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Roelof Botha

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2022-08-31
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2022-08-31
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  1. “The most boring thing is a life left unexamined, right? I mean, it's fun. Who cares? You've had so much success. And no one remembers you if your failures, by the way. Can you enumerate the six companies, seven companies that I invested in that were complete write-offs? Probably not. But do you remember the ones that made it, right?”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  2. “And so there to dream, take a chance, just do something interesting and just think if it doesn't work out, then there's something else. There's something else. Just keep taking more chances.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  3. “So my answer would be dare to dream. And the reason I say that is actually when I interviewed it at PayPal and Peter interviewed me, part of what he talked about is people's failure to understand repeat games. So if I told you to take a chance on your career with one role of the dice proverbially, pretty dicey to do that, no pun intended. But if instead I told you, look, you have one shot and if it doesn't work out, there's another one and another one, another one. By the way, we have many ad bats, so to speak. You have many different opportunities for different companies over your career. Would you take a chance on something that has a low probability of success? And that's fun along the way. Yeah, sure you would. And so I saw so many of my classmates. I've seen so many people over the years make safe decisions, play it safe, they make these conservative decisions. Oh, I can't take a chance on this thing. What if this company fails? And so, and they just end up getting in a rut. And then, you know, before you know it, they're in their 40s, they have a midlife crisis, they feel that they've wasted their lives.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  4. “WhatsApp was growing outside America because of the way that cell phone carriers outside America were charging people on a per SMS basis. And in the US, we had all you can eat plans. And so WhatsApp is growing. Our data science effort showed it. And no one in America is paying attention to it because no one in Silicon Valley or the US was using WhatsApp. And so we connected with Jan. He'd worked at Yahoo. And so we were able to use our historical Yahoo connection to make sure we can get to him. But that is a glimmer into the sort of data science capabilities that we've now honed a decade later that give us an unfair advantage. So that to me is a concrete example of how business is better for it. It doesn't substitute for the insight, the grit, the salesmanship that an individual partner has in actually landing an entrepreneur.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  5. “These are things that didn't exist in our industry 15 years ago. And Jim, actually, Jim Gates was one of the first ones to help us pioneer with this. He built a system called Early Bird, which is part of how we identified WhatsApp.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  6. “And we want to encourage that. And I actually at Sequoia, one of our cultural frameworks, is maintaining tension between individualism and teamwork. It's not either or. It's and. We want both. You need to stick your neck out. You need to do exceptional work. You need to be accountable for what you do. But you also need to be supportive as a team member because that's part of why we've been able to endure as a partnership. It's both. So can you do incredibly well as an individual or a collection of individuals? Absolutely. But the cultural consistency for us inside our organization is we need that for us to consistently do well. So to give you an example, I mean, we've built internal systems now for us to track companies. So we have, if you give me a company name, I can look it up and I can tell you, have we met it? Who met it? What are the notes? What do they think of the company? I have data science signals that tell me how this company is doing, the proprietary to give me a sense of whether or not it's worth pursuing.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  7. “And even in our own business, there are examples where an individual partner has an idea, forms a connection with a particular team, and can bring that entire opportunity home, and then that partner probably is most of the interface for that company in terms of company building, board building, and things.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  8. “And that's partly me, my experience, my partners, and what we bring as a team. And what are the other services around our partnership that we can deliver to help you succeed?”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  9. “And like I mentioned earlier, the investment team is still pretty small. We have 25-ish investors in our business, but we have marketing capabilities. We have data science, we have engineering, we have product. We obviously offer talent services to our portfolio companies. We have a big finance organization now that manages the complexity of all of this. And so we've just changed as a business to be able to serve founders. The business has gotten more competitive. You can't just be money. As you pointed out earlier, there's just so many people who are willing to write checks. You know, that is not a differentiator. What is it that I'm offering an entrepreneur that makes him or her choose to work with me because they think that I have a disproportionate impact on their chance of success?”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  10. “So, if you go back 25 years, the typical venture firm had To 12 investors just factually, they were probably white men at the time. That obviously is changing very quickly in our industry, appropriately. You had a handful of people sitting around a table making investments. The total organization size was maybe 25. They had some assistance, some receptionists, maybe a finance person, maybe they were outsourcing everything. And there was very little offered in the way of services to portfolio companies to help them. It was just small professional services organizations at some level that were investors. And today, our team at Sequoia, US and Europe is about 180.