Sam opens with a story about Alfred Nobel — how reading his obituary calling him “the merchant of death” led him to rewrite his will and create the Nobel Prize — and uses it as a launching pad for a conversation about prize-based philanthropy as a more powerful lever than direct charity. The hosts riff on the X Prize, DARPA’s Grand Challenge, the Vesuvius scroll challenge, Shaan’s Milk Road grant, and Sam’s plan to fund a “campus Onion” scholarship. The episode closes with a discussion of Peter Thiel’s Fellowship and the hosts’ best hiring interview questions and frameworks, including insights from Steve Jobs, Jeff Bezos, and Warren Buffett.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Alfred Nobel and the “Merchant of Death” Obituary [00:00:00]
Sam: All right, I want to tell you something. So I have a family now — do you have a will?
Shaan: Weird flex. All right. Yes, I do have a will.
Sam: Okay, so once you have a family you start getting into the will stuff, right? And it’s kind of been screwing with me. I read a story last week that has maybe changed my life, and I think that if only a couple of listeners actually buy into what I’m buying into, this could be like the most life-changing thing we’ve ever done on this podcast.
So in the 1800s in Sweden, there was this guy named Alfred. Alfred was an inventor, and he had a little bit of success — he started inventing a bunch of small stuff. But then when he was like 30 or 40, he had something that changed his life. He basically found out that nitroglycerin, if you mess with it in a certain way, you can make it explosive. And thus was the creation of dynamite.
So it made him incredibly rich. He was worth something like the equivalent of $300 million in today’s money. And towards the end of his life, his brother Ludwig died. When his brother died, someone ran an obituary for Alfred by accident — they used the wrong brother — and the obituary started with: “The Merchant of Death is no longer.” And they go on to explain how Alfred created dynamite and how it revolutionized the way people were murdered.
Now, whether that story is true or false is actually up for debate — nobody has disproved it, but there are people who are like, “I’m not sure if that’s actually true.” But that’s the story.
Afterwards, Alfred changed his life. He goes, “That’s ridiculous. I can’t be known as the person who is the Merchant of Death. I have to change this.” So two years before he died, he decided to rewrite his will, and he left 95% of his assets towards a foundation where he created the rules. The rules were — and I’m using today’s money — I’m going to give $1 million to the person who impacted humanity the most. The first category is peace, but after peace we’re going to do chemistry, economics, and literature. And thus became the Nobel Prize.
To this day, it’s lasted 130 years. They now have like $600 million in assets, and the whole point of the foundation is we invest enough money so we’re always able to give the equivalent of $5 million a year to the person who has impacted the world the most. Winners have been like Marie Curie, Martin Luther King, Ernest Hemingway — a lot of groundbreaking people.
And in a way this contest has encouraged things. I don’t think there are too many people doing stuff just to win the Nobel Prize, but in the back of their head they’re like, yeah, that would be amazing — to discover something and know that’s the ultimate goal. So it kind of changed my life.
By the way, did you know that story? The dynamite story and the merchant of death?
Shaan: Not the specifics. I had heard Peter Thiel talking about this with Joe Rogan — the sort of whitewashing of a reputation. They were talking about Epstein, they were talking about Bill Gates, and Rogan brought up, “That’s how the Nobel Prize happened.” He said, “Have you heard that?” and Pete was like, “Yeah, you know, the dynamite guy.” But I didn’t know anything beyond that. So that’s actually pretty cool — I didn’t know the Merchant of Death obituary story.
Sam: So the truth of it is that dynamite actually wasn’t used to kill that many people because of the way it worked. TNT killed a lot of people, but dynamite was used to open up caves for mining. That’s where the story gets fuzzy. But we don’t let the truth get in the way of a good story.
Shaan: Yeah.
Sam: But what is true is that the Nobel Prize has worked. It’s encouraged people through incentives to do stuff.
How the Nobel Foundation Actually Works [00:05:00]
Shaan: Sorry, explain the money side of this. He left how much money, and is it just draining from that pot or does new money get injected?
