56. Miles Grimshaw - Back Down the Mountain

·Investor
Miles Grimshaw - Back Down the Mountain

Description

Miles Grimshaw (X, LinkedIn) is an investor at Thrive Capital. He’s spent most of his career there, there, partnering with founders at the early stages of company building, including Cursor, Turbopuffer, Chai Discovery, Mesh Optical, Revel, XDOF, Socket, Benchling, GitHub, and many more. Miles was also briefly an investor at Benchmark before returning to Thrive in 2024.

The conversation focuses on Miles’ appetite for change and continuing to begin anew, again and again. That starts with “adventure racing” as a teenager, and continues through his career as an investor in search of world-changing companies.

We talk about how Miles proactively puts himself in position to work with great founders in a style that resembles courtship, his disposition of impatient patience, and why he loves change. The latter includes the dramatic shift in his primary domain: software. As the underlying assumptions for software businesses change due to AI, what traits will great companies have? And what moats if any will persist? Is software investing over?

Miles also talks through how great companies and founders go where they are looking, prioritizing customers that help you live in the future, the learned intuition of greatness, and joining the expedition squad alongside the founders Thrive partners with. Finally, we talk a bit about Thrive, his departure to and return from Benchmark, and endurance.

I hope you are inspired to find an infinite game where you are excited to see the stone roll back down the hill and begin to push again.

*Disclaimer: This podcast is for informational purposes only. The views expressed are the speaker's own as of the recording date and are subject to change. Thrive funds and their affiliates have investments in certain companies discussed in this episode. References to those companies are illustrative, do not represent all investments made by Thrive, and should not be viewed as recommendations or indications of future investment performance. Past performance is not indicative of future results.*

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Timestamps

  • (0:00) Opening Highlights
  • (1:37) Intro: Miles Grimshaw
  • (4:30) Infinite Games, Adventure Racing, and Starting Anew, Over and Over
  • (11:01) Staying Hungry: Proactive Hunting and the Turbopuffer Story
  • (17:35) Impatiently Patient: Courtship, Cursor, Recruiting, and Joining the Team
  • (25:33) Loving Change: London to America, the Himalayas, and Learning New Sports
  • (31:36) The Genetics of Companies: "What Is It?" and "Who Cares?"
  • (38:08) House Cats & Tigers: Where Is the Founder Looking?
  • (47:00) Confidence in Uncertainty and Customers That Pull You Into the Future
  • (54:25) What Remains for Software: Moats, Cities, Wall-Clock Time, and the Barbell of Scale & Luxury
  • (1:04:54) Craft, Trust, and Why Software Isn't Over
  • (1:11:13) Intuition: Gradient Descent and Seeing Greatness Up Close
  • (1:18:07) "I Don't Know" and "I'll Figure It Out"
  • (1:22:12) Commitments, Not Bets: Closing People and Board Work
  • (1:29:06) Joining Thrive, Being a Punk, and Music Studios over Jury Trials
  • (1:36:18) Leaving for Benchmark and Returning to Thrive
  • (1:43:18) Dream Bigger: Lessons from Josh, Teaching Agency to Kids, and Going the Distance
  • (1:51:36) Outro

Links & References

Transcript

(4:30) Infinite Games, Adventure Racing, and Starting Anew, Over and Over

Jackson: (4:29) Mr. Miles Grimshaw, thank you for joining me.

Miles: (4:33) Fun to join.

Jackson: (4:34) Long have we waited.

Miles: (4:35) Long-time listener, first-time caller.

Jackson: (4:37) The place I want to start is: what does the concept of finite and infinite games mean to you?

Miles: (4:45) You're creating the board for the game, versus trying to beat someone else in a defined game. That's kind of, I guess, how I've grown up in a way. Coming to America with my parents, I used to love this crazy sport of adventure racing, which was more about—the longest race I did was 60 hours, two and a half days, for example.

Jackson: (5:10) Continuously?

Miles: (5:10) Continuously. And you're orienteering—map and compass orienteering. There's not a fixed course, per se. There are points you've got to get to, but you figure out how you want to get to them.

Jackson: (5:19) Do you sleep?

Miles: (5:20) We slept an hour a night on the forest floor.

Jackson: (5:24) And you can sleep as long as you want to, or as little as you want to?

Miles: (5:26) You can sleep as little or as long as you want to. Obviously, you want to cover a lot of distance and a lot of course, and so you sleep very little.

Jackson: (5:34) Are you on a team, or are you solo?

Miles: (5:36) You're on a team. Three people, three or four people. There's a fun dynamic to that, too, where you're only moving as fast as the slowest person on the team. And so there's a lot of helping each other out because there are moments when you are at the end of your capabilities. I remember one moment vividly. We started at noon one day, and the next day at 7:00 AM—so you're not even 24 hours in, and you've got a whole other 32 hours to go. And we'd been waist-deep in a freezing cold bog—like a bog marshland—for six hours, from midnight to 5:00 AM. And we come out of there...

Jackson: (6:17) You're trudging through.

Miles: (6:18) Trudging through it. Straight-up bushwhacking through this bog because there was a flag. And these flags are like this big, and you're trying to find these flags.

Jackson: (6:27) Oh, I see. It's almost like a scavenger hunt.

Miles: (6:29) It's a scavenger hunt of finding flags. You've mapped the points on a map and you've gotta get to them and stamp your little punch card and keep going. We come out of that bog at five in the morning and there's an hour and a half descent on mountain bikes. It's maybe just above freezing in northern Maine and you are frozen. Every limb of your body is frozen. I was really struggling and I gave my teammates my bag and they took it. I held on for dear life as the last person in the mountain bike trail. But then there's days when you're doing well and you take other people's backpack and you take their weight and you move on anyway. In some sense, it's a fixed course. There is a winner or loser in this race, but it's such an emergent race in some sense. It's more about: can you go the distance? Can you find that within you versus the world record for the triathlon or the world record for the mile? I've kind of loved that adventure—that bushwhacking versus running the faster path. I think that is the energy that I really love of entrepreneurship and your own canvas to create on, an infinite game to get to play.

Jackson: (7:54) Maybe on the note of keeping playing. I think even within the context of entrepreneurship, venture is kind of a strange job in that in the best case as a founder, you basically get to compound in one container for 20 years. Patrick Collison at Stripe is deep into the compounding. In the most successful case for the founder, that continues. In the most successful case for you—Cursor recently sold to SpaceX—you go back to square one. A mutual friend of ours said he called you when this Cursor deal was announced, and the whole call, all you were saying was basically, "I just need to find another. What do you got? What are you hearing?" What about that specific shape of investing and that necessary point where you actually have to go back to ground zero and stay hungry? Maybe it's in part of the answer you just gave, but what about that specifically is so interesting to you?

Miles: (8:55) It is very true. When I was younger and pursuing some of this ultra-endurance stuff, there was a coach who sent me this little essay that basically said many people imagine Sisyphus suffering because the boulder falls back down the hill and he has to climb back up the mountain with it on repeat. It's better to imagine Sisyphus as happy and enjoying the journey of rolling that back up and seeing new heights, and that each experience has its own dimensionality to it, even if theoretically it's the same mountain. That always stuck with me, even in high school as I was training for different things. I think there's an element where it's come full circle in many ways to the investing experience. You're exactly right. You kind of go back down the mountain and try and look for new summits with new teams. You can imagine that as a painful experience in some ways.

Jackson: (10:06) Right. Most people don't opt into being Sisyphus.

Miles: (10:09) Yeah, exactly.

Jackson: (10:10) That's a good mindset if you are Sisyphus.

Miles: (10:13) But I love going back down and looking at new summits and going, "Can we go do that one?" These are the founders' summits and their conquests. I like to think of Thrive and all of us as joining the expedition team of those pursuits and going back down. It's a blank slate almost at the early stage, dreaming of a new challenge again. Getting comfortable in the discomfort of learning again, because oftentimes you're in a new area—it's maybe new technology, it's a new market. I just relish that. I love hunting that change, hunting those opportunities.

(11:01) Staying Hungry: Proactive Hunting and the Turbopuffer Story

Jackson: (11:01) Yeah. I think it's also interesting that the trend seems to be as people become more successful in this type of job over the course of their career—granted, you're still relatively quite young—that you sort of lose your edge. That narrative is great, and yes, definitionally, something about investing is about staying hungry. But the ability to really do the hustling work that you would do when you're 20 years old and you're trying to make it as an analyst or something... Are there ways you remind yourself about what it feels like to feel really hungry?

Miles: (11:39) I think it is absolutely a risk. It's a risk for any investor, and it's a risk for any founder as they succeed at their company. You end up potentially insulating over time and having, in some sense, a bigger circle, but a smaller circle of reinforcement for your ideas and positive feedback. You're also maybe only engaging with successful people as well. It is active confrontation to break out of that. You also end up with a dynamic where more people are coming to you for things they know of you, which is a great privilege to have, obviously, whether you're a CEO or an investor.

Jackson: (12:29) Even at a firm level, by the way. When you started at Thrive...

