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Kareem Zaki

lines on the record: 95
first: 2024-10-08
most recent: 2024-10-08
sittings or episodes: 1
sources: podcast

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“But I do think it honestly changed the structure of my life and set me on a different path on the college and all the things that came from there. So, Miss Bonfield, if you're listening to this podcast, thank you.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think to answer it literally, obviously, my parents just growing up in a loving home, the family they created here, building this foundation of faith that drives everything I do. Also, my wife Raquel, who's, I can't imagine, a better, more wonderful partner to have the blessing of a family together and to see her evolve into a mother and to be able to do that together. Wow. But if I was to answer, what was something that someone did that maybe felt small to them but ended up being dramatic for me? Actually my eighth grade teacher, she went out of her way to reach out to my parents and said, Kareem needs to go to a different school. And we had just moved to this area, moved a bunch. We didn't even know about the school. She printed out all these papers to explain to them that Kareem needs to go to this new school and that's what have fully expressed his talents. And so I ended up going to the school, St. Xavier in Cincinnati, because of her guidance. And I don't think that would have happened otherwise. And we could overextrapolate some of these moments.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't have to harbor or hold the things or to feel wronged in a way, but just to lean into grace, have that hopefully be a default posture. And hopefully that makes me more agreeable person to be around, but also it's made me enjoy the day-to-day a lot more.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“It would have to boil down to the life that Jesus modeled on earth. Christian obviously sent it around Christ, so everything flows from Jesus. But I think one of the things that's been really powerful is the idea that I believe I was created by God, that there's a purpose for me on my life, and I think that's really shaped the intensity and the energy by which I approach things. Because if I believe that this is where God's put me, this is the opportunity He's put me in, then it's on me to make the most of it. That's probably the biggest idea. I think the second thing that's really modeled by Jesus in the whole idea of him coming to connect this back to God, to be the person who forgives us is this idea of having grace in everything. There's no way to be perfect. The people you're going to work with aren't perfect. They're going to be mistakes along the way. And so really how to lean with grace through things has really been a part that's just made the intensity of work much more enjoyable in a way where I feel like I...”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to reflect on it. I think, honestly, sports helped in some way. And so meeting new teammates, I just got used to it. So I just knew that the first month I wasn't going to have friends. And then by the third month, I will have friends. And I think it pushed me to also be proactive as well, which I think if you're just going to be reactive, the default comfort zone for everyone is to hang out with their old friends. And so taught me to be proactive and try to find ways to connect with folks.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“To try to be the best in that way and not let obstacles get in the way of that. I think obviously a relentless hard work to kind of go pursue the things that you want to go get. And I think like so many other immigrant stories, immigrants are entrepreneurs in their nature. And so I think it's really built this builder DNA within me. Actually moving around, we had to move around a lot mostly for visa reasons. I end up going to eight different schools growing up. And so that just really shaped me in terms of new environments don't phase me, change maybe doesn't phase me as much. Actually, it's an opportunity to build in connections. And I feel fortunate now because I have friends across six different states and seven different elementary schools and things like that. And so I think that's morphed into what we do now.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Egyptian, my family's Egyptian, we immigrated to this country when I was young. And I think there's so many immigrant stories just imprinted me in a way that I think is really hard to separate from how I approach things, especially my family's Christian and minority in that country and a big part of why we came to the US was to be a little bit unburdened from the restrictions that existed there. My dad was a leading surgeon and doctor, and you can do a good job as a Christian, but you can't be the best. So he was denied professorships and other things because of that. And so a big part of the ambition of coming to the US was to be a little bit unbounded in what can be accomplished. And he ended up being one of the first robotic surgeons in the Midwest and brought that to the US in the early 2000s pioneer into that. A big part that's shaped me, this idea of one, not putting a ceiling on yourself and finding ways to push the limits and really find and push yourself.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“My faith is super important to me. And so that's a big commitment and drives everything about me. I also just love learning new things. I love new challenges. I love being steep on the learning curve. It's the most recent things I'm trying to learn tennis. And I never grew up playing it, so I'm comically bad a year ago, maybe a little bit better now. But I think that idea of getting better a little bit every day, learning something. I just find that to be a lot of fun.