Kalshi CEO Tarek Mansour on Raising $1BN, CNN and CNBC Deals & the Polymarket Feud

1. 0:00 – 0:56

   Intro

   1. TMTarek Mansour0:00

      Kind of what happened with Kalshi in the election was a bit of a ChatGPT moment for our industry.

   2. HSHarry Stebbings0:03

      Kalshi is one of the fastest-growing companies on the planet. In the last week, they announced a $1 billion raise at an $11 billion valuation. Dave, Tariq joins me for his only interview following these announcements.

   3. TMTarek Mansour0:14

      An industry truly becomes an industry when there's a rivalry. Without Polymarket, we wouldn't have pushed our marketing and pushed our product as hard.

   4. HSHarry Stebbings0:23

      Did you ever cross paths with SBF? And what did you learn from observing FDI since implosion? Ready to go? (instrumental music plays) Tariq, dude, it is so fucking good to have you on the show. I mean, holy cow, what a rampage Kalshi's been on, my friend. Thank you so much for coming back.

   5. TMTarek Mansour0:50

      Thanks for having me. Super excited.

   6. HSHarry Stebbings0:53

      Now, dude, I got to start on the main thing. A billion

2. 0:56 – 8:35

   Why Did Kalshi Need to Raise $1BN

   1. HSHarry Stebbings0:56

      dollars. Uh, the first thing I have to ask, why does Kalshi need a billion dollars?

   2. TMTarek Mansour1:02

      That's a good question. But what we've realized in the last, um, I would say six to nine months, given the sort of acceleration of what we've seen, um, is I think the opportunity ahe- ahead of us is may- maybe even bigger than we had all possibly imagined. There's a few symptoms of that. So, one, I don't know if you know this, Harry, but, um, Kalshi this year, um, is at- at this scale at least, you know, I think the fasted growing company in America outside of AI. I think Anthropic is growing faster, and I'm not sure about Metacore and Cursor, but we're, you know, growing at that sort of, uh, at that- that pace, at that rate. Um, and number two, what we're seeing, which is even more important, the- the qualitative, uh, thing that we're seeing is there's a- there's a real and rare shift in consumer behavior. You know, people are kind of turning from, like, passive watchers of events or news or- or sports or other things that they engage with in real life to active participants. You know? That- that natural behavior of wanting to predict the future or debating about something is turning into activity on Kalshi. That is rare. Like, when you see this shift in consumer behavior, I mean, you've seen it in Airbnb with the hosts and- and Uber with riders, when, you know, we're seeing a new class of people, in this case prediction market traders, becoming a thing, that's indicative of a very, very massive opportunity ahead of us. And, you know, when you have a massive opportunity ahead of you, you- you want to go big, you want to bet big, and so we're- we're really scaling up for that opportunity here.

   3. HSHarry Stebbings2:23

      Totally get you. What does a billion dollars get for you that you couldn't do without?

   4. TMTarek Mansour2:28

      I think one... So, okay, we are at a point right now where, so we're growing incredibly fast, um, we are also profitable right now, um, you know, and, um... So it's a good question. I think the next phase is how do we build a global brand? How do we build a brand that people know, they talk about, they associate with, um, and how we put the story of the company and the story of the brand out there? Um, and so there's a lot of marketing that's coming. Obviously scaling the team. So, we're still 100 people. And number two is, we're a financial market, we're a financial, uh, company, and so as the volumes increase, as liquidity increases, uh, y- you know, as a regulated f- like, we're a federally regulated comp- uh, financial exchange. It's a little bit like a bank or some of the kind of regulated clearing houses you hear about. You have re- reserve requirements, and added capital on the balance sheet, think of it a little bit as a safety cushion. S- things that adds sort of, um, uh, uh, it enables us to do things in- in- in, like faster. Like, more capital enables you to do things faster in financial services, and that's usually a good thing.

   5. HSHarry Stebbings3:27

      Dude, do you agree with the concept of king-making, that large, large amounts of money can anoint a winner in a category? Do you believe that that is a thing?

   6. TMTarek Mansour3:37

      At least, maybe I'll respond to it in terms of the Kalshi strategy. Like, I, at least for the Kalshi strategy, that's not how we think about it. Um, I- I- I- I'm, maybe- maybe I'll lean a little bit more on the other side, which is like a better product will trump any- any- any day. Like, and we've seen this a bit like with DoorDash and Uber Eats, right? Like, Uber Eats had, I mean, infinite capital to, compared to DoorDash, but Tony built a better product, and Tony won, right? And- and- and so, um, I- I don't feel too dogmatic, but maybe I'm a slight no on this one. What do you think?

   7. HSHarry Stebbings4:09

      I unwaveringly do. I think we're seeing it today where you're seeing VCs essentially choose a category and then just plow money in, knowing that if you build the right infrastructure, it massively increases your likelihood of success. If you have the right founders who are good resource allocators.

   8. TMTarek Mansour4:27

      Yeah, maybe with-

   9. HSHarry Stebbings4:28

      I'm not-

   10. TMTarek Mansour4:28

       Maybe with the if at the end, right? And- and, but- but the problem is the if is a bit conditional, right? Like, oftentimes a lot of money can create, like, inefficiency, and like, you know, uh, uh, companies start making a bunch of unforced errors when a lot of money comes in. But if that if is true, I think yeah, capital tends to be correlated with success if the company is- is- is a- is a- is- is an A+ execution company.

   11. HSHarry Stebbings4:48

       Dude, how much of Kalshi's activity is sports betting? And how do you respond to people who say, "Eh, it's just a sports betting platform?"

