What are you serving?
The Hidden Motivations of Great Founders
The best founders serve a higher power.
I am reminded of the Stuyvesant High School math team coach, Mr. Geller, who would start each year writing “Math is #1” on the chalk board. Winning was a byproduct of loving the game.
Scott Wu loves coding as much as Mr. Geller loved math, and he’s built a fantastic company around coding. Demis Hassabis loved games, and he was the first to systematically build AIs that could solve them. Brian Schimpf and the Anduril mafia were all patriots who loved America, and they built America’s most defining defense company. In the AGI race, this is patently obvious: Nearly everyone involved is a true believer.
Not all dreams are so concrete, but great founders generally have this in common: When they are making a hard decision, they are testing it against their dream of the future to decide whether or not to move forward. They are not running a game theory optimization solver. They are constantly making decisions that are short-term irrational (such as turning down distracting revenue), in order to optimize for the long-term (building the right product).
GTO vs. GOD
Why is this so important? One of the fundamental takeaways from much of literature (literary fiction) and from game theory (a mathematical way of understanding human nature) is that the short-run game theoretic optimal strategy is “Always defect.” The correct solution to the prisoner’s dilemma is to turn the other guy in. Much of game theory discusses how we navigate short-term optimization (in one-shot games, for example) and long-term cooperation (e.g., tit-for-tat in repeat games). There is something that is deeply instinctual about our desire to collaborate and its tension with our fear of being betrayed.
This tension is at the heart of many of the great stories. The Gospels chronicle Christ’s encounters with this kind of behavior, and his radical proclamation to “turn the other cheek.” In Game of Thrones, Jon must kill Daenerys at the end, or be killed by her. This is simple game theory. In the Lord of the Rings, the loyalty of Sam, Frodo and their “Fellowship” is contrasted against the ruthlessness of Mordor, and is tested over and over again. This meta-story is the cornerstone of Western culture.
The Old Testament is so old, its stories are even more bizarre. The Jews in Egypt undergo the greatest of miracles, and yet they are full of complaints. The Exodus story begins with the ultimate betrayal — eleven brothers throwing the twelfth in a pit — and ends with the betrayal of the ten spies in Canaan. Everywhere you turn in the Bible, brothers are killing brothers. Faith is an attempt to unify men and women in common service to the transcendent, and a core religious theme is our inevitable failure to follow through.
The Education System
Our education system has very little to offer by way of transcendence, or in helping young people conceive of their role in society.
I have written previous essays about my interactions with hundreds of young recent college graduates. They are lost and without guidance from their schools. They have been trained that the ultimate KPI is “success” and are trying to figure out exactly what that means in the working world, where there is no report card.
They are incepted at this stage by mega-corporations who have constructed a system to “snipe” them: A career ladder at a Big Law firm. The path from L3 to L8 at a big tech company. Eventually, 4-6 years in, kids figure it out. Often, this is when I encounter them. It is a challenging moment in life, but life is filled with many such moments, as David Brooks has written poignantly about in The Second Mountain and many of his books. Many people do climb out of this trap, and they begin to think more critically about what they want their role in society to look like.
Once people get off the treadmill, here’s what they discover: Doing great things requires other people. In school — and this is clearly the great flaw of our education system — you are rewarded simply for your own actions, for individual achievement. But in the real world, you usually need hundreds or thousands of people to do anything of real substance. You can be the smartest person in the world, and unless you go into the pure sciences, you are unlikely to have an impact without engaging with the complex coordination system that is the economy.
Coordination problems are hard, precisely because of the GTO vs. GOD problem. Everyone has been trained to maximize their career trajectory, salary, title, what have you. But the way the economy works is, you need to work with a lot of other people who are doing exactly the same thing. And for the most part, this is why big companies are extremely dysfunctional. Try as you might, no amount of HR is going to solve the problem of human conflict. It’s hard enough to do the right thing when there is a real mission at stake; it’s nearly impossible when everyone is going through the motions.
And so what ends up happening is that the most successful people are not the smartest ones, but the ones who are able to create or join an organization with a compelling mission that others want to get behind. And ironically, just like Mr. Geller ended up winning so many math championships, the companies that are organized this way end up being the most financially successful as well.
