The Twenty Minute VCKalshi CEO Tarek Mansour: How to Build Moats Against Incumbents; How to Hire Engineers | 20VC #931
EVERY SPOKEN WORD
115 min read · 23,388 words- 0:00 – 0:36
Intro
- HSHarry Stebbings
Three, two, one, zero. You have now arrived at your destination. Tarek, I've heard so many good things an- ... We met before through, obviously, Alex at Deel, but then I spoke to Alfred at Sequoia, I spoke to Shreyas, who I had on the show, I spoke to Ali Partovi. I feel like I know you incredibly well already. Thank you so much for joining me first, Tarek.
- TMTarek Mansour
Super excited. Uh, really excited for this. It's gonna be fun.
- HSHarry Stebbings
This will be a great conversation, so I want to start with a little bit on you. So tell me, how did you make your way into the world of startups first? And brilliant clicking of the fingers there. (laughs)
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
And then how
- 0:36 – 3:23
The founding of Kalshi
- HSHarry Stebbings
did you come to found Kalshi most recently?
- TMTarek Mansour
Uh, Louann and I were another type of, uh, people, uh, in school that were sort of like tinkering with a bunch of products and, and trying a bunch of different projects where like, you know, you always had this sort of like clique that is just like, "Oh, we're, we're like ... We wanna be entrepreneurs. We wanna be entrepreneurial, and we're trying a bunch of different things until you, you, you find something that, that maybe works and kind of go with it." So that wasn't us. We were pretty convinced that we were going into, um, uh, finance. You know, I was gonna be a trader. Uh, you know, my charter was gonna be at Citadel or kind of one of the quant funds. And, uh, I would say it's one of those examples where the dri- ... the idea drove us like out of our path to basically ... It, it just sort of like attracted us to itself, uh, to basically go and build it. Um, and so, I mean, I'll give you a little bit of background, but I ... You know, I- I'm, I'm originally from Lebanon, and I show up to MIT, um, and, you know, when I got to MIT, you know ... In Lebanon, I was like the math nerd. I was, you know, really, really smart, really good at, at school. When I get to MIT, I was like, "Holy shit." Like, I'm actually, at the very most, pretty average.
- HSHarry Stebbings
(laughs)
- TMTarek Mansour
Uh, and I got, like, super pumped. I was like, "Holy shit." Like, I, I have to, you know, outwork everyone. I need to beat everyone." And then the thing that became kind of, "Okay, like, what do I need to do next?" Is like, "I need to go to Goldman." Because that was the cool thing to do at the time. I go to Goldman and I, like ... You know, I loved it. I was just, you know, everything about it, uh, and ... Uh, not necessarily Goldman. I, I just like loved trading, and then I found myself at night, you know, everyone was kind of thinking about w- ... You know, how do we trade this, and how do we pitch this to the client? And, you know, I was in this kind of thing called equity exotics desk, where you, you know, you bundle exotics, uh, uh, and sell them to clients. Um, and I wasn't thinking about, "How do we trade 'em?" I was thinking, "Why on Earth are we even trading these things?" I mean, we, we did this things in 2016 where, um, uh, people wanted to hedge themselves against Brexit or get exposure to Brexit, and what we would do is, like, we would take a bunch of option swaps, put them in one bundle, and then, uh, sell it to investors, and sell it as a good proxy for what they're actually looking for and then sell it for 40% premiums.
- HSHarry Stebbings
Mm-hmm.
- TMTarek Mansour
I was like, "How is anyone even buying this?" And that question was seeded. It was like, "Why is there no exchange where you can just trade directly on events?" And then after that, it was just e- ... You know, it went all downhill, where every single interaction I had with, with a person, I would think about it. It's like, "Oh, people, you know, are making a forecast about the future. They're speculating," or they're like, you know, worried about a certain future event, and then it was similar with Louann until we were like, "Okay, we need to build this. I don't think we're gonna be able to live with ourselves if we don't build this." And so yeah, that's how we got into Kalshi and the startup world.
- HSHarry Stebbings
So I want, I want to break a couple-
- TMTarek Mansour
It's a great thing.
- HSHarry Stebbings
... of this down there. Uh, one, I love that as kind of an idea origination, but I want to break ... You mentioned kind of coming from Lebanon, being the maths nerd. Um, I think everyone ... And (laughs) this is such a deep first question, so, uh, grant it's not a first date. Um-
- TMTarek Mansour
Yeah.
- HSHarry Stebbings
... we're,
- 3:23 – 5:03
What are you running from and towards?
- HSHarry Stebbings
we're all a product of our history. What are you running from-
- TMTarek Mansour
I agree.
- HSHarry Stebbings
... and what are you running towards, Tarek?
- TMTarek Mansour
That's a great question, actually. I've never been asked that on a podcast. Um, um, yeah, I mean, we can get trans- ... I, I think, you know ... Personally, I think it just, like, tends to be very related to parents.
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
Um, generally. I mean, parents just have, like, a very big im- impact on you growing up. And I think, um, what I think, and, you know, this is through my, through my own introspection now, is when I ... I grew up without really m- ... My, my dad was really absent, and I think there was this kind of constant ... I'd say that created a constant need of, like, you know, where is he and what's going on and why is he not there. Um, and then two, my mom was just, like, an extremely ... And I, and I kind of attribute a lot of things to her. She was an extremely kind of strict ... Uh, she was a great parent, but she was very strict when it came to excellence.
- HSHarry Stebbings
Mm.
- TMTarek Mansour
It was truly one of those things where, like, you come back and you're excited about, you know, having achieved 98%, and she is just focused on the 2%. She was like, "Where is that 2%?" Um, and she ... I think she just, like, would push us to be at 120% of the way every single day. Like, the 120% was very consistent. Everything we did, it's like, you wanna go play soccer? You have to do it at 120%. You wanna s- go skiing? You need to do that. You need ... You know, at school, you need to be at 120%. I think that drive and that sort of need for 120%, that doesn't leave you. You don't-
- HSHarry Stebbings
Can, can I, can I ask-
- TMTarek Mansour
... you know, leave your parents' house and ... Yeah.
- HSHarry Stebbings
Your, your mother, I'm sure, is not a subscriber. (laughs) As much as I would like it to be as big a show as that.
- TMTarek Mansour
(laughs) I'll send it to her.
- HSHarry Stebbings
Do you think that's good parenting? And when you think about leadership today,
- 5:03 – 6:13
Leading and parenting
- HSHarry Stebbings
I often think actually about, you know, parenting as being kind of a core tenet of being a great leader and the right way to teach people. H- like, do you think it's good parenting, and do you take anything from that in terms of teaching your team?
- TMTarek Mansour
I, I think it's a great question, honestly. I mean, I ... Look, I, I don't know. I, I, I ... You know, I, I'm far from being a parent still, but I, I just think it depends on the circumstances. Like, I am very grateful for it. I am where I am largely because of it. Um, and, you know, otherwise I would be kind of another person that just, you know, goes ... That went to school in Lebanon and is, you know, maybe, you know, doing something like a lot of my other friends in Lebanon, nothing kind of that meaningful. Not that all my friends are ... You know, I have some friends that are doing amazing, amazing things. But, um, uh, and I, I think if you want to achieve outlier results, you need some sort of outlier ... I'm, I'm gonna call it imbalance. Uh, you know, uh, you need some sort of outlier, you know, unusual-... uh, thing that is part of your history. It could be your upbringing, it could be some, you know, s- a big shock that happened, something. And I- I don't- I'm not trying to make a, kind of, fully journalistic statement, but I think there's a strong correlation between those two
- 6:13 – 10:35
Work-life balance
- TMTarek Mansour
things.