   12. TMTarek Mansour4:57

       It's pretty similar to what happened last year, actually. So, last year it was, you know, the question I was receiving is, how much of the activity is elections? And, you know, obviously a lot, right? Like, that was the big talk of the... Like, uh, and the way I would answer it is like, well, how much of the attention right now is on the election? Like, in terms of, like, what people were talking about in October 2024? And if you think about it, it's like, well, out of ten tweets I see on Twitter, 9.5 tweets were about the election, right? Like, (laughs) so maybe that will correlate with the volume on Kalshi. And it did, right? It was- it was exactly that. And you're seeing the same thing happen with sports. But, like, per unit of time, it really is about what is most on top of people's minds. So yes, Sunday, NFL Sunday is massive in America, and that's on top of people's minds. Um, but when there's a Fed decision, that's on top of people's minds, and that's where the trading volume is. When there's a Mamdani election, that's when the trading volume is. So the volumes will basically ebb and flow with whatever is in the news, whatever is trending on X, whatever is top of people's minds. Um, and I think it's a matter of time till basically, like, you know, we- we're seeing incredibly strong evidence or traction in the culture markets, for example.I actually think, like, what's happening with Taylor Swift, you know, movies and how successful they're going to be, anything around culture like that, that is massive unaddress- unaddressed TAM right now. And it's a matter of time till like, uh, you know, we scale the number of markets, we scale the liquidity, and I think those one day will be very big. So, sports is very big right now, but I don't think it's kind of like a... I think it's a moment in time.

   13. HSHarry Stebbings6:24

       It's funny, I spoke to mo- pretty much every one of your investors, by the way, before the show-

   14. TMTarek Mansour6:28

       Nice.

   15. HSHarry Stebbings6:28

       ... including Colin at Sandwich-

   16. TMTarek Mansour6:30

       Yeah.

   17. HSHarry Stebbings6:30

       ... uh, who then told me about investing back in 2019 because it was the biggest TAM he had ever seen in potential. And I, I thought that was an interesting and bold statement, which I completely agree with you when you look at the untapped element of movies to culture and everything in between. With that, you have people realize that untapped TAM and you see Robinhood come in with alternate products. How do you think about Robinhood's entry? I know Vlad pretty well. I'm always very impressed by their product suite. How do you internally think about that?

   18. TMTarek Mansour6:59

       I think that, um... Maybe let me answer that question generally and then specifically. So, in 2024 we won, uh, the fight against the government. We won that, that... We sued the government and then we won that fight in twen- in October 7th, 2024. And I think that has accelerated prediction markets. That has really spearheaded them into the mainstream. And, and that y- and this, and this has continued into this year. And you, when you see this type of s- like, I would say success, I think this kind of what happened with Kalshi in the election was a bit of a ChatGPT moment for our industry. And what, what, what, what happened with ChatGPT and OpenAI is like every- everybody flocked, right? Like, uh, you know, everyone was like, "Well, there's, there's a gold mine here. We're gonna go after it." And so that's happening in prediction market, and I always think of it as like, I think there's two markets. There's a, either small markets that not a lot of people will care about, or massive markets that a lot of people will care about as long as you live in a free, open, uh, market, in a free, open, you know, uh, uh, society. Uh, and obviously I'm running a free market, so I, I have to believe in competition, right? And so it's great, like, this competition that you're seeing from CME, from, you know, obviously DraftKings, FanDuel, from some of the offshore players, some of the startups, uh, some of the brokers, is, is a sign that I think the opportunity ahead is, is massive. It's a very big opportunity. On specifically Robinhood, I mean, incredible company, amazing execution. Um, um, I think Vlad has been able to sort of move into new products pretty suc- pretty successfully. And, you know, we... They've been incredible partner of ours, um, uh, uh, on the prediction market front. So, I think them kind of pushing for more innovation in the space I think is a very positive thing. You know, I think it's gonna make all of us get better, um, and we're very excited

3. 8:35 – 20:48

   Why is Kalshi vs Polymarket Such a Fierce Rivalry?

   1. TMTarek Mansour8:35

      about it.

   2. HSHarry Stebbings8:35

      I totally get you and I, I share that on Vlad, just such a good dude. He's so funny, dude. I had him on the show when the market cap was in the dumps, and fuck me, he wa- he was in the dumps. And I had him on the show when the market cap was riding high, and this man was, like, lighter than air. He was so happy, he was so positive. (laughs) I was like, "Whoever says that your happiness is not correlated to market cap lied." Um, uh, uh, why is the competition so intense with Polymarket? You know, the... We're great friends with Alex at Deel. The Deel-Rippling and you and Polymarket rem- go at similar in ferocity. Theirs probably even trump's you. But why is yours so intense?

   3. TMTarek Mansour9:15

      There's a little bit of spectacle around these things. You know how like I, I, when, when... I gotta ask this question and like I think a little bit about boxing. You know, I always wonder like, do these boxers actually hate each other or like are they doing it for the show, right? Like, do they go back and, you know, after they punch each other kind of in the, in the weighing event or whatever, do they go back, you know, b- back, you know, in the back room and they sort of like, you know, hang with each other, and, you know, I don't know, like, you know, d- dab each other and move on? I always wondered that, and probably there's some truth to that. I, I... And look, I think people like rivalries, and like they, you know, they, they, they sort of like scale them and amplify them and grow them, and, and, and, you know, it's more fun to watch a Kalshi/Polymarket than, you know, to not watch a Kalshi/Polymarket. (laughs) And, and-

   4. HSHarry Stebbings9:59

      I get you, but like Rippling hate Deel, and Deel hate Rippling.

   5. TMTarek Mansour10:03

      I don't know if there's that. I mean, look, we've, we've had our differences and we've had real conflicts there. There's no question about that, and I think both companies have made mistakes in the past. Maybe the... Fortunately, n- neither of us have maybe escalated to that level, to, to the Rippling/Deel level. But like, um, you know, we made a mistake last year with the, you know, the... We had a... You know, both of us have been sort of playing games against each other for years now because we're competitors, and there was one last year that sort of, um, you know, they promoted, and there's like a whole backstory to it. That was a mistake. Made it clear to the team, like, "Don't ever do this again."

   6. HSHarry Stebbings10:37

      Can I just say... What, what do you learn from... I, you know, I... Specifically, for example, when I left my old fund, you know, I was very quick in leaving and I really ne- l- no time for transition. I was quite thoughtless in my old partner, and I really regret that. I'm like, "I should have given more time, been more thoughtful and caring," and with the benefit of hindsight I, I would have done it differently. Benefits of age. When you reflect on the mistakes that you mentioned there, is there a takeaway for you?