Miles: (12:32) Thrive, no one knew our name basically, and it's amazing that people do now and we work hard on that every day. But the key is curiosity. I think curiosity is a very lean-forward endeavor and way of being, not a lean-back way of being. I think you have to practice the muscle like you would weightlift or like you'd practice for running—that active curiosity constantly, breaking out of what's just coming to you. It's critically important. I think it's a muscle to keep building and a way of being to get RL'd into in some sense. I think a lot about, for every week, every month, every quarter at Thrive, where are we going out and pursuing proactively—hunting, learning, chasing, meeting—versus just what's come at us. I would bet—I haven't actually done this as an analysis, although maybe LLMs can do it really quickly—if you looked at most of the serious investment conversations we had this year, 2026, I bet you the vast majority, definitely the majority, are very proactive pursuits, whether that's early stage or growth stage. In the early stage cases where that relationship, that journey, that awareness started even many years prior with getting to know someone and just supporting them, you're constantly sowing the seeds for the years ahead. I'll give you a specific story. I'm very lucky to get to work with TurboPuffer. They told me I was the first person to fly to Ottawa to have dinner with them. Ottawa is in Canada, in case you didn't know.

Jackson: I heard it's an hour from Toronto?

Miles: Something like that, yeah. Up there, northern New York—I shouldn't say that; you should cut that for the Canadians.

Jackson: (14:56) You've gotta keep that in. Are you kidding?

Miles: (14:59) I'd heard about it because Cursor was using it as a sort of underlying semantic search and storage. I think often for great companies, they have really great early customers that pressurize their development in a really productive, constructive way for the future. TurboPuffer had—I think search was going to be reimagined. When you can search everything, when knowledge is the oxygen for the LLMs, search will get reinvented. So I was really intrigued by that. They had Cursor as an early customer. I did one quick call with Simon, and he was wildly impressive just on that call. We said, "Hey, we'll be in Ottawa next week for dinner." This was before investors were hounding him, so he's since shut that down.

Jackson: (15:50) They don't have many investors.

Miles: (15:51) No, we're the only. Along with Lachy Groom, we're actually the only outside investors. But before investors were hounding him, no one had said, "Hey, I'm coming to Ottawa for dinner." So we went to Ottawa for dinner, had an amazing dinner, and actually gave him a term sheet the next day because we were so impressed and wanted to support him. At that point, he said, "I'm not really ready to take any money." He'd mostly bootstrapped it by and large. I think he was even maybe profitable at that point in time, or break-even. Over the next one and a bit years, we were just friends and supported him. Another part to your point about not getting comfortable: when he called, he called me on a Monday night. I was in New York at about 9:30 PM Eastern. I picked up and he goes, "Miles, this is that call." I was like, "Amazing, thank you." He's like, "We want to raise a little money. We want it to be from you. You're my first call. If you want to work together, let's do it." We spoke for 20 minutes. I sent a message to the investment team and said, "We need to talk now." We all got on a call at 10:15 PM EST. We spoke for 20 or 30 minutes. We already knew the company so well, but we had a "check ourselves" moment. I called him back at 10:30 PM Eastern that Monday night, and we worked together and committed. In some sense, you're sowing those seeds today. You've got to keep being proactive and fast, and not get locked into your calendar being set by reactive things.

(17:35) Impatiently Patient: Courtship, Cursor, Recruiting, and Joining the Team

Jackson: (17:35) How do you toe the line between aggression and patience as a meta practice across all of this?

Miles: (17:43) There's a frame that I have often said to the investment team, and it is a core ethos of us as a group: our challenge is to be impatiently patient. The "impatiently" is to be constantly learning, to be constantly exploring in the world, meeting and supporting new, amazing people like Simon. Maybe he was never going to raise any money, but search would be reimagined as a core part of technology and software experiences. I felt that he was a superb person to do it and was doing it in a really special way. Regardless of whether we work together, we just want to support and be of help. You can be impatiently constantly exploring those curiosities, but patient to wait for the right moments—the ones that are organic or fit best for us. We've spent a lot of time learning about the supply chain for AI, the infrastructure hardware that all the models run on and consume. This has been a big focus for a year or so now for us. It's an uncomfortable area. We have no prior silicon experience on the team. It's been an area where we're learning huge amounts, and you have to be willing to walk into conversations and say "I don't know" a lot of times, or "Could you please explain that more to me?" We've been writing things down and using ChatGPT to learn a lot more about them. We've been impatient with ourselves to learn about that, really pursuing it, but we hadn't made any investment basically up until now. We're making one investment at the moment, our first investment there. We are impatient about learning—we've got to be smarter on it—but patient for the right fit, the right team, and the pursuit of a mission where we think we can be a good partner. I think it even applies to investments and prices. Stripe is a phenomenal company, and we were lucky to get to partner with them early at $3 billion or $5 billion originally. It ran up a lot during COVID and fundraised north of 100, which now it's obviously well exceeded. But there was a moment in the fall-off from the ZIRP moment when everyone else was fearful. We were patient enough to be able to step in during really important moments for teams as well. There are a lot of places where you combine that impatience of being "always on" with the patience to not feel like it needs to be today for the right fit.

Jackson: (20:49) It's definitely a specific piece of that broader thing. In a case like TurboPuffer, which I think in some ways is pretty atypical—although it may not be in the future, especially in software—how often are you trying to convince Simon to take your money? There's a tact element of it. There's a strategic element of it. There is the thought of, "Wow, are we really going to wait for three years for this guy?" To be clear, my sense is you are very good at whatever the part of this job is that you could roughly call sales. But sales doesn't always come on super aggressively, I guess.

Miles: (21:38) Yeah, I think it's kind of you to say. At the earlier stages, the ethos I have—and we at Thrive have—is that yes, there's capital being invested, but we're joining the team in a way. We're going to work for that ownership that we have for a decade. We've worked with some teams for 10-plus years now. One of the core questions I ask myself as a gut check on any investment is imagining recruiting for it. One of the things that we will do a heck of a lot of with any team is recruit for that company. Whether it's in the investment conversation or just in my bones personally, I'm thinking about the pitch to the first recruit tomorrow and the recruit 10 years from now. I'm still helping Saji at Benchling recruit and close talent or keep people. Through that journey of getting to know each other, a founder hopefully says, "Sure, I want to raise money from these people, but actually, I kind of want them on the team." We had gotten to know Michael at Cursor for probably a year as well. Again, to the proactive piece—

Jackson: (23:18) He had a year in advance? He had been doing Cursor for a—

Miles: (23:23) Cursor was a thing. He'd probably been doing it for a year. I forget the exact timeline, but I'd been getting to know him when Cursor was in its very infancy. Our first meeting was probably a year before the first investment, the Series A. Through that time, you build relational context. One of the things he most prized at that moment was help with recruiting. One of the things we talked about during that investment moment was actually supporting on recruiting. We did effectively some case study conversations on working, selling recruits to the company, and strategies they might employ to do it. I think Michael has even said in moments that he learned, in some sense, from me trying to sell Michael on us investing about recruiting, because it's a recruiting game in many ways.

Jackson: (24:23) I was going to say both of these examples sound a lot more like courtship than the traditional venture capital—like, "Go pitch the VC."

Miles: (24:29) Yeah, 100%. And around that time the business was starting to work. I got the rough numbers from him over a dinner. I never got a spreadsheet of any finances because it never starts with a spreadsheet. It starts with that person, the future that they see, and being a team for that summit—back to that expedition lens. And what did we do after Series A? We basically were full-time recruiters with them on that team ahead of the Series B. And then Michael picked us to be the lead for that next financing as well. And so these are long relationships. I think in the version of it where we don't have to invest in everything—people don't have to pick us to be on every team, and we can't be—that we will get hyper-selective in places where we think we can be a great partner, a team member to the founders and their ambitions. I think that's very felt interpersonally.

(25:33) Loving Change: London to America, the Himalayas, and Learning New Sports

Jackson: (25:34) Most people don't like change. Have you always loved change, or has something about doing this—or something earlier—made you into a person who loves change?

Miles: (25:49) Yeah, I now have two kids and it's fun seeing them and their personalities because, naively, to me kids were kids. Kid A versus Kid B versus Kid C was just "kids." I might remember the kid's name, but they're just a kid—they're a two-year-old, they're a three-year-old, they're a one-year-old. My mom—I'm the eldest of seven—often would say to us, "Oh, you were so different." Not just me, but each of us were so different as kids. She very much raised us to push to be the best version of ourselves versus any one ideal. I think part of that was that each of us are, very much so, very different. But it was sort of abstract to me in a way. I couldn't imagine that you could see it when they were really young because it's just a kid, it's a two-year-old. Now having my own kids, I realize kids are really different, even my own. So I think it was probably in the DNA for me in some sense. Also, I was the kid who did the—

Jackson: (26:58) Adventure racing, I suppose.

Miles: (26:59) Exactly. My mom moved us to America for love. I was 12 when we moved over, the eldest of four. I've had my mom tell me more stories actually of me being younger because it helps me realize and think about my own son, which is a wonderful evolution of family relationships. She told me a story recently. She said that she sat me down in my bedroom as it was really getting serious that we might move to America. I'd only flown to America once before moving permanently.