- HSHarry Stebbings
I, I totally agree. I mean, listen, how, how old are you, Tarek?
- TMTarek Mansour
I'm 26.
- HSHarry Stebbings
Okay, you're 26. I'm 26 too. Okay. We've both done relatively exceptional things for our age, if we're gonna inflate our own egos enough. But I think we've both given up a huge amount of life that other 26-year-olds have not. And I think, going to your question on balance, I fundamentally do not believe you get to where we get to unless you give up and sacrifice. I'm sorry, you can't have both worlds, in my mind. I want to hear your thoughts on the balanced life. If one's gonna operate at this level, can one truly be balanced, and how do you think about this?
- TMTarek Mansour
I think that's a- that's a great, um, that's a great question. So, I think, um, the analogy I always like to give is, you know ... Have you played FIFA or do you play FIFA?
- HSHarry Stebbings
I used to play it a lot when I was, you know, younger, but it's been a while.
- TMTarek Mansour
I used to play a lot. I- I ... So, I used to play a lot, but one thing that was interesting in FIFA is, you know how when you're like- when you're picking your players and you're- you want to substitute them, they show you this kind of like, um, um ... I don't know what you call these. Like, a chart where you have different attributes like speed, dribbling, you know-
- HSHarry Stebbings
Sure.
- TMTarek Mansour
... uh, shooting. And then, you know, you have players that are balanced, you have players like Messi, which are, like, low on everything but dribbling. They're just, like, so outlier. Um, and I think founders tend to h- be- have one category where they're extremely spiked, and a lot of other categories where they're just, like, really abysmal. And, you know, founders that basically find that, you know, something to build or something to do that, you know, really heavily, um, uses that attribute where they spike end up actually in these outlier results. I- I think that's sort of the framework that I use. Um, and the reason I say this is because, you know, like, a startup is intrinsically something that the world does not want to exist. Sounds like a counterintuitive statement, but a- actually, to me, it's an intuitive statement. Like, the world does not want your startup to exist. It- it- it ... The- the default state, the defactor status for their startup to just not be. There's usually ... In any- in any kind of market you're ever gonna go, it's either there's a shit ton of competitors, thus, you know, the pressure is for your startup not to exist, or there's no one in that market, which means there's something wrong in that market. Um, right? It's like, you know, ............................ Um-
- HSHarry Stebbings
Okay.
- TMTarek Mansour
Um-
- HSHarry Stebbings
Well- well, I'll pose a different view, okay? Let- let's have a debate.
- TMTarek Mansour
Yeah.
- HSHarry Stebbings
Yours-
- TMTarek Mansour
I like it.
- HSHarry Stebbings
It's not- it's not that there's a ton of competitors, and it's not that there's- uh, that there's a problem in your market. It's just you foresaw something in your market that other people did not see. You saw an expansion of financial products that people wanted to bet on that other people did not see. Market creation through kind of mindset innovation. And that's ... I always ask, like, "What do you see that the world does not see?" And so I think yours sits in the middle.
- TMTarek Mansour
Mm-hmm.
- HSHarry Stebbings
No?
- TMTarek Mansour
I love that, but there's one thing. I do think it sits in the second category, because regulatory-wise it wasn't allowed.
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
Right? So, you know, then you're in a situation where, like, uh, you know, anyone with a reasonable ... Uh, you know, I- I think we were naive and honestly pretty nuts, you know, three, four year- like, three years ago. Anyone with a reasonable mind would be like, "Okay," you know? (laughs) "We're not gonna go and try ..." The- I mean, it's not allowed. The government does not allow this, and it's been decades of people trying it. I think we were persistent and stubborn enough to just make it happen, and- and I think this is where sort of that spike helped us achieve this sort of outlier outcome regulatory-wise, where even companies like CME, you know, who's been there since 1848 hasn't been able to achieve. Right? And, um, so I- I- I would still put it in category number two. And- and again, the point I'm trying to say is, like, you need to have, like, an outlier attribute that allows you to pierce through a specific market, uh, and pierce through kind of all these external pressures that want your startup to die.
- HSHarry Stebbings
So, do you believe in work/life balance? And for those today-
- TMTarek Mansour
I don't.
- HSHarry Stebbings
... because?
- TMTarek Mansour
I- I ... Yeah, I mean, it ... The law of equal exchange. (laughs) It's just, like, you know, you're- you're, you know, y- y- ... You know, if you wanna achieve something outlier, you're gonna have to work. Like, a variety of different things. I- you know, I think there's, like, a lot of the work smart-type thing. I mean, I think, sure, y- you should work smart, but that's conditioned on you working hard first. Like (laughs) y- you don't- you don't just show up and start working smart. You need to work very hard first, and then you can figure out how to optimize maybe your work day and work smarter. Um, but, um, you just need to work very hard to achieve outlier results. I mean, I- I just don't see any- any way around it
- 10:35 – 14:20
How has your style of work changed?
- TMTarek Mansour
............................
- HSHarry Stebbings
Have you changed how-
- TMTarek Mansour
you know?
- HSHarry Stebbings
Have you changed how you work over the years? What I mean by that is, like, you know, now I actually take very few calls. I hate calls, (laughs) um, and I try and do everything by email. I- I d- actually, you know, have teams that obviously help me with email now as well. But how I actually work has changed a lot. Has your style of work changed?
- TMTarek Mansour
Yeah, I think so. I mean, I- I think, um, you know, when I first started Kal She, it was fully brute force. It was just outright, you know, there's no- no process, no system, nothing. And same- same with my co-founder, Luana. It was just 100% brute force, where it's like, "Oh, we need to do this? We're gonna pull three all-nighters," and we'd do it. And then we'd just, like, constantly brute force, brute force, brute force. I- it got to the point where, like, you know, physically (laughs) ... You know, it was- it was really taxing, and I- I got to that point where it's become very, very, very tiring. And I would still do that now if it's- if I'm convinced that it's the right thing, but now as I'm kind of starting to see, okay, like, the company has grown, the company has matured. Um, I think now, I think my role, like, e- even though, you know, it's gonna be the cliche thing where you need to delegate a little bit more, you need to do a variety of different things. But, like, there are just so many things to do in a day, like, there's so many things to do that if you're just brute force do it, it just does not become the optimal solution. I do think it was the optimal solution when you're- when you're, you know, when you're first starting a company, but right now it's like if you don't actually pause and I- you know, I'll- I'll give a, you know ... First step, which is, like-... first you can just, like, throw yourself into work and then do it. Now, at the very least, I pause, and I prioritized before. And if you don't do that prioritization thing, you know, the brute force thing is- is a greedy algorithm. You're just taking whatever comes before you and then you- you solve it. I think pausing and prioritizing is pretty important. So I think that's one thing that I... yeah.
- HSHarry Stebbings
Can I interrupt you and say-
- TMTarek Mansour
Yeah.
- HSHarry Stebbings
... at that moment of prioritize, how do you determine what your next step is? Is it, "We will lose $10,000 if we do this," is it, "We'll lose two weeks of engineering"? How do you determine what dictates your next step?