   7. TMTarek Mansour11:05

      I think it's like... The way I think of it is like I think the... What I'm real- what I'm learning over time is that an industry truly becomes an industry when there's a rivalry, because that rivalry will push you, um, j- w- w- will push you to... Will push you beyond the l- like, the limits of what you thought you could get to. That's just how these rivalries work. Like Messi, Ronaldo, right? Like, uh, uh, they're both considered potentially the greatest of all time. Well, I think Messi's the greatest of all time, but we... That's a debate for another day. But like, but... And they lived in the same era and I think that's... There's correlation in that. I don't... Or causation. I don't think this is just sort of like, uh, you know, they, they just happened to be born in the same time. You know, Tom Brady and Manning, and you, when you... Tom Brady kind of reflected on that back in the day. He's like, "You know, we were like the most ferocious on the field and we fought each other." But then over time he got... In some ways he became grateful for that because he realized that without Manning being, uh, in there and vice versa, he would have never achieved what he achieved. And I think that's happening in prediction markets. Like, I think that, like, w-... without Polymarket, we wouldn't have, uh, um, I- I- I think, like, pushed our marketing and pushed our product a- as hard. And without us, they wouldn't have pushed our mar- their marketing and their product, and maybe also without us, the kind of, the regulatory piece that we've unlocked as hard. And so, that sort of in-fighting I think is going to push both of us to scale this industry and reach heights that we honestly wouldn't have been able to otherwise, which long term is actually net positive for the customer. Like, the net winner of all of this, the people that are happiest here, is these early evangelist and prediction markets that now have seen their market grow from this sort of weird corner of the internet to, like, a massive industry, right? Like, it literally is starting to look like a stock market. And I think that-

   8. HSHarry Stebbings12:48

      Do you respect Shane and Polymarket more than any other competitor?

   9. TMTarek Mansour12:53

      I don't like relatives like that, you know what I mean? Like, I, I think it depends on what you mean, right? There's like, you know, a lot of really great companies in this space, uh, you know, especially like bigger companies, legacy companies. I respect CME a lot, um, even though they're like an incumbent, a legacy, but the- as a business it's, it's really an incredible business, what they've built and l- the modes that they have. I think, you know, obviously some of the tradi- like, traditional players like, you know, DraftSkins and FanDuel, they, uh, they have really effective, I would say, like marketing machines. They're like some of the best spenders of dollars on the planet. So, maybe in an absolute terms, I mean look, I think they, some are... Like, Poly has done an incredible job at marketing. Uh, they've built a good brand, uh, and we learned from that, and I think, you know, Kalshi has gotten really good this year, um, on that front.

   10. HSHarry Stebbings13:36

       What do you not do in brand today that you would like to do?

   11. TMTarek Mansour13:40

       So this, this week we've announced, uh, well we've on the first and then the second, uh, m- m- large scale news network partnership with a prediction market. So, we announced CNN, exclusive partnership, and then CNBC the same thing, uh, the next day. Um, and those have always been dream partnerships of ours, and there's more to come because this idea of just like embedding prediction markets in the news. You know, there's like so much symbiosis here, which is like, the news can get better from prediction markets because prediction markets are like this sort of, you know... Think of it as like the news covers what's happening now. Prediction markets can extend the news to cover what's about to happen next, which is kind of the ne- the next, sort of next iteration of news. And then prediction markets can benefit from the, the news because you can create that habit which is like, I read a market, I read something about whether the Fed is gonna raise interest rate on the economy, I can maybe directly trade on it and put a position in. And so they really gel really well together. Um, there's obviously sports leagues, I think some, some authority figures and affiliates, but I actually think the bigger thing for us that I think we, we're learning over time that we have to do, uh, that we're doing, starting to do a better job at, is you just got to tell the story of the company. And we haven't done as much of that because, you know, what, what I realized is the story actually resonates, and it resonates with our customers, it resonates with partners, but it also resonates with sort of like aspiring entrepreneurs that are starting this kind of, uh, whatever they're starting, um, because when you look back at the story of Kalshi, like, the one thing I always tell people, like, that I think is the thing that spiked for us, uh... A- and, and look, I think we're competent, I think we're smart, I think we have great strategy, we work hard, but I think it's resilience. I think we were so deeply committed to making this thing work and in some ways even for me the- the beautiful outcome here, maybe the outcome is- is giving us a beautiful lesson which is like, you truly can will something into existence. You really can, and it's- it's kind of amazing to see that play out. I mean, I've had my doubts over the years obviously, but it really did work out and I think we gotta get that story out there.

   12. HSHarry Stebbings15:32

       Totally get you. I spoke to Don Stalter before this show and he asked you, uh, tied to that resilience, what was your lowest day and what did your mind tell you in that lowest day?

   13. TMTarek Mansour15:45

       It's really a hard... Eh, I've had so many low days throughout the last 10 years.

   14. HSHarry Stebbings15:49

       I'm saying like... So I'll tell you, uh, we lost three anchors for our fundraise and I had to call my mom up crying walking through London in the rain. And she just told me, "The harder it is, the better the story c- comes out of it."

   15. TMTarek Mansour16:03

       Yeah. See-

   16. HSHarry Stebbings16:04

       And I always remember that.

