Cursor + Kalshi Seed Investor on Spotting Outlier Talent | Ali Partovi, Neo

24:54Turner Novak:Yeah, there's a picture in the Forbes article, a picture of the notes. There's like a picture of him, and then there's some notes scribbled on there. Yeah, and I also have the paper and pen coding test that I gave him. Yeah, is it all written? All these coding tests, are they all written, or are some of it electronic? So they've moved to electronic. When I started it, and for the first few years, 2017, 18, 19, I was traveling around the country personally giving the first pass test to people. So, you know, it's shifted now to thousands of people. I can't do all that. So, yeah, I started out being the first line of defense, you know, the first round.

25:33Now I'm like the third or fourth round. But yeah, I should, paper and pen is, first of all, it's what I'm comfortable with. but it makes it so you have to, like you can see what the person's brain is doing rather than relying on, you know, the terminal. And what I mean by that is if you write some code and it doesn't work, you can run it and be like, oh, it didn't work. Let me change it a bit. It still didn't work. Let me change it. It still didn't work. There's a, you know, it's a bit of a crutch. Now, obviously real working engineers do that and it's fine. Yeah. But, but this one you have

26:10Turner Novak:almost just like straight shot write it or you're crossing things out well you write it and then i'll say like look through it and like test it in your head does it work now having said that i give people easy coding challenges my i don't i never want to see somebody squirming and sweating and failing i actually try to offer things where everybody is going to succeed it's how they go about it, how they think, you know, that that's more important than whether it's, you know, like if you give somebody a riddle where like 99 % of people won't have the aha moment, you're not really learning that much.

26:48Turner Novak:Yeah. Now, the other thing I do is I let them give me a coding test. Oh, really? Okay. Yeah. And so it's funny, but the page where I have Michael Trull's coding test, he solved it in like 10 minutes or less, you know, in like five lines. And then I asked him to give me one. And mine is like a page full of like cross outs and mistakes. Do they know going into this that they're going to have to give you one? I don't think so. Maybe, I mean, I certainly don't say that. And it doesn't always lend itself. Like if the person took too long with theirs, we run out of time. So we might not. but but yeah this actually wasn't my own idea it started with uh actually russell kaplan one of my favorite stories from the early days of neo i you know i had just started this thing had sort of spread the word i'm looking for the top cs students who are potential founders yeah how did you do that again when you first kicked it off you got you got the first wave of people applying?

27:54I'll be candid. I was pretty insecure. Like, what if I fail at this? Because I had, you know, I told all of the people of my generation, I'm going to do this thing. You know, I'm going to go find these superstars in college. And you're like kind of an old guy

28:10Turner Novak:at that point, right? Were you in your thirties or forties at that point? 43. I'm 53 now. So I had had some success, but I wasn't by any stretch famous. And you know, what am I, a balding white man showing up on campus going to offer someone? Who is this guy? Yeah. And also I'm expecting them to take a coding test with me when I'm not offering a job. That's true. Right? And they're like, what am I applying for? How did you get anyone to sign up for this? I've never heard of this. Yeah. But also the stakes for me, I had told people like Max Lefgen and Craig Silver, But I told the people who were preparing to fund me that this is what I'm going to do.

28:55Reed Hoffman was one of our first LPs. And Max and Craig and a whole bunch of people gave me money and said they want to be part of it. And they want to be attending our events and so on. And meet these brilliant college students that I would find. And so I was like, fuck. You kind of had to do this.

29:14Turner Novak:Yeah. How am I? Like, where do I start? Yeah. And I was pretty worried. And this was actually the part I wasn't sure I could deliver on. I did know deeply that brilliant students are out there. I just was a little unsure how to go about finding them. And so I called a professor, David Malin, at Harvard. And I was like, who are the smartest students at Harvard? And he was like, I don't know. I might be embellishing a little bit. But he basically said, look, Ali, I run a lecture with 800 students, and also we're teaching computer science. What you're looking for are the builders who are creating new projects on the side at home, not their schoolwork, but they're doing their side projects that turn into a company and so on.

30:10I wouldn't know who the strongest coders and so on are the same way as you should talk to like the top recruiters. They know all our best students because they're recruiting them to go get jobs at Facebook or Google or so on. So David introduced me to Mo Usman, who was a recruiter from Facebook. And I had lunch with Mo. I was thinking maybe I should hire this person. And, you know, Mo said, I remember clearly asking Mo, like, tell me, tell me what, you know, how it works. What do you do? And he said, I'm one of 250 university recruiters at Facebook. And it's, you know, when he said that, I was like, Army.

30:55Yeah. My first thought, well, I do not want to hire 250 people. And he said, you know, we go to all these campuses and find the top students, but you probably want the rock stars. And I said, well, obviously, of course. And he said, no, no, no. I mean, Rockstar is a database designation we have. Of the thousands of interns we bring back each summer, 12 of them get designated as Rockstars based on all of their performance and manager feedback.

31:26Turner Novak:This is literally the top 1 % of the Facebook interns. Yeah. And those 12 get invited to Mark Zuckerberg's house for dinner. those are the ones that we are going to be obsessed about trying to hire to join Facebook full-time. And I remember hearing this and thinking, number one, I'm clearly not the only one who believes in the ability to find superstars in college. And it was actually a full circle moment because one of the first bits of advice that, you know, when my brother Hadi and I got involved with Facebook, our main advice to them was to hire superstars. and Hadi specifically told Mark, hire younger people than yourself and referred the first summer intern to Facebook back when it was like a nine-person company.

32:12And so it was interesting seeing full circle, you know, more than 10 years later, this company is still so obsessed with finding the top talent in college. My other thought was, could I somehow hack this system? You know, like what if I could just meet those 12 people people skip yeah skip the rest so i said oh mo these rock stars would you happen to know any of them and he was like oh yeah i know willie zhao i know i mean he just literally listed off a couple of names willie zhao justin rosenblum and i was like could you introduce me to them and he's like

32:48Turner Novak:sure and i was like is it because they they weren't worried about you like i'm not hiring anyone yeah you were just trying to meet them meet them and it was sort of like be part of this membership where go ahead and join Facebook. Maybe in four years when you start a company, we'll invest in that. And in the meantime, it's like an honor. Yeah. So I remember being shocked that Mo gave me, not only gave me the names, but then introduced me. But then I realized if, if that was that easy, maybe other companies would do the same. So I was like, I think at this time is when I thought of calling it Neo Scholars, because that also sounds more like just an academic honor.

33:32And I just sent out a mass email to other founders that I was in my portfolio. I emailed the Dropbox founders, and I emailed the Airbnb founders, and I emailed basically the hot companies of that time. Hey, would you nominate your two best interns to become a Neo Scholar? And, you know, Nate, the co-founder of Airbnb replied being like, Ali, I don't know who our two best interns are because it's hundreds of interns, but I can find out. And then he emailed me back and was like, these are the two, you know, names that are three names that are people sent me. And I said, OK, Nate, can you introduce me to them?

34:14So then Nate sent individual warm intros to these college kids being like, Ali is one of our angel investors. He's awesome. You should meet with him. And that enabled me to have the starting list. And Nate's introduction, I think, was to Jasper Liu, who was a Vanderbilt student. And I flew around the country to these campuses meeting these students and interviewing them. And it would often be to see one kid, right?

34:46Turner Novak:Yeah, literally. Like you'd fly across the country full trip. There was one kid from Vanderbilt, Jasper Liu. And yeah. Yeah, so I interrupted the story with Russell from Stanford. Somebody had made this intro to Russell. And I show up. I actually was, you know, I was kind of dressed up because it was like a four o 'clock meeting. Then I had a cocktail event. And then I had a red eye to go to interview some students at Rice in Texas. Is Rice in Dallas? Where is Rice? Rice is in Houston. But I was hitting UT Austin and Rice. So I had this whole, you know, I was literally like grinding. You were an expert.