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“And be able to shape and mold that in a way that allows them to grow and do things in a unique way that we think we do. And we take a lot of pride in the development of that. And I think a lot of us are in a position to do that because it's still fresh in our mind what it's like to be new to the industry. We've been doing it for a decade, but we've gone through that journey. And so we want to make sure we're continuously investing in new talent, wanting to build around that. And I think if you look at any great company, not just an investment firm that has a unique culture that does things differently, I think you would find that they hire their talent early and they stay for a long time because they really mold them and build them in a unique way.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Usually comes from these generalists. It's the Roger Federer who played soccer a bunch before he played tennis. It's Satom Brady, who was better at baseball than he was at football when he was young. I think he quotes that Nobel laureates are 20 times more likely than other scientists have serious hobbies and poetry and art, in woodworking, things like that that are able to help them connect concepts. And I think that's something we really look for in the Thrive team. I think the last thing, especially on the investment team, is we're really focused on being able to develop and build our own talent. I think you go to every investment firm, you ask them, what's the most important thing that you do? Well, it's the people. Well, if you believe that, you better be good at developing and building people. Because if that's not true, you're basically outsourcing talent development to other people and you're hoping to maybe poach them later down the line. Well, now you've just outsourced the most important thing you believe makes your company differentiated. And so we really focus on hiring people of zero to four years experience who have the raw talents and abilities. They might have never even imagined they'd be in venture capital.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“You're getting large, and we have no shortage of ambition at Thrive. And so we're constantly constrained by our ability to get great people to grow here. But I think it's important to really hold the bar because when you get those people who are multidimensional, they can create new and exciting things. And again, when we come back to Thrive, it's again the small team, both on the investment team, but everywhere that's doing all these things. They're building companies, investing early, investing late. They invest across categories. That's not just like a fun thing to talk about. We actually think it creates better outcomes, not just a focus, but being multidimensional and having the range, that book by David Epstein, I think you might have even had him on a podcast. He talks through that. And if people are multidimensional and connect worlds in different ways are able to see the exciting things, but I think bring a new dimension to companies that wouldn't just happen if you have one-dimensional people in the range book. If you want to be predictably good, specialize. If you really want to be the elite, the cutting edge of things had never been seen before.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“To pursue the things that seem safe, and our founders go through that all the time. You're a company, the replacements, the rag tag, passionate people are going to go build it. And then at some point you're a series D company and all these resumes from Google start showing up. And it's like exciting and flattering, but you got to make sure that the mentality matches. It doesn't mean that someone from Google doesn't match, but you have to, I think, fight that because you don't want to lose the core of what made your company successful in the first place. And the high horsepower thing, there's no substitute for hard work. You said will or scale. We believe in both. And so it's like you got to work your tail off. You got to be high IQ and you got to be high EQ. And really, when we talk about high horsepower, can you deliver on the things you say you're going to go do? Can you go deliver on that? Emblematic of that. I think usually the first bonding experience people show up at Thrive is how long their interview process was because it could take months. It's intense. And it's because we're trying to look across all these dimensions and it's easy to compromise as you're growing.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that will and skill really lines up to me. It's like this maverick mentality tied with high horsepower. Back to this maverick point, you got to want to do things in a different way. If you've always done the default thing in your life, if you've never really challenged the status quo, if you've never really pushed yourself outside your comfort zone, if you just take things that people say at face value, never challenge it yourself, you're probably not a thrive. It's not an insult to anyone. It's just more about how...”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“And not just give you an hour phone call of advice. Say, I'm gonna be here for the next three to six months, and we're gonna get through this together. Those are the things that I think really strike founders in ways that they never expected. And they said, I know you said you were going to be here for me, but I never thought you were going to be here for me in this kind of way.