk about right now, but I think it's easier if I just give you money." He goes back to his Porsche, comes back with a checkbook, and writes them a check for $100,000, made out to **Google Inc.** They say, "Google?" and, "Hey, we haven't even incorporated the company yet." He replies, "It doesn't matter." They ask, "But what about valuation?" He says, "Guys, this is the best idea I've ever seen. Take the money, start building." He leaves, gets back in his Porsche, and drives away. He doesn't even know how much of the company he's just bought because they didn't even agree on a valuation, a number of shares, none of that. He invested the money and walked away—he invested at a $10,000,000 valuation. Google today is like multiple $1,000,000,000,000, right?

Sam Parr

so he

Shaan Puri

He owns **2%** — he owns 2% of this company. He doesn't even realize this at the time because they haven't decided on a valuation. He's so excited about this company. If you remember the *four levels of luck*, he basically has "luck 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 this is the guy who created **Sun**. At the time he's the man. This is like if **Elon** saw something and invested in a company — he'd say, "No, this is the best product I've ever seen," and, "This is the guy that made **Tesla** and **SpaceX** and is building rockets." He's like, "No, no, no, this is the shit." Andy does that — 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?"

Sam Parr

He's another *OG*—like **Cisco** or **Zoom**, one of those big companies that I don't even know what they do, but they have a huge building.</FormattedResponse>

Shaan Puri

Arista Networks. Okay — he also invested in, I think, VMware, which sold to Cisco for $700 million. 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 Cheriton's nickname was "the Billionaire Professor." This guy is a professor at Stanford, but he's super wealthy — a multibillionaire. He's also on many lists as one of the most frugal billionaires you'll ever meet. A little quote about it: they were like, "Dude, you're a billionaire — why don't you... you ride your bike everywhere, you don't even have 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, "Honestly, I kind of hate the idea of living like a billionaire. I'm actually pretty offended by that sort of thing — you know, the type of people that live in houses with 13 bathrooms and so on. Something's wrong with those people." This is David Cheriton. He gives away tons of money — he's given away 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 on his old bike. That's how he lives his life, and he's great.

Sam Parr

So, can we just say, really quick, that the *professor‑billionaire* type—of all the billionaires, they might be one of the best?

Shaan Puri

maybe your

Sam Parr

favorite I think so

Shaan Puri

I thought criminal billionaire like silk road type shit

Sam Parr

They were good. They're cool — those are cool, but they're not aspirational. I mean, I want to be friends with them, but the aspirational one is the **professor-billionaire**. You know, the guy who started Renaissance, the big hedge fund. Professor-billionaire Ed Thorp was a professor-billionaire. Those are the best billionaires.

Shaan Puri

but what about I thought you loved like the just the ruthless tycoons the the

Sam Parr

I like reading about them. They're fun to read about; they've got great stories. But if you could be anyone... did you— you wanna be a billionaire? You were the "professor of billionaires." Great.

Shaan Puri

So Andy tells David Sheridan. He goes, "Hey, you gotta talk to these guys — they're at Stanford." He starts; he meets the guys. He also writes a check in the same round again, like between $100,000 and $150,000, so he puts it in. Okay, so now...

Sam Parr

and was he a billionaire when he made that deal or was he just successful

Shaan Puri

Not a billionaire, but successful. He had started a company called **Granite Systems**, and eventually he did create **Arista Networks**, which is a *multibillion-dollar* company. But at the time it was, you know... let's call it probably had tens of millions of dollars. </FormattedResponse>

Sam Parr

and he is really rich now I just googled him holy crap

Shaan Puri

yeah like 10,000,000,000 + right 20,000,000,000

Sam Parr

like yeah closer like really rich like top 100 rich

Shaan Puri

Yeah — him and Andy. Both of them. They both are now... This guy ended up making over $1 billion just off his Google shares. Okay, so he meets David. Now, who's the next person that finds out about this little company called "Google" that was started by these two students on campus? Well, David goes to a holiday party, and at the holiday party he meets another person. Do you know who this guy is? Yeah — Ron Conway. Ron Conway. This is going to be a little bit of a long session because Ron Conway is a *goddamn legend*, and I kind of knew Ron Conway was the man. I've actually met Ron Conway before, and he just has this presence — he's got a bit of an aura about him. But is he—

Sam Parr

"Like a *forgetful professor type*, because he's always taking notes, always moving and doing stuff, and he forgets things. Is that...?"

Shaan Puri

Always taking notes. In this picture he's got a light yellow legal pad. When I met him, he also had a yellow legal pad and he was furiously writing notes. We were at a lunch with the mayor, and he was just writing copious amounts of notes. He was always on the move. If somebody asked him a question, or if someone came to introduce themselves, he'd say, "How can I help you do what you're doing?" He was like, *get to the ask* — "What's your ask? If I could do it, I'm gonna do it." Then he'd jot down a note on his yellow legal pad: "Cool, I'll make that introduction." Literally seven minutes later, the introduction was made. This guy moves at a different speed.

Sam Parr

You know, in the Mafia, when the Godfather has a wedding—his daughter's wedding—everyone in town can come and ask him *one favor*. He's like that every day.

Shaan Puri

Exactly. You said, "Is he also like the forgetful professor?" I think he's more like... he's more like *Santa Claus*. He's *Saint Nick*.

