Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: And a lot of people did doubt them in that moment. [00:00:00] S1: They should never be doubted. [00:00:00] S0: One is tempted after a deal like that – $2 billion check – I don't know what it's valued at now, probably back north of $100 billion, at least in secondary markets, to pat oneself on the back. Can you tell the Instagram story and the message that you got? You doubled your money on Instagram in like, days or something, in your original Instagram investment. Again, tempted to pat oneself on the back. What was the fun story after that?
· Josh Kushner
[00:00:00] S1: I feel very grateful to Kevin. Every time I see him or Mikey, I thank them because I think in many respects, they were huge contributors to Thrive being the firm that it is. Them giving us the shot to be a part of such a hotly coveted opportunity is something that I have enormous gratitude for. Thrive was a no name New York firm. We were pushing this agenda of being this opportunistic vehicle that was agnostic to stage, sector and geography. Instagram raised at $500 million. We had a $40 million fund. We put in $12 million between our fund and co-investment. It sold two days later. When the investment was announced, people were giving us a very hard time for investing in a company at a half a billion dollar valuation. But when a billion dollars was a lot for a company to sell for, we were starting to get recognized. And I remember vividly, I was standing in our office on a Sunday afternoon, and Jon Winkelried, who's now the CEO of TPG – he was spending time with us after his time at Goldman Sachs – called me. I was a 26, 27-year-old who had just done a transaction that was on the cover of the Wall Street Journal. I was expecting to get a congratulations, and John said to me, “I'm going to give you the greatest lesson that you'll ever get from me, which is never believe your own bullshit”. And I remember how piercing that was in the moment, but taking a step back, it was the right advice. I actually wrote it on Post-It Notes, I think Thrive was only 10 people at that time, and I put it on every single person's computer so that when they got into the office on Monday morning, they saw it. And we just talked about it. We're going to be right, we're going to be wrong, but it's really important that we recognize that in our world, we're trying to predict the future and anyone who convinces themselves that they are capable of doing so is not being true to themselves. It's our job to have the right conversations around these things, but intellectual honesty and self-awareness has been a huge part of the right decisions that we've made and I'm very grateful to him.
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: Can you tell the story of Isomorphic and the creation of deals – which is creating a company in a deal that you didn't necessarily start but which you created out of thin air, which I think is so interesting and creative. The quote that I heard from Demis about the work you did with him to get Isomorphic as a standalone thing that you invested in out of DeepMind, was that he should "Stop being so British about it and get a little bit more aggressive." Maybe tell the Demis, Isomorphic story. [00:00:00] S1: We are very much oriented not towards transactions, but companies or ideas that we want to be a part of. I've known Demis for quite some time. After AlphaFold came out, I expressed to him that I would be very excited to support him in whatever way I could around his efforts within Isomorphic. A lot of the products that are being created within the AI ecosystem, whether it be around robotics or coding – are going to lead to tremendous transformation in the world that we currently live in. We view Thrive as enabling technology for the world that we wish to see. The idea of creating a company that's end goal is to cure disease is probably the most important thing that we could ever be a part of. I feel very honored and grateful to have the opportunity to partner with him and the rest of the Isomorphic team.
· Josh Kushner, Patrick O'Shaughnessy
[00:00:00] S1: We are very much oriented not towards transactions, but companies or ideas that we want to be a part of. I've known Demis for quite some time. After AlphaFold came out, I expressed to him that I would be very excited to support him in whatever way I could around his efforts within Isomorphic. A lot of the products that are being created within the AI ecosystem, whether it be around robotics or coding – are going to lead to tremendous transformation in the world that we currently live in. We view Thrive as enabling technology for the world that we wish to see. The idea of creating a company that's end goal is to cure disease is probably the most important thing that we could ever be a part of. I feel very honored and grateful to have the opportunity to partner with him and the rest of the Isomorphic team. [00:00:00] S0: You and I have talked a lot about the difference between the enablers and the artists themselves. A24 and Dan Katz, who I'm an enormous fan of, is building something really interesting and really special that I think has some elements in common with how you think about Thrive. Can you tell us about the relationship and why you made an investment and parallels that you see that you think are useful?
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: You and I have talked a lot about the difference between the enablers and the artists themselves. A24 and Dan Katz, who I'm an enormous fan of, is building something really interesting and really special that I think has some elements in common with how you think about Thrive. Can you tell us about the relationship and why you made an investment and parallels that you see that you think are useful? [00:00:00] S1: It's really important that we understand our place within the ecosystem. Our founders are our heroes. We're not DaVinci, we're Medici. And it's our opportunity to enable the artists that we're fortunate enough to support to create their masterpieces. I've always been fascinated by A24 because there have been a lot of analogs to Thrive's story. They have captivated Hollywood by being based in New York. They keep to themselves, they're very focused on the director, the actor – in the same ways in which I think we're very focused on the founder. It's very input driven around, "How do you create the best work? How do you support the people who are actually the creators in this ecosystem?" I've learned a lot from him and the team as they have gone on to make extraordinary art by supporting the people that are making it.
· Josh Kushner, Patrick O'Shaughnessy
[00:00:00] S1: It's really important that we understand our place within the ecosystem. Our founders are our heroes. We're not DaVinci, we're Medici. And it's our opportunity to enable the artists that we're fortunate enough to support to create their masterpieces. I've always been fascinated by A24 because there have been a lot of analogs to Thrive's story. They have captivated Hollywood by being based in New York. They keep to themselves, they're very focused on the director, the actor – in the same ways in which I think we're very focused on the founder. It's very input driven around, "How do you create the best work? How do you support the people who are actually the creators in this ecosystem?" I've learned a lot from him and the team as they have gone on to make extraordinary art by supporting the people that are making it. [00:00:00] S0: The notion of investing in Fifth Avenue, in the very best assets in a given category is something we talked about a lot last time. I want to expand upon that around OpenAI as a specific example. It's such an interesting thing to me that so much of the power and the value can accrue to the number one player. I heard Peter Thiel say recently, if he was to go back and rewrite any part of "Zero to One" – he has that chapter on the four types of monopoly – that he would maybe give scale its own chapter, separate from the other three. And this notion of all the resources accruing around the leader – maybe say a little bit about that ongoing education you've had on that concept, and then we'll use it to talk about OpenAI.