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Lots of things we've done exploring. I don't know crazy, but it's kind of an open secret at this point, but Nabil, who's one of our partners, was the interim CFO at GitHub for a long time leading up to the Microsoft acquisition. We have another person on Kimi Show. I'd done that for another really fast-growing company where they really needed to get a hold of their finances. They're growing so quickly that mismanaging their working capital. And so to step in and save that company in that moment and transition, we've had people step in as interim chief growth officers to do that. And so I think you'll find here at any given time one or two of our leaders here are embedded in companies almost committed to it. And I think a lot of times people think of portfolio services and say, well, that's only for the struggling companies that need the portfolio services. We found the opposite. It's the fastest growing companies who need this the most. Because the reality is if you're in these fast-growing companies, anyone who's been there knows it's more chaos than order. Things are all over the place. And it's because you're growing so quickly. So you're outgrowing your systems. You might be outgrowing your people in some dimensions. And so to have a partner here who can drop in embed.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like go find a way to get in front of them. And so the early days, we had a really hustle to get a meeting. We had to send people GitHub like a 100 page deck just to get them to meet with us and all the research that we would have done. And so there was so much in the early days just to get a meeting. You'd put almost like a month's work in just to get an hour with the founder. And I hope that's still six with us. I think one of the things we really want to maintain at Thrive, we could talk about the character of our team and what we look for and how we build the culture of Thrive. It's like this maverick mentality, this ability to want to create, the ability to do things differently. Josh and others at the firm really talk about the most important thing for us to remember is all the hard work it took to get to this moment. And now that Thrive is maybe a little bit more mature and established, how do we still maintain that energy and that focus to go create”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Patrick and John from Stripe emailing him being like, Oh, we're in town, we'd love to meet. And then being like, can you come later today? And we're still in New York and finding a way to get out there. Or Peter from Segment being at a customer in Indianapolis and us being like, oh, we're in Indianapolis.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“And they know that we're not making that many investments, that it's a real sign for us to say yes, that it means that we're not here for just this year or just for the good times, but we're here for the whole journey, and that it's a sign of our passion and commitment. I think they want to be picked in that way.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Founder who wants to build something big and grand, and it's not the conversation they're having with everyone who's maybe focused on the next year or two. The same thing is when you go talk to a growth stage founder and I'm not sitting there just talking about your P&L and your LTV to CAC and your payback. I'm sitting there talking about, okay, how do customers use your product? Where's the product going to evolve from here? How's it going to grow? What's the second and third act going to look like? I'm engaging with them like it's an early stage company thing about the product lines. And I think that's exciting for founders because founders don't change who they are just because they're a series D company. They didn't start their company because they love the P&L. They started the company because they wanted to solve a problem. They're animated. They're passionate to deliver for their customers. And so I think they have investors who show up and still have that DNA and aren't fully financial in the way that sometimes can flip at the later stages. I think it really resonates in founders feel that and then I think they respect the concentration and conviction because they're all in on their company. And so to show up.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Before they make an investment. And so I'd look at that diligence process and be like, how well do they understand my market? How well do they understand dimensions? How well do they understand my product roadmap? I think the third thing is we work as a team. And it came from necessity at the beginning. Again, me having a couple years experience, Josh only having a year or two more than that, Miles on our team was 22 at the time. Everyone was young and figuring it out. While the only way we could win against someone at 20 years experience was to collectively bring our experiences together. And so I think that's been something that we've maintained even as Thrive has gotten more experience. I think it's been grounded in our DNA. And I think it resonates with founders. I think the other thing is the way we structured ourselves has been unique and founders feel that. So at the early stage side, when you're a founder and you're building, the fact that I'm sitting here not just talking about next year and how you're going to raise Series A, but I'm talking about 10 years from now and what we're going to go build, how we build the foundation, what's the most ambitious version of what we're doing resonates with that early stage.