Sam Parr

okay

Shaan Puri

He's like *Saint Nick after a triple espresso* — so he's just moving. Okay, so Ron Conway goes to this holiday party. The way he tells the story is: "I get to this party and I'm in a tuxedo, and Goddamn, I hate being in a tuxedo. I'm so uncomfortable." He says, "I just see—I see David there; he's also in a tuxedo. 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.'" 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. You gotta be my eyes and ears on the ground." He asks, "David, what are you seeing at Stanford? What's exciting right now?" David replies, "Oh, I just—I just invested in these two PhD students that are doing the search engine thing." He had invested in Ask Jeeves, so he knew: search engines are a big deal. If somebody says there's a new search engine that's better than Ask Jeeves, "I'm interested, I want to check it out." So he asked David, "Can you arrange for a meeting?" and he tries to get this meeting and he kinda fails. They're like, "We're busy. Look, we're not taking angel investors—we want VCs." But they go, "But maybe you can actually help us get a VC."

Sam Parr

was ron a legend then or a legend in the making

Shaan Puri

legend in the making

Sam Parr

got it okay

Shaan Puri

are you do you want do you want the quick backstory on ron that's pretty insane

Sam Parr

yeah

Shaan Puri

Alright, so Ron Conway starts off as an entrepreneur. He starts a company called **Altos Computing**. They were making computers like **Sun** [Sun Microsystems], and he ends up taking it public. Then they get their ass kicked — the personal computer (the PC) comes out, and the PC starts kicking their ass. They end up selling the company, but they do well. His early investor was **Sequoia**, so he goes to Don Valentine, who's like the guy who created...

Sam Parr

og yeah

Shaan Puri

The **OG of OG investors**, and Don's like, "Alright, Ron, what do you wanna do next? What's the next company you're gonna start?" Ron goes, "Honestly, I never wanna manage a thousand people again. That was a nightmare. I don't know what I wanna do, but that's not it." Don replies, "That's a bummer. My hope is you're ready to start a new company — I was ready to write the check. But if not, maybe you'd be a good investor. How about I recruit you [unclear: 'descoa']? Why don't you come follow me around for a couple weeks, see if you like this investing thing?" So he follows Don around. Don says, "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*. It's a new thing." At the time, *angel investing* was actually a term from Hollywood; it was about investing in movies.

Sam Parr

I think they called it super angel or something wasn't it like even like a different term

Shaan Puri

he became a super angel but like it started with just angel investing he goes you know what you don't even have to start your own vc fund you could just invest your own money just small checks 10 20 k checks and then hey when you see something cool you bring it to me it's sequoia right and so he tells him we should go do this and ron decides alright 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 1994 he's like alright 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 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 and so don's like okay is your niche gonna be com like 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 andreessen 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 and there's this new thing called the internet fuck it I'm all in on the internet and he just decides he's like look it's a thing that's at 0 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 0 I'm gonna get to watch it grow and by the time you know this thing's 4 years 5 years in I'll be the expert and he goes that's the greatest decision I ever made in my life and he goes by the way it's now 2025 I'm still all in on the internet he's like I 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 the internet now around 1999 he's been angel investing he raises a fund he raises a fund for $25,000,000 from other people to be the silicon valley you know angel investing fund sv angel if you've heard of it and yeah actually at the time it was called something else angel investments or something like that but he decides I'm gonna invest in silicon valley companies he raised $25,000,000 the dotcom boom hits it's getting hot he raises the next year another 175,000,000 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 250 investments by the time the dotcom bubble bursts and when it bursts he's like oh shit and they go to him his his he's only working with like 4 or 5 guys and they're like hey what's our strategy like the market's 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 and so 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 the dotcom bubble burst 80% of our companies just went to 0 but luckily he had Google and he had invested in Google along the way 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 philosophy was and a lot of people say this but he actually did it his philosophy was all I do is I am as 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 paul graham basically calls us the the ronco principle and he goes paul graham describes this he goes I he goes I noticed when ron conway goes I've never heard one instance of ron conway behaving badly to any founder and that's incredible because this guy's invested in like thousands of companies he goes in fact I went looking for examples has 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 some a situation and he just went above and beyond and he goes so paul graham hears this and says you know what actually maybe there's something to this actually I've heard about a couple other investors that are like this and he goes maybe this is not just like a a funky coincidence maybe there's a bit of a strategy which is so much of angel investing is getting invited into deals and if your reputation is just one where you just always act benevolently then it's actually not just like an 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 and so ron conway who by the way just side note go to sv angel's website if you were trying to research this company what would you what would you pay attention to

Sam Parr

which companies they invested in

Shaan Puri

and what do you see there

Sam Parr

**Pinterest**, **Coinbase**, **Facebook**, **OpenAI**, **Snapchat**, **Twitter**, **Rippling**, **Reddit**, **Okta**, **Anthropic**, **Square**.

Shaan Puri

Every hit company is on this list. Every hit Silicon Valley company is on this list. **Paul Graham**, when he...

Sam Parr

Airbnb, Brex, Checkr — like, everything ever. *Like, literally every company.*

Shaan Puri

Paul Graham did a talk where he interviewed Ron Conway. He said: > "Alright, if you need to remember one thing from this, I'm gonna say a bunch of words but just remember this one sentence: 'Ron Conway is the man.'" He continued: "I was gonna do an intro talking about the hit companies you've invested in and then I realized it's actually shorter to write down a list of the hit Silicon Valley companies that you missed." He listed three that Ron missed: Salesforce, Kickstarter, and one more I forgot. He said, "It's insane the number of hits that you've invested in." The funny thing is that Ron doesn't even spend—like, I don't know if you know about his investing style—but it's exactly the same as YC [Y Combinator], which I find fascinating.

Sam Parr

is why he just like $100,000 in every single thing

Shaan Puri

He meets you, and in 10 minutes he makes a decision. And Ron says, "It's usually **3 to 5 minutes** — he'll just decide on the spot in **3 to 5 minutes**." YC has a **10‑minute** interview and then they make their entire decision off those 10 minutes. So the two best pickers — the two best angel investors in the history of Silicon Valley — both make all of their decisions in under 10 minutes. Isn't that insane?