Sam: It’s a million dollars per prize, right? And there are five per year. One year during World War II they were like, “We don’t have peace, so we’re not going to give a Peace Prize.” But in general, every year for the last 120 years they’ve done this. The money right now — this is all public — they have $612 million. It made a 10.7% return on capital in 2023. It’s invested in equity funds and hedge funds. And the way it’s set up according to his will was: make sure the money never runs dry, so we can always give this away for potentially hundreds of years.
The organization’s expenses are like three or eight million — single-digit millions per year to operate — and then they give away roughly $5 million per year.
Shaan: Is this like Forbes 30 Under 30 or how legit are the winners? I’ve never paid too much attention to it. Do you have a sense of whether this is high signal or not?
Sam: In my opinion it’s very high signal. Albert Einstein, Martin Luther King, Marie Curie — legit people. Now there have been a few times where they’ve made mistakes. In 1926 they gave the award to someone who created the enzyme that cured cancer, and obviously that wasn’t true — but six months after the discovery they thought it was true. They’ve since made a rule where they want to give the award a couple years after the person made the discovery.
The other criticism is they have a liberal bias. They’ve given one to Barack Obama, and then there was a case where people on the Palestinian side were like, “What the hell?” So there’s criticism sometimes. But in general it’s very well regarded, though a lot of people criticize it as being too academic or too liberal. I think it’s as legit as it could be.
Shaan: What’s your take on this overall?
Sam: So here’s my take. This prize setup is awesome, and let me give you a few examples of it.
Prize Philanthropy as a Lever: Orteig, X Prize, DARPA [00:09:00]
Sam: Inspired by the Nobel Prize, in 1919 there was this guy named Raymond Orteig. He was like, “Hey, these planes we’ve created are pretty amazing but we’re not doing great things with them. I’m going to offer $25,000 to anyone who can fly from New York City to Paris.” That’s like $500,000 today. Eight people signed up. Seven of them failed. In fact, five of them died. And the one person who made it? Charles Lindbergh.
The year before Lindbergh’s flight, airline passengers numbered 5,000. A few years after — 300,000. It completely changed the airline industry because it made a big hoopla out of the thing.
Shaan: Then inspired by that prize, Peter Diamandis created the X Prize.
Sam: Right, he offered $10 million — I think the rules were: anyone who can fly a rocket into space, bring it back down, and two weeks later have it go right back up again. Reusable rockets. And Elon Musk at the time — SpaceX was two years old — said the X Prize basically helped create the commercial space industry. It showed that you didn’t have to be a giant aerospace company to make progress in space, and it definitely influenced the direction he took with SpaceX.
The genius of the X Prize was that by putting up $10 million, twenty teams would each invest $2 million trying to win it — so you’d get $40 million invested for a $10 million prize. It was a genius way to spur innovation. Not just the prize itself attracting people, but the act of pursuing the prize caused way more dollars to get poured in because the math worked out: I get leverage — my $10 million actually becomes $100 million invested in this mission if I get enough interest around it.
So it works. And now there’s a SpaceX prize that Elon has funded where it’s $100 million for someone who, by 2030, can remove a certain amount of carbon from the planet.
Shaan: You know what DARPA is? Defense Advanced Research Projects Agency.
Sam: Weren’t they responsible for creating the internet?
Shaan: They’ve done a bunch of stuff. In 2003 they created the Grand Challenge — the idea was: here’s a 150-mile route, and the first person who can create an autonomous vehicle to drive that route wins $1 million. Six hundred teams applied. For a while nobody did it. But then a team did it, and that’s when we first used LiDAR applied to cars for self-driving technology.
The Vesuvius Challenge and Nat Friedman [00:15:30]
Shaan: There’s also a guy you might know — Nat Friedman. He’s doing a lot of stuff with AI investing right now. He’s got a really cool prize. There was an explosion at Mount Vesuvius, and all these ancient Greek texts got basically ruined. He’s put up a prize where if you can create a machine learning algorithm that helps decipher parts of the text, he’ll give you a prize.
Sam: It’s like a scroll that’s almost sealed — you can’t unroll and read it. So they’re using computer vision to try to analyze it from the outside and figure out what was written.