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a couple things. If we think about the early days of Thrive, man, it was a grind. It was hard. And the only way that we were going to win was either we had to get to that founder early. If we showed up in a process with Sequoia and Kleiner and benchmark and their meeting us for the first time, zero chance. So we got to get to them early. We got to build a relationship. We got to show value ahead of that. Again, if it's just my reputation who's been investing for two years and someone who's been doing it for 30 years and has all these wins on their walls, gonna lose that deal. And so that's really pushed a lot of us to be like, let's add value to founders even before we're going to partner with them. We got to get early. We have to align with them. We have to do the work to understand their market and be really deep around that, which by the way, I think translates to be great thought partners to any founder out there. If an investor doesn't take the time to really understand your business and due diligence process, I can guarantee they're not going to do it after they make the investment. They have the highest motivation to understand your business.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“In the market, what are consumers downloading? Which I think we used to augment and help us understand the trends and what's happening in the market, what's happening broadly. And I think it's one of the things that as we've thought of Thrive, not just as an investment firm, but as a company where we started to invest and bring people on who've really augmented our thinking around that and be like, how do we improve every element of it? How do we get best-in-class people across every dimension? And that's been a big part, I think, of really adding so much context to help us find the right pockets, but also understand what's happening in the world.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think what allows us to make decisions at the early stage, even though it's maybe a smaller part of our time, is this narrow funnel that we have, this narrow lens of these category-defining companies, these 100 or 200 companies, these 10 or 20 companies found it every year allows us to say no to a lot of things and really pursue the things that we think are breakouts. Because if I'm looking at a company that might be at scale, it might be a $5 or $10 billion company, well, there's very few companies where we could sit here and be like, wow, this is writing a big decade trend. They're still on the exponential growth curve. There's multiple products they can launch even from here. And so that really narrows it. And we're able to really focus on those companies, which higher probability that we'll see the right things. And also that I think we're more attuned to identify the right opportunities. I think where we've evolved a little bit is there's lots of data out there on identifying these companies. And we have teammates here. We have whole data and analytics team that's really analyzing where founders are, what are the new companies, what are the things that are getting traction.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd say a lot of things that stay the same, and some things have evolved. And what I mean by that is we want to meet these founders as early as possible. Again, we're co-founding and building companies with them. So a lot of founders are coming to us even before they have pitch check ready because we might go build that together. The second thing is I think there's no substitution, especially in the early stages, to go meet founders. And it's so hard to tell from a pitch deck. It's so hard to tell obviously outside in on traction because it might not be there. And so there's no substitute for being in the room. And we do this. We audit our calendars. And usually every quarter, probably 80% of our meetings are early stage. So it's reflective. And so you might look at the capital deployed and say, oh, there's a lot of capital at the later stages. Well, we have to spend all the time in the early stages because we don't know what's going to be there. You have to engage a lot of founders to really find these exciting opportunities as early as possible.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think the other element is that it should take some time to go build. And no, I think a founder wants to get out there and go do it. But again, if you can get it out there in a month, is that actually the most exciting thing to go after? Step back, be like, what do I want to work on for a decade? What do I have the best shot of recruiting the best talent to go execute on? What would I be proud about tell my kids that I built and created? If you can answer satisfactory to all those questions, you're probably on something that's interesting.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it goes back to the first advice about all businesses in all category defining companies, which say solve a problem that matters and hopefully do it in a way that you're adding value. Again, I think when we see this new technology, especially when you see it before the rest of the world, there are going to be these arbitrage moments that we're talking about where I can take this and give it to someone else because they haven't heard of OpenAI or they haven't played with ChatGPT yet or they don't know that OpenAI has an API that they go use. And those are, I think, fleeting arbitrage moments and to your point if we think about the archetype might not be defensible. And so I think people step back and be like, okay, what can I build that's meaningful? What can I build that's transformative? What can I build that can solve a problem? It might not be the first idea you have back to small ideas have lots of competition. If the first idea probably lots of people have it, if it feels super easy, lots of people are going to go after it. And then I think it's going to take creativity. How do we reimagine the world again that wasn't built for AI if we're starting to build these things from the ground up with AI? What would that look like?”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great question, and it's probably the trillion dollar question if we're thinking about all the value that's going to be created. It's a $3 trillion question. Yeah, exactly. Well, $5 trillion by the time that these companies play out over time. We don't want to put a cap on it.