Jackson: (27:39) Where in the UK were you?

Miles: (27:40) West London—a suburb of London. I was probably 11 when she did this because we moved when I was 12. She was saying, "It'll be a lot of change, and these are the exciting things, these will be the hard things," et cetera. "This might be the school you go to." I'd never seen the school; I had no idea. Unequivocally, as she finished telling me and I thought about it, I was like, "We gotta go. Let's go."

Jackson: (28:06) Wow.

Miles: (28:06) I'm in.

Jackson: (28:07) Wow.

Miles: (28:08) She even said I wrote a note to the Tooth Fairy—I guess I forget you still lose teeth at that age. I'd written a note to the Tooth Fairy that was like, "I don't want any money. Just help my sister get into the school there." I really, really wanted to go—more than I remember wanting to do it. In high school, I actually went to the Himalayas in India for six months to a boarding school there. I had an uncle who's not an uncle—he's my stepdad's best friend whom he founded a company with. He was showing me pictures one summer of the school he went to in the Himalayas. He grew up in India and spent six years there. I was like, "I want to go there." My mom is an enabler of this as well; she took it seriously. I remember the history from there as well. She kind of had it happen, and she recently told me again, "Oh, wow..."

Jackson: (29:02) Huh.

Miles: (29:02) I'm learning about my own son and how determined he is on things he sets his mind to, even at four. And she goes, "Oh, no, you were determined to go. You said we have to go." We got a curriculum change so the school would allow me to, and all these things. It's funny how the things—

Jackson: (29:20) —we remember.

Miles: (29:21) Yeah, yeah. So I think that embrace of a new adventure, the love of it... I often think it's a lot of fun, even though it's painful to learn new sports. Windsurfing, kitesurfing, skiing, snowboarding. I've learned to do a little bit of a really weird sport called Alpine snowboarding, which is a long board, hard boots, like slalom racing snowboarding. It's really fun for carving. It's really hard to figure out, and basically no one does it on the mountain. My dad did some of it, and I saw him do it and thought, "I gotta learn that too."

Jackson: (30:05) Are you comfortable with—I kind of enjoy it—

Miles: (30:08) Flying planes.

Jackson: (30:08) I kitesurfed for the first time recently. The first three hours, you don't even get to get on the board.

Miles: (30:13) Oh yeah. Not just three hours—several days.

Jackson: (30:17) Are you comfortable—most people don't like to suck. Are you just comfortable in sucking, or are you confident enough in your learning curve?

Miles: (30:28) You are absolutely right. The painful thing is being able to live in that place of sucking or not knowing. I'm getting dragged around—

Jackson: (30:37) —on your face in the water with the kite.

Miles: (30:40) Exactly. I just think it's really fun to figure out a new thing and to learn it. I think this is where it's probably in the DNA, but also, that's the nature side. I do think there's a nurture side to it all. The language for the nurture side that we all can share as a mental frame now is that you kind of get reinforcement learning on the thing. So I have more comfort with it. The reinforcement learning was that I have experiences growing up where you ended up in a place that was really uncomfortable or totally new, or you totally sucked, and you figured it out. That was a reward function, so to speak, where you go—

Jackson: (31:29) "Okay, yeah." My friend Jason says—

Miles: (31:31) "I can do that again."

Jackson: (31:32) Confidence is the memory of success.

Miles: (31:35) Great line. I'm going to steal that one.

(31:36) The Genetics of Companies: "What Is It?" and "Who Cares?"

Jackson: (31:37) You've spoken in the past quite a bit about this broad frame of companies—the biological approach to companies—and the idea of companies having durable genetics. Unlike a biologist or a sports scout—which you've made use of that metaphor, too, people seeing Michael Jordan early on or whatever—your creatures aren't just adapting to an environment. They're adapting to an environment that is in constant and rapid change, especially in the last couple of years. So it's like two things are in major flux. I have a few questions on this note. First, what do you look for in genes that are durable across very dynamic environments? Are there any genes that are as true for companies as they were 10 or 20 years ago as they are for this new, crazy era?

Miles: (32:33) It is an appropriate question given the rate of change that's happening.

Jackson: (32:37) The environment has never been changing like—

Miles: (32:39) It is now, 100%. And I think that leads one to question every premise. In many ways, one should question every premise because maybe things that we have normalized to—the assumptions that drove those normalizations—have changed. Yes, I think that there are aspects of building software, building software companies, that were premised on certain assumptions—the core of which being that building software is hard, really hard, and maintaining software is even harder. And now that input, that truth, has changed. Things that we took as consequences of that, without realizing they were premised on that assumption, we should reevaluate. So I think it's an important moment to do that. And it's funny, because as you were saying that, I was thinking about a very good investor friend at another firm. When we were just riffing and catching up the other day, he basically said something along the lines of, "I'm wondering if I should not be as precious about great businesses and business models." So, yeah, very peak sentiment, but also the "all bets are off" and "maybe I should just..." So I think it's right to do it. That said, I think that there's a fundamental law still, which is you have to create more value than you capture, and some version of a customer has to give a shit. All the marketing mumbo jumbo, all the valuations or whatever—at the end of the day, if you don't deliver something that creates a lot of value for an end user and end buyer that you can take a small share of, nothing else matters.

Jackson: (34:23) That last part's important, too.

Miles: (34:24) Yeah, yeah. And I have two silly but true questions that have become a bit of a meme at times at Thrive, which is: one, what is it? And two, who cares? Sometimes I say, "Who the fuck cares?" What is it? You can say a lot of words, but what really is it? What is a customer really buying? What is the thing that it is doing for them? And two, who cares? Who is that customer? Who is that user? Who is that person on the other end? Who's it for? I think that those two are really important to ground oneself in. I do wonder—in any cycle, I think you can take the wrong lessons from the successful companies. I think Google did a hilarious thing for a bunch of teams. Google was so successful in their core thing that, in some sense, no matter what they did next didn't really matter. So people tried to copy them for this idea of 20% time, which was, "Oh, you can have 20% of your time to do creative things," which did birth Gmail and a bunch of other things.

Jackson: (35:55) They also had the best business model in the history of the world.

Miles: (35:56) They had the best business model in the history of the world to do it. But the corollary frame of that is, "Oh, you can only work four days a week." What 20% time really means nowadays is no one works five days a week; they work more. In some sense, it was the wrong thing to learn the lesson of from that company. Another version of that for SaaS for a little bit was "every software company's revenue is 10x ARR"—which just is not true—or "all revenues are created equal"—not true. Then I think for this one, we call them "labs," and they are very commercial entities. Sam is an extremely, incredibly product-minded leader. Sam has great sensibility for products and customer demand and value to customers. Calling them labs belies that product-mindedness, that customer-centricity. And I think that some are learning a bit of the wrong lessons from that. The Cursor lesson is a better lesson to learn, which is a relentless focus on delivering an incredible product that will, for a long time, sell itself. We had a very small sales team until the beginning of 2026 this year. When I first started working with Michael, they were passing many single digits and rapidly tens of millions in ARR, and they had zero salespeople. Michael was relentless on his own team's feedback on that product. They are the customer of the product. It was individual end-user conversations versus just sales. They had a very strong purity to delivering a great product. I think that is a truth that you can never lose sight of. If you ground yourself in that, good things will happen.

(38:08) House Cats & Tigers: Where Is the Founder Looking?

Jackson: (38:09) When it comes to these sort of outliers, especially with the sort of "good genes" frame, I think one of the most interesting bits of thinking behind the genes frame is that, as you also said, the house cat kitten and the tiger kitten kind of look the same early on. There are lots of companies with crazy exponential growth really early on. I think what you seem to be quite good at is identifying which ones have the genes that can go the distance and which ones don't. In the case of the truly outlier companies, as you sort of implied in your previous answer, they sort of defy categorization. I'm curious how you think about being willing to slot some frame on what a good gene is and also tolerate something that looks like something you've never seen before. Definitionally, I think you've written or spoken in the past about a company like SpaceX or a company like Shopify—what even is it? It's got a bunch of these different products. How do you identify a gene that you have no prior evidence for its success?

Miles: (39:31) The big part of the genetic lens to it is whether it's early stage or what people would call growth stage, which we still think about as being early for that company. When we're doing growth, whatever is measured today is visible today. Product or a spreadsheet or whatever is a fraction of what should be to come. It's all backwards-looking, by and large, not forward-looking. One is trying to ponder what the genetics of this are so that at age, so to speak—Michael Jordan being young or whatever—what does that become? When the kitten and the tiger are both small cats, you know which one is which.

Jackson: (40:27) But we know what a tiger looks like and we know what a great NBA player looks like, whereas we don't really know what a—

Miles: (40:31) Yeah, and so you're pondering that. What will that be? I never pondered the full expression of that through the lens of it being some other thing. It's like, "What is its version?"

Jackson: (40:49) What sort of traits does it have that are outlier?