Sam Parr

and so how much does he invest

Shaan Puri

initially he was investing like you know 25 k then it became a 100 k then became 250 k

Sam Parr

I'm not sure if that strategy would work now, because... I think back in the '90s and 2000s, if you had the gumption to be one of the people who threw your hat in the ring, got a meeting, and did this, it worked. The **barrier to entry was high**, and there was a higher ratio of "freaks" doing this stuff. Now it's cool, so there's **a lot more noise**. I don't know if that would work now.

Shaan Puri

Well, let's look at their list here: **Anthropic** — that's recent. **OpenAI** — that's recent. **Hugging Face** — that's recent, right? These are the big ones. If I said, "What are the best companies in the last four years to be invested in?" — OpenAI, Anthropic, and Hugging Face would be on that list. He's in **Uniswap**, which was the big one in the crypto phase, like five years ago or whatever. So I think this still works. But the trick to making it work is not just that they make snap decisions. His decision process was basically this: people would ask, "What's your thesis?" He said, "I had no thesis." He went into angel investing when there wasn't even really a word for it — there was no thesis you could have at the time. "I just—alright, the internet's cool." He said, "I realized one mistake pretty quickly," which was that the more he tried to judge a founder by blending the idea, the founder, and the market together and making a decision off that mix, you lose. If you love the founder but you hate the idea, you also lose. He said, "Airbnb — I didn't love the idea, but I loved the founders."

Sam Parr

so what does he pick 1 of those 3 or just the person he's just like I just pick the founder

Shaan Puri

He goes, "What I do is, I'm just gonna invest in the founder. It's the founder's job to figure out the idea," and often they change the idea. He goes, "By the way, I'm not just investing in this founder for this company—I'm investing in this founder for life," because he realized that the best founders start multiple companies. For example, one of his first employees when he started doing this was his son, Topher. His son was 13 years old and made his first investment at 13 in a little company called *Napster*. He said, "I heard about Napster but I don't know about this shit. Topher, go use this thing and tell me if it's amazing." Topher came back the next day: "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 like—this is mind-blowing, this decentralized thing." He said, "Cool. Alright, let's go invest in this thing." He met the founders—he had already met them; that was his diligence—and he invested in Sean Parker and Shawn Fanning. "Cool, anything you guys do from here on out, I'm in." Napster didn't work out, but Shawn Fanning's fourth or fifth company ended up being a hit. Napster didn't work out, but Sean Parker's next company was Facebook. "I totally didn't get Facebook. I didn't know how social networks would make any money. It seemed like college kids posting pictures of their drunk escapades—it didn't seem like someone was going to make money." But Sean Parker was in, and he said, "I've decided Sean Parker's a founder that I want back," so he invested in Facebook too.

Sam Parr

alright so bringing it back to Google alright so bringing

Shaan Puri

He goes to the Google guys. They're like, "Hey, we want a VC." They say, "All right — we'll let you in if you can go get Sequoia," because Paul Graham asked him. He says, "You know when you invest in Google, did you know this is a huge company? There's gonna be an all-time company." He adds, "You could never think of a company as a $1,000,000,000,000 company" [= $1 trillion], "but I did think it was going to be really, really big." I went all in trying to get this investment. They asked, "Why'd you go all in?" He says it was because they had three things: 1. **Super-smart geeks** — that's criterion one. 2. **Really determined**. 3. **Do they do something that surprises me?** For example, they're really smart geeks but also really charismatic. He notes that wasn't the case for Zuck — he wasn't especially charismatic. With Zuck, early on he was talking about getting **300 million users**. He said, "No service had 300 million users," and the fact that Zuck had figured out, "Yeah, we're gonna connect everybody," made him think, "Oh shit — this guy is saying things like that. He has a level of ambition that's not common." He wasn't surprised when Zuck turned down **$1 billion** from Yahoo, because all he wanted to do was rifle-focus on a product that would actually reach everybody. With Google, they were super strategic. They told me, "You could be in if you can get Sequoia." I asked, "Okay, Sequoia is great, but why Sequoia?" They said, "Not just Sequoia — we need Mike Moritz." I asked, "Okay, Mike's great, but why Mike?" They said, "Because Mike is on the board of Yahoo. What we're gonna do is build the best search engine. Right now Yahoo has a deal with AltaVista — AltaVista powers all of their search. We want to cut two mega deals: we want to be the default search engine on Yahoo, and once we convince Mike Moritz that this is awesome — he's on the board at Yahoo — he'll get us the meeting. Then we want to do the same thing with AOL." </FormattedResponse>

Sam Parr

do they have like a product at this?

Shaan Puri

They had a product. They had users. He talks about that — he's like, "You know, basically... I saw the searches. The results were better." They had early users who *used it all the time*. So it wasn't that they had a ton of users, but it's the same thing as Facebook: the people who used it used it like crazy. And so they go, "We want Sequoia and we want Kleiner Perkins." He goes, "Well, you know, you could have either—or they don't usually like to do deals together." He says, "We want Sequoia and we want Kleiner Perkins because Kleiner Perkins' John Doerr is on the board of AOL—or has a relationship with AOL. We need that deal too."

Sam Parr

so they were cocky and smart and strategic

Shaan Puri

Yeah, 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.

Sam Parr

Well, I've read stories of them—**Sergei** and **Larry**—retelling the story. They said: > "We were full of ourselves. We thought we were the best, and we were pretty good, and we acted like it."