35:28Yeah, college navigator. So I meet with Russell, who was at the time interning at Tesla headquarters. and I'm there with my backpack, with my notebook on which I plan to do the paper and pen coding test. And he says, want to go for a walk? I say, okay. So we go for what I thought was going to be like a leisurely walk. It was like a hike on a trail, super dusty. I'm getting all sweaty and dusty with my heavy backpack. And it ended up being like an hour-long trail hike where Russell was grilling me. Like, what is your intention with this organization? What's your vision? Blah, blah, blah, blah, blah.

36:12And at the end of it, he was like, all right, I'll do the interview. And I was like, I'm out of time. We're gonna have to reschedule this because, you know, I have a cocktail event to go to and a red eye. So we met a second time at Coho on Stanford campus this time. And this time it was for the actual coding interview. And, you know, he finished the challenge I gave him in like 10 or 15 minutes. And then he's like, I have a question for you. And I was like, what do you mean? He's like, I want to give you a coding interview. And no one had done that before. And I was like, this is so exciting. Fortunately, I love coding challenges.

36:57I do well in performance situations. Some people get stressed, but I was so excited and a bit scared. And he's like, I'm going to give you this challenge that none of my roommates and I have solved. And he gave it to me, and I solved it in like five minutes. And he's like, that's just the easy level. There's this harder level that, you know, let's see how you do on that. and that took me the rest of the hour, but I did solve it.

37:24Turner Novak:Oh, nice. And he's like, that's how far my roommates and I have gotten. Here's the hardest level that we don't know how to do. And I was like, again, I'm out of time. I have to leave. But I knew that I had to solve this. It was like I was not going to give up. I remember going home that night, sat at dinner with my wife and kids, and my kids were like, Dad, how come you're not speaking? because I'm thinking in my head about this coding challenge. And then around 1 a.m. or 2 a.m., I emailed Russell the solution. And it was correct. And he responded being like, oh, wow, this is right. And it was this amazing connection because both...

38:12I mean, I had already realized he is going to be a Neo-Scholar. Like, you could tell he is just an unbeliever... not just technically astute, but unbelievable natural leader. But I also realized something clicked between us, where he saw in me essentially the older version of himself, perhaps. And basically, he was like, okay, this guy is one of us. It doesn't matter that I'm twice his age or whatever. And he then helped me identify the other top people at Stanford and kind of vouched for the organization. and but yeah i loved that interaction and so i kind of kept it as part of it yeah yeah because it changes the power dynamic to being less about i'm evaluating you to more like we're we're doing something that even if we were like classmates i might give you a puzzle and you give me a puzzle and yeah you know like discuss it as peers yeah and you mentioned um at the first the

39:15Turner Novak:first hike you had to leave to go to a cocktail party i think that's kind of where you first maybe not this specific one but it was at a kind of event i think it was a cocktail party with a bunch of vcs and then i think steph curry was where you first kind of got this idea to do neo like kind of formalize it what what happened on that night that's not where i got the idea i had been thinking about this for a very long time like it's actually embarrassing how many years i had been thinking someone should do this but I didn't have the courage to do it myself this was like the catalyst this yeah and how I even ended up there was a little bit uh ridiculous I was not invited to be there my twin brother Hadi was invited to be there okay and I didn't even know it was an event I was like having dinner and Hadi called me like Ali I need a huge favor it's like what's going on?

40:10I just missed my flight. I was supposed to be in the Bay Area tonight for this cocktail event with the Golden State Warriors. Can you go as me? And I was like, I'm sorry,

40:20Turner Novak:what? Wait, you guys are twins, right? We are identical twins. Okay. I was like, what do you mean? Like literally as you? Yeah. He's like, no, no, not. I mean, he had, he hadn't fully thought it through. He's like, no, I guess you can't literally impersonate me, but can you wear your code.org hat and just kind of look like me. And my goal is to get Steph Curry as a spokesperson for code.org. You go accomplish that." And I was like, I am happy to drop whatever I was doing tonight to go to, you know, small gathering, not only with Steph Curry, but many of, you know, Andre Iguodala and many of the goals.

40:59Like it was, I think the whole team was there. So. Yeah, I was like, this is awesome. You know, so, yeah, I dropped everything, found my code.org hat, went there. And so it was this event that was kind of bringing together the players from the Golden State Warriors with a group of VCs. Pretty sure Ben Horowitz was there and maybe Marc Andreessen and a number of tech leaders. Marc Benioff. I definitely felt like I'm the one who does not belong here. I definitely felt like some imposter syndrome because A, I'm not a VC. I mean, I am a successful person, but I'm not supposed to be in this room. I was not invited to this room.

41:48And even the person who was, I'm here with this code.org hat, which is a nonprofit. Like I'd say he was barely really like supposed to be in the mix.

42:00Turner Novak:You're like the sub for the guy who was maybe barely not supposed to be there. Exactly. And I could tell because I was sort of like approaching and listening in on conversations to get the vibe. And people were talking about how to make money in Silicon Valley. And specifically for the basketball players, could some of them become interested in investing or in VC in some way? And so I was like, what do I have to offer here? so I was definitely like trying to find a group of people that would let me join their conversation and definitely felt like yeah those awkward networking events circle things yeah who wants to talk to me but I am also like you know I'm a persistent guy and I had a job like my brother had told me I needed to get Steph Curry so I was not gonna like you know not deliver yeah It just took me a while to work up the courage.

42:58And, like, Steph was obviously one of the more popular people that everyone was trying to talk to, so waiting for the window. So I went up to him and, you know, introduced myself and started talking about Code.org, which is an amazing organization that teaches computer science to K-12 kids. It's a nonprofit with enormous impact. And I'm very passionate about it. And at the same time, I had this feeling like, maybe Steph isn't that interested in what I'm saying. I could be wrong, but it felt like he was looking around the room to see.

43:30Turner Novak:Who's cool? Where do I go? Is there anyone cooler to talk to here? This guy's talking to me was nonprofit. Nonprofit. Education, kindergartners, coding. exactly. Now that might all be in my head. Yeah. But I felt like I got to somehow save this before Steph leaves. What can I do? Because I need to deliver something to my brother, some contact. And so just thinking on my feet at that instant, I said, you know what? Computer science is actually very similar to basketball in an interesting way. And he was like, huh? I said, in both fields, you can spot the superstars really, really young. You can spot somebody who has basketball talent in like eighth grade.

44:14And certainly by high school or by college, you can identify the future Michael Jordans. and there's an entire system in the NBA to scout and find and recruit those superstars. The same thing is true in computer science. And often the biggest breakthroughs, even at a large company, are done by one person. You know, like, for example, Google is a big company. Gmail was largely written by one person, by Paul Buchheit. Microsoft is a large company. Windows was initially a one-man project. It was like a summer project by one person. And for the outside world, we don't see that. We just see the final product.

45:01But there is the same aspect of superstars on a team, and there's the same aspect where you can identify them very young. But what's missing is there isn't, you know, like a system in the tech industry to find that superstar and nurture them and help them accomplish their potential and when they start a company to invest in them. And I'm going to build that. And at this moment, I was basically kind of snookering myself.

45:30Turner Novak:You had to start Neo at that point. Yeah, literally, I just threw down my own gauntlet. I think I would say I wanted to do it, but I was basically making it so that like, it's a little bit like, you know, eliminating your own outs, you know? So yeah, the motivation was basically to get Steph Curry's contact info. So I would have an excuse to follow up. So I can tell my brother I didn't completely fail. And Steph was like, I'm interested in this. And, you know, he had a associate with him and he's like, can you exchange contact info? I definitely want to follow up. Turns out Steph never did anything with Neo.

46:17He did become a spokesperson for Code.org. So I did.

46:20Turner Novak:Oh, that's cool. I did deliver. You did actually, you hit everything you meant to accomplish with that. Yes. But I left that being like, all right, I've now just publicly, or not that publicly, but I've now attached my name to this goal. And I'm not someone who quits after I've said I'm going to do something. I, you know, I'll try everything possible to make it happen. And so maybe an interesting point to talk about Code.org. Yeah. That was, it's like still a pretty big thing. It is, yeah. What's the story with Code.org? So you're doing it with your brother. I think it's your brother's full-time thing.