Shaan: Right. I think it’s going to be some of the earliest written text. I don’t know the details — I heard about this and thought, wow, this is so cool. Nobody was going to justify the investment they’d take to read this because you also don’t know if there’s anything interesting inside. And he decided to fund this competition. And what happened recently was somebody figured out how to read a bit of it — they had a breakthrough where somebody figured out how to read a little bit from some stupidly simple computer vision technique.
Sam: Let me read you the actual Vesuvius thing because I think it’s pretty fascinating.
Shaan: Quick, yeah.
Sam: They were able to take four passages with 140 characters each and get 85% of the characters readable. They used AI, blah blah blah. I don’t know all the details of this — I heard this like six months ago while getting a haircut and I thought it was pretty fascinating.
Shaan: So what did the scrolls say?
Sam: The general subject of the text is pleasure, which “properly understood is the highest good in their philosophy.” One snippet says: “As to the case of food, we do not right away believe things that are scarce to be absolutely more pleasant than those that are abundant.” I don’t know exactly what’s going on, but it’s basically a philosophy text.
Shaan: Do you get a haircut with earbuds in your ears?
Sam: I won’t go to a barbershop if they don’t let me listen to something. If they try talking to me I’m just like — nothing, can’t hear. And it falls out like four times during every haircut and I’m like, “Oh, sorry, can you get that?” And they’re like, “Dude, this is annoying.”
That’s why I started having a guy come to my house and just do it there so I could listen on blast. But then I felt kind of weird because he was also listening to these old Max Levchin talks from like 2002, and he’s like, “What is this? Why is this guy talking about the future of the internet?” I’m like, “Yeah, yeah, it’s before the internet was that huge of a deal.”
Shaan: God, that’s so rude. But whatever.
Sam: Well — it’s like going to a sports bar and I don’t want to talk to the bartender, I want to watch the game. That’s what I’m trying to do. I’m the customer, let me have the experience I want.
The Milk Road Grant and Sam’s Campus Onion Idea [00:21:00]
Shaan: So all of this to say — when I’m thinking about what will happen to money when I die, you think about giving it to family, traditional giving. I’m incredibly fascinated by these competitions. And they don’t all need to be huge. There’s Aubrey de Grey who has a $25,000-a-year grant for interesting breakthroughs on longevity.
I think this is so much more leverage. The publicity, the wanting to win it — it seems so much better for society than just giving. You know what I mean?
Sam: One hundred percent. I love this topic.
Shaan: Can I tell you two ideas? So early on I had this idea — basically the X Prize model for companies. When I was inside Twitch after we got acquired, they were trying to build things internally but didn’t have the best team on it, didn’t have the best focus or urgency. Then you have startups — really high-caliber small teams, super high urgency, it’s their baby.
I was like: why wouldn’t a company just say $10 million for the person who can build the best version of X? And the conditions are: when you hit it, we have the first right to buy it, you can’t sell to anybody else, we get to hire you and the team, and they earn out over two years. Here’s the scope of what we want. You get 25 teams to go try to win that prize, because you don’t need venture capital — you’re like, “Hey, we’re going to take nine months and try to build this thing and win the prize.” I’m surprised that doesn’t exist.
Sam: Yeah.
Shaan: Second idea — I actually tried this. When we were doing Milk Road, we created a grant called the Milk Money Grant. We said you could build whatever you want, some use case or application of crypto. It was one ETH — at the time, like $2,000 or $3,000. We had over 2,000 submissions. We picked 10 or 12 people, so we gave away probably $36,000. We used ad revenue money to pay it out, treated it as a business expense.
We got to meet these people — super interesting, young, high-caliber, building really interesting things. Even though they were probably already making more than two or three grand in their job, it felt like a scholarship. It felt like they got accepted, got paid to scratch an itch. We framed it as: what’s an itch you want to scratch? It doesn’t need to be the biggest project — something you want to see built that you want to use. What would it be?
People built all kinds of things. It was honestly really, really awesome, and I forgot about it until now. It’s something I want to do again. I have a couple ideas of what I might do with it.
Sam: Do you want to talk about those?
Shaan: I have a specific idea I want to fund. It’s not even going to be that big of a business — it might just be philanthropic. My version of a young hustlers’ grant.