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Multiple spaces, and you have to marry the technology with the operational and the process to really drive that forward. And so I think for that reason, we're taking on a slightly different approach there, much more aligned with ownership. But also, I think the big breakout cases that we'll see in the short term aren't going to be the obvious ones. It's going to be the new categories that don't have that friction of transformation that we'll see breakout. Vince, our partner, thinks the first $100 billion AI company is going to be a consumer company for that reason. One, it's been stale in the consumer space. So hopefully the surface area for something that's new and innovative, but I think it's just going to be a little bit more of an unrestricted behavior that hopefully we're going to create or new markets that are going to build. They're going to be fastest adopted because there's not the friction of the old ways. But I'm optimistic that everything's going to change over time.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Individual workstations, and to embrace electricity, you had to remodel the manufacturing plant. You had to create all these individual workstations. It created a flexibility that we didn't have with steam power, but it just took time for that to evolve. And eventually, obviously, that replaced everything. I think the similar thing with AI, where it's going to be obvious that it's going to change every category, but we have to rework how work is done. It's one of the reasons actually we're inspired to partner hand in hand with some traditional businesses. And so a little bit different than we've done in the past. But again, we like to defy tradition, like the thing from first principles. We're actually partnered with two founders, Jake and Frank, to go acquire a lot of accounting firms and rework a lot of the workflows that happen today because we don't think it's purely technology. It's going to be operational. It's going to be incentives. It's going to be processes that are actually going to drive the change. And I partnered with another group that's unannounced, that's doing something similar in a couple exciting industries, and they're investing in a platform to do it across.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Incredibly hard not to be fired up about what's going to happen to AI. I just can't imagine a world where not everything, how work is done across all dimensions, doesn't ultimately get transformed. I think in the short to medium term, I think it's inevitable that we're disappointed. And I think the big reason is because the world's not ready for AI. How could it be? It didn't know AI was coming. AI, I was actually reading in a book called Capitalism in America. And it just goes to the history of innovation in America and all these different cycles. And it's amazing to go look back at electricity. And even after electricity was launched, which was one of the biggest innovations, horizontal innovations that's happened in the last two centuries, 20 years in, I think it was like less than five or 10% of manufacturing was powered by electricity. And why was that? It's because all the manufacturing plants were designed for steam engine and steam power, which means you had one big drive shaft that powered the entire factory that meant every machine had to run at the same time.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think one of the advantages, again, about being a generalist firm is I spend a lot of time in fields like healthcare or find services or some of these traditional industries. And I think people will look at that and be like, oh, that's such a disadvantage that maybe your other partners don't understand your spaces so well. They're so regulated. They're so nuanced. But I find that if I'm pitching something and it's not resonating with a generalist crowd, it probably means I'm thinking too small. And I've convinced myself that a small idea is a big idea just because I live in that market and I breathe it all the time. But if I can't elevate to someone who doesn't live in healthcare, doesn't live in financial services, they're like, wow, that's a big idea. That's exciting. And I find myself having to go two or three layers deeper to defend why it's a big deal and you don't understand this is going to happen in the market. When I'm talking that way, it's usually a click for me that no, the best ideas are going to be big and simple. They're going to captivate an audience who hasn't spent their whole life studying these markets.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm an optimist at heart, so I don't spend too much time thinking about what I don't like. More attracted to what is exciting, what's inspiring, what gives us energy versus critiquing maybe other people's thinking. So I just think if it was anything, it would just come back to this core point of revenue doesn't mean you're solving a problem. And I think it's easy with the investor lens to just look at what's growing. But if we really step back and be like, if this company is successful, how does the world change? How does this person's life get materially better? If you were explaining this to your wife or your kids who aren't in tech with their eyes gloss over and there'd be like, okay, sure. Or would they be fired up as well? That's actually one of the tests I use. I talked to my wife, Raquel, a lot about the things we're working on. And the more she's animated or excited about the things we're looking at, the more it resonates with me that were onto something special.