Miles: (40:51) What does it have? Eventually those would map to common business principles, which is that it can have high earnings power. Back to the basics: it will have high earnings power in a large market, but it's probably not fully expressing that right now. Rarely is that the case. I think there are two aspects to that. One is these are led by a person, and a person is making every marginal decision about this company and the trade-offs that it faces. A big part of that is: where is this person looking? You can have similar things in different people. They can look the same today in phenotypic expression—which is to say what you see in the organism, in the company—but they can be looking at very different things, which is to say they have very different genetics. I think you can take Stripe and Braintree. Early on, they kind of looked the same. But you talk with someone like Patrick Collison, and he might not have had the words right then, but he kind of has the framing of GDP of the internet, and that will be expansive in nature. What they have done so far is like a tiny fragment of where they're looking. Early on, the job to figure out is: where's that person looking? Because eventually, in driving and biking, you go where you look, right? Any sport you're learning, the thing you learn is look where you want to go. I think it's really true for companies too: you go where you're looking. I think that is a key aspect of it. You might see only a bit of it, but where's that founder looking? Again, to come back to it, Michael of Cursor—when I did an early dinner with him just two weeks before we invested, we had a conversation. He wasn't looking at the IDE; he was looking at abstractions of coding, making coding easier. The IDE was the manifestation of it today, but he wasn't looking at that. He was looking over there. I think that is a really important part. The other element that it applies to is: what's the nature of this product with its customers and the value created and the value capture, and the genetics of that? Many people will look at an—

Jackson: (43:34) AI's business model fit?

Miles: (43:36) It's almost as if you want to try and put it into something, it's like the unit economics—but not economics—the unit economic, singular version of a customer value proposition, in a way. And the nature of that, if eventually the companies we work with hopefully are very scalable, and scalability comes from repeatability. And repeatability is that one thing, a lot of times. And so, what's the nature of that one thing?

Jackson: (44:04) And how repeatable is it?

Miles: (44:05) What's the nature of that one thing? So many people go, "Oh, what's the ARR growth?" That's a big thing these days. "Oh, how fast was I to 10? How fast was I to 100?" I kind of don't care. That's a phenotypic expression of an underlying set of genetics. And the question is, what are those genetics? If you have one customer that you suddenly sign—let's be more realistic, you have three customers you sign for $50 million apiece, and so you're going to say that you're at $150 million of ARR, basically—that's just a very different set of genetics than if I have 500,000 customers at $100 apiece. I'm not saying one's better or worse. That's not the question. They're just really different. And the question isn't which is better or worse; it's where are you looking, and what can that, repeated and evolved, become?

Jackson: (45:00) How durable is that to a changing environment, and all these other things?

Miles: (45:03) And you need to be, in some sense, an analytical dreamer to this. So, coming back to Cursor on this, and you were asking which ones are going to be Michael Jordan versus a good college player. It wasn't, "Hey, what's an IDE worth?" If you look at the IDE market and you ask, "What are the genetics of this IDE kind of thing?"—it's a terrible market. It's mostly free, with VS Studio, and the company that had done the best on it, JetBrains, maybe made a couple hundred million of revenue. I forget. It's not a business you want to be in. But if you get more first principles about it, you ask, "What if intelligence is at the core of that IDE, and that is a scalable thing that you consume through that IDE or through the product manifestation that that eventually becomes?" Because the IDE is only today's manifestation. You actually now may be a product that has $1,000—no, it's actually $10,000 of value consumption in that experience. If you take what the world has evolved to so far, the IDE market is naturally $200 million, because the value of the product can only do so much for you. But when that product is now the consumption of intelligence and is supercharging you—we literally put on a piece of paper that we think that could be thousands of dollars, which is definitely undershooting it, of user value and monetization in that form factor. And so the dream is dreaming something new. What is its unique version with a thinking on almost those atomic units? Where's that founder looking?

(47:00) Confidence in Uncertainty and Customers That Pull You Into the Future

Jackson: (47:00) Do you think… This is a bit of a can of worms. At the time you made the Cursor investment, it was probably an implausible conception. But let's say somebody was really thoughtful and they were able to pull forward the conception of something like Claude Code hitting the market. It seems conceivable to me that they would be able to make an argument using this frame that says vertical providers who make the models themselves—and maybe in the end you could even make the case, though I don't know enough to say—I think it makes sense that Cursor teamed up with a big lab in some sense. How important is it to see the end-case business model fit versus just projecting enough potential? Are you going to pay for Cursor with seats? Are you going to pay per token? Maybe I'm getting caught up on how important it is to specifically see the unit economic trade there, but presumably Cursor's business model in a year or two or three might be different than it is now. That's why this is so hard.

Miles: (48:00) You have to be willing to have confidence in that uncertainty versus trying to have a deterministic view of it. Certainly for early-stage and even early growth-stage, the interesting question—I said this to a candidate I was interviewing once—is: I don't need you to tell me more ways this can go wrong. There are infinite ways this can go wrong that I can enumerate. Our job is to figure out the path of it going right. What if it went really right? And if that's not implausible, and if we think this is the unique company for its confluence of factors to get to do that, let's go help make that happen. Not because we know it's a sure thing, but because we want to try and do our best to help make it as sure a thing as we possibly can. In that case, the models at that point in time were not good enough to do it all. You needed a lot of human oversight. And so, no question, the thing to deliver value on for the foreseeable future was a coupling of the product experience for the human with more and more intelligence—evolving from better autocomplete to better pseudocode to better code review. It was all this stuff that they were very creatively doing and actually doing their own model development for. People forget this, because their tab model was their own, and so they were full stack from the get-go. Obviously the labs have done incredibly well as the models have gotten a lot better. But the view which Cursor is still certainly proving out is of the product-model combination to unleash the maximum of that intelligence. The team cared and thought a lot about the craft and the science of the model, but also the craft of the product in that intersection. That holistic coding experience was not just an IDE. It was never where Michael was looking. He was looking at code review; he was looking at other aspects of the whole software development supply chain. To make building software easier is a pursuit worth pursuing.

Jackson: (50:37) And they were in the game in a continuing way, which is—

Miles: (50:48) Exactly. You learn. The other thing I think a lot about, to the genetics metaphor, is these companies are evolving entities. What are the genetic pressures that are happening? What are the market forces? The customers you pick are pressurizing functions for your adaptation. Being in the game and having great customers like they did early on—like Shopify, OpenAI was a big customer early on, Nvidia is one of our biggest customers—is an incredible adaptive pressurizing force.

Jackson: (51:34) Yeah.

Miles: (51:35) It's not theory for adaptation; it's what do they want? And those are, back to the point, not all ARR early on is created equal. It's not about just that number. It's about the genetics. I care far more that you've selected and are working with really thoughtful, avant-garde, demanding customers than just your revenue, because those are pressurizing functions for you to adapt your fitness, your product, your organization, etc., to be well-adapted to the most demanding future. It's not about the revenue early on. It's about that adaptation to the best version of what it can be. And the best customers force that. Stripe early on—I think Stripe would be a very different company if Delta was its first customer, not Shopify or Lyft.

Jackson: (52:34) How would you advise, let's say, a Series A company that has found something like product market fit? They're early on. They're maybe not working with their first customer or two, but they're early. How would you advise choosing? Obviously, it depends so much on the company and the business, but roughly, what does choosing a good customer mean? It sounds like maybe a young company that's moving fast, but what else?

Miles: (53:01) What customer will best help you live in the future of your market?

Jackson: (53:08) Of your market?

Miles: (53:09) Of your market, of your product? The value you hope to create or the problems you hope to solve.

Jackson: (53:13) Yeah, yeah.

Miles: (53:14) Some customer of yours is that. Who is that? And don't pick the customer just for the air. At some point, you do need oxygen.

Jackson: (53:26) Yeah, yeah.

Miles: (53:28) You just need to have some.

Jackson: (53:29) We have venture capital for that.

Miles: (53:30) So you need some momentum. There's no strict rule ever, but you need customers that help you live in the future. Lyft, I think, was an amazing one. Shopify was an amazing one for Stripe for that. The complexity of their money movement there was actually a leading indicator of how the rest of them scale.

Jackson: (53:46) It was actually a leading indicator of how...

Miles: (53:47) ...how the rest of them scale. The complexity of Shopify's scale pressurizes a company that's willing to take the risk. It's not Amazon taking the risk on you—that's very hard to do. It's Shopify taking the risk on you. But the scale, their growth, their demands, and their Black Fridays—

Jackson: (54:05) Yeah, that's cool.

Miles: (54:07) It is superb pressure. And Tobi is a developer's developer, so you know he's going to be understanding while pressuring you. So it's not just the nature of their business; it's who is the person on the other end and what are they going to be doing?

(54:25) What Remains for Software: Moats, Cities, Wall-Clock Time, and the Barbell of Scale & Luxury

Jackson: (54:25) I want to speak a little bit about the broad sense that venture-backed software companies were certainly one of the most amazing places you could invest money over the last 15 years, and where you have spent the vast majority of your time. A lot of that is being called into question. Maybe a first cut, based on what we were just speaking about, would be: have you started to develop a sense of what types of "genes" are most adapted for this crazy new world? Which ones were previously strong that are now maybe—we spoke about it briefly—one super obvious thing is we have a thing that used to be scarce that is no longer, which is making software at all.

