Episode 31: Kevin Hartz - General Partner at A* Capital

0:00This week on Generating Alpha, I'm joined by another than Kevin Hartz, co-founder of Eventbrite, co-founder of Zoom, and general partner at ASTART. An entrepreneur and early-stage investor, Kevin has backed category-defining companies like Airbnb, Pinterest, and Uber, while building two startups from idea to IPO. His career spans the early PayPal days, pioneering digital remittances with Zoom and transforming live events with Eventbrite. Over the last two decades, Kevin has navigated nearly every stage of the startup journey, from idea to IPO, from seed checks to billion-dollar valuations. He's worked alongside some of Silicon Valley's most influential figures, learned from legendary mentors and built a reputation for spotting breakout founders before the rest of the world catches on.

0:42In our conversation, we cover how early political contrast shaped his contrarian streak and his time at Stanford building an early social networking platform while connecting him with future PayPal leaders. We discuss lessons from his mentors, the personal crisis that redirected his career, founding Zoom and Eventbrite, and his investment philosophy at ASTAR. I really enjoyed making this episode, and I hope you guys enjoyed listening. If you haven't already, I'd urge you to follow the podcast on Spotify and subscribe to the channel on YouTube. Thank you. Thanks, Kevin, for coming on. I really appreciate it.

1:16My pleasure. Thank you, Ramir. I'd like to start where I always begin. Let's talk a little bit about your childhood and kind of your upbringing. So if I understand correctly, you grew up in a small town around the Bay Area, and then you also spent some time in Miami in your childhood. So give me a little bit of background. What was your childhood like? What was your upbringing like? Yeah, idyllic childhood. Very lucky, very fortunate to be kind of born in upper middle class, you know, waspy neighborhood in Orinda, California, which is in the East Bay of the Bay Area. The South Bay being, you know, the famous Silicon Valley.

1:52I was kind of peripheral to that for just four or five years. family went off. My dad took a job with a bank in Miami. My father's a retired attorney. He was general counsel for this bank for a few years. Great place to be a kid at first grade through fourth, fifth grade. It's sunny all the time, warm weather, the beach. and and we came back and you know eventually I went to college but didn't go very far went to the South Bay to Stanford so that proximity I'd say you know how there that you know maybe there's there's some luck and fortune in everything is that going to Stanford grew up right or I went to university right in kind of ground zero of all this exciting innovation that was happening.

2:51And if I understand correctly, Orinda was a very Republican town during your kind of childhood, and you guys were the only Democrats, right? Yeah, it was a good research there, Amir. We you know, we kind of call it like Orange, inland Orange County of sorts, after Orange County in Southern California, like it was, it was very Republican. And we were, you know, we joked about being the token Democrats, you know, out in town. The irony is that I was out visiting just somewhat recently, and there was a Trump protest. And now apparently, most serendipitous are Democrats and it's sort of flipped. So I don't know, you know, I, I guess maybe we were early adopters or something.

3:45Do you think kind of growing up in that environment helped you kind of adopt the contrarian mindset or was it just, you know? Yeah. You know, I, I think like while Rinda had these like very kind of wonderful like institutions, they were also very, you know kind of very traditional and so it made it easy for me to kind of rebel against that and I don't know my friends used to say I was kind of a rebel without a cause like in a tongue-in-cheek way but I think that's that's right but I mean I'm full of contradictions on On the one hand, I was an Eagle Scout. I, you know, went through and did these things and crossed old ladies across the street and things of that nature.

4:37But on the other hand, wanted to kind of shake up a lot of things. Do you see those contradictions in your investing today? you know very very much so um i mean it what immediately comes to mind of course is is defense tech you know we're building weapons um and you know that's that's a pretty heavy burden something to be mindful of um and something you know i could talk at length about and you know maybe that really contradicts more of a pacifist mentality I have

5:19but but we could go on and on so you said you love school you go off to Stanford and there you build kind of an early Facebook like platform just tell me about your experience there being in Stanford if I understand you met a lot of these incredible people and the student government there and what were the core lessons or principles you took away from that experience? Right. So Stanford at that time in the late 80s, early 90s was this sort of hotbed. It was really this sort of murmur before like the storm of this day, before the kind of massive storm of DEI. And don't get me wrong. I mean, I think I should just point out I've grown far more conservative today over these years, and especially with how the country has transformed.