Shaan Puri

well there's stories of both right at one. They tried before this they tried to sell the tech for like $8,000 yeah and this is when they're like oh it's just an algorithm and then they had sort of gotten bigger and bigger so anyways so he goes so he goes I basically so from the time that that guy david sheridan tells about this company at this holiday party he goes I called them for 5 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 and klein and perkins is in oh actually there's one little thing before that he goes hey guys I'll lead this myself $10,000,000 and they go no we don't want you and he goes okay fine I'll go get your sequoia so he goes and he gets them sequoia into kline perkins but they're negotiating they both wanna do the deal they both wanna do the deal at unprecedented numbers they're trying to do it at like a $75,000,000 valuation which at the time was like bananas to do a $75,000,000 valuation but they they 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 fresh after a month of back and forth to larry and sergei are like dude forget this we don't wanna be fundraising ron you said that you would do this thing 10,000,000 yourself was that bullshit or is that real he go they 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 alright that's what we want he goes but honestly guys do you 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 but he he does what paul graham calls the most generous act in the history of silicon valley he calls sequoia he calls connor perkins he goes guys they're not bluffing if you don't have this thing done by monday they're doing a deal with me to do all 10,000,000 but they want this with you guys that's what they truly want you guys gotta figure this shit out 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 broke the deal yeah he he he gets the 250 k so that's how ron conway gets in on this deal one last little ron conway thing because it's just you said something about like mafia and here's ben horowitz from from andreessen horowitz 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 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 he goes 2 you must answer when called ron makes sure that his network matters because he demands extreme reliability if he calls you to participate you must participate when called upon and he goes 3 that keeps you in what I call good standing with ron 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 you 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 get one up and because of that he is ensured that silicon valley works

Sam Parr

so people like this guy that much

Shaan Puri

Alright, listen to this story. So, **Alfred Lin**, who ends up... have you ever heard that name, **Alfred Lin**, before?

Sam Parr

zappos zappos yeah

Shaan Puri

He ends up being the number-two guy at Zappos. I think before that he had started this company, and he tells the story like this: We were honestly on the brink of failure. It looked like the company was going to fail. My cofounder and I were talking — we were like, "Alright, have we tried everything?" There was one investor we hadn't talked to because we didn't know him super well. Ron did invest in our company early on, but his investment was really small, which is why we hadn't reached out to him yet. We first went to our big investors, but we struck out. We had a deal with a big Fortune 50 company and it fell apart. If we lost that deal, the company's dead. We had nothing to lose at that point. So at 11 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 50 company. We need the meeting this week, and if you can't make it happen, hey, that's totally okay — I understand. But we may be going down and I'm sorry." Two minutes later — this is 11 pm — Ron writes back in what I now have learned is *Ron style*: immediate, short, and all caps: > **"AM ON IT"** 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. Eventually our company got acquired for $800,000,000. We were on the brink of death, Ron didn't know us from Sam, and he saved our ass.

Sam Parr

Dude, the takeaway from all of this: **San Francisco's amazing**. Now, it's cool to shit on it because it is very frustrating. I've lived there for 10 years; it's super frustrating, but I've missed out so much by not being there. What people don't realize is San Francisco is only about 800,000 people. If I had to guess, Ron Conway lives in the Pacific Heights/Marina area. Walking around that neighborhood, you feel it and you hear these weird conversations. Just being able to email someone and say, "I'll meet you at the coffee shop five blocks away"—that's *special*, man. These types of interactions are special.

Shaan Puri

so check this out so you said like I don't know if that approach would work because now there's so many more companies and at the time when there's very few people starting companies I'm about to work so they asked him this was kind of like when he was in his peak investing time they go so how do you invest he goes I only take meetings that come from my network so he goes I will get 5 pitches a day so I see 30 a week 30 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 1 out of 30 every single week he goes of the 5 that I get per day I'll turn down 2 or 3 just via email no phone call the rest we'll invest in and I'll invest in I'll make my decision within 5 minutes of talking to the founder they go well what are you looking for in that founder he goes I'm looking for 3 things insane 247 desire to work he goes I could 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 he goes 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 and like this is this is it this is my thing and I'm doing this he goes that's the first thing I look for 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 anjad from replit was on the podcast where it's like this it's like oh shit this is kinda 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 with jimmy mister 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 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 3 weeks later it's like these friends are putting their hand on these chocolate bars and whoever takes their hand off the last gets like half a $1,000,000 of chocolate bars it's like wait this is just like this is kind of a dumb video but when you're there it's not a dumb video right it's fucking everything and he's able to like make you feel that way so that's kind of what he describes the last thing he talks about is he goes rifle focus on the product he goes 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 facebook all zuck one talked to 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 and he goes always talking about this product he goes then I met his his head of product or his like kind of his one of his core guys and I met him 3 times and every time he was wearing the same shirt and I go hey do you wear this shirt like often he goes I wear this shirt every day and you know what the shirt is it's a shirt with a circle and just the inside is just this word focus and he goes this guy literally every day wears 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 wanna go there he goes to the.

Shaan Puri

Of being rude these people just wanna focus on the shit that their folk on their their product that's it

Sam Parr

so he he did Google he brokered the deal who are the other people

Shaan Puri

I want

Sam Parr

next guy ron talked to

Shaan Puri

who you see

Sam Parr

I see shaquille o'neal shaq not a chance

Shaan Puri

so shaq is sitting at the

Sam Parr

that that doesn't even make sense was he even famous then

Shaan Puri

Of course, Shaq's famous. This is a little '90s—Shaq is an NBA star at this time. Shaq is in a hotel; he's in a fancy, I don't know, **Four Seasons** or **Ritz-Carlton**, sitting in the lobby. So this is Shaq telling the story. He goes, "I see four distinguished gentlemen in the lobby."

