The Crazy Story of Google’s 7 Angel Investors

today i'm gonna tell you about seven strangers who made the greatest investment of all time i feel like i could rude world i know i could be what i want to from at all in in like a days off on a less travel i'm just gonna put my finger to your lips such let me cook here because i got something for you i'm just gonna i'm gonna take you down a road here alright so i've been down this rabbit hole dude for the last i wanna call it six hours preparing for this podcast because i just got obsessed with the random story and lore of the first people that invested in google this is crazy so this is the story of all the people who invested earlier google and the the lessons from this are not about investing google this was like you know twenty years ago but how crazy the world of angel investing is and how much you can almost create your own luck and i wanna show you how these people created their own luck step by step so first let me show you something and if you're on itunes go to youtube right now you're gonna wanna see my little powerpoint i made for sam alright sam check this out do you recognize this building just probably something in downtown palo alto what you're looking at is one six five university avenue also known as the lucky office also known as the karma building you might recognize a little better here would you see one of the companies that was started here so google was started here before google started there paypal was started there before paypal was started there logitech was started there after google started there the company called danger started their sold for five hundred million to microsoft by the guy who created android right after that this office is legendary who's in there now well it's had a little bit of a cold streak recently and it's kinda like ed sheeran says ed sheeran believes that rooms have songs and he's like once a studio has been mined by like four or five great artists it loses its magic it's there's no more songs left in the room that's the kind of what's happened to this office down alright i wanna take you through the first few people that invested in google and how it happened do you recognize this guy here recognize either of these two guys the guy in on the left is sergey he's one of the founders is that sergey or the other guy larry yeah that's sergei sergey and the guy on the right is that eric schmidt it's not eric schmidt it is a guy named andy be stein does that name sound familiar no maybe if you just look at these murdered out guys from yeah and just murdered out red corvette vets from the early nineties here this might ring a bell or two what you're looking at are some of the og of silicon valley these are the founders of sun micro systems do you know what some micro systems did it was one of the first big companies was it making microchip chips workstations computers basically okay and they made their own chips also they they ended making chips they ended making their own operating system they they're doing a lot of things these guys were like og of the og that first guy the india guy that's vin ko so that's vin v ko there's bill joy there's andy and then there's scott mc alright so these are the four founders of sun dude by the way for the record they looked dope they looked dope hell necessarily like corvette and the flex that doesn't exist anymore and i think it's fantastic i think this is great first of all they're all on cell phones guess what cell phones hadn't been invented yet so i don't even know what they're holding there there's like a corded phone it gets running into their car with a little you know like the spiral cord anyways these guys are awesome so andy wakes up one morning and he's got an email on this inbox and it's from two stanford students larry and sergei the founders of google and they're pitching him on an idea for a new kind of search engine you know the way that search engines worked at the time was there were these ass ji there was alta vista there was yahoo and all of these companies back in the early nineties they were you know search engines that had some combination of manual curation so they had like editors picking what goes upfront for people where and what how do you find what you find or you would search it and it would just try to match the words that you're typing to the website and these two phd students said hey we have a new way of doing this it's called page drink and what page drink does is it basically says this is a genius insight the genius insight was of google was that instead of just showing you what our editors say is the right answer would you search for murdered out red corvette instead of just giving you a a word batch for it we're gonna show you a link to the website that other people are linking to social proof right so if other websites are linking to your website that beats your website's probably pretty good and the more important those websites are so like let's say the wall street journal links to you that matters more than if sean's website least you and they had this insight that they could create better search results this way they said we'd like to show you and so he says i'll see you tomorrow morning eight am he sees them they pull up in a parking lot he's in his the story says porsche so maybe one of these is a porsche one of those is a push okay great so as you could tell i'm a car guy one of those is a porsche that's andy car larry and sergey show up they have a little laptop and they are trying to show him a demo of google and they show him they say search for something he searches for something and the results come up in its magic the results are way better than you would get out of a traditional search engine and they start telling them their their thesis and what they're gonna do and how they're having they're thinking about raising money to go actually turn this into a company and he says guys there's a lot of things we could talk about right now but i think it's easier if i just give you money and he goes back to his porsche and he comes back with a checkbook he writes them a check for a hundred thousand dollars and he writes it out to google inc and they're like google they're like hey we haven't even incorporated the company yet and he goes it doesn't matter and they go but what about valuation he goes guys this is the best idea i've ever seen take the money start building and he leaves it he gets back in his porsche he drives away and he doesn't even know how much of the company he's just bought because he didn't even agree on valuation a number of share price none of that he invest the money he walks away he invested at a ten million dollar valuation google today is like multiple trillion dollars so he only two percent you know two percent of this company he doesn't even realize this of the time because they haven't decided an evaluation and he's so excited about this company and if you remember the four levels of luck he's basically has that luck favors the prepared mind he knew when he saw this company that this was he goes this is the greatest idea i've ever seen and and this is the guy who created son at at the time he's the he's like the man right this is like if elon saw something and invested in a company he's like no this is the best product i've ever seen and this is the guy that made tesla and you know spacex and billy rockets he's like no no this is the shit so andy does that he's so excited he goes and he tells the next guy in our story and this is the next guy do you know who david she is he's another og like cisco or something like that or zoo what one of these like big things that i don't know what they do but they building ari network was okay he also invested in i think vmware that sold to cisco for seven hundred million dollars so i i took the screenshot off of google it says the quiet billionaire oh i forgot to say andy nickname is the golden boy well david sheridan nickname was he was the billionaire professor and this guy's a professor or a a a at stanford but he's super wealthy like a multi billionaire he's also on many lists as the cheapest billionaire is the top ten cheapest or most frugal billionaires you'll ever meet a little quote from him on it they were like did you're a billionaire why don't you like you ride your bike everywhere you don't even have like a fancy car you still live in this old house that you lived in before you got rich what's the deal and he goes honestly i kinda hate the idea of living like a billionaire he goes i'm actually pretty offended by that sort of thing you know the cut type of people that live in houses with thirteen bathrooms and so on something's wrong