- TMTarek Mansour
That's a great question. Um, I don't have the unifying key yet. I don't want to overstate it. Uh, you know, I- I love Elon's, which is like, you know, "Does this get- get us to Mars faster?" And I think that's really cool. Um, but- but I think broadly speaking, you know, if- if I were to kind of distill it into, um, into one or two things, um, it is usually around, um, expanding the category somehow, which is still kind of the same thinking as what we had initially when we started the company, which is like, okay, we have this ecosystem that's events. And the way I view the events ecosystem is, you know, you have stocks, right? You have, you know, futures, like grain futures, then it w- became metal, metal and oil futures, like tangible commodities, then you've got intangible, like interest rate swaps, which is a $512 market now. And then you have events, which is this idea of commoditizing anything. I just constantly... my mind is always going into, like, the ecosystem. It's not number of users, it's not revenue, it's not financials. It's this next step basically helping us bring more people into the ecosystem or expand the ecosystem, bring in a new market, bring in something else. And I just feel... and the reason I think about the ecosystem, not the company, at Scalshy is because right now we're the only ones. I mean, you know, we basically
- NANarrator
(techno music)
- TMTarek Mansour
... there's this regulatory thing and we have pretty strong regulatory moats. But I just want this as... I'm very focused on this asset class becoming as big as crypto and then stocks and something else over time. And that's really kind of the framework. It's like, am I expanding the asset class? If I'm expanding the asset class, everything will trickle down afterwards.
- HSHarry Stebbings
I totally agree with you. You mentioned the regulatory moats that you have and also kind of the, uh, kind of crazy nature of going after them. Uh, some would say it's naive, um, when you started, and naivety is often posited as a superpower. I'm intrigued. Do you think of
- 14:20 – 16:10
Is naivety a superpower?
- HSHarry Stebbings
naivety today as a superpower or do you actually think of experience as incredibly helpful and, uh, poignant?
- TMTarek Mansour
It's- it's a very interesting story. You know, I mean, like, sometimes being naive can- just leads you to disasters and it does often. There's just a kind of a healthy mix. I remember I had a conversation with, um, with Justin Mateen, uh, the- the founder of Tinder. When he first, you know, we- we, um... so I- I, you know, he came in late to our seed round and then, you know, we had, like, I think a five-minute conversation. He said, "I want to invest. I want to do the whole round." I was like, "Okay, you can't do the whole round. You can do maybe, you know, we'll see how much..." He's like, "I want as much as I can. I really want to do it." Then we did it and then, like, I think a month later, I just called him and was like, you know, "Justin, like, you talked to me for five minutes. I think you barely understood the business. And- and, uh, what was that?" And then he basically looked at me... you know, he was- he was very clear. And I think, by the way, Justin has an incredible, incredible early stage track record. I don't- I don't know if you knew that, but it was just phenomenal. He just, you know... so he said, like, there's two things that were there. It's like, "You're really smart. Like, you- you- you know what you're talking about. You're smart." There's like that precondition that you- you're smart, you're gonna figure something out, and then you're extremely naïve. Um, and he says that combo is usually, like, very strong. Y- you know, if you're naïve and you're not- you don't really know what you're talking about, then it's bad. Uh, if you're very smart and- and you're naïve, the naivete is not coming from, like, a lack of understanding or lack from- of deep thinking, it's coming from a lack of experience, right? And those two types of naivetes are different. Like, lack of understanding and lack of deep thinking, that's bad. Lack of experience tends to be very good because experience, what it does is, like, you can learn it. If you have high slopes you can learn experience, but you're also not carrying all the baggage and sadness and difficulties of life or any industry-
- HSHarry Stebbings
(laughs)
- TMTarek Mansour
... if you're in startups. But, yeah.
- HSHarry Stebbings
Carrying the baggage of life. (laughs) Um,
- 16:10 – 18:19
How do you hire?
- HSHarry Stebbings
I- I- I totally agree with you. Does that impact how you hire? Like, do you look for these high slope, high gradient, like, learning machines, but who are very young, or- or do you actually look to complement, no offense, your lack of experience with 45-year-old logoed execs?
- TMTarek Mansour
I think regulatory wise definitely the latter.
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
And, you know, I'll tell you from the b- you know, the first person in the company was Jeff Bandman, uh, who's- who's actually pretty publicized now, which is- which was really cool. I- I love that. But Jeff, you know, is the only lawyer that basically took up our- our kind of, like, case at the time, and he was ex-CTFTC. He knew everyone. He kind of knows the ins and outs. He knows kind of how it works. And I think that complement of us with this ridiculous drive and Jeff's wisdom, um, and experience and knowledge of the space kind of ends up creating a very strong combo. Um, now, I- I have to say, we tend to try to focus on people with a lot of experience and wisdom that still... I mean, I- I don't mean... I really mean this in a good way, that still have a little bit of, like, I call it, like, the childish fascination aspect. And- and- and there's a lot of those people. There's a lot of people that, like, you know, feel like they've got it figured out, and now I have my wisdom and- and experience, and then other people, you know, they could be, you know... at the end of it, they could have retired already, but they constantly have this sort of childish fascination with new things, like with, "Oh, what- what is this?" Or, "What is this, like, you know, crypto thing," or, "What is this?" Like, and I think those types of people are, like... tend to be extremely good people to have in an organization. Uh-
- HSHarry Stebbings
Yeah. The las- the lesson that I have is, I- I like people who need to make it happen. There are people who want to make it happen and they want to see Kalshi succeed, and then there are others who fucking need to make it happen. And the ones that need to make it happen do the three all-nighters in a row (laughs) and get it done, and the ones that want to are motivated on Monday and tired on Friday.And that's a big lesson that I learned. When I was hiring for my fund, I could hire galactico GPs, or like fucking hustlers who may have more flaws, but a different kind of mindset around needing and wanting. So, uh,
- 18:19 – 19:48
Terrible hiring mistakes?
- HSHarry Stebbings
I, it's just something I learned. Man, have, have you made any terrible hiring mistakes? I've made many. What, what are your big hiring mistakes?
- TMTarek Mansour
Yeah, I mean if I said no, I'd be lying, so...
- HSHarry Stebbings
(laughs)
- TMTarek Mansour
You know, um, no, I think, I think s- the, the ones that tend to be difficult are the ones where I basically over-index, and especially when I, we first started on... You know, I always, I was, uh, I'm a, you know, one, I've always been very, um, big, um, admirer of raw intellect. You know, at MIT I would really admire people that just, you know, can come and crank a piece of code at, you know, in normal magnitude less time than anyone else. And I think we over-indexed on this o- a little bit earlier on. I mean, I think it was really about like, "Okay, where are the smartest people who can get into the company?" And I think we would put aside a little bit of the cultural aspects and, um, and, you know, w- whether this is, you know, this person's adding positively to the culture, whether this person can rally troops, whether this person... You know, a l- a variety of kind of behavior. I think, I think it sounds cliche, but I think as, as young founders, we definitely over-indexed on that, and I think that led to the worst, you know, I think the, the biggest sort of hiring mistakes. The one that tends to be particularly painful is self-awareness, I would say. Um, you know, I think s- self, like people who are not self-aware tend to be very difficult to manage, t- very difficult to talk to, even kind of like the exit tends to be painful as well, kind of the whole thing tends to be. And so those are the ones that really kind of thinking back I was like, "Okay, this, this was a big hiring mistake."