Sam Parr

your shaq voice we gotta go lower

Shaan Puri

I said

Sam Parr

I see I see 4 guys

Shaan Puri

Shaq walks into a meeting with four distinguished gentlemen. The men don't know who he is, but their kids do. They run up to him shouting, "Oh my God—it's Shaq!" The cool thing about Shaq—if you've ever seen videos of him—is that he's like a giant kid: playful and very kind to people. He's not one of those celebrities with sunglasses and a hat trying to push people away or getting annoyed when someone gets in his space. Shaq says, "I'm doing my job—babysitting," and he starts playing with the kids while they're having a meeting. At the end of the meeting, Ron Conway comes up to Shaq and says, "Thank you so much for playing with my grandkids." They start chit‑chatting. Ron says, "We were just talking about this investment we're doing. 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 Larry and Sergey. He says it was an accident: "I'm doing my job—I'm babysitting," and he agreed to a meeting. He put in some money and then forgot about it. Years later, Google goes public. He reads in the newspaper—[the S‑1 filing]—that "Shaq is in the S‑1; Shaq's gonna make a killing." He thought, "I'm Shaq?" and then he remembers. He wishes he had invested more. Shaq turned a couple hundred dollars into over $100,000,000 from that Google investment.

Sam Parr

way really

Shaan Puri

"Nobody knows how long he held it, but, you know, it's *pretty insane*. So **Shaq** is the next one. Do you know who this is?" "Yeah. Rip, rip. This is... I don't actually—how do you say her name? Do you know who?"

Sam Parr

she is susan last name is a polish name wojowski I forget yeah

Shaan Puri

wojowski I I don't know what it is

Sam Parr

susan w

Shaan Puri

So, Susan ends up getting in on the action early with Google, but I don't know if you know the story—how...

Sam Parr

I know that she had a garage, and they wanted to work there. Did she give them a free place to stay and work there, and get a little bit more equity?

Shaan Puri

Yeah, kind of. So her sister Anne was dating Sergei, and Anne said, "My boyfriend needs office space." Susan wasn't wealthy at the time. She was a mid-level marketing manager at some company. She and her husband had just bought their house and were feeling a bit of a pinch about the home, so they thought, "What if we rent out our garage?" They put up an ad saying they'd rent out their garage. The Google guys responded: "Oh actually, my boyfriend needs a space," and the Google team rented their garage for $1,700 a month. They started working out of her garage, and Susan saw them working there day and night. She heard updates just from bumping into them. She quit her job and ended up being employee number 16 at Google. That's how she became a billionaire—by quitting her job to go work for the company that was working out of her garage at the time.

Sam Parr

ended up being up until recently when she passed she was the youtube ceo

Shaan Puri

Exactly. She worked on AdWords for a bit, and then—she was a big advocate for, "Hey, we should acquire YouTube." When they acquired YouTube, they said, "You were a big champion for this deal." She ended up becoming the **CEO of YouTube** for many years before she passed away, and I think...

Sam Parr

that sister of hers started 23andme correct

Shaan Puri

Alright, this is... I don't think you know who this is.

Sam Parr

no oh yes I do I do per

Shaan Puri

Yes. Oh wow — that's a deep pull for you to know this. So this is Pejman. Now, he did not actually invest in Google, so I'm cheating a little bit, but this is part of... you said, "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 and this other guy — last name Amidi (I forgot; I think it's like "Samid Amidi" or something like that) — are two Persian guys. The first Persian guy starts a rug shop in Silicon Valley, right in the heart of Palo Alto. He's selling luxury Persian rugs. Right above his — like, right next to his rug shop — there's also some office space. He ends up renting office space to the founders of, I think, *PayPal* or something like that. PayPal's early founders were there; there were a couple others. He starts selling rugs to these people, gets to know them, and then he realizes, like, "Wow — Google, PayPal..."

Sam Parr

*Like that classic, gregarious immigrant or Persian guy who says:* > "Hey, my friend! Come here, come here. Come, my friend."

Shaan Puri

exactly you want some tea let's have some tea they have a tea

Sam Parr

tell me about yourself tell me about yourself

Shaan Puri

He becomes friends with them. He's right next to them — he's selling them rugs, he's selling them office space. But he's like, "Dude, these companies, you know, made a killing." So they start taking their rug money and they start investing and become angel investors. 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 rugs if they seem interesting." So how does Benjamin factor into this? Benjamin cold-calls this guy and says, "Hey, I'm coming up to Silicon Valley. Can I have a job with you?" The guy asks, "Have you ever sold drugs before?" Benjamin says, "No." The guy asks, "Have you ever sold anything before?" He goes, "No, but I could learn." The guy replies, "Listen, man, how can I give this job to somebody who's got no—no experience?" Benjamin plays on the Persian side and says, "How could you turn me down? You haven't even met me yet. Just meet me." The man agrees to meet him, he hires him, and Benjamin ends up basically as a rug salesman for this guy. Over the next 15 years, his English improves, his confidence improves, and he becomes BD's [business development's] top rug seller. In his best year he moves $8 million worth of rugs.

Sam Parr

that's insane that's absolutely insane

Shaan Puri

one of his first out

Sam Parr

of a out of a storefront

Shaan Puri

out of a storefront palo alto

Sam Parr

And so that's, like, you know, $600,000 of rugs a month... or that's so many dollars' worth of...