46:56Yeah, Hottie deserves 99 % of the credit for this thing. And it is truly, I would say my 1%. When I die, it might still be the most impactful thing I've ever done. It's unbelievably inspiring. You know, it's not just a nonprofit. It's also, I think, the most popular dev environment for coding because it has hundreds of millions of kids writing code on it, although a lot of that is drag-and-drop, you know, block-based coding. But yeah, it's introduced hundreds of millions of children to coding. It's being taught in thousands, actually millions of classrooms. It is the curriculum of computer science for K through 12.

47:42It's the number one curriculum at every level.

47:45Turner Novak:Is there a certain program that they use? Is it just code.org as the website? That's the website, and it has like, you know, first grade level, second grade level. You know, it has like step-by-step instruction. it uh yeah the team built all this technology that starts with block-based coding it's similar to scratch which is which is wonderful also and then for the high school stage there's like this ability to toggle where you can drag and drop blocks and then click a toggle and they like switch into real code and they can switch back so you can kind of you know you can ease into it ease into coding.

48:26Where it's going, you know, today, needless to say, coding is not actually what people do as a job. It's so much that it's done by AI, but code.org is now bringing AI into the curriculum in a way of not, you know, rather than use AI to cheat, it's learn how AI works and learn how you can use AI to create. But I will say that the starting story for code.org, it's pretty interesting it goes back to something you and i were chatting about right before we started the podcast it started out as just a video we were talking about launch videos the vision wasn't even to build a giant organization i would say this was it was kind of a side project that my brother haidi was we had just sold our second startup and it had been a tough very difficult you know process that i like was a company that had a lot of ups and downs but ultimately was not very successful so this was we'd come out of this failure and we're both taking time off kind of detoxing and hadi was like you know what i'm for the next few months my project is going to be to create a short viral kind of documentary promo for computer science to like just get more kids excited about coding, to demystify it and to kind of counter the narrative that coding is like really difficult and only for losers and, you know, and not even lucrative.

49:59Because the narrative in 2012 or 13 was that all the coding jobs are being outsourced to India. And the truth was, in fact, it's the most lucrative profession there is. so the idea was what if we had a video with people like bill gates and others mark zuckerberg saying their story of how they learned to code and um how he actually got bill and mark to both say they'll do it and then it was easy to get a whole bunch of other leaders to to kind of participate and he hired this production company and we put out this video that in its first week had like 10 million views. It was astounding at the time.

50:45Turner Novak:It was like two college girls right in the beginning in the first scene and then they kind of like, they talk through talking to a bunch of people and I'm thinking of the video. That's... Or is it a different one? There is a, there is multiple women because it was very intentional to have kind of representative role models, both of leaders and of students. But I don't think that's the one. This is... Okay. I mean, it's still on YouTube. It says the title is What Most Schools Don't Teach, and the thumbnail shows Bill Gates, Mark Zuckerberg. It shows the famous faces. And it just opens with each of these tech leaders saying in their own story, I was seven-year-old when I learned to code, and it was fun, and I was building silly games to show my sister or so on.

51:38and but the thing i wanted to draw to you this basically was kind of a launch video for nothing there wasn't anything else there okay yeah um but some journalist called to ask about what is it

51:53Turner Novak:you know i wanted to write a story about this and i was doing the interview with this journalist and they're like so tell me about the org and i was like what org and the you know code.org what What is the organization? What is your mission? What is your long-term plan?" And we had nothing. There was nothing, but I didn't want to admit that. So I started spitballing. Now I should say, we knew about the legitimate challenges that could be solved. And so I just started saying, yeah, we need political advocacy to change the rules, to make computer science satisfy graduation requirements. We need to build curriculum.

52:35We need teacher training. There's a shortage of teachers who can teach. You know, I just listed all these things as this is our mission. And the reporter basically, like, wrote it all into an article being like, code.org's mission is this stuff. And my brother, Hadi, was like, what did you just do?

52:55Turner Novak:Who's going to do all that? And I was like, you will. So to some extent, I was snookering Hadi into like, this is what... Now I will say I'm embellishing it a little bit because I knew deep down this was what Hadi wanted to do. Like he was also kind of a little afraid to throw down the gauntlet and say, I will accomplish these things. It's scary for anyone to kind of aim high and, you know, say what they're gonna do. So I sort of did it for him. And I think he was both resentful but also a little grateful. And it's been amazing to see how he crushed those goals. The funny thing, though, is then for the next three or four months, we were in a funk where we had just had this 10 million view launch video, basically, for an org that didn't exist.

53:47It was just the two of us and had literally no product or plan. It was like, what do we do next?

53:54Turner Novak:We don't know. Where do we start? We don't know. And we had something like a million people give their email address on our website, but nothing to provide them other than that. And I would say for several months, we were kind of twiddling our thumbs. And one day Hadi called me, and he was like, I know what we're going to do next. And he said, you know, it's too hard to do teacher training for every school. build curriculum for every grade. All of that is, you know, one day. But what we're going to start with is one hour of code. We'll call it the hour of code, and we'll build the curriculum for students to do literally, you know, one hour worth.

54:42We can build that and get other partners like Khan Academy and others to do the same thing and get celebrities to promote it and make it an annual kind of event. Let's do that. And it was like this aha moment where then immediately he was like, and if we're doing it, we should do it during computer science education week, which no one had ever heard of before, but it's the birthdates of Ada Lovelace and Grace Hopper fall in the same week in December. And he was like, holy shit, we only have like five months We need to raise millions of dollars. We need to hire people." It was like instantly from like funk to like, we're already behind and we need to start sprinting.

55:28And yeah, and it was just amazing. And by December, we had Barack Obama posting a video and all sorts of, you know, celebrity promotion. Thousands of schools signed up to do it. I remember, and we raised, I remember, quite a bit of money my brother and i each put in you know quite a bit of money and i remember the board meeting before december our board said okay what's the goal for this and haddie said we should have 10 million people do the hour of code and our board was like that's insane because you know like the video had 10 million views there's a four minute video getting 10 million people to do one hour of computer science instruction is a totally different thing than a viral YouTube.

56:21Yeah.

56:21Turner Novak:Were there even 10 million people that had written code even at the time in the world? Maybe not. Yeah. But Hadi said, you know, we have enough schools signed up and they've said they will have their whole student body do it. The key thing here was this was not going to be something just for the nerdy, you know, Asian kids or whatever, whatever you might think of as those are the coders in the classroom. Yeah. This is for the whole school, for the whole student body, you know, boys and girls, doesn't matter what age or race or gender, everyone does one hour worth. And, you know, and so if every school who has signed up did get their whole student body to do it, we would hit that number.

57:06So let's, we should, that should be our goal. and by the end of the week 20 million it was unbelievable that's insane yeah and i could go on forever but this is really my brother's you know accomplishment i could not be more proud of him and uh there is a connection to neo though because many of the people i'm now funding first learned to code on code.org or on hour of code Like literally there's somebody we just funded, you know, that I met last week. And he said, my first time coding was on code.org. And so it's like a really nice full circle for me.

57:49Turner Novak:Yeah, I'm trying to think because my daughter, her favorite thing, they do this. It's called Project Lead the Way. And they do some coding in it. I've been trying to figure out, based on everything you're saying, if they use the code.org, any of the products at all, I'm not sure. But yeah, I mean, they just, it's like a drag and drop. You type in something and there's like a script. You can add music. The thing moves across the screen. Stuff happens and she calls it coding. And when she first started talking about it, I was like really surprised. I was like, oh, that's kind of cool. You're learning this in school.

58:21And she was in, I think it was in first grade

58:24Turner Novak:she started doing it or, but anyway, and she loves it. And she's really into music and art and theater, and I would not have thought that she'd be really into coding, but she is. Yeah, there's a music lab on Code.org. A lot of kids don't inherently think they want to do coding. They love music. They might love dance. They might love these other things. And in the music lab, you might think of a song, but what if you could break it down into the subparts? There's the verse. There's the chorus. The verse has actually five subverses. Each subverse has 12 beats. In the same way, you can break down any task into subcomponents.