Miles: (55:16) You have to be questioning it because that fundamental input has changed. People talk about the moats—well, actually, they talk less about the moats of software companies now. They tended to talk about the "spreadsheetification" of software companies. They have all these fancy numbers like magic number and Rule of 40 for why a great company was valuable. The visual metaphor I think about a lot for explaining some of it is that, in many ways, the great software companies basically built a city. Software was hard to do. So your wall-clock time—assuming you put resources on it—meant you built up this whole ecosystem of this city. If you're Benioff and you're building a CRM, sure, you're building a CRM, but you're kind of building the City of Sales in many ways. There's an economics term called the agglomeration effect.

Jackson: (56:18) Yeah.

Miles: (56:18) It is used to describe why all the butchers or bakers would all be on the same street. It makes no sense that they would be on the same street because you can very easily go to the other baker and get bread from them instead. Wouldn't bakers want to be separate in parts of the city so that if I went there, I only went to that one, versus being able to easily walk next door to the other one? But it's actually rational for every baker to be on the same street because the demand is going to aggregate. So theoretically, competition is easier, but actually everyone does better with it all there.

Jackson: (56:48) Yeah.

Miles: (56:48) I think as a software company, you're kind of building the city. You had clear moats of switching costs and other things. Occasionally you got a network effect business, but it's very rare in software. I think you got a lot of agglomeration effect and wall-clock time. If your city had more people that did that thing in it—

Jackson: (57:12) There's even a mindshare element.

Miles: (57:13) Mindshare element. If an alien comes down to planet Earth and is doing sales, they look at the map, they go to Sales City, and it kind of all just went there.

Jackson: (57:24) Yeah.

Miles: (57:25) And the moat was the wall-clock time, which was just the sheer hours that had been put in building that software empire around that thing. Building that city around that thing. What's challenging about what's happened in AI for software is the wall-clock time has kind of been eliminated. So you can kind of build that city. It might not have any residents yet, but you can build that city.

Jackson: (57:56) If it took a day to build a city, we'd have more cities for sure.

Miles: (57:58) We have more cities. I think that software is still going to be really useful. We're going to use way more software in the future in some sense. I think the future-oriented lens is to maybe think a little bit about what happened in e-commerce as a function of the internet and to think about where software might go. We're going to do a lot more transactions, e-commerce, maybe media as well. But in the course of it, I think we're going to consume a lot more things. We're going to buy a lot more things. Commerce grew, but the nature of it changed. This is where the city analogy almost bridges the two. You could be Radio City or Bed Bath & Beyond or Staples or Blockbuster in the offline, no-internet world because you picked the top 30 or 50 metros in America and you had one or two stores. If you'd built Radio City in that city and you were running it well, giving value back to customers, and being competitive on prices, why would anyone else start? You had this wall-clock time and cornered resource, and that's where the value goes. That changed. You couldn't be a specialized, mid-market retailer for a thing anymore. You had to be Amazon and get really big, or Walmart and get really big, or you're luxury like LVMH. I think that there's been a lot of Radio City and Bed Bath & Beyond of software, so to speak. You're going to need to do a lot because the wall-clock time changed. You should have way more surface area; you should cover way more. You'll make less margin on it all.

Jackson: (59:56) I make one buying decision, but I appreciate it.

Miles: (59:59) You see that insecurity in some of these other areas that have trended in that direction. I think it'll—

Jackson: (1:00:03) Get way amplified, or maybe even Salesforce.

Miles: (1:00:05) Right, Salesforce. But you need to put intelligence at the center. You need to totally reimagine that too for the modern age. In some ways, the retail analogy holds here. The way you thought of retailing had to change too. Amazon merchandises everything. Radio City picks merchandising thoughtfully where it puts it in the store. Amazon says, "I merchandise everything." And so it's how I think about supply chain changes. Here, I actually have real working capital issues for staff stocking inventory on shelves. In e-commerce land, I have no working capital issues. I sell it before I have to pay for it—negative working capital. So the whole nature of the thing changed. I think the same is true for putting intelligence in the thing. But there's a version of, "I need to do a lot in my industry, even more so than I ever thought of before," and be there, or I'm some version of a luxury type. I'd be scared of saying anything about this company in some sense because I'm not sure how he thinks about it, but I have a ton of respect for Palantir, and obviously they're doing remarkably well. In some sense, maybe they're luxury. They're like, "We're here to help you." And they are the original forward-deployed engineers. It's only a forward-deployed engineer if it's from the Champagne region of Palantir. They're the OGs of engaging with you on it and building it bespoke.

Jackson: (1:01:31) Got it, got it, got it.

Miles: (1:01:33) And this mid-version of things in software you would never build bespoke. Building bespoke, if you did that, was a minefield because the maintenance on all of that over the years ahead was going to be brutal. You're going to end up running so many versions of it. But that assumption suddenly changed. I actually think more companies now should say yes to one customer's needed feature. And if you, A, can't get that shipped fast, you're probably not using the tools totally effectively. And B, if maintaining that slight version of that n-of-one feature is a minefield for you, your codebase is probably not your architecture, and your decision-making is probably not adapted to literally the ephemerality, disposability, and ease of building software. So I think they might be one of the best ideas I have so far of the other barbell of what could happen if you learn from commerce in this sort of luxury frame.

Jackson: (1:02:30) Or "white glove" feels almost even more fit. What is durable about that? Is it just the fact that, yeah sure, I could build it myself, but these guys do it well? They meet our needs really quickly. Maybe more broadly, what will the actual moats of software businesses be in the end? Is it just like, "Oh yeah, to build something at the scale of Salesforce or Amazon would take too much time"? And maybe within all this, presumably margins compress. Will there be areas of software where you still have really high margins?

Miles: (1:03:08) I think this can have really high margins.

Jackson: (1:03:10) Okay. The white glove.

Miles: (1:03:11) Yeah, I think there's enormous value that can be just—we're all going to consume enormous amounts of software, way more than before.

Jackson: (1:03:19) Yeah, again, like media. Maybe that's the place.

Miles: (1:03:21) Yes. Yeah, yeah.

Jackson: (1:03:23) I think YouTube consumption versus—yeah, it's—

Miles: (1:03:26) It's going to grow massively.

Jackson: (1:03:30) You have millions of creators, but you don't have three mega-studios or cable networks or whatever.

Miles: (1:03:34) And the value created from that is going to be even bigger because you now have, in aggregate, the end result to customers of value created. I think it is going to be enormous. And that's the ceiling of it all. The ceiling of any market is in value created for the customer. And that's especially true with intelligence, where it evolved from software that can help you do work to software that can do work; software that helped you make decisions to software that could make decisions; software that helped you coordinate to software that planned and did it. It is enormous.

Jackson: (1:04:09) Yeah.

Miles: (1:04:10) And so we're going to consume a lot more, and the value from all of it is going to be a lot higher, and that's the umbrella ceiling of it all. I think someone like Palantir and like others that will come about are going to create enormous amounts of value, make that very easy, make that very bespoke, and make it very curated and custom-tailored to that business. They're going to get paid very well for that because they're going to create a ton of value.

Jackson: (1:04:39) Whatever you need, we'll do.

Miles: (1:04:39) There will be switching costs to it that will exist somewhat. There will be trust that will be really valuable as part of that. There will be know-how and knowledge that's imbued in that whole thing that's really valuable and the like.

(1:04:54) Craft, Trust, and Why Software Isn't Over

Jackson: (1:04:54) You mentioned selling work. In a world where you go from selling products and tools to selling work, do you think there's still a place for software with great craft and with great artistry? Or does that not really apply in a services context?

Miles: (1:05:14) I think it does. I think it really does. I really like how Patrick Collison said this once—paraphrasing—he said the reason you should care about craft and attention to detail is that your customers, in seeing and feeling that, will trust you more because they'll know that you really paid attention. I can't rationally say that one button being more beautiful or that one whatever being better matters, but without maybe knowing that thing, you have a sense of that as a customer. It imbues trust where I'm going to trust a lot of the other stuff.

Jackson: (1:05:54) "Seems like they know what they're doing here."

Miles: (1:05:56) Seems like they know what they're doing. And I actually think interior design is an amazing area to develop that. As a layperson, you just go through spaces and they feel so different. Developing the perception of that and the ability to see that, down to the level of what are the switches or plugs that someone chooses to have in a building and in a room, tells you a lot. A human being made every single decision around you.

Jackson: (1:06:22) Especially in our abundant AI world.