   17. TMTarek Mansour16:05

       Uh, so look, I- I think one of the harshest moments in the history of the company were, was, um... So, you know, we- we spent three years to get regulated up front. Then we got legalized prediction markets, finally could be able to launch, then we got blocked about the launch, uh, on the launch. And then at the end of 2021, we started working on the, uh, on doing the election market, um, to get it in time for the 2022 midterm election. And, you know, we had a team. We, we bet an entire kind of two years on that, and then, um, the government pocket vetoed so they delayed their approval till past the midterms, uh, to not give it to us in time. I think that was a... You know, the day that that happened you could feel, you know, there's a sort of feeling that you know in the room that, like, something's changed or, like, kind of people just lose confidence in you, you know? It's like they- they... Because when things like that happen people oftentimes question the strategy and they question, you know, the- the decisions and, and, and, um... So we lost a lot of the team over it. Uh, we... I- I could feel that, like, the trust and the faith in the company had kind of plummeted. It was zero at that point. So very similar actually, I- I- I... It's one of those moments where you kind of walk out of the office and you actually feel physical pain in your stomach. You know what I'm talking about? Like, there is this ar- like, feeling of like, uh, hopelessness that like it is done, that like th- we're not... This is it. And I also called my mom, uh, you know, and- and I was like, "I- I honestly think this is it." Like I, you know, "This is, this is the, this is the end of the road." (phone notification chimes) And, um, and then, you know, she's religious so she's like, "Well, don't worry. I asked one of the saints that are l- you know, popular in Lebanon." She's like, "Don't worry at all. I asked the saint, you know. You know, I- I got the signs that I need. This company is going to be massive." Um, and you know (laughs) , obviously that's a very hard for, thing for me to kind of like stand on, but like, the one thing that has always been very good about Ruan and I is like we have gotten so gut punched so many times in the history of the company, true really hard gut punches, and we stood, you know, st- stood back up. And like that one, so we...... took a day to kind of recover. The next day, we came back and we were like, "We're gonna try again for the 2024 election." And then we tried another year till the end of 2023. Then the government blocked it again. And then, so that's the second time. And then, uh, got punched, same exact deal. Lost another big chunk of the team, you know, a horrible kind of situation. You know, this was the moment where we were like, "We're gonna try a third time and this time we're gonna sue the government over the selection market." So three years just kind of going through that absolutely intolerable pain, um, up until kind of... you know, obviously we got rewarded at the end of 2024 where we actually won. But it took three different trials and three different years.

   18. HSHarry Stebbings18:54

       The hardest days are the stories that you tell. Um, did you ever, like, doubt your leadership?

   19. TMTarek Mansour19:00

       The answer is yes, right? So, so at times. Even, even today, I mean, you always doubt, like... because as, as... you know, when you're building a company that's just going after a large market and, you know, first it's not working or then it starts working, and then it goes back to not working, and then you do that 10 times, and then, then it works really, really well, but then everything starts breaking. And, uh, um, and this is maybe the phase we're in, and then you start fixing some of the things, but then more things start breaking. You have to continuously kind of shift yourself as founder and then CEO, um, and evolve yourself. And there's always questions like, "Am I gonna be able to kind of do this next phase," right? And, and like-

   20. HSHarry Stebbings19:35

       What are you not sure that you're able to do today?

   21. TMTarek Mansour19:38

       I think that for us, it's, it's the time at a company where we need to evolve into sort of like, into a more structured organization, um, and build the right set of processes and systems in the company. And we haven't done that before. And, you know, we'll, we'll... that's kind of the m- next big challenge is like, you know, am I gonna scale to the occasion and, you know, be able to do it while, you know, keep accelerating the growth of the company and not sort of compromising the growth? And that, that's a hard problem. And the reason all these problems are hard is there's no answer, right? Like, there's no, there's no recipe. There's no book. It, it really depends on you, your company, the circumstances. You have to kind of go through it and you have to go... you have to make a bunch of mistakes, uh, as you go through it. Um, and you never know if it's gonna work out exactly the way that you want it to work out. Um, so...

   22. HSHarry Stebbings20:24

       What, what function do you think is weakest today?

   23. TMTarek Mansour20:28

       That's a good question, and I think marketing at the beginning of the year was... is kind of a lot of where I spent my time. I think, like, it's less about some specific department lacking, but more about, like, consistency now. How do we move that into like a scaled, consistent, um, set of habits in the company, rather than like a, a series of sprints?

4. 20:48 – 24:04

   The Future of Prediction Markets

   1. TMTarek Mansour20:48

   2. HSHarry Stebbings20:48

      Can I ask you a weird one, dude, which is, like, if the world is financialized by Kalshi, is that actually good for the world?

   3. TMTarek Mansour20:56

      I think there's two very important dimensions here. So the answer is unequivocally yes. Yes. Like, more free markets generally tend to have more positive outcomes, always. But the thing that struck me is, like, the current financial markets, they don't relate to a lot of people. Like, you know, trading stocks or options or futures, like, people don't really understand them and the game is sort of rigged. It's rigged on behalf of... like, for Wall Street against mainstream, against the average person. Because you never can win against Wall Street on like where a stock is gonna go or where an option's gonna go because they have all the asymmetric information. The thing that got me excited about building this is, like, actually there's an opportunity to build a financial market or a market that relates to anyone, that anyone can relate to and like... One of my core beliefs, like, everyone is an expert on something. Like, everyone has a, has... you know, reads the news about certain things or has passion about, like, specific so-... like mo- like, really the vast majority of people have specific passions or are really excited about a specific vertical. And Kalshi is really a way to kind of get them to participate in a financial market on that vertical that is their home turf, where they are not kind of facing somebody who has more information than them.

   4. HSHarry Stebbings22:00

      A hedge fund or, you know, I'm sure you've seen pro sports traders.

   5. TMTarek Mansour22:04

      Yeah.

   6. HSHarry Stebbings22:04

      They have every insight on every player and every injury and every weather wind pattern. The, the standard s- guy, girl betting on an NHL game on Sunday, I think you said, doesn't have that. Is it not just, like, increasing access to a different field where there are different pros?

   7. TMTarek Mansour22:22

      I think it's part of it. I mean, like, I don't think that Citadel and Wall Street has asymmetric information on, for example, our political process. And you saw with the election, like, the best traders in, in, in the, you know, in politics, what bills is gonna pass, who's gonna win an election, they're people that love politics. They're not Wall Street. Like, Wall Street is, is good and they can, like, get smarter over time. But where Wall Street is really good is seeing kind of like what hedge fund and mutual fund and whatever is buying which stock and they can know where a stock is gonna go better than the average person. But a lot of people have a lot of insight about politics. Why? Because they've been following politics for a decade or two. And you see it in the numbers. These are some of the most successful traders on Kalshi. But there's another kind of facet to this, to this what's ve- very important, is that the prediction market user is not just a trader. Actually, few... out of every 100 prediction market tra- uh, users, maybe there's like one or two traders that are actually trading on the market. But the rest of the users are getting informed about the world. It's really a form of news. It's a form of media. It's a way to basically comment like, you know, get truth about what's gonna happen next in a world where like, actually, it's been, it's been really hard to figure out what's happening. And you see this at the... every election, big election, people flock to Kalshi because you go on the traditional news networks and, like, you don't know who won until f- five, six, seven hours after Kalshi. Right? And that's extremely valuable. If we can see and get a little bit smarter about the future, we can make better decisions over time, allocate resources better, and, uh, manage risks better. Um, and I think that's a very positive thing.