- HSHarry Stebbings
Can I ask-
- TMTarek Mansour
When a,
- 19:48 – 21:25
How long do you give someone before letting them go?
- TMTarek Mansour
when a, when a person-
- HSHarry Stebbings
How long do you give people? This is another thing. I've always waited too long to let someone go, even when I know that it's not gonna work. How long do you give people, and how do you know when to call it?
- TMTarek Mansour
Yeah, I mean, I think a lot of the feedback I r- receive, and that's something I'm, I'm, I'm working on, is I think I take too long. Um, and y- you always have a gut as a founder. Like you, you, you have a gut and you, you know, start constraining, and then you, it ta- it takes too... I think it takes too long. I think o- er, I'm, it's something I'm working on. I think being able to do it better, it's, it's also more fair to them, more fair to the company, more fair to everyone. Uh, and the reason I, I just think is, you know, it's always tough. I mean, I, you know, it's just one of those things that everyone hates doing. Um, and, you know, you, you carry them with you. I don't know if the... I definitely carry, carry mine with me.
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
It's like, you know, I, I always check in with everyone, and, you know, you always carry them with you, so it's, it's a little bit one of those that, you know. I, I, I take blame first essentially for these types of situations. It's like-
- HSHarry Stebbings
So I am-
- TMTarek Mansour
... always, "Wha- what, what did I do wrong?" And, you know, it's there.
- HSHarry Stebbings
What did you do wrong? You want the blame first?
- TMTarek Mansour
I think so, always, because, you know, it's like, we're not saying what did you, but like, "What can I do better?" It's, it's really a bette- a, a better question, which is like next time in the interview process, like what can we change and what did we kind of misflag and how it was left back, and two, in terms of like, you know, management, did we make your expectations clear enough, et cetera. Especially when it, it, there's a kind of disagreement when it happens. You know, if everyone's aligned, it's like, you know, okay, that's fine. You know, people kind of understood the, the reasoning. If people didn't understand the reasoning, then inevitably we did something wrong, right?
- HSHarry Stebbings
I, I, I totally get you. Can I ask you, you know, you've mentioned kind of mistakes in hiring and, you know, maybe raw intellect, but lack of experience.
- 21:25 – 24:24
Biggest insecurity in leadership
- HSHarry Stebbings
When you think about like insecurities in leadership, what do you think your biggest insecurities in leadership are today?
- TMTarek Mansour
So, you know, just to make sure we're, we're kind of agreed on definition here, it's like we, we're talking about something that is not necessarily true, but I'm worried about?
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
Because we- which is what u- usually insecurity tends to be. Um, um...
- HSHarry Stebbings
So one of my insecurities is that maybe LPs would treat me younger because of my age. And I often ask, would they treat Alfred Lin like this? Would they treat Lee Fixel like this? And the answer is actually a reflection on myself, going back to the blame yourself. The truth is, I think often young people like us ask for permission, where Alfred Lin or Lee Fixel will say, "LP, I'm doing this. I would like your support," whereas we ask for permission. Do you see that? Yeah, so I'm kind of reflecting on myself, but the insecurity for me is the question of, "Oh, do they? Oh, am I put in that position?" And that kind of questioning of myself in that way.
- TMTarek Mansour
Yeah, I, I, I'll talk about one. I mean, I, I think that tends to be true. I, I, I think probably to, for example, for, for someone as, as well, so I think as a leader, you know, there's something at the company. I always, um, worry about like, I'm more respected than liked, which oftentimes a lot, if you ask a lot of like founders, they say it's, uh, it's, it's great, you know. A lot of people prefer to be respected over liked. But I would say that's an insecurity of mine, so I, I sometimes think like, "Okay, maybe, like it would be nice to be more liked." I think for example, like the balance between Juan and I, like I, you know, Juan is more liked than the organization, I would say. Um, and so-
- HSHarry Stebbings
Why, why, why-
- TMTarek Mansour
... that's something that I think about.
- HSHarry Stebbings
Why do you think that is?
- TMTarek Mansour
I think I tend to be harsh sometimes, and I, I am a little bit like, sometimes de- like described a little bit like as hyper-rational, just like everything kind of, um, and, um, uh-
- HSHarry Stebbings
Do you want to, do you want to change-
- TMTarek Mansour
... you know, I can be quite harsh and intense.
- HSHarry Stebbings
Do you want to change that? Do you want to have more softness? In-
- TMTarek Mansour
I, I, I, I think I'm working on that. I mean, I think it's something I'm working on. Um, you know, and, and kind of working the balance. I don't want to reduce my intensity. That's not something I want to do. Uh, but at the same time I, you know, I think there's some things that can be mitigated and easily managed by like becoming softer or becoming kind of more intentional about communication or communicating things, and I think that's a positive thing.
- HSHarry Stebbings
Do you struggle with your intensity in your personal life? Like, my girlfriend now says like, "It's exhausting being with you." Friday night, you're like intensely talking about hyperinflation or like whatever you're gonna talk about-
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
... and I'm just like fucking tired and bored. Like, it's intense all the time. Do you have trouble with that? (laughs) I mean, I, I love it.
- TMTarek Mansour
I m- I'm the... I definitely, I definitely relate to this. Yes, yes, uh, yeah.
- HSHarry Stebbings
But do you want-
- TMTarek Mansour
It's just hard to turn it off.
- HSHarry Stebbings
But, but yeah-
- TMTarek Mansour
It's hard to turn it off.
- HSHarry Stebbings
... and do you even want to? You're like, because it makes you what you are.
- TMTarek Mansour
I don't think I really want to. I mean, I don't, you know... I- I, you know, I don't, I don't... I mean, sometimes I'm like, "Maybe, maybe I should be just, like, a little, mm, more chill." I mean... But, uh, I am intense. You know, if I want, like... So, like, the description is always intense, intense, uh, so... (laughs)
- HSHarry Stebbings
Speaking of that intensity-
- 24:24 – 28:15
How are you so good at hiring engineers?
- HSHarry Stebbings
- TMTarek Mansour
Yeah. (laughs)
- HSHarry Stebbings
A- Ali Partovi told me it was particularly that intensity that made you so good at hiring engineers. If we think about building that team of engineers that you have done so well, what do you think makes you so good at hiring engineers, and where do you think most founders make mistakes?
- TMTarek Mansour
I- I would credit a lot of it to the vision more so than myself, to be honest. Um, I just think we're building something pretty cool. Like, I think we're building something pretty awesome. Like, if you think, you know, it's like a ca- new category. It is one of those really, uh, you know, long one-shot ideas. It's a mix of finance and tech. You, you see a lot of really smart people, they struggle with that balance between, "Do I want to do finance?" Which is really cool, and there's a lot of interesting problems to solve, or, "Do I wanna go build something?" Which is also really cool, because I'm building something real, concrete, in the world. And Kalshi is the perfect combo of both, where you can do both. We're coming to everyone saying, "How about you do both? You don't need to go to Jane Street, you don't need to go to Facebook. How about you..." Or Facebook is bad, but, uh, to a tech startup like B2B SaaS company, "How about you merge the two? Here's Kalshi." Um, and I think that tends to be really attractive as a value prop for an engineer that wants to solve really hard problems and build something meaningful. Um, and then two, I think it just, like, compounds. I mean, you know, I, um, um, I- I put a lot of time early on in, like, creating an interview process, um, that is actually interesting, that, that people enjoy, kind of, going through. And I think that helped to create a little bit of variety around campuses because, like, "Oh, this question at Kalshi is really fun, and how do you solve it?" And, "Can you solve it?" And, and things like that. And I think that kind of trickles down and compounds. And then you, when you... Once you have a really, like, an amazing engineering team of really smart people, like, that also attracts more, and, you know, you get sort of the compounding effects.