Miles: (1:06:25) Yeah. And how intentional were those decisions? One, I think I love it because you become more aware of detail in the world. I kind of like the craft for just that love of learning and the pursuit of more understanding and awareness. As a total side on interior design, I remember feeling like I had no sense of that. I've tried to work on it and hone it. I was looking at some couches once and I sent it to a friend. I was like, "What do you think?" They're like, "Well, I don't like the legs on that couch." I hadn't even looked at the legs. After that point, I was way more aware of different legs and the feeling that they gave you between modern and mid-century and the like. Anyway, do I think that is still true in a world where you're maybe consuming less of a digital interface as we know it today? I think so. In the same way that you work with people who you know have more attention to detail, who you know have more thoughtfulness to it, who you know have more dynamic range to the way...

Jackson: (1:07:27) They are, in a way, a craft.

Miles: (1:07:29) The way we are is absolutely a craft. So I think that will still remain true.

Jackson: (1:07:38) When it comes to actually investing in software—and you've done it a little bit, granted, mostly through a software lens, but you've started to do more in bio, too. It sounds like, at least as a firm, Thrive Capital is continuing to do a wide range of things. As a career software investor, are you expecting to have to do serious reinvention? Are you like, "Man, I've got to start investing in atoms now"? How are you thinking about software broadly as a category for the next three to five years? Asked very crudely and without nuance: Is software over?

Miles: (1:08:14) I don't think so, to the point where we're going to consume a lot and we're going to have a lot more in our lives.

Jackson: (1:08:19) Yeah, through a venture investor context.

Miles: (1:08:21) Well, I don't think so, in part because there's a high rate of change right now, and change is the oxygen for new companies to get formed. Incumbents are caught off guard, or incumbents don't serve something, or there's a new demand and a new infinite game to be played—to build for, to invent for—that exists. Change is why there is such entrepreneurial zeal right now. Because there was change, and change is the oxygen for new teams. I love software. I just think it's amazing that in your dorm room, so to speak, you can build something where no one can stop you, where you don't have to have an insane amount of pedigree or know special people. There's no gatekeeper. You can go build it, and if you build something valuable in the world, it has zero costs of replication and people can benefit from it. It's a magical thing. I hope that I will not be labeled as a software investor, but rather someone who was a great partner to visionaries achieving their dreams—a great partner when they started small and were not much to being really big. Going back down the mountain and finding that, even if it's in different areas, is the joy. It happens to have manifested so far more through software because it's an amazing medium for that. Cursor was a joy of that in many ways. It was four MIT 20-year-olds who were going up against Microsoft. I live for the story of the four 20-year-olds who went up against Microsoft in their bread-and-butter developer IDE mainline pursuit, and did it better and created value. Amazing magic for the world came from that. One of the ones I was most proud of before was working with Tom Blomfield, who founded Monzo. He went and said, "We could build a better bank in the UK," and that is a nuts thing to say. It was all digital; there were no atoms, per se. But it's a real-world thing, and I think something like a tenth of the UK population has it as a daily checking account. It is a big bank in the UK, and that's awesome.

(1:11:13) Intuition: Gradient Descent and Seeing Greatness Up Close

Jackson: (1:11:13) A few other questions about investing. How does intuition play a role in what you do, if at all?

Miles: (1:11:29) It's an interesting question because I think over time I've learned to trust it more. Early on, it's sort of like the adage: "If I had more time, I would have written you a shorter letter." I think early on, you both don't know a lot—you don't know what you don't know—and you definitely don't know how to weigh things. No one should trust you to really weigh any of the factors. If you're lucky, you can lay out all the factors, but oftentimes you have to start by learning what all the factors might be. To my point earlier, you can tell me a thousand ways this can fail, laying it all out. And then over time, the ability to weigh those is reinforcement learning, in some sense, to become good at feeling those.

Jackson: (1:12:18) Just feel?

Miles: (1:12:19) Yeah, gradient descent your way to that. And without some reps, I don't know that you should. You might have the intuition and the intuition might be right, but I think to get confidence in it for myself, the gradient descent has been important versus trying to be purely analytical about it. It might now align with a lot of what was my instinct or gut along the way, but also you develop more feel for it. It's important. I also think to be a productive team member, you need to find ways to communicate that instinct. If my partners or team doesn't see something that I see, I don't think it's a failure in them. I think it's a failure on me because I haven't been able to communicate what I see here as the potential and what's exciting. If I can't communicate it to the people who trust me the most, who believe in me the most, who know I'm telling the truth more than anyone, how is the rest of the world going to do that? I have to be able to not just have instinct, but be able to communicate instinct in a way that is legible to our team, because otherwise it won't be legible to the world and it's not going to be constructive. I've learned to trust that, but in a way that hopefully can articulate that as well more and more as time has gone on. Another aspect of trusting that instinct and leaning into it is—well, I'm biased because this is my view—but I don't know that as humans we're very good at an absolute perspective on things, per se. Maybe with very mathy things we are, because we can say 10 is greater than 9 and there's rules. But in a lot of it, we are far more relative beings. You need to have been aware of and have a sense of what true greatness is to be calibrated. I feel very lucky in my journey and at Thrive and with the teams we've worked with to have been able to work with and have a sense of some of the very, very best. One of the hardest things if you don't have that is knowing just how great "great" is. Once you do have that, I think it becomes a lot clearer to see that and understand that and have instinct for that. The more I've had the fortune of that awareness, the more I also have come to trust instinct. There was actually a team we were fortunate to work with called Mesh Optical that we've partnered with at incorporation. They just left SpaceX—three people who'd left SpaceX who'd worked on the laser interconnect for Starlink so that all the sats could communicate data across each other. We met them basically the week they left through a relationship that was a founder who I never backed but deeply respected and admired and tried to be friendly and a resource for. I think he does some of the best young people recruiting out there. We'd stayed very close to that because I deeply admired him. I struggled to get conviction in the product and the company he was building, but he was a star. So we stayed very close, and he was kind enough to me. This is something else I try to hold myself to: who has introduced me to things even if we don't work together, and trying to have that be a great experience. You put just positive out there in the world. Anyway, he introduced me to them the first week they'd just left. I do that first meeting with them on a Friday afternoon, and it hits you in that meeting: they are incredibly authentic. They want to build lasers. They love building lasers—laser interconnect—and now they want to do optical transceivers for data centers, which is lasers. It was part of a bigger vision of photonics manufacturing. That's where they're looking. You can tell that they have been very aware of the water that they've been in at SpaceX. So their thoughts about leadership and culture, even if they've not honed the words per se for it, they've been very aware of the water that they've been in, which means they'll be leaders. It's not just coming up with a product; you've got to build the company and lead the company. So you go "Wow" on that. That was a Friday afternoon. Saturday morning we see them. Sunday afternoon of a long weekend, we have a team call where they pitch the whole investment team. By Monday morning, we'd agreed to work together in an area—optical transceivers—that we had no business knowing anything about. Absolutely zero business knowing anything about. But that was instinct, and I felt confident. And you've always got to be checking...

Jackson: (1:17:22) It's not low resolution.

Miles: (1:17:23) You've always got to be checking your confidence on that, because you can get complacent and you can get off-tilt over time. Potentially, you get the wrong exposure. But I personally would not have had the confidence to do that five years ago. The exposure to great people and even what those look like very early, and enough of a sense of what a good business can be, gave us the confidence to do that in two days. Monday was a holiday, and most people would have had partner pitches on a Tuesday, and it was all done.

(1:18:07) "I Don't Know" and "I'll Figure It Out"

Jackson: (1:18:06) That's a great answer. You've been described to me as being elite at getting up to speed on a domain incredibly quickly—specifically the story orientation of, "Who's the SEAL team group of people I should meet?" whether it's five or ten people, as I'm first learning a new domain. Can you speak a little bit about that? Maybe this goes back to what we were talking about at the very beginning of the conversation, where I'm going to go learn about some of this AI stuff, or lasers, or games. When you don't really know a domain and you've got a week or two to do a crash course, how do you think about that?

Miles: (1:18:47) I think the three most important words for an investor are: "I don't know." I think that an investment team and organization that can't say those words to each other is a very dangerous one. I've thought that for a long time, almost from first principles. I was with a terrific public market investor who had worked for a decade under an extremely esteemed public investor—the sort of investor who has books that are sold out and you have to find deep in the libraries. I was asking him lessons learned from working for that person and what that person looked for in people. He said when that very esteemed older investor would interview people, he'd give a case study and then you'd do a chat on the case and the investment opportunity. You'd just be riffing, and the investor would love going through different areas of it. The main thing he was looking for was at some point you'd say, "I don't know." He might go, "Okay, imagine if we spun out that asset from that company. What would the tax consequences be in the three major jurisdictions where it was sold?" If you didn't say, "I don't fucking know, let's talk to the tax person"—wrong answer. I think it's really important to be able to say, "I don't know." The four really powerful words after that are: "I'll figure it out." And a willingness to go try and figure it out. I've never thought of giving myself a clock on it. Sometimes there is a clock on a decision. If we don't get to a place where we feel like we know enough, you just can't make the decision. Learning is a continuous game in that regard. I've found that people can get very uncomfortable in those conversations where you're trying to learn something. In those moments, saying, "Sorry, I didn't understand that," is important. I will preface things by saying, "Hey, I'm really naive here. Can you help me? Can you explain this?" or, "Let me play that back to you. I'm thinking, can I analogize it this way?" People worry about that because as you have some success, you're meant to be really smart and know it all. To walk into areas where you don't and be willing to be vulnerable and say, "I just don't understand that," is key to getting to ground truth. You want to get that bottoms-up understanding versus accepting high-level or marketing-oriented responses. One has to have a lot of ego to say, "I'm going to figure it out," but be very low-ego about the process. That's the disposition I have towards it all.