The other day I was thinking about my time in college because I have two cousins who just got accepted into college and they were like, “What advice would you have?” I said, if you don’t know what you want, spend that time dabbling — go meet a bunch of people, try a bunch of things, shadow people, figure out what the menu even is. One of them said, “I know what I want — I want to be an entrepreneur. That’s why I’m doing this business program.” I said, “That’s awesome. But they’re not going to teach you how to be an entrepreneur in college. That’s not what’s going to happen.”
I said, here’s the best thing you can do. I think it’s the best college campus business that I can think of for somebody wired like me or Sam. That is: create the Onion for your campus.
When I was in college, the campus paper was a big deal. At Duke everybody read the Duke Chronicle. I never thought about it, never knew who wrote it. But if I was smart, what I would have done is say, “I’m going to create a Duke newspaper — but different is better than better, so I’m not going to create just another school newspaper. I’m going to create the Onion for my campus.”
That teaches you a bunch of skills: how to start a business, content creation, copywriting, humor, content pipeline, hiring and firing, ad sales and ad revenue, distribution, marketing, naming the thing. It’s the perfect type of business for college because it’s a sandbox.
Sam: I think one pressure a lot of people have when they want to be an entrepreneur in college is they try to think of businesses like the ones they read about on TechCrunch. Big money-making things. That’s really hard, and you’re a beginner. You’re a white belt. You need a white belt business. For me that was my virtual sushi restaurant thing. Yours was like the hot dog thing and the college booze business. Little starter businesses that aren’t meant to last but teach you the core building block skills that, lumped together, is this thing called business.
Shaan: Exactly. So I want basically one hustler on every campus to create their version of the campus paper. I’m down to put in some amount of money — like $10,000 or $15,000 — to kickstart people on this thing. I don’t think it’ll take much. I think $10,000 will be more than enough to start these on several campuses, and they should become self-sustaining cash flow businesses from there. The people who run these will be way far ahead.
And you know how Barstool started? A physical paper. Dave Portnoy would write it under pen names — the font is hilarious, it was Comic Sans on the internet — and it was mostly a gambling rag. He called it that. In the morning he would write the thing, get it printed, and then rush into the subway handing it out to people in Boston. He’d hand them out all day. Then he’d go home, call advertisers trying to get enough money to print the thing again, write it under all his pen names, get them printed, and the next day go distribute it again. Over time he got other people to hand them out, write the thing, do the ad sales. And that became Barstool Sports — a many-hundred-million dollar company.
Sam: That’s amazing. You guys should go Google the early ones — it’s pretty hilarious.
Shaan: So I’m thinking after this I’m going to put up a Google Doc — my rules, who I’m looking for, how to apply. I’ll put it in the show notes. I’m going to think of a name because the name matters.
Every campus will have the same naming convention. We’ll share learnings — if you’re the kid at Northwestern and some kid at Duke comes up with a good distribution idea, there’ll be one group chat where all the people share what’s working and what’s not. I’m really curious to see what happens. This is my version of the lemonade stand — the slightly superior lemonade stand business that I think would be great. I wish I had done this in college.
Sam: I’ll take my bow, because I have successfully — potentially — proved that this might be one of the bigger ideas we’ve ever talked about. And that’s kind of the point with this stuff: when you repackage giving or whatever you want to call it into a game, it makes it exciting. It makes it fun. It makes it cool.
Shaan: What’s the name for this sort of action philanthropy? You’re not giving to starving kids in Africa, but you are giving broke college kids both inspiration, maybe capital, and an excuse to better their lives. Is there a name for that?
Sam: In my head I’ve been calling it incentivized philanthropy, but that’s too much of a mouthful. What this really comes down to is a slight difference in incentivization having a massive difference in outcome. Versus just giving: only one of you is going to get this, and you all got to get after it.
Peter Thiel’s Fellowship [00:35:00]
Sam: There are a few versions of this that I’ve thought about. When the Thiel Fellowship came out I thought it was genius. Peter Thiel basically had this point of view that universities are a bubble — and there’s this umbrella where you can never criticize a university. College, what education, it’s the most important thing for our kids, how dare you.