6:09You know, I think there's a well-known quote attributed to the prime minister of England that, you know, if my child was 18 and conservative, I'd call him heartless. But if he were 50 and not conservative, I'd call him brainless. and the notion there is you kind of see the pragmatism of life and what and how things are done and I've certainly moved that way but where I'm going with this is there's been a lot of like sort of radicalization of of liberal ideals you know you would say you would say for example you know the the treatment of israel by the far left as uh you know call imperial colonists um you know is is is one of these um and there's been action you know in the current administration to try to shake this out of of of the of universities um that's what they're trying to get at whether the right direction or not.

7:20A lot of these kind of liberal ideals have kind of gone too far. This all kind of began in the late 80s, early 90s, where it was the beginning of affirmative action. And Peter Thiel came to campus in the late 80s and created the Stanford Review to speak out against this, speak out against the attempted changes against Western civilization track at Stanford. There was pressure to overhaul that. And it really was a reflection. It was like a warm-up or a dress rehearsal. What came just over the last five to ten years was like radical changes and things that we have went through there. That's where I first met Peter, Reed Hoffman was there, Keith Reboys, and many other, David Sachs and many others.

8:25So Peter Thiel, Keith Reboys, David Sachs, Reed Hoffman, how important would you say that peer group was to kind of your, in shaping your ambitions and overall your career trajectory?

8:39um well it turned out to be incredibly important um you know in in that's when i tended to get involved or engaged with projects around you know this this group and and peter um you know amazing things happened and you know i don't think anyone would have realized the massive impact historical impact that that group you know really has had on technology on society on on thinking um and and so um you know i think like when if there's any lesson about this when you see these really extraordinary people kind of staying close to them and learning from them and and being a part of that is a really good idea.

9:30I'll say I was fortunate to get involved in PayPal as an angel and then started a company building on the PayPal API, the first developer on the PayPal API. That company went public and was acquired by PayPal and started Eventbrite also at the time on the PayPal API. uh so those those were my attempts to kind of stay close um to these talented people and alongside of Peter Thiel you've cited Pierre Lamond and Roloff Botha as kind of your key mentors what are each of them like how would you describe each of them and what type of advice or guidance do you go to each of them for uh well uh Pierre is extraordinary he's in his late 90s still sharp as a tack.

10:22And he was the co-founder of National Semiconductor. He's a physicist and a chip specialist and then turned Sequoia partner with Don Valentine, a longtime Sequoia partner. and, you know, Pierre is just whip smart and then has a lot of kind of understanding of how businesses work. So he just intuitively, you know, could tell you from experience which door number to go to. You know, as a CEO, he would always have me make my own recommendation and then challenge that, you know, with different options. But, you know, the pattern recognition in PR is just extraordinary. And what would you say about Peter and Roloff?

11:22Roloff, you know, Roloff was on both the boards of Zoom, the money remittance business and Eventbrite, you know, for almost two decades. And Roloff is just somebody who can solve a problem in a very creative um manner i mean of course he's like a calculator he was an actuary originally out of university um but but yeah his creative problem solving and then as seeing his investing is is like second to numb but um there's always somebody that i could have a conversation with and help me find a solution to a very, to very, very hard problems. So you go to Stanford, and then if I understand correctly, you go off to school in England.

12:14And then after that, you describe yourself as going through a personal crisis of meaning. What do you think triggered that crisis? And how did you kind of work through an emergent? well i i think i you know in like it stanford and oxford just took things that were of interest to me not that would have a bearing directly on you know like my trade or what i would be doing the rest of my life so i came out of oxford with a master's in history and figured well maybe i should just apply to law school, take the LSATs and go that direction. Or I also interned in a neuro lab and was considering the med school route.

13:00But I was basically like kind of at a crossroads and, you know, not sure the right direction what to do. And then, you know, again, And maybe you'll call it dumb luck, but this was right as the first internet boom was happening. And right in the midst of that, you know, I was looking for something that would challenge me, that would have a high degree of intellectual rigor that I could learn every day from. And, you know, in a very fortunate manner, that teased technology right up to me. So I went to Silicon Graphics and became a product manager. And your first major entrepreneurial endeavor was Zoom.

