E163: How Thiel Fellows Build Billion-Dollar Startups w/Zaid Rahman
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What is the Thiel Fellowship and why is it so exclusive?
Something like 10% of TL followers have started billion-dollar-plus companies. A third of them have started companies valued over $100 million. Some of the best companies in the last 10 years have come out of the fellowship, including things like Figma, Loom, Luminar, OERooms, Ethereum. Today, I'm excited to welcome Zaid Rahman, founder and CEO of Flex, the fintech super app transforming financial management for small businesses. A serial entrepreneur and Teal Fellow, Zade has recently raised capital at a $225 million valuation in order to build an all-in-one platform that bundles credit, banking, payments, and expense automation for business owners. Without further ado, here's my conversation with Zade. You were part of this very elite fellowship, Peter Thiel's fellowship, which is over 10 times more difficult to get into YC, which itself is elite. Tell me about that program and tell me about your experience.
Peter Thiel started the Thiel Fellowship now 12 years ago or so. The idea was that, you know, he would select 20 people every single year and give them 100 grand with no conditions except one that he had to drop out of college. At the time, it sort of started as a kind of like a social experiment. Over time, it sort of scaled into this much bigger thing. Something like 10% of TL followers have started billion-dollar-plus companies. A third of them have started companies valued over $100 million. And so the program itself is doing fantastically well. Some of the best companies in the last 10 years have come out of the fellowship, including things like Figma, Loom, Luminar, OERooms, Ethereum, and so on and so forth.
And so it was sort of an awesome experience just being part of that. And from my kind of vantage point, I like to sort of joke that I'm the least sort of qualified person in the room when I'm around these guys, because to me, it's sort of been just about surrounding myself with the right kind of peers. And the fellowship just comes in with this amazingly elite group of people that kind of all very driven to be extremely ambitious and kind of really change the way things are done. And so it's been an awesome sort of experience being part of that. Last time you were talking about this very specific way that you use the fellowship in order to scale Flex and to solve problems. Tell me about how you benefit from the fellowship today.
How does the Thiel Fellowship community support its members?
The TL Fellowship has this amazing group of 285 people. And so, you know, a couple of years ago, I thought it was crazy that we were not all in a WhatsApp group together. And so I created a little group chat and that became pretty successful. I think the group chat is like 250 of the 300 or so fellows now. And in that context, you know, if you go on the group chat, I mean, even right now I can see it on the side. There are people talking about all sorts of problems that they're running across. Just yesterday, someone mentioned that, you know, they're going through an M&A and there's a difficult investor and, you know, they're giving them a hard time, you know, in the M&A process. Has anyone gone through that? They have three tail followers, some of them very successful, giving them advice on how to sort of navigate that situation. It's been really awesome to sort of see up close problems that, you know, this sort of elite group of founders are facing together and sort of take that as an opportunity to sort of learn and also be part of that community.
So you're not only benefit from the camaraderie and everybody going through similar difficult problems, you're also building relationships with people, having a personal mentorship network. And also you get to see, maybe some of these problems are not as esoteric. So you get to see these problems solved live. Some problems you may not even realize other people have the same problem. Exactly, right? Like the M&A context is an interesting one, right? Because at Flex, we have recently been stepping up on M&A. We've done two transactions and we're looking to do a third one shortly. And so seeing what founders are complaining about in the M&A process is really interesting. And, you know, it's sort of like an accumulated knowledge base, right?
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Chapters
9 chapters
1
What is the Thiel Fellowship and why is it so exclusive?
0:00–2:25
2
How does the Thiel Fellowship community support its members?
2:25–5:15
3
How is Flex using AI to revolutionize credit underwriting?
5:15–7:33
4
What challenges does AI address in business credit underwriting?
7:33–9:08
5
How accurate and efficient is AI in Flex’s underwriting process?
9:08–11:28
6
How does Flex differentiate itself from competitors like Brex and Ramp?
11:28–13:39
7
What is Zaid Rahman’s approach to recruiting and building a high-performance team?
13:39–16:27
8
What is the Delta 4 framework and why is 'taste' important in fintech product design?
16:27–18:30
9
How do you evaluate candidates’ problem-solving skills and first principles thinking?
18:30–47:11
Speakers
1 identifiedMore from How I Invest with David Weisburd
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E428: Michael Green on Peter Thiel, SpaceX, and Inefficient Markets
E427: AQR's Peter Hecht on AI, Market Bubbles & How the Best Investors Build Portfolios
E426: American Securities CEO on Warren Buffett, Private Equity & Playing the Long Game