He said education is a bundle. And he bundled it as: it’s an insurance policy for the parent — you give your kid this degree because it’s “my kid’s not going to fall through the cracks of society” insurance. And it’s a filtering process — companies don’t care what you learned at Harvard, but if Harvard did a good job filtering, they know they’re picking from the smarter end of the crop when hiring. Then there’s the social piece, then there’s the actual education component. He had like five or six things: together those are all part of the bundle.
He’s like, “What’s going to happen is people are going to unbundle the bundle.” So he came out and said: I think universities are such a waste that if you’re a high-potential person, I will pay you $120,000 to drop out of college. And Peter Thiel, for all of his uncharismatic ways of speaking, is kind of a master of communication if you just don’t watch him speak — if you read an article about his presentation and see the quotes, it’s the best.
He literally has speechwriters. He has a point of view that universities have something weird going on with them. And his speechwriters take it and workshop it with him — are you saying that universities are a bubble? Yes. Nail. Cool headline. What’s the subhead? And he literally goes on tour. He did it with the Zero to One thing. He finds the head-turning statement — something he knows is going to make heads turn — then builds a pretty convincing case around it.
With Zero to One: instead of “buy my book, I’m Peter Thiel, I’ve had great business success,” he said: “Competition is for losers.” And then: “The only goal of a business is to shoot for monopoly.” People are like: monopoly? I thought that’s illegal, you get broken up. And he’s like, “Exactly.” He finds the head-turning thing and builds the convincing case.
So he did this with the Thiel Fellowship — paid kids to drop out of school.
Shaan: How many kids a year do it? Do you know?
Sam: I remember I hosted them at my office — I think the first or second year of the Thiel Fellowship. There was like 20 kids, like 18 or 19 year olds, at my office. I was like, “Hey, who are you guys, what are you doing?” And they’re like, “Oh, we don’t know.” It was super disorganized, by the way. Peter Thiel was not there.
Shaan: So you apply, one of Peter Thiel’s team members selects people, they wire you the money — and then what? Do they say come back in three months with a thing?
Sam: At the time: you’d get accepted, drop out, they’d give you the money, you’d come to San Francisco and participate in the batch. You’d live there — I don’t know if you lived together, but they all showed up at my office so they were definitely there for a period of time. It was pretty open-ended.
It’s a two-year, $100,000 grant for young people who want to build new things instead of sitting in a classroom. 20 or 30 people per year, you have to be 22 or younger, you need to drop out, you don’t have to move to San Francisco, and an idea is enough. That was the idea.
It’s been going for I don’t know, ten years now. Here are some notable recipients: Dylan Field, founder and CEO of Figma — tens of billions of dollars company. Oyo Rooms, the hotel-style startup out of India, worth many billions. Austin Russell, who created Luminar Technologies — I think he became the youngest billionaire ever, self-driving technology. The founder of Ethereum — hundreds of billions of dollars in value creation. The founder of Loom, acquired for hundreds of millions. Josh Browder from DoNotPay, which I love. And then there are recipients like a guy who created software to detect Parkinson’s disease.
Shaan: He probably didn’t do it for the money, but even if he wanted to, there was definitely a return on encouraging value creation. I mean, if just Ethereum came out of it — smashing success. If just Figma came out of it — smashing success. Those are the two power law winners of the thing.
Sam: By the way, go to muskfoundation.org. Elon Musk was the biggest donor to the Vesuvian challenge — he donated $2 million. Describe what you see.
Shaan: All right, so muskfoundation.org — it’s a website with no design. It’s a blank piece of paper with five bullet points. It says: “Musk Foundation grants are made in support of renewable energy, human space exploration, pediatric research, science and engineering education, development of artificial intelligence to benefit humanity.” That’s it. It’s like a hello world page.
Sam: Yeah, it’s basically 100 words, bullet-pointed, on a white piece of paper. This is extreme Money Talks, Wealth Whispers energy.
Shaan: I call it sexy indifference. That’s what we’re going to call this — where you want people to know that you don’t care, but you also want them to know you don’t care because you’re cool.
Sam: It’s the homeless billionaire paradox. In San Francisco you will not be able to tell the difference.