13:47What was kind of the initial insight that led to it? And how did it eventually take shape or in the early days like? Yeah, great question. It was something Mike Moore had said. I had been meeting with him the day that PayPal went public. And he said that, you know, first PayPal is only in like the second or third inning. and then second that a great company will create industries upon industries now it looks like stripe is that one doing that it's the massive fintech winner and and so i went to work with my partner alan braveman to launch um to to launch the remittance business we actually we're experimenting around like much what you see today is that here we had a payments API that we're building different payment apps on top of today you know you build different apps on top of of open AI not not very different at all it's the same context how do you think that kind of experience not only shaped your development as a founder but what's also one thing you understand now that you wish you understood that?

15:02Well, I think it's always perseverance. You know, perhaps we should have kept Zoom independent. It was a great exit. But, you know, a lot of the small players in the market at the time that were far behind us, you know, are now doing multi-billions in net revenue. I mean, it's staggering how big the remittance market has has grown to. And, you know, persevering and just keeping going is always hard year in and year out. So that's certainly one that's like universal lesson here. Look for a big market and steer towards it. So your second major entrepreneurial endeavor was Eventbrite, and you co-founded it while engaged to your wife.

15:51And starting a company with your partner is very unusual. I can't think of anyone else I know who's done that. What made you confident you could grow a business together? Well, we kind of tested it out. We, you know, just went upon building the business and day in and day out would kind of stop and check in and see, you know, is there friction? Is there conflict? Is something awry? And, you know, we just said, no, well, you know, things are working great. Let's keep, keep moving along. And it was, it's, it was like maybe the most rewarding experience of my career and lifetime in general. I think it was so fun building and going through that early stage rapid growth phase with Julia.

16:45I want to shift a little bit to talk about your current endeavor, which is A-Star and talk a little bit about the investment philosophy. What lessons from Zoom, Eventbrite, but then also you were a partner at Founders Fund for some time, kind of shaped your investment philosophy right now? And how would you describe it? Yeah, there's lots of different methodologies around investing. And, you know, A-Star is really an amalgamation of all the things I've learned from the Sequoias, the Founders Funds, and just from, meeting and getting to be to work with so many great founders over the years so i would say in the case of a star we're very talent focused we are it's immaterial practically immaterial what category the business it is it could be almost any business if you're an extraordinary founder you know we want to be in that that seat um in the notion there is the brightest people find the biggest opportunities and capitalize on them.

17:51And they usually are opportunities that are overlooked and kind of cast aside and give that founder some time to build in kind of solitude in a sense. You know, and that's just like a lesson, you know, that's held true. We backed, Bobby is this kid out of Yale, and he's building General Biological. It's an industrial biotech business that is incredibly out of favor with the investment community. And there was a kind of first generation of these that the majority of them didn't make it. We see why the why now matters and works now. And then his ability and resourcefulness is extraordinary. so we found ourselves in this market not because we wanted that narrative or we thought it sounded sexy or it was good for the environment you know there is good for the environment but because it's extraordinary i want to shift back to paypal for a minute because i'm kind of talking about people in talent you weren't necessarily at paypal or part of the paripal mafia but you were kind of alongside it which i think is a very interesting perspective So from your vantage point, what made not only PayPal, but the people inside of it so successful?

19:20but paypal special is that peter had a special opportunity to recruit far in advance of of you know the creation and recruiting of paypal itself uh while at stanford he found all these brilliant misfits um and put them through the ringer um keith and david and and then read on the more liberal side, but was able to see all these and understand all these contrarian thinkers. And so when he founded PayPal with Max Lebschen, and that was the other key piece is finding a brilliant, relentlessly driven Max. Max is phenomenal. From UIUC at the time, it was the top school for CS. and so associated with the internet and Mozilla and so on.

20:23They really shouldn't have been not so nice to Marc Andreessen. That hurt them quite a bit. But that combo was amazing. And then Peter's really great. Let's say you're talking to me right now and I'm a founder and looking to back me for a sec. But what are the kind of common questions you ask or what are some unique questions you ask when speaking with the founder? And what are the general things you look for out of those questions? You know, I like to say it's not an employment interview. And so you're not restricted by law in California to questions. And so I can ask about your family. I want to find out what made you you.

21:07like you know you're in in high school and you're spending your time like doing this on the side and learning so like we're doing this from where did this desire come from like what are your parents professions do you have siblings like what are your siblings doing and you can often look for these signs you of competitive, of drive, of grit. And those are the things that we're all trying to figure out because we have to make a decision and very long short amount of time for many millions of dollars.