Shaan Puri

it's the same it's totally the same so along the way 30 grand is it

Sam Parr

what is that 20 grand a day of rugs

Shaan Puri

Yeah, and this guy's living—he comes to Silicon Valley, lives in an attic above a yogurt shop, and then becomes a rug salesman. That guy ends up becoming one of the greatest investors in Silicon Valley. Here's his trick. He meets somebody while selling rugs. One of the guys who walks in is **Andy Rubin**. **Andy Rubin** comes in; he buys a $5,000 Persian rug. During the negotiation he's so impressed with this guy. He's like, "Man, you're a great negotiator—what do you do?" The guy replies, "Oh, I'm a businessman. I got this company." He's like, "Tell me about it." The guy's got this company called *Danger*. Remember I told you one of the companies in the Lucky Office is called *Danger*? These guys made—do you remember the T-Mobile Sidekick cell phone? That's **Andy Rubin**—he made that. His next thing he made became *Android*. So **Andy Rubin**'s prolific.

Sam Parr

and then now he's since done deepmind or some type of a like no no

Shaan Puri

He went and became the head of mobile for the big Chinese manufacturers, and then I think now he's doing an AI thing. He's talked to this guy and he goes to his—he goes to his boss. I mean, he goes, "We gotta invest in this guy's company." His boss says, "Cool. What does it do?" He goes, "Couldn't tell you. It's some super complicated technology. I don't know anything about it, but I'm telling you we gotta invest in this guy." His boss asks, "Are you sure?" He goes, "Listen, if this guy was selling red balloons, I would invest in it. This guy is gonna make things happen." So they write a $400,000 check into *Danger* [the company]. Along the way he ends up becoming a partner in their investing. As he makes money from his commissions, he takes every dollar he has—basically $200,000—and buys into their partnership to invest in startups. They invest in all these different startups, so he meets Joe Lonsdale.

Sam Parr

no way

Shaan Puri

After he'd done Palantir, Joe was buying rugs—whatever. He gets introduced to the rug seller and says, "Joe, I would love to show you a rug." Joe replies, "Cool. I'll come into the shop." The seller says, "No, no, no, brother—let me bring the rugs to your house." So he brings about 100 rugs to Joe Lonsdale's house. His trick is: "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."

Sam Parr

and at the time joe lonsdale would have been in his mid twenties right yeah

Shaan Puri

he's very young and he goes and he meets him and he's

Sam Parr

like in that persian rug game

Shaan Puri

He's in that Persian rug game already, and he's like—he's doing the next company, **Adipar**, which, by the way, recently sold for a couple of $1,000,000,000. At the time he's like, "Love this guy. Love Adipar. Joe Lonsdale, we got to invest in this thing." He ends up investing in **Adipar**. He also ends up investing in **Dropbox** because one of the cofounders of Dropbox is also Persian. So he's speaking in Farsi, chumming them up, and he's like, "Come on, please let us in." He ends up doing that. He ends up investing in **AppLovin**, which is now a $100,000,000,000+ company.

Sam Parr

because I think the founder of applovin might be a persian guy right

Shaan Puri

I think so, too. I think so, yeah. He's Iranian, or from somewhere in that area, and so there's this whole mafia that gets created off of this rug shop. How insane is that?

Sam Parr

"Dude, does any **WASP** want to relate with me? Hey—let's talk about baseball, hot dogs, and cows. Where's my **WASP**?"

Shaan Puri

Dude, okay — I'll give you some credit. One of your best investments now is this company you told me about, which I totally didn't get at the time. I was like, "Dude, what are you doing? You're just putting nicotine pouches in your mouth while we're doing the podcast." And you were like, "Yeah, I always have one in." I was like, "What the hell are you doing?" You invested in a company called **Lucy** that was making, like, a nicotine gum or pouch at the time.

Sam Parr

at the time it was a gum

Shaan Puri

And it kinda just wandered around for a little while; it didn't even seem like it was going to take off. But now *this shit is taking off*, dude. I think Lucy's going to end up being like a $500,000,000 or $1,000,000,000 company. You invested early on in that because you were—you were pouch bros with these guys.

Sam Parr

Yeah, I did $25 into it. When I did it I was just like, "Oh, you started Soylent," and our mutual friend is Josh. Josh says, "You're cool," and "nicotine is addicting." Yeah... I guess *cool* sounds good—I'm in. So I invested $25,000. I think I only had $100,000 saved up, so that was a big deal for me. So, hopefully... Then I messaged them: "What's happened to you guys? I haven't heard from you in like six years. What's going on?" They recently hollered at me, and it turns out it's going really well.

Shaan Puri

Yeah, it's going amazing. Now, shout out to **John Coogan** and the crew there. Okay, so let me finish out the story here. Did you know that **Bezos invested in Google**?

Sam Parr

I heard that did he invest in it because he was getting a lot of traffic from it or why

Shaan Puri

I'm not sure—he's... I tried to find it; he could not find any of this backstory here. But *Bezos invested $250,000 pretty early in Google as well*, which is kinda wild. It's the same way that, you know, Microsoft also invested in Apple and kinda saved Apple from failure at one time. There are these stories of people you think are enemies or competitors who, at a key time, invested in each other. I just thought that was kind of cool. Alright, I want to share with you... do I have anything else? Oh, there's one other hilarious story from this whole thing. Rod Conway was like, "Did you know that Google would make so much money it would be essentially the most profitable money machine man has ever made?" And he said: > "No. I still have Google's first slide deck—10 pages, 10 slides—and it was all about the product. > The last slide, which is always the financials and the projections, it just said 'Thank you.'" He's like, "Dude, where's your financial slide?" And they go, "We... we have no idea." He goes, "Okay, love it. I'm in." But how crazy is this—the wild world of meeting people at a party or the lobby of a hotel, hearing about this thing, and doing this deal? Isn't this crazy?