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  11. “Maybe because of the time period that it covers, I think the professionalization of the industry that's happening right now is something that's not fully captured in the book.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  12. “Mike had the right chemistry with the founders, the right experience because of Yahoo, and that made sense for us. And so we always try to think about what's the right match. Do we have the right group of people in the room? And at the end of the day, back to the rugby analogy, we have to win as a team. We have to win as a team, which is why things like the MIDAS lists are a little bit insidious from our point of view culturally, because it tries to create individual attribution. When we have a success at Sequoia, when there's a company that goes public or gets acquired, we actually write an email internally and we enumerate all the people that contributed to the success of the company, not just the person whose name is normally attached to it as the board member.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  13. “Should have been prepared. We should have had better prepared to make a good decision now. Why do we not do that? And so we've tried to think about do we ensure that the people who were there before meet them again because they have a sense of continuity and how far they've progressed, but do we also inject some fresh pair of eyes to help guard against the individual who maybe is jaded by their past experience? Sometimes we have to switch who the point person is because some of the chemistry is just between a founder and an investor that it's a personal relationship you're joining somebody's board and so sometimes the person who met the company and Google is a case in point where the person who found Google for Sequoia was Douglione. The person who became the board member was Mike Moritz.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  14. “It was just too much. We have to learn from them. So we got the space right, but we picked the wrong team. Why did we pick the wrong team? Oh, they had better technology, but they didn't have the right go-to-market capabilities or they aimed at the wrong part of the value chain. We try to learn from those because it informs future decisions. So don't make it sound like we're oblivious to the mistakes of the past, but then re-looking at a company. What's one of the things we analyzed recently that many of the best investments that had happened in a particular, I can't remember when we did this particular analysis, but many of the best investments that happened in a particular window of time were companies that we had previously met. We'd already met them before.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  15. “Start discussing a company that I remember meeting nine months prior, and I can just feel my instincts like, no, I didn't like it then. Why should I like it now? Why do I have to work and think about it again? I mean, the lazy part of me just wanted to say no. I really made the decision. Move on, right? And so it takes effort. It really takes effort. That's part of why heuristics are valuable, right? The shortcuts. And for many things in life, shortcuts are great. But if you want to make important decisions, maybe shortcuts are a curse. And so I don't make it sound like it just comes naturally. By the way, we do do lightweight post-mortems on the things that failed where we made an investment. It was just that we used to have this exercise, which is the sponsor has to go write a memo and make a culprit.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  16. “It takes work, by the way. I don't pretend that it's easy and that it just comes naturally. I think we've evolved with all these heuristics and they maybe served us well 200,000 years ago when we first evolved as a species, but it hampers us today. So I have to fight it the whole time.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  17. “I think it's, I think, in terms of cultivating it, just calling it for what it is in an organization, creating a culture where you're willing to stand up to new information and change your mind and then praising people for changing their mind on things. I said no to this decision. I've reevaluated. I walked into the partner meeting thinking we shouldn't make this investment. And I've been swayed by your arguments, or recognizing that somebody else changed their mind and praising them for doing that. I think you need to cultivate that kind of culture.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  18. “So, I don't know if because I obviously didn't know him growing up, I met him in the PayPal context. Peter's just so supremely smart and rational that my guess is it's innate in him and he just he doesn't suffer that kind of baggage if you will and he thinks for himself there are a lot of people that are so worried about what others think of them and Peter just doesn't seem encumbered by that not that he's Indifferent to it, but I just don't think he spends his whole life worrying about what others think about him. He just does what he thinks is right. Seems that way.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  19. “Would say we're turning left, we're turning left, and then we weren't sure we'd go analyze, bring him data, we'd show him the results, and he'd say, yep, I've just looked at it, returning right. And he would just turn like that on a dime. And he had no qualms about this. And I think most people get so stuck in the escalation of commitment where I need to remain consistent with the person you thought I was yesterday. Otherwise, I'm going to be viewed as irrational. And there's a whole branch of psychology that talks about this, right? To some extent, people view flip-floppers negatively, especially in politics and things like that. But in business, it's incredibly valuable if you're just rational. And Peter did that to a T and made him an incredible CEO.