21:56You've worked in partnerships, both of your kind of bigger entrepreneurial endeavors were partnerships and you've worked in partnerships throughout your career. Do you prefer to back companies with co-founders? I do. I'm not as strict about it as, you know, say YC. And I would imagine YC, I meant to ask Harsh the other day, I wonder if they're going to move away from it. This, you know, we don't back single founders. It is hard to do this on your own. And I think it's very important to have a partner and somebody that's got your back and somebody that's going to help balance you out and get you through the hard times.

22:35So, you know, we prefer it, but it's, you know, it's not a rule. Like Ethan Thornton, the founder of Mock Industries, is a solo founder. And he's incredible. And, yeah, I back him 100 times over, like, and he's doing it entirely on his own. He started at age 19, dropped out freshman year from MIT to build this defense tech business. And, you know, he's relentless. When meeting with a person and you kind of mentioned you like to learn about not necessarily the company, but first kind of the person learning about their background, their family, all that kind of stuff. How fast do you generally know if this is someone you want to back or not?

23:25Oh gosh. I'd say before 10 minutes in. Yeah. It's just, it really shines through kind of out the gaze. So it's not to say there's like the quieter, quieter, softer spoken, super talent. I put Ben Silderman there as a quieter force that's not banging his fist or super energized, but an absolute brilliant product person. And I have one more question about venture before we go into a little bit of perspective and some advice. What do you think is the most overrated trait investors look for in founders? And what's the most underrated overrated trait in founders what would be that um what would be an overrated trait i don't know if i have a good answer for that that's so interesting i don't want to i mean And, you know, I'm, you know what, I think I would, I would say like, it is a great benefit to be, to have an engineering background, you know, but some investors still only require it.

24:55And some of the best founders of our time don't have engineering backgrounds or in tech. In the olden days, that was much more set in stone. You had to be an engineer to set the room for it. What's the most underrated? I think underrated-wise,

25:26I don't see investors talking as much about how a relentless founder who keeps going and keeps pushing forward, pushing forward, really has the right effect here. I'm not in perplexity, but I was just reading the Wall Street Journal before this, and he's trying to buy Chrome for $34.5 billion. And he is just like a, he's relentless, you know, and he's in a competitive space, a very competitive space with some big players. And he's a relentless example. and actually how I heard your name an example of a relentless founder is um my friend Patrick O'Shaughnessy host a podcast and best like the best and Ram Tim Naimi was on there and he seems like a relentless person um and he I mean went bankrupt I think at 26 and now he he runs abstract and he mentioned you as one of his kind of mentors um someone that's guided him along the way so I I think it's an example.

26:39I want to move on to a little bit of a perspective question before going into a little bit of advice. But it's a very broad question, and you can break this down how you want. But which industries or technologies do you think will have the biggest impact on the world in the next decade? I generally try not to make predictions. I tend to follow the evidence because it always surprises us. I don't think anyone except for Elon saw what was going to happen with space in that direction or even electric cars. I hope it's around energy. I hope it's around fusion that we find an inexpensive, plentiful source.

27:28So that's really where there's more investments and a lot of bright people out there. We're small investors in a company called Pews, and that's where our bet is. But we hope that big problem gets solved. It's almost critical for humanity. What impact do you ultimately hope to have on the world? well i i want to keep building and helping founders build great businesses that um and those businesses can have um a really terrific impact on on lives uh you know i was a little disillusioned you know i came out of stanford excited around politics and i mean we all see what happens things go one way and then they flip back the other and they you know you sometimes just make no forward progress.

28:22But when you can build and improve the lives of others, in the case of Zoom, the money remittance business, it was an industry that was really backward. It was run by two kind of oligopolies, Western Union and a money grant, and they were policing immigrants. And we changed that from our perspective today. where we are. This is one last question. I like to ask every single guest. So I'm 15. If you were to give one piece of advice to a 15 year old today, what would it be? One piece of advice would be keep looking for what, where you find the most intellectual curiosity and passion and just keep following towards that.

29:19and then i'm going to say two here's the second one is is to find your own peter teal like you know where where are those uh you know where are those folks out there well it's been a pleasure kevin thank you for coming on i really appreciate it um i hope you enjoyed it thanks abir great to meet you