- HSHarry Stebbings
Pause. W- how, how do you structure that interview process, and how do you make it fun and different? Can we double-click on that one?
- TMTarek Mansour
Yeah, I mean, uh, I think the, the, you know, obviously change over time, but, um, you know, we, we, we try to limit the kind of algorithm interviews and all of that. We don't do many of those. Uh, we do everything... It's either, one, it is something that we're actually tackling today in the exchange. And we put a lot of time to, "Okay, how can we scope it out so that, you know, they are go- they go through in the hour that they're talking to us a similar problem that we've gone through a month ago, or today, or something like that? And, like, let's collaborate on it." So they have very direct exposure to kind of what's going on. And I think that's just exciting. Like, it gives them a little bit of inside sco- like, inside view on, on what's going on, uh, inside look, et cetera. And then the second type is more... I don't know. I love these. I know a lot of people love these. But, like, kind of just, like, mathematically difficult, uh, interesting problems. Uh, you know, the, the question that we ask a lot is, um... And, you know, I- I don't know, maybe we're giving some trade secrets here, but, uh, we, we asked the, uh, question about... I guess I don't wanna give a- uh, give away too much, but basically it has to do with an elephant, and it has to do with the mathematical constant, pi. And the person has to relate these two somehow. Uh, it's a pretty tough mathematical problem, but it, it is a pretty elegant solution. And the whole thing, it's like, you know, start with an elephant, you end up with pie, and how, how is that even possible?
- HSHarry Stebbings
Do you know what I learn about... Do you know what I learn about giving away secrets, is that actually e- even when you give them away, no one will pick them up. (laughs)
- TMTarek Mansour
That's true. I, I... Lo- look, I don't believe in startup secrets, like, "Oh, I wanna keep my idea a secret." I- I never believed in that. Interview questions wise, yeah, I'm just trying not to piss off our engineers because (laughs) if I say it here-
- HSHarry Stebbings
Oh, good.
- TMTarek Mansour
... everyone who's applying is gonna prepare for it-
- HSHarry Stebbings
I, I-
- TMTarek Mansour
... before anyone comes.
- HSHarry Stebbings
I, I, I'm not, I'm not pushing you in any way. I- I-
- TMTarek Mansour
Yeah.
- HSHarry Stebbings
... just released a show which is like 10 secrets to building a media company. And the reason I felt so confident doing it was 'cause I know that people won't do it. (laughs)
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
And so it's totally fine. Um, you mentioned kind of, you know, choosing working at Kalshi over a B2B, you know, software company. Um, when we spoke before, you said B2B is a Ponzi scheme.
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
Um, uh, as generally an enterprise investor,
- 28:15 – 31:22
Why is B2B SaaS is a ponzi scheme
- HSHarry Stebbings
my ears were pricked by this one. Um, why, why do you think that? And why is B2B SaaS a, a massive Ponzi scheme?
- TMTarek Mansour
To be clear, I'm not saying, you know, I'm, I, I, I wanna be very clear. (laughs) I think there's a lot of amazing B2B SaaS companies. You know, as we all know, they built amazingly interesting products. Um, I think, um, and, you know, all of them are very useful to, to the world. Uh, I think... I'll give... uh, I'll kind of describe a little bit kind of how, how, how I view the ecosystem. I think there's a lot that share. Uh, one of the things I like... S- SVF also tweeted about this, I think, recently. So, the idea is like, one, I think there's going to be a lot of pain for B2B SaaS companies that are not solving a real need. They're solving something that is good to have. And I think that's the first thing that a lot of companies are gonna cut. Um, and I think that's gonna be really difficult. But, you know, at a high level, let's assume the whole ecosystem is two B2B SaaS companies and one VC, you know, with a bunch of LPs. The VC basically, you know, gives, you know, does a million dollar round for each, tells them to spend the million dollars around selling to others very quickly. So, they both sell to each other. They generate revenue. Because of that revenue, that same VC basically injects more money into them and tells them to repeat. "So, sell even more with the... you know, grow even harder with all the money. So, spend all that money real quickly, grow your revenue even faster. Revenue's still growing. Okay, now we're doing a series B, we'll do a series C, we'll do a series D." And basically, like, these companies fundamentally, it's a circle of companies that are selling to each other pretty massively. Obviously, there's not two companies, there's thousands of companies with the same source, same pool of money coming from the top, which is essentially the ultimate LPs, um, at the end. And so you basically got into a cycle where, like, growth has been fueled by injection of capital pretty consistently until, you know, you get the B, the C, the D, E, F, and then someone is holding the bag. The ones that succeed is basically the ones that go all the way to IPO, where, like, they dump it on retail investors, and retail investors are holding the bag. The ones that don't are the ones, you know, that basically do a series...... E, F, and then, you know, that investor is the one that is left holding the bag when the tide shifts. Um-
- HSHarry Stebbings
But do you not, do you not, do you not believe in the, like, the explosion of market size? And what I mean by that is, you know, I am in SMB, um, CRM providers that sell to plumbers and sell to cleaning companies. And they're not in the circular economy of LP inflated ecosystems. They are in the, you know, national economy of labor and labor productivity. And those are the winners, in my mind. When you have Dallas Ford Motor Company as your customer, that's a win.
- TMTarek Mansour
I totally agree. I mean, you know, totally agree on that, on that, on that point. I mean, i- i- and that's people are solving a real need. Ford is not gonna s- buy it just because, you know, they're gonna buy it. But within the ecosystem, which is what a lot of the companies that we've seen get built in, in the f- last decade, I would say, uh, which are, like, very kind of startup heavy, like, let's sell to each other, and everyone's selling to each other, you know. Obviously, there's an explosion, but that's all kind of very VC-fueled. Uh, it's not too dissimilar from crypto, you know. There's a lot of fuel in, in crypto that went in, and there was, like, a lot of speculation. That doesn't mean that crypto is not... and a big chunk of crypto is not very meaningful, it's just the ecosystem is very hyper, over-inflated through a mechanism that is
- 31:22 – 33:55
What would you like to change about venture?
- TMTarek Mansour
not too dissimilar to Ponzi schemes.
- HSHarry Stebbings
What would you like to change about venture? You, you know, you come from a background in finance. You g- r- obviously not patron, but you get it. Like, maybe other founders don't give them the background in finance, but you also have the founder hat. Where are you like, "This is broken"? So I would say LP incentives.
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
LPs get salary and bonuses the larger the institution they're at. They are naturally incented for job protection. Give money to massive mega firm that will do 1.8 X, rather than give money to Tarek and Alex at Deel and give them 20 million of a 50 million seed fund 'cause they're gonna see everything of the next generation. That's risky. You know, we could lose our jobs if we do that one. But let's give it to name your massive mega firm, even though the upside is way less, 'cause there's no incentive for them to. That's like one area I think is broken.