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  20. “Peter came back as a CEO if you've read any of the PayPal books, another story we as a team rallied to get him back as CEO, it was difficult because the board wasn't fully supportive and we had to keep as a team we had to keep interviewing other candidates and we kept feeling, no, but Peter, we're a team and Peter's our man and we want Peter to be our leader and our CEO. And so Peter had incredible ability to change his mind.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  21. “I want to be miserable by myself. And, you know, Doug knocked and he had literally from Basil that he grew in his own garden. He brought this little jar of pesto for me, which was delicious. But it was the sign that he was there for me and knew what I was going through. And that was memorable and had a big impact.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  22. “There's a balance that we have not learned since I've been long enough to recognize when other people go through this as well. And you can't coddle, you can't be there with making it too safe, too many boundaries, too many guardrails. People actually have to walk through a little bit of the valley of despair on their own and wrestle with it. But at one point, Jim realized that I was going too far and he would take me for walks around the office. I don't remember the specifics of what he talked about, but I remember him spending a lot of time investing in trying to get me into the right space. And then Doug Leone showed up at my house one day with homemade pesto. And he was knocking on the door on a Saturday. I honestly didn't feel like opening the door. I was like, leave me.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  23. “Of my doldrums, we ended up investing in Unity and Eventbrite and Square and MongoDB and a list of companies. And it was just this purple patch of investing. And so just reminded me, don't give up, keep going.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  24. “$500 million. That excuses three of those failed $5 million investments many times over. You have to get over it. You just psychologically have to accept that you just have to move on from that failure and not have it encumber you. Learn from it. Don't dismiss it. But you just rationally have to look at the math and go, okay, next. And so part of what helped me, by the way, I was in the doldrums in 2009. I actually thought about quitting the business. You know, YouTube was a great success early on in my career. I was incredibly fortunate to have had such a big success within my first three years as a venture investor. And then I had a pretty lean backlog. And I wasn't sure I was cut out for it. One hit wonder, is this going to be one and done? And then, you know, I kept at it and I realized there's always another red bat in our industry. So in 2009, after I thought about it, after my partner Doug and Mike and Jim really pulled me out of it.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  25. “Scared to take chances. And if you're dealing in a power law business with asymmetric upside, why cry over yet another one that failed? You need to focus on the ones that really succeed. That's where the business is one. Now, obviously, if all you do is you make a dozen investments that don't work out, then you probably need to go to something else with your time. So you need to give enough ones that are good, obviously, to survive. So that was part of it. We stopped doing post-mortems and we supported each other. It was clear to me that my partners weren't judging me and that my head wasn't on the block for the next failure. I felt secure enough that I could make decisions and knew that I was part of the team. It wasn't as though maybe you want to use a sports analogy. If you go for a crazy shot, are you going to be cut from the starting team next game? No, because you took a rational shot. It maybe didn't drop that time and there are probably a million Michael Jordan quotes you can use that make that point. So that was one piece. The other one was at some point you have enough success where you realize while I made an investment that made us”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  26. “Wasn't the support of the partners just in that meeting? In general, I think we started to have conversations about not doing post-mortems. At one point, we had an exercise of doing postmortems on investments. We got this one wrong. Let's hammer into each other why we got it wrong. And what does that breed? That breeds a culture where people are going to be scared.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  27. “We corrected it and we paid up for the series B and helped lead the investment, and I had to swallow my pride. I'm sorry, team, I should have recommended it nine months ago. My bad, now we're paying a high price for the investment, but I still believe in it. And I think there's huge upside. And psychologically, that's a very difficult thing for people to do. And so we want to create that kind of safety for us in our investment team.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  28. “And so I'm always reminded about the need for imagination in our business, the need to be naive at some level. If you become a chromungeon in the venture business, you're done. You need to be naive. You need to dream. So that's the one. The second one is learning a little bit from behavioral economics of the need to revisit your assumptions. So I was really stuck in a some cost fallacy where I'd made a decision to, you know, my recommendation was for us to not invest, wrong decision. So let's dig my head into the ground and hide and just keep saying we shouldn't invest, we shouldn't invest because I admit that I was wrong. And so you need to be able to revisit your decision and admit you were wrong. So we got the series A, it's square wrong.