Sam Parr

but that's how it still is isn't it

Shaan Puri

it is

Sam Parr

like it's just that you don't get out you know you used to live there but you don't get out like

Shaan Puri

During the Tony Robbins episode on our podcast, he has this phrase he says: **"Proximity is power."** He talks about literally being close to the action as the most underrated thing you can do. Being as close as you can to the people you want to be around — to the people you want to be like — matters. Whether you hear something or meet someone, you start to adopt the same habits and lifestyle as those people. **"Proximity is power."** That's the crazy thing about Silicon Valley: the **"proximity is power"** principle.

Sam Parr

I moved where I did because of family reasons. But if I could live anywhere, I think Palo Alto would be the place. I dearly loved San Francisco, but I got pissed off at it because of the crime. Palo Alto is pretty amazing. Do you ever think you'd rather be there? I mean, you're an hour north of San Francisco—do you wish you were an hour south?

Shaan Puri

No, I mean, **SF** is now where the action is. The question would be: do I wish I was still in the city? The answer is yes—I definitely would have. I definitely know I would make more money if I lived in **SF**. It seems like it's a more expensive place to live, but actually I know I would make way more money because of the serendipitous bumping into people. It's just a much greater headache.

Sam Parr

though it's such a headache

Shaan Puri

but yeah exactly making money is not the only criteria and so like you know family wise it's much better to be in the burbs for me so lifestyle wise I'm happy with this choice but damn when I hear these stories it does make me wish I was backing on the action like I went and hung out with my friend luke in palo alto and we he was 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 2 3 hours and in that 2 3 hours he was like that's the garage where Google started and this is this and that's 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 quora is and then we go to a we go to the starbucks there's like a little coffee shop there and like I get recognized by 5 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 you know like vc 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 the hours just now was crazy 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 2 big takeaways was number 1 proximity is power and like literally just showing up and being there being in the heart of the action for whatever scene you wanna be and 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 midwitt meme strikes again where it's like so the 2 best early pickers of start ups ever in the history of silicon valley both make their decisions based off of just 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 on all these different markets and it's like dude the best people are literally just amazing judges of people and they're making their decisions in 5 minutes and then they spend the rest of their time just helping people

Sam Parr

It's so exciting to hear these stories. How much do you think that each of these investors made? Like, I guess... if you— and what was the *first valuation*?

Shaan Puri

So, the first valuation was $10 million. The next round was at $75 million *pre-money*. This is about Ron Conway — this was now a decade ago, I think 2012. They asked him, they were like, "Ron, how much did you...?" They were like, "First, were you scared off by the valuation? I mean, $75 million pre-money today?"

Sam Parr

is a lot

Shaan Puri

Is a high valuation for a Series A company? And, you know, Google — obviously now it's *obvious* — but nothing's obvious at the beginning. Nothing's that obvious. And he goes...

Sam Parr

"Which, by the way, that's worth **$150 million** today. So that's a shitload of money... How am I ever—so this company has to sell for **$1 billion**."

Shaan Puri

Right, right. So they're like, "Did this valuation scare you off?" He goes, "No — I think that's crazy." He said, "Companies are binary. A company — the investing we do — is binary: it's either a huge win or it's a zero. I just let the market figure out the valuation, and then I invest. Once I've decided to invest, I let the market decide the price." He goes, "Yeah, we did great. For every dollar invested we got **$400** out." This was back in 2012. They asked, "Is that the peak valuation or is that the current valuation?" He replied, "The peak valuation of Google is far in the future." He knew. And this was, you know, twelve years ago. Google has since at least tripled in value, so it's a pretty wild return. Now, I don't know how much guys like Shaq and others got. Ron got in at the $75,000,000 round. The guys like Andy or David that I mentioned at the beginning — the professors — got in at the $10,000,000 round, which is just wild. So, you know, $100,000 became over **$1 billion** for each of those people.

Sam Parr

And the crazy thing about **pricing** is... so **Google** was started, I think, about 30 years ago, right? Thirty—28 years ago? And I don't—what are they worth, a trillion or something? Or $2,000,000,000,000 ($2 trillion). What's crazy is that the equivalent would be investing in a company today and trying to convince yourself that it will be worth $6,000,000,000,000 ($6 trillion). Do you know what I mean? </FormattedResponse>

Shaan Puri

like it's really $2,300,000,000,000 company today

Sam Parr

So in 30 years, double that or triple that. It's incredibly hard for the brain to think: if I invest in this company, maybe one day it could be worth $1,000,000,000,000. That's an inconceivable thing to think about. And so that's why angel investing is the *mind‑fuck*—to think like this: you think, "Oh, this is worth $100,000,000 now; you gotta sell for $1,000,000,000," and the founder's like, "No, man, it's like $1,000,000,000,000." The math behind all of this is very, very, very challenging to even wrap your head around.

Shaan Puri

Yeah, totally. Even when it's staring you in the face. I think I've told this story before, but I remember sitting in a conference room in Silicon Valley in 2014 or 2015. There was a time when I was telling this guy about my move out to Silicon Valley. I said, "I applied to two places: the place I'm at now and the other place I applied to was Stripe. Those are the only two jobs I'd ever applied to in my life." I didn't get the Stripe job — I got rejected. I blew the interview. He said, "Oh — actually, I'm investing in Stripe right now." I was like, "Stripe? Now it's not like an angel investment anymore?" He said, "Yeah... it's a $3,000,000,000 valuation." I remember just thinking, *what a dummy*. Like, you're $3,000,000,000 — what do you think this is going to turn into, like three? I thought the game in startups was to create a $1 billion company, so hearing that it was already at $3 billion was surprising.

Sam Parr

it's already 3 x overvalued

Shaan Puri

It's like, "Oh, what are you hoping it gets to 10 billion and you triple your money?" Like, nuts. And now it's, you know, a $100 billion company. I would have 30x my money even then. 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? It just didn't make any sense.