   8. HSHarry Stebbings23:55

      It's really interesting insight that one out of every 100 is say a trader or one or two is a trader, and, and the rest are what I call in social lurkers. You know, people sit and watch on the sidelines.

5. 24:04 – 27:31

   Why Does Kalshi Partner with CNN When They Could Replace Them?

   1. HSHarry Stebbings24:04

      Um, the question then becomes, and a lot of your investors ask this, why partner with a legacy media brand like CNN or CNBC when you could actually own the vertical? You have the money, dude. You could build the media brand and the media platform and own the entire stack. Why partner with Legacy?And how long before that legacy partnership becomes cannibalism?

   2. TMTarek Mansour24:28

      I think they are not mutually exclusive, uh, and I think that's a, a, you know, that's, that's a fair question. I just think that, like, right now, we're so early that it's hard to think about cannibalism or to think about any of this as a zero sum, you know, question, right? It- it- it- we're just so early. The n- percentage of people that understand, deeply understand prediction markets is still so small. There's so much education to do, and I think the news, and, you know, it's- partners like CNN and CNBC are really an incredible way to get people to- to understand what these markets are about. And at the end of the day, the mission of the company is like, we want to bring more truth to a lot of these processes, whether it's, uh, the election process. Right now, we're using polls and pundits, and people say whatever they want. Or weather or climate or the economy, and how we make decisions about the economy. And the best way to do that is, like, put it in the places where people go and take that information, get their information about that. So, imagine a world where election night coverage is informed by prediction markets, which actually work better than what we're doing today. That is actually net positive. And the best way to do that is, well, you know, let's go to the place where people are going to get their information about the election, and I think the news networks are an amazing way to do that.

   3. HSHarry Stebbings25:35

      Do you not think you can create the next news network?

   4. TMTarek Mansour25:37

      I think we can. They're not mutually exclusive. Like, I think we can, we can do both. And, um, you know, there's, over time, like, there's diff- I mean, even today, right, like not everybody, like, there's not a single news network that owns all the audience, and there's some news networks, like CNBC for finance and business, CNN is for politics, um, and so, um, I think they're- they're not mutually exclusive.

   5. HSHarry Stebbings26:00

      When you look at activity, what's more important? Is it breadth or is it, like, depth? You know, is there 99% of trading and interest in a very small number of inventory, or is that breadth massively important? You know, me and your team were talking before this about Luana and doing some PR in Brazil, and just getting the brand in Brazil. Is breadth everything or is it having the 1% that everyone gives a shit about?

   6. TMTarek Mansour26:30

      It's a great question, and we think about this a lot. Uh-

   7. HSHarry Stebbings26:33

      Yeah.

   8. TMTarek Mansour26:34

      ... and the unfortunate truth is, the answer is kind of, like, a nuance in between. Uh, you know, y- y- y- you know, you cannot go fully, uh, fully vertical because then your product offering is not diverse and interesting enough, and you cannot go fully wide because then you don't concentrate enough liquidity in specific events. That what, that's what makes it an interesting marketplace problem. It- it's a, it's a, it's not an easy problem. But like, you know, my mental model for this is you have to have breadth. Like, product diversity and, you know, making sure that people have enough content to engage with and markets that are related to the news or the things that they read on X is important, right? Like if you... And it's a bit similar to X. If you go on X and you read about one specific thing all the time, like, that's not gonna make a very interesting experience. Y- you have to have diversity, even if there are specific topics that are the vast majority of the eyeballs. So, it's just really a balancing, a constant balancing act between the two.

   9. HSHarry Stebbings27:24

      Totally get that. Can I ask you, moving to the fact we spoke about kind of becoming a news network and th- that also takes money.

6. 27:31 – 28:34

   Why Did Tarek Fight For the Rights of his Early Investors So Much?

   1. HSHarry Stebbings27:31

      Don said, "You fought hard to protect early investors' pro rata, even when top-tier funds wanted to squeeze the shit out of us."

   2. TMTarek Mansour27:37

      Oh, I see. I see. I see. That's, uh, yeah, that's interesting. Um, my mental model for this, we're playing, uh, a long-term, iterated, infinite game, and it's sort of like there's a lot of rounds to that game, and every decision is a round. And I think it's very important that throughout the game and throughout the rounds, you build a reputation that- where people can trust you and can trust that, uh, you know, when you have a trade-off ahead of you, you will not be too, you will not be quick, or you'll- you will not be quick to basically, you know, kind of prioritize yourself, and you'll try to kind of like do right by people to the extent you can. And it's the same thing. Like, the people that believed in us early, right, like even though maybe we don't need them as much right now, because my mental model is you need them in terms of a reputation and doing right by them, uh, because that compounds. And if you're somebody that, like, does right by people around you, uh, over time, people are gonna want to work with you. And I think the best people, whether it's investors, partners, team members, uh, uh, want to work with people that, like,

7. 28:34 – 30:56

   What Makes Alfred Lin The Best?

   1. TMTarek Mansour28:34

      do right by them.

   2. HSHarry Stebbings28:34

      Does Sequoia really move the needle in your company?

   3. TMTarek Mansour28:37

      Alfred Lin is incredible. Yes. Um, yes, um-

   4. HSHarry Stebbings28:41

      'Cause when I had Alex Boozis on the show, he said that Alfred is the one person he doesn't have who he would most like to have.

   5. TMTarek Mansour28:48

      Yeah, I know. He's- he's-

   6. HSHarry Stebbings28:49

      Why is Alfred incredible, and what specifically makes you say that?