with those people and this is david sheridan he gives away tons of money so he's given away you know tens of millions of dollars to universities to schools to education to phil but he himself just rides around like do with the bike helmet out on his old bike and he just that's how he lives his life and he's great so can can we just say really quick that the professor billionaire type i think of all the billionaires they might be one of the best maybe your favorite i think i thought criminal billionaire like silk road type shit was those are cool those are cool but they're not aspirational like i wanna be friends with them but like the aspirational one is the professor billionaire you know the guy who started renaissance the big hedge fund professor their billionaire ed thor was a professor billionaire those are the best billionaires but what about i thought you love like the just the ruthless ty cocoon the they're like reading about them they're fun to read about they've got great stories but if you could be anyone you you want the press billionaire there it's great so andy he tells david sheridan he goes hey you gotta talk to these guys at stanford he starts he meets the guys he also writes the check in the same round again like hundred hundred and fifty thousand dollars so he he puts it in okay so now and was he a billionaire when he made that deal or was he just not a billionaire but successful had started a company called granite system he had and eventually he does create a risk network versus is like a a multi billion dollar company but at the time was like you know let's call it probably had tens of millions of dollars and he is really rich now i just googled them holy crap yeah like ten billion plus right twenty billion like yeah closer to like really rich like top one hundred rich yeah he's both him and andy both of they they both are now so he this guy's may this guy ended up making over a billion dollars just off his google shares okay so he meets david now who's the next person that finds out about this little little company called google that started by these two students on campus well david goes to a holiday party and at the holiday party he meets another person do you know who this guy is yeah ron conway ron conway this is gonna be a little bit of a long session because ron conway is a goddamn legend and i kinda knew ron conway was the man i've actually met ron conway before and i just he just has this presence he's got a bit of an aurora about it he like a forgetful professor type because like where he's like always take notes and he's like always move and doing stuff and he forgets stuff is that always taken notes so like this he's got this light yellow legal pad when i met him he also had a yellow legal pad and he was furiously writing notes and we were just at like a lunch we were like a lunch with the mayor and he was just writing like copious amounts of notes and he was just like always on the move he was moving and if somebody asked him a question he would just somebody came to introduce themselves he's like how can i help you do what you're doing it and he was if i get to the ask like what's your ask if i could do it i'm gonna do it and then he would jot down a note on his yellow league pad cool i'll make that introduction and like literally like seven minutes later the introduction was made guess got moves at a different speed you know like in ama mafia when the godfather has a wedding his daughter's wedding at every everyone in the town can come and ask him one favor he's like that every day exactly i you said is he also like their forgive professor i think he's more like he's more like santa claus he's he's saint nick okay he's like saint nick after it with like a triple express out and so he's just moving okay so okay so ron conway goes to the holiday party and the way he tells the story is he goes i get to this party and i'm in a tuxedo and i got down i hate at a tuxedo i'm so uncomfortable and i just see i see david there he's also in a tuxedo and i go to him and i go david let's talk about something else because i'm so uncomfortable with this tuxedo right now and you david had invested in in his fund and he goes david the deal is you invest in this fund cool i'll invest your money but you gotta be telling me what you're seeing and like you gotta be my eyes and ears on the ground he goes david what are you seeing at stanford what's exciting right now it goes oh i just i just invested these two phd students that are doing the search engine thing and he had invested in as chief so he knew okay search engine's big deal somebody says there's a new search that's better than asked achieves i got i'm interested i wanna check it out so yes asked david can you arrange for a meeting and he tries to get this meeting and he kinda fails they they're like they're busy they're like we're not taking angel investors we want vcs but they go but maybe you can actually help us get a vc was ron a legend then or a legend in the making legend in the make got it are you do you wanna do you want the quick backstory on ron that's pretty insane yeah alright so he ron conway starts off as an entrepreneur he starts to think the company called alto computing so he's also making computers like sun and he ends up taking it public and then they get their ass kicked the personal computer comes out the pc the pc starts kicking their ass they end up selling the company but they do well and his early investor was sequoia so he goes to don valentine who's like the guy who created og yeah the og of og investors and it and don like alright ron what do you wanna do next what's the next company you're gonna start he goes honestly i never wanna manage a thousand people again that was that was night a nightmare i don't know what i wanna do but that's not it and he goes that's a bummer like you know my my hope is you're ready to start a new company and i was ready to write the check but if not maybe you'd be a good investor how i recruit you to sequoia why don't you come follow me around for a couple weeks see if he you like this investing thing so he follows follows down around and he's like hey this is he goes hey i think you could be pretty great at this but you know what you should do you should do this thing called angel investing a new thing and angel investing at the time was actually a term from hollywood it was about investing in movies i think they call it super angel or something that was it like even like a different term he became a super angel but like it started with just angel investing goes you know what you don't even have to start your own vc fund you could just invest your own money just small checks ten twenty k checks and man hey where do you see something the cool you bring it to me at sequoia right and so he tells me we should go do this and ron decides alright i'm gonna start angel investing ed basically he he starts angel investing his own money very quickly he decides he's he's like i made one great decision in my life and it's in nineteen ninety four he's like alright i could just be an investor he's like but if i if i'm competing competing against guys like don i have no advantage right they've been doing this they're just more skilled more experience than me they have a better brand than me and they just know that game inside and out he goes but what can i do to differentiate he goes well what if i actually just start investing what if i pick a niche and he goes the and so don's like okay is your niche gonna be like hardware computers just like you just did with your company goes no all i know is i hate hardware so what's the opposite of hardware software software what's this new thing the internet and at this time by the way the browser hadn't even been invented like mark teresa is still a student at university universal of illinois i didn't even graduated yet but he's like i think there's this thing software we needed it for our computer for our hardware and there's this new thing called the internet fuck it i'm all in on the internet and he just decides he's like look it's a thing that's at zero so he goes the beautiful thing is there are no experts so i can't be behind because this thing just started so gonna go in this thing at zero i'm gonna get to watch you grow and by the time you know this thing's four years five years in i'll be the expert hey it goes that's the greatest decision i ever made in my life hey it goes by the way it's now twenty twenty five i'm still all in on the internet he's like i said this this thing i i thought this thing was small then he goes i still think it's early days and so he he goes all in the internet now around nineteen ninety nine