- TMTarek Mansour
That is interesting. I probably agree with you. I, I think, uh, I don't know if I have kind of unique insight into this. I, I haven't put much thought into it. Um, it is interesting-
- HSHarry Stebbings
The other way that I could- the other way that I could ask is, Tarek, like, help me be a better investor. What could I do to be the best investor for you?
- TMTarek Mansour
You know, the way, the thing I would say, and, you know, we have A- Alfred and Ali Rogani on the board. Like, th- and they're both really great, and they're, the measure... And, and this is more of a founder, it's really not about us saying we're a VC ecosystem and all that. And I, this is gonna sound cliche a bit, but I, I truly feel like, you know, the framework is like, um, can this person be my first call when shit hits the fan? And I, I know everyone says that, but, like, it just doesn't tend to be true with everyone. I, I'm, we're lucky enough that I, I truly feel like I can call, and other people on my board, I can call Ali Partovi literally any time. And it can be something like something personal that's really shitty just happened and I'm feeling pretty down, and I can call Ali Partovi and he'll lift me up. And, and, and I think that type of... And, and how, w- you know, it just kind of boils down to trust and building a relationship that goes beyond like, "Hey, give me the quarterly financials." And, you know, why it is like slower than we expected and why it is faster than expected. Like, you know, it goes beyond that. It goes beyond like actually digging in with the founder, understanding your mo- like, the founder's motivations, and actually becoming friends with them, you know. Be- becoming, you know, understanding that you're like with them for the next, i- if, in the good case, which is what- the one you're hoping for, for the next few decades. They're kind of family at that point. (laughs) I mean, like, you know. And so, you need to treat them like family, um, and, you
- 33:55 – 38:37
Where do founders go wrong when fundraising?
- TMTarek Mansour
know, family's gonna have pros and cons.
- HSHarry Stebbings
Where do you think founders go wrong when fundraising? You're an angel investor today. Um, where do you think they go wrong? Like, I often think when they take angels, they try and squeeze angels down to their minimum, minimum check-
- TMTarek Mansour
Yeah, yeah, yeah.
- HSHarry Stebbings
... and get Tarek in for ten, and then it's not fucking worth your time to help at all, but everyone says yes still. Massive mistake. Give fewer people more.
- TMTarek Mansour
I, I see this a lot. I mean, I, I think, you know, probably two things. I mean, o- one, especially in this environment, raise too much too early, unnecessarily. So like, I see these seed rounds where like, oh, we can raise two but we can raise four. It's like, great. W- why would you raise four? (laughs) Just raise... And it's largely similar valuations. The valuation wouldn't scale proportionately. Obviously, as valuations scale, scale proportionately, raise four. But, um, uh, the valuation logic to me, same or scaling sublinearly. So they're, again, getting diluted extra, and it's like, okay, with two million, it's giving you that much runway, what is four million getting you more? Buying you more team members? That's just a bad thing, outright, before you're kind of figured out what you want to build, et cetera. And so consistently, I think, i- in the good case scenario, these companies regret having done more because of extra dilution. The second thing that ties to angels, I think there's just a lot of need and want to go to these super angels. Like, I got, you know, the f- you know, founder of 100 billion dollar company X on my cap table, and I got this... I mean, this is great, but these people, n- barely ever answer your calls, um, and they won't be on the ground with you. So, yeah, I just think more meaningful angels that are actually bought into the vision... I, I just feel like people don't focus on that as much.
- HSHarry Stebbings
So, let, let, let's do, uh, you know, when I was younger, I always used to just like say, "Yes, you're right." Um, I disagree with you on the raise size, and I disagree with you 'cause bluntly, I feel that fundamentally, it's very rarely the first V1 that actually hits. Uh, even when it does hit, the data can be slower than you think. Uh, most often post-launch, the numbers are never as good as you think. Um, and fundamentally, if you operate like you have two million but have four million, yes, you'll be more dilution heavy, which sucks from a founding perspective, but the leverage that you get going into future fundraises, and the mental luxury that you have in terms of knowing if it doesn't hit the first time, you can have a second go, I would always favor the second. I would always favor the four. As I said, it's worse for dilution, but I think for company build, it's better.
- TMTarek Mansour
I probably agree that if you can have the mindset of, uh, of a $2 million raise, even if you raise $4 million, that's the ideal outcome.
- HSHarry Stebbings
Yeah.
- TMTarek Mansour
So I definitely agree that it's the best of both worlds. I do think that it is an extremely difficult thing to do in practice. Uh, the gun to a founder's head thing is actually, I think, a pretty understated, uh, force. Um-
- HSHarry Stebbings
Talk, talk, talk to me about that. I've never understood this.
- TMTarek Mansour
Uh, you know, when you... Companies, and you've seen this, like, like, when they go... And I love this from Sequoia, the crucible moment, which is, like, when they go through a crucible moment, which is, like, you need to act and you need to do things the right way or you might die, those are the moments where oftentimes when you go back to stories about how companies were built and how their legacies were built, are like, those are times when people went into their A game, and they've just, like, you know, fueled the business to greater heights. And I think the issue with raising more is it's really hard to create this false sense of urgency without it being real. And I think, you know, with two to four, what ends up happening on average, on average, people f- hire more. People get a little bit more comfortable. They feel like they have more time. When actually, two to four, you should hire the same team. The business, business is still the same. You have more money, but the business is still the same, you should hire the same team, um, and you still have the same amount of time. Your biggest problem, I mean, sure, maybe might be runway, but, like, your biggest problem is basically, again, figuring out what you want to build, and you should do that as fast as humanly possible, no matter what. So the more constraints you ba- basically put on yourself, the more you can put in... yourself in a situation where you can actually, like, be in those crucible moments. And I'll give you example, like, Airbnb in 2020 went through a crucible moment when, you know, COVID basically slashed their rev... I mean, literally slashed their revenue to nada. Um, and they came out of this a significantly more efficient company with a bigger TAM. I mean, just, like, ripping through kind of, like, uh, that, that moment, and, you know, it was definitely cruel. I mean, they had to fire, I think... I forgot, but I think it was, like, 25% of their team, and, um, they, you know, they had to do a bunch of restructuring, cut a bunch of business lines that were kind of working but not really working. It's like, you know, they got... suddenly imposed a bunch of constraints, and they're like, "If we don't figure this out right now, we may not be the company that we want to be."
- 38:37 – 41:37
How much money have you raised?
- TMTarek Mansour
Um, and look at Airbnb.
- HSHarry Stebbings
Can I... Can I be direct, Tariq? How much money have you raised?
- TMTarek Mansour
Yeah, for sure. Uh, we've raised 100 and... Got approximately 110.
- HSHarry Stebbings
Okay, 110. That's a lot of cash. (laughs) Um, how have you stayed mentally and financially lean and constrained with, bluntly, a lot of capital injection into the company in a relatively short amount of time?