   7. TMTarek Mansour28:53

      Alex pinned me so often over the years about Alfred. (laughs) Alfred is very unique, very unique investor. Uh, and, um, in- in many dimensions, but like, a few things, uh, uh, that I really appreciate and admire about Alfred. One, he's not the type of investor... He's kind of the antithesis of what you would usually imagine a VC to- to be, which is like, VCs love to make strong, simplistic statements. You know, you tweet something like, "The way to win is, like, have a great team." And like, Alfred's answer to everything is this sort of very nuanced, in the gray, uninteresting, uninspiring answer. But it tends to be the right answer. I- i- i- like, and- and- and most investors like simple, kind of like structures and frames. Like, "Oh, you know, the margins aren't gonna get compressed, so the business is not gonna be very hard." And- whereas Alfred is like, "Well, how is the specific compression over time? It's actually gonna be slower than expected, and then you're gonna grow." And I- it- it's- it's kind of a lot of, like, in the gray, you know, math and nuance. But that helps push you to get to the right balance between this, uh, in- in e- every decision. So one is nuance. Number two is, he's always, always a kind of counterbalancing actor. So- and the thing I learned with Alfred is every time- so if I go with him with idea A, he will argue for the other, for- for not A, and if I go with idea not A, he will argue for A, always, systematically. He will always argue the other side, always. And this is to push me back to the middle, to push me back to like, hey, every decision comes with trade-offs, and every problem, uh, solution comes with problems. Um, and- and the last part is like, so...He, and again, it's kind of, maybe there's a, a, a theme here is, like, when the company is doing poorly, Alfred is the most optimistic and will come and, like, be, be excited and push you. And with company is going well, Alfred gets pissy. He just wants to make sure that you don't get o- over your head. And he'll be like, you know, "Don't forget, dark times are coming again." And like, you know, "Be careful." But he's really been there for us from the early, early beginning. He's been a huge believer when, at times where people really didn't believe. It was really hard to believe at Kal She- in Kal Sheon times, and he was just, like, always consistent.

8. 30:56 – 39:22

   Does Having Sequoia as an Investor Change the Game?

   1. TMTarek Mansour30:56

   2. HSHarry Stebbings30:56

      One of the most bullshit statements I think founders say, and has proliferated is, "Oh, you never want people who want to join your company because an investor is invested." I think that's utter crap. Because if Sequoia invest, it does increase the chances of success. It means you'll have another round of funding, it means more good people will want to join, and people want to make money for their families and make money.

   3. TMTarek Mansour31:21

      Yeah.

   4. HSHarry Stebbings31:21

      And so, it's completely logical that you would get more people want to join post-Sequoia investing. Do you agree with me or do you s- take the stance that, don't take people who only join because of your investor?

   5. TMTarek Mansour31:33

      The best people want to win, right? Like, they want to join a winning team. And like, I think having great investors is a, is one sign out of many others that you are on a winning team, right? So, so I, I think expecting people to, like, disregard that altogether is... That probably, you're probably kind of like, you know, pushing out or, or excluding some people that are, you know, winners, people that really want to win. But at the same time, you have to be, you know, ma- make sure you're picking people that are, that are gonna do whate- you know, that are gonna really work hard and do whatever it takes to win, uh, as long as they believe that this is kind of a winning company and a winning formula. Um, so, so my answer is like, I don't think that people that, like, see having Sequoia on the cap table as strong signal are, are, are bad people at all. Like, I think n- no, but I think you still have to do the diligence in the interview that is like, is, is this person just joining just for a free ticket on a ride, or is this person joining to make that ride go accelerate even harder? And are they gonna do whatever it takes and work however h- hard to make it happen? Um, if the answer to, to that is yes, then, you know, by all means, you should hire that person.

   6. HSHarry Stebbings32:31

      Which investor do you not have that you would most like to have? If Alex's was Alfred, who's yours?

   7. TMTarek Mansour32:37

      Well, the, the most recent round, um, you know, Neil Mehta came in in small capacity. I've always wanted to have Neil involved. He's just, like, such an incredibly smart p- like, such an incredibly smart person every time I talk to him.

   8. HSHarry Stebbings32:46

      Why did you not let Neil come in in a bigger capacity?

   9. TMTarek Mansour32:50

      Uh, I, we, I, it's not... I don't... It's not like, uh, mostly me driven. Like, it, we just chatted, like, towards the end of the round and we just decided to do something, uh, small. I think, um, who would I really love to have? I have a lot of respect for Ribbit and Mickey. I have a lot of respect for Founders Fund. I have a lot of respect for, um, uh, Altimeter. A lot of the crossovers in the public funds are also great.

   10. HSHarry Stebbings33:13

       Learning from people is very important. Um, one of your investors asked something that they asked not to be attributed, which I'm honoring. Um, but they said, "Did you ever cross paths with SBF, and what did you learn from observing FTX's implosion?"

   11. TMTarek Mansour33:28

       I gotta know who this investor is. I, yeah, I mean, the, uh, y- the answer is yes. So, actually, the funny story is, uh, uh, SBF, when I was a freshman at MIT, he interviewed me for Jane Street. Um, and so I'd known him f- since then. And then when he's, you know, came into the US with, with FTX, we met once. We were never really close. He, he was honestly kinda close to... Uh, he was kinda cold towards us when, when things were going well. And I, I, I think we... I mean, Kal She has had a history of people sort of looking down on us a lot. And, you know, we were a smaller company and we weren't as successful, and we're having all these, like... We were, like, doing the regulated route. We were focusing on regulation. We're like, "We wanna do it right. We wanna do it clean, compliant, regulated first." And in those years, it was very unsexy to be that company, right? Like, you had FTX, like, uh, e- everything was crazy and, like, all the unregulated, offshore, like, like, free-for-all, like, uh, those were the sexy companies. Those were the companies breaking rules and winning and, like, and, and we were seen as sort of the safe, boring losers, you know? Like, we, we, w- you know, because we were, we were committed. We were like, "We are not going to do this unless the government approves it." I have always been unwavering in my beliefs, same with Luana, regulatory first. And the reason is because I think in financial services and healthcare, the only way to build something that will last the test of time and that will truly go mainstream is to work with regulators, to do it clean, to do it right. And so, maybe the learning came afterwards, which was like... You know, at ti- at times you have doubts, right? Investors are like, "Why are you not growing like FTX? Why are you not doing this? Maybe you should go offshore, you should do that." And you start doubting yourself, and like, maybe the learning was like, honestly, just like, stay true to your approach. Like, if you really have high conviction, for- forget everything going around you. No matter the valuations, no matter what's building, stay true to your approach.

