Shruti Rajagopalan talks to Daniel Gross and Tyler about Identifying and Predicting Talent

**Tyler Cowen** (0:04)
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**Shruti Rajagopalan** (0:27)
Welcome, everyone. It's a pleasure to be here. Hi, Tyler. Hi, Daniel. So I'll start right away.
What is a talent that you think you possess that is underrated by everyone else?

**Tyler Cowen** (0:39)
Daniel, I think that's for you first.

**Daniel Gross** (0:43)
Well, pausing before answering a question is definitely a rare skill these days. But I think something that's been helpful for me that I've kind of realized I have, that I think many people have, I don't know if it's totally ubiquitous, is in the process of an interview, which you do in venture a lot, like hundreds and thousands of times a year, being able to sort of build a grid of the person who's talking to you, who they most kind of remind you of and the outcomes that those people have had is I think a pretty important skill. And I think it's a pretty important skill for anyone searching for talent, but certainly in the venture world, that's kind of what you're doing when you meet these early stage businesses, is you're kind of trying to build some type of search map in your head that's more intuitive than it is rational. It's sometimes a bit hard to explain why X might remind you of Y, but that's a skill I think a lot of people have. The benefit I've had is I got inculcated in this world at a very young age, and so I've had many, many hours of reps, just getting it in and mostly making mistakes, but occasionally getting it right.

**Tyler Cowen** (1:45)
I don't think I have the talent of hesitating before answering the question.
But I think one thing I'm good at is turning problems into combinatorials. And then within my head, very rapidly searching for all possible combinations of factors that might somehow fit together and spitting that out in well under a second. I'm not even sure that's an underrated talent, but I think it's a way to think about some of the talents I have. That if it's an area where I can turn it into that, I will typically do quite well. But if it's, say, trying to work the microwave at home, which I cannot turn into some kind of combinatorial, factorial analysis, then I'm like way below average at trying to work the microwave at home.

**Shruti Rajagopalan** (2:24)
That's true. So, Daniel, if you're looking for talent in investing or finance, how does that look different from the talent in the startup world?

**Daniel Gross** (2:34)
Yeah, what makes a good investor is very different from what makes a good founder.
And if you were to kind of make a scatterplot of it, some of the attributes are completely diametrically opposed. For example, I think very good investors are the kind of right degree of optimistic, but also realistic, whereas founders are too optimistic, which they should be. I mean, at the end of the day, startups are a very funny activity when you think about it from a probability standpoint. Most companies fail, almost all companies fail, and yet people seem to be seemingly doing this activity over and over. They're jumping off a cliff over and over again. You look over the cliff and everyone who jumped out of the cliff is just on the ground dead, but people keep on jumping off the cliff.
And so founders are kind of almost too optimistic. But I think when you're evaluating a business, especially at later and later stages, I think optimism can be your enemy. And often you see when a lot of founders later on in life, and I am such a person who started a business, sold it, and then became an investor, you actually have to be able to wear very different kind of psychometric hats. And one of them is this continuum of realism and optimism. And I'd probably say that's the starkest difference between kind of what makes a good startup investor and a good founder. There are probably many others. But that's kind of the main thing that you look for.

**Shruti Rajagopalan** (3:47)
Who's more likely to drink diet coke, the two groups?

**Daniel Gross** (3:51)
That's a good question. Yeah, I'd say both, I think, are pretty likely to be of the whatever diet coke signals.
Obviously, here in San Francisco, it's quadruple espresso, $25 coffee, and maybe the rest of America, it's a diet coke. But both are, I think, in the people that want more stimulants as opposed to depressants.