Sam Parr

It's because you think in absolute numbers. I remember one time when I first started my company we were spending $30,000 a month. I met with the CEO of a $1 billion company and I was like, "Can you believe this? I hired two people and we went from spending $8,000 a month to $30,000 a month — how insane is that?" He said, "Dude, I spend $300 million a year. You can't think of this as an absolute number compared to your real life. This is just a number on a spreadsheet and it doesn't matter how many zeros are behind it. Are these zeros going in? Are you getting more zeros out? That's all you have to think about. Don't think about this in terms of a real number." When he told me that, it kind of shaped how I viewed a lot of things.

Shaan Puri

You need to do the *casino thing*. You have 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 hand of blackjack, you're...

Sam Parr

playing $50,000 hand

Shaan Puri

That — that's a month's rent or whatever it is, right? It's insane. All of a sudden you just start making different decisions. I remember—even it's not even the absolute number; sometimes even relative numbers will screw you up. I invested in Tesla when Tesla was at about a $5 or $6 billion valuation. Or I invested even before that; I think it got to $6 or $7 billion. I'd made like three times my money. I remember looking at the market cap of the biggest car company I could think of at the time—probably GM or Ford—and it was around $26 billion. I looked at how many cars Tesla was selling compared to them, and Tesla sold almost nothing in comparison. I just remember thinking, “Okay, the ceiling of this is like a $30 billion company.” So if I rode this out, if Tesla became the most valuable car company in the world, it would be a $30 billion company. That would be a 5x from here. Or I could just take my winnings now and go enjoy them. I don't remember the exact number, but I remember that $26 billion was where the car companies were at. Today, Tesla is not that—today it's like a $1.5 trillion company. So I was off by, you know, more than 10x. I was off by basically two orders of magnitude. On top of that, Tesla is worth more than the next ten car companies in the world combined. It's a crazy idea.

Sam Parr

will be

Shaan Puri

Number one: it — it *breaks my brain*, right? Like, **Tesla** is literally worth all of the next six car companies combined. They're worth, like, $600,000,000,000 or something like that... oh no — the big six are $477,000,000,000. **Tesla** is $1.3 trillion, right? So it is just mind‑boggling what these things are.

Sam Parr

It's hard. It's hard to understand. I mean, didn't I tell you—when I was trying to understand what a **$1,000,000,000,000 ($1 trillion)** person is, or a person worth **$100,000,000,000 ($100 billion)** compared to a person worth **$1,000,000,000,000 ($1 trillion)** (which Elon [Musk] will be in three or four or five years)? If you have **$100,000,000 ($100 million)**, you're like ungodly rich. Okay. But the equivalent gap between those two, the comparison of those two, is the same as **$100,010,000 ($100.01 million)**.

Shaan Puri

right

Sam Parr

"Isn't that insane? When I think of a $100 million person, I think you're one of the richest people I've ever met."

Shaan Puri

Dude, I think there's this great quote about happiness: *"I have talked myself out of happiness 1,000 times, but I've never once talked myself into it."* I've never talked my way into happiness. I've talked my way into unhappiness 1,000 different ways. I don't know if I buy that quote exactly, but I get the premise: we can very much talk ourselves out of things or into unhappiness. I think investing is very much the same. I've now realized—especially in technology investing (this may not be true for value investing)—that the whole game is like find the one or two *psychos* and the one or two breakout categories that are going to just break the entire game as a power law. These things can become worth not $1,000,000 or $10,000,000, but $100,000,000,000 or even $1,000,000,000,000 each. I think it comes back to making a **5- to 10-minute, gut-based decision** on the quality of the founder or the overall space: the internet in '94, crypto in the early 2010s, mobile, now AI. It's like, "Is this the smartest person I know doing something in AI?" That's enough. The more I think, the worse my returns will get—at least that's what I've realized when it comes to tech investing—because it is all about the breakouts, and the breakouts are not things you can figure out linearly. We had [Shield] on the pod the other day and he said, "Yeah, I invested in Bitcoin early and Nvidia early." We were like, "Wow, you're so smart." He's like, "Yeah, I invested in Bitcoin because I thought it was going to become this other thing, and I invested in Nvidia because I thought it was going to win in crypto mining." So even a professional investor with amazing returns who picked the right two things to bet on over the last 15 years—Bitcoin and Nvidia—got it absolutely right. He did it even for the wrong reason. It's like, goddamn it... what are you supposed to do in this?

Sam Parr

"This was a great podcast. That was a great story. We should — it would be fun. I would love to do a series where we get the first employee, or the first investor, or one of the first in legendary companies to come and talk. So, like **Google**, **Facebook**, **Reddit**."

Shaan Puri

I think that's the hack: getting the founder is obviously great, but it's super hard. They're also still running the company and have to say certain things, and they've been so *media-trained*.

Sam Parr

And, like, the *statute of limitations* can be passed, so if it's 10 years old, it's: "Look, no one's gonna get mad at you if you say that you guys called the competitors and pretended to be a customer just so you could get fake information." You know what I mean? We're past that, so you could actually reveal a bunch of stuff. </FormattedResponse>

Shaan Puri

Paul Graham asked Ron Conway, "You've been doing this now for a while — you were a founder and now you've invested in all these legendary founders — what's changed?" Ron Conway replied, "We drank way more back then." Paul said, "What? That's the thing you're gonna say?" Ron continued, "Yeah. Every day around 4 p.m. we had this woman, Donna, who would push a cart around the office with booze and we would all drink. We literally taught 'work hard, play hard' at the same time."

Sam Parr

was a whole podcast

Shaan Puri

"Crazy shit going on 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 have happy hour on Fridays after work, not all the time during work. Crazy shenanigans going on."

Sam Parr

dude that was great is that it that's it that's the pod