   12. HSHarry Stebbings35:10

       When did you stay true to your approach where you should have changed? For example, for me, I believed for many years that audio was our platform. We don't do video. People don't feel as comfortable on video. It should be audio. I was stupid and we should've moved to video much sooner.

   13. TMTarek Mansour35:27

       Yeah.

   14. HSHarry Stebbings35:27

       When did you stay true when you should have moved, and what did you learn?

   15. TMTarek Mansour35:30

       A- and this is gonna sound a little bit unusual. I was too product-driven for too long. Like, I think... I was always like, "We gotta build a product and make it absolutely perfect. And it needs to grow, you know, and grow really fast organically. And then we basically, uh, do more marketing and, you know, uh, build a brand." And I actually think you have to build both together. And I think if I were to do it again, I would really be thinking about building both together. Your product's never gonna be perfect, right? Like, it evolves and it shifts and it improves over time. And, and the brand, you have to learn it. It's a muscle, right? The, the grow- growth in marketing and brand is not something that you just turn on all of a sudden and it's like, "Oh, now we're ready to grow." It, it is a muscle. It's something you have to embed in your company. And so I, I, I've changed my mind on this, which is like, it's not like... Uh, maybe it's the YC thing, which is build a great product, then people will come. I, I, I'm, I, I, you know, I, I think build a great product, but build a great marketing engine and scramble to do both at the same time is now my best answer to this. (laughs)

   16. HSHarry Stebbings36:30

       Do you think we've moved too far in that direction when you look at the r- yeah, in the distribution is everything, the rage bait, the everyone has videos and everyone has a podcast, and the clearly I'm gonna take pictures doing obscene things, and the sh- do you think we've moved too far?

   17. TMTarek Mansour36:48

       Here's the way I would s- put it, right? If you take that statement to the extreme, it's like, maybe you should do marketing and not really focus on product. Well, that, that is definitely a recipe for failure, right? Like, in, in the o- order of, of things, like, you know, build a great product, but make sure to think about your marketing motion early enough. Don't think of it, like, years late, which is what we did, which was a big mistake. The second is, you know, build a great product and then think about your marketing. The third is build a great marketing machine and then think about your product is, is my view. Because no matter the number of eyeballs and the number ... You have to build a great product, right? Like, there, you know, there's a lot of people that have had massive eyeballs. You see influencers and you see celebrities with mass eyeballs. Their, you know, they, you know, their tweets get thou- tens of thousands, if not hundreds of thousands of likes sometimes, um, and they launch a product that doesn't really work, right? That's the age-old story of, you know... A- and so, I'm not a believer of this whole, like, distribution first and that's all that matters. And, no, I think you have to do... You, you have to have a great product. That's a precondition to success. But you have to also build, in today's age, because technology has become easier, right? It's, it's not that... Building tech is not the way it was 10 years, 15 years ago. You have to also build a good brand and, and build a marketing motion.

   18. HSHarry Stebbings37:54

       Cristiano Ronaldo announced last night that he was investing in Perplexity. Clearly, fantastic judgment as a fellow Perplexity investor. Um, my question to you would be, what celebrity would you most like to have in Kalshi?

   19. TMTarek Mansour38:08

       That's a very good question for Luana because hers is Taylor Swift. And, you know, it's funny because the, a lot of the coverage this week was, like, tying her to Taylor Swift.

   20. HSHarry Stebbings38:15

       But now she's richer than Taylor Swift, apparently.

   21. TMTarek Mansour38:18

       I think-

   22. HSHarry Stebbings38:18

       She's richer than Taylor Swift.

   23. TMTarek Mansour38:20

       She's just younger, she's just younger. I mean, look, my, my, my almighty goat is Messi. Uh, you know? And, um, we, we, we have talked to... I think we are talking to his team right now so maybe we'll, we'll figure something out. But I think he's the greatest athlete of all time. Uh, of all time. And I, and I think he really embodied, like, he's obviously great on the pitch in everything he's done, but, like, he loves soccer more than anything on this planet, and you can feel it. And you can feel it so heavily in, in everything around his life, right? Like, he's made it, he's become rich, he's become famous, he's... And all he cares about is getting on that pitch and winning. And you could feel that hunger. Like, and it, you know, and, and the man never really spent obscenely. He stayed with the same person, um, uh, you know, who's now his wife for, since he was like, I think 14. He has his family, and that's his kind of like, you know, source of, of joy outside of work. But he is so deeply committing to getting that ball and scoring, and I love that. I love that so much because it, it was just never about anything other than the soccer for him, and

9. 39:22 – 41:11

   Are Teenage Founders Today Emotionally Ready to Lead Companies

   1. TMTarek Mansour39:22

      you could feel that.

   2. HSHarry Stebbings39:22

      You mentioned the humility there, the not getting distracted, the one-partner focus. I'm a bit worried, dude. The youth of founders today is so much younger than it was even before. You know, I'm meeting 17-year-olds with term sheets for $5 million every week.

   3. TMTarek Mansour39:39

      Mm-hmm.

   4. HSHarry Stebbings39:40

      And I... They're talented, absolutely, and their talent is here. But, dude, when I was 17, my emotional maturity was here, and I think most of ours was here. Do you worry that we are overestimating the emotional maturity of a generation of very, very young founders?

   5. TMTarek Mansour39:55

      Look, I, I will say that each generation is more mature than the prior one. So, I, I think that you, you can definitely feel... Like, I, I feel like so oftentimes I talk to, you know, 17, 18-year-olds now, and, and like, they're more mature than I was when I was 17, 18. As you go through battles and a- as you go through the ups and downs, like, it just humbles you, right? Like, you have to go through some of that. I, I, I agree with you that, like, maybe kind of people that are coming at it, like, younger people that are coming at it clean and they... first thing they get, like, first, uh, time they have an idea, they get a $5 million term sheet. They get, like, maybe a wrong set of expectations about what it takes, what are they about to get into, and how good they truly are. And like, uh, I think Luana and I have been lucky. Like, we really have a massive... We've always looked at ourselves as the underdogs and had, like, always a massive chip on our shoulders. Like, we, we don't... Our internal view of ourselves is not like we're these almighty beings or we're, we're always like, "What are we doing wrong? Who's better than us?" What are... Like, we, we think a lot more that way. And, and in some ways it's a bit more tiring today, but it's l- it's made us lucky because, uh, we have humbled each other over the years. We, we just stay very grounded on like, you know, what we're lacking at a- every stage of growth. And like, there's a lot of things we're lacking. There's so many great people out there. Like, truly, right? Like, if you compare yourself to some of the greats, like, they, they're all operating on such a different level and, like, there's so much for us to learn.