he's been angel vest he raises the fund he raises the fund for twenty five million dollars from other people to be the silicon valley you know angel investing fund s angel if you've heard of it yeah and actually at the time he was called it something else angel investments or something like that but yeah he decides i'm gonna invest silicon valley companies he raised twenty five million dollars the dot com boom hits it's getting hot he raises the next year another hundred and seventy five million and his his approach is just spray and pray he's investing in anything and everything that he sees and so he's made like two hundred fifty investments by the time the dot com bubble burst and would it burst he's like oh shit and they go to him his his he's only working with like four five guys and they're like hey what's our strategy like the market's crashing he goes our strategy is we don't invest anymore like our strategy is i think it's over i don't know i don't know what to do like there's just no there's nothing to invest in now and so he's he's like but my hope is that one of these deals that we did early on is a winner and basically what he says is that when that dot com bubble burst eighty percent of our companies just went to zero but luckily he had google and he had invested in google along the way and google carried it okay so how did he end up investing google because remember they didn't want an angel investor they wanted an institution well the thing about ron conway is that ron conway is known for being just extremely generous so even if he's not gonna invest in the deal he's just like i'm gonna help the founder and he his philosophy was and a lot of people say this but he actually did it his philosophy was all i do is i am a in service of the founder i'm just gonna help as many founders as i can and money will be the byproduct like money has to come if i help enough great founders money has to show up and paul graham basically calls us the the ron c principal and he goes paul graham describes as he goes i he goes i noticed when ron conway goes i've never heard one instance of ron conway behaving badly to any founder and that's incredible because this guy's invested like thousands of companies because in fact i went looking for example as anyone had an experience where ron conway treated you poorly or didn't act in your best interest hey he goes and instead i just got this out pouring of people are like no you know what he had nothing to gain from some a situation and he just went above and beyond and he goes so paul graham hears this and says you know what actually maybe there's something to this actually i've heard about a couple other investors that are like this and it goes maybe this is not just like a a funky coincidence and it's maybe there's a bit of a strategy which is so much of angel investing is getting invited into deals and if your reputation is just one where you just always act ben evidently then it it's actually not just like a active generosity or charity you're actually building a reputation that's gonna get you into the next deal the next deal the next deal and that's exactly what happened here and so ron conway who by the way to side note go to angels website if you were trying to research this company what would you what would you pay attention to do which companies is they invested in and what do you see there pinterest coinbase based facebook open ai snapchat twitter rip reddit o ant philanthropic square every hit company is on this list yeah every hit silicon valley company is on this list paul graham when he airbnb b checker like everything ever like literally never every every company paul grabbed did a talk where he interviewed ron conway and he goes alright if you need to remember one thing from this i'm gonna say a bunch of words but just remember this one i'm son one sentence it's ron conway is the man he goes i was gonna do an intro talked about the hit companies you've invested in and then i realized it's actually shorter to to write down a list of the hit silicon valley companies that you missed and he had three it was like he missed salesforce he missed kickstarter and he missed one more i figure forgot which one it is and he's like it's insane the number of hits that you've invested in and he goes and the funny thing is that ron doesn't even spend like i don't know if you know about his like investing style but it's exactly the same as yc which i find fascinating which is why he just like a hundred thousand dollars in every single thing he meets you and in ten minutes he makes a decision and he ron says it's usually three to five minutes and then he'll just decide on on the spot in three to five minutes yc has a ten minute interview and then they make their entire decision off ten minutes so the two best picker the two best angel investors in the history of silicon valley both make all of the decisions in under ten minutes isn't that insane and so how much does he invest initially it was investing like you know twenty five k and then it became a hundred k and then became two hundred fifty k i'm not sure if that strategy would work now because there's so because i think that then in the two thousands and nineties and things like that they're if you had the gum to be one of the people who like through your hat ring and like got a meeting and did this i think that because the barrier to entry was high because there was a higher ratio of like freaks doing this shit you know now it's because it's like cool that there's a lot more noise but i i don't so i don't know if that would work now let's look at their list here ant philanthropic that's recent open that's recent hugging face that's recent right like these are the big if i said one of the best companies in the last four years you know that to be invested in open ai and rocket hugging face like these would be in that list you you know he's in uni swap which is was the big one in the crypto phase like you know five years ago or whatever so i think this still works but the trick to making it work is not just that they make snap decisions right like his decision you know his process was basically they're were like what's your thesis he goes i had no thesis he goes i went to angel investing when there wasn't even really a word he goes there was no thesis that you could have at the time i just alright the internet's cool and then he's like i he goes i i realized one mistake pretty quickly which was that the more i tried to judge a you meet a founder and they have a idea they have a personality and then there's a market and basically if you try to blend those together you try to make a decision off the the mix of the idea the founder in the market you lose if you love the founder but you hate the idea you also lose so he goes airbnb i didn't love the idea but i love the founders so what does he take one of those three are just the person he's just like i just pick the founder he goes and i what i do is i like i'm just gonna a best in the founder it's the founder job to figure out the idea and they'll chain they often they change the idea and he goes and by the way i'm not just investing in this founder for this company i'm investing in this founder for life because he because i realized that the best founders start multiple companies so for example he put one of his for first employees at what he started doing this was his son and his son's thirteen years old and his son makes this first investment at thirteen and a little company called naps and he's like oh i heard about naps but i don't know about this shit to go use this thing and tell me if it's amazing to comes back the next day like dad this is the craziest thing i've ever seen i can get any song i could tell it anything this is changing the game i'm downloading bits of the song from other people around the world it's the like this is mind blowing this decentralized thing and he's like cool alright let's go invest in this thing he goes and he meets the founders or he had already met founders that was his diligence and he en sean parker and sean fanning and he's like cool anything you guys do from here on out i'm in and so naps didn't work out but sean fanning fourth to fifth company ended up being a hit naps didn't work out but sean parker next company was facebook and he's like i totally didn't get facebook i didn't know how social networks would make any money it seem like college kids you know posting pictures of they're drunk you know es like i didn't seem like somebody was gonna be money but sean parker in and i just i've decided sean parker is a founder that i wanna back and so i've invest in facebook too alright so bringing it back to