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Employers used to be responsible for retirement. That was pension funds. I was guaranteeing you retirement. And that became really unwieldy and hard to manage. And then they said, well, I'm just going to go from defined benefit to defined contribution. Now I'm just going to give you money. You got to invest and responsible for retirement. And so I think if we can move to a world like that on the healthcare side, I think would be one of the biggest unlocks and would create a bunch of competition, which I think will create new innovation, new companies to be built against it.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“For people to sell even directly to the employee. So I don't have to go sell the employer, I could sell to you and be like, well, you have your $10,000 healthcare bucks. Why don't you buy these services that I'm going to build to you and I'm going to deliver to you directly? And so we start to take the middleman out of it and allow people to compete on an individual level. Because right now you have to go through the broker that then goes to the employer who then makes the decision and now you have this network and then you got to go figure out the doctor. And at the end of the day, the consumer is so outside of it. And the consumer is also so shielded from the cost of it all. They don't really understand. Yes, we talk about high deductible plans on the rise, which I think is giving more consumer choice. But even then, it might be a $2,000 deductible on a $15,000 plan. What if I gave the consumer $15,000? Now they know the cost of everything. Now they know the cost of going to one hospital versus the other. And so I think they're starting to lay the groundwork with some of those. And so the more to push in that direction, and I think the analog that gives me a little bit of hope is we had pension funds and they went to 401ks.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so this morphed into this entire system now, and now you have these employers who are responsible for healthcare, and rightly, they don't know what they're doing. They're like, I don't know what I'm picking. I don't know what I'm doing. And then you have a middleman as the employer who's picking benefits for your employees. And then you also have to pick these bundled benefits. Because if I'm buying something for 500 employees, it's got to work for them. So it makes it hard for new things to show up. And as a startup, you can't literally do everything day one. And so you try to figure out your niche and do that person really well. Well, employer can't bundle that. And so how do we move there? Honestly, there's a rule now that's been put into place personally. I want to see flourishing grow, which is this idea of employers now can give payments to their employees to go purchase health insurance. And it's tax advantaged in the same way. And so I think that's interesting because it allows people to go pick individual plans. And hopefully that creates new competition. It allows new startups to grow in that market, new ways.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting. Going back to the competition and silos, and if I had to pick one, I'd pick competition. How do it increase competition? And I think the biggest thing we could do is honestly get the employer out of healthcare. And the fact that the employer picture healthcare plan is a vestige of after World War II, where there was a freeze on wages. And so people were thinking about other ways to pay people and create benefits. And so they said, I'll pay for your health plan. And now it's morphed into this entire system. That's kind of new that.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fail, well, there's going to be no momentum in innovation because they have to invest real resources to work with us. And so we got to show up with a lot more commitment, a lot more build. And so if you actually look at a lot of the healthcare companies who backed, it's big capital checks. It's big ideas. It's robust around that because that's one, the only way we can remove the needle. But we need to partner with the system and we got to choke with a commitment that this isn't just a lottery ticket or an option call for us.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Cedar really focused on the broken experience for consumers understanding their bills and their payments in healthcare. I'm proud to say we're serving over 20 million Americans today. So I think we're going to get to that 100 million goal as we go after that. And I think the last thing, which maybe fits with the Thrive DNA, but also is counter to maybe some venture thinking is I just don't think venture math works in healthcare. This idea that 70% of your companies can fail and the 30% will pay for it. Again, mathematically might work, but I think why it struggles in healthcare is if you're going to go partner with a health system and you're going to partner with insurance company, it's hard for them to integrate and work for you. And so if 70% of the startups they work with are going to be gone in two to three years, you just can't get any momentum of innovation. And so I think something we're really prideed ourselves on in Thrive is like, we're concentrated, we're committed, and when we're showing up to go partner with a lot of these systems, we're committed to these companies are going to be there. It's a higher bar for us to show up. Because if 70% of the companies we represent,”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Needle in healthcare, the system that's bankrupting us, it's growing faster than inflation consistently, that's a poor consumer experience, you got to think of the order magnitude of 100 million people. And you're not going to get their building for New York and San Francisco. A cool anecdote on this were early investors in a company called Hedway, and we were looking at the Series A of the company, and it was small at the time, but even in that first early data, and they were only in New York City, we looked at it, and the most represented employer in their data set was the MTA, the transportation authority. And why? Because it was the biggest employer in New York. And so we looked at that and said, wow, this is a problem for everyone. It's not just for fancy engineers or high paying light-collar jobs. This is for all of New York City's residents. And so that gives us confidence that it was going to scale to the rest of America, that it was going to scarce all the states. And now the company is in most of the states and growing really quickly because they built a model that worked within the system, that scaled to every American and has a real shot to get to 100 million users when we co-founded.