- TMTarek Mansour
It's a great question. Um, we, um... So here's what I would say. Uh, Luan and I have a scarcity mentality. Like, we know, um, uh, like, it's really quite simple, which is don't even consider that we raised that much. It's just, you know... We, we... In our minds, we basically raised much less. We have, you know, like a certain roadmap for two years. We basically cap our burn very, very aggressively. Like, everyone around us says, "Oh, you're not going aggressively enough. You're not growing the team aggressively enough." And we're like, "No, no, no. This is how much... This is how much we're burning a month, and this is the number of s- side of the team." And I think we, we do have, like, a, I would say, pretty h- hard, disciplined around being, like, around burn and being frugal. And I, I, you know... And I, I think it comes a little bit from this kind of immigrant mindset where you're kind of always worried that shit-... things are gonna shift and, like, money is not gonna be there for long and all these different things. Um, so, you know, I don't know if this is kind of like a super amazing answer, but, uh, it's... I think it's working. Um, you know-
- HSHarry Stebbings
(laughs)
- TMTarek Mansour
And-
- HSHarry Stebbings
It could.
- TMTarek Mansour
It's, like, the only negative is basically mostly... Like, the only negative is you, you get more pressure from everyone around you, from the team, from investors. Like, "You have all this money. Why are you not spending more?" Like, you got that pressure of, like, you know, "You're being too cheap or too frugal." And it's like, "Fine. I'd rather be frugal and cheap than, you know, overspend."
- HSHarry Stebbings
Is that what you meant when you said gun to your head? And help me understand as a VC. Does that originate from us? Is this our fault?
- TMTarek Mansour
No, I think gun to the head is a good thing, and I, I don't, I don't... I mean, I... It could originate from VCs somehow, but I don't think that's the most... I don't know. I don't think that's the most powerful gun in some sense. I mean, I think the more powerful gun is, like, if you have one chip on your shoulder so that you have very high motivation, ambition to make this thing succeed. You need... As you said, you need to make this succeed. You don't want to make this succeed. Two, you have a circumstance that is putting... endangering number one, and endangering it imminently, so that it's pushing you to act with a very large sense of urgency pretty consistently, right? And, and I think those two together is basically a gun to your head. Now, you know, there, there are some founders that have it intrinsically. One example that I always think about is Travis from Uber.
- HSHarry Stebbings
Huh.
- TMTarek Mansour
I mean, that guy could raise $100 million. He would o-... Like, he's just wired in a way that he can... He has a sense of urgency. The gun is always to his head. He's, he's just like, "We need to move, we need to move, we need to move, we need to move." Like I, I... You know. And I think, uh, that's pretty inspiring. I admire, I mean, I admire how he built the company, um, through-
- HSHarry Stebbings
Thank you.
- TMTarek Mansour
... a variety of lenses. Other things, obviously,
- 41:37 – 44:25
Biggest learnings from the people you work with?
- TMTarek Mansour
but yeah.
- HSHarry Stebbings
Can I ask before we move into a quickfire, you worked with some incredible people, Alfred Lin, Henry Kravis, Chuck Schwab, um, and, and this was Ali Partovi, so credit to him for this, but he said... What's been your biggest one learning from working with each of them?
- TMTarek Mansour
That's very interesting. So probably pretty different. So Alfred is an outlier, like, he's just really good at pushing my thinking. Um, and I got to learn that over time, and, and I kind of really like that now. But, like, no matter what I go to Alfred with, even if it's the right decision, oftentimes it is the right decision, Alfred just basically pushes back. He's like, "Why?" You know, w- you know. He, he can even go all the way to say, "This does not make much sense." Even if he thinks it's the right decision but he... he's just... his, like, reasoning is not crisp, like super crisp and crystal clear yet-He's like, "Go back and c- you know, go and come back." And, and I really like that. It's constantly this exercise of, like, am I really, really, like, thinking about this extremely critically, um, and am I thinking about this decision, you know, a- a- as crystal clearly as I can? And I think over time that I- it feels like it's kind of, like, literally like a, you know, coaching, constant, like, coaching that I'm getting from Alfred that's pretty awesome. I've been really enjoying that. Um, I think, um, I've interacted more with, with, with, um, with Kravis than Schwab. Um, and, and, and they're actually very similar in a variety of respects. But I'll talk about Kravis real quick. He, um... He's just such a deep, long-term thinker and, like, you know, we're talking, like, long term for, like, decades, you know? He's not- he's not talking, like, next five years. He's talking, like, like next 30 years and how this can evolve in the next 30 years. And- and I really enjoy our conversations because I go back with a refreshed sense- sense of, like, long term, long term, long term, like... And- and- and when you think about it, like, now a lot of... Every time you go through very difficult hardship, I have, like, an easier time. Like, okay, how do... How- how- how would- how would Henry think about this? It's like, you know, zoom out pretty massively, and then imagine yourself five years into the future looking back at this and you're like, "Uh, this is just, like, a tiny blip and a tiny challenge. Oh, there was this tiny thing that we had to do at that time and it sucked," but you know. Um, and I always have that perspective when I'm going through these things.
- HSHarry Stebbings
It's true- My- my great mentor sh- told me to, like, extrapolate yourself out when things seem bad and ask yourself, "Will I remember this in 10 years time?" And 90% of the time, you won't remember losing your CMO. It's like, "Oh, who, who were they?" Sorry, I didn't mean it badly, but do you know what I mean?
- TMTarek Mansour
Yeah. Yeah, yeah, I know what you mean.
- HSHarry Stebbings
It's more like, "Oh, I remember that Head of Sales leaving." (laughs)
- TMTarek Mansour
Yeah.
- HSHarry Stebbings
If so, please seek counseling immediately. Um, I- I mean, man, I do wanna move into a quick fire. So I say a short statement and then you give me your immediate thoughts. Does that sound okay?
- TMTarek Mansour
That sounds great.
- HSHarry Stebbings
Okay. So I- I'm gonna be honest. I don't read. I- I don't have time to
- 44:25 – 44:45
What’s your favorite book and why?
- HSHarry Stebbings
read (laughs) , uh, fucking podcast. Um, what- what's your favorite book and why?
- TMTarek Mansour
Favorite book? I really like Never Split The Difference. I don't know if it's my favorite book. I mean, I like a lot of different books, but Never- Never Split The Difference is just quite good. I like it.
- HSHarry Stebbings
Too-
- TMTarek Mansour
It's by negotiation.
- HSHarry Stebbings
Yeah. No, I- I, um, I've got it. I haven't read it. Um, the joy is I get
- 44:45 – 45:20
Biggest strength and weakness
- HSHarry Stebbings
sent books, um, and they look really intellectual on my mantle. Uh, what's your biggest strength and what's your biggest weakness, Tarek?
- TMTarek Mansour
I think biggest strength is I can, like, get compulsively obsessed about anything that I... A- a next big challenge for the company that I need to solve, and I'll do whatever it takes to solve it. I just, you know, just dig into that wall no matter what. Um, biggest weakness, I tend to have a little bit more trouble with, um, or- organization across different threads. And I try to compliment myself with a team, but I- I'm not as good as, like, when it's, like, multiple different things and checking that trains are running on time, uh, which is a little bit
- 45:20 – 46:25
Hardest element of role with Kalshi today
- TMTarek Mansour
of an operation thing. I'm a little bit less... It's less natural to me.
- HSHarry Stebbings
What's the hardest element of your role with Kalshi today?
- TMTarek Mansour
Wow. So it's just so many things. But I- I would say (sighs) the constant balance between, uh, company building and product building is probably one of the hardest. That- that balance-
- HSHarry Stebbings
Which-
- TMTarek Mansour
... is really, really difficult. Um, because it's-
- HSHarry Stebbings
How do you think about split- splitting today?
