#228 Elad Gil: How to Spot a Billion-Dollar Startup Before the Rest of the World

The Knowledge Project with Shane Parrish

Farnam Street

Business, Investing, Entrepreneurship

4.7 • 2.9K Ratings

🗓️ 13 May 2025

⏱️ 98 minutes

🔗️ Recording | iTunes | RSS

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Summary

What if the world’s most connected tech investor handed you his mental playbook? Elad Gil, an investor behind Airbnb, Stripe, Coinbase and Anduril, flips conventional wisdom on its head and prioritizes market opportunities over founders. Elad decodes why innovation has clustered geographically throughout history, from Renaissance Florence to Silicon Valley, where today 25% of global tech wealth is created. We get into why he believes AI is dramatically under-hyped and still under-appreciated, why remote work hampers innovation, and the self-inflicted wounds that he's seen kill most startups. This is a masterclass in pattern recognition from one of tech's most consistent and accurate forecasters, revealing the counterintuitive principles behind identifying world-changing ideas. Disclaimer: This episode was recorded in January. The pace of AI development is staggering, and some of what we discussed has already evolved. But the mental models Elad shares about strategy, judgment, and high-agency thinking are timeless and will remain relevant for years to come. Approximate timestamps: Subject to variation due to dynamically inserted ads. (2:13) - Investing in Startups (3:25) - Identifying Outlier Teams (6:37) - Tech Clusters (9:55) - Remote Work and Innovation (11:19) - Role of Y Combinator (15:19) - The Waves of AI Companies (20:24) - AI's Problem Solving Capabilities (26:13) - AI's Learning Process (30:41) - Prompt Engineering and AI (32:00) - AI's Role in Future Development (34:37) - AI's Impact on Self-Driving Technology (40:16) - The Role of Open Source in AI (43:23) - The Future of AI in Big Players (44:23) - Regulation and Safety Concerns in AI (49:11) - Common Self-Inflicted Wounds (51:34) - Scaling the CEO and Avoiding Conventional Wisdom (55:21) - Workplace Culture (58:39) - Patterns Among Outlier CEOs (1:15:50) - Remote Work and its Implications (1:18:47) - The Impact of Clusters and Exceptional Individuals (1:25:41) - Investing in Defense Technology (1:27:38) - Business Model Shift in the Defense Industry (1:31:46) - Changes in Warfare SHOPIFY: Upgrade your business and get the same checkout I use. Sign up for your one-dollar-per-month trial period at shopify.com/knowledgeproject NORDVPN: To get the best discount off your NordVPN plan go to nordvpn.com/KNOWLEDGEPROJECT. Our link will also give you 4 extra months on the 2-year plan. There's no risk with Nord’s 30 day money-back guarantee! Newsletter - The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at ⁠fs.blog/newsletter⁠ Upgrade — If you want to hear my thoughts and reflections at the end of the episode, join our membership: ⁠⁠⁠⁠⁠⁠⁠⁠fs.blog/membership⁠⁠⁠ and get your own private feed. Watch on YouTube: ⁠@tkppodcast Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	You're one of the most successful investors that a lot of people have probably never heard of.
0:06.4	AI is the only market where the more I learn, the less I know. And in every other market,
0:10.3	the more I learn, the more I know, the more I'm able to predict things. And I can't predict
0:13.2	anything anymore. What scares you about the future? That's a big question. I think in a couple
0:20.2	years we'll start thinking about it as we're selling units of cognition.
0:23.6	AI is dramatically underhyped because most enterprises have not done anything in it.
0:27.6	And that's where all the money is, all the changes, all the impact is, all the jobs, everything.
0:31.6	The people that I know who have been very successful or driven solely by money end up miserable.
0:36.6	Because they have money, and then what?
0:38.6	It's just, what do you do?
0:40.4	What fulfills you?
0:41.5	What are the most common self-inflicted wounds
0:44.0	that kill companies?
0:46.2	I think that...
0:47.8	What do you think is the next wave?
0:49.6	I think it's gonna be an ongoing wave of,
0:52.6	and that's coming, right? And that hasn't even hit yet. Welcome to the Knowledge Project podcast. I'm your host, Shane Parrish. In a world where knowledge
1:21.2	is power, this podcast is your toolkit for mastering the best of what other people have
1:25.3	already figured out. My guest today is Elad Gill, who has had a front row seat to some of the most important
1:31.8	technology companies started in the past two decades. He invested early in Stripe, Airbnb,
1:37.4	Notion, Coinbase, Andrel, and so many others. He's also authored an incredible book on scaling
1:43.4	startups called High Growth Handbook. My opinion, he's one of the most underrated figures in Silicon
	...

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