59:11And coding is very much about taking an intimidating, complicated task, breaking it into parts down to digestible little parts that are no longer intimidating. And so, yeah, if she hasn't already, have her check out the music lab on Code.org.

59:29Turner Novak:Okay. Yeah, I don't know if she's used the Code.org product. When I get back home, we'll look into it. I will say one thing I'm often asked, is coding still relevant? Yeah, I was going to say, because you've gone all in on the importance of computer science coding versus talk to anyone today. Like, do you even need to code anymore? Yeah, it's, I mean, it's a valid question. I strongly believe it still is, but let me be clear what I mean by this. It is important to teach it to every student. And I would say for the same reason that we teach people writing and math, like writing is easily done by LLMs, yet it's very important to teach people how to read and write because it teaches you how to think.

1:00:16It's important to teach people math, even though, I mean, you probably learned the quadratic equation, I'm assuming, in high school. Have you ever used it again? No. We don't use all the things that we learn, but it does teach us how to think. It teaches us how to, you know, how to solve problems. I would say coding, you know, computer science in school is an even better way for kids to learn how to think than, say, factoring polynomials or all this stuff that's, for a lot of kids, painful, and they see no connection to their real life. At least with this, it's like, oh, you can make a song, or you can do something.

1:00:58You can imagine how you could make an app. And it's more fun for kids, and I would say teaches structured thinking and logic, which are useful for many different potential occupations. One analogy I would say is if you think about lawyers and law, that's in English, right?

1:01:24Turner Novak:Yeah. They're not learning some new language. They're learning English. But to be a lawyer, you need to have a whole way of thinking and training and experience. You know, just because someone knows English doesn't mean they can do law, right? Practicing law is a profession. And I would say the language of software engineering is becoming just English. But to be a really good software engineer is not something that just anyone can do. In the same way that to be a great lawyer, it's not enough to know English to be a great lawyer. So I'd say there's still a lot of reason to teach computer science and to be an effective software engineer.

1:02:06There's a lot to learn beyond just, you know, like vernacular English. And then lastly, for me as an investor, I think strength in computer science is a really great predictor for strength in business. And this is not because someone's coding all day long. You know, like, I doubt that Satya Nadella is coding all day long, you know, as CEO of Microsoft, but he is a computer science, you know, person. And it's remarkable how many of the leaders of great companies studied computer science. I mean, everyone thinks of Bill Gates or Mark Zuckerberg as kind of the, like, you know.

1:02:50Turner Novak:Like a CEO, like a businessman almost, I guess. But those two have this kind of, you know, origin story as, like, the nerd dropout who is a great coder. But there are others that you don't think of as, like, a CS nerd. Like Larry Ellison is, you know, was a computer science student. Jeff Bezos was a computer science student. The founder of Netflix, Reed Hastings, studied computer science. Netflix isn't exactly a, like, it's not a software company. It's mainly an entertainment company. Studying computer science, I think, is just great preparation for business because it helps you with pattern matching, and it helps you break down complicated things into smaller elements, which is relevant to thinking about a business, even if you're not coding.

1:03:38Turner Novak:What do you think? You mentioned this a little bit earlier. I didn't want to forget to talk about this. So you talked about the importance of hiring as a founder. So obviously you're an investor. You're trying to figure out, do I invest in this person? Is hiring similar? How should somebody think about hiring the best talent? It is similar. I mean, I would say in both cases, it's a form of forecasting. hiring is forecasting it's meaning you should be thinking not just can this person do this job that i need done yesterday you know but what will this person grow into you know and ideally could this person become greater than myself you know i'd say the the best is if you don't have an ego about it and you actually are excited that what if this person is you know going to grow into better than me.

1:04:32The dream, if you're hiring, is that the stuff that keeps me awake at night will keep this person awake at night so I can sleep, you know? And I'm half joking. Like when you're a, when you're a founder, you have so many things you stress about and wake up in the middle of the night being like, did I do this? What, what if this goes wrong? You know? And when you hire someone great, it's just such a relief because then you're like, oh no, this person is taking care of that. I can sleep because I totally trust them. And it's hard to hire people who are so strong that you just know it's going to be taken care of.

1:05:11But that definitely is the holy grail. And it's also a mental shift when you're starting out and you have three or four challenges, the instinct is, okay, how do I solve this problem? How do I solve that problem? Let me learn how to do it myself. Whereas it's like a new muscle, like, who is the best person to solve this problem? Instead of learning everything and doing it yourself, bring on somebody. Now, of course, you can't just hire infinite number of people, so you need to be thoughtful about what is the right combination of people on the team. But eventually, you want to get to where when new challenges come up in your organization, these are my three top problems, these are my three top people you know you solve this one you solve that one i i can relax and not stress about it because my best people are doing it and that's it's almost like a new muscle for how to think about you know dealing with stressful things because i'd say the normal instinct at

1:06:16Turner Novak:least for me is i should figure it out myself yeah yeah i feel like a lot of times i'm talking to it'll be someone they're maybe 22, 24. They're kind of interested in startups and they kind of want a job at one. They're kind of in that phase where they're thinking about it and they're really nervous about like, how do I get a job? How do I, I don't want to waste anyone's time. And I usually say, if there is a startup that you think looks really interesting, the founder is probably so busy and so stressed and trying to figure out all these things. If you just reach out to them with a pretty clear, hey, this is me.

1:06:55Turner Novak:I noticed you're hiring for this thing. Here's some thoughts I have on what I can do and maybe what I've done in the past. If they read that and think, oh, this person is going to fix some of these problems I have, like, I will gladly talk to them. I will gladly take that email or however you're reaching out to them. So I feel like a lot of people, to the point about like fear, like almost afraid to reach out. But if you're somebody who's looking for a job at a startup and you can actually help the company, the founders are very happy to hear from you. Like they want you to help them. Yeah. Well, speaking of fear, it's remarkable how often we all kind of censor ourselves out of some form of fear of a failure or whatever.

1:07:35But with respect to hiring, first of all, a little plug. We at NEO have this whole recruiting platform where thousands of undergrads in the process of applying to become NEO scholars are also, we basically use the same evaluations to serve as a common app platform to apply to startup jobs. because if somebody is junior at MIT going through a whole bunch of coding tests for us and reference checks and so on, why not also make that information available to the startups that are looking for the top coders at MIT? So for folks who, if you're a strong enough engineer, if you think you're in the 99th or 98th percentile, I would say go through the NEO application process because it's a time saver because it's time consuming to apply to 10 different startups.

1:08:29The normal way requires 10 separate sets of interviews, and students are busy. They have midterms. They have social lives. We amortize that so you go through one set of evaluations and then a faster process. But I would also say what you just said is very contrarian, but I agree that if you have a real passion for one company, I would generally say put all your eggs in that basket. I generally would say the advice to not put all your eggs in one basket, I just disagree. If you know this is the place I belong, it's better to go all in in all sorts of ways. Don't cold call the founder. Figure out who you can get an introduction from.

1:09:19Maybe that'll take five days of work. But if it's the place you want more than anything else, it's worth it. You know, get an introduction and like, let it be known that this is what you want.

1:09:29Turner Novak:You know, I don't want to hire someone who's going to kind of just like half ass, even a year, like not really into it. Exactly. They want someone who's like, holy shit, this is the coolest company, product, team, mission. Like, I'm going to work 100 hours a week on this. If someone's doing scattershot, like I've applied to 100 places with, you know, some AI generated, you know, like, is that my personalized thing? They can tell. Yeah, those are super obvious. Super obvious. Vice versa, if somebody, you know, if it's evident that someone is doing like unnaturally extreme amount of commitment for this one thing, that's also very obvious.

1:10:12And other people will also want to help them. You know, it's very easy to get other stakeholders who want to help you accomplish something if you take that risk and you're like, this is my dream, you know. So, yeah.