google alright so bringing it back to google he goes to the google guys they're like hey we want a vc but they're like alright we will let you in if you can go get a sequoia because program asked him they go he goes you know when you invest in google did you know like this is a huge company he there's gonna be like an all time company he goes you know you can never think of a company as like a trillion dollar company he goes but i did think it was gonna be really really big and i went all in trying to get this investment and he goes why'd did you go all in and he goes well because they had three things he goes first super smart geek that's criteria one two really determined three do they do something that surprises me for example they're really smart geek but they're also really charismatic or the real there he goes but that wasn't the case for them it wasn't the case for z that they were really charismatic he goes with z it was that early on he was talking to me about like getting into getting three hundred million users and he's like no service had three hundred million users so the fact that z had figured out like yeah we're gonna connect everybody a's is like oh shit okay the just the fact that this guy saying things like that it is a level of ambition that's not really you know common and guess what i wasn't surprised when he turned down a billion dollars from yahoo because all he wanted to do was rifle focus on a product that would actually reach everybody so with google he goes they were super strategic they he goes they they told me they go you can you could be in if he wants if you can get sequoia he goes okay that's great sequoia is great but why sequoia they go not just sequoia we need mike mori he goes okay mike's great but why mike and you go because mike is on the board of yahoo and what we're gonna do is we're gonna build the best search engine and right now yahoo has a deal with alta vista alta vista powers all of their search so we wanna cut two mega deals we want to be the default search engine on yahoo and once we convince mike morris this is awesome he's on the board of yahoo he'll get us the meeting and then we wanna do the same thing with aol do they have like a product at this point they had a product they had users and and he talks about that he's like you know basically he's like i saw the searches that the results were better and they had early users that were like the people who used it used it all the time so it wasn't like they had a ton of users but the same thing as facebook the people who used it used it like crazy and and so he ends so they go we want sequoia and we want client perkins he goes well you know you could have either or they don't usually like to do deals together he goes we want sequoia and we want klein perkins because klein perkins john do on the board of aol or has a relationship with aol we need that deal too so they were cocky and smart and strategic yeah they they knew what they needed and they were like we're gonna like at algorithms rooms like that's the output we need so then we need to find the path through that well i i i've read stories of them the sergey and larry re telling the story and they were like we were full of ourselves we thought we were the best and we were pretty good and we and we acted like it looks well there's stories of both right at one point they tried before this they tried to sell the tech for lately dollars yeah and this is when they're like just an algorithm and then they have sort of gotten bigger and bigger so anyways so he goes so he goes i basically so from the time that deck david church and tells about this company at at this quality party he goes i called them for five months straight every month i called them and finally i got my audition and at that addition they go you're in if he can get sequoia so he starts working the phones he gets them a meeting sequoia is in and klein perkins is in oh actually there's one little thing before that he goes hey guys i'll lead this myself ten million dollars and they go no we don't want you he goes okay fine i'll go get you go so he goes and he get some square client but they're negotiating they both wanna do the deal they both wanna do the deal at unprecedented numbers they're trying to do it at like a seventy five million dollar valuation which at the time was like bananas to do a seventy five million dollar valuation but they they they believe that search was already like a big deal and they thought this was the new search thing but they can't agree who's gonna get the deal they don't wanna share it and larry and sergey get fresh after a month of back and forth larry sergey like dude forget this we don't wanna be fundraising ron you said that you would do this thing ten million yourself was that bullshit or is that real he go they go you you said you could make that happen could you actually make that happy because goes i can make it happen this is friday he goes i'll have it by monday if you want it and they go alright that's what we want he goes but honestly guys do you want do you want that or do you want them to share the deal they go our first choice is we want them to share the deal but if if they can't get the shit together we'll do it with you and look again ron county badly wants this deal but he he does what paul calls the most generous act in the history of silicon valley he calls sequoia he calls klein perkins he goes guys they're not bluff if you don't have this thing done by monday they're doing a deal with me to do all ten million but they want this with you guys and that's what they truly want you guys gotta figure this shit out by saturday morning they've agreed we're gonna do this and they carve out ron a little allocation because he put that deal to get yeah he he he gets the two hundred fifty k so that's how ron conway gets in on this deal while the last little ron conway thing because it's just you said something about like mafia and here's ben h from from recent h he wrote a whole blog post called ron and in the blog post about ron he says ron is not an investor ron runs a network and in ron's network everybody who's a node knows you are important and there's a certain code of behavior that you have to have he goes to get into the network you must have a relationship with ron no i save a relationship that means it's not not just i've met or i know more on this later he goes two you must answer when called ron makes sure that his network matters because he demands extreme reliability if he calls you to participate you must participate when called upon and he goes three that keeps you in what i call good standing with ron which is you must remain in good standing with ron to remain in the network if you do not act when called upon or you do not act well in terms of you you you have some kind of bad behavior with founders ron will light you up and take your ass out of the network and it goes no matter what deal you're in it is more costly to be out of ron's network than it is to you know try to get it get one up and because of that he is ensured that silicon valley works so people like this guy that much u alright listen to this story so alfred lynn who ends up have you ever heard that named alfred limp before zappos zappos yeah he he ends up being like the number two guy at zappos i think before that he had started this company he's like and he tells the story he's like y so we had this company it was honestly he was on the brink of failure and he's like it didn't end up you know he's like it it looked like the company was gonna fail and me and my c founder were talking we're like alright have we tried everything and they're like well there's one investor we haven't talked to because we don't really know him super well but like ron did invest in our company early on and they're like we we had this deal if if with this big company this fortune fifty company fell apart and like there was no way if we lost this deal the company's dead so he goes i didn't know ron at the time and his investment was really small which is why we hadn't reached out to him yet we've worked first went to our big investors but we struck out so he goes we had nothing to lose at this point so at eleven pm i wrote ron an email that said hey you don't really know me but i'm an executive at a company or investor in and we need a meeting in person with the ceo of this fortune fifty company we need the meeting this week and if you can't make it happen hey that's totally okay i understand but we may be going down and i'm sorry hey he goes he goes two minutes later is eleven two minutes later ron writes back in a way that i now have learned is ron style it's immediate