10. 41:11 – 47:44

    Quick-Fire Round: Celebrity Investors, Relationships with Parents

    1. TMTarek Mansour41:11

    2. HSHarry Stebbings41:11

       Dude, if it's okay with you, I want to do a quick fire round. So, I pepper you with questions and you give me your immediate thoughts. Does that sound okay?

    3. TMTarek Mansour41:18

       Uh, yeah, sounds great.

    4. HSHarry Stebbings41:20

       Dude, what's a prediction market that should exist but you're too scared to list?

    5. TMTarek Mansour41:26

       That's a great question. Uh, (laughs) I think it's markets around, like, the evolution of geopolitical, like, conflicts. And they could have a lot of utility. Like, that information could be very, very useful. But I think they have downsides. And we always avoid markets that, like... We try to make our market- markets always orthogonal. You can never get paid or not paid based on something bad happening.

    6. HSHarry Stebbings41:48

       It's really hard, isn't it? Because how do you balance news and information and the benefits that come from transparency with the acknowledgement that with that is financialization?

    7. TMTarek Mansour41:59

       It's a dilemma for any technology. You see this in AI. I mean, that's technology, right? Technology comes with a lot of positives, but there's risks and you have to balance between the two.

    8. HSHarry Stebbings42:06

       Which founder brand in tech do you think is most brilliantly crafted? For example, I think the Collisons brand has been expertly crafted, phenomenally maintained. It's a fantastic brand that they should be very proud of. I'm saying it nicely. But that would be my brand that I aspire to. They've... It's a Chanel brand of knowledge and premium.

    9. TMTarek Mansour42:30

       I think Eric and Karim have done a very good job building a, a, a story and a brand around founders, the team, how the company have co- have come to be, um, and the, the quality of their execution. Um, so, you know, learning a lot from, from those two and others.

    10. HSHarry Stebbings42:45

        What's the biggest misconception people have about Kalshi today?

    11. TMTarek Mansour42:49

        People...Think of Kal- uh, yeah, I mean, one of the misconceptions is people s- sometimes think that Kalshi is gambling. It's not.

    12. HSHarry Stebbings42:55

        It's information and news.

    13. TMTarek Mansour42:57

        Well, I think when I think about gam- like, i- i- it's a very, very different model. And the reason why this, you know, there's, it's a financial market for two reasons. One, it has economic value, but the second one, the, the really core one, is in gambling there's a house. You walk into a casino and the revenue of the house is equal to its customers losses. That's how they make money. You're betting against the house. In our model, it's an open, transparent financial market that is neutral. You know? Harry is trading against somebody else and whether you lose or make money, we are not incentivized for either way. We make as much money either way. We take a transaction fee on top, whether you lo- the same one whether you win or lose. And that's why we, like, the dynamic is much more akin to, you know, the New York Stock Exchange or traditional financial markets, uh, than, like, you know, a tr- you know, a traditional, like, you know, um, uh, casino or sports book.

    14. HSHarry Stebbings43:46

        One piece of advice on hiring that is most controversial or unconventional?

    15. TMTarek Mansour43:53

        You know, the, the, the vast majority of people are not in the top 10%. (laughs) So, so, uh, you know, it sounds like an obvious statement, you know, but like, most people that come through your door should probably not be at your company. Right? It's, uh, it's n- you know, and, and I think that, like, I think people always forget that. Like, you know, most teams are not great teams. They can be, right? Like, not everybody can be in the top 10%. It, and so, a- and maybe the, the way to frame this as a contrarian or controversial take is, like, m- most people are, are kind of mediocre. And not in a bad way necessarily, but just mediocre for the job that you're trying to hire them for. Um, and so it's really, really, really hard to find the top five ten percenters.

    16. HSHarry Stebbings44:30

        I do not think you can only have A players if you have a company over 250 people. By definition, A players are extremely rare if you want to keep that high bar. Post-250, I've, I don't think you can. Do you agree?

    17. TMTarek Mansour44:45

        I don't know. We're not at 250 yet, so we'll see.

    18. HSHarry Stebbings44:48

        What are you at today?

    19. TMTarek Mansour44:50

        100 and change. 110, I think.

    20. HSHarry Stebbings44:53

        What's the worst part about your culture?

    21. TMTarek Mansour44:55

        That's a great question. Uh, we're a little bit chaotic. Uh, but it's, it's, it's virtue of, like, um, very flat, low on process, very low on pol- politics, and just really focused on product, customer, and shipping. That's like e- ev- every decision is product, customer, shipping. Don't think about anything else. And when that happens, we are trading off the pain of not like... You're choosing, in my view, uh, uh, uh, uh, uh, between two different pains. Either product velocity, um, which comes... Or, or, i- uh, so you either c- cave on product velocity or you cave on, like, chaos and organization in a company. I don't think you can get both.

    22. HSHarry Stebbings45:34

        I know you love walking meetings. What's the most memorable walking meeting and why?

    23. TMTarek Mansour45:39

        I do love walking meetings. How do you know that?

    24. HSHarry Stebbings45:42

        Dude, I stalk this shit up.

    25. TMTarek Mansour45:43

        (laughs)

    26. HSHarry Stebbings45:45

        I hear y- you know why this show's done well? And I don't mean this in agony. It's just 'cause most people don't prep.

    27. TMTarek Mansour45:49

        That's, that's-

    28. HSHarry Stebbings45:50

        They don't really put the time in-

    29. TMTarek Mansour45:51

        ... incredible.

    30. HSHarry Stebbings45:51

        ... to get to know you.

Episode duration: 47:45