1:10:25Turner Novak:You stand out. Like, very few other people are probably doing the same thing. They're all doing the shotgun approach, scattered, 100 applications. And even if they're a better candidate than you, if you just put in a little bit more effort, you'll probably, you would probably, you know, the odds of getting the job are much higher. Correct. And you might turn out to be a better employee because better candidate, maybe they're, you know, it goes back to hiring is forecasting, right? The person who is so passionate, will they stay a few hours later at night? Will they show up earlier in the morning?

1:10:56What will they grow into? I would say the person who it's their dream is actually the better candidate as well. So, you know, even if they were like a little weaker on some test or whatever.

1:11:08Turner Novak:Yeah. And so you mentioned this a little bit earlier, the NEO residency. program. It's kind of, it sounds like it's like an evolution of the scholars program. It's a little bit more in depth. You talked about it a little bit. Can you just explain what it is and then kind of the thinking around doing this? It definitely stems from the same belief that we can identify superstars when they're still in college. And what I'd say it has in common with the Teal Fellowship is this idea of giving a young person the space to take a big swing at something they might have otherwise been a bit afraid to do.

1:11:44And the space and the financial support and so on. Unlike the Teal Fellowship, we're not forcing anyone to drop out of college and we're not going to ask for our money back if they return to college. So rather than like, hey, goodbye to college for good, it's take three or four months of your time, build something that, you know, take a big swing, do something that you otherwise might not have had time to do, and then go back to college. So we're planning on doing it twice a year, a summer and a winter option. And for the students, it's a really generous grant, $40 ,000 per person, plus$10 ,000 of money at work in our fund.

1:12:29Now, side by side with these students is a program for startup founders, which I would think of it as the same person four years, five years later, you know, with a team, you know, it's, you know, it's an investment vehicle now for us where we invest 750K uncapped and give them, you know, incredibly bespoke mentorship towards building their startup, connect them with, you know, highly, highly relevant mentors and advisors and, you know, culminates in a demo day to help them raise their next round. So we have these two cohorts kind of going through the same experience side by side. Roughly, I mean, we're now almost finished choosing the first cohort.

1:13:14It's looking like it'll be around 12 startups and eight student teams. We have just like a couple of spots left. But part of it, I would say, what's interesting is bringing these two age levels together. It's a bit inspired by, if you think of universities, you can have undergrads working side by side with grad students, students working under a postdoc or PhD and ultimately a professor. Every level of that in a university setting is learning from each other. And we are kind of creating a similar thing where just because someone's five years older doesn't mean they can't learn from the college students who might be really brilliant at something, and vice versa.

1:13:56So, you know, like, so being near someone who's ahead of you or coming up, following in your footsteps helps people be, you know, inspired to bring their best game. And there's possibilities of interesting, unforeseen combinations. Like a student might say, oh, my project isn't making it, but I want to join this startup because I spent time with them and they're brilliant. so we don't prescribe things like that but a lot of our ethos is about just bringing together brilliant people and let good things follow

1:14:32Turner Novak:so is it sort of like an accelerator or do you probably don't like to think of it like that you call it a residency we call it a residency we intentionally we used to have a program called Neo Accelerator and we intentionally dropped that name it is sort of like an accelerator but I'd say a few differences it's really not meant to be like, you know, ABCs for people who don't know what they're doing. It's meant to be for people who do know what they're doing, for people who have a plan, maybe already have good Silicon Valley connections, and to kind of, A, lift them up, and B, bring them together with others of the same level.

1:15:15The other thing is, candidly, the word accelerator has... has developed somewhat of a negative stigma. And when we started Neo Accelerator four years ago, our challenge, I mean, we actually said this, is to make a new accelerator that is more relevant and to reimagine the accelerator. And I would say we accomplished that, but the word still carries certain expectations of this is for people who couldn't raise funding

1:15:48Turner Novak:on their own or like need to learn the abc yeah needing to learn the abcs and it also carries the expectation that this is going to be like you know the funding terms will be not the best you're giving a lot of ownership in return for whatever acceleration you receive our funding terms are freaking good i mean it's uh our funding terms are designed so that even if you have a term sheet from the very best VC, you'd look at it and be like, well, maybe I could do this first and then I'll get an even better term sheet because it's uncapped. So unless you believe that your company is going to go down in value...

1:16:29Turner Novak:I hope no founders truly believe that at the bottom of their heart. Yeah, and if we're not for them, if somebody thinks that... I'm going to do Neo so I can fail. I mean, maybe a lot of people do actually think that they might not succeed. Yeah, it's uncapped. And then the only real benefit to us, you know, I assume your listeners know what uncapped means, but it basically means we don't know what percentage of your company we will own. Yeah, there's no valuation. You basically, the valuation that NIO gets is the next one. At the next round, which could be, who knows, 30 million, 100 million. It could be a very bad deal for NIO.

1:17:06Turner Novak:For us. So the element we have that makes it a good deal for us is we get a participation right to put in as much money as necessary in that next round to get to 5 % total. So what that means is your valuation could be$100 million. That means for us to get our 5%, we need to put in$4.25 million more on top of the$750. and we're literally getting no stock, you know, like our entire investment is at this 100 million valuation. We are not getting any sort of upside for discovering a company earlier and we're okay with that because our belief is that we want to invest in the company that's going to become worth 10 billion and if that's the case, who cares whether we came in at 10 million or 20 million or 100 million?

1:17:58If we have 5%, that's going to become worth a ton, you know. And so, yeah, so the impetus for us is to try to make terms so attractive that they'll attract people who could have or actually do have a, you know, term sheet from a top VC, but see this as a way to be part of a cohort of equally strong people and essentially funding to get started and raise that bigger round a little bit later. So it's quite different from what people think of when they think of accelerator funding terms. Usually it's like you're giving 5 % or 10 % or more away and for not very much money. There are some accelerators that are truly predatory, where it's like give up 10 % for like 50K.

1:18:55Yeah. I feel really bad when I come across those. Yes. But I'd also say there are accelerators that do an incredible job helping outsiders to Silicon Valley basically get access. It can be worth it. Yes, totally. It really depends on what skills you bring to the table and what network you already have. Neo residency is not trying to be all things to all people. We're trying to find, like, we're trying to essentially be like the Stanford, so to speak, of accelerators for people who don't need an accelerator, but who still get the benefit of community and mentorship.

1:19:38Turner Novak:Yeah. And one thing that you mentioned earlier, we talked a lot about your brother, some of your different family members. So you have a bunch of family. You grew up in Iran. What was that like growing up in Iran throughout? I think you moved to the U.S. in 1984. What was that like when you were growing up in Iran? I mean, the really traumatic part was from 1979 to 84 was both a revolution and a war. Before that, I had a short stint as a baby living in the U.S., so I learned English when I was two. I went to MIT daycare because my dad was a visiting professor there and my mom was getting her master's.

1:20:20Turner Novak:And then they moved back to Iran? Then we moved back to Iran. And I should say, I consider myself really blessed because I was surrounded by math and science nerdy kids from a very young age. Daycare center at MIT. But my dad was not just a professor. He was the founder of a great university in Iran, a university called Sharif University. He co-founded and essentially recruited all the faculty for. and Sharif today is one of the top universities in the world. In fact, there was a tweet just like yesterday about how it is the third highest source of IOI gold medalists. Really? I would not have expected that.

1:21:07Yeah, you would not expect this. It is a superb university, but for me growing up as a little kid, I didn't know any of that stuff. I just knew that it was cool to be good at math and science and the other kids around me were all smarter than me. And so I just grew up being used to, like I'm happiest when I'm not the smartest person in the room. And so that I would say from my childhood is the best part. The hardest part was a lot of these people, you know, like my family members left when the revolution happened. And I'd say like my social circle shrank quite a bit after the revolution because there was just an era of fear of not knowing what's legal and what's not, not knowing whether laws are observed or, you know, like what could get us into trouble.

1:21:58It was, the country was shifting into this, you know, like very religious Islamic, you know, legal structure where, you know, I was always worried about what if my mom would be taken away. Why? What for? You know, as a little kid, you just imagine things that may not make any sense, but I was constantly afraid of coming home one day to find that my mom was not there anymore.