email short and it's all caps am on it all caps by the next morning ron had done it we got an eight figure contract with that company that led to a nine figure contract all because of this desperate email and eventually our company got acquired for eight hundred million we were on the brink of death ron didn't know us from sam and he saved our ass dude the takeaway from all of this san francisco is amazing and now it's cool to shoot on it because it is very frustrating it's a very fur i've lived there for ten years it's super frustrating but i have missed out so much not being there and just like what people don't realize that san francisco is only like by eight hundred thousand people and if i had a guess ron conway lives in like pacific heights marina area yep and just like walking around that area you feel it and you hear these like weird conversations and just being able to email someone and just be like i'll meet you at the coffee shop five blocks away that's special man just these types of interactions are special so check this out so you said like i don't know if that approach would work because now there's somebody many more companies and that at the time when there's very few people starting companies that might work so they asked him this was kind of like when he was in his peak investing time they go so how do you invest he goes i only take meetings that come from my network so he goes i will get five pitches a day so i see thirty a week thirty deals code i desk a week every single one is from a referral of a founder or investor that i know well that knows me and knows what to refer to me hey he goes i will invest in one out of thirty every single week he goes of the five that i get per day i'll turn down two or three just via email no phone call the rest will invest in and i'll invest in you i'll make my decision within five minutes of talking to the founder they go well what are you looking for in that founder he goes i'm looking for three things insane twenty four seven desire to work he goes that i could tell when i'm talking to founder if they wish they could just spend all of the time working on this and they view everything else in their life as like a nuisance or an obstacle in the way of doing this it goes have they warned their wife or girlfriend like hey i love you but i'm all in on this thing and i'm gonna be gone and i'm gonna be doing shit and like this is this is it this is my thing and i'm doing this he goes that's the first thing i look for it goes and when i he goes if i could feel it then i know it's gonna be infectious to other people because they're gonna have to recruit badass other people it goes lastly can they communicate why this matters and he goes you know z it's not like he had like this crazy charisma or personality but when you talk to them it's the feeling we got when i'm job from rep was on the podcast where is this like this it's like oh shit this is kind bigger than i realized in this is like your life's work this is kind of this is gonna change everything isn't it and they sort of distort your reality to believe that this shit is even bigger than you could ever believe next week we're going to hang out with with jimmy mister beast and i always have this a feeling every year we go to do this event with him we hang out with them with literally like stay in his house and when you're there it's like what he's doing is the most badass ass important crazy shit that any human being could be doing and then you leave and you click a video like three weeks later it's like these friends are putting their hand on these chocolate bars and whoever takes their hand off flask gets it's like half a million dollars of chocolate bars i like wait this is just like this kind of dumb video but when you're there it's not a dumb video right it's fucking everything and he's able to like make you feel that way so that's kind of what he describes the last thing he talks about is he goes rifle focus on the product he goes i invested in square and all jack do everyone are talking to me about was the product he goes i invested in twitter same thing all they talked me about what was the product i invested in facebook all like when wanna talking to product he goes pinterest pinterest i didn't really get like this pin boards like scrapbook booking i didn't really understand it he because i met the founder ben and he goes always he's talking me about about this product he goes then i met his his head of product or he's like kind of his one of his core guys and i met him three times that every time he was wearing the same shirt and i go hey you wear the shirt like often he goes i wear the shirt every day and you know what the shirt is it's a shirt with a circle yeah just the inside is just this word focus goes this guy literally every day wears this shirt that just says focus in the middle of it this guy was ex facebook and then he was at pinterest and this guy was just absolutely obsessed with all we need to do is focus on the product oh there's a meeting oh we got invited to speak at this event what do are you talking about i don't wanna go there he goes to the point of being rude these people just wanna focus on the shit that they're folk on their their product that's it so he he did google he broke with the deal who are the other people i next guy who do you see i see shaq kilo o'neal shaq not a chance the shaq is sitting at the that doesn't even make sense what's even famous then of course shaq is famous this is little the nineties shaq is a is a be a sup star at this time shaq is in a hotel he's in the fancy out of four seasons or r carlton sitting in the lobby and he is the way that this is shaq telling the story he goes i see four distinguished gentlemen in the lobby shaq voice we had the lower let's see four goes full for distinguished gentleman he goes and what he says he goes gentleman don't know who i am but their kids do and their kids are like oh my god is shaq and they run up to him and the cool thing about shaq if you've ever seen videos a shaq shaq is like a giant kid is super playful he's super good he's super good to people that see him he does he's not like one of these celebrities that's like sunglasses hat on trying to like push people away at all times getting annoyed underway when you get in his space it's so shot goes i'm abdul my job babysitting and so he just starts playing with the kids he's just babysitting sitting while they're having a meeting at the end of the meeting ron conway comes up to shaq and goes thank you so much for playing with my my grandkids and so it's so they just starts chi chatting goes yeah we were just talking about this investment that we're doing you know what you should invest in this company it's one of the best companies i've ever seen it's called google shaq gets a meeting with with with i think i think i think i guess this was with larry sergey he goes was an accident he goes i've doing my job at babysitting and then he goes i asked him he goes i have him meeting with them sound good i put in some money i forgot about it years later google goes public he he doesn't even realize that he's invested in google he reads in the newspaper that shaq has shaq is in the s one shaq is gonna make a killing off of this he goes i'm shaq what and so he goes and he remembers it's it's a shaq turned and he's like yeah i wish i invested more shaq turned like you know a couple hundred grand into you know hundred million plus off of his google investment way real no nobody knows how long he held it but you know it's pretty insane so shaq is the next one do you know who this is yeah rip ip rip ip this is don't know actually how do say her name you susan susan last name is a polish name ba i forget what is i don't know what it is susan w so susan it ends up getting in on the action early with google but i don't know if you know the story how i i know that she had a garage and they wanted to work there and did she like give them free place to stay and work there and got like a a little bit more equity yeah kind of so her sister anne was dating sergei and anne says my boyfriend needs a office space and susan wasn't wealthy at the time she like a mid level like marketing manager at some company and her and her husband it just bought this house and then they were feeling a bit of the pants about like kind of the the home and they're like you know what if we rented out garage so they put up an ad saying we'll rent out our garage and was like oh actually my boyfriend needs a space so the google guys rent out our garage for seventeen hundred dollars a month and they start working out of her garage and she just sees them working their day and night and she sees she she hears updates because she's bumping into them she quits her job she ends up being employee sixteen at google and so that's how she became a billionaire was by quitting her job to go work for the company that was working out of her garage at the and she ended up being up until recently when she passed she was the youtube ceo exactly so she she worked on adwords for a bit and then when the google she was a big advocate for like hey we should acquire youtube and when they acquired youtube they were like hey you were big champion for this deal she ends up becoming the ceo of youtube for many years before she passed away i think that's sister of her started twenty three in me correct alright this is do i don't think you know who this is no oh yes i do i do pair yes yeah oh wow that's a that's a deep pull for you to know this so this is pe now he did not actually invest in google wilson so i'm cheating a little bit but this is part of or you said what by takeaway is the magic silicon valley here's more of the magic silicon valley okay so this guy's story is crazy he him and this other guy last name a media i forgot i think it's like a media or something like that amin meme purge two persian guys so first version guy starts a rug shop in silicon valley right in the heart of palo alto he's selling luxury persian rug and right above his like right next to his his rug shop there's also some office space and so he he ends up renting on office space to the founders of i think it's like paypal or something like that paypal are early or early founders were there there was a couple others and so he ends up in he's like he's selling rug these people he gets to know these people that he realizes like wow google piss that that like the classic greg areas like immigrant or version guy first she got like hey my friend come here come here my friend exactly you want some tea let's have some tea the tell me about yourself tell me about yourself he becomes friends he's right next to them he's selling them rug he's selling them office space but he's like dude these companies you know made a killing and so they start taking their rug money good and they start investing and become angel investors and they don't know anything to about technology really but they're like let's just invest in the people that come in to buy the rug if they seem them interesting and so how does pe factor into this cold calls this guy and he's like hey i'm coming up to silicon valley and he's like can give it can i have a job with you and the guy guy's like well have you ever sold drugs before he's said no he's it have you ever sold anything before he goes no but i can learn and he goes listen man i how can i get this job somebody he's got no no experience he's like he plays on the the person side and he says like how can you turn me down you haven't even met me yet just meet me and so he did agrees to meet him he hires him and so he ends up becoming basically like a a rug salesman for this guy and he over the next fifteen years his english improves his confidence approves he becomes a baby's top rug seller in in his best year he moves eight million dollars worth of rug does that insane that's absolutely say one of his first out of a out of a storefront out of a storefront palo alto and so that so that's like a you know six hundred thousand dollars of rug a month or you that's so many dollars for from dude it's totally so along the way the is one of that twenty grand a day of rug yeah and and this guy living he he comes to silicon valley he lives in an attic above a yogurt shop and then becomes a rug salesman and that guy ends up becoming one of the greatest investors in silicon valley and here's his trick so he's like he he meets somebody he starts selling rug and one of the guys who walks in is this guy andy rubin andy rubin comes in and he sells him a five thousand dollar persian rug and during the negotiation he's like so impressed with this guy he's like you're a great negotiator what do you do he's like i'm a businessman i got this company and he's like tell me about it and he's he's got this company called danger remember i told you one of the companies in the lucky office company called danger and these guys made do you remember the t mobile side kick cell phone that's andy rubin made that yeah his next thing he made became android and so andrew rubin pro prolific and then now he's since done deep mind or some type of a like no he went he went and became like the head of mobile for like the big chinese manufacturer or whatever and then i think now he's doing like an ai i so he's like and so he's talked to this guy he goes to his he goes to his boss immediately and he goes he goes we gotta invest in this guy's company he goes cool what does it he goes couldn't tell you it's something technology super complicated i don't know anything about it but i'm telling you gotta invest in this guy he goes he goes are you sure he goes listen if this guy was selling red balloons i would invest in it this guy gonna to make things happen and say he goes okay they write a four hundred thousand dollar check into into danger and along the way he ends up becoming like partner in their investing as he makes money from his commissions he takes every dollar he has basically two hundred thousand dollars and he buys in to like their partnership to be investing in startups and they invest in all these different are up so he meets joe lo no wow after he done pal joe's buying rug whatever he gets introduced to him and he goes joe i would love to show you a rug he's like cool i'll come into the shop he goes no no brother let me bring the rug to your house so he brings like a hundred drugs to joe lo house and his trick is he's like you learn a lot about a person when you go to their house much more than if you meet them for coffee or they come to your shop and after he joe lo would have been in his mid twenties right yes very young and he goes and he meets him and he's he's in that persian rug game he's in that person rug game already and he's like he's like doing this next company at a part which by the way recently sold for a couple billion dollars and at the time he's like love this guy love out par joe lo we gotta invest in this thing and he ends up investing in ata par he ends up investing in dropbox because one of the cofounder of dropbox is also persian and so he's speaking in far he's like chu him up and he's like come on please let us in he ends up doing that he ends up investing an app love which is now a hundred billion dollar plus company because i think he's founder of app loving might be a person guy right i think so too i think so yeah he's iranian or or so somewhere from that area and so there's like this whole mafia they just created an off of this rug shop how insane is that dude do any wasp want to relate with me hey let's talk about baseball and hot dogs and cows like like where is my like that dude okay i'll give you some credit you one of your best investments now is this company you told me about that i totally didn't get because i was like dude what are you doing you're just putting nicotine pouches in your mouth while we're doing the podcast and yeah i always have one in and i was like what the hell are you doing and you invested in this company called lucy that was making like a nicotine gum or pouch at the time at the time it was to come and they kinda just wandered around for a little while didn't even seem like it was gonna take off but now this shit is taking off dude think lucy's is gonna end up being like a five hundred million or billion dollar company you invested early on in that because your your pouch bros with these guys yeah i did twenty five grand into it and i when i did it i i was just like oh you started soil and our mutual friend is josh and josh has your your cool and nicotine is addict yeah like i guess cool sounds sounds good i'm in and so i invested twenty five thousand dollars i think i only had a hundred thousand dollars saved up so that was like a big deal for me so hopefully and then i like message them and i'm like what's happened to you guys i haven't heard from you in like six years what's going on and then they recently holler at me it turns out it's going really well yeah it's going amazing now shout out to jog k and and the crew there okay so let me finish out the story here did you know that bezos invested in google i heard that did he invest in it because he was getting a lot of traffic from it or why i'm not sure there's he's i try to find it it could not find like any of this backstory here but bezos invested two hundred fifty k pretty early in google as well which is kinda wow this is the same way that you know microsoft also invested in apple and kinda saved apple from failure at one point in time like there's these stories of these people that you think are kind of enemies or competitors but actually at a key point in time invested in each i just thought that was kind of kinda cool alright i wanna share with you listen see do have anything else oh there's one of their hilarious story from this whole thing rod conway was like they go did you know that google would make you know so much money it'd be essentially the most profitable money best money machine man has ever made and he goes no he goes i still have google's first slide deck ten pages ten slides and it was all about the product it goes the last slide which is always like the financials and the projections it just said thank you it's like dude where's that's where's your financials slide did they go we we have no idea and he goes okay love it i in but how crazy is this like wild world of like meeting people at a party or the lobby of a hotel and hearing about this thing and doing this deal isn't this isn't this crazy but that's how it still is isn't it it is like it's just that you don't get out you know used to live there but you don't get out like during during the tony robbins episode on our pod he he has this phrase he says which is proximity is power and he just talks about like literally just being close to the action is it's like this most underrated thing you could do just being as close as you can to the people you wanna be around to the people you wanna be like because whether it's you hear a thing you meet a thing you start to do the same habits and lifestyle of those people proximity is power and like that's the crazy thing about silicon valley is like proximity power principal i moved to where i moved because of family reasons but if i could live anywhere i think palo alto would be the place i think i i dearly loved san francisco but i got pissed off at it because of the crime but palo alto is like pretty amazing we do you ever think that you'd rather be there i mean you're you're an hour north of s f do you wish that you're an hour south no i mean s f is now where the action is but so the question would be do i wish i was still in the city and the answer is i definitely would have i definitely know i would make more money if i lived in s like it seems like it's a more expensive place to live but actually i know i would make way more money because those just the ser bumping into some people it's just so much a great headache though it's such a headache but yeah exactly making money is not the only criteria is so like you family wise it's much better to be in the birds for me so lifestyle wise i'm happy with this choice but dan when i hear these stories it does make me wish i was back in on the action like i went hung out with my friend luke and palo alto and we he was i we went his house and he was you a walk and i was let's take a walk we walked around for probably two three hours and in at two three hours he was like that's the garage where google started and this is this and that's z house actually and this is this person's house and then we bumped into like somebody he's like oh that's where the founder of quo is and then we go to a we go to the starbucks he's like a little coffee shop there and like i get recognized by five people that i you know i just sit in my house all day but there's people who listen to the podcast and then they start telling me what they're up to and they're doing a cool ai company and then you leave the coffee shop and we just pop into our friends you know like vc shop and we he's having a meeting he introduced us to those founders and so i'm like oh man dude the amount of serendipity i had this crazy now was crazy and you don't you don't really get it until you until you experience it so if there's like one takeaway from anybody who's who's like you know listen to this i would say my two big takeaways was number one proximity is power and like literally just showing up and being there being in the heart of the action for whatever scene you wanna be and how much that matters and the second was the ron conway principle of how do you just act so prevalent that your reputation is the product you're actually building you're not building a portfolio you're building a reputation the reputation builds the portfolio and the third one is the mid wit meme strikes again where it's like so the two best early picker of startups ever in the history of silicon valley both make their decisions based off of just do they feel like these people are fierce founders and they could figure that out in less than ten minutes and then here you have people that are doing market analysis and segmentation maps and tons of due diligence and and this and that and they have thesis on out on the on all these different markets and it's like do the best people are literally just amazing judges of people and they're making their decisions at five minutes and then they spend the rest of the time just helping people it it's so exciting to hear these stories how much do you think that each of these investors made like i guess like if you and what was the first valuation so the first valuation was ten million the next round was at seventy five pre so ron conway this is now a decade plus ago i think twenty twelve they asked him they were like ron how much did you they were they were like first were you scared off by the valuation i mean seventy five pre today there's a lot it's a high valuation for a series a company and you know google obviously now it's obvious but like that is obvious at the beginning that that obvious and he goes which by the way no that's worth the hundred and fifty million dollars today so that's a a shit of money like how i so this company has to sell for a billion dollars right right so like they're like did the valuation valuation scare off he goes no i think that's crazy he goes companies are binary he goes a company it's the investing we do a company is binary it's either a huge win or it's a zero i just let the market figure out the the valuation and then i invest once haven't decided to i let the market decide the price he goes yeah we did great he goes for every dollar invested we got four hundred dollars out and this was back in twenty twelve and they go and they go is that the peak valuation or that's the current valuation he goes the peak valuation of google is far in the future and why you he knew alright right and this is because this is you know twelve years ago and google has since you know you know at least tripled and in value since then so it it's a pretty pretty wild return now i don't know how much guys like shaq and others got so ron got in at the seventy five million round the guys like andy or david that i mentioned at the beginning of the professors they got in in the ten million dollar round right which is just just wild so you know a hundred thousand dollars became over a billion dollars for each of those people and the crazy thing about pricing is like so google was started i think thirty years ago right the thirty twenty eight years ago and the i don't what are they worth a trillion or something or two trillion what's what's what's crazy is that the company is like the the equivalent of that would be investing in a company today and trying to admit yourself that it will be worth six trillion do you what i mean like it's a really two point three trillion dollar company today so in thirty years double that or triple that so like it's it's it's it's incredibly hard for the brain to think if i invest in this company maybe one day it could be worth a trillion dollars that's like an inc thing to think about and so that's why angel investing it's a mind fuck like to think like like because you think like oh this is worth a hundred million now you gotta sell for a billion and then the founder is like no man it's like one trillion like those the the the the math behind all of this is very very very challenging too even like wrap your head around yeah totally and even when it's staring in the face i think i told the story before but i remember sitting in a a car room in silicon valley in twenty maybe fourteen fifty fifteen or something like that there was some point in time where i was telling this guy i was yeah i came out silicon valley i applied to two places the place i'm at now and the other place i applied to was stripe there's was only two jobs i'd ever applied to in my life and i didn't get the stripe chop i got rejected i blew the interview and he goes oh actually he goes i'm investing in stripe right now and i go stripe now he it's not like an angel investment anymore he goes yeah he he goes yeah it's a three billion dollar valuation and i remember just thinking like what a dummy like you know three billion do you think this is gonna turn into like three like i thought this the game of startups was to create a billion dollar company hearing that one was already at three thirty three x over valued it's like oh are you hoping it gets to ten billion and you triple your money like nuts and now it's you know a hundred billion dollars dollar company i would a thirty x my money even and it was so obvious like anybody i knew used stripe it was so obvious stripe was the best company and so we can valley at that time and i talked myself out of investing in it because i just couldn't fathom the numbers right it just didn't make any sense it's because you think in absolute numbers so i remember one time my when i first started my company we were spending thirty thousand dollars a month that i met the ceo of like a billion dollar company and i was like can you believe this i hired two people and we went from spending eight thousand dollars a month to thirty thousand dollars a month how insane is that and he was like dude like i spent you know three hundred million a year like you these aren't he he was like you can't think of this as an as an absolute number compared to your real life this is just a a number on a spreadsheet and it doesn't matter how many zeros are behind it you just are these zeros going in you're getting more zeros out that's all you have to think about don't think about this in terms of like a real number and when he told me that that kind of like shaped how i how i viewed a lot of things you need to do like the casino thing you have to take your cash trade it for these chips that are different colors you're not used to and then just try to make the chip stacked bigger versus if you look at a you know a hand a blackjack you're like fifty thousand dollar that that's a month's rent or whatever it is right it's like a insane all of a sudden you just start making different decisions i remember like even it's not even the absolute number sometimes even relative we'll screw you up because i remember investing in tesla when tesla was like a at like a five or six billion dollar valuation and or i invested even before that i think it got to six or seven and something like that i paid like three times my money and i remember looking at the market cap of the biggest car company i could think of at the i think was like gm or some full order or one of those one of those companies and it was like a twenty six billion dollar company and i remember thinking like and i looked at how many cars tesla was selling and how many cars they sold it was like know tesla sold like nothing compared to them and i just remember thinking okay okay the ceiling of this is like a thirty billion dollar company like cool so like if i ride this out if if tesla became the most valuable car company in the world you it would be a thirty billion dollar company that would be thirty billion to be like a five x from here or i could just take my winning down go and enjoy them i don't remember the exact number that i remember that twenty six billion was like where the the car companies were at tesla today is not only is it today like a one and a half trillion dollar company or whatever it is so it's that would say one half trillion dollar company so i was off by like you know more than ten x i was off by like two orders of magnitude basically on top of that tesla is worth more than the next like ten car companies in the world combined it's it's like the whole idea of it's like you're company one it it it broke like it breaks my brain right like tesla is literally worth but all of the next six car companies they're worth like i think it's like i don't know six hundred billion or something something like that it's like a oh no the big six are four hundred and seventy seven billion tesla is one point three trillion right so it's it is just mind boggling what these things are it's hard to understand i mean didn't tell you the the what i was trying to understand what a trillion dollar a person worth one hundred million dollars compared to a person worth one trillion dollars which is what elon will be in three or four or five years if you have a hundred million dollars you're like un godly rich okay but the equivalent of those two compare of those two the gap is the same as a hundred million and ten thousand dollars right isn't that insane so like when i think of a hundred billion dollar a person i think you're one of the richest people i've ever met did my i think my invite there's this great quote by happiness it's like i have talk myself out of happiness a thousand times but i've never once talked myself into it right i've never thought like i never thought my my way i've thought my way into unhappiness a thousand thousand of different ways but i've never thought my way into happiness i don't know if i buy that quote exactly but i get the the premise of it which is like we could very much talk ourselves out of things or into unhappiness i think investing is very much the same if not realize like especially in technology investing this may not be true for value investing but for tech investing where you're the whole game is like find the one or two psycho and the one or two like breakout out categories that are gonna just break the entire game as the power law and these things are gonna become worth not a billion dollars not ten billion dollars but like a hundred billion dollars or even a trillion dollars each i think it's back to the like make a five to ten minute gut based decision on the like quality of the founder or the overall space like the internet in ninety four crypto you know in in the in the early twenty tens mobile now ai right it's like just i the the smartest person i know is doing something in ai that's enough i don't need to like the more i think the worst my returns will get is sort of what i've i realized that it comes to to tech investing because it is all about the breakouts and the breakouts are not things that you could just linearly you figure out we had shield on the pod the other day he's was like yeah i invested in bitcoin early and nvidia early like wow you're so smart he's yeah invested in bitcoin because i thought he was gonna become this other thing and i invested in nvidia because i thought about i thought it was gonna win in crypto mining so he's like you know even then the ones he was right even in the professional investor with amazing returns who picked the right two things to bet on of the last fifteen years bitcoin and nvidia he got it absolutely right he did it even for the wrong reason right like it's like goddamn what what are you supposed to do in this this was a great podcast that was a great story we should it would be fun i would love to do a series where we get the first employee we're the first investor in or one of the first in legendary companies to come in and talk so like google facebook reddit i think that's the hack because getting the founder obviously it's great super hard and they're also getting they're also like still running the company and have to say certain things and like they've they've been so media training and like the statue of limitations can be like past it so it's like if it's said old it's like look no one's gonna get mad at you if you say that you guys like call the competitors it pretend to be a customer just so you can get like fake information you know what i mean like it's we're past that it's so you could actually reveal a bunch of stuff paul asked drunk conway he goes you've could do this now for like you know you were a founder and now you've invest all these legendary founders what's changed and he goes because we drank way more back then he goes you goes what that's the thing you're gonna say he goes yeah he's like every day around like four pm we had this woman madonna who would like push a cart around the office with booze and we would all drink and he's like we he's like we literally talk like work hard play hard at the same time like let's do this she's like there was what is crazy shit going on and this in our company and he's like that's just what we did he goes now i go to these companies they don't do that at all they're much better about segmenting it they do play hard but they like happy hour on fridays after work like not like all the time during work crazy shenanigans going on dude that was great is that it that's it that's the pod i feel like i could rude to world i know i could be what i want to from at all in it like a days off on a road less travel never looking back