(1:22:12) Commitments, Not Bets: Closing People and Board Work

Jackson: (1:22:12) Obviously, a huge part of the type of investing you do is being a board member. But the thing I'm most interested in is any advice or thoughts you have on helping companies close great people. As I understand, when it comes to what VCs actually do, that's one of the things where you really provide a ton of value.

Miles: (1:22:40) It's kind if someone has said that. I think that it starts with making investments and committing to teams that you believe in. Everyone can tell if you're selling something that you don't believe in.

Jackson: (1:22:57) Yeah.

Miles: (1:22:58) Which is why I think that word choices matter. When we invest, we make a commitment. We don't make a bet. This is not just putting some chips down on a roulette table and hoping one in ten times it turns up positive. No, we made a commitment because we really believe in this. We're committed to helping this organization be the best version of itself and succeed as big as it can. We stand for that. Selling starts before you get on the call. It starts with you knowing that and other people knowing that you stand for that. The gut question I always ask myself is: "Can I imagine recruiting for this?" I've done a lot of those calls—not as many as founders do, obviously, but it's a core thing. When you do those, you have to be honest. It doesn't mean you sugarcoat everything or don't acknowledge the risk, but you help a candidate make the right decision for themselves. If they join somewhere that they weren't really a fit for, it's actually really unproductive. Now the CEO and the leadership have a management challenge on their hands. They're going to have to move on from that person, or the person is going to opt to leave in a short amount of time. It's better to have a fit than just a person. I approach it from: "What is this person's goal? Where are they looking?" They are the writer of their book. What's their book going to say? This is the next chapter in it. Where's that storyline going? Does this fit that? Can I help them see the degree to which this does fit in that story? Regarding the board member piece: I think the job of an investor, the investor I hope to be, is that a founder would say Miles helped them make better decisions. They are the founder's decisions to make; they are never our decisions to make. If we can give them perspective, resources, and input so they make better decisions on the way—such that they have a more successful company and accomplish more of their dreams—fantastic. Some of that is recruiting people to the team because it gives them better input, and we have an amazing team that works on marketing, finance, and sales. But as a board member, one of the core things is to help them make the best decisions. That's the ethos one grounds everything in. It doesn't mean you're always a "yes." Sometimes I will say, "I'm not sure I believe in this, per se, but you should hear it such that under hearing it, you're still extremely confident in the decision you're making." This could be another scenario of the world. If that scenario is some obnoxious edge case, it's not productive. But if it's a real consideration, or a failure mode seen at other places, or a risk or consequence seen elsewhere, you want to expose that versus just being like, "Yeah, of course, great." I'm not here to push an opinion. I'm here to give perspective such that the founder makes better driving decisions. That's our goal. The only other thing I'd say—and I heard this from Sir Michael Moritz very early on—is that a great board member is demanding in good times and supportive in tough times. They are a shock absorber. They're a shock absorber, yeah.

Miles: (1:27:40) I kind of understood that. It sort of made some intuitive sense to me. But again, to our earlier chats, I didn't really have the feel for that. What I've realized is the reason you need to be demanding in good times is because that's when you can level up to the next area. It's when you have the capacity for the next amazing recruit. It's when you have the capacity to walk into a room with a customer you maybe shouldn't be serving yet. It's when you have the capacity to raise the capital because things are working well. And so in success, when things are working, you need to set your eyes further out.

Jackson: (1:28:18) Yes.

Miles: (1:28:19) Amplifying the pressure on that in good times, I think, is a very important thing for a board member. The more I've done it and seen others, it's actually the time when usually less attention is given because it's working. It's actually almost the time when one needs to try and lean in a little more because it is the time to do that. Simultaneously, when things are not working, that founder has thought about all the ways it's not working and all the pain of it not working way more than we ever will.

Jackson: (1:28:54) They need a shoulder.

Miles: (1:28:58) And constructive help at that point is probably most fruitful.

(1:29:06) Joining Thrive, Being a Punk, and Music Studios over Jury Trials

Jackson: (1:29:06) As I understand it, when you joined Thrive, it was not a super obvious decision. I think you also turned down Bridgewater. Why did it feel right to you? And more broadly, what do you think went right early on, both for you and for Thrive?

Miles: (1:29:23) My curiosity for Bridgewater was not macro trading at all. I don't care for macro trading. But there was not an organization I knew of—I was in college, so I didn't know everyone—that put more thought into thinking about people and organizations. Ray Dalio's Principles hadn't been published yet, but they were an internal thing. When you do the interview process and spend time on the team, there was so much curiosity for team organization. Part one is building a great product that delivers value; part two is building an organization that could build great products. That is the job of a founder. I was fascinated by Bridgewater for the latter question, not for anything to do with macro. But what I loved is building, imagining, and thinking about how to build where there are opportunities for change and new ideas—building products and making sure they succeeded. I know it seems silly now because it's so understood, but in my last two or three years of college, I read TechCrunch most days. It was not as much of a thing then, but I read it most days. I read Hacker News. There's a blog that no one would know now because there are so many blogs on SaaS, but SaaS in 2011 and 2012 was really early still. I wish I realized how early it was. You're not aware of the water that you're in at times. There was a great blog written by David Skok, who is a partner at Matrix, called For Entrepreneurs. It was basically all about the SaaS business world. No one of this generation would know it anymore, but it was amazing. It was a gift that he put so much of this out there. He was studying this business model and thinking about it while working with HubSpot and some others. I actually interned at Matrix and I read all of this blog; I was a voracious consumer of it. That curiosity and love of learning translated to me meeting Will Gaybrick. Then Will joined Thrive and they said, "You should come join us." At the time, we were mostly doing consumer investing—Warby Parker, Harry's, Instagram was a great success. I was like, "But I think the software stuff is amazing." That led us to Segment and GitHub and other things. What went well in that sense—to our earlier comment—was the early reinforcement learning of what greatness looks like. Seeing Instagram, GitHub, or Josh building Oscar was really powerful for seeing how great success can look. For myself, Josh really leaned into people who had a lot of will, even if they didn't necessarily have any proven ability. It's something that we've really continued to do. Our most recent member of the investment team joined us when they were 20 years old, so younger than I was by quite a bit at that time. He actually dropped out of college to do it. I'm extremely grateful for Josh and Will and Chris and Jared for leaning into a lot of willpower and honest curiosity, even if there was absolutely no reason to believe in it. It was way more controversial at that point to leave college and go straight into investing. I'm very grateful for the risk they took.

Jackson: (1:33:15) A friend of the pod, Jared Weinstein, says Miles was a "punk." And I say that in a complimentary way. What do you think he meant?

Miles: (1:33:25) It's funny, I've joked to Jared that the best compliment he ever gave me was that I'm a punk. I think it's in that theme of not being an A-student. I'm not someone who gets given a test and just goes. I'm either fanatical about it, or I'm not giving it much attention. It's about picking the things you want to focus on and the pursuits you really care about. In those, I'll also be very honest. It's never because I think I have the perfect answer, but just a love of that engagement, that dialogue, and that journey. I think that said in a fun, jesting way amongst friends is "punkish." When I was early on, I probably did not communicate in the most effective way at times.

Jackson: (1:34:34) Or even frustration? You couldn't communicate your intuition?

Miles: (1:34:36) Yeah. I see it now with my son. My son is definitely sometimes a punk too, but it's also because he doesn't really know how to communicate the thing that he wants to. I went on that journey, and I'm grateful for people sticking with me. One of the great things about Thrive is we're extremely collaborative. I think the best version of investment team conversations are not a jury trial; it's like being in the music studio making music together. I think people think of an investment committee as a jury trial: "I want to do this, and your job is to find me guilty." That's terrible. The best version is being in the studio jamming, riffing, and figuring it out. Yes, we came prepared and we all had sheet music or beats that we worked on, but we're trying to get at the magic and the right answer. We've always had that ethos at Thrive. At times, as we were all figuring it out together because we all started young, it was probably more of that debate than the making music. The "punkishness" is another element of us all learning to communicate and be amazing together. But there was always a strong belief in being better together—the collaboration of that, even when it's maybe not the easiest path.

Jackson: (1:36:16) Most people—

Miles: (1:36:16) Thank you, Jared.

(1:36:18) Leaving for Benchmark and Returning to Thrive

Jackson: (1:36:18) Most people succumb to inertia or sunk cost when it comes to making decisions. You made two very unusual decisions that create a strange blip on your very Thrive-looking resume, which is that you chose to leave and join Benchmark, and then not only that, but you chose to leave Benchmark and return to Thrive. I suspect there were a lot of things involved in that decision, including more strategic thoughts or opportunistic thoughts, also emotional thoughts, humility, all these things. But again, I think most people, certainly having made that decision once, probably don't do it again. I would love to just hear a little bit about how you made that decision to leave and how you made it to stay, and how particularly maybe on the return you had probably largely the humility to say, "I made the wrong decision" or at least, "This is the right decision for my future. I'm going to go back."