1:22:24Turner Novak:Did that happen a lot? No, no. Like with other families, did that happen? No. Actually, we had one cousin who basically disappeared and was taken to jail. But for a woman, if their, like, headscarf was blown back by the wind at the wrong time when police or enforcement, you know, was nearby, they could get, you know, arrested or taken and punished and so on. So I was also afraid of myself being taken to the war because there was a rumor that kids as young as 12 or 13 were being recruited to the front lines. Again, I don't know if this is true, but there's articles about this you can find. The rumor was that Iran was using, you know, teenagers to clear minefields, meaning, like, to run across and blow themselves up so that then the soldiers could follow in their footsteps.

1:23:24And there definitely was talk, you know, in fifth grade where, like, one kid who had the worst grades you know, one day stopped showing up to school. Everyone said, oh, he probably got taken to the war. You know, was this true or not? I don't know. But I guess I would say it's just the stuff of nightmares for a little kid. And for, you know, I was certain I'm going to get the best grades. So that's not going to happen to me. And I spent the whole time just dreaming and wishing I could be in America.

1:23:55Turner Novak:And your family, extended family, had moved? A lot of my extended family had left when the revolution started in 79. And so I missed them. But I also, I mostly read English books. I knew all about American culture from reading. Now, American culture, 50 or 100 years old. So I was like reading, you know, I was reading like, I don't remember what, like the Peanuts cartoons. I knew all of that from reading, you know. So I was obsessed with baseball. I couldn't watch baseball, but like we had a book, like the official rule book of baseball. We read, you know, all the rules and we're trying to recreate it, you know.

1:24:37Turner Novak:So have you ever seen baseball be played before? No, we had a mitt. Okay. And then we read about like the ball is made out of like cork and leather stitched together. We're like, how are we going to make one of those? But we did get our, like, a whole bunch of kids in our street to play baseball. You know, like, my brother and I, like, rounded up the neighborhood kids to play. But my point is we admired American culture, even though we couldn't see it on TV or anything. I, like, really wanted to be American. And I also, I mean, I was by age 11. I was old enough to be able to understand the premise that all people are equal under the law.

1:25:19You know, like the Declaration of Independence is truly a beacon for even fairly young people everywhere. I just dreamed of that. And actually, one of my dad's professor friends, I think it was Professor Aredalan, said to my dad, your kids are Americans. They don't belong here. Like, you should let them grow up where they belong.

1:25:41Turner Novak:But he had started this university, right? Yeah, yeah. So it was tough for my dad. And when we came to the U.S., actually, we were sort of separated. My mom and dad had to go back because we didn't have, like, proper immigration. So, yeah, so I, for some period of time, my dad was back in Iran and then reunited with us. I mean, how, how do you think that shaped you? Just kind of that immigration process growing up? What I'll say, Turner, is I think that adversity, I've seen it two fairly opposite ways that impacts people. Some people get stronger, and some people kind of the opposite. I feel lucky that for me, the way I've dealt with adversity in my life is mostly about, like, if I survive that, I can survive anything, and it's a motivator to me.

1:26:31There are definitely other people where they are stuck in the past almost and, like, can't get out of a difficult experience. and, you know, or if they had a substantial loss, they just kind of wish they could have it back.

1:26:48Turner Novak:Yeah, you just kind of get stuck in that funk. Yeah, for sure. And there's a lot of people from Iran who lost wealth in the revolution who, you know, basically haven't gotten over that loss. Our family, we had a lot of ups and downs wealth-wise. Like, we came from one of the wealthiest families in Iran, like ultra, ultra wealthy. a lot of it was confiscated in the revolution. And so I went from having a lifestyle where our family owned beaches and vast amounts of the country to living in an apartment building with my mom and dad to then leaving that behind to come to the U.S. In the U.S., when we...

1:27:34The first several years as a teenager, my brother and I shared a twin bed. I thought actually the reason it's called a twin bed was because we're twins. But it was actually my mom, dad, brother, and I shared two twin beds stuck together. You know how you can put two twin beds to make the size of a twin bed.

1:27:55Turner Novak:That would be a rough sleeping arrangement. Yeah, especially as an adolescent. And yeah, I learned a lot about how to avoid the middle where you can fall between the mattresses. But I had that sort of life at home. Meanwhile, my brother and I went to one of the wealthiest private schools in Westchester. So it was this real dichotomy. My dad and mom both worked. And I know you shared your story with me about how your mom worked so hard and had her own business. I think it's super motivating for a growing kid to see their mom making sacrifices for them. My mom worked as a secretary by day and as a department store sales lady by night, all to make enough money to be able to put us into a great private school.

1:28:41And that, for me, was an incredible motivator that I need to make this education turn into something and to take care of my own parents when I grow up. so there's several members of my family who haven't really discussed it directly with them but I can tell similarly had this motivation that like we come from a family that had built a lot in Iran and lost it and we're just going to rebuild and yeah so I'd say that for me and for some of my family members has clearly been a motivator yeah just reflecting on that my mom

1:29:18Turner Novak:she worked in a flower shop a friend's flower shop she got paid in Meyer gift cards I don't know if anyone listening knows about Meyer it's kind of just like a Midwest regional kind of department store grocery store type chain she got paid in gift cards and then she went to school full-time and then she also had her own business that she ran so it's kind of doing three jobs at once oh all at the same time at the same time the business was the bridal custom bridal outfits yeah she makes custom wedding gown so that's always been she's probably done that for the past 40 years it's kind of been like ebb and flow like just depending on the the state of life that's either 80 hours a week or 10 you know it just kind of fluctuates based on what she could do and then now she's doing it again full time oh wow good for her yeah and yeah so i mean i got there's actually one one semester in college where i had three jobs and took 18 credits and that was the that was like the most intense era of my life where it was i think i was i was interning at a um like a corporate financial big company i was doing i was interning at this pe firm two days a week and then on the weekends i was taking pictures at bowling tournaments with my stepdad super random i don't even know how he got into that but i could make like a couple hundred bucks in a weekend.

1:30:44Turner Novak:You basically, it's like, I guess bowling tournaments are like a pretty big thing. And there's people there, there'd be every, I have no idea how these things got organized, but we drive down from Grand Rapids to Cincinnati. It was always at the same bowling alley. And there'd literally be every single lane, like 64 lanes. There'd just be loaded up with, you know, five or six people teams. And I guess, I guess there's a tournament. I never actually sat and watched a tournament, but we'd go out, take pictures of every team to start the tournament and then in the back we'd be printing and like framing them and i'd walk out and try to sell them to like these these old ladies basically that were bowling and i made a decent amount of money for being in college like it was it was definitely helpful but yeah i you just like learn you just do things like you just work you fill up your time you like for me a lot of it was i was trying to avoid student loans like i know i was trying to like the first couple semesters it was i realized i was like holy cow i like forty thousand dollars in debt like i gotta so then you're just like working it's like oh cool i didn't have to take student loans a semester so you just you kind of figure out how to make it work i i love that story and i i will say i didn't mention this earlier when you told me when you asked me what i look for in college students not everyone but i just love it when i hear that somebody has had an experience where they made money doing their own thing some way in college and high school or younger, you know, um, and it, it doesn't need to be technology driven at all, you know, but this aspect of like your story of like taking photos at the bowling alley and then sell that photo to the team, like just figuring out how to do something and sell it is, I think it really imprints a person, especially if they're younger, with this confidence that I can do useful stuff and make money, and I'm not afraid of rejection.

1:32:44Sales is all about rejection and getting over that. And I think it just imprints, especially a young person with this hunger, to do that rather than get a normal job. And it's remarkable how many stories of great entrepreneurs actually you can draw back to like even as young as elementary school they did something that was entrepreneurial you know like my first co-founder tony shea sold worms why why worms he had read in some magazine or some he read somewhere that the organic farming industry was like held back by a shortage of compost where does compost come from you know like there weren't enough earthworms.

1:33:30I think he was in like fourth grade or something. But he convinced his parents to like buy him a terrarium so that he could grow worms. So he could like make a ton of money selling them to organic farmers. That's awesome. He didn't actually make much money, from my understanding. Like, it was a money losing business.