- TMTarek Mansour
Um, you know, I don't have great answers, but you know, pr- definitely dynamically and it ebbs and flows over time. But, you know, I think doing product building and staying really close to customers and really understanding kind of what we need to do next and what we need to build next. And why is this... What- what are the kinds of customers' concerns? Staying very close to that is- is extremely crucial- crucial as a founder, so I want to do it as long as humanly possible. Um, but at the same time, like, starting to establish systems and processes and, you know, defining culture and communicating culture and values consistently across the org is also very, very, very important. You know, I- I honestly don't have a good answer to this. I think I- I still don't have good structure. I- I kind of
- 46:25 – 47:47
If you could be CEO of any other company
- TMTarek Mansour
dynamically and greedily try to allocate my time between the two. But I- but I think that's been a challenge.
- HSHarry Stebbings
If you could be CEO of any other company, what would it be and why?
- TMTarek Mansour
(laughs) Uh... Public, private, anything?
- HSHarry Stebbings
Anything maybe.
- TMTarek Mansour
I'd like to be a CEO of an airline. Uh, so heavily regulated. There's a lot of interesting things to be done there. Innovation is really hard because of how regulated it is. I just like these types of businesses where, like, you have to really deeply think about how you can innovate within a number of sets of constraints. And it's a, you know, pretty tough low margin business. Um, just seems pretty exciting.
- HSHarry Stebbings
Are you nuts? (laughs)
- TMTarek Mansour
Yeah, I am. Yeah.
- HSHarry Stebbings
That's... No, I- I love it, Tarek. I was just like, I would... That would be a nightmare. It's like that's the hardest strategy. Low margin, low MPS, shit regulatory service. Anyway, totally with you. Uh, tell me, what angel investor has been the most value add to you?
- TMTarek Mansour
Oh, I get... You know, everyone's been... I mean, you know, again, there's just been, like, you know, a lot of them. A lot of them have been absolutely phenomenal. I mean, you know, um, Ron Conway, just outlier, you know, incredible. Henry Kravis is super helpful, Justin Mateen. Um-
- HSHarry Stebbings
What- what... Can I ask? I- I've never worked with Ron. What makes Ron so good?
- 47:47 – 48:13
What angel investors have been most helpful?
- TMTarek Mansour
He just fights for you. He doesn't just hustle for... He- he fights for you. And I- I think that's rare. You know, he... He'll just, you know... And it's not just about the economic incentive and what the ownership is or- or, like, there's... He'll just fight for you. He wants your co-... He believes in the mission, he believes in the vision. He's like, "I'm gonna put myself on the front line and, you know, you're a portfolio company and I'm... You know, I'm gonna be in the arena." And, you know, I think, I think when you go into the arena, that's-
- 48:13 – 49:28
What do you wish you knew when you started?
- TMTarek Mansour
that's a different level. That's a different level of help.
- HSHarry Stebbings
I love that. What do you know now that you wish you'd known when you started Kalshi?
- TMTarek Mansour
Oh, dude. Uh-
- HSHarry Stebbings
A lot. (laughs)
- TMTarek Mansour
Uh... Well, there's some things that I- I say I wish I knew, but I think it was positive that I didn't. Um, like I could... You know, easily I say I would- I would... Wished I knew how difficult that whole regulatory, you know, the regulatory path. You know, because regulators are like great at their job. They're- they're doing it right. They're doing it cautiously. But, like, how difficult the industry is, you know, and how some of the bigger players can be monopolistic. I- I- I say I wish I knew, but, like, actually I'm happy that I didn't.... uh, because that pushed me to basically get to where I am. It's a good thing. I mean, but I really ... The, the one thing I would say is, like, most people that look amazing and have done amazing things and, you know, look they have it all figured out, authority figures, whether it's the President of the United States to, you know, the CEO of Tesla. I mean, I don't ... You know, to, to any kind of ... They don't have it as figured out as you think. You know, they stumbled upon a bunch of different things and, you know, they, they just have high ambition, high grit, but, like, they, they're, they're like you actually. They're like you. You know? It's, it's mostly th- they're very similar. They have their insecurities, they have all these ... And I wish I knew that earlier on. You know? It's like you trust the authority figures, but you realize that actually, you know, you can do anything with enough grit and enough intellect in this world. I
- 49:28 – 51:08
What would you like to change about the world of startups?
- TMTarek Mansour
think that's pretty cool.
- HSHarry Stebbings
I, I agree. I totally agree. Uh, tell me, what would you most like to change about the world of startups?
- TMTarek Mansour
I don't know. I mean, the, the ... I was discussing this with two of, two of my good friends. I don't know if you've ever met Benjamin Yu from ChildSpark and, and Diesel Feltz, um, uh, uh, who's in ... You know, who's also part of amazing- amazing investors. So, but, um, we were talking about this ... I don't know. There's this weird shift that's been in the last decade where you see ... I mean, before that you felt like very strong ... Like, you admired f- founders. Like, there was a very strong passion for what they were building. You know, when you think about, you know, obviously Sergey and Larry with Google or, you know, even Zuck with Facebook. They, they just were obsessed what they were building, et cetera. I just feel like the ecosystem has turned a bit too financial. A lot of founders just like, you know, very quickly, like, tr- trying to, like ... I, I don't know. I mean, I think you get my point, but like, uh, there's just, like, less passion towards what they're building. There's a lot of like, "Oh, let me raise a quick, like, a monstrous round really quickly and, you know, try to kind of, um, uh, exit very quickly." These types of ... I don't know. I just feel like there's less passion and less kind of commitment, um, toward building because the startup ecosystem has gone too mainstream. I think everyone, you know, now is founder and gets funded, et cetera. Whereas before, you really needed to want it to be part of this. Um, so maybe that, that's, you know, think bringing back the whole, like, check on, like, do you really want this? You know? This is a tough path. It's not a two-year-long path. So maybe that's ...
- HSHarry Stebbings
Listen, I, I agree, and it's what I'm ... You know, I, I think hopefully will change in the next few years, um, when tourists realize that it sucks not to be able to raise money and it sucks not to be able to fund companies and, you know, there is shit in this business. (laughs) Um, tell me,
- 51:08 – 52:02
Where do you see Kalshi in 5 years?
- HSHarry Stebbings
final one. Kalshi, five years time is 2027. We're back on the show. Where's Kalshi then?
- TMTarek Mansour
So I think we look a little bit like the New York Stock Exchange where, you know, you think about trading on events who come to Kalshi and whether you're trading it via your brokerage account that's integrated on Kalshi, you're trading it via API, and you're a fund that's basically providing liquidity or trading across Kalshi and other assets, or you're someone that's just coming straight up to our app, uh, and trading events all across the world. But I, I, I ... 2027, I think really about it, like, as event contracts becoming something that's as mainstream as crypto or stocks today. And people talk about it as if it's not a ... It's like a boring utility at that point. Not e- not new innovation, cool thing.
- HSHarry Stebbings
Tarek, I can't thank you enough for putting up with my prying questions.
- TMTarek Mansour
(laughs)
- HSHarry Stebbings
I know we went totally off schedule, but I loved it. You're a star and, uh, thank you so much for joining me today, my friend.
- TMTarek Mansour
Thanks for having me. This was awesome.
Episode duration: 52:02
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