Miles: (1:37:17) I like your frame because I do think it's actually something an LP once said to me and I hadn't quite thought of in that light, which is actually it required, in some sense, a lot of humility and letting go of others' perception and not caring about that, and caring about oneself and being honest and true to oneself to say, "Yeah, it wasn't right, and this was, and I made the wrong call in that regard." I think that to some of our conversation of loving change and hunting change and being comfortable in new situations and seeking new situations out, it was probably very weird for me to imagine being at one place for my entire life. And it so happened that that is true, and that the place I joined, not knowing anywhere else basically, is that place. You never know unless you go. And so to my point earlier of helping people see what sort of chapters—who are you, what are you writing to? The recruiting thing. Sometimes it's hard to fully know the water you're in when it's the only water one's had, even though I knew the water was fantastic and I just was heads-down all the time on it. And so I think partly I had to go on that personal journey. I'm married as well with two kids, third on the way. And I think that I've also come to see—I was always someone who was leaving. I left the UK with my parents, I then went to India, I went to China for half a year. I changed majors senior spring. I left one thing, did the other. I'm always sort of new in there because that's sort of the clearest sense of next challenge, next adventure. And I've come to find a lot more. The magic that gets unlocked by a strong foundation in my personal life—having my wife as my rock, unflinching and supportive—allows so much more adventure than if that was not there. And I think in Thrive, having that be so strong, all the trust and understanding of each other and being demanding and supportive of each other we've built up allows us to do such amazing things. And how, in some sense, that not being change and not being an adventure allows for more of this out in the world together. And so I think I've come to mature in that sense. And then you've got to just be true to oneself. The Benchmark team is phenomenal. I've learned a ton from them. Eric Vishria, I think, is remarkable at connecting theory to operations and change and execution within a company. He is totally full-swing in that regard. I think Peter has amazing wherewithal across consumer and enterprise that is remarkable, and my good friend Jack Altman, who's sort of an entrepreneur's entrepreneur, is there. And so I have a lot of fondness for that team. But you've also got to just learn what is the right fit for you. And to some of our earlier conversation of Thrive, we are insanely collaborative to that point of just loving trying to figure out and think about reality and our views towards the future together. And the dialogue and debate and discussion of that. I never did debate in school or anything; I thought it was kind of weird and esoteric because why do I care about debating that topic? I don't. But I love that for Thrive and I rely on the team a ton for their input and perspective. And then we are a group that is always on. Someone once told me they read a book on a DJ—I forget the name—and they recounted this aspect of it where the DJ said he had to sleep with the dryer machine on because he just needed the noise. I love the intensity of our team, to the TurboPuff at 9:30 Monday night, 10:00 PM call. The other weekend after the World Cup final, we were all on a call at 9:00 EST before Philip and I went to a founders dinner on Sunday night. And then Monday morning straight again. We're constantly calling each other, constantly pulling each other in. There's an idea possible every day. You know, the impatiently patient—always be hunting. And Josh is incredible in this. I remember after we'd agreed to our investment in OpenAI at 150 billion and there was a lot of turmoil at that point. Obviously, in general, people forget it, but Greg Brockman was going on leave. I think John Schulman was leaving to go to Anthropic and then, I guess—thank you. So it was not straightforward. And Josh had flown back and forth to the West Coast two times in three days. And we have Thursday morning deal—we got it agreed Wednesday night—we have Thursday morning 7:00 AM deal meetings. And Josh has got the three next ideas, to the point of being demanding in the good times. I'm someone who has learned I love getting the call at 7:00 PM on Saturday night. I'm with my family, but I step out for 15 minutes to have the chat with the team or to do the thing. I like that always-on nature of things. And so Thrive is just a personal fit.

(1:43:18) Dream Bigger: Lessons from Josh, Teaching Agency to Kids, and Going the Distance

Jackson: (1:43:18) What's the most important thing you've learned from Josh?

Miles: (1:43:26) It would be hard to say just one thing. A few things might come to mind. One is, again to this point of great CEOs and with them looking where they're going, and the way they look sets ambition. Josh is insanely ambitious. Look at what he's done: Thrive, founding Oscar, Holdings, supporting OpenAI in good and bad moments. And the idea of the person who wants, and not necessarily the person who's most credentialed or most experienced, and the power of will, a can-do attitude, and determination. He's a founder and an incredible exemplar of that. And so, even more than I might imagine possible: dream bigger. I learned to dream bigger from him. Two, I think he often will say, and it is imbued in the culture: "It's not just winning; it's the way we win. It's not just the business; it's the way we do business." And he has really led with kindness. And so I think he's an amazing exemplar in being kind and competitive. Competitive might not be against others; it might just be against oneself. Like the element of drive in the competition part. But the kindness in combination with that—I think he really leads by example and raises the bar in the way we do business, not just the business we do.

Jackson: (1:45:19) A couple more things. It's funny, you wrote an old piece for some Yale review about how education might change, which I thought was quite good. It got me thinking: your oldest kid is four. How do you think about what is most important to teach them or prepare them for a very uncertain world?

Miles: (1:45:41) I thought you were going to say what might the world look like for them, and I was just going to say, I don't know. I really have no idea. I think two things probably—although we have never made "family principles" or something, which I know some people do. It's more organic. I think one, it's really important to be a good, kind person. Obviously, you have to work on that every day and remember that that's a muscle and an act. Then two is agency and agenticness—to use the AI version of it all. It is more important than ever in many ways. You can have all the intelligence you want, but what question are you asking? Where do you want to go? I think that agenticness is something that I hope to instill in him. A fun version I've seen on Instagram reels—I love Instagram reels, you can learn a lot—is to get your 10-year-old for their birthday to pick the family vacation spot and make a presentation. I'm looking forward to having him do a family presentation of where we're going. I think it's true for other things, too. One of my favorite questions—and I probably shouldn't tell you this because then recruits will listen—is: what's a relationship, personal or professional, that has come out of proactive outreach? A cold email, a cold outreach, whatever. That's very agentic.

Jackson: (1:47:26) Yeah, it's been the serendipity wheel.

Miles: (1:47:28) Yeah. And constant curiosity. Show me the last ChatGPT questions that you had. I actually have two phones, and my son asked me the other day—he's very curious—he goes, "Why do you have two phones?" That's a hard one to explain: a work phone and a personal phone. Then he goes, "Do you have two ChatGpt?" because we're always asking ChatGPT questions. If you ever ask me a question that's a good one for ChatGPT, let's ask ChatGPT that question. We pull up voice mode, and so I try to cultivate that curiosity.

Jackson: (1:48:05) I think when we first met over Zoom, we were talking about long-distance running, endurance, and pushing through. We talked about adventure racing. I think you were a rower as well. This comes back a little bit to what we spoke about at the top, which is—and forgive me, but I think this is something you literally said—"I was never faster than anyone else, but I'll go longer and I'll suffer more pain than anyone else." How do you remember and how would you encourage or advise others to dig deep and have endurance?

Miles: (1:48:44) I think part of it is developing the muscle and the comfort of doing it. There's no shortcut. Your mind is something that I think you can train. I did my first marathon when I was 17 because I was about to turn 18 and I thought, "I gotta do it before I turn 18." I don't know that I'd run longer than that before, but I'd done adventure racing. In adventure racing, we cover 250 miles, but you're not at marathon pace. You're hiking and ascending 10,000 feet more than you're running. I thought, "I just got to do it." So I basically went two days later and ran the Boston Marathon course. I think more people could probably run a marathon if they just went out and ran 20 miles once. Once you know you can, you can. The first time you do a 60-hour race—my wife and I did a 150-mile race in New Zealand. She's an elite marathoner. She's top 50 in the US. She runs a marathon faster than I can basically run a mile—a sub-six-minute mile marathoner.

Jackson: (1:50:09) Oh my God.

Miles: (1:50:10) It's insane. But she had always wanted to race this series called Racing the Planet. They do them in the four major deserts in the world, and then they have a moving fifth race each year. I found out when we were dating that the fifth race in 2019 was in New Zealand. New Zealand is the most beautiful place in the world to get to do this. It turns out it's incredibly hilly. We ascended and descended about 8,000 feet a day, which is absolutely brutal. Half the race never even finished. But I was like, "We gotta go do that together." To the point of having that rock and more adventures, you need someone who would go do that. When I first brought it up, we were actually hiking around Mont Blanc, and she was like, "You're out of your mind." But she did it, and now she knows she can. After that, she did rim-to-rim-to-rim, running across the Grand Canyon and back. She was like, "Oh my God, that's so easy." Once you do it, you develop the confidence. I think this is as much a mental game as anything else.

Jackson: (1:51:33) That's all I got for you. Thank you. This was a blast.

Miles: (1:51:36) Yeah, appreciate it.

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