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  29. “Two things are imagination dreaming, sitting back for a second and saying, and my partner, Mike Muritz often hammers this home for us in our partner meetings when he was part of the team full-time was what if it goes right? You know, we're in the business of investing. We're not in the business of not investing. So assume for a second it goes right. What could you imagine this being? Imagine for a second instead of the pre-parade exercise in some sense, just put on your thinking caps. I remember being in a meeting with Mike and Max Leften and Jeremy Stoppelman when Yelp was an idea, an idea in 2005, and Mike in a meeting said, I imagine a future where there are Yelp stickers outside restaurants. I mean, that was an amazing insight, an amazing vision for the future, which came to be true”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  30. “And that was a huge lesson for me. And sometimes you can explain away an investment you didn't make by saying, well, ex ante were those same facts. Would you make the same decision today or not? Because obviously ex post, you should have made the investment, but ex ante, you know, sometimes things just, you know, they're weird twists and turns on the road to company building. And so maybe you could justify that the Series A was a bit more random because it took a lot from there to where they were in, say, 2010. But by 2010, we should have looked at it and reevaluated our decision. And that, I feel really guilty for. That was terrible. I really, really messed up for not revisiting assumptions.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  31. “Attain what they had in the past. So that to me was a very painful experience. But the ones that really sting are the ones we should have made. And I think back to meeting Jack when he was at Twitter. I met him and Ev and we had an opportunity to invest in the Series A at Twitter. This is in 2007. So this is before the iPhone was released. There was no Twitter app. This was text messaging, different business. And I just didn't dream enough. I failed to imagine what might happen with a service like this. And that was incredibly painful for me. And we missed the A and we missed the B and we missed the C.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  32. “Think I should really highlight any of them because we made a good try. The founders were great, didn't quite work out, and it was valiant. We did whatever we could. I will tell you that the first time I had an investment that went to zero was a $10 million complete write-off. I literally cried in our partner meeting because I had such an immense sense of shame and guilt for having failed and for having lost money for our limited partners. And it was an important moment, partly because my senior partners at Sukwam, I think part of what we do well as a team, part of our longevity is the way that we help each other. And so senior partners who had gone through this themselves were there to support me and to guide me through this because the danger in the business is if you've had an experience like that is you recoil and you become very careful and you'll never get back to the glory days. Maybe like an athlete who has a severe injury and they never want to test that knee again because they had a bad knee injury or something.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  33. “Which has its downsides, obviously. So, one of the things we talk about in our partnership is the sins of commission and the sense of omission. The sense of commission is we made an investment we shouldn't have. The sins of omission are the ones you didn't but should have. I've probably made six, seven investments in my career already that literally went to zero.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  34. “I don't know. I felt like we were in it together as a team. We had incredible spirit and camaraderie within the building. I felt like we had each other's backs. We became good friends. It's part of the reason I think the PayPal Mafia was as successful as it was is we formed incredibly strong bonds. Then I don't know, we just rallied as a team and we sort of felt we're going to build this and if we don't build it, we're going to, you know, we'll go down with the ship rather than abandon ship. It was just a sentiment, so we just kept trying, you know, problem after problem, whether it was fraud, whether it was eBay trying to kill us, whether it was regulators, whether it was VAT.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  35. “I never thought about quitting, by the way. It was more just Not sure we're going to make it. I might have to row a boat back to South Africa.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  36. “So, Firsty Paper wasn't generating revenue yet. So, whenever somebody accepted a transaction on PayPal, it just says $100 transaction, roughly speaking, two and a half percent was the fee that goes back to the credit card associations and the issuer of the credit card. So we were paying that $2.50 for every single transaction that was happening on PayPal and never charging the recipient, the merchant, for the transaction. So our losses were growing, very quickly. And then when we were dealing with two types of fraud, the first is unauthorized fraud. This is where somebody stole your credit card number, enters onto the PayPal website at that time, charges $100, and withdraws the money and runs away. And then you get your credit card statement at the end of the month and go, I didn't authorize this transaction, you file a charge back. PayPal wasn't the hook to pay you back your hundred dollars. So we had to protect against this unauthorized fraud use case. And then there's merchant fraud, which is the person said they'd ship you something, it never arrived, it arrived damage, it didn't.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  37. “Say that, like, I want to go work there. I thought we played nice in Silicon Valley. What's going on here? And then we had the fraud challenges, then our burn rate was $14 million in June 2000 before we started to charge for payments. And our burn rate was accelerating.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  38. “Two weeks later My offer letter was signed on March 30th, 2000. April 12th, the Nasdaq has a massive correction. I mean, literally two weeks later. Then I go to a class where Meg Whitman was a guest lecturer, she was a guest speaker in one of the classes I was taking at Stanford. I'd already accepted my offer to join. And she came to this class and she says, well, we own this payment service called Billpoint, and we're going to crush this annoying little startup in Palo Alto called PayPal.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  39. “Payments piece was a way to make a very well, there was a clear path to turning it into a revenue business. I thought that the combination of X and PayPal would really dominate the P2P payment space. I fell in love with business and the people.