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October 8, 2024 • 52min
How Silicon Valley’s Most Prolific Investor Picks Unicorns | Elad Gil Interview
My First Million
In this episode, Sam Parr and Shaan Puri interview Elad Gil, a prolific angel investor who has invested in over 40 billion-dollar companies at early stages. Gil is known for being ahead of technology trends, investing early in areas like longevity and AI before they became mainstream. The hosts explore Gil's investment philosophy, his ideas for ambitious projects, and his approach to life and learning.
How Silicon Valley’s Most Prolific Investor Picks Unicorns | Elad Gil Interview
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Key Takeaways
- Market-first approach to investing: Elad Gil focuses more on the market and product-market fit than founders when evaluating early-stage investments. He looks for important technological shifts and market changes.
- Identifying key insights: Most successful businesses have 1-2 fundamental aspects that matter most. Everything else is often noise. Identifying these key insights is crucial for founders and investors.
- Longevity and aging research: This field is dramatically under-invested despite promising developments. Aging is likely a developmental program that can potentially be modified through drugs or gene therapies.
- Monumental projects: Gil believes society should invest in large-scale inspiring monuments and works of art again, as was common in past eras. This could encourage optimism, progress and inspire future generations.
- Intensive travel: Spending at least a month immersed in one place learning a new skill or joining a community can be a transformative experience. This allows for deeper cultural understanding than typical tourism.
Introduction
In this episode, Sam Parr and Shaan Puri interview Elad Gil, a prolific angel investor who has invested in over 40 billion-dollar companies at early stages. Gil is known for being ahead of technology trends, investing early in areas like longevity and AI before they became mainstream. The hosts explore Gil's investment philosophy, his ideas for ambitious projects, and his approach to life and learning.
Topics Discussed
Angel Investing Approach (1:53)
Elad Gil attributes his success as an angel investor to three main factors:
- Timing: He started investing when there were still many opportunities in SaaS and consumer tech
- Market-first approach: Gil focuses more on the market and product-market fit than on founders
- Following technology trends: He tries to identify important technological shifts early
Gil emphasizes the importance of the market, stating: "I've seen great people crushed by terrible markets, and I've seen reasonably mediocre people do really well."
Funding and Investment Strategy (3:00)
Gil initially invested his own money from his Google earnings, putting over 50% of his wealth into private companies. When he ran out of personal funds, he started raising small SPVs (Special Purpose Vehicles) which later morphed into funds. He now has a "tiramisu-like" structure of different investment vehicles.
Gil's approach differs from traditional VCs:
- He aims to be "builder-first" - continuing to build and work on technology projects
- His team works on side projects to stay engaged with new technologies
Identifying Key Business Insights (7:21)
Gil believes most successful businesses have 1-2 fundamental aspects that truly matter, with everything else being secondary. He gave examples:
- Stripe: Their key insight was focusing entirely on getting every developer to use their product initially, ignoring mid-market and enterprise
- Anduril: Gil identified 5 key things a next-gen defense tech company needed to do to become a prime contractor
Gil states: "90% of the time plus it boils down to one area of belief or maybe one thing that you just need to see happen in the business, to believe that everything else will fall into place."
Investing in Anduril (12:15)
Gil became interested in defense tech when major tech companies like Google started pulling away from the sector. He saw this as an opportunity for startups. Key points:
- He proactively sought out founders working on defense tech after Google shut down Project Maven
- Gil invested in Anduril's first round after meeting co-founder Trae Stephens
- He identified a market opportunity for higher-margin business models in defense contracting compared to traditional "cost-plus" models
Billion Dollar Companies with Small Teams (15:47)
The hosts discussed the potential for more billion-dollar companies run by very small teams, enabled by AI. Gil's thoughts:
- There are historical precedents like Minecraft (acquired by Microsoft for billions with a tiny team)
- Many top hedge funds and VC firms already operate with small core teams
- AI will enable some teams to shrink, but Gil believes the "two-person AI company" is largely overstated in the near term
- Certain business functions like customer success may see significant AI-driven efficiency gains and team reductions
Missionary vs Mercenary Approach (18:51)
The hosts noted that Gil seems less motivated by money than many investors. Gil referenced Naval Ravikant's framework on this topic:
- Early career: Partially mercenary to find and win opportunities
- Mid-career: More missionary, focused on greater good
- Late career: Become an artist, doing it for love of the craft
Gil's primary motivator is "technology as a lever in the world" rather than financial returns. He believes working on important problems with the best people often leads to good financial outcomes as a byproduct.
New School Concept Inspired by Ancient Greece (22:12)
Gil discussed his idea for a new chain of K-12 schools inspired by ancient Greek education:
- Focus on core skills like reasoning, logic, debate, mathematics, writing
- Emphasis on physical fitness and resilience
- Potentially create a consistent curriculum that could be applied across different regions
- Cited "Proof School" in San Francisco as an inspiring example of a math-focused curriculum
Gil is looking for an entrepreneur to spearhead this project, which he would be willing to sponsor.
Longevity and Anti-Aging Research (25:49)
Gil has a background in biology and has invested in longevity research. Key points:
- Aging research is dramatically under-invested compared to other medical fields
- There are competing theories of aging, including cumulative damage vs. a regulated developmental program
- Certain drugs and gene modifications have extended lifespans in animal models
- Regulatory frameworks have historically made it difficult to develop anti-aging drugs for humans
- Gil was an early investor in Bioage, a public company developing drugs targeting aging
Gil emphasized the potential societal impact: "Imagine if you had another 30 or 40 or 50 healthy years."
Monumental Projects (34:56)
Gil proposed the idea of building large-scale monuments and inspiring works of art, similar to how past societies created wonders like the Eiffel Tower. His thoughts:
- These projects could inspire optimism, progress, and encourage future generations
- He's looking for collaborators to help realize this vision in different locations
- The goal is to create works that make people "jazzed about the future and technology and optimism"
- Gil sees a lack of such projects as reflective of societal cynicism that emerged in the 1960s-70s
Gil asks: "Why aren't we doing it? Like, what happened? What happened to us societally, to stop doing all this really inspiring, amazing stuff?"
Intensive Travel Experiences (44:25)
Gil shared his approach to transformative travel experiences:
- Spend at least a month in one city
- Decide to learn something specific there (e.g. yoga, cooking, language)
- Join a local community related to your chosen activity
- This approach allows for deeper immersion than typical tourism
Gil emphasized the value of plugging into global communities (like jiu-jitsu) that offer instant connection and shared interests across cultures.
Conclusion
Elad Gil's wide-ranging interests and unconventional approach to investing and life offer valuable insights for entrepreneurs and investors alike. His focus on identifying key market shifts, pursuing ambitious projects for societal benefit, and continuous learning through immersive experiences showcase a unique philosophy that has led to remarkable success. Gil's emphasis on looking beyond immediate financial returns to focus on transformative technologies and ideas provides an inspiring model for those seeking to make a lasting impact.