Money and Passion
We’ve talked about two sources of motivation, and how they tend to lead in opposing directions: “Success” (inculcated in school), and mission-alignment, inspired by deep thinking about what the world ought to look like.
There are two other sources of motivation that we should touch on, at least for completeness. One is money. Wall Street has been made famous for this source of motivation in books like Liar’s Poker and The Predator’s Ball. Usually, you need to solve complex coordination problems to generate financial value — think of Amazon and the tremendous feat of organizing a worldwide logistics network and world class engineering team. But speculation has always been the one realm where you do not need to do this. Speculation is fundamentally a single player game, whereas value creation is a multi-player game.
The last source of motivation is passion. Bill Gurley writes about this extensively in his book, Runnin’ Down a Dream (which I highly recommend). Passion is such an anodyne word, and Gurley resists this by taking an extremely concrete approach to how you actually follow it — finding sources of obsessive curiosity (e.g., Danny Meyer and his palpable love of food and restaurants), selecting a peer group that will motivate you (e.g., MrBeast, who developed his skills alongside a group of Internet optimizers), or going where the action is (e.g., getting to Silicon Valley if you want to get into tech). There are many founders, especially in the developer tools and open-source software worlds, whose love of the game oozes from them.
Hidden Variables
Understanding human motivations, as we’ve discussed so far in this essay, is not a small part of my job — it’s the main thing. Venture is essentially a job that is about organizing people, and venture capital is a fundamental part of the organizational process itself (in my view).
In my opinion, it is possible to discover what other people are motivated by, or at least get close to doing so. I call this “Uncovering hidden variables.” We all reveal huge amounts of information about ourselves through the decisions we make in life. As a venture capitalist, my job is to understand people through a very limited set of interactions, and then try to predict how they will behave in the future. If I’m going to be in a ten year relationship with this founder, the current state of the business is such a tiny percentage of the overall value at exit, and I need to understand how they are going to build their business in the future. By studying the decisions a founder has made in the past, I can make some educated guesses.
More simply: reputation is very hard to fake. Through repeated behaviors, we’ve all revealed much of how we operate. If a founder wants to know how an investor is going to behave, the only thing they need to do is to call five other founders that this person has worked with. It is exceedingly unlikely that the investor is going to change their pattern of behavior just for you. Similarly, if a founder has a track record of extreme hard work, motivating other people, attempting to do the impossible, it is safe to conclude those characteristics are going to show up in their next endeavor.
When I meet a founder, I am trying to understand whether they are running a “success optimization” playbook (are they starting a company because running a startup is the “cool” thing to do right now?) or do they really care about achieving something that will really matter in the universe (have they given up a bunch of their equity to co-founders who will grow the size of the pie long-term?) Like all hidden variables, this is a revealed preference rather than something you need to ask about.
Religion
This essay, in framing the world through the lens of GTO vs. GOD, is pseudo-religious in nature. As a religious person myself, it is clear that my worldview is shaped by this polarity. Of course, what I’m calling GOD in this essay is not necessarily the Judeo-Christian G-d of Moses and Maimonides, but rather the abstract concept of something that transcends the secular, material, often meaningless world that we live in by default.
What’s interesting about the Valley, which is not religious by any traditional term, is that this ethos really is an undercurrent that infuses so many companies and founders and how they operate. It too is a hidden variable, one that reveals itself the more time you spend around great companies and teams. I think for an outsider, this essay may come across as too generous to founders, and certainly there are many (with valid reasons) who have critiques of the Valley. But for those who are day-to-day in the trenches building companies, I hope that this will put words to a feeling that you probably already have.
There is a famous Jewish phrase: אִם אֵין קֶמַח, אֵין תּוֹרָה; אִם אֵין תּוֹרָה, אֵין קֶמַח. This reflects the idea that a person should seek balance in their life. There is no bread without Torah, but there is no Torah without bread. I think we can all attempt to infuse this duality into our work, as we attempt to contribute to the human collective community through the innovations we are building, and the dreams we are trying to make a reality.