Keith Rabois - If You Can’t Sell Them, Compete with Them - [Invest Like the Best, EP.115]

My guest this week is Keith Rabois. Keith is currently an investment partner at Khosla Ventures, but has a storied and diverse background as an investor, entrepreneur, and executive. He has worked in senior positions at Paypal, LinkedIn, and Square; has led investments in companies like Stripe, YouTube, Palantir, and AirBnB; and started the company OpenDoor, which aims to transform the process of selling a home through technology.

One fun fact about Keith is that he may have the most impressive list of bosses I’ve ever seen, which we discuss during the episode.

We cover a lot, but one thing we kept returning to was business strategy. Keith’s frameworks for gaining and building strategic power helped me clarify my thinking on the topic, and his examples of contrarian thinking will hopefully make you question some commonly held beliefs.

Please enjoy our conversation.

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

1:35  (First Question) – A look at his investing philosophy

3:16  – Favorite examples of his own investment history

            4:40 – 7 Powers: The Foundations of Business Strategy

5:07 – Understanding what is anomalous in a given investment

7:07 – How much a secret needs to be protected within a business

11:51 – Why accumulating advantage with data is of interest to Keith

15:12 – Digital health companies and ideas that he finds compelling

16:17 – Nuance around financial services that investors should be mindful of

17:56 – How do they evaluate managers ability to recruit talent

19:36 – How similar are the roles of entrepreneur, board member, investor, etc that Keith has had in his career

24:02 – Ways that Keith is a contrarian, including his feelings on “lean startup.”

27:04 – Is problem identification a specific skill set

28:29 – Objection with experimentation/iteration

30:02 – Bad ideas in venture

31:36 – What he likes about Apple

            31:51 – Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs

32:26 - Interview questions for identifying great talent

35:41 – Elements of good design

37:14 – Impact of platforms on opening new opportunities

38:42 – His take on valuation in the early stage environment

40:33 – Advice he would give people early in their careers

43:58 – Do high growth companies get beat by established larger businesses

45:25 – Popular narratives that he thinks are just wrong

48:22 – His thoughts on how people should learn, balancing experience vs information gathering

50:00 – Other investors that are taking a unique approach to investing

51:57 – Reflecting on the entrepreneur as a client model of private equity

55:04 – Books that he recommends that is least known

            55:18 – The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It

56:30 – Kindest thing anyone has done for Keith

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast. 

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag