Invest Like the Best with Patrick O'Shaughnessy
00:02:22 · Patrick O'Shaughnessy, Sarah Guo
[00:02:22] S0: So where to begin what will hopefully be a really fun conversation? I guess because you and I are interested in so many of the same things, I'm just curious what's on your mind today. I think we're both feeling a little frenzied, and it's been going for a while. And it kinda feels like if anything, it might get more frenzied and more chaotic both for what you do, but also the world around what you do. So just in this moment, what does it feel like? What's on your mind? [00:02:49] S2: An obvious thing for anyone thinking about how to navigate this period as an investor is just how does it unfurl and how is it different from the past? What do I do if I can't back test? I was talking to a investor friend last night and the analogy he gave me was, I keep saying I wanna press the brakes as hard as I can but I'm not doing it, going 90 miles an hour. And I do think the question is, do you miss the opportunity on one side or do you make the mistake of every boom bust cycle in technology history? Especially if you like combine that with what does it mean when you're also four years into building a firm for the durability of the firm and the careers of the people? I think it's a complex question.
00:02:49 · Sarah Guo, Patrick O'Shaughnessy
[00:02:49] S2: An obvious thing for anyone thinking about how to navigate this period as an investor is just how does it unfurl and how is it different from the past? What do I do if I can't back test? I was talking to a investor friend last night and the analogy he gave me was, I keep saying I wanna press the brakes as hard as I can but I'm not doing it, going 90 miles an hour. And I do think the question is, do you miss the opportunity on one side or do you make the mistake of every boom bust cycle in technology history? Especially if you like combine that with what does it mean when you're also four years into building a firm for the durability of the firm and the careers of the people? I think it's a complex question. [00:03:37] S0: Do you think that we got it right in the profile that we wrote that you're sort of making a specific, I think we called it a wager or a bed, a positioning, whatever you wanna call it, that there is a really important fundamental thing happening between a couple of labs in AI and everybody else. And that we need to sort of like take up arms to make sure we don't end up in like a very monolithic outcome. Do you think about it that way?
00:04:03 · Sarah Guo, Patrick O'Shaughnessy
[00:04:03] S2: I would answer in a maybe different way, which is I believe in like the great man and great woman theories of history. If you have very high agency people in all of these places and they have the correct risk capital or support in the network or environment, yeah, you change outcomes. You look at very important questions of what happens to open source models and like US industrial policy. If you think about the opportunity for the ecosystem in the future, is there going to be a competitive Western open source model? It actually leads to, did anybody make one? Could they raise the money or were they willing to commit the capital and to gather the talent base, build all the infrastructure and fight for the frontier or not? I definitely think that individual people and entrepreneurs can affect the outcome. I don't necessarily think of it as a war. I am working closely with and co invest with and have many friends at the labs. I think it's fair to say the extreme point of view that some folks may had in and outside of those big labs of the owner of one, two, three frontier models consumes the economy. I do not want that future very clearly. And I don't think we are going to end up there. [00:05:20] S0: Do you actively want to be a great woman in this sense of the theory?
00:05:20 · Patrick O'Shaughnessy, Sarah Guo
[00:05:20] S0: Do you actively want to be a great woman in this sense of the theory? [00:05:25] S2: No. I don't mean that from like a personal humility perspective. It's just like it's not on my set of goals. I want to be the best investor in the things that I try to do. So it's not out of a lack of ambition or even confidence. It's... I think some people are driven by like, I want to be the person that made this happen. I thought I was gonna be like a software entrepreneur for the longest time. My decision that from an identity perspective, I was going to be an investor actually had a lot to do with the idea of I'm deeply curious. I like to understand things. I like to be right. I'm very motivated by working with extraordinary people. If I have a set of skills using those to make them more successful, it's like a pretty good fit for early stage investing. If I wanna work with the very best people and I want the companies to have impact, the firm can support a movement and support change we wanna see. But I don't think it has to be me. [00:06:21] S0: If that's the goal, what does it take, do you think, right now to be the best in a very competitive environment? Undeniably, you've done really well so far. I'm curious what it has taken to be that good and what you think it's going to take in the next year plus within Horizon to be that good.
00:06:21 · Patrick O'Shaughnessy, Sarah Guo
[00:06:21] S0: If that's the goal, what does it take, do you think, right now to be the best in a very competitive environment? Undeniably, you've done really well so far. I'm curious what it has taken to be that good and what you think it's going to take in the next year plus within Horizon to be that good. [00:06:40] S2: I think it's been pretty simple so far. My read of the environment was the growth of firms and generational transitions that were happening meant that it wasn't the most competitive landscape in early that it has been. And you had this massive technology transition happening. And if you took the bet on understanding the technology and the community and approach it from first principles, you might have better access and make better decisions than others who are less focused. All you have to do is take the risk and be focused, and then it's an execution play. That's one of those things that I think is, like, pretty simple and it's just hard, this effort. I think today, it has actually been not that complicated. It's more about what your bar is for the people you work with. And my partner, Mike, and I started with a set of preexisting relationships and understanding. And so I think that has been useful. [00:07:30] S0: Surely, must be more than just outworking everyone. Mike said something interesting to me a couple weeks ago, which was there's sort of 250 ish people that he thinks about or you guys think about that are some combination of entrepreneurs and researchers and [00:07:48] S2: Doing the most interesting things on the frontier.
00:07:48 · Sarah Guo, Patrick O'Shaughnessy
[00:07:48] S2: Doing the most interesting things on the frontier. [00:07:50] S0: Yes. The people that are actually showing up in the morning and pushing this whole thing forward. And that one of your goals as a firm is to be as close to those people, know them all and be as close to them and support them in as many ways as possible. I really like that idea. It's a cool idea. And that's more than just doing a bunch of meetings with people that are starting companies From the outside looking in from the cheap seats, it looks like there's more unique stuff going on than just the competition set was low and we focused more and we're executing better. I'm interested in the ingredients that have been so far a part of success. I won't name them, but there's one well known LP that does the survey every year of what all the other fancy LPs who they most wanna invest with. You're either number one or two. There's something going on both with the companies you've invested in with the performance so far with the market perception. There's something more than just, okay. It was a moment in time we worked really hard. I'm I'm trying to get at those ingredients. That's why I'm pushing on it.