Shaan: I saw a LinkedIn the other day — no profile photo, one-line bio, one job experience: 26 years, owner. And I was like: here’s a man who’s going to leave a lot of money for his children. I can tell you right now. I don’t know anything about this company, never heard of this guy, but that’s a high signal thing. Or at worst he owns a really nice lake house. Or he’s broke and homeless. We don’t know — it could go either way.
Sam: By the way, I bought the Peter Thiel shirt from The Joe Rogan podcast. I’m going to wear it next week on the pod — the all-white mesh Peter Thiel shirt from Sacks. I’m just teasing it right now. Subscribe on YouTube and you’ll get to see me wear it.
Shaan: It’s made for hairy people. Mesh is not usually a great choice for us.
Sam: I think my ratings will go up like six or seven points if I wear it.
Shaan: You’re going to look like human Velcro with all these little threads sticking out. I saw people talking about his shirt, I thought it was pretty funny. He also had the Nazi haircut — the high fade — which is totally in. He looked good. He looked great.
Sam: He seems to be on a bit of a rejuvenation kick. I mean, he’s like 56 — he looks a little bit younger than 56, but if you’ve heard of cool contests like this or a cool name for what this is called, tweet at me — I’m @theSamParr — because this stuff is very fascinating to me and I’m trying to understand the economics of it. I think I might actually do it.
Shaan: Are you going 50/50 with me on the MFM scholarship?
Sam: I’m not willing to commit to that yet. I’m a slower person than you. I’m thinking about the Parr family — where it’s going to go.
Shaan: Oh dude, the Parr 4? You used a golf pun.
Sam: Yeah, the Parr 4. You can’t decide if you want to go cheeky or extra serious. When you look at the Nobel Prize, they’re wearing suits with tails. But you know what you’re going to do — you’re going to go cheeky on the front end, deadly serious on the execution. I feel like that’s you.
Shaan: I think that’s what we might do. I had the conversation with my wife — I’m like, should we do something like this? What are we going to do? Right now I’m obsessed with single motherhood. Have you ever been a single parent for the day when your wife’s gone? It’s impossible. You actually can’t do it. So I’m like, if you’re a single mother, how do you get ahead? How do you break that cycle? I’m obsessed with that problem right now, trying to figure out how we could contribute.
Hiring Interview Questions: Elon, Bezos, and Steve Jobs [00:47:00]
Sam: All right, what do you want to do? I’ll give you a simple, useful lesson — learned from Elon Musk and Jeff Bezos.
Somebody asked Elon about hiring: “Do you still interview people? And when you interview them, what do you ask? How does Elon Musk filter for great talent?”
Shaan: I’ve heard one thing — he said if he’s talking to someone and like 45 seconds in he could tell it’s a bad match, he just acts on that. He’ll be like, “Hey, I don’t want to talk anymore,” and he just walks away.
Sam: Right. But what he said about the actual question was: “Tell me about the toughest problem you’ve dealt with and how you dealt with it at your last company or project.” He likes this question because it filters out candidates who haven’t actually done anything. You can ask very detailed follow-up questions, and the person who actually did it will know the details — whereas the person who was not actually responsible for the thing won’t know. Very quick filtering mechanism.
Other great interview questions: Steve Jobs used to ask, “Why are you here?” He wanted to understand the motivation. Why this company, why this job, why you — that was the most important thing to Steve Jobs.
And Jeff Bezos asked: “Do you consider yourself a lucky person?”
Shaan: I actually interviewed with Joe Gebbia, the founder of Airbnb. He was the last person, 15 minutes, and the only question he asked me was: “On a scale of 1 to 10, how lucky are you?”
Sam: What did you say?
Shaan: I said I’m a nine. I said, “You know, I’m lucky for a variety of reasons,” and I explained them. Then I said, “I don’t know if it’s luck or what, but I seem to get my way a lot.” And I asked why he asked that. He said, “Well, because if luck’s real, I want to be around lucky people. And even if it’s not real, I want to be around people who tend to get their way.”
I thought it was weird at the time. Looking back, I think it was better.
Sam: Dan Rose, who worked for Bezos from ‘99 to 2006, is a fun person to read. He shares good personal stories from the early Bezos era — like, “In ‘99 we were struggling with this and sitting in the stairwell because we didn’t have time to make desks.”
