PayPal went off the rails fairly often. We had three different CEOs in six months. We were burning $10 million a month with less than six weeks of cash left. [2:09]

We had a lot of enemies back then. Visa and Mastercard hated us. eBay hated us. Various states hated us. The state of Louisiana tried to shut us down right before our IPO. [2:41]

Stripe has an adage that every problem is a leadership problem. The right people doing the right things tends to produce solutions —with enough time horizon—as you wait your set of options gets incredibly reduced. The earlier you identify you have potential issues the number of options are substantially greater. [5:30]

Lessons Keith learned from Peter Thiel:

Focus on undiscovered talent. You must hire people who are undiscovered talents. You can not recruit people that are already proven because there are always larger incumbents that can outbid you for proven talent. [6:30]

Peter can be a pretty draconian manager. He can be very rational and very unemotional. He is extremely capable of assessing people around him, identifying their strengths and weaknesses and providing feedback. [8:35]

Peter believed his job was to make 3 or 4 decisions a year. That was it. He would enable and delegate to deputies he trusted to make every other decision. Peter was deciding who to promote, who to fire, and then about 3 very difficult decisions a year. [12:10]

Jeff Bezos believes you need to manage people by inputs, not outputs. If you judge people by outputs, nobody on your team will take on the more difficult tasks because they are worried about their professional progression and your assessment of them.[9:35]

I had a philosophy at Square that all I cared about was adding zeros to the dashboard. I didn’t want projects that would only add 10%. I would tell product and marketing I want zeros. [10:34]

Jack Dorsey at Square had a very different philosophy than most startups. He would say our users are not guinea pigs. You could not A/B test. You were not allowed to give a subpar experience to anybody. Everything should be perfect. Treat all of your customers as first-rate customers. [13:40]

I don’t believe you map or discover a market. I think you forge a market, or you create a market. You imagine a better future, go create it, and then you sell tickets. The best metaphor for creating a startup is like producing a movie. Someone has an idea or vision for what the movie could be. Then you write a script that details how this will play out. Then you cast the movie. You need the right people in the right roles. Then you need to finance it. Then you need to make a trailer and distribute it —which is basically a value proposition that is distinct and powerful and hopefully people buy the tickets. [17:42]

A mistake that companies/entrepreneurs make that is common: They tackle problems that are easier rather than harder. I think you want to go in the reverse order. What are the three most difficult things that can interfere with success? Take the harder one first. Then the second, then the third. A lot of founders like to defer that problem. I think you should take it on right away. [20:13]

The best book [High Output Management by Andy Grove] on how to run a startup was written in 1982. No one has written anything nearly as good since. [22:00]

Full podcast here: Starting Greatness: Keith Rabois: Key lessons from Peter Thiel, Reid Hoffman, and Jack Dorsey

Learn from founders who came before you. Every week I read a biography of a founder and tell you what I learned on Founders podcast.

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