Invest Like the Best with Patrick O'Shaughnessy
· Josh Kushner
The North Star KPI for the holding company is to not just create efficiency within these businesses, but really in many respects to think of these companies as product and technology companies. We've always looked at the world that we've lived in as one that needed to be disrupted from an outside-in perspective. If you were to think about the paradigm shift of reinforcement learning, the things that you need are both the data that is proprietary to the company, but also the experts that exist at the company to fine-tune the model. So I think we are of the belief that on a go forward basis, disruption will happen from the inside out. We set up this permanent capital vehicle that enables us to buy these businesses and hold them in perpetuity, because if you actually have a differentiated unique lens and cost of capital around these businesses and you're able to transform them in the ways in which you want to, you ultimately want to hold on to them forever. One person I'm very grateful for that helped us create this structure is Alex Taubman from Long Lake. Alex is one of my best friends. We were doing this for quite some time, but his insights and perspectives around the actual structure that it should exist in is something that I'm enormously grateful for.
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: I love the idea that the disruption because of data and internal know-how is happening inside out rather than outside in. That's a totally interesting, different paradigm than in the past. How do you relate to competition? Back to the Thiel idea, he would say you don't want competition at all. The same way that SpaceX doesn't really have competition for Starlink. There's just nothing else, and that's better than fighting everyone and trying to beat everyone all the time. VC and venture and private investing has massively proliferated since you started Thrive. How do you think about your “competitors”? [00:00:00] S1: We think about competition in probably more of a positive sum capacity than others. We feel like we have a lot to learn from other firms. We have deep respect for a lot of other firms. We always try our best to be as collaborative as possible. I view competition as a swim race. When you are swimming, if you look to your left or if you look to your right, you're going to lose. You just need to look straight ahead. We are competing against ourselves most of the days that we are working, and it's just fundamentally important that we don't look at anyone else in terms of how they're doing. We just have to swim as hard as we can in one direction, and “don't save anything for the swim back.” [00:00:00] S0: Nonetheless, sometimes you're in your lane – someone else comes in and they swim into the lane. There are competitive deals that you want to win, I'm sure, that other great firms also want to win. How do you win when you want to?
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: Nonetheless, sometimes you're in your lane – someone else comes in and they swim into the lane. There are competitive deals that you want to win, I'm sure, that other great firms also want to win. How do you win when you want to? [00:00:00] S1: The ethos of the firm is never sell against anyone else. There are truly a lot of firms that we respect deeply, and we will never compare ourselves to anyone else. What we like to do is just express to people that this is who we are. These are the types of values that we represent. These are the types of things that we can do for you. Other firms can do other things as well, but we try our best to make it about ourselves and what we can do, as opposed to us versus anyone else, and just give it to the entrepreneur for them to ultimately decide. [00:00:00] S0: Tell me about loyalty as a concept. [00:00:00] S1: It's been very hard at times to see people act in ways that don't necessarily resonate with the ethics and values of Thrive. And as I've expressed to you sometimes before, perhaps Thrive will be less successful because we're not willing to do the things that other people are willing to do. But it depends on how you define success. We really try our best to be positive sum, but also at the same time, if you're on our team, you're on our team. And if you decide not to be on our team, that's fine as well. [00:00:00] S0: What's something you'd be unwilling to do that you've seen others willing to do? What’s an example of that?
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: What's something you'd be unwilling to do that you've seen others willing to do? What’s an example of that? [00:00:00] S1: I believe that my word, the word of the firm is more important than anything else. And if I commit to someone that I'm going to be by their side, I'm going to be by their side. We don't invest in competitive businesses. I've always fundamentally believed that that notion is more important than whatever the ultimate trade is. I think it's important that we always think about the industry in a positive sum capacity, but also at the same time, I think it's fundamentally important that we also hold our ground. And a line that I've used to the team before is, “kindness without toughness falters, and toughness without kindness corrodes.” [00:00:00] S0: Do you think of the words that could be used to describe you that ferocious is a fair one? [00:00:00] S1: There's a lot of passion in what we do every day, and we want to be the best that we possibly can. Define it however you want. [00:00:00] S0: Trust is something I'm always interested in. Has it become harder or easier for you to trust people with your success? [00:00:00] S1: I don't think we've achieved much, but I'm a trust by default person. But if someone breaks that trust, they’re out. [00:00:00] S0: What's the best way to build it?
· Patrick O'Shaughnessy, Josh Kushner
[00:00:00] S0: What's the best way to build it? [00:00:00] S1: I really believe in humanity. I really believe that people were created to be good. People can grow. People can always aspire to be better. So, I think seeing people for who they are in the best versions of themselves is the best way to build it. And to be honest, to live your life in a certain way. The only way to create trust with someone is to be trustworthy, to make sure that they know where you stand on something. That doesn't mean we're not all human, and that we don't all make mistakes, but I think that's the way in which I've gone about it. [00:00:00] S0: You just had a daughter whose name is Rae. Rae was your grandma's name. And your grandma, I did not fully appreciate until recently when I learned more about it, led an absolutely insane life and story. Maybe say a little bit about her significance in your life and the significance of that story in your life.
· Josh Kushner
[00:00:00] S1: My grandmother was a very special person to me. She was an absolute hero in my eyes. I feel so lucky to have the opportunity to honor her with the name of our child. Her story is really one of impossibility and resilience and perseverance. She grew up in a small town in Belarus, was put into a ghetto with a bunch of other Jews, dug a tunnel with other people in her town to escape, with a spoon. 600 feet. After experiencing and witnessing her sister get murdered, her mother get murdered before her eyes, to escape into the forest, to live with the Bielski partisans. To come to America with my grandfather, and nothing with the exception of the shirts on their back. The thing that my grandmother provides the most for me is just perspective, which is nothing I will ever go through in life will be as hard as what she went through. To see her family murdered, to escape in the way in which she did, to live in the Polish-Belarusian Forest for years, to live in a refugee camp for four years, to have to start anew in this country. There's no amount of pain that I can ever experience that will ever amount to what she has and whenever there's a difficult situation that I face, I always try my best to put it into perspective. More importantly in a very humbling way, there's nothing I will ever accomplish in life that will be greater than what she pulled off. Most people would break in that situation. I'm very proud of what I've done at Thrive, the personal life that I'm living, and I hope she's looking down and is proud of me as well. But nothing I will ever do will equate to what she has accomplished.