Key Takeaways
- • Keith Rabois, investment partner at Founders Fund (previously Khosla Ventures), argues that teams should blend naive, hungry "natural athletes" with experienced operators, particularly in enterprise versus consumer markets.
- • Rabois says PayPal limited financial services experience to two or three people, and Square's first 200 employees included only three with financial services backgrounds, using experienced staff sparingly and questioning them constantly.
- • Rabois states that CEOs who have no time for thinking or discretionary interaction are "way over-consumed," and that a COO becomes more likely when a CEO also serves as VP of product, marketing, or sales.
- • Rabois says a COO hire should fill the specific gap between a founder's skills and what the target market requires, with the title serving as a recruiting tool alongside equity and cash.
Summary
In a SaaStr Annual session transcript published January 10, 2017, Keith Rabois, an entrepreneur and investment partner at Founders Fund and previously at Khosla Ventures, discussed how to build high-performing teams. Rabois has held roles at PayPal, Square, LinkedIn, and Yelp, and co-founded Opendoor. Interviewer Jason Lemkin, who hosted the session, framed the discussion around the tension between experience and raw talent.
On team composition, Rabois said he generally favors natural athletes, though the answer depends on vertical. On consumer products, he said natural athletes are almost always the better choice, while enterprise businesses benefit from experience. He suggested pairing a naive, hungry founder with a more experienced partner, such as a CEO and COO, to capture both advantages. He warned that experience can breed cynicism; he said he avoided payments for about eight years after PayPal and later joined Square, despite skepticism from former colleagues. He also said he declined to invest in Stripe initially, which he called a major mistake.
Rabois described PayPal's approach of keeping financial services experience concentrated in two or three people, including the general counsel, and said Square's first 200 employees included three with such experience. He recommended having experienced staff answer relentless "why" questions from newcomers. At Opendoor, he said, only one or two employees had deep real estate experience among roughly 70 staff, with the CEO bringing personal rather than industry-specific expertise.
On COO hiring, Rabois said there is no universal answer, but that a CEO whose calendar is more than half booked likely needs another senior leader. He also said CEOs who combine their role with VP of product, marketing, or sales roles will likely need a COO sooner, and that the hire should fill the gap between the founder's strengths and the market's demands. He noted that a COO title can serve as a recruiting incentive alongside equity and cash.
The transcript is a conversational interview, and Rabois' views are presented as personal opinion drawn from his operating and investing experience.
On team composition, Rabois said he generally favors natural athletes, though the answer depends on vertical. On consumer products, he said natural athletes are almost always the better choice, while enterprise businesses benefit from experience. He suggested pairing a naive, hungry founder with a more experienced partner, such as a CEO and COO, to capture both advantages. He warned that experience can breed cynicism; he said he avoided payments for about eight years after PayPal and later joined Square, despite skepticism from former colleagues. He also said he declined to invest in Stripe initially, which he called a major mistake.
Rabois described PayPal's approach of keeping financial services experience concentrated in two or three people, including the general counsel, and said Square's first 200 employees included three with such experience. He recommended having experienced staff answer relentless "why" questions from newcomers. At Opendoor, he said, only one or two employees had deep real estate experience among roughly 70 staff, with the CEO bringing personal rather than industry-specific expertise.
On COO hiring, Rabois said there is no universal answer, but that a CEO whose calendar is more than half booked likely needs another senior leader. He also said CEOs who combine their role with VP of product, marketing, or sales roles will likely need a COO sooner, and that the hire should fill the gap between the founder's strengths and the market's demands. He noted that a COO title can serve as a recruiting incentive alongside equity and cash.
The transcript is a conversational interview, and Rabois' views are presented as personal opinion drawn from his operating and investing experience.
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