1:33:48Turner Novak:Yeah. But just the fact that he like saw that, connected the dots and wanted to do his own thing. You know? So fast forward to in college when we were at Harvard, he and Sanjay, my other co-founders, ran the Quincy House Grill, which essentially was a student-run burger joint at Quincy House. and it was passed down each year from the seniors you know who are graduating to the next and with a with a purchase basically the the the next generation of students had to buy it from the previous one and then like earn enough over the course of the year to you know whatever to make a profit and then sell it yep and i believe tony and sanjay decided as juniors meaning like to do it for a two-year stint and to put in extra money to change it from just a burger joint to also having pizza.

1:34:52Basically, they were like, if we do two years' worth, we can invest in a pizza oven and recoup that and just elevate this to the next level. And Tony submitted a bid saying he will pay, because actually the Harvard students have to bid, what will they buy it for? and he said the next highest bid plus one dollar. Basically he submitted like I will outbid everybody for this. So he got it. He did this. And then the funny thing is they made a ton of money running the Quincy House grill which was now not just a grill but pizza joint. My classmate who lived in Quincy House and loved pizza, Alfred Lynn, he made his own side business just going down because he lived on like the sixth floor and he would ask all like the other people around that floor like do you want pizza yeah and and he would like buy multiple pies and bring them up and sell it by the slice nice and you know and i think like it worked out to like 75 cents a slice when he bought it as a pie but no one wanted to deal with quarters so he'd sell it for one dollar a slice he wasn't even trying to make a profit but he basically made a profit just arbitraging the

1:36:07Turner Novak:cost of a of going down to the first floor going down like to the first floor and bringing it back up and selling it by the slice anyway my point is with these stories is that each of these people these ended up helping me build my first startup experiencing how to make money in some clever sometimes stupid way it's still i think it's like an incredible like incredible like predictor of future entrepreneurial success. So I definitely look for that whenever I meet somebody young. Nice. Yeah. And Maya, we did a garage sale over the summer and my nine-year-old daughter was randomly like, oh, I want to do a lemonade stand.

1:36:41And I was like, whoa, this is cool.

1:36:43Turner Novak:Let's do it. By the way, running a lemonade stand as a kid, incredible margins because your parents buy everything. They do everything and then you make all the money, like a hundred percent gross margin in business totally yeah but i'd still say it's great because you're getting over that fear of rejection yeah and i made her talk to everyone like i just i just sat there and when someone would walk up i remember the first person that came up she was like she didn't really know what to do and i was like just stand up go talk to them ask them if they want some lemonade we made cookies too yeah and i think we i don't know if we ever gave cookies away but we definitely i mean the cookies were almost like uh they both kind of fed in like someone would just want cookies someone would get a cookie and then they come back for a lemonade sometimes there'd be like little kids and the kids would want to get cookies and like the parents would get sucked in so yeah you definitely learn a lot yeah i mean i would say the the essence of entrepreneurship i love the white combinator slogan make something people want it's so simple and you could say that to a seven-year-old or younger, and they would understand it.

1:37:49And that's basically the same thing as product-market fit, literally. Product is make something. Market fit is something people want. But it's saying it without the sort of corporate business school babble. It's just like this is the essence of what building a company is. And, you know, not all kids actually experience that, oh, my gosh, I created something people wanted and they gave me money for it. If you experience that as a young person, I think it's really empowering.

1:38:23Turner Novak:Well, then, too, a lot of the times when someone, like I'll have a friend who they maybe they're not as into entrepreneurship or they never started a business and they have this idea and you think you need to come up with a business plan. like you need to write 10 pages and detail all this stuff out and I mean that's fine you can do that but also it's almost like this unnecessary friction and to the point of just distilling it down you just need to make something that people will pay you money for like that's really all you have to do you don't have to make it this huge fancy process talking about innovation, business plan, etc like all those things are helpful but yeah i feel like it's just you just got to get started just do something make something the people want it i agree i agree yeah and then also speaking about just generally jargon buzzwords business plan one thing i think is always interesting when people talk about like have like a thesis for something do you and kind of contrasting with everything we've talked about you're very much it's more about the talent and the people how do you think about having a thesis when you're going into...

1:39:31Turner Novak:As a VC? As a VC, yeah. I not only don't have one, I would say it's like a mistake to have one. My hot take is that VC theses are feces. Okay. Now, I'll say what I mean by this. First of all, I'm half joking. Our thesis, we do have a thesis. It's to invest in people. But what I'm saying is kind of BS is when you go too far in saying, this is what I predict is the future of AI or this is the future of B2B SaaS. You can go quite a ways. If you're a smart person predicting the future, mapping out which sector will be where the value is, and you can do all that. And a lot of VCs publish their mental map of here's the landscape and here's what we predict.

1:40:26And first of all, I don't think I'm good enough at seeing the future to do that. So I'm perhaps a little insecure about putting out my own predictions. But I'll also say that if you do that, you're going to miss the situations where it's an incredible team that doesn't fall on your map. Like I said earlier, I thought the original idea of Google was stupid. Why would you make an 11th search engine when there's already 10 highly competitive ones? And, you know, but bringing more up to the present day, when Cursor was first fundraising, their business idea was autocomplete for CAD. And we weren't the only ones they knew.

1:41:13I had known them since they were freshmen, but at that time they were pitching multiple firms, including the best. Sequoia and Founders Fund saw the pitch.

1:41:27And I don't know whether autocomplete for CAD was on their thesis or mental map. This was before ChatGPT, so like AI, like a CAD copilot. This is CAD like AutoCAD? the idea was a co-pilot for cad so co-pilot for if you're designing a some piece of hardware yeah like autocad like imagine if you're designing a gear yep which has you know like teeth going all the way around it a gear might have like a hundred teeth by the time you've designed like the first five it's clear where you're going what if it could complete the rest of the circle so we don't have to do it by hand you know it was kind of can you do llm type magic technology but for hardware design my real point though is like i ignored all that my whole focus was i've known michael and aman since they were like 19 and i would invest in anything they do i was meeting with them regularly like trying to give feedback on their ideas i'm not sure i was that useful at all, but I was mostly just like, when will these two incorporate?

1:42:36And as soon as they do, how to make sure we get to invest? And the idea, of course, I would give feedback and tell them one thing was not as good or what I thought, but always with the basic humility of like, I'm going to back you guys no matter what you do. And they pivoted completely into being what Kershaw has subsequently become. Even more clear example, Kalshi, when they were fundraising their seed round, you know, we led their seed round. I'm sure prediction markets weren't on anybody's thesis map, right? In 2019, if you asked some, like a spectrum of VCs what their thesis is, you might have heard crypto, B2B SaaS, VR, self-driving cars.

1:43:29Some of these are still relevant. Some are not as much. Metaverse. Metaverse. There was a whole range of things that VCs had as their thesis. Zero attention to prediction markets. Yeah.

1:43:42Turner Novak:I wonder how big the TAM was. If you were to actually search up the market size of prediction markets, because it didn't even exist. There was some legacy desktop websites that didn't work very well. Well, specifically what existed in the United States was a nonprofit. So it was almost the opposite of a TAM. It wasn't even a business. It was like, this is only legal in a nonprofit format. And it, you know, and Predict It was actually only licensed because they were nonprofit and had a cap on, you know, so it was almost like a, not only it wasn't a big TAM, it was like legally questionable whether it can ever have a TAM.

1:44:20Turner Novak:Yeah. And, you know, and for me, meeting Tariq and Luana, it was like, these two are brilliant, and they are doing something that will probably fail, but if it succeeds, it'll be so huge. And, you know, I don't want to gamble my career on something so high risk, but they're doing it. And, you know, if two incredibly talented, you know, MIT grads of their caliber are gambling their entire career on this all-in bet, I want to bet with them, you know? So, yeah, there was definitely an element of if this succeeds, it would be huge. But it was more than anything about on the people and definitely not tied to some thesis around prediction markets.