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  40. “Of course, they were worried, but they didn't have the means to be able to support me. So, you know, Peter, the person who is the person who I work for at McKinsey, he lent me some money. My best friend who was working in London at that point was my best man when I got married. He lent me some money. My now wife, who was a classmate, we were dating already. She lent me some money. It was embarrassing at some level. But I had to get through. And so I was struggling with the decision because it was an expensive decision to walk away from going back to McKinsey or maybe joining Goldman. And so I struggled with those two choices and the choice to go to a startup. And my wife actually studied computer engineering at Carnegie Mellon, who's also an immigrant from Singapore. She and I had long conversations and she really encouraged me to take the startup round. And she'd worked at startups before she came to business school. We were classmates. We'd met there. And so she was a huge influence. I made that decision. I liked the business that they were building. It was clear that the”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  41. “No, no, no, just earlier, obviously. I love the business model. And let me be clear, I still vacillated because I had to pay back an enormous amount of student debt. I didn't have any money. I'd run out of money actually in second year of business school and was living off borrowed funds from friends of mine. And I was struggling to make rent.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  42. “That point when he made me another offer, and the opportunity was actually to report to Peter, Peter Thiel, that seemed like something I shouldn't turn down. So I accepted the offer and I was so delighted they took a chance on me.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  43. “And for me, as a South African, it was more than many South Africans that live in the UK. It's same time zone essentially as South Africa. And so it was closer to home. I mean, California is about as far as you can get from where I grew up in my family. And I was very close to my family. And so I was wondering if that made sense. And so I tried it. I got enough information to realize that was not my destiny. And so I came back for second year. One of my classmates met Elon before he came to business school when Elon ran Zip2 and this friend of mine was at City Search and introduced me to Elon. And I thought the intersection of financial services and technology was interesting. And he made me a job offer. And I couldn't quit because I didn't have a work permit. I was here on a student visa. And so, you know, we kept in touch and I started to learn more about PayPal. I was really intrigued when PayPal and X.com came together because I loved the business model that that had.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  44. “No, I realized that that was not the right calling. Going back to Europe at that point to me felt like going back to the past as opposed to the future. And the West Coast was the future.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  45. “It's what one does on a weekend. You know, you run these Monte Carlo simulations on your little Realize that you gotta know me.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  46. “Need to change your mind if we talk about mentors, by the way, I have a specific anecdote about one of them that really hammered this into me. So right before I came to business school, I was doing a master's degree, which I didn't complete at the University of Cape Town on long-term option pricing using stochastic simulation techniques.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  47. “So he was the project manager. He convinced me I should apply to business school, which I didn't think was necessary because I'd done a business undergraduate as part of my actual science training. And he wrote on my recommendation letters and strongly encouraged me to think about coming to Stanford. And at that point, this was in the late 90s, obviously Stanford or Silicon Valley in general looked like an interesting place. This was the well of opportunity so many companies were being formed instinctively it seemed like the place to be. And so that's how I got to Stanford in 1998.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  48. “Engagement in McKinsey language was a project basically. So who's the project manager? They just needed to come up with a Fancy words to merit the exorbitant fees that we're charging.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  49. “It was a funny story. There was an American who'd come to the University of Cape Town when I was an undergrad. And he was a guest lecturer in economics. His name is Peter Baird. And it was fascinating to meet him. He had a wonderfully bubbly personality and he was just one of these larger than life people. I loved working for him. Well, I ended up working for him later, as I'll explain. He ended up working in McKinsey, coming to South Africa, and I was staffed in a project with him where he was my engagement manager. And he convinced me that I should apply to business school because I'd done a business undergraduate.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT

  50. “But you have to pay back if you don't go work for them. So the deal was that they would pay for my tuition and I had to work for them for the same number of years that I studied to pay off the debt. And if I didn't work for them, I literally had to pay them back every penny. So I earned less and had the debt to pay off. I made the same decision when I joined PayPal. So McKinsey was paying for some of my tuition at Stanford, and I had to pay them back. I still have my offer letter. Elon recruited me to PayPal slash X.com, and I have the signed offer letter still in my drawer. And I got $80,000. That was my salary when I finished my MBA in 2000. And it was less than McKinsey was going to pay me. And I had to pay McKinsey back. And then the third one was joining Sequoia. And those are the three key career decisions. That was it.”

    2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT