How I Invest with David Weisburd
00:03:04 · David Weisburd, Jack Selby
[00:03:04] S0: A lot of people today, it's almost an overused term at this point, talent magnet. How did PayPal recruit this kind of gang of characters that ended up building some of the greatest companies in Silicon Valley? [00:03:16] S1: Peter's approach to hiring was very much kind of a best athlete approach. And so we weren't looking for someone who was necessarily, say, an expert in payments because we kinda stumbled into, you know, the ultimate product for PayPal, you know, emailing payments. I mean, our original product was beaming money between PalmPilots, and that's what we spent most of our entire series a round that we raised from Nokia because we were literally beaming money between PalmPilots and most importantly, trying to figure out how to encrypt that infrared beam between the two Palm Pilots. So it wasn't as if we were hiring for specific aspects of how the business looked at the time. We're just really looking for kind of the the best athlete, smartest people we could bring onto the team, and I think Peter did a really good job of that. [00:03:56] S0: And what was the trade off there outside of the domain expertise? Was there also cultural trade off in terms of if it's the best athlete, it doesn't necessarily have to be a culture fit?
00:03:56 · David Weisburd, Jack Selby
[00:03:56] S0: And what was the trade off there outside of the domain expertise? Was there also cultural trade off in terms of if it's the best athlete, it doesn't necessarily have to be a culture fit? [00:04:05] S1: The culture just kinda coalesced naturally, organically. I ended up running the international operations. I was 25 years old. I mean, I didn't know anything about running international payments or international operations for a payments company. So like most of us on the team, on the executive team, we just kinda made it up as we went along. And so... And the culture just kinda coalesced. And if you fast forward today, like, we did a twenty year post IPO reunion party at Peter's house in LA a couple years ago, and, basically, everyone showed up. It was really cool. We had, like, 400 plus people there, and so we're all still really friendly and get along quite well, which is, which is pretty amazing. [00:04:37] S0: There's a lot of turmoil around the company in terms of a lot of fraud and just these big issues that you had to solve. It was obviously a very stressful time. Did that help define your career in terms of that's where you started and there was, like, a second order effect? I'm still trying to double click on why everybody became so successful.
00:04:37 · David Weisburd, Jack Selby
[00:04:37] S0: There's a lot of turmoil around the company in terms of a lot of fraud and just these big issues that you had to solve. It was obviously a very stressful time. Did that help define your career in terms of that's where you started and there was, like, a second order effect? I'm still trying to double click on why everybody became so successful. [00:04:56] S1: There was always a lot of stress. I mean, the analogy I would give you, if you're working at a successful startup, it's like you get on the treadmill, and it just goes faster and faster and faster. And if it starts slowing down, that's a problem. And so it was just a fire drill at all times. Like, on the fraud side, you mentioned, like, Max Levchin, world class in helping figure out how to prevent all these attacks from these Russian mobster, Mafia types that were trying to infiltrate our system and steal money out of the PayPal, overall network. And that was just one of many, many, many issues that we were dealing with nonstop. But that was just... That was the kind of the normal business affairs on a day to day basis. So I think that probably forged us to be, I don't know. Maybe we... That left us stronger because of it, but it was a constant fire drill. [00:05:38] S0: Oftentimes, think about there's this meme now that you wanna find founders that have childhood trauma. So I wonder whether there's such a thing as an adult... Adulthood trauma that that leads to success.
00:05:38 · David Weisburd, Jack Selby
[00:05:38] S0: Oftentimes, think about there's this meme now that you wanna find founders that have childhood trauma. So I wonder whether there's such a thing as an adult... Adulthood trauma that that leads to success. [00:05:49] S1: I mean, we certainly had a lot of turnover. We had to certainly had to let some of the senior staff go because they just ended up not being cultural fits or they just were underperformers. But for the most part, the team that was with us from the earliest days, that was the team that we basically left with when we sold the the company to eBay. So it was... Again, to Peter Thiel's he's a very, very, very skilled guy, and arguably his best skill for at least from the PayPal days was as a hiring manager. [00:06:11] S0: And you have the track record of being with Peter Thiel, I think, longer than any other human being in the world, close to twenty years. What did you learn from Peter Thiel that a lot of people don't know?
00:06:11 · David Weisburd, Jack Selby
[00:06:11] S0: And you have the track record of being with Peter Thiel, I think, longer than any other human being in the world, close to twenty years. What did you learn from Peter Thiel that a lot of people don't know? [00:06:21] S1: I've actually... I met Peter twenty eight years ago and have been working with him for twenty seven years. So, it's been truly an incredible ride. I mean, my bad joke on this is that I met Peter Peter when I was 24, then we merged with Elon's company when I was 25. And so if you had to replicate that in a laboratory of meeting two luminary types at such an early age, I mean, that replicating that experiment would be basically impossible. So I feel very blessed, very lucky, and just fast forward to today, still as a managing director at Thiel Capital and having a kind of a foot in his world and the people I get to meet and the companies I get exposed to, it's really special. I feel very blessed. [00:06:58] S0: So let's talk a little bit about your thesis. So you're on your second fund, and it's quite contrarian, which doesn't come as a surprise to me. Today, roughly 90% of capital goes to three states, California, New York, and Massachusetts. Right. And in many ways, that's actually becoming more lopsided. It's getting closer to a 100% than it is to 80%. [00:07:19] S1: That's right. [00:07:20] S0: Why do you think that that's inefficient? This episode is presented by Juniper Square, the operations partner for private markets.
00:07:20 · David Weisburd, Jack Selby
[00:07:20] S0: Why do you think that that's inefficient? This episode is presented by Juniper Square, the operations partner for private markets. [00:07:29] S1: As the AI euphoria continues to hit new highs, venture capital continues to chase these AI shiny toy deals, and those deals are predominantly based in the three coastal states, so New York, California, Massachusetts. And that's just the reality of the market that we live in. And so the good news, though, if you will, glass half full with this dynamic, is that if you get away from those three states, if you go to the other 47 states, which is where 290 plus people live and where, you know, more than three quarters of our GDP economically come from, you can find deals that are much more reasonably priced. And, essentially, it's a bet that there are some smart, investable entrepreneurs that live in these other places, and that's the bet that we're taking at Copper Sky. [00:08:06] S0: What's an example of a company that's outside of these three states that you felt were... Was miss... Mispriced?