He says Bezos’s favorite interview question was “Are you a lucky person?” — it was a great way to filter for optimists and people who manifest success.
The humble, correct answer for a successful person starts with: “I’m the luckiest person on Earth. I worked really hard to get where I am, but a lot of things had to go right for me, and I’ve taken full advantage of my luck.” That’s the crux of what you want them to say.
He goes: sorting for optimistic people is a good proxy for leadership potential. Perceiving yourself as lucky is a proxy for optimism — people will always tell you they’re optimistic, but they won’t always say they’re lucky. So it’s a stealth question to get at optimism.
The humility part is also important. False humility is easy to filter out — humble brags are very obvious when you ask follow-up questions.
The two wrong answers: number one, “No, I’ve never really gotten lucky, but I’ve overcome and outworked all the bad things.” And number two, “I’ve never needed luck because I’m smarter and stronger than everyone.” And a third wrong answer: “No, I’ve been pretty unlucky.” Because then you’re either unlucky — and if luck’s real, I don’t want to be around that — or you think you’re a victim, and I don’t want to be around that either.
Shaan: That’s exactly what Joe told me. He said: “If you say you’re lucky, you’re either lucky — in which case I want to be around you — or you just make things work. If you say you’re a one or two, you’re either genuinely unlucky or you think you’re a victim. I don’t want to be around that.”
I interviewed at Google years ago and they asked me how many days it would take to clean the windows on a skyscraper. I hated that question.
Sam: Me too. Another way to think about interview questions: they’re meant to filter out certain people and pull in others. A great interview question will either attract or repel the wrong cultural fit.
The Google puzzle question — part of the reason I would hate that question is part of the reason they don’t want to hire me. They want puzzle-solving nerds. I heard this put really well by Max Levchin. He was talking about when he got acquired by Google: “How do they retain smart people? They’re trying to hire the most brilliant people on Earth and then telling them to go tweak the knob on Google AdSense. That’s not only soulless, it’s literally the definition of a cog in the machine.”
He said they kept people around by putting really hard puzzles on the bathroom stalls, giving 20% time to work on whatever you want, doing your laundry, feeding you, coddling you. They would do everything to keep talent there.
The PayPal Mafia Culture and Warren Buffett’s Filter [00:55:00]
Sam: The PayPal Mafia is probably the most successful early group of people to come together in Silicon Valley. They had Elon, Peter Thiel, Max Levchin — they went on to create like 10-plus billion-dollar companies out of the first 15 people. The smallest thing of the PayPal Mafia was like Yelp.
Shaan: No offense to Jeremy, he’s a good dude. Sitting at the kids’ table at their reunion.
Sam: The thing with PayPal was they wanted to create a culture. And they’re on the record saying — you couldn’t say this today — that “diversity is not what you want at a startup.” The idea being: pick the culture, then only attract people who reinforce that culture, and immediately repel otherwise smart people who would dilute it.
There was a famous one where they were interviewing an engineer and asked what he liked to do outside of work. He said he loved playing basketball. And Max was like, “I don’t want to hire this guy.” Not because he plays basketball — but “I’ve never met a great engineer who says he loves pickup hoops. Great engineers have other hobbies.”
And even if you’re wrong about it — it’s what Mohnish Pabrai said on the podcast. Mohnish met Warren Buffett and asked, “Warren, you’re a great judge of people. How do you do it?” Buffett said, “I don’t think I have a good people radar. What I have is a very tight filter.”
“Take me to a cocktail party, let me talk to 100 people for five minutes each. I could probably take the worst five or seven people and tell you — don’t hire them. And the best five or seven I could probably identify. But the other 85 to 90 people? I don’t know. I couldn’t make a judgment in five minutes, so I put them all in the no pile.”
“Isn’t that a little harsh? There might be some great people in there.” He goes, “Yeah. But the cost of bringing a not-great person into my circle of life is so high. The cost of discarding somebody who might be great is comparatively so low. So I am willing to be a very harsh grader — either you’re obviously in, or you go in the ‘too hard to tell’ bucket and I lump you in with the obvious nos.”
