Invest Like the Best with Patrick O'Shaughnessy
01:00:33 · Micky Malka
[01:00:33] S2: I never believed in titles and never believed in job descriptions or, hey, I'm looking for this and here's a job description. I thought it was... Again, that's... Those are labels. And in the mindset of labels, I think you gotta start backwards. Start just finding amazing people. No assholes. Nick is one of the smartest persons I've met in my life. By the way, he's the only Ivy League guy we have in the entire Ribbit team, so that tells you. There's a lot of joy I'm sure. In that story. He's ten years younger than me. He's much smarter, much more thoughtful. And from day one, there was one thing that I remember from our first conversation was I gave him a case study to go look at. It was a company in Europe that was one of the first big fintechs. I said, go study it and we'll have breakfast and chat about it. And he came back and talked about this company, but talked about the founders by name. And that was the moment where I said, he gets people. He didn't start by talking about the numbers or the market. He just said, x name and x name, they came from this company. This is what they be... My guess is this is their behavior. This is the way I read the way they speak, and this is what they're saying. And it was just so human. So I think fundamentally from the beginning... Then we added Nikolay a little bit later from Bulgaria, and he was from Morgan Stanley. But we've just added people that had grit, had passion for the space, and had this ability to truly be humans first. Literally just good people. And after that, you just work on the skills. So our culture has been bring them young, train them in our ways, grow them in an organization that has no titles, no job descriptions. You will change your role multiple times on any given day, week or month or year. We will shift. You gotta be able to be good at self expressing yourself because you have to teach. Every moment you come back from a meeting, gotta teach back everybody else. We are only as good as the knowledge that you transfer to the rest of us. If the knowledge stays with one person, you're fried. It's a dead end street that has no output. So that by itself drives a different kind of people. We don't bring stars. Everybody has become a star being here. There was nobody, oh, he was great there. We brought him here. No. They don't gel because the team wins as a whole.
01:03:03 · Micky Malka, Patrick O'Shaughnessy
So that joy that comes from working together only comes when you have that. Once you put something different to the inside of the model, it can break. Or the inertia just expels it off. So it's very different. And we tell that with companies, like companies said, hey, but am I gonna talk to you? Am I gonna talk to Nick or Nikolay or Justin or Eva or someone says, no, you don't talk to everybody. You will find that you will call Justin for something and you will call Zach for something else and you'll call Eva and you'll call Cindy. And then typically, typically, when the shit hits a fan, that's when they call me. That's a call I get when something goes really wrong. The other calls, everybody else gets. But that's how it works. [01:03:49] S0: How much do you think about returns? [01:03:51] S2: I don't. I don't think about returns. I think returns is an output metric, and I focus a lot more on the input and I let the output take care of itself. Now, one thing that a friend of mine, a dear friend told me early on in this journey, Ribbit was, great work, you got your first fund raised, but guess what? You only truly win your stars on your shoulder when you return capital. So that stuck with me. It stuck with me in so many ways that from early on, was always thinking about it instead of trying to build an empire of AUM. And I always looked up at Berkshire since I was a kid, how they compounded and compounded and compounded the balance sheet, I understood that I was playing a different kind of game than that and just the differences on that.
01:03:51 · Micky Malka, Patrick O'Shaughnessy
[01:03:51] S2: I don't. I don't think about returns. I think returns is an output metric, and I focus a lot more on the input and I let the output take care of itself. Now, one thing that a friend of mine, a dear friend told me early on in this journey, Ribbit was, great work, you got your first fund raised, but guess what? You only truly win your stars on your shoulder when you return capital. So that stuck with me. It stuck with me in so many ways that from early on, was always thinking about it instead of trying to build an empire of AUM. And I always looked up at Berkshire since I was a kid, how they compounded and compounded and compounded the balance sheet, I understood that I was playing a different kind of game than that and just the differences on that. [01:04:43] S0: So how does that manifest in something like price? We were talking before about a company that has all the trappings of an incredible founder opportunity at the edge of what's possible, and the price is to say nosebleeds would be understating it. How do you think about a situation like that? [01:05:03] S2: Warren Buffett used to say that if you graduated from business school or college and they give you a scar with like ten [01:05:11] S0: Twenty punches on it, that one, yeah.
01:05:11 · Patrick O'Shaughnessy, Micky Malka
[01:05:11] S0: Twenty punches on it, that one, yeah. [01:05:12] S2: Yeah. Exactly. That's all you should do in your life and be very careful. I think we each wanna have one of those to just pack amazing people regardless of value. So you're not gonna do that every day. You're not gonna do that every year. But I put myself in your shoes and say, okay, Patrick, you have interviewed almost every smart person there is to interview in America, and eventually you will do this around the world. You have met them, you've seen them vulnerable, you've seen them speak, you've seen them interact, you talk to them online, offline, and then you find somebody who blows your mind away. What in your framework does not give you the right to punch that card? Why get stuck on value when you have array of exposure to people and as you get older, your gut overtakes your brain and you gotta trust it more. So that's the way I think of it. I said, am I gonna build a business like that? Probably not because it's not the right way. It's really hard to do it and you end up gambling a lot more than you are investing. But would you make an exception when you find somebody unique and just close your eyes and said, don't look at it for literally five years, ten years, and just see this person became amazing, and if not, learn why. Definitely, you should do it.
01:06:33 · Patrick O'Shaughnessy
[01:06:33] S0: It makes me think of other singular things. And fintech for sure, with exceptions, of course, like Robinhood, I wouldn't say is an area that's associated with amazing brands. You and I spent some fascinating time together learning from some of the people that have built the most iconic brands in the world. How is your view on the importance of brand evolve? Like what does a great brand mean to you?
01:06:55 · Micky Malka
[01:06:55] S2: It's the topic that I've been spending the most time the last two years outside of these trends and what we need to do here. You have some of the greatest podcasts on brand stories too. I think at the end, brand is to under promise and over deliver on anything that you do. And that's how great brands get built. So if you can do that and you can be a great storyteller that under promise and over deliver, in no matter what area you are, you will win. Now, what I find interesting is that most people are not trained to think about brand. No one taught them about this concept. They didn't study it in college. They didn't grow up in an environment even though America's brands around the world are some of the best in everything. When we were building Ribbit, I always said, why are we not doing active speaking or marketing or Twitter? Because our brand needed to come from the founders. Our brand needed to come is when you ask any founder, who is the first person you call, will they say Ribbit? And if we win that battle, that's our brand. So what I've learned about it is that when you talk to entrepreneurs in our space, any space in around e commerce or digital financial services or crypto. Crypto has a terrible brand for the record. The crypto brands such as this... Who came up with the Bitcoin logo? There's no brand story there. And despite all of those things, look at what he has done. Imagine if he had a grip. One day that will happen, but not yet. When you look at the best companies around the world, you took Samir from PhonePe or David from Nubank, you talked to Nikolay at Revolut, how they built it, they never spent a lot of money on marketing. All they did was over deliver on what they promised. And that's what it takes.