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there are some really innovative business models we could go after to go do that, but we started, we're going to go fee for service, we're going to go partner with these health systems. So we're going to go work with them because all the patients are already there. We're going to go work with their physicians because they already have the relationship. And we're going to be a part of that. We're not going to build outside the system. We're going to build in the system. We're going to get paid like the system. And I think over time we can evolve it and get paid in new ways and innovative ways. But we got to get to scale on the system and help it evolve over time, which I think runs counter to a lot of people's initial reactions. It makes want to build outside the system. I think the other thing that looks a little bit different is, again, a lot of advice is, well, build products for yourself, build products for your friends. And I just don't know if that's going to have the impact in healthcare. If we do that, we're going to have a lot of great products that are good for fancy tech companies or big New York firms. And that's just not going to move the needle on healthcare. We got to build for Ohio where I grew up. We got to build for the rest of America. And that's the only chance to go impact 100 million people, which if we want to move the needle.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“We've done people rewiring the mental health care system, and it's because they're broad that I think gives them a chance. I think the second thing is you got to meet the system where it is. Where I think, again, classics venture would be like, forget the system, build it new, build it from first principles. Let's go challenge the norms. Well, U.S. healthcare is $4.5 trillion. If it was its own economy with the fourth largest economy in the world, the size of Germany, something that big is not going to move and change that quickly, definitely not in the timeline that a startup needs. And so I think you've got to go meet the system where it is today. Go build within the system, go understand the system, and then help it evolve over time. Back to some of the co-founding points, we co-founded”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Clunky for the consumer. I think as we look at how we've approached that, when Joshua was starting Oscar, there were two routes. We could have built software to sell to health insurance companies or it could have built a health insurance company. I think the reality is we wouldn't have moved the needle for the consumer if we just ended up being a small part of it. Oscars are like 30 startups in one to go do what it's going to do. And so I think if we started with a small approach, which is a classic WINSDA, it would have never worked. Same with the PBM where I was talking about. It's intimidating to go build a new pharmacy benefits manager. I'm sure most people don't even know what that is, but that's the way that you go access your drugs. And it's a big considered decision for an employer to pick a new PBM because if it doesn't work, then your employees are going to show up on January 1st and they can't get their medicine. In a lot of cases, it can be life-saving and life-threatening if that doesn't work. There's so much to go build if you're going to rewire and move someone from their existing PBM to a new PBM. We've done it backing companies that are building full stack pharma companies. We've done full stack home care.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know, different systems and different departments, and a payer has a lot of different systems. And a big part is the industry's grown through M&A. So you have all these acquisitions and it just builds on itself. And it just calcifies. So you have lack of competition and you have all these silos. Makes it really hard to make progress. And then I think the other thing, which is I just don't think we've been approaching the problem in the right way to change it when I think about how we've approached it as tech startups or Silicon Valley because I think When you look at that problem and you say, how should we do it? It might look a little bit different than we would go disrupt some other industries. Because if you look at classic wisdom, the first is build a small MVP and launch that in market. And I think the only way in this moment of time to move the needle on healthcare is to go after big problems and build big products. Because there's so many small silos that if you're just another piece in the process, you're not going to really change anything. The whole experience is still going to be slow.