Shaan: That’s a non-obvious insight. There are freaks like Peter Thiel and Mark Zuckerberg who nailed that harshness early on. But then there are normal people like me where I find a 22-year-old and I’m like, “I don’t know — maybe they’re promising. Maybe they were nervous in the interview.” And it feels good to give the underdog a shot. But often that narrative doesn’t end the way you’d like.
The people where that underdog narrative has worked for me — it’s someone like Steph Smith, where I was into her because I just read her blog and I was like, “This person is quirky and interesting, she has an it factor.” Maybe I wasn’t sure how that it factor could be deployed or used, but there was a fire there. I don’t know how I’m going to harness it, but there was something. Whereas I’ve hired a lot of people who didn’t exactly have that — I was like, “Maybe it’s there,” and I made stupid decisions. It doesn’t work because you want to be a good person or whatever.
Sam: What’s that phrase — no good deed goes unpunished. That’s how it felt with a lot of my hiring decisions.
Shaan: Yeah. You don’t want to face the confrontation. You don’t want to admit you were wrong. You don’t want to go back to square one. You don’t want to admit to your team that you were wrong on this person. There’s a whole bunch of very understandable reasons why we make that mistake.
Great People Show Greatness Fast [01:02:00]
Shaan: I got in a lot of trouble at Twitch — when I was there, I tweeted something that was very true for me. I said something to the effect of: “You always know in the first two weeks if someone’s going to be great. Great people are great right off the bat. They show you greatness in the first two or three weeks. I’ve rarely ever seen someone who turns out to be great who was just ‘eh’ in the first two or three weeks.”
Sam: And they yelled at you?
Shaan: Yeah. The COO and others didn’t like it. They were like, “That’s too harsh. Different people start at different paces.” It was seen as almost like “not diverse” — like there’s a group of people who are slower to acclimate.
The COO responded to the tweet. Since then I’ve seen a bunch of other people say the exact same thing — successful people with the same firsthand experience. Which kind of validated it. The great people show greatness very early on. That doesn’t mean somebody can’t be a solid contributor who had a slow first couple weeks, but they’re never the ones who are great. And great is all I’m really looking for.
Sam: The Warren Buffett “be a harsh grader” — that is some of the best advice you could get.
Shaan: We have this all the time on my team. My business partner Ben will have some interaction with somebody and ask, “So what do you think of how that’s going?” And if you have to ask, you know. Right? That’s first principles.
I’ll say something pretty harsh, like: “We talked about doing these three things, and those three things haven’t happened and there’s been no update on them in a week. So I don’t know. How do you think it’s going, Ben?”
And Ben gives a generous interpretation of almost everybody. Like his wife will yell at him and he’ll be like, “I mean, maybe I could have been a little more present.” That’s his first reaction. And everybody loves Ben for it. But in a company, it’s a really harsh hard way to run things. Because great people are great in spite of circumstances — not bogged down by 10 reasons why they’re struggling right now.
That attitude that serves me in the workplace doesn’t serve me outside of it. Having a generous interpretation for people outside of work is a really awesome trait. In a company, it doesn’t work the same way. Democracy inside a company — everybody gets a vote on what we’re doing — is not a great way to build a company. Companies are benevolent dictatorships when they win. And you have to be comfortable being a benevolent dictator there. But benevolent dictator doesn’t work in other areas of your life.
Sam: And that’s why a lot of the most successful people are — you know. Four-times divorced or whatever. What makes you great at one thing can make you shitty at another.
Shaan: All right, I enjoyed that conversation.
Sam: Is that the pod?
Shaan: That’s the pod.
Sam: Sam, how many diapers are you changing per day right now?
Shaan: For the past while it was at least one a day. But now it’s one every three days.
Sam: Every three days? Wow, that’s incredible.
Shaan: Well, we have a nanny. A nanny tends to be a nanny for the whole family — she does our laundry, cooks a little bit, cleans. I usually work at the kitchen table with headphones in, so I’m always present. Every 30 minutes I take my headphones out and go play.
My goal was to make sure my child does not have a Jamaican accent.
Sam: You threw a curveball at the end there.
Shaan: I didn’t want someone else to do all the raising of my child, you know what I mean? So if my daughter Naomi ever says “jaman,” I’m going to know I need to be more involved.
Sam: Yeah, I’ve been working too hard.