Invest Like the Best with Patrick O'Shaughnessy
00:15:15 · Patrick O'Shaughnessy
[00:15:15] S0: Vanta automates compliance so your team can spend less time on security reviews and more time getting customers. Vanta cuts audit prep by 82% and gives you instant up to date proof of trust without all the manual work, so you can close deals faster and with less friction. Customers report a 526% return on investment, and more than 16,000 companies use Vanta, including Ramp, Harvey, and Snowflake. Get started with $1,000 off at vanta.com/invest. Ridgeline is the first end to end system of record with embedded AI for investment management firms running portfolio accounting, reconciliation, reporting, trading, compliance on one unified platform. Firms are moving off legacy technology and onto Ridgeline because of how far ahead Ridgeline's AI features are compared to anything else in investment management software. I've been hearing from a lot of investment managers about AI and they fall roughly into two camps, with some unsure where to even start and others convinced that they can build their own order management system over a weekend. The reality is that running an investment firm will always require governance, controls, and single a source of truth for your data. And no amount of AI enthusiasm changes that requirement. Ridgeline is built on exactly that foundation, which is why I believe that the firms that come out ahead in the AI era will be the ones running on Ridgeline's unified platform. If you're serious about your firm's AI strategy, Ridgeline should be part of that conversation, and you can request a demo at ridgeline.ai. Going back to your family's history, one of my favorite topics is this idea that you can learn so much about a person from what happens in their first twelve, thirteen, fourteen years, as you said. Carl Jung had this great idea of studying the unlived life of the parent. Another way of framing it would be, this is a little trite, but you should be like who your father was supposed to be. You should live the life that he was unable to or didn't quite. And that part of that imprinting is children observing their parents, but they're not going after the risks they're not taking, and maybe running in that direction is a great way to explore. Back to the point about where does one person end and the next begin, like, the break from the parents is really important.
00:17:25 · Patrick O'Shaughnessy
I'm curious how you arrived at this method of yours, this first fourteen year interrogation method. When you first did it, how you do it, like what the method is, and why you find it just so impactful in understanding a new person.
00:17:39 · Michael Moritz
[00:17:39] S2: I suppose I first came across it oddly in Detroit when I was a correspondent for Time Magazine. With a colleague, I wrote a book about the Chrysler Corporation, but more importantly, the person who turned around Chrysler at the end of the 1970s and the beginning of the 1980s. And a man who was for a time, the best known business figure in America, even though today most people struggle to pronounce his last name, but he was a gentleman called Nia Coker. He was the son of Italian immigrants. In writing this book, we spent a fair amount of time interviewing Ioaca. And what came through loud and clear was how much as the son of Italian immigrants who'd grown up in Pennsylvania, Lee grew up in Pennsylvania, he felt like an outsider. He worked in the automobile industry and obviously in the upper echelons of the automobile industry where I think he was always viewed with suspicion, most notably when he worked at the Ford Motor Company by Henry Ford II and the other people who obviously everybody had immigrated, but who were much more members of the establishment. And Iacocan never felt like a member of the establishment, and became very clear that all of that stemmed from his childhood. As the years went by, he began to interpret many of the slights that then fell upon him, including not getting the top job at Ford, to the fact that he was seen as an Italian immigrant. If you think about the people
00:19:17 · Patrick O'Shaughnessy, Michael Moritz
[00:19:17] S0: who have harnessed that outsider energy, a lot of whom you've backed with great success, have you seen people graduate out of it? And when they do, does their driving motivation [00:19:28] S2: go away or suffer? I wanna answer the previous question a little bit as well. You asked when I've met various people and various founders over the years, spent so much time on their backgrounds. Many of these people are only 20 years old or 21 years old. [00:19:43] S0: You're covering a big percentage. [00:19:44] S2: You're not exactly gonna be able to ask them about their life in their 50s. So it's just natural to try to understand that. I don't think people grow out of it. I think what happens is that people work with a certain intensity in their late teens and their 20s and maybe their early 30s. And that intensity for a whole variety of reasons diminishes over time. I think that's what changes. The inner being doesn't change, the outward intensity changes. [00:20:14] S0: When you were asking these questions, was there any one thing or set of things that you tended to be looking for? Was it you coming away feeling as though someone had extreme drive?
00:20:14 · Patrick O'Shaughnessy, Michael Moritz
[00:20:14] S0: When you were asking these questions, was there any one thing or set of things that you tended to be looking for? Was it you coming away feeling as though someone had extreme drive? [00:20:24] S2: I try to paint when I have some time. I'm not a good painter, but I really enjoy it. At least the way that I paint. You make marks in different parts of the canvas and the marks seem unrelated. Maybe it's a color blue here and the color brown there. You're putting these marks and dots on the canvas. There doesn't seem to be any composition there whatsoever. And then eventually, in my case, the picture comes out and it's bad, but there's a picture at the end of it. And it's the accumulation of all these different marks. And I think that's what happens when you're talking to people about their backgrounds. You're looking for these little dots here, and then eventually you put together this portrait for yourself of the individual. [00:21:09] S0: In searching for those dots, did you come to favorite questions that you always found yourself asking?
00:21:15 · Michael Moritz
[00:21:15] S2: There's one that comes to mind, which I've always found quite revealing is to ask somebody if they think back and had a chance to do one thing differently, one action differently, what is it that they would do? And I remember one person we interviewed for Sequoia who burst into tears when I asked that question. It turned out that he'd grown up as the son of an immigrant here in America. He was Hispanic. His father was very proud to have made it here and that his child was bright, his son was bright and he was getting good marks at school. And this fella, probably when he was 12 or so, had gone down to a corner grocery store with a pal of his and stolen some candy. The shopkeeper who knew his father complained to his father, And his father took him by the ear, took him back down to the candy store, made him apologize, made him empty his pockets. The man I interviewed was so chastened, so embarrassed by bringing shame upon his family and his father just burst into tears. What's your answer to the question? What would you have done differently? You're a good interviewer. People don't listen to answers very often when they interview people. I think every child of parents feels this in one way or another. I felt it as I was writing the book that I was embarrassed. If I could erase one thing, it would be some of my interactions and dealings with my parents, which I feel ashamed about today, but there's no going back. And I spent the first sixteen, seventeen years of my life with them. But there were many things probably that I wish. And also when I was a younger man and just encounters with them that I wished had gone differently because I didn't really understand who they were and so be it.