1:45:09Turner Novak:So then that's of all the things that are not people related, if you're just talking about the market thesis aspect or whatever, it has to be if this succeeds, it's huge. If I was really, really smart and I was making like a new coffee cup lid company or something, you might be like, nah, that's really hard to make that a really big company. Right. Correct. Yeah.

1:45:32My investing is very much based on the people, but then ideas that will probably fail. But if they succeed, they'll be huge. Those are the ideas I love. And I'm explicit in saying it'll probably fail because I don't want to shy away or give a euphemism about failure. A lot of people are afraid to even acknowledge the elephant in the room. But it's a very real thing. And the fear of failure drives a lot of first-time founders into this corner where they're staying within the realm of ideas that will probably succeed. but those are usually the ones that are incremental, like making a coffee lid that's 10 % better, you know, versus, I think of an idea like Airbnb.

1:46:22I remember of my many investing mistakes, I missed out on Airbnb when Brian Chesky was, like, sitting next to me at a restaurant. Like, it wasn't even a pitch, but he, like, pitched me, and I was like, who the fuck is this guy? But Airbnb was such a, like, insane idea And at that same time, I remember hearing pitches from people saying, oh, we have software that will make hotel pricing 5 % more efficient or that will help hotels reduce their vacancy or whatever by 10%. And those are incremental type ideas. Meanwhile, this guy's, we're going to replace hotels altogether. Imagine if people would just open their homes for strangers to come stay in and turn their otherwise kind of unused real estate inventory into space that they can monetize.

1:47:12Utterly bonkers. You know, this will probably fail. But if it succeeds, it's completely like, you know, redefining a sector. So I'm drawn to people who think that way and dare to imagine things that almost feel scary because they're so out there.

1:47:31Turner Novak:You kind of think a lot about just like you should be attacking risk. You should be like taking on risk. 100%. Yeah. I think that risk minimization is a huge mistake. Like you should always be looking to maximize reward, which means straight up look for where the risk is and steer towards it. In fact, the word de-risk is an interesting word. You know, how do you de-risk something? Most people, when they hear that, they're thinking, oh, it would be so nice. It's making the risk disappear so I don't have to fear it. That's not what it means. It means do the risky thing, like roll the freaking dice.

1:48:11And if you lose, you're dead. But if you win, now you've de-risked that. So it's, but to build a startup is all about going all in at times when you have like, you know, potential existential risk. And yeah, starting with the business idea, but also all the way through the course of building it.

1:48:32Turner Novak:So, and then it ties back to your point of like, you just have to be really talented to take on the riskiest propositions. Well, to be talented, but I will also say the act of doing something risky attracts other people. People are drawn to courage. People are drawn to like, oh my gosh, that person is trying something I would be afraid of. I wonder if they'll make it. Maybe I want to join them. And by the way, one of the greats is Elon Musk. If you look at his videos when he talks about things before they were successful, it's fascinating. He straight up says, this will probably fail. Verbatim.

1:49:14Regularly says that. Or another version of what he says is, one of the possible outcomes is success. So, you remember that starship landing where it was like the chopsticks caught the rocket falling down out of the sky?

1:49:28Turner Novak:That first time. Yeah, the first time. That was, I mean, one of the greatest technological accomplishments of humankind. rewind back like three years to the video of Elon planning, like saying, we're going to build this. And he described it. He was like, yeah, to whatever the rationale is, like reduce the weight of the rocket, the landing gear needs to be lighter. So we need to be able to catch it or something. But it is, you know, one of the possible outcomes is success. he straight up acknowledges that this will probably fail. Yeah. But as long as success is a possibility, it's a motivator. And I would say that it's actually each person has their own way of how to motivate people and how to draw people.

1:50:18But I think the inherent thing is courage attracts other people.

1:50:23Turner Novak:On the flip side of this, I don't think we talked about this yet while we were recording, but you're starting a podcast that is about embracing failure. It is, yes. So what's the podcast? I think you're launching it probably in a couple weeks by the time this comes out. Yeah. It's going to be called Confession, and it's going to be inviting tech leaders to share a painful lesson they've learned, ideally something they've never shared before, like some story of either an actual mistake or failure of theirs or just some difficult lesson or situation that has stayed with them. And ideally, to show some vulnerability, but also to share the lesson.

1:51:03And this stems from, I have so many failures in my own career. I've tweeted about a bunch of them, and it's therapeutic to share your own failure stories. But it also demystifies, you know, and it reduces, for the young people, for the next generation who might look up to you, it helps kind of make it feel more more approachable to take their own risks and not to be as afraid of failure and so that's the motivation I yeah I've got a I think a pretty rock star group of initial people I've started interviewing and it's going to be coming out soon

1:51:44Turner Novak:what's the best way for people to follow that or follow you or follow Neo where can they find you? I would say following me on Twitter. Sorry, on X. I still call it Twitter. Yeah. It's apartovi. Okay. That's probably, I mean, I'm surely going to start promoting the podcast there once it's out. Cool. We'll throw a link to that in the description. We'll throw some other links. I'll find, we didn't even get a chance to talk about, you had a couple crazy stories with an acquisition by Yahoo that didn't happen. on an acquisition with Steve Jobs that didn't happen. We'll throw those links in the description if you want to check them out.

1:52:27Yeah, I've shared those both online. The Steve Jobs one is the one that went ultra viral and it basically hinged on me lying. I mean, I fucked up a$50 million deal with one word that was intended to trick Steve Jobs. And I'm saying that because that's the hardest part to admit. He had offered$50 million, and I responded, I think we're worth$150. And then I changed my posture and my body language, and I said, actually, I know we're worth$150. And in that moment, I was hoping he would... I was hoping to deceive him into thinking we had another offer for$150, which we totally did not. And... Oh, no.

1:53:12But it's really important to acknowledge my intent was to mislead him. And he totally saw through it and pounced on me and, you know, basically ripped me to shreds. And it was very traumatic for me. I thought the job of a founder is to do whatever it takes to, whatever, make the company successful. And so I, you know, yeah, it was very tough. But the reason it was particularly tough is, if I'm being honest with myself, you know, this company I like was struggling. And so the job of a CEO of a struggling company is inherently pretty hazardous because you are trying to make the outside world believe you're awesome when you privately know all is not well.

1:53:56Turner Novak:Yeah, because you're trying to recruit, you're trying to get customers, you're trying to fundraise. Everything. Yeah. And that encounter with Steve Jobs made me realize I'm probably being untruthful more often than I'd like to admit in more places than I'd like to admit. and I bet other people are seeing through it, but they're just politely ignoring or moving on. Whereas this guy pounced on me and I'd lost a major deal because of it. But it was a wake-up call for me that I need to rethink how I'm showing up across the board. Yeah, after I posted that story, though, I was like, you know what? I've also lost my previous startup.

1:54:38I fucked up a$125 million acquisition by being too honest. So I shared that story online as well. I have, there are many ways to mess up a deal and I've explored, I mean, I've experienced many of them.

1:54:52Turner Novak:Yeah, well, we'll let people, if they want to check out the podcast, I think you said you're launching a couple of weeks from the time this comes out. And yeah, this has been awesome. Thanks for taking the time to do this. Thank you, Turner. It's been wonderful to be here. And I hope everyone listening has had a wonderful time too. Thanks again to this episode's sponsors, upgrade to Flex with one of the two links in the description and get$1 ,000 after your first $10 ,000 of spend. Put your sales tax and autopilot at numeral.com. And for AI analytics, just ask Amplitude. If you enjoy this conversation, please like, comment, subscribe, and share this episode with a friend who should apply for NeoScholars.

1:55:28Turner Novak:Make sure to check out the backlog of over 100 episodes with the founders of companies like Robinhood, Sweetgreen, and Mercury, and investors like Gary Tan at YC, and Chathan and Eric at Benchmark. Tune in next week for my conversation with Tomas Tungus at Theory Ventures on everything he's learned getting the fund off the ground and all the emerging trends and data he's tracking in AI and venture capital. If you don't want to miss it, subscribe to my newsletter, The Split, linked in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks again for listening.

1:55:59Turner Novak:See you next time.

1:56:06you