#228 Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World - The Knowledge Project with Shane Parrish  ## Metadata - Author: **The Knowledge Project with Shane Parrish** - Full Title: #228 Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World - Category: #podcasts ## Highlights - **AI Impact** - Elad Gil believes AI is dramatically underhyped because most enterprises haven't embraced it yet. - All the money, changes, impact and jobs are in enterprises. Transcript: Elad Gil That's a big question. I think in a couple years, we'll start thinking about it as we're selling units of cognition. AI is dramatically underhyped because most enterprises have not done anything in it. And that's where all the money is, all the changes, all the impact is, all the jobs, everything. ([Time 0:00:16](https://share.snipd.com/snip/37b560d0-8ecb-43c9-8e71-020038352e82)) - **Startup Killers** - Early-stage startups die from founder conflict or running out of money before achieving product-market fit. - Most incumbents don't care about startups for five to six years. Transcript: Shane Parrish What are the most common self-inflicted wounds that kill companies? Elad Gil Yeah I think there's two or three of them. It depends on the stage of the company. For a very early company, the two ways that they die is the founders start fighting and the team blows up or they run out of money, which means they never got to product market fit. They never figured out something that they could build economically that people would care about. So for the earliest stages, that's roughly everything. Every once in a while, you have some competitive dynamic. But the reality is most incumbent companies don't care about startups. And startups have five, six years before an incumbent wakes up and realizes it's a big deal and then tries to crush them. And sometimes that works. Sometimes you just end up with capped outcomes. So for example, you could argue Zoom and ([Time 0:53:18](https://share.snipd.com/snip/092948b3-078e-4c9d-8e0b-8897fdfcd6aa)) - **Founder Archetypes** - Founders can be categorized into hyper-focused individuals and those with broader interests who delve deeply into various fields. - The latter are driven by both impact and a sense of 'interestingness', often pursuing diverse interests alongside their primary ventures. Transcript: Elad Gil I think it's more like when you talk to them, the way that they think about the world and the set of interests they have is a little bit different from the, from the first group of folks. And I'm not talking about Travis specifically because I didn't know him well enough to have a perspective on that, but I just mean more generally, I've noticed that they have this commonality Of when you talk to them very early, they're like 20 years old or whatever, and you meet them. The set of interests that they have is very, very broad. And they tend to go very deep on each thing that they get interested in. Yeah. Whether it benefits them or not, they just go deep on it, right? Because it's interesting. They're driven by a certain form of interestingness in addition to being driven by impact. And then I think there's a third set of people who end up with outside successes. And sometimes that's just product market fit. And then they grow into the role. And so there's some businesses that just have either such strong network effects or just such strong liftoff early on. And they're obviously very smart people and all the rest of it, but you don't feel that same drive underlying it or that same need ([Time 1:05:16](https://share.snipd.com/snip/28f1df27-3cc5-4d86-9ca8-9411c1e5db07)) - **Utility Function** - Elad Gil suggests that people driven solely by money often end up miserable despite their wealth, questioning what truly fulfills them. - He highlights Naval Ravikant's framework: young individuals are mercenary, mid-career individuals are missionaries, and later-life individuals become artists. Transcript: Shane Parrish Yeah, it's back to what do you care about? Elad Gil What's your utility function? What's driving you? And based on what's driving you, like the people that I know who have been very successful or driven solely by money end up miserable because they have money. And then, and then what? What do you do then? Well, it's not just never enough. It's just, what do you do? What fulfills you? You can already buy everything you could ever buy. Like what fulfills you? And you also see versions of this where you see people who make it, and then they don't know what to do with themselves. I think I mentioned this earlier. There's one guy I know who's incredibly successful, and he spends all his time buying domain names. And you're like, well, is that fulfilling? Or, you know, it's almost like, what's your meaning or purpose. I feel like the people who end up doing these other things have some broader meaning or purpose driver even very early on. And obviously people want to win and all the rest. There's this really good framework from Naval Ravikant. And so in the nineties, John Doerr was one of the giants. So the legends of investing used to ask founders, are you a missionary or mercenary? And of course, the question that you were expected to say is I'm a missionary, right? I'm doing it because it's the right work to do and all this. And Naval's framework is like, when you're young, of course, you're at least half, if not more, mercenary. You want to make it, you're hungry, you don't have any money, you need to survive, you're driven because of that in part. And then in the middle phase of your career or life, you're more of a missionary if you're not a zero-sum person, right? You suddenly can have a broader purpose, you can do other things, you can engage. And then he's like, late in your life, you're an artist, you do it for the love of the craft, right? ([Time 1:07:38](https://share.snipd.com/snip/7f69b1ae-f9d2-418f-81ec-103d780a357b)) - **Expanding Circles of Focus** - Elad Gil describes success as expanding circles of focus that change over time. - These circles include oneself, work, family, community, and society. Transcript: Elad Gil And I think if I look at the frameworks exist in certain Eastern philosophies or religions, it's almost like there are these expanding circles that change with time as you go through Your life, right? Early on, you're focused more on yourself and your schooling, and then you kind of add work, and then you add your family and community, and then you add society. And then eventually you become a sadhu, and you go off and you meditate in a cave in the forest or whatever and different people weigh those different circles differentially and a big Transition I'm making right now probably is I've been focused a lot on work and family and the thing I'm increasingly thinking about are like what are positive things I can do that are Shane Parrish More society level thank you, this was awesome thanks ([Time 1:36:56](https://share.snipd.com/snip/e1e8ba89-7da2-44ab-8579-67eb2e35dc20))