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Even though we're spending so much more. And so the problems are numerous, and we could spend this whole podcast talking about the problems. Where does it kind of stem from? I think it's kind of two dimensions. The first is the market's not competitive, and everything is so siloed. On the competition piece, healthcare is local, and every market, there's like two or three insurers. There's one to three health systems. We talked about PBMs earlier. There's three PBMs that capture 80% of the total market. Even on the tech side, you have one or two IT service providers that power all these health systems. And so when you don't have competition, you don't have an urgency to change. And so things just move so slowly. So we have all these problems. They're so obvious, but there's not an urgency to change because there's not competition and there's not a mechanism for the right behaviors to be rewarded and the wrong behaviors to be punished. And then on the silo piece, I think it slows it down a lot more because it gets harder to drive change where you're in a health system and they might be”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, we could start in lots of places. I mean, I think the first thing is that the problems, I think, are obvious in healthcare. You don't have to look so far to find problems. Everyone's usually had a bad experience. And it's an individual problem. And it's a government problem. I mean, our government itself is probably going bankrupt with healthcare. I think we spend over 25% of the federal budget on healthcare, and that continues to grow faster than inflation. Our employers are now spending more on healthcare than they're spending on R&D on average. And so as you look at that cycle and where we're entering, it's the number one reason for consumer bankruptcy. So consumers are really struggling by it. By some accounts, consumers are spending probably 30% of their overall income on healthcare because when you look at what their employer is contributing, which is wages that would have gone to them, but now it's going to health benefits, when you look at their taxes and where their tax dollars go. And then at the end of the day, the quality and the experience, barring some unique cancer treatments, which America is better than the rest of the world at, it's not better than the best of the world.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Narrative. And if you look at it in the economics are upside down or the customer retention isn't great or they're not attaching and cross-selling to new products, something in your narrative about how this is a dominant company and exciting market isn't holding up. And that's a big part of where a quantitative check comes in the back end. It's like, lay the narrative out. We're so narrative driven because the world has changed by narratives. But does the data then support what comes through there is a big part of us assessing the quality of the market.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, obviously you have the classic five forces and all these different dimensions. I think to speak at a high level, I think one, you obviously need to believe in the defensibility in the moats of what exists. Obviously that creates the margin that you can go capture. I think a second thing is the stickiness and the loyalty of the customers. And part of that's product, part of that's market. But are you the most important thing that these customers work with? Are you list five or seven on a priority list, which I think gives you the right of first refusal to build a lot of things over time? And I think fundamentally, just again, the unit economics of how these things flow through, which I think we got away from because capital is cheap. We look at the headline growth numbers. But if you really parse it back, these businesses famously are spending a dollar to get 90 cents and no amount of growth was going to cover what was going to happen there. And so I think when you step back, you look at it, be like, am I solving a real problem? Does that have modes to it? That allows me to capture margin. And we're looking at the growth stage. Does the data support the quality?”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Things line up. And so I think when you look at some companies, especially ones that are technology-enabled services companies playing in traditional sectors, what is the quality of the end market and how that going to play out? Because you can't escape the genetics of the business at the end of the day and the genetics of the market.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“A good question. I think the big thing is honestly quality of the market. And so, what do I mean by that is if you think it's fool's gold, it's probably growing really quickly. I mean, that's the first tell. Is this thing exciting? So we see businesses that are growing really quickly. And so I think the second question is, what's the durability of this tailwind and what's the quality of the end market? And that seems obvious to say, but I think for a while we got away from thinking about that because so many of the tech business are being created were just automatically great companies. And some of these companies too didn't look great. And then they got to big scale and then there was a pot of gold at that end of the rainbow, like a Google. You just scaled and then, wow, search has money and Facebook. Or it's like, we're just going to scale the network. We're going to grow, grow, grow, and then money's going to pop out of the other side. And that's what happened. And then also we were backing a lot of SaaS companies were just inherently the business model was advantaged. And so we just, you didn't really think about how to all the things.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of most of the use cases in AI is just ridiculous as well. And so it's a very selective group of companies that will be investing at these really high valuations. It feels early. It feels like we're investing these innovative companies that still have a long way to go. And that's what gets us excited to invest in these companies even at these valuations.”
2024-10-08 · Invest Like the Best · Kareem Zaki - Small Ideas Attract Competition - [Invest Like the Best, EP